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.

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?