So, I'm watching the FOX business block, and the champions and defenders of free market capitalism each dutifully rail against government excess, new regulations, subsidies and take-overs. Yet in the final two-minutes, when it's time to recommend a stock, they invariably select a company that stands to benefit from new regulation, government excess and take-overs.
In 2009 we got bail outs, stimulus, a tripling of the deficit, industry take-overs, cap and trade passed the house, the health care take-over passed both houses of Congress and the market soared.
It seems as if the top 20% of earners in this country actually believes that they can keep on truckin' without the bottom 80%. Their words say to the government "No, no, no." but their actions say "Go, go, go.".
The overt defenders of the new world order can't even bring themselves to decry multi-million dollar get-aways for government employees to hang around hotels and talk about their new contracts. The bribery that takes place in legislation is brushed off as "business as usual" which means, we shouldn't care. All news is good news so long as their favored party remains in charge. It reminds me of the prisoner in "Life of Brian" hanging upside down in shackles, talking about how great the Romans are.
I think that most people know that we are totally abandoning the founding principals of the United States. Many will even state opposition to it if you ask them. However, many of the same people believe they're going to benefit somehow in the short term, so they don't put up much of a fuss about it.
My optimistic side likes to point out that we still have the capacity to turn things around on a dime in this country. My pessimistic side observes that Rome was not destroyed in a day. There were multiple generations of misery before the once mighty empire finally dissipated onto the ash-heap of history. Are we headed for a similar fate? It's entirely possible.
I would urge all you market moguls to put your money where your principals are. Never mind the short-term trade and invest in freedom, or at least refrain from investing in statism. Money talks. Speak up!
Saturday, December 26, 2009
Wednesday, December 23, 2009
The New Transparency of Government
During the presidential campaign of 2008, Barack Obama promised a new era of transparency in government. He said that bills would be debated in the open, even on CSPAN. Everyone would have their due input and the public would be able to witness the process from beginning to end. Well, it hasn't exactly gone down that way, but thanks to ever progressing communication and information technology, the motives and character of our elected officials has never been more transparent.
2009 was the year of the crisis. Every major piece of legislation was an emergency. So much so that they had to be written behind closed doors by a handful of chosen legislators and policy makers. When they were finally released, there was no time for debate, or even for most members of Congress to read the bills before voting on them. Stimulus, bail outs, climate change and health care were all deemed way too important to be subjected to the whims of the common citizen.
This approach may have worked in the past. There was a time, not so long ago, when there were only three major television networks. Each had a half hour of national news per night, airing at roughly the same time. The average American was provided perhaps ten minutes of information per day on what was happening in Washington D.C.. Today, you can literally keep tabs on our elected officials 24/7. Deals might be made in private, but the fact that the deal making is happening is as plain as day. Whether its scientists fudging data to promote their pre-conceived conclusions or Congress members getting huge paydays for their states in exchange for their votes, the public is fully aware and tuned in and none too happy about it.
Big government proponents are embarking on a power grab agenda. The plan was to rush everything through so that, by the time Joe Six Pack realized what was happening, the deals would be done, the game would be changed, and eventually we'd all get used to the idea that the government is going to tell us what to do and when and how to do it. The problem they're having is that tactics that worked even 3 or 4 years ago, no longer work today. Releasing an important piece of news on Friday evening no longer means it wont garner major scrutiny. You can't just make ridiculous statements like the center of the Earth is "millions of degrees" or the polar ice cap is going to "disappear within 7 years" and not expect people to take 5 minutes on Google to check your facts. You can't just tell people "Relax, we know what we're doing" and hope we don't ask for details. Technology has made it possible for government to disseminate information to almost everyone in real time, and we want to know exactly what they're up to.
Despite their best efforts, our government is becoming more and more transparent. They are currently promoting government by the state, of the state and for the state. This aggression will not stand. George Orwell had it backwards. Big Brother, we're watching you.
2009 was the year of the crisis. Every major piece of legislation was an emergency. So much so that they had to be written behind closed doors by a handful of chosen legislators and policy makers. When they were finally released, there was no time for debate, or even for most members of Congress to read the bills before voting on them. Stimulus, bail outs, climate change and health care were all deemed way too important to be subjected to the whims of the common citizen.
This approach may have worked in the past. There was a time, not so long ago, when there were only three major television networks. Each had a half hour of national news per night, airing at roughly the same time. The average American was provided perhaps ten minutes of information per day on what was happening in Washington D.C.. Today, you can literally keep tabs on our elected officials 24/7. Deals might be made in private, but the fact that the deal making is happening is as plain as day. Whether its scientists fudging data to promote their pre-conceived conclusions or Congress members getting huge paydays for their states in exchange for their votes, the public is fully aware and tuned in and none too happy about it.
Big government proponents are embarking on a power grab agenda. The plan was to rush everything through so that, by the time Joe Six Pack realized what was happening, the deals would be done, the game would be changed, and eventually we'd all get used to the idea that the government is going to tell us what to do and when and how to do it. The problem they're having is that tactics that worked even 3 or 4 years ago, no longer work today. Releasing an important piece of news on Friday evening no longer means it wont garner major scrutiny. You can't just make ridiculous statements like the center of the Earth is "millions of degrees" or the polar ice cap is going to "disappear within 7 years" and not expect people to take 5 minutes on Google to check your facts. You can't just tell people "Relax, we know what we're doing" and hope we don't ask for details. Technology has made it possible for government to disseminate information to almost everyone in real time, and we want to know exactly what they're up to.
Despite their best efforts, our government is becoming more and more transparent. They are currently promoting government by the state, of the state and for the state. This aggression will not stand. George Orwell had it backwards. Big Brother, we're watching you.
Wednesday, November 11, 2009
The Latest on the Global Warming scam
Reality has taken another swipe at the religion of Global Warming. The Global Warming cult is not just annoying, they may potentially deal a devastating blow to economies and freedom worldwide based on the premise that man-made carbon emmisions are building up in the atmosphere and bringing about catastrophic global warming. Mother nature begs to differ.
A new study published online in Geophysical Research Letters, states: “New data show that the balance between the airborne and the absorbed fraction of carbon dioxide has stayed approximately constant since 1850, despite emissions of carbon dioxide having risen from about 2 billion tons a year in 1850 to 35 billion tons a year now.”
In plain English, the oceans and land are absorbing our carbon emissions as fast as we can put them out. The catastophic greenhouse scenario is not happening. From PhysOrg.com: “The strength of the new study, published online in Geophysical Research Letters, is that it rests solely on measurements and statistical data, including historical records extracted from Antarctic ice, and does not rely on computations with complex climate models.”
In other words this study deals with reality, whereas the nightmare scenarios are based on commonly held belief.
There is some confusion among scientists, particularly those seeking new grants to combat global warming, as to why the atmosphere is not absorbing the CO2. I’m not a scientist, but I know that mixtures have saturation points. When you stir salt into a glass of water, and continue to add salt, there will come a point where the salt will no longer dissolve into the mixture and you’ll simply get a bunch of salt resting on the bottom of the glass. My unprofessional guess would be that the atmosphere has absorbed about all the CO2 it is capable of absorbing. That’s a good thing. The Earth is recycling our carbon for us.
As you read this, the United Nations is conducting a Climate Change Conference, where world leaders will debate what to do about the non-existent build up of CO2 in the atmosphere. Proposals include payments from countries like the United States to developing countries which emit less carbon; a carbon-debt system, which would be enforced by a newly formed, unelected, global governing body. Here at home, Congress is attempting to pass the infamous “Cap and Trade” bill, which will enrich traders, at our expense, and accomplish very little else.
It’s not that good information is not available to the powers that be. Global Warming or Climate Change is just the most recent vehicle to drive the real agenda; world government. If this crisis comes apart at the seams, they’ll find a new one. It’s never been about protecting you. It’s always been about controlling you.
More info: http://www.physorg.com/news177059550.html
A new study published online in Geophysical Research Letters, states: “New data show that the balance between the airborne and the absorbed fraction of carbon dioxide has stayed approximately constant since 1850, despite emissions of carbon dioxide having risen from about 2 billion tons a year in 1850 to 35 billion tons a year now.”
In plain English, the oceans and land are absorbing our carbon emissions as fast as we can put them out. The catastophic greenhouse scenario is not happening. From PhysOrg.com: “The strength of the new study, published online in Geophysical Research Letters, is that it rests solely on measurements and statistical data, including historical records extracted from Antarctic ice, and does not rely on computations with complex climate models.”
In other words this study deals with reality, whereas the nightmare scenarios are based on commonly held belief.
There is some confusion among scientists, particularly those seeking new grants to combat global warming, as to why the atmosphere is not absorbing the CO2. I’m not a scientist, but I know that mixtures have saturation points. When you stir salt into a glass of water, and continue to add salt, there will come a point where the salt will no longer dissolve into the mixture and you’ll simply get a bunch of salt resting on the bottom of the glass. My unprofessional guess would be that the atmosphere has absorbed about all the CO2 it is capable of absorbing. That’s a good thing. The Earth is recycling our carbon for us.
As you read this, the United Nations is conducting a Climate Change Conference, where world leaders will debate what to do about the non-existent build up of CO2 in the atmosphere. Proposals include payments from countries like the United States to developing countries which emit less carbon; a carbon-debt system, which would be enforced by a newly formed, unelected, global governing body. Here at home, Congress is attempting to pass the infamous “Cap and Trade” bill, which will enrich traders, at our expense, and accomplish very little else.
It’s not that good information is not available to the powers that be. Global Warming or Climate Change is just the most recent vehicle to drive the real agenda; world government. If this crisis comes apart at the seams, they’ll find a new one. It’s never been about protecting you. It’s always been about controlling you.
More info: http://www.physorg.com/news177059550.html
Saturday, October 24, 2009
Capping executive pay, You asked for it.
The federal government’s new Pay Czar, Kenneth Feinberg, has determiined that executives at several bailed out firms must take substantial pay cuts. This has predictably sparked a heated debate about whether the government should be involved in pay decisions and what constitutes “excessive pay”. I believe Wall Street has made its own bed, and now must lie in it.
When firms accept themselves as “too big to fail” and take money from taxpayers through the federal government, they lose any right to make free market arguments. These firms turned their backs on the free market system because they didn’t want to face the pain of failure. Now they have to accept their new masters.
Will government meddling and bureaucracy make the situations at these companies worse? Probably. Will talent walk away? Of course. Then again, it was the alleged “best and brightest” that helped create this fiasco. What about “mission creep”? What if the government decides to cap pay at companies that weren’t bailed out? The optimum time to put the brakes on the government takeover of the free market was before they started doling out TARP loans. Where were the shouts from the free market champions back then?
Eventually the government will wind down its takeover of big business because it will fail. Whether it’s this administration or the next one, reality will set in over time. For now, we’ll get a demonstration of what happens when entrepreneurs are replaced with czars and committees. I believe individuals are entitled to every dime they can make honestly in the free market, but I also believe that individuals and companies have to take the consequences of their actions and inactions. If you want out from under the thumb of the government, give the money back or find a new career.
When firms accept themselves as “too big to fail” and take money from taxpayers through the federal government, they lose any right to make free market arguments. These firms turned their backs on the free market system because they didn’t want to face the pain of failure. Now they have to accept their new masters.
Will government meddling and bureaucracy make the situations at these companies worse? Probably. Will talent walk away? Of course. Then again, it was the alleged “best and brightest” that helped create this fiasco. What about “mission creep”? What if the government decides to cap pay at companies that weren’t bailed out? The optimum time to put the brakes on the government takeover of the free market was before they started doling out TARP loans. Where were the shouts from the free market champions back then?
Eventually the government will wind down its takeover of big business because it will fail. Whether it’s this administration or the next one, reality will set in over time. For now, we’ll get a demonstration of what happens when entrepreneurs are replaced with czars and committees. I believe individuals are entitled to every dime they can make honestly in the free market, but I also believe that individuals and companies have to take the consequences of their actions and inactions. If you want out from under the thumb of the government, give the money back or find a new career.
Monday, October 19, 2009
No More "Lesser of two evils"
The Republican Party may have thought it had a great ally in the "Tea Party" movement. However, they're beginning to learn that opposition to liberal Democrats does not automatically mean support for Republicans.
The most obvious illustration is the race in N.Y. for the 23d Congressional District seat up for grabs this November. A liberal Republican, Dierdre Scozzafava, is vying for the seat against Democrat Bill Owens and Conservative candidate Doug Hoffman. While old-guard Republicans like Newt Gingrich are supporting Scozzafava, many of the "Tea Partyers" and conservatives such as Dick Army, are supporting Hoffman. Critics say that by splitting the vote between Hoffman and Scozzafava, the third party supporters may be handing the Democrat a win in a traditional Republican stronghold.
The fact that Republicans would even make that argument is a sign that they still don't understand what's going on out in the real world. People who are concerned about ever-growing government, outlandish spending, runaway deficits and the destruction of the free market system, don't give a hoot about the welfare of any political party. They want to vote for individuals who will work for what they believe in. Voting for the lesser of evils is no longer tolerable.
The grass roots rebellion that has become known as the Tea Party movement is comprised of individuals looking at the long term and not liking what they see. They see a real crisis upon us right now. They aren't interested in the numbers game played by the ruling parties in Washington D.C.. They want credibility, accountability, commitment.
I tend to agree with this sentiment. We are always told that it is our duty as a citizen to vote. However, if I don't like the choices put in front of me, I believe the better option is to not vote. Maybe we have to take another step or two in the wrong direction before we move to the right track. If one or both major parties becomes extinct in the process, so be it. If Republicans think that conservatives, capitalists, libertarians and independents have nowhere else to go, they're wrong...dead wrong.
The most obvious illustration is the race in N.Y. for the 23d Congressional District seat up for grabs this November. A liberal Republican, Dierdre Scozzafava, is vying for the seat against Democrat Bill Owens and Conservative candidate Doug Hoffman. While old-guard Republicans like Newt Gingrich are supporting Scozzafava, many of the "Tea Partyers" and conservatives such as Dick Army, are supporting Hoffman. Critics say that by splitting the vote between Hoffman and Scozzafava, the third party supporters may be handing the Democrat a win in a traditional Republican stronghold.
The fact that Republicans would even make that argument is a sign that they still don't understand what's going on out in the real world. People who are concerned about ever-growing government, outlandish spending, runaway deficits and the destruction of the free market system, don't give a hoot about the welfare of any political party. They want to vote for individuals who will work for what they believe in. Voting for the lesser of evils is no longer tolerable.
The grass roots rebellion that has become known as the Tea Party movement is comprised of individuals looking at the long term and not liking what they see. They see a real crisis upon us right now. They aren't interested in the numbers game played by the ruling parties in Washington D.C.. They want credibility, accountability, commitment.
I tend to agree with this sentiment. We are always told that it is our duty as a citizen to vote. However, if I don't like the choices put in front of me, I believe the better option is to not vote. Maybe we have to take another step or two in the wrong direction before we move to the right track. If one or both major parties becomes extinct in the process, so be it. If Republicans think that conservatives, capitalists, libertarians and independents have nowhere else to go, they're wrong...dead wrong.
Wednesday, September 9, 2009
America, you ignorant slut!
President Obama addresses Congress on health care, 9/9/09
President Obama addressed both houses of Congress tonight in a speech intended to boost support for his health care proposals. If you expected him to state that he’d heard the voices of the opposition and is willing to consider alternatives, you were sorely disappointed. Here is the complete text of the speech. From NYTimes.com.
In it, he implies that fierce opposition to the plan stems mainly from people bent on stopping reform in any incarnation for their own greedy and/or evil purposes. Others are either ignorant, mislead, paranoid idealogues or some combination of the above.
The reason the health care debate has been so intense is that it goes to a very fundamental issue. At the foundation of the argument is whether or not it is the proper role of government to take direct responsibility for the health and welfare of its citizens. Proponents believe it is. Opponents believe it is not. When proponents start with that premise and envision the future it will bring, they see Utopia. When opponents do the same, they see disaster.
When the President tugs at our heart strings and appeals for compassion in the form of support for his plan, it’s not touching, it’s insulting. It’s insulting because it assumes that a reasonable, compassionate, thinking adult can’t possibly be against a caretaker government. Of course if you believe a caretaker government will lead to widespread misery, supporting one wouldn’t be very compassionate, would it?
Both sides of the issue believe they are right. Both cannot be right. There are undecideds and “don’t knows” but there is no middle ground. So, where do we go from here? We could start by taking on the fundamental issue instead of dressing it up as health care reform and dancing around it. This is about collectivism versus individualism. If you have confidence in your convictions, call them by their name and let’s have the debate.
President Obama addressed both houses of Congress tonight in a speech intended to boost support for his health care proposals. If you expected him to state that he’d heard the voices of the opposition and is willing to consider alternatives, you were sorely disappointed. Here is the complete text of the speech. From NYTimes.com.
In it, he implies that fierce opposition to the plan stems mainly from people bent on stopping reform in any incarnation for their own greedy and/or evil purposes. Others are either ignorant, mislead, paranoid idealogues or some combination of the above.
The reason the health care debate has been so intense is that it goes to a very fundamental issue. At the foundation of the argument is whether or not it is the proper role of government to take direct responsibility for the health and welfare of its citizens. Proponents believe it is. Opponents believe it is not. When proponents start with that premise and envision the future it will bring, they see Utopia. When opponents do the same, they see disaster.
When the President tugs at our heart strings and appeals for compassion in the form of support for his plan, it’s not touching, it’s insulting. It’s insulting because it assumes that a reasonable, compassionate, thinking adult can’t possibly be against a caretaker government. Of course if you believe a caretaker government will lead to widespread misery, supporting one wouldn’t be very compassionate, would it?
Both sides of the issue believe they are right. Both cannot be right. There are undecideds and “don’t knows” but there is no middle ground. So, where do we go from here? We could start by taking on the fundamental issue instead of dressing it up as health care reform and dancing around it. This is about collectivism versus individualism. If you have confidence in your convictions, call them by their name and let’s have the debate.
Thursday, September 3, 2009
Premature Indoctrination
Turning a capitalist democracy into a socialist autocracy is no easy task. It can be done. But, it takes cunning, planning and lots of patience. The movement was well underway in this country, but the left may have tried to implement the final phase a decade or two too soon. Now they have to try to pull it off in broad daylight before an unreceptive audience.
Before you can put absolute power in the hands of a few for the good of all, you must first lay the groundwork; set the tone, create the proper atmosphere. You need allies in the education sector. You need allies in the media. You need to get big companies on board. All that was done fairly successfully over the past several decades. However, before you can make the final play, you must have the majority of the population at the point where they’re ready to throw up their hands and say “anything is better than this”.
Higher education is staffed mainly with leftists. No problems there. Major media outlets are dutifully providing the right coverage. In fact, the CEO of General Electric (owner of NBC) is now on the board of the New York Federal Reserve and is a chief Obama economic advisor. Everything’s going well there. Big businesses don’t mind tight regulation and expensive mandates. It keeps the competition down. Keeping up the guise of capitalistic activity also allows for blaming capitalism for everyone’s woes when the time comes to make the big switch. Everything looked to be in place. The public was dissatisfied with the status quo. The left made its move.
The Feds took over the mortgage industry, the financial industry, the auto industry, but health care was a bridge too far. The problem is, they misread the mood of the public. We were annoyed, angry, maybe even outraged, but we weren’t miserable. We were outraged at the players, not the game.
Now the White House is staffed with people who openly supported communism not twenty years ago, but twenty weeks ago. They were feeling confident their time had come. No need to hide the agenda anymore!
But the people aren’t buying it. The genie can’t be put back in the bottle. They have to try to play this out. Obama has to either embrace capitalism and free markets, which he will not do, or go down with the ship.
However it goes from here, we’ll still have massive deficits and a debt that can only be dealt with by inflation of epic proportions. Will we take it on the chin and get back to free people, freely associating in free markets or will be all become willing servants of a great society? I’m betting on the former.
Before you can put absolute power in the hands of a few for the good of all, you must first lay the groundwork; set the tone, create the proper atmosphere. You need allies in the education sector. You need allies in the media. You need to get big companies on board. All that was done fairly successfully over the past several decades. However, before you can make the final play, you must have the majority of the population at the point where they’re ready to throw up their hands and say “anything is better than this”.
Higher education is staffed mainly with leftists. No problems there. Major media outlets are dutifully providing the right coverage. In fact, the CEO of General Electric (owner of NBC) is now on the board of the New York Federal Reserve and is a chief Obama economic advisor. Everything’s going well there. Big businesses don’t mind tight regulation and expensive mandates. It keeps the competition down. Keeping up the guise of capitalistic activity also allows for blaming capitalism for everyone’s woes when the time comes to make the big switch. Everything looked to be in place. The public was dissatisfied with the status quo. The left made its move.
The Feds took over the mortgage industry, the financial industry, the auto industry, but health care was a bridge too far. The problem is, they misread the mood of the public. We were annoyed, angry, maybe even outraged, but we weren’t miserable. We were outraged at the players, not the game.
Now the White House is staffed with people who openly supported communism not twenty years ago, but twenty weeks ago. They were feeling confident their time had come. No need to hide the agenda anymore!
But the people aren’t buying it. The genie can’t be put back in the bottle. They have to try to play this out. Obama has to either embrace capitalism and free markets, which he will not do, or go down with the ship.
However it goes from here, we’ll still have massive deficits and a debt that can only be dealt with by inflation of epic proportions. Will we take it on the chin and get back to free people, freely associating in free markets or will be all become willing servants of a great society? I’m betting on the former.
Saturday, August 29, 2009
China, Apple and the economics of free
Apple recently announced that it has reached a deal to bring the iPhone and its Apps Store to China. This is a very interesting and potentially very insightful proving ground for technology and economics which was actually made possible by the Chinese government keeping the masses poor.
The iPhone handsets will be purchased by China Unicom, who will not share subscription revenue with Apple. This means, for Apple to capitalize on this opportunity to reach such a huge market, they have to sell Apps, lots and lots of Apps.
But, that huge marketplace is made up mainly of very low income individuals. Apple, and its army of application developers must come up with highly desired software at a price point that’s agreeable to poor people. In many cases that price point may be zero, or close to zero. The game will be to figure out how to get a little money from an enormous amount of people, consistently. New streams of revenue related to applications may have to subsidize the production and distribution of the applications. It could be advertising, data collection, storage, establishing networks, or some function nobody has imagined yet. There are further challenges. The iPhones in China will not be WiFi enabled. It sounds like a tough bed to grow in, but the parallel processing nature of the world of iPhone application development should make it up to the challenge.
Some believe the “economics of free” is a threat to capitalism. It’s not. Capitalists adapt and continue to find ways to improve their own lot by improving the lot of others. Government can change the rules, but they can’t kill the game. That’s because capitalism takes advantage of and works with human nature, whereas socialism aims to suppress it.
Of course, I don’t endorse repressive dictatorships as a means of market-testing ideas, but there it is. Americans, through commerce, have the opportunity to try to improve the quality of life of people across the globe, under severe restriction. Demonstration of the power of free markets and free people is a far more effective tool than either diplomacy or force in making the most of such an opportunity.
The iPhone handsets will be purchased by China Unicom, who will not share subscription revenue with Apple. This means, for Apple to capitalize on this opportunity to reach such a huge market, they have to sell Apps, lots and lots of Apps.
But, that huge marketplace is made up mainly of very low income individuals. Apple, and its army of application developers must come up with highly desired software at a price point that’s agreeable to poor people. In many cases that price point may be zero, or close to zero. The game will be to figure out how to get a little money from an enormous amount of people, consistently. New streams of revenue related to applications may have to subsidize the production and distribution of the applications. It could be advertising, data collection, storage, establishing networks, or some function nobody has imagined yet. There are further challenges. The iPhones in China will not be WiFi enabled. It sounds like a tough bed to grow in, but the parallel processing nature of the world of iPhone application development should make it up to the challenge.
Some believe the “economics of free” is a threat to capitalism. It’s not. Capitalists adapt and continue to find ways to improve their own lot by improving the lot of others. Government can change the rules, but they can’t kill the game. That’s because capitalism takes advantage of and works with human nature, whereas socialism aims to suppress it.
Of course, I don’t endorse repressive dictatorships as a means of market-testing ideas, but there it is. Americans, through commerce, have the opportunity to try to improve the quality of life of people across the globe, under severe restriction. Demonstration of the power of free markets and free people is a far more effective tool than either diplomacy or force in making the most of such an opportunity.
Thursday, August 13, 2009
It's the volume stupid!
In response to lower revenues and budget shortfalls due to the recession, many state and local governments and agencies have resorted to raising fees, taxes, fines and whatever else they can think of. In my neck of the woods, the City of Fountain is contemplating a sales tax increase to pay for infrastructure projects. While I applaud the proponents for getting their plan before the public well in advance of even attempting to get it on the ballot, I think the focus is in the wrong direction.
It seems to me a better strategy would be to look for ways to increase sales volume rather than the sales tax rate. Government should be looking for opportunities to get out of the way. If government needs to cut spending, how about cutting in areas that make doing business cumbersome. Look for paperwork to eliminate, outdated or unnecessary codes or regulations. Less bureaucracy means fewer man hours. There's your savings.
Yes, that would mean a reduction in government's work force, but I believe those jobs would be made up many times over in a more vibrant private sector. Business doesn't want advisory boards, cheerleaders, commissions or more government assistance. It just wants you out of the way.
It seems to me a better strategy would be to look for ways to increase sales volume rather than the sales tax rate. Government should be looking for opportunities to get out of the way. If government needs to cut spending, how about cutting in areas that make doing business cumbersome. Look for paperwork to eliminate, outdated or unnecessary codes or regulations. Less bureaucracy means fewer man hours. There's your savings.
Yes, that would mean a reduction in government's work force, but I believe those jobs would be made up many times over in a more vibrant private sector. Business doesn't want advisory boards, cheerleaders, commissions or more government assistance. It just wants you out of the way.
Saturday, August 8, 2009
Cash for Clunkers for housing?
The Senate has added another $2 billion to the Cash for Clunkers program. This is in addition to the original $1 billion allocated to the program. In all, that's enough to subsidize the purchase of about 750,000 new cars. The program was originally supposed to run through November, but consumers jumped on the deal and even with the new money, it will probably be done within a week or so.
A major component of the program is that the cars traded in to qualify for the rebate must be destroyed. This takes used cars off the road and is allegedly good for the environment (although I don't know if building an entirely new car uses less energy than just keeping your old one). If this program is deemed a success, why not apply it in other areas?
In the housing market, we could reduce inventories and increase energy efficiency by offering a $20,000 rebate on the purchase of a new house when you agree to have your current home destroyed. It would be the end of the housing glut right? One could also apply it to electronics. Smash your old TV, get $100 off a new one. This could be the silver bullet we've been looking for. To get out of an economic downturn, all the government has to do is pay people to destroy their stuff and buy new stuff! It could be applied to services as well. Throw some mud on your car and the government will give you a voucher toward a car wash. Bring a steak to a restaurant and get a voucher toward a meal, providing the steak is destroyed. Show proof that you've destroyed an mp3 file and get half off your next song purchase. Divorce your spouse and get $3,000 toward your next wedding.
This does more than create economic activity. It allows the government to determine which economic activity to create. Instead of individuals running around allocating resources all willy nilly, the much more intelligent and wise experts in Washington D.C. can ensure that you're spending your money on what's best for society as a whole and not just wasting it on yourself and your family.
Sure it will be expensive, but with the government's new policy of actually printing on both sides of paper, the raw materials cost of printing more money should come down. No problem there. Crank up the presses!
A major component of the program is that the cars traded in to qualify for the rebate must be destroyed. This takes used cars off the road and is allegedly good for the environment (although I don't know if building an entirely new car uses less energy than just keeping your old one). If this program is deemed a success, why not apply it in other areas?
In the housing market, we could reduce inventories and increase energy efficiency by offering a $20,000 rebate on the purchase of a new house when you agree to have your current home destroyed. It would be the end of the housing glut right? One could also apply it to electronics. Smash your old TV, get $100 off a new one. This could be the silver bullet we've been looking for. To get out of an economic downturn, all the government has to do is pay people to destroy their stuff and buy new stuff! It could be applied to services as well. Throw some mud on your car and the government will give you a voucher toward a car wash. Bring a steak to a restaurant and get a voucher toward a meal, providing the steak is destroyed. Show proof that you've destroyed an mp3 file and get half off your next song purchase. Divorce your spouse and get $3,000 toward your next wedding.
This does more than create economic activity. It allows the government to determine which economic activity to create. Instead of individuals running around allocating resources all willy nilly, the much more intelligent and wise experts in Washington D.C. can ensure that you're spending your money on what's best for society as a whole and not just wasting it on yourself and your family.
Sure it will be expensive, but with the government's new policy of actually printing on both sides of paper, the raw materials cost of printing more money should come down. No problem there. Crank up the presses!
Friday, August 7, 2009
Sorry Big Brother, Technology Favors Freedom
Some politicians have had more success than others putting new information and communication technology to work for themselves. Ron Paul has used the internet very effectively to get out his message. Obama far out-manuevered his opponents on the net as well. Until recently, it was a matter of being the first to know what was available and how to use it. All that is about to change.
The internet, Twitter, Facebook, MySpace and other mass collaboration/communication networks are no longer a mystery to any one group of activists. In fact, the ability to communicate in real time with like minded people across the country and across the globe has made activists out of people who never felt like they had any control over the social-political landscape. This is bad news for collectivists and statists.
The new reality is that interest groups no longer need be a formal organization or even come with a long term commitment. Like minded individuals can band together for a rally this afternoon, and be on opposite sides of a different barricade later the same evening.
This type of "free radical" association favors those who tend to frown on central control in general. For people who truly value the preservation of individuality, free association and free markets, this mode of operating is right in their wheelhouse. It's actually a real life demonstration of the principals they espouse.
The White House is frantically trying to put the genie back in the bottle in response to the ad hoc association of people opposed to the health care overhaul. They've put out a call for people to report "fishy" information put out in emails, blog posts, even casual conversation. If they think that's going to stifle open communication, they couldn't be more wrong. I imagine the inbox at "flag@whitehouse.gov" contains more angry and sarcastic emails than "fishiness" reports.
Monitoring and manipulating groups of neatly organized citizens is far easier than trying to corral 300,000,000 "free radicals". Some are panicked by the emerging social trends enabled by mass communication technology. They would refer to it as chaos. I believe the founders would refer to it as beautiful.
The internet, Twitter, Facebook, MySpace and other mass collaboration/communication networks are no longer a mystery to any one group of activists. In fact, the ability to communicate in real time with like minded people across the country and across the globe has made activists out of people who never felt like they had any control over the social-political landscape. This is bad news for collectivists and statists.
The new reality is that interest groups no longer need be a formal organization or even come with a long term commitment. Like minded individuals can band together for a rally this afternoon, and be on opposite sides of a different barricade later the same evening.
This type of "free radical" association favors those who tend to frown on central control in general. For people who truly value the preservation of individuality, free association and free markets, this mode of operating is right in their wheelhouse. It's actually a real life demonstration of the principals they espouse.
The White House is frantically trying to put the genie back in the bottle in response to the ad hoc association of people opposed to the health care overhaul. They've put out a call for people to report "fishy" information put out in emails, blog posts, even casual conversation. If they think that's going to stifle open communication, they couldn't be more wrong. I imagine the inbox at "flag@whitehouse.gov" contains more angry and sarcastic emails than "fishiness" reports.
Monitoring and manipulating groups of neatly organized citizens is far easier than trying to corral 300,000,000 "free radicals". Some are panicked by the emerging social trends enabled by mass communication technology. They would refer to it as chaos. I believe the founders would refer to it as beautiful.
Thursday, July 9, 2009
Gangland and Politics
I watch a lot of History Channel's Gangland. I also watch a lot of news. Today, I connected some dots:
How political parties are like gangs
Recruit the needy. Gang members tend to be individuals looking for something to belong to; a family. Politicians, for the most part, are individuals who crave acceptance and approval.
You have to get "beaten in". We call this non-stop barrage of vicious attacks being "vetted by the media". It's a rite of passage. If you survive, your in. If you don't, your out.
Parties stake out territories, just as gangs do. Look at the boundaries of electoral districts. They are designed to favor the incumbents.
Currency transactions are hidden through money laundering. Both gangs and politicians trade in cash and favors and are very careful not to explicitly connect the payment to the deed.
Constantly looking to expand their territory. Being powerful within a single country is not enough. There is a growing "global community" movement, which of course is administered by a level of government above sovereign nations.
Prey on the weak of will. Gangster deal in vices like drugs and prostitution. Politicians deal in vices like government assistance, contracts and subsidies. In both cases, once you become dependent, they own you.
Both gangs and political parties are self-perpetuating and are not dependent on any particular individual for their long-term survival. Police infiltrate gangs with multi-year sting operations, resulting in hundreds of arrests and convictions, and they keep coming back strong. Political parties also have their purges and downfalls, but a new crop of power hungry recruits is always there to take it to a new level.
For the most part, neither gangs nor political parties go directly after the strong of will. Their prey consists of those who are attracted to bright shiny objects; fame, "free" money, drugs, crime, the need to be accepted by a group. Things generally go badly for both when they try to force their world on people who have no interest in it. Political parties have avoided a lot of potential bad blood by directing the cash flow to their organizations through employers. You get paid less, but you don't notice. You just focus on the net take home, and you feel good about the refund check that comes every year because they took a little extra from you each pay period.
Both gangs and political parties prefer to operate in an atmosphere of chaos. There has to be some degree of order, so there will always be someone to rob. But you also want to avoid facing any consequences for your actions. Creating chaos in the political world is simply a matter of expanding "grey areas" and becoming very adept at the art of rationalization and pragmatism. In fact, pragmatism (changing your code of behavior to suit your circumstances) is openly heralded as a virtue among politicians. Actually establishing a core set of beliefs and striving to live by them makes you an "idealogue" which is an insult in the political world. They've sold this mindset to the public at large, and for the most part, we bought it. It's very appealing after all. Rather than feeling bad about your missteps and moments of weakness, you talk yourself into seeing them as virtuous. Others, who do the same, are not going to argue with you, no matter how ridiculous the justification.
So the formula goes something like this: Recruit the needy (emotionally speaking). Create a common bond through trauma. Prey on the weak. Avoid direct confrontation with the strong. Promote ambiguity and chaos and attack any attempt to promote logic and reason as a means of arriving at an objective truth. Distasteful as it is, it seems to be working so far.
How political parties are like gangs
Recruit the needy. Gang members tend to be individuals looking for something to belong to; a family. Politicians, for the most part, are individuals who crave acceptance and approval.
You have to get "beaten in". We call this non-stop barrage of vicious attacks being "vetted by the media". It's a rite of passage. If you survive, your in. If you don't, your out.
Parties stake out territories, just as gangs do. Look at the boundaries of electoral districts. They are designed to favor the incumbents.
Currency transactions are hidden through money laundering. Both gangs and politicians trade in cash and favors and are very careful not to explicitly connect the payment to the deed.
Constantly looking to expand their territory. Being powerful within a single country is not enough. There is a growing "global community" movement, which of course is administered by a level of government above sovereign nations.
Prey on the weak of will. Gangster deal in vices like drugs and prostitution. Politicians deal in vices like government assistance, contracts and subsidies. In both cases, once you become dependent, they own you.
Both gangs and political parties are self-perpetuating and are not dependent on any particular individual for their long-term survival. Police infiltrate gangs with multi-year sting operations, resulting in hundreds of arrests and convictions, and they keep coming back strong. Political parties also have their purges and downfalls, but a new crop of power hungry recruits is always there to take it to a new level.
For the most part, neither gangs nor political parties go directly after the strong of will. Their prey consists of those who are attracted to bright shiny objects; fame, "free" money, drugs, crime, the need to be accepted by a group. Things generally go badly for both when they try to force their world on people who have no interest in it. Political parties have avoided a lot of potential bad blood by directing the cash flow to their organizations through employers. You get paid less, but you don't notice. You just focus on the net take home, and you feel good about the refund check that comes every year because they took a little extra from you each pay period.
Both gangs and political parties prefer to operate in an atmosphere of chaos. There has to be some degree of order, so there will always be someone to rob. But you also want to avoid facing any consequences for your actions. Creating chaos in the political world is simply a matter of expanding "grey areas" and becoming very adept at the art of rationalization and pragmatism. In fact, pragmatism (changing your code of behavior to suit your circumstances) is openly heralded as a virtue among politicians. Actually establishing a core set of beliefs and striving to live by them makes you an "idealogue" which is an insult in the political world. They've sold this mindset to the public at large, and for the most part, we bought it. It's very appealing after all. Rather than feeling bad about your missteps and moments of weakness, you talk yourself into seeing them as virtuous. Others, who do the same, are not going to argue with you, no matter how ridiculous the justification.
So the formula goes something like this: Recruit the needy (emotionally speaking). Create a common bond through trauma. Prey on the weak. Avoid direct confrontation with the strong. Promote ambiguity and chaos and attack any attempt to promote logic and reason as a means of arriving at an objective truth. Distasteful as it is, it seems to be working so far.
Tuesday, June 30, 2009
New Gallup poll says 'A pox on both your houses.'
A new poll posted on Gallup.com today states:
"A Gallup Poll finds a statistically significant increase since last year in the percentage of Americans who describe the Democratic Party's views as being "too liberal," from 39% to 46%. This is the largest percentage saying so since November 1994, after the party's losses in that year's midterm elections."
It goes on...
"Notably, there has been no change over the past year in the percentage of Americans who say the Republican Party is "too conservative," though the 43% who say the party leans too far to the right matches the historical high mark set last year."
So record high numbers of respondents believe the Democrats are too liberal and the Republicans are too conservative. So ideally, they move closer to each other and become "just right", right? Wrong.
We don't need Republicans to become more like Democrats or vice versa. The big lie is that solutions to the problems facing this country lie somewhere along a straight line between the two major parties. In reality, both parties agendas are more like a plate of spaghetti that occasionally intersects with the truth.
The common thread between most politicians of all persuasions is control. Republicans generally believe we should all adhere to Judeo-Christian values and that they should be institutionalized to a large extent. Democrats tend to believe that we are all each others keepers and the good of the community and society should be paramount. Both parties seem to believe that the preservation of the "too big to fail" trumps free market principals. Americans believe none of it.
Government's job is to enable us to freely associate in the absence of force. It is not to mold us into the people they want us to be. We don't have to all get on the same page. In fact, that is the antithesis of what this country is about. This is a nation where people of all kinds of beliefs, with all kinds of personalities and backgrounds find a way to live, work and play in relative peace. This is not accomplished through conformity. It's accomplished by eliminating the requirement for conformity except that we agree not to initiate force against one another.
We don't need Democrats to get more Republican or Republicans to become more like Democrats. We need both parties to get out of our face.
"A Gallup Poll finds a statistically significant increase since last year in the percentage of Americans who describe the Democratic Party's views as being "too liberal," from 39% to 46%. This is the largest percentage saying so since November 1994, after the party's losses in that year's midterm elections."
It goes on...
"Notably, there has been no change over the past year in the percentage of Americans who say the Republican Party is "too conservative," though the 43% who say the party leans too far to the right matches the historical high mark set last year."
So record high numbers of respondents believe the Democrats are too liberal and the Republicans are too conservative. So ideally, they move closer to each other and become "just right", right? Wrong.
We don't need Republicans to become more like Democrats or vice versa. The big lie is that solutions to the problems facing this country lie somewhere along a straight line between the two major parties. In reality, both parties agendas are more like a plate of spaghetti that occasionally intersects with the truth.
The common thread between most politicians of all persuasions is control. Republicans generally believe we should all adhere to Judeo-Christian values and that they should be institutionalized to a large extent. Democrats tend to believe that we are all each others keepers and the good of the community and society should be paramount. Both parties seem to believe that the preservation of the "too big to fail" trumps free market principals. Americans believe none of it.
Government's job is to enable us to freely associate in the absence of force. It is not to mold us into the people they want us to be. We don't have to all get on the same page. In fact, that is the antithesis of what this country is about. This is a nation where people of all kinds of beliefs, with all kinds of personalities and backgrounds find a way to live, work and play in relative peace. This is not accomplished through conformity. It's accomplished by eliminating the requirement for conformity except that we agree not to initiate force against one another.
We don't need Democrats to get more Republican or Republicans to become more like Democrats. We need both parties to get out of our face.
Sunday, June 21, 2009
Why I didn't buy a GM car
sumitted by Nathan Thompson
First, the United Auto Workers Union has strangled the life out of GM. There are too many unproductive people being kept on the payroll, and GM isn't permitted to lay any of them off unless they shell out a year or two's worth of income and benefits to the layed-off employee. Retirees receive almost full wages and benefits, even many years after having retired. The executives of GM paid themselves millions in bonuses even while the company lost money on every vehicle. They allowed the company to amass over $170 Billion in debt.
This debt was purchased by pension funds, insurance companies, and investors who believed in GM and were willing to trust their money and future incomes to this giant of American industry. Now, those investors have just had their money stolen from them, by way of the Obama administration and the bankruptcy court. Bondholders have always been first in line when a company goes bankrupt, and the bondholders get their money first. This has been true since the beginning of capitalism. But now, bondholders are toast. They were put at the END of the line (illegally), behind the UAW labor union and Uncle Sam himself. This massive theft from bondholders should be a warning to anyone who thinks free-market capitalism still works for the common man. GM ran itself just like our government does. It borrowed more and more, even while revenues and market share shrank and shrank. If you want to know how the government intends to pay off all of its treasury bond debt, look no further than how it just treated GM bondholders.
So, why didn't I buy a GM car instead of a new Kia this month? As an American shouldn't I have "rushed to the aid of fellow citizens" by supporting GM? Heck no, GM is toast, and so is the broken system of debt issuance for our government. I don't run MY business this way, and I DO NOT support a system where Peter is robbed so that Paul can continue to do the same ole' same ole'. No, in fact I'll NEVER buy another GM, even though I already own three. I'm pissed off at how they have enabled the biggest and best car company in the world to turn into a poorly run operation that doesn't honor its debts. I'm proud to be an American: I PAY my debts; all of them. If GM doesn't, then I will not support them by buying their vehicles. Nor will I continue to purchase T-Bills or treasury bonds from the US Treasury Dept. I will sell any I hold, and instead, send the money to KIA to pay for my new car, which incidentally, is thousands of dollars lower in cost than the GM, with twice the warranty. Besides the IRS, the only government agency I will voluntarily surrender my hard-earned dollars to is the US Mint. At least they will exchange your devalued currency for real money, silver and gold coins, that never lose their value and represent honest money unencumbered by debt. Wake up America! First, they screwed up the mortgage industry and housing. Then, they wrecked the banks. Then, they caused a stock market collapse. Then, they took over the auto industry. They have consistently strangled the domestic oil industry. Now, commercial real estate is collapsing, and the insurance industry is reeling. Now they want to screw up the health care industry. How much longer until they mess up the farming industry and decimate our food supply. I don't know about you, but I'm buying canned food as fast as I cash my paycheck, because I don't trust these guys anymore. I have lost faith in the ability of the American government to simply do what is right for tax-paying citizens.
Goodbye GM. You had your moment in the sun. Goodbye American economy. You killed the golden goose. Now it is time for we citizens to stand on our own and protect our own families from the excesses of our government!
Respectfully submitted,
Nathan Thompson
citizen, Fountain, CO
First, the United Auto Workers Union has strangled the life out of GM. There are too many unproductive people being kept on the payroll, and GM isn't permitted to lay any of them off unless they shell out a year or two's worth of income and benefits to the layed-off employee. Retirees receive almost full wages and benefits, even many years after having retired. The executives of GM paid themselves millions in bonuses even while the company lost money on every vehicle. They allowed the company to amass over $170 Billion in debt.
This debt was purchased by pension funds, insurance companies, and investors who believed in GM and were willing to trust their money and future incomes to this giant of American industry. Now, those investors have just had their money stolen from them, by way of the Obama administration and the bankruptcy court. Bondholders have always been first in line when a company goes bankrupt, and the bondholders get their money first. This has been true since the beginning of capitalism. But now, bondholders are toast. They were put at the END of the line (illegally), behind the UAW labor union and Uncle Sam himself. This massive theft from bondholders should be a warning to anyone who thinks free-market capitalism still works for the common man. GM ran itself just like our government does. It borrowed more and more, even while revenues and market share shrank and shrank. If you want to know how the government intends to pay off all of its treasury bond debt, look no further than how it just treated GM bondholders.
So, why didn't I buy a GM car instead of a new Kia this month? As an American shouldn't I have "rushed to the aid of fellow citizens" by supporting GM? Heck no, GM is toast, and so is the broken system of debt issuance for our government. I don't run MY business this way, and I DO NOT support a system where Peter is robbed so that Paul can continue to do the same ole' same ole'. No, in fact I'll NEVER buy another GM, even though I already own three. I'm pissed off at how they have enabled the biggest and best car company in the world to turn into a poorly run operation that doesn't honor its debts. I'm proud to be an American: I PAY my debts; all of them. If GM doesn't, then I will not support them by buying their vehicles. Nor will I continue to purchase T-Bills or treasury bonds from the US Treasury Dept. I will sell any I hold, and instead, send the money to KIA to pay for my new car, which incidentally, is thousands of dollars lower in cost than the GM, with twice the warranty. Besides the IRS, the only government agency I will voluntarily surrender my hard-earned dollars to is the US Mint. At least they will exchange your devalued currency for real money, silver and gold coins, that never lose their value and represent honest money unencumbered by debt. Wake up America! First, they screwed up the mortgage industry and housing. Then, they wrecked the banks. Then, they caused a stock market collapse. Then, they took over the auto industry. They have consistently strangled the domestic oil industry. Now, commercial real estate is collapsing, and the insurance industry is reeling. Now they want to screw up the health care industry. How much longer until they mess up the farming industry and decimate our food supply. I don't know about you, but I'm buying canned food as fast as I cash my paycheck, because I don't trust these guys anymore. I have lost faith in the ability of the American government to simply do what is right for tax-paying citizens.
Goodbye GM. You had your moment in the sun. Goodbye American economy. You killed the golden goose. Now it is time for we citizens to stand on our own and protect our own families from the excesses of our government!
Respectfully submitted,
Nathan Thompson
citizen, Fountain, CO
Thursday, June 18, 2009
Obama Day on ABC
June 24th is going to be Obama Day on ABC. The network will team up with the White House to broadcast a "debate" on health care on four of their news programs: Good Morning America,” “World News,” “Primetime” and “Nightline.”
No Republicans were invited to participate, at least not any party leaders. There many be some grass roots types present in the audience at the town hall event on "Primetime", or perhaps in the audience or as pundits on the other shows. We'll have to wait and see what they dish up for us.
Politicians, media critics and even other media outlets have criticized the arrangement for being one-sided. Personally, I believe that if ABC or any other network wants to go on a full out Obama promotional campaign, they should be able to do so. My concern is that they promote it as "news". I believe that's deceptive advertising and smacks of Soviet style media. Also, while I don't believe in limiting free speech through campaign finance rules, if they are going to apply to one, they should apply to all. If the Obama administration is going to get hours of free advertising on a major network, it should come under the same scrutiny and regulation that it would for any other candidate or party.
I wont declare journalism dead, as others have. It just doesn't show up very often on the major broadcast networks anymore. If you look hard enough, you can find it elsewhere. I don't even mind entire networks being in the tank for a candidate or party, so long as their open about it. Instead of reigning in the broadcast networks, how about taking the shackles off completely? Do away with campaign finance "reform". Let the money go where it wants to go. Let everyone get their message out as far and wide as they are able. Instead of more government money for campaigns, zero government money for campaigns.
The caveats would be that although you can get as much funding as you're able from wherever you are able, you must fully disclose who and where it came from. If your network is going to support one candidate or party over another, you must clearly state such.
I don't believe that most people are so easily manipulated that they are going to change their vote or their opinion because one person or another had a poster in the right place at the right time or because a morning show host expressed his or her approval of an issue or candidate. As long as speech is free and honest and force and intimidation are kept out of the mix, Americans will get it right eventually.
As evidenced by the controversy generated over ABC's programming, this story is really more about presentation than health care. Regardless of where individuals stand on a particular issue or candidate, nobody likes to feel like they are being "played".
For more info: RBR.com
Saturday, June 13, 2009
The new American Civil War
Once again America finds itself in a war in which, like pre-9/11, one side is mostly unaware they are even engaged. It's a battle for control over the allocation of resources, human and otherwise. It pits the free market against big government and some of the biggest players on the free market side are actually aiding and abetting their rival.
Ideally, in the free market world, the allocation of resource is accomplished by the cumulative effect of billions of individual decisions made every day. Corporations are headed by boards and management which is directly accountable to shareholders, customers, suppliers and associates. They are graded with every purchase decision and their performance is measured in profits. The model is subject to a vote every business minute of every day.
In the big government world, resources are allocated by a select group of bureaucrats, appointed by leaders who are only periodically accountable to voters. The deck is stacked in favor of incumbents through constant and free exposure and they are supported by an underlying bureaucracy that is accountable only to itself. There is no instantaneous measure of efficiency in particular sectors, only the general measures of the economy, based on data compiled by the bureaucracy.
For a time, it looked like the free market had the upper hand. The largest corporations were getting larger. Companies like WalMart were actually able to roll out their own, private sector prescription drug programs. Companies like Google were able to turn the internet into a powerful means of information exchange and storage. If things continued down this path, private sector companies would eventually be more relevant than the government. Something had to be done.
The big victory for big government was in pressuring financial institutions to make loans to individuals based on neighborhoods and ethnicity rather than credit risk. They enabled them to re-package these high risk loans into derivatives and sell them to the taxpayers via Freddie Mac and Fannie Mae, who turned around and sold them to private institutions. Soon, even financial institutions that were not subject to government arm twisting were getting in on the free money orgy. It spread like a cancer, until the whole thing blew up. Of course, rather than let these now huge financial institutions fail, big government saved them. The financial industry surrendered before they even knew they were in a fight.
The auto industry take-over has been in the works for decades. While pundits argue over whether the demise was due to the unions or poor management, few ask the real relevant question: Why has there been no competitive new car company established since around 1935? It's been about 75 years since a newcomer has appeared on the scene. Again, the industry was complicit in its own demise. They went along with ever increasing regulation in the name of safety, fuel efficiency and workers rights. They made compliance so expensive and time consuming that starting a new American car company became a fiscal impossibility. In ensuring that they'd have no competition, they made a deal with the Devil. The Devil won.
Doctors are beginning to wake up to the fact that they too are in a fight for their own survival. But it may already be too late. They were all for third party pay because it ensured that they would be compensated for their work. Everyone would pay and they wouldn't have to spend time on collections. They could negotiate with a few insurance companies rather than individual patients. It would be great! Now the demands on their time are cutting into their income generating capacity. The need to order tests for everything to avoid liability, has vast resources tied up in CYA activities rather than actual health care. Malpractice insurance has gone through the roof. The insurance companies that they negotiate with fund the campaigns of the big government folks who set the rules. Game over.
The FDA has taken control of the tobacco industry, to thunderous applause. There's talk of new regulation of the food we eat, the beverages we drink and of course, big government is going to save us from global warming by taxing us all on carbon emissions, even as global temperatures are falling. Of course, they can show data to the contrary, but as the now infamous fraud known as the "hockey stick" graph demonstrates, they can produce data to demonstrate that the moon is made of green cheese if they want to.
We have the capacity to fight back. Nothing stirs a politician more than an angry mob. The people can demand their freedom back and if they put up a united front, defeat big government. The problem for free market proponents is that either the people and the corporations are unaware that they are under attack, or individuals and individual corporations still believe that they can personally benefit from big government somehow. If it's the latter, the war is over.
Ideally, in the free market world, the allocation of resource is accomplished by the cumulative effect of billions of individual decisions made every day. Corporations are headed by boards and management which is directly accountable to shareholders, customers, suppliers and associates. They are graded with every purchase decision and their performance is measured in profits. The model is subject to a vote every business minute of every day.
In the big government world, resources are allocated by a select group of bureaucrats, appointed by leaders who are only periodically accountable to voters. The deck is stacked in favor of incumbents through constant and free exposure and they are supported by an underlying bureaucracy that is accountable only to itself. There is no instantaneous measure of efficiency in particular sectors, only the general measures of the economy, based on data compiled by the bureaucracy.
For a time, it looked like the free market had the upper hand. The largest corporations were getting larger. Companies like WalMart were actually able to roll out their own, private sector prescription drug programs. Companies like Google were able to turn the internet into a powerful means of information exchange and storage. If things continued down this path, private sector companies would eventually be more relevant than the government. Something had to be done.
The big victory for big government was in pressuring financial institutions to make loans to individuals based on neighborhoods and ethnicity rather than credit risk. They enabled them to re-package these high risk loans into derivatives and sell them to the taxpayers via Freddie Mac and Fannie Mae, who turned around and sold them to private institutions. Soon, even financial institutions that were not subject to government arm twisting were getting in on the free money orgy. It spread like a cancer, until the whole thing blew up. Of course, rather than let these now huge financial institutions fail, big government saved them. The financial industry surrendered before they even knew they were in a fight.
The auto industry take-over has been in the works for decades. While pundits argue over whether the demise was due to the unions or poor management, few ask the real relevant question: Why has there been no competitive new car company established since around 1935? It's been about 75 years since a newcomer has appeared on the scene. Again, the industry was complicit in its own demise. They went along with ever increasing regulation in the name of safety, fuel efficiency and workers rights. They made compliance so expensive and time consuming that starting a new American car company became a fiscal impossibility. In ensuring that they'd have no competition, they made a deal with the Devil. The Devil won.
Doctors are beginning to wake up to the fact that they too are in a fight for their own survival. But it may already be too late. They were all for third party pay because it ensured that they would be compensated for their work. Everyone would pay and they wouldn't have to spend time on collections. They could negotiate with a few insurance companies rather than individual patients. It would be great! Now the demands on their time are cutting into their income generating capacity. The need to order tests for everything to avoid liability, has vast resources tied up in CYA activities rather than actual health care. Malpractice insurance has gone through the roof. The insurance companies that they negotiate with fund the campaigns of the big government folks who set the rules. Game over.
The FDA has taken control of the tobacco industry, to thunderous applause. There's talk of new regulation of the food we eat, the beverages we drink and of course, big government is going to save us from global warming by taxing us all on carbon emissions, even as global temperatures are falling. Of course, they can show data to the contrary, but as the now infamous fraud known as the "hockey stick" graph demonstrates, they can produce data to demonstrate that the moon is made of green cheese if they want to.
We have the capacity to fight back. Nothing stirs a politician more than an angry mob. The people can demand their freedom back and if they put up a united front, defeat big government. The problem for free market proponents is that either the people and the corporations are unaware that they are under attack, or individuals and individual corporations still believe that they can personally benefit from big government somehow. If it's the latter, the war is over.
Tuesday, June 2, 2009
How to Play Inflation
The federal government is going to need to borrow at least $1.8 trillion by October of this year. The national debt is growing and there seems no end in sight. Many people believe that this will lead to inflation as the value of the dollar drops. There are those who believe this will not happen. They point to Japan, where the supply of money increased, but since economic activity remained depressed, inflation never took hold. Inflation is actually the more optimistic view, so I'm going to go with that one. What strategies can one employ to navigate an inflationary environment?
I'm not a financial advisor, so I wont get into specific investment advice, but there are some general approaches one can take that make sense when the value of the dollar is falling. The most obvious is, if you have variable rate debt, fix it. Certainty may come at a bit of a premium, but it's tough to manage your cash flow when your debt payments are continually on the rise. Whether it's a revolving balance on your credit cards or an adjustable rate mortgage, talk to your lender of choice and see about taking some of that risk out of the equation.
Invest in yourself. If you've been considering making home improvements "someday", today might be a good day. If you believe the value of a dollar is going to drop faster than the value of a new deck, and you were going to get a deck anyway, you may as well make the swap. After all, you can't barbecue on pile of dollars. One great home improvement idea is the creation of a pantry, if you don't already have one. It can be as simple as putting up some shelves and it gives you the capacity to take advantage of "loss leaders" or specials on non-perishable items. Education is always a great investment. To get the most bang for your buck, choose an educational path that you're really interested in and can get passionate about. Tools also make good sense. Having the means to build, fix and maintain things on your own can save you a lot of money in the long run. Home improvement stores often offer free classes in construction, installation and repair techniques.
Invest in your business. If you're a business owner, an inflationary period can be a good time to get at that paint job you've been putting off, upgrade signage, shelves and equipment. Again, you're swapping cash for something you expect to hold its value longer. The government is inevitably going to attack its deficit with higher taxes, so investing in tax deductible improvements makes good sense. Also, we are going to come out of this situation at some point. Making improvements now will put you in a stronger position when the economy rights itself. If you believe inflation is coming and will be around for a while you may also want to get away from "just-in-time" inventory management. If you're only carrying a few weeks inventory, you'll just barely be able to keep up with rising prices. If you have the space and fairly consistent demand, going to a several month inventory strategy can help you stay ahead of the game.
Obviously you don't want to blow your life savings just because the dollar is falling. As I said, I'm not going to offer specific advice as to what to do with your long-term wealth. I will say, however, that if you believe that inflation is inevitable and your financial advisor doesn't, you need a new advisor. I could be wrong of course. Ultimately, it's your money and your call. Just be sure you and your fiduciary partners are on the same page.
Railing against the powers that be for financial mismanagement is your right as an American. It can make you feel better and it makes for good water-cooler conversation, but you still have to deal with the reality of the situation. Generally speaking, the keyword for our times is Value. Don't just spend. Spend wisely.
I'm not a financial advisor, so I wont get into specific investment advice, but there are some general approaches one can take that make sense when the value of the dollar is falling. The most obvious is, if you have variable rate debt, fix it. Certainty may come at a bit of a premium, but it's tough to manage your cash flow when your debt payments are continually on the rise. Whether it's a revolving balance on your credit cards or an adjustable rate mortgage, talk to your lender of choice and see about taking some of that risk out of the equation.
Invest in yourself. If you've been considering making home improvements "someday", today might be a good day. If you believe the value of a dollar is going to drop faster than the value of a new deck, and you were going to get a deck anyway, you may as well make the swap. After all, you can't barbecue on pile of dollars. One great home improvement idea is the creation of a pantry, if you don't already have one. It can be as simple as putting up some shelves and it gives you the capacity to take advantage of "loss leaders" or specials on non-perishable items. Education is always a great investment. To get the most bang for your buck, choose an educational path that you're really interested in and can get passionate about. Tools also make good sense. Having the means to build, fix and maintain things on your own can save you a lot of money in the long run. Home improvement stores often offer free classes in construction, installation and repair techniques.
Invest in your business. If you're a business owner, an inflationary period can be a good time to get at that paint job you've been putting off, upgrade signage, shelves and equipment. Again, you're swapping cash for something you expect to hold its value longer. The government is inevitably going to attack its deficit with higher taxes, so investing in tax deductible improvements makes good sense. Also, we are going to come out of this situation at some point. Making improvements now will put you in a stronger position when the economy rights itself. If you believe inflation is coming and will be around for a while you may also want to get away from "just-in-time" inventory management. If you're only carrying a few weeks inventory, you'll just barely be able to keep up with rising prices. If you have the space and fairly consistent demand, going to a several month inventory strategy can help you stay ahead of the game.
Obviously you don't want to blow your life savings just because the dollar is falling. As I said, I'm not going to offer specific advice as to what to do with your long-term wealth. I will say, however, that if you believe that inflation is inevitable and your financial advisor doesn't, you need a new advisor. I could be wrong of course. Ultimately, it's your money and your call. Just be sure you and your fiduciary partners are on the same page.
Railing against the powers that be for financial mismanagement is your right as an American. It can make you feel better and it makes for good water-cooler conversation, but you still have to deal with the reality of the situation. Generally speaking, the keyword for our times is Value. Don't just spend. Spend wisely.
Tuesday, May 19, 2009
The inflation solution
There is a situation developing that I believe is inevitable, that people should be aware of, and that the government will not tell you about. It's not a conspiracy. It's just very unpleasant, very unfair and unavoidable. They have to maintain "plausible deniability". That is, when it comes to pass, they have to be able to claim they didn't see it coming, or better yet, blame it on the other party. The good news is, as painful as it may be, it will not be the end of the world as we know it.
I'm referring to inflation. Not garden variety inflation, but hyper-inflation. The government currently owes about 8 times what it collects in revenues in a year. This year, they will spend more than twice what they take in, further adding to the debt. That's like a household that takes home $50,000/year after taxes, carrying $400,000 in debt and adding more than $50,000/year in additional debt. Such a household would eventually declare bankruptcy. The government doesn't have that option. There is no entity large enough to absorb a $12 trillion loss on our behalf. Raising taxes would result in a smaller number of people paying higher tax rates on less income. The net return to the Treasury would actually fall. That's not going to work. We could drastically cut government spending, but we already have so much mandatory spending in the form of entitlements already owed, that that's not a workable solution either. The final option, the only one left, is to devalue the currency to the point that $12 trillion is no longer a big number.
Here's how it works. Let's go back to our $50,000/year household. Now let's assume that their income keeps up with inflation and that they are able to stop or slow their accumulation of new debt. Now inflation goes ballistic; let's say 1,000% in a year. Now the household income is $5 million/year and the debt is still around $400,000. Their financial situation is much more manageable. Sure, a loaf of bread now costs about $1,000, but as a percentage of their income, it's about what it was last year. That's the government's out, although you will never hear them say it out loud. I don't know exactly when, but it's going to happen because there's no alternative.
Of course most people's income will not keep up with inflation. Therein lies the pain and the injustice. Under such a scenario, people on a fixed income and people who cannot simply demand a raise and get one, would essentially experience a cut in pay every payday until the inflation cycle is over. None of this was their fault, yet they will take the brunt of the damage. That's why you will not get "fair warning" from the government.
The good news is, hyper-inflation can come and go relatively quickly. Eventually, the government's balance sheet will become sustainable and the money supply will be brought back under control. Wages and prices will adjust and we can move forward again. It's a bit like discovering that the only way to get back to the tropical beach is by wading through a half mile of four foot deep hot tar. It's not going to be pleasant, but we'll get there, because that's where we want to be. In the meantime, we can face what's coming without fear, do everything we can to ensure everyone makes it across and it would be helpful if our elected and appointed officials would quit blowing smoke and treat us like full grown adults, capable of handling the truth.
I'm referring to inflation. Not garden variety inflation, but hyper-inflation. The government currently owes about 8 times what it collects in revenues in a year. This year, they will spend more than twice what they take in, further adding to the debt. That's like a household that takes home $50,000/year after taxes, carrying $400,000 in debt and adding more than $50,000/year in additional debt. Such a household would eventually declare bankruptcy. The government doesn't have that option. There is no entity large enough to absorb a $12 trillion loss on our behalf. Raising taxes would result in a smaller number of people paying higher tax rates on less income. The net return to the Treasury would actually fall. That's not going to work. We could drastically cut government spending, but we already have so much mandatory spending in the form of entitlements already owed, that that's not a workable solution either. The final option, the only one left, is to devalue the currency to the point that $12 trillion is no longer a big number.
Here's how it works. Let's go back to our $50,000/year household. Now let's assume that their income keeps up with inflation and that they are able to stop or slow their accumulation of new debt. Now inflation goes ballistic; let's say 1,000% in a year. Now the household income is $5 million/year and the debt is still around $400,000. Their financial situation is much more manageable. Sure, a loaf of bread now costs about $1,000, but as a percentage of their income, it's about what it was last year. That's the government's out, although you will never hear them say it out loud. I don't know exactly when, but it's going to happen because there's no alternative.
Of course most people's income will not keep up with inflation. Therein lies the pain and the injustice. Under such a scenario, people on a fixed income and people who cannot simply demand a raise and get one, would essentially experience a cut in pay every payday until the inflation cycle is over. None of this was their fault, yet they will take the brunt of the damage. That's why you will not get "fair warning" from the government.
The good news is, hyper-inflation can come and go relatively quickly. Eventually, the government's balance sheet will become sustainable and the money supply will be brought back under control. Wages and prices will adjust and we can move forward again. It's a bit like discovering that the only way to get back to the tropical beach is by wading through a half mile of four foot deep hot tar. It's not going to be pleasant, but we'll get there, because that's where we want to be. In the meantime, we can face what's coming without fear, do everything we can to ensure everyone makes it across and it would be helpful if our elected and appointed officials would quit blowing smoke and treat us like full grown adults, capable of handling the truth.
Fuel efficiency and processing speeds - the new CAFE standards
President Obama announced new fuel efficiency standards for the American Automobile industry, suggesting that something must be done about the fact that we have not seen the kind of progress in fuel efficiency in cars that we've seen with processing speeds in computers.
That's an interesting comparison. Let's look at it more closely. The computer industry was never given government mandates on processing speeds. Computers have improved exponentially due to increasing demands from customers combined with fierce competition. Software and hardware engineers do not have a powerful union. They either continue to produce new innovations or they lose their jobs.
In the auto industry, there are a very limited number of competitors. Volumes of regulations and government mandates keep it that way. The general mindset for a union labor force is "how do we get more to do less?" That's not a commentary on the quality of the people. It's the nature of a system that makes management and employees adversaries.
Government getting ahead of the free market and declaring on the public's behalf what they want and what they shall get will never lead to better products.
Hopefully, Silicon Valley will make the whole issue obsolete at some point by coming through with technology that makes the new government targets look like child's play. That is, unless the government decides to help them too.
That's an interesting comparison. Let's look at it more closely. The computer industry was never given government mandates on processing speeds. Computers have improved exponentially due to increasing demands from customers combined with fierce competition. Software and hardware engineers do not have a powerful union. They either continue to produce new innovations or they lose their jobs.
In the auto industry, there are a very limited number of competitors. Volumes of regulations and government mandates keep it that way. The general mindset for a union labor force is "how do we get more to do less?" That's not a commentary on the quality of the people. It's the nature of a system that makes management and employees adversaries.
Government getting ahead of the free market and declaring on the public's behalf what they want and what they shall get will never lead to better products.
Hopefully, Silicon Valley will make the whole issue obsolete at some point by coming through with technology that makes the new government targets look like child's play. That is, unless the government decides to help them too.
Wednesday, April 15, 2009
We Don't Need Another Hero
For years, a certain constituency of Americans has been vastly under-served and under-represented. While they may disagree on a number of issues, the members of this constituency agree on a few fundamental things. One is that massive government debt will be a severe burden on future generations and that it is immoral to attempt to improve our short-term circumstances by knowingly jeopardizing our children and grandchildren. Another, related idea is that it is not the role of government to shield us from the consequences of misfortune or poor judgment, but to uphold our rights as we sort it out ourselves. It's a constituency that believes government's role in the life of the individual should be limited, as should it's budget. Issues thus far not involved in this coalition include abortion, gay rights, global warming and other hotly contested subjects that are left for another venue and another group.
This constituency has been left asking "Who will champion our cause? Where's the next Ronald Reagan? Who will defend our position?" Well, on April 15th 2009, they stopped asking and started defending themselves.
The problem with putting your fate in the hands of a political party is that they are really not sets of ideas, they are infrastructures for accomplishing a task; winning elections. As a party, they don't promote a limited scope of ideas or single issues, they adopt a number of issues and positions based partly on commonly held beliefs and partly on political expediency.
The Republican Party has spoken up for limited government and fiscal discipline, but has not lived up to the hype. Also, people who believe in capitalism, limited government and fiscal restraint, but don't tow the party line on other issues are ostracized. The same dynamic takes place in the Democrat party. You have to buy the whole package.
Whether you're liberal or conservative; capitalist, socialist or communist, you have to admire a group that refused to give up when a leader failed to emerge. The followers have become the leaders. This is in clear evidence as conservative politicians and pundits are now falling all over themselves trying to connect themselves to this movement.
I would caution members of this coalition not to allow it to get hijacked by a political party or to try to expand it to cover more issues. This is a unique movement of individuals promoting a specific set of ideas upon which they agree. At stake is whether future generations will work for the state or the state will work for them. Other issues can wait for another day, another rally, a different coalition, a different movement. No one who believes in ensuring the freedom of our descendants need be excluded because they also believe in something else. If we protect and respect each others individuality, we can work everything else out in time.
This constituency has been left asking "Who will champion our cause? Where's the next Ronald Reagan? Who will defend our position?" Well, on April 15th 2009, they stopped asking and started defending themselves.
The problem with putting your fate in the hands of a political party is that they are really not sets of ideas, they are infrastructures for accomplishing a task; winning elections. As a party, they don't promote a limited scope of ideas or single issues, they adopt a number of issues and positions based partly on commonly held beliefs and partly on political expediency.
The Republican Party has spoken up for limited government and fiscal discipline, but has not lived up to the hype. Also, people who believe in capitalism, limited government and fiscal restraint, but don't tow the party line on other issues are ostracized. The same dynamic takes place in the Democrat party. You have to buy the whole package.
Whether you're liberal or conservative; capitalist, socialist or communist, you have to admire a group that refused to give up when a leader failed to emerge. The followers have become the leaders. This is in clear evidence as conservative politicians and pundits are now falling all over themselves trying to connect themselves to this movement.
I would caution members of this coalition not to allow it to get hijacked by a political party or to try to expand it to cover more issues. This is a unique movement of individuals promoting a specific set of ideas upon which they agree. At stake is whether future generations will work for the state or the state will work for them. Other issues can wait for another day, another rally, a different coalition, a different movement. No one who believes in ensuring the freedom of our descendants need be excluded because they also believe in something else. If we protect and respect each others individuality, we can work everything else out in time.
Saturday, March 28, 2009
An economic highway to hell?
Will big government snuff out the recovery?
There have been small signs that the economy is ready to turn the corner on the downward part of the current economic cycle. Banks are talking about repaying TARP funds, the growth in unemployment has at least leveled off. Home sales, while still dismal, actually rose last month. One would expect the next leg to be increased lending by the banks as they come out of defensive mode and get back to competing for profits.
However, in the name of saving the economy the government is installing some huge circuit breakers on any up cycle in the economy. The deficit is nearly $2 trillion dollars. The stimulus package contained massive amounts of new, permanent spending. Much of the aid that was given to states and municipalities is covered by the federal government in the first years, but requires them to continue the spending in later years on their own. Increasing taxes can be politically tough. Expect to see higher fees, surcharges, licensing requirements and other forms of revenue collection by governments on all levels. Businesses could be forced to lay off workers or even go out of business due to their requirement to subsidize the unemployed.
Even as more and more scientists around the world warm up to the notion that the Earth's climate is far more dependent on the activity or lack of it, on the Sun than on man-made carbon emissions, and that we are far more likely to experience the ravages of global cooling in the coming decades than global warming it's full steam ahead for global warming advocates. The government is proposing a "cap and trade" system to regulate carbon emissions. Going over your carbon limit will necessitate that you buy "carbon credits" perhaps from companies that come in under their limit. Whether companies pay through the nose for the credits, spend more on technology to reduce their emissions, move overseas, or just close their doors, the cost of producing just about everything in this country is going to go up if this is enacted. There is nothing stimulating about it. Even if it worked exactly as intended and we go to a completely carbon free energy environment, the government will have received countless billions of dollars from carbon credits which may become obsolete. Do you think they're just going to shrug off all that revenue? They will tax the sun if that what it takes to keep the cash flow going.
Some kind of nationalized health care system may soon be coming our way, as well as increased government control over large businesses, the risks they take, the salaries the pay out, the investments they make. I've worked with civil servants. They're fine human beings. But among the rank and file, the bragging that goes on around the water cooler is about who gets paid the most to do the least. Those are the heros. Those are the one's the others look up to. That's what you shoot for. It's a bit different for celebrity civil servants of course, but they come and go. Most of the work is done by career folks with zero profit incentive. The path to advancement is based mainly on how many people you supervise and how big a budget you oversee. The incentives are to get more people in your department spending as much as possible. It doesn't really matter what they spend it on or how they spend their day, so long as it looks good on paper.
Even government leaders in Switzerland, France and England are now publicly voicing concern over runaway government spending in the U.S. Why do they care? Because if we go down, they go down. They know that big government is not the answer, it's a poison. We have been subsidizing big governments in Europe for decades. They don't want to see that cash cow disappear. The Czech premier got it right when he said that trying to spend our way out of recession puts us on the Highway to Hell, which, as you know is paved with good intentions. He actually said "way to hell" but later stated his comments were inspired by an AC/DC concert he had recently attended.
We all want a better country, a better world, but we're going the wrong way.
Wednesday, March 25, 2009
The Tea Party mentality
Tea Parties are popping up across the country. People see the government getting bigger, deficits ballooning. They're worried. They're angry. They're frustrated. Perhaps you're among them. If you think the country is moving in the wrong direction and you want to effectively communicate that, you first have to understand why. You have to have a firm grasp of the fundamental principals your seeking to promote. So what are they?
This is not about Republican or Democrat. This is about capitalism, free markets and free people.
Leaders in both major political parties have advanced the notion that capitalism is a necessary evil, evil being the key word. We're taught that selfishness is bad; that one should always serve a cause "higher than yourself". All of this is dead wrong.
Capitalism is not primarily about money. It's about making your self your top priority. Advancing your agenda. Setting your own priorities. Big government proponents want you to serve a purpose "higher than yourself". They don't even really care what that purpose is. The key is to convince you that you should subjegate yourself to something else; society, country, others. Others, by definition, is everyone except you. Once I've convinced you that you are not worthy of your own efforts and attention, I can set myself up as a representative of the higher, more worthy cause. Now I can use your own guilt to take your time, your labor, your intelligence and direct them toward my agenda. After all, working for me makes you a better person.
The truth is that when you take care of yourself, I don't have to. Your neighbors don't have to, your family and friends don't have to. You become an asset rather than a burden. If you regard yourself as a good person, capable of determining right from wrong and pursuing right, why would you not trust in your own priorities? Three hundred million individuals all focused on being the best person, by their own yardstick, that they can be is what will uplift this nation. Three hundred million people looking for direction from self-annointed leaders will not.
Support whatever cause you please. Help anyone you want. But you determine the who, what, where, why, when and for how long. Be your own cause and keep in mind that there is no cause higher than your self. Your integrity is your greatest asset. Your agenda matters. You matter. Know who you are. Know what you believe. Believe what you know. Take care of yourself.
We all want a better country; a better world. The basic conflict is whether you get there by empowering your self or surrendering your self. I submit that surrender is not the answer.
This is not about Republican or Democrat. This is about capitalism, free markets and free people.
Leaders in both major political parties have advanced the notion that capitalism is a necessary evil, evil being the key word. We're taught that selfishness is bad; that one should always serve a cause "higher than yourself". All of this is dead wrong.
Capitalism is not primarily about money. It's about making your self your top priority. Advancing your agenda. Setting your own priorities. Big government proponents want you to serve a purpose "higher than yourself". They don't even really care what that purpose is. The key is to convince you that you should subjegate yourself to something else; society, country, others. Others, by definition, is everyone except you. Once I've convinced you that you are not worthy of your own efforts and attention, I can set myself up as a representative of the higher, more worthy cause. Now I can use your own guilt to take your time, your labor, your intelligence and direct them toward my agenda. After all, working for me makes you a better person.
The truth is that when you take care of yourself, I don't have to. Your neighbors don't have to, your family and friends don't have to. You become an asset rather than a burden. If you regard yourself as a good person, capable of determining right from wrong and pursuing right, why would you not trust in your own priorities? Three hundred million individuals all focused on being the best person, by their own yardstick, that they can be is what will uplift this nation. Three hundred million people looking for direction from self-annointed leaders will not.
Support whatever cause you please. Help anyone you want. But you determine the who, what, where, why, when and for how long. Be your own cause and keep in mind that there is no cause higher than your self. Your integrity is your greatest asset. Your agenda matters. You matter. Know who you are. Know what you believe. Believe what you know. Take care of yourself.
We all want a better country; a better world. The basic conflict is whether you get there by empowering your self or surrendering your self. I submit that surrender is not the answer.
Saturday, March 7, 2009
The hope from audacity
If government spending and increasing fees and taxes have you scared, take heart. It seems even some liberal democrats are experiencing sticker shock. Senator Fiengold is among those who can't digest the amount of pork in the omnibus spending bill. The 9,000 earmarks have been excused by the administration and members of Congress because it was written last year. I guess if the robbery was planned in advance, it's okay.
But it's not flying with all members of Congress or the American public and the bill could well be headed for failure. This could be a hopeful sign that the general public is ready to get angry. Angry voters scare politicians and sometimes even force them to do the right thing. "Tea parties" are cropping up all over the country and some wealthier Americans are "going Galt". That's a reference to a character in Ayn Rand's 'Atlas Shrugged' who called a general strike among top producers. In real life, people are intentionally reducing their income to avoid becoming targets of a starving government spending monster.
It's not all about the money. People generally don't like being manipulated and they don't like the idea of working their tails off for "others" (others, by definition being anyone but you).
It may seem like the government is a runaway train when it comes to driving us deeper into debt and recession, but there is still hope. This country has the capacity to turn on a dime. The question is, are people willing to face some pain now, or would they risk putting future generations in an impossible fiscal situation in a pathetic attempt to soften the blow?
But it's not flying with all members of Congress or the American public and the bill could well be headed for failure. This could be a hopeful sign that the general public is ready to get angry. Angry voters scare politicians and sometimes even force them to do the right thing. "Tea parties" are cropping up all over the country and some wealthier Americans are "going Galt". That's a reference to a character in Ayn Rand's 'Atlas Shrugged' who called a general strike among top producers. In real life, people are intentionally reducing their income to avoid becoming targets of a starving government spending monster.
It's not all about the money. People generally don't like being manipulated and they don't like the idea of working their tails off for "others" (others, by definition being anyone but you).
It may seem like the government is a runaway train when it comes to driving us deeper into debt and recession, but there is still hope. This country has the capacity to turn on a dime. The question is, are people willing to face some pain now, or would they risk putting future generations in an impossible fiscal situation in a pathetic attempt to soften the blow?
Saturday, February 28, 2009
Give the people what they want
Perhaps we have to lose everything before we can begin to get it back.
I have been frustrated over the years by the fact that capitalists have not done much to defend or communicate their beliefs. Maybe they don't understand them themselves. Capitalism is not all about money. It's about freedom and creativity and an economic system that compliments human nature rather than trying to suppress it.
However, I'm beginning to believe that there might be some wisdom in standing down and letting the people have what they think they want. What they think they want is security. They want to be fed, housed and cared for. They don't want to have to stress and worry about how to take care of themselves and their families. They believe that the government can make this happen.
The fact is, the more the government takes over the functions of the free market, the worse our economic situation is going to get. Incentives for producers are rapidly disappearing. The level of government debt is getting so enormous that any sector, industry, company or individual that has a degree of success better than average is going to be targeted a revenue source. Eventually, we may indeed all be more equal. We will be equally poor. We will have a Soviet style society where toilet paper is a hot commodity. Health care will be free, and dangerous. You will be employed, but the government will tell you where you'll work, what you'll produce and to what specifications. This will come about as more and more industries are "temporarily" nationalized for the public good.
But, enough with the dire predictions. There's nothing left to do now but watch it play out. This is what the people demanded. I believe we will find out fairly quickly if what they thought they wanted was what they really wanted. You can have all the security you asked for. All it will cost you is your self.
I have been frustrated over the years by the fact that capitalists have not done much to defend or communicate their beliefs. Maybe they don't understand them themselves. Capitalism is not all about money. It's about freedom and creativity and an economic system that compliments human nature rather than trying to suppress it.
However, I'm beginning to believe that there might be some wisdom in standing down and letting the people have what they think they want. What they think they want is security. They want to be fed, housed and cared for. They don't want to have to stress and worry about how to take care of themselves and their families. They believe that the government can make this happen.
The fact is, the more the government takes over the functions of the free market, the worse our economic situation is going to get. Incentives for producers are rapidly disappearing. The level of government debt is getting so enormous that any sector, industry, company or individual that has a degree of success better than average is going to be targeted a revenue source. Eventually, we may indeed all be more equal. We will be equally poor. We will have a Soviet style society where toilet paper is a hot commodity. Health care will be free, and dangerous. You will be employed, but the government will tell you where you'll work, what you'll produce and to what specifications. This will come about as more and more industries are "temporarily" nationalized for the public good.
But, enough with the dire predictions. There's nothing left to do now but watch it play out. This is what the people demanded. I believe we will find out fairly quickly if what they thought they wanted was what they really wanted. You can have all the security you asked for. All it will cost you is your self.
Wednesday, February 25, 2009
The fig leaf of "regulation"
In his recent address to a joint session of Congress, one of the things President Obama pointed to as causing our current financial crisis was "the gutting of regulations". That's a nice generalization and it conveniently gets everyone off the hook, as it implies that everyone responsible was operating within the law.
In fact the catalyst for this crisis was what has become known as "toxic assets". That is, complicated derivatives based on very risky loans made to high risk individuals. Evidently these investment products, which were largely purchased by major financial institutions, were so complicated that even the buyers weren't and aren't sure how they work or what they're really worth.
Who designed these derivatives? I mean, specifically, what are their names? Who marketed them? What about the "best and brightest" CEO's and execs in the banking industry that bought them without knowing what they were buying? Who made these purchase decisions? What are their names and how do they explain their actions? Where was Congressional and federal oversight when these derivatives were being created and sold? How do you get approval to market an investment vehicle nobody understands?
I submit there are players who knew full well this thing was going to blow up, but laundered the make up of the derivatives and stroked their politicians so well they were able to successfully dupe the whole country out of trillions of dollars. Who knew what and when did they know it?
We may never know the answers to these questions because the Bush administration and then the Obama administration as well as Congress called for trillions of taxpayer dollars to bury the problem rather than a full investigation to unmask it. The federal government could have allowed the major banks to fail (creating a huge opportunity for others), let the consequences play out and expose and hold accountable the individuals who, over decades, concocted this Ponzi scheme. Instead, they took the cowards' way out. They criticize entire classes of people and industries because a true search for the truth might leave them fully exposed. They generically call for "stricter regulations" because they don't want an investigation. They hope to pass this off as a natural consequence of capitalism and "too free" markets rather than a continuing deception. If they get away with it, and they probably will, it will happen again, and again, and again.
In fact the catalyst for this crisis was what has become known as "toxic assets". That is, complicated derivatives based on very risky loans made to high risk individuals. Evidently these investment products, which were largely purchased by major financial institutions, were so complicated that even the buyers weren't and aren't sure how they work or what they're really worth.
Who designed these derivatives? I mean, specifically, what are their names? Who marketed them? What about the "best and brightest" CEO's and execs in the banking industry that bought them without knowing what they were buying? Who made these purchase decisions? What are their names and how do they explain their actions? Where was Congressional and federal oversight when these derivatives were being created and sold? How do you get approval to market an investment vehicle nobody understands?
I submit there are players who knew full well this thing was going to blow up, but laundered the make up of the derivatives and stroked their politicians so well they were able to successfully dupe the whole country out of trillions of dollars. Who knew what and when did they know it?
We may never know the answers to these questions because the Bush administration and then the Obama administration as well as Congress called for trillions of taxpayer dollars to bury the problem rather than a full investigation to unmask it. The federal government could have allowed the major banks to fail (creating a huge opportunity for others), let the consequences play out and expose and hold accountable the individuals who, over decades, concocted this Ponzi scheme. Instead, they took the cowards' way out. They criticize entire classes of people and industries because a true search for the truth might leave them fully exposed. They generically call for "stricter regulations" because they don't want an investigation. They hope to pass this off as a natural consequence of capitalism and "too free" markets rather than a continuing deception. If they get away with it, and they probably will, it will happen again, and again, and again.
Saturday, January 31, 2009
Don't throw out the baby with the bathwater
I don't expect the economic stimulus package, in any form, to save the economy. In fact, I expect the financial situation in this country to get worse; much worse. This is when we find out who we really are. Take away all of our goodies, our easy money, our leisurely comforts and what do you have left? What does it mean to be an American?
I submit that the thing that most ties us together is our Constitution and especially the Bill of Rights. It is the Covenant we have made with each other; our Ten Commandments.
The first thing we have to realize is that we absolutely can survive incompetence in government and even the total collapse of our financial and monetary system. It's okay to get angry, but don't panic. Our principals have not failed us. Our representatives have. We can replace our representatives without abandoning our principals. If we have to start from square one with our financial/monetary structure, we can do that too, but let's not tear up the foundation.
There is a fundamental battle going on between those who believe government's role is to enable opportunity and those who believe government's role is to direct the allocation of resources and provide for the basic needs of the people. The latter sounds more compassionate and has also been proven time and time again to be an abysmal failure. You can't redistribute wealth if you destroy the incentive to create wealth.
The Constitution and the Bill of Rights were designed to ensure that we never lose focus of the fact that the individual is the driver of economic success. Society is our servant, not our master. We engage it when and if it suits us, not because we are compelled to by a central authority. Government's job is to take the use or threat of force out of individual interactions, not to micro-manage those interactions.
We are at a turning point in history. We can make yet another amazing comeback or we can dive into the abyss. It's time to go back to the basics. A clear understanding of the ideals that made this the greatest country on Earth to date is essential to keeping it that way.
I submit that the thing that most ties us together is our Constitution and especially the Bill of Rights. It is the Covenant we have made with each other; our Ten Commandments.
The first thing we have to realize is that we absolutely can survive incompetence in government and even the total collapse of our financial and monetary system. It's okay to get angry, but don't panic. Our principals have not failed us. Our representatives have. We can replace our representatives without abandoning our principals. If we have to start from square one with our financial/monetary structure, we can do that too, but let's not tear up the foundation.
There is a fundamental battle going on between those who believe government's role is to enable opportunity and those who believe government's role is to direct the allocation of resources and provide for the basic needs of the people. The latter sounds more compassionate and has also been proven time and time again to be an abysmal failure. You can't redistribute wealth if you destroy the incentive to create wealth.
The Constitution and the Bill of Rights were designed to ensure that we never lose focus of the fact that the individual is the driver of economic success. Society is our servant, not our master. We engage it when and if it suits us, not because we are compelled to by a central authority. Government's job is to take the use or threat of force out of individual interactions, not to micro-manage those interactions.
We are at a turning point in history. We can make yet another amazing comeback or we can dive into the abyss. It's time to go back to the basics. A clear understanding of the ideals that made this the greatest country on Earth to date is essential to keeping it that way.
Friday, January 23, 2009
The best government stimulus plan; stand down
from Examiner.com
Ronald Reagan was right when he said the scariest words a person can hear are "I'm from the government, and I'm here to help."
If you hold government action on the economy in check, market cycles are fairly predictable. Low interest rates, falling real estate prices, companies going out of business, leads healthy companies and entrepreneurs to snap up assets on the cheap. Some people take huge losses, while others take advantage of huge opportunities and the new growth cycle begins. That's not happening today. The reason is that government has come to the rescue. In doing so it has caused so much uncertainty in the marketplace that making major investments in new projects and ideas at this point would be irresponsible and dangerous.
Nobody wants to commit sizable amounts of time resources and money into a company or project, only to find out six months later that the government has decided to subsidize a competing company or project. Who wants to hire 1,000 new workers only to find out later that their unemployment insurance has doubled and new benefits have been mandated. You don't want to borrow a lot of money right now and then have to refinance it in an environment of sky-rocketing interest rates due to runaway government debt.
Winners and losers, or at least survivors and non-survivors, are increasingly being selected by a handful of government policy makers rather than by 300 million individual consumers. Believe it or not, the mob is much easier to predict and more efficient at directing resources than any Washington committee, no matter how many degrees they have hanging on the wall.
If the government truly wants to help, they need to stand down. Have some faith in the American people. We can work this out. The road to the next Great Depression is paved with good intentions. Pull over and let us drive for a while.
Ronald Reagan was right when he said the scariest words a person can hear are "I'm from the government, and I'm here to help."
If you hold government action on the economy in check, market cycles are fairly predictable. Low interest rates, falling real estate prices, companies going out of business, leads healthy companies and entrepreneurs to snap up assets on the cheap. Some people take huge losses, while others take advantage of huge opportunities and the new growth cycle begins. That's not happening today. The reason is that government has come to the rescue. In doing so it has caused so much uncertainty in the marketplace that making major investments in new projects and ideas at this point would be irresponsible and dangerous.
Nobody wants to commit sizable amounts of time resources and money into a company or project, only to find out six months later that the government has decided to subsidize a competing company or project. Who wants to hire 1,000 new workers only to find out later that their unemployment insurance has doubled and new benefits have been mandated. You don't want to borrow a lot of money right now and then have to refinance it in an environment of sky-rocketing interest rates due to runaway government debt.
Winners and losers, or at least survivors and non-survivors, are increasingly being selected by a handful of government policy makers rather than by 300 million individual consumers. Believe it or not, the mob is much easier to predict and more efficient at directing resources than any Washington committee, no matter how many degrees they have hanging on the wall.
If the government truly wants to help, they need to stand down. Have some faith in the American people. We can work this out. The road to the next Great Depression is paved with good intentions. Pull over and let us drive for a while.
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