Saturday, December 31, 2011

On democracy versus a republic

“[The] illusion, that the democratic process is the same as liberty, is an ideal weapon for those few who may desire to destroy liberty and to replace it with some form of authoritarian society; innocent but ignorant persons are thereby made their dupes. Under the spell of this illusion, liberty is most likely lost and its loss not discovered until too late. Liberty can easily be taken from the individual citizen, piece by piece and always more and more, as more and more persons under the spell of the same illusion join the Pied Piper proceedings. Finally, all liberty is gone and can be recovered only by a bloody revolution.”

-- F.A. Harper
Harper, Dr. Floyd A. Liberty - A Path to Its Recovery. Irving-on-Hudson, NY: Foundation for Economic Education, The, 1949.

Additional reading:

Friday, December 30, 2011

On socialism, slavery and blacks in America

Social theorist George Fitzhugh justified slavery as a positive good: "Slavery here [in the U.S.] relieves" the African "from a far more cruel slavery in Africa.... It christianizes [sic], protects, supports and civilizes him; it governs him far better than free laborers at the North are governed.... The master labors for the slave, they exchange industrial value. But the capitalist, living on his income, gives nothing to his subjects. He lives by mere exploitations." Unlike the "wage slaves" (a term Fitzhugh coined), African-Americans were cared for from the cradle to the grave. "Slavery is a form, and the very best form, of socialism," Fitzhugh wrote in 1854.

[The above adapted from a speech by Robert M.S. McDonald, associate professor of history at the U.S. Military Academy.]

The tragedy is that Fitzhugh's arguments can be reframed to fit the subjugation of American blacks (and other minorities) to socialist welfare policies by Democrats and progressives today. Rewritten as:

"Welfare here in the U.S. relieves the African-Americans from a far more cruel slavery in Africa (or elsewhere).... Welfare protects and supports him; it controls him--assuring that he always knows who his 'master' is and to whom he owes his allegiance at the polls (namely, the Democrats). Welfare controls them far better than free laborers in free-market capitalism are controlled. One never knows how those folks might vote!?!

"In exchange for the African-American's unthinking support at the polls, election cycle after election cycle, the Democrats and progressives promise to care for him (poorly, but care for him, they will) from cradle to grave.

"We, the liberal politician 'masters' will 'labor for them.' We will do whatever is necessary to keep ourselves in a position of power so that we can also assure our 'control' over the votes of the African-Americans under our sway. And we will always endeavor to convince them of how much better off they are under welfare than under the 'exploitation' of the capitalist. We will accomplish this--with the assistance of the willing aid of a progressive media—by avoiding calling attention to the successful blacks who have managed to become successful 'runaway slaves', for we do not want too many others to believe that they might be better off away from the 'plantation' of the welfare state.

"Slavery to welfare is, after all, the very best form of socialism."

Thursday, December 29, 2011

Liberals enslave the poor to their poverty

It is ongoing liberal, so-called “progressive,” Democrat public policies that keep many minorities in the U.S. today enslaved, by and large, to programs that reduce their incentive to industry, commerce, and self-improvement. It is a further shame that such public policies and such ongoing class warfare is frequently encouraged by liberal-minded, power-hungry leadership within the minority communities themselves.

These programs function not only as a disincentive to work (i.e., actually have a job), but they also lead to the deterioration of minority neighborhoods as more and more (especially) males are jobless and on the streets day after day. Their hopeless state brought about through well-intentioned but dramatically misguided public welfare programs, leads to increased involvement with drugs and crime while two-parent homes dissolve because the welfare programs pay better when there is no 'bread-winner' in the household.

NOTE: If you don’t want to take my word for it, then at least click on the links in this post and read what is written there before contacting me. Thank you.

Wednesday, December 28, 2011

On what one cannot do when seeking real progress

The following is common mistakenly attributed to Abraham Lincoln:
You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong.
You cannot help small men by tearing down big men.
You cannot help the poor by destroying the rich.
You cannot lift the wage earner by pulling down the wage payer.
You cannot keep out of trouble by spending more than your income.
You cannot further brotherhood of men by inciting class hatred.
You cannot establish sound security on borrowed money.
You cannot build character and courage by taking away a man’s initiative.
You cannot really help men by having the government tax others to do for them what they can and should do for themselves.

The story for the misattribution goes all the way back to the original publication.

The quotation by this local preacher was printed on a flyer that bore Lincoln's Gettysburg Address on the other side. Some, at the time, apparently thought that both quotations to belong to Mr. Lincoln. It has been very commonly publicized as the words of Lincoln to this day.

Chances are, however, that our illustrious 16th President would have heartily endorsed the sentiment.

Tuesday, December 27, 2011

On compulsory education by the state

In 1932 there were 128,000 school districts in the United States. while today there are fewer than 15,000. This shrinkage and centralization of decision-making has gone on at the same time our student population has grown to twice its size. This is to say nothing of the hundreds of billions of dollars, taken from taxpayers and spent by local, state, and federal government on education. Sadly, the result of all of this centralization and excessive spending has been only to diminish the quality education and a grand decline in the results produced for the consumers—the students and their parents.

Moreover, public schools are increasingly imposing politicized, standardized, one-size-fits-all curricula that neither accommodate individual strengths nor correct for individual weaknesses.

Long before "Goals 2000" and its dubious federal education program predecessors, some people foresaw the way in which public schools were being and would continue to be used to impose a political agenda that in turn seeks to reinforce political support for government means and institutions.

Education continues to be one of the most politically charged issues in our national culture, and the conflicts over education in America are likely to grow more polarized and polarizing so long as the political control increases. Indeed, for centuries the political control of education has engendered social conflict, and even led to civil wars and revolutions.

It is time to completely rethink public education, to clearly understand and unashamedly admit what works and what does not work. Return local control to schools; let parents direct their children's education; return school tax monies to the taxpayers and let parents freely choose the schools they want their children to attend. Beyond that, eliminate the stranglehold of teachers unions and the education establishment—both proven failures—on every school in America.

Let's put students first—not the teachers’ unions.

Monday, December 26, 2011

I am opposed to socialism…

I am opposed to socialism

  • Because of its inhumanity
  • Because it saps the vitality of the human race, which has no vitality to spare
  • Because it lulls to indolence those who must struggle to survive
  • Because the theories of good men who are enthralled by its delusions are made the excuse of the wicked who would rather plunder than work
  • Because it stops enterprise, promotes laziness, exalts inefficiency, inspires hatred, checks production, assures waste and instills into the souls of the unfortunate and the weak hopes impossible of fruition whose inevitable blasting will add to the bitterness of their lot

Edward F. Adams

Sunday, December 25, 2011

The lie of international socialists (communists) as “liberators” and “champions of justice”

Communists and so-called “international socialists” portray themselves as democratic liberators and champions of justice, yet here is their 70 history beginning with1917:

  • 60 MILLION KILLED in the Soviet Union | 40% of these were executed directly by Communist officials
  • 66 MILLION IMPRISONED in Soviet prisons and concentration camps (GULAG)
  • At least half of these totals of killed and imprisoned were Christians
  • As late as 1982, there were still an estimated 10 MILLION people being IMPRISONED in about 1,000 concentration camps and prisons in the former U.S.S.R.
  • According to the International Red Cross, at least ONE MILLION people were IMPRISONED in the Soviet Union for "religious" offenses alone
  • There were OVER 500,000 IMPRISONED in political and religious concentration camps in Communist Vietnam. (Que Me, 1985)
  • More than ONE MILLION Afghans were KILLED by the Soviet Army between 1979 and 1985. (Helsinki Watch Committee, 1985)
  • Over THREE MILLION Cambodians (40% of the population) were KILLED by the Marxist Khmer Rouge during Pol Pot's reign of terror
  • About 1,800 Christian churches were forcibly closed by Marxists in Ethiopia during early 1985

It is worth remembering that a good many labor union leaders in the U.S. are also big supporters of communism or international socialism.

Communists also say the oppose aggression and are peace-loving. But look at their record:

Lastly, Communists claim to oppose colonialism for “democratic” reasons, but the Soviet Union was the last major colonial power on earth. Native Russians made up only half the population of the USSR. There were 63 major national groups and more than 127 languages engulfed by the Soviet colonialism.

Never trust a Leftists!

Saturday, December 24, 2011

Stop blaming the CEO’s—it’s the way we invest that’s killing us!

Day by day, the leading corporations of the United States are growing more and more disconnected from the U.S. economy. Their interests are less and less attached to those of our workers and our consumers. Worse: they are becoming indifferent to our own nation’s economic future.

A decade ago, only 32 percent of income for firms listed in Standard & Poor’s index of the 500 largest publicly-traded U.S. firms (S&P 500) came from sources outside the United States. However, by 2008 that figure had grown to nearly half—48 percent.

A 2008 survey conducted by Duke University’s Fuqua School of Business in conjunction with the Conference Board uncovered the fact that 53 percent of the 1,600 companies surveyed had an “offshoring strategy”—compared to only 22 percent three years earlier. The survey drew the conclusion that “very few” of the companies had any “plan to relocate activities back to the United States.”

Many of the companies that have tried—usually driven by unions—to maintain a significant production presence in the U.S. (such as the automobile industry) have been “hollowed-out” by year-on-year losses. Many of these losses can be traced to bad decisions for profit-taking in earlier years or unwise concessions to unions that management must have known could not be sustained in the long run.

What’s driving this trend?

Of course, we all know the answer to this question: It’s “profits,” stupid!

But there is more than that. The whole of the blame cannot be laid on the shoulders of the CEOs and the corporate boards.

Here’s why.

A little history on investment

Prior to the year 1924, most people who invested in a corporation did so for one of two reasons:

  1. Because they—or their advisor—believed the firm had opportunity for making profits. Not necessarily profits in the coming quarter, but in the long term.
  2. Because they had a sincere “investment” in the firm itself. They had a heartfelt interest in what the firm produced or did for people or the economy as a whole.

So, what happened in 1924?

The first modern mutual fund was created in 1924 in Boston, Massachusetts. This began a dramatic shift in the way investors were connected—or, rather, disconnected—from the firms in which they made investments.

Mutual funds removed any sense of heart-felt investment in the long-term good of the firms in which the monetary investments reside. In fact, it removed the investor by one full step from his or her investments. Mutual funds are a dispassionate “yield” instrument only.

Paper entrepreneurs

Here’s how the picture has changed. In the pre-mutual fund days, most investors had a relatively direct connection with their investments and the companies in which they were invested.

Investor –> Corporation

In those days, larger investors took a personal interest in their investments and not infrequently attended stockholder meetings. They, more often than not, had a longer view of their investments and were looking out for the long-term profitability of the businesses in which they invested their funds.

However, as open-ended mutual funds grew from 19 in 1929 to more than 100 by 1954, Wall Street investment bankers began to see that the middle class could become a great source for new capital investment (and profits for the investment bankers, of course).

By the end of the 1960s, there were about 270 mutual funds supplying $48 billion in capital. The introduction of bank “money market” funds in the late 1970s boost growth even more. Then the real explosion came when Congress introduced tax-favored treatment for such investments through Individual Retirement Accounts (IRAs), 401(k)s and other defined-contribution plans.

Today, while a great number of middle class Americans are invested in the stock market, the vast, vast majority of them would be unable to name any single corporation in which they hold investments. They are entirely disconnected and interested in one and only one factor: the yield on their investments.

Today the picture looks like this:

Investor –> Fund Manager –> Mutual Fund –> Corporation

As I said, the investor has one and only one interest in his investment: yield—especially short-term yield. (Since this is the “McDonald’s generation,” everything is expected to happen fast or impatience sets in.) Between the investor and his money sits the fund manager. The fund manager also has only one interest: the short-term yield on the fund. His or her interest is driven by a couple of concerns:

  • Short-term yield will attract new assets to the fund, likely contributing to the fund manager’s bonus
  • Short-term yield will keep assets from leaving the fund, also contributing to higher bonuses in all likelihood
  • Short-term yield will increase the earnings of the fund, which is also likely a metric by which the fund manager is measured and compensated

I think you get the picture. The fund manager will measure every investment in corporations by short-term returns on investment (ROI) and the likelihood of future short-term returns. This is why I inserted the “mutual fund” as an entity between the fund manager and the corporation in which the fund is invested. It is likely that the fund manager views the fund as a entity in and of itself and its individual corporate investments as only vehicles for yield on the fund. He has no real interest—beyond short-term yield estimates—in any of the corporations in which the fund is invested.

The tail wags the dog

Formerly, CEOs at corporations were wise enough to not sacrifice a firm’s future for short-term profits. They were careful not to consume the company’s long-term future in pursuit of profits in the coming quarter.

But that was back in the days when the investors were invested in the firm with both their money and their hearts (and, sometimes, their souls). That was back in the days when an investor might show up in the CEOs office or at a board meeting and upbraid management for not taking a longer view toward the success of the firm.

Those days are gone for almost all publicly-held companies.

Mutual fund managers can make or break a company today by moving hundreds of millions of dollars from one company to another based solely on the prospect of short-term returns on investment. The fund managers care not one iota about the long-term success of the firms, and the investors in the mutual funds care even less.

So, what do CEOs do?

CEOs of publicly-held corporations seek only one thing: short-term profits. Boards of directors hire and compensate CEOs for this one objective because they know the dramatic loss of market capital that might be incurred if major fund managers decide to disinvest in their firms.

Local interests cannot play a part

It is America’s investment strategy that has driven this. It is because American investors are disconnected from their investments that CEOs are driven to this end.

It is America’s investment methods that have driven CEOs to lose interest in the American economy. The investors do not care whether the profits that bring yields to their 401(k) or IRA come from off-shoring or from selling products in South America or on the African continent.

Unlike prior American recessions—including the so-called “Great Depression—this recession is the first in American history from which corporate profits can rebound without rehiring of large numbers of American workers.

Politicians and the mainstream media blame the “greedy” capitalists and the capitalist system

The politicians ought to look at their own policies. It is the preferential tax treatment given by Congress to instruments like IRAs and similar investment vehicles that have made the mutual fund market explode. Politicians ought to consider revamping every market intervention that makes “paper entrepreneurs”—instead of old-fashioned “investors”—a primary source for capital in the markets.

Actually, corporations that are not publicly-held are more likely to have a local and regional interest in our American economy and the American worker.

In the past, downwardly-mobile American consumers would have created problems for U.S. corporations. Today, since more and more profits come to these corporations from markets in other nations, this is far less a concern to them. And, it should be noted, that the U.S. market emerging from the present recession is very much downwardly mobile. (I, personally, have taken a 29 percent pay-cut in the last two years.)

The German model

U.S. politicians could learn a lot by looking at the German model for business financing. In Germany, city-owned savings banks provide funds to enable enterprises, especially family-owned (read: passionately invested) mid-sized businesses, to grow and prosper. The same locally-based financing gives these businesses what they need to grow and become involved in exporting their products. Nearly two out of three of Germany’s small-to-mid-sized businesses get their funding from these local banks.

The funding links and limits these enterprises to doing business in the local markets, thus building both their local economies and the larger economy of Germany as a nation.

Sadly, no similar localism can be found in America’s investment model. Our brand of capitalism and dispassionate investment drives our corporations to move more and more of their part of economic growth and hiring away from the U.S.

The answer is not more regulation of corporations. The answer is a radical restructuring of our investment and financing model for American businesses.

Friday, December 23, 2011

A political strategy for real recovery

The required systemic transformation of our now much-corrupted American republic cannot be simply an exercise in applied economics nor an application of political science. It must be understood that these changes will involve real human beings and will affect their day-to-day lives.

In the short-term, the dramatic, but necessary, changes will create new groups of “winners” and “losers.” I say, "short-term" because, as the market re-balances itself as government interventions are removed and taxes are reduced, the "short-term" losers will still be long-term gainers through economic growth, the return of prosperity, lower unemployment, a sounder dollar, and rising wages.

Nevertheless, the relative political and economic strength of various so-called “special interest” groups will shift as the transformations occur. And, in order to be successful, you—as the leaders—must clearly formulate, clearly articulate and, indeed, "sell" these necessary changes to the voters with a positive and compelling vision for the future. (By “successful” I mean, here, having the practical ability to create and maintain sufficient political capital to keep the restoration of the republic moving forward.)

The first and most important task must the formulation of a unified vision within the political caucus itself. Every member must learn to speak with the same voice, reinforce the same concepts, and deliver the same positive vision in every public discourse. The vision must be straightforward. It cannot be "fuzzy." And, it must motivate. It must effectively move the hearts—not just the heads—of men and women in the center of political spectrum.

Doing this will require clarity in both “yes” responses and “no” responses to the questioning press and electorate. The clear, articulate, well-considered answers must be stated in an "ideal" form—as a “visions”, while acknowledging that reaching the ideal will take time and will require a process.

Most importantly, the vision must clearly reject all the apparent alternative means and half-measures or you will have lost your path. Half-measures will never do the job.

In fact, half-measures are worst of all, because following the failure of half-measures (and they will fail) the public—and your opponents—will say, "We've given you your chance; we've given your methods a try; and we are little improved. Now, we'll do it our way." You will have squandered your cache of political capital.

It will be necessary to make temporary accommodations for the those who see themselves as "losers" in certain transformations (e.g., public sector employees, trade unions, entitlement recipients and more). While this is necessary, make it clearly understood why it is necessary and why such accommodations are temporary. Then stick to your guns.

Remember: "Selling" the vision is much more difficult and complicated than it first appears. It will require you and your team to address the people directly and clearly; to present your arguments compellingly and with conviction; and to be prepared to defend against the arguments that will naturally be cast against your vision. Every possible argument that might be set forth by your opponents in the press or at the polls must be anticipated and a rational, succinct response prepared. Doing this will require careful planning, considerable forethought and no small amount of endurance.

We are here to help.

Thursday, December 22, 2011

What the Democrats have done for (or, rather, “to”) blacks

Let's review:
  • Democrats fought against the Republicans of the ‘Grand Ol’ Party’ (GOP) to protect slavery
  • Democrats invented the Ku Klux Klan (KKK), and until recently had a former Klansman was third-in-line to be president of the United States
  • Democrats fought Republican attempts to integrate the schools (Remember Governor George Wallace?)
  • In the 2008 election, some Democrats called blacks "lazy," "violent" or responsible for their own troubles, and many refused to vote for a black president
  • Democrats stripped blacks of parental choice in Washington, DC, and forced their children back into disastrous government-run schools...after Republicans had liberated them (Then the Republican Party had to liberate the once again)
  • Democrats published vicious cartoons of Condi Rice as an ignorant mammy sputtering sentence fragments and as a parrot with giant lips...and called Clarence Thomas everything from "lawn jockey" to "Oreo"
  • And to this day, Democrats continue to cheapen and taint black accomplishments through lowered standards and racist preferential treatment in schools and in the workplace (e.g., affirmative action)—refusing to acknowledge that blacks can, indeed, stand on their own two feet and on their own merits
  • In fact, until Democrats began pandering to blacks and making them dependent on government, the black community didn't even have the rampant crime, divorce, illegitimacy, abortions,  et cetera that now plague it relentlessly
  • As with virtually everything liberals and progressives do, the more they have "helped" blacks, the further down the toilet the black community has gone
  • The Left has systematically taught blacks to be angry, paranoid bigots hyperventilating over every little injustice, no matter how trivial or even imagined...and now, Democrats think blacks should be grateful.

Wednesday, December 21, 2011

On capitalism and exploitation (falsely so-called)

The “Occupy Wall Street” (OWS) crowd and others have frequently used the terms "capitalist" and "exploit" together where "exploit" is referenced in its negative connotation. Many times this application of the term refers to the "exploitation" of foreign workers. While acknowledging that, surely, some workers worldwide are likely subjected to truly coercive means (genuine "slave labor"), the "exploitation" term is wrongly applied on a far larger scale—generally by those with concealed motives or out of pure ignorance. Allow me to tell you why I say this.

For twelve-and-a-half years I lived in El Paso, Texas, which, as you may know, lies just across the Rio Grande from Ciudad Juarez, Mexico. As a businessman, I had reason to know something of the so-called "Twin Plant" operations (or maquiladoras), where U.S. companies frequently had facilities both in Juarez and El Paso. I also knew folks who lived in Juarez, Mexico, on a personal basis and had reason to converse with them on many topics.

At the time (mid-1980s), the typical U.S. plant in Juarez was paying workers something under two dollars per hour (I don't recall the precise figures). The typical U.S. plant was relatively new, air conditioned, well-lighted, and the firm provided safety training and safety gear to its workers. In many cases the U.S. firm also provided a cafeteria for the workers; and in some cases, these U.S. companies also provided on-site day-care for working mothers. Working at, let us say, $1.75 per hour, a worker in such a plant could make $70 in a normal 40-hour week, not including the value of the fringe benefits such as day-care or a free company cafeteria.

Also, however, among my personal acquaintances, was a typical young woman who worked for a Mexican employer—a baking company. This woman worked in a hot (not air conditioned) bakery for up to 60 hours a week. There was no company cafeteria and no on-site child-care paid at the expense of her employer. This young woman took home, on average, $11 to $16 (US) per week. That amounts to pay in the range of thirty cents ($0.30 US) an hour.

The differences between the working conditions and pay supplied by that nasty old U.S. company "exploiting" Mexican workers (as folks ignorantly decried) versus the working conditions and pay at that fine, wholesome, and upstanding Mexican firm explained clearly why—for every opening at the U.S. company's plant—there were more than 300 people just standing in line, waiting to "exploited" under such circumstances. These Mexican workers could not wait to be "exploited" at five or six times the pay, and working a 50 percent shorter workweek!

It is impossible to compare wages across such economic boundaries. No, $1.75 per hour—even in the 1980s—would not be a living wage for a man with a family in the U.S. But for a worker in Mexico, it was a rich wage for which they were more than grateful.

Exploitation, in its negative connotation, cannot happen in the absence of coercion or fraud. Most U.S. firms—I am convinced—do not participate willingly in situations where fraud or coercion is being used to unfairly extract labors from people—any people. Nevertheless, thousands of ill-informed people—especially those with strong allegiances to unions—will wrongfully call what the U.S. firm  was doing (as described above) "exploitation." It is, but only in the positive connotation of the term. (If you don't know what that is, then look it up. You need to understand it.)

Tuesday, December 20, 2011

Who is a capitalist?

What is a Capitalist? Or, rather, who is a capitalist?

HE'S COMMERCE with a smile on his face. He's REAL PROGRESS standing behind a counter, in a factory, or behind a desk.

Capitalists are the heartbeat of every Main Street in America. In fact, progress all over the world really stems from the risks the capitalists are willing to take.

Every man, woman or couple that decides to risk home and life savings by opening a new business is a capitalist.

Capitalists comes in all sizes, shapes and temperaments. There are tall, sad capitalists who sell hardware; and short, happy capitalists who manufacture shoes or produce software.

There are young capitalists who have taken over the family farm to grow and sell hay. There are old capitalists who still run the family clothing store chain and pay wages to thousands of folks on their payrolls.

A capitalist might be rich and powerful--but most are not. Or he may be small and energetic—most are—and he has risked it ALL to open the little shop around the corner from where YOU and I live.

But either way, rich or small, large or medium, he's the great American businessman who spins the wheels of trade and meshes the economic gears of the nation.

He's a capitalist.

He's a good neighbor back of a cash register, a desk or a milling machine. He's freedom with the front door of his business open to you!

He's America's greatest host and largest employer.

Each business morning he opens his glittering stores and displays what's fine in the world for all to buy at prices you can afford.

He creates, manufactures and/or sells bathtubs, wonder drugs, lumber, automobiles, bread, books, and much, much more.

He is the godfather of better living for you and me by supplying us with wages and helping to drive prices down through production—so our wages will go further and buy more to satisfy our needs and desires. He's the man who buys tomorrow at wholesale in the hope of pleasing YOU.

Yes! He's a capitalist!

He's also a philosopher with a fixed daily overhead and a diplomat with a file full of accounts receivable.

He's the community philanthropist who helps build hospitals, and helps pay for schools. He's the spark plug of every community producing benefits for others while seeking some profit for himself.

He's a capitalist.

Landlords love him because his payroll helps thousands of renters pay their rent on time. Bankers respect him because they understand the risk he undertakes day after day.

We, the customers depend on him.

He keeps the factories of the nation alive. His constant freight moves the overland trucks and the nation's railroad cars. His payroll churns the community's economy.

He's a capitalist.

He likes: Quality merchandise, people who pay their bills, modern stores, clean sidewalks, shiny store windows, good checks, a healthy economy, happy customers, courteous salesmen, the Chamber of Commerce, and Christmas.
He dislikes: Inferior merchandise, shoplifters, checks that bounce, rainy days, fly-by-night salesmen, dirty show windows, and unpaid bills.

He's a buyer and he's a seller. He's a gambler, betting his own money on what will may YOU and ME—his customers—happier tomorrow than they are today.
He's proprietor, a tax collector for the state, a bookkeeper, a straw boss, a messenger boy, an efficiency expert, a cashier, a credit manager, a trouble shooter, an order filler, a payroll clerk, a bill collector, a "Yes" man, a "No" man, and a civic builder.

He's the hardest-working, most valuable man on every Main Street.

He's a capitalist.

Monday, December 19, 2011

Big Government damages the economy, reduces wages, and more

Without being overly dramatic, it is a fair statement that the presence of government is, in itself, induces economic distortions into the economy. This is true for at least two reason:

  1. Taxes, collected in any form to support government operations, change the basis of economic calculation and take resources (e.g., capital, manpower) out of the private economy
  2. Government regulations take further resources from the private economy, by forcing businesses to employ capital and manpower in efforts to comply with these regulations

The larger government grows, the taxes it takes to support it and the more regulations it promulgates, the greater the economic distortions. However, the effect of government growth (as a percent of GDP) is not linear. Instead, as government grows beyond a certain point, the curve turns upward exponentially.

Exponential Curve

Texas A&M University’s Edgar Browning, writing in Stealing From Each Other (2008), concludes that out own excessive government reduces average incomes in the U.S. by about 25 percent. The more the U.S. politicians insist on growing spending, the more average American incomes will be squeezed downward.

Mind you, the squeezing will occur only against the middle class. The extremely wealthy—especially those connected with international banking and capital brokerages (Wall Street)—are affected by this squeeze. Similarly, those at the bottom of the economy are not greatly affected. They are sheltered mostly because they are being propped up through (damaging) government entitlements and supports (e.g., welfare, minimum wage mandates).

There’s more damage

As government grows, the more it creates a top-down bureaucracy that was formerly alien to our American tradition of individual liberty. The growth in federal power and over-regulation tends to destroy both diversity and innovation in state and local governments by seeking to impose nationwide uniformity through its rules. Federal aid to states is always accompanied by reams of regulations that reduce freedom and operating choices.

In short—whether we run trillion-dollar deficits or not—cutting federal spending is beneficial because the cuts automatically contribute to the dispersion of power (back to the states) and the expansion of liberty.

Sunday, December 18, 2011

Trade tariffs, protectionism and the damage done

Recently I have heard many folks make an argument for saving or restoring America’s manufacturing base by erecting protective tariffs. I believe we need to resurrect manufacturing in the U.S., but trade barriers is not the way to go about it.

Here’s why:

If American industry can manufacture a widget that would sell for $20, but a foreign competitor can manufacture an equivalent widget to sell for $10, frequently the widget industry (or an allied trade union) will ask Congress to put a tariff on imported widgets to "level the playing field."

So, let's see what that does to our economy.

This action means that every American now has to pay $20 for every widget. If it is made in the U.S., then some lucky Americans might get a better wage as a result. However, every American pays the price. The extra $10 that goes to the widget industry means there is less money for every other industry—less money for Americans to spend on fuel, food, housing, clothes, movies, and so on. So, a very small number of American benefit at the expense of every other American who wants or needs to buy a widget.

But, the case is even worse if the Americans actually prefer the foreign-made widgets. If the widgets are imported to meet demand, every American still has to pay $20 for a widget. Some of that money goes back to the foreign country where the widget was made; but the other $10—the tariff money—simply goes to the U.S. government and adds nothing to the producing economy at all.

And, since raising the price here in the U.S. means sales will be lower to the foreign country, the foreign country now has less money to buy American goods that it might otherwise buy from us. This, too, damages the U.S. economy and workers in every American industry.

Again every American is a loser as a result. Prices are higher on the products we buy and we can sell fewer goods and services to foreign nations. The size of our economy is diminished—all to protect one small group (a “special interest”), not Americans, in general, or the American economy.

It's a loss for everyone in the long run.

For another view on what is really driving manufacturing jobs out of the U.S., read this article on how and why we pay the CEO’s of our nation’s publicly-held companies. We have met the enemy, and it is us!

Saturday, December 17, 2011

Arguments for abolishing the Department of Homeland Security

After September 11,200 1, the Department of Homeland Security [DHS] was created to improve federal counterterrorism efforts. David Rittgers, legal policy analyst at Cato [Institute], makes a compelling argument chat this was a mistake. In “Abolish the Department of Homeland Security” (Policy Analysis No. 683), Rittgers explains that the fundamental problem is the department’s structure. “Creating DHS resulted in an unwieldy organization,” he writes—one that failed · for three distinct reasons.

First, it has too many disparate subdivisions. The department’s “massive portfolio of responsibility” has created an oversight nightmare: as just one example, there are now 108 separate congressional committees and panels with jurisdiction over DHS operations.

Second, it is known for its wasteful spending. The grants that DHS has bestowed upon different localities are simply “an unequivocal handout to the states”—pork that includes funds for “unused biological warfare equipment, armored vehicles, and extravagant border checkpoints.”

Finally, DHS duplicates the work of other agencies. “Domestic counterterrorism is a law enforcement function,” Rittgers writes, and efforts to coordinate these activities under one umbrella have created bureaucratic redundancies. Rittgers traces the creation and expansion of DHS, carefully dissecting its appropriation of airport security, the rise of fusion centers, and the trend of politicized threat reporting. Ultimately, the reorganization was not only costly, but also unnecessary. “Terrorism remains a serious problem,” he concludes, “but a sprawling Department of Homeland Security is not the proper way to address that threat.”

From the Cato Policy Report (Nov/Dec 2011)

Friday, December 16, 2011

Big Government spending and the Economic “Wreckovery”

Chris Edwards, director of tax policy studies at the Cato Institute and editor of, points out that “[d]ata from the Organization for Economic Cooperation and Development (OECD)  show that total federal, state, and local government spending in the United States this year (2011) is a huge 41 percent of GDP [Gross Domestic Product]. That compares to the average of the 32 advanced economies in the OECD of 45 percent. Until the big-spending Bush and Obama years, we enjoyed a government size advantage compared to the OECD average of about 10 percentage  points of GDP. But that advantage has now shrunk to just 4 points, and we are fast becoming just another bloated welfare state.” (Cato Policy Report, Nov/Dec 2011)

What this means is that more and more of our economic resources are being shifted from producers (those who produce goods and services for consumption) to non-producers (those who produce no goods or services for consumption).

“What difference does this make?” I hear you ask? “Doesn’t government spending ‘stimulate’ the economy?”

The answer is a resounding, “No!”

If the economy is stimulated by government spending, then we should not restrict ourselves to building four-lane highways. We should build eight- and 16-lane highways everywhere. In fact, we really should invest in “bridges to nowhere” and even in “highways to nowhere.” Maybe would should even start a program where four lanes are being jackhammered away while the citizens use the other four lanes. Then, when the jackhammered lanes have been rebuilt, shift the traffic onto those lanes and jackhammer the first four lanes and rebuild them. Then just keep repeating that cycle.

If a little bit of spending by the government is good for the economy, then all that spending should have the economy skyrocketing.

However, with all that money is being taken out the private sector economy and more and more workers and money being used to build roads and bridges and whatever government decides to undertake, that leave less money in the economy and fewer workers to produce what consumers (read: citizens and taxpayers) need day-to-day. There would be less food produced, less gasoline being refined and delivered, fewer automobiles being produced, fewer coffee shops to go to, fewer movies being made and fewer theaters in which to watch them—in short, less of everything.

And, since supply influences prices, that also means that the prices of all those goods and services would be going up. There might be more money circulating due to the wages being paid for all the public works projects, but all that money would be chasing fewer and fewer goods until no one could afford to buy anything.

Edwards tells us: “Stanford University’s Michael Boskin calls government spending a ‘leaky bucket’ because the benefits are a fraction of the cost. For every $1 spent on a government program, the required taxes cause about $1.50 of damage to the private economy. And because programs are so inefficient, every $1 of spending may only produce a return of perhaps 50 cents. Thus, ‘it costs taxpayers $3 to provide a benefit worth $1 to recipients,’ notes Texas A&M University’s Edgar Browning.”

Let’s get real! Tell your Congressman and Senators that you’re onto the scheme and know that all that “stimulus” just leads to “wreckovery,” not recovery.

Thursday, December 15, 2011

Leftists, Liberals and the War on Liberty and the Economy

Edward H. Crane, president of Cato Institute, writing in “Cato Policy Report” (Nov/Dec 2011), properly characterizes the Left here in the U.S.:

Of course, the Left has pretty much given up any claim to being champions of liberty these days. Speech codes on campus and restrictions of political speech show their disdain for the First Amendment. Double-down on troops in Afghanistan? Okay if the president’s a liberal. Then there’s the Left’s profound ignorance on how wealth is created. They love to focus on how to alleviate poverty when the [real] answer is wealth creation. Poverty is the natural state of man. Prosperity requires free markets, respect for contracts, and protection of private property. No big secret, but it seems to escape the Left.

So you have the Obama administration trample centuries of business law [Common Law] by denying Chrysler bondholders their contractual right to be first in line for assets sales under bankruptcy, and instead giving those rights to the UAW [United Auto Workers union], which had no such claim [under the law]. Property rights abused; the difficulty in selling corporate debt increased. The earned income of the rich? We’ll just take it and give it to those who didn’t earn it. Property rights abused; the incentive to create wealth undermined.

Wednesday, December 14, 2011

Politicians’ addiction to spending, the value of the dollar, and ongoing inflation

Politicians have clearly seen opportunity after opportunity to buy, not only goods and services for the government, but votes for re-election and big bucks for their campaign coffers, without raising visible taxes.


They accomplish this feat through deficit spending augmented by a Federal Reserve System (FRS) willing to print U.S. dollars that have no specie metals backing them up. The Congress authorizes the FRS to print more money to cover their expenditures while the politicians avoid that whole nasty business of increasing taxes.

These actions by Washington politicians (and in Europe, too) are motivated by their audacity in believing one of two—or, perhaps, both—lies:

  1. The government is capable of getting something for nothing.
  2. The taxpayers are not smart enough to figure out what the politicians are doing to them, or the taxpayers are too involved in their own daily affairs to care.

Of course, if you and I were to print worthless currencies, we would be arrested and thrown in prison for a crime called “counterfeiting.” However, the politicians in Washington, D.C.—especially the radical leftists among them—call their authorizing the production of more and more increasingly worthless currency “a progressive monetary policy.”

What needs to be understood about this matter is this: Whether a private citizen produces currency back by no sound money (specie metals) or the government does it, the result (ultimately) is the same: monetary inflation.

It’s not the “wage-price spiral”

When prices rise—and continue to rise—one frequently hears statements like, “the unions are driving prices up.” Or, some others might say, “No. Management is driving prices up in search for higher profits.” But both of these arguments are wrong, in the final analysis.

Without the collaboration of the Federal Reserve and its printing of unbacked currency, neither labor nor management would be able to force prices upward. Labor would soon price itself out of the market, or management would drive prices to the level that business would soon shift to a competitive products, or competitors offering similar products at lower prices.

No. In the absence of monetary inflation, the so-called wage-price spiral would not be sustainable. So, if you’re looking for someone to blame for higher prices, look no further than the government and the governments’ (almost all national governments engage in the practice) willingness to spend too much while printing currency to cover all or part of their ongoing spending spree.

Tuesday, December 13, 2011

The “green religion” versus civilization as we know it

Ivan Brezina, writing in his article “Ecologism as a Green Religion” (2004), clearly and correctly draws the distinction between what he calls the “green religion” and “scientific ecology.” Brezina is a biologist by training, so he should certainly know.

Brezina does not consider environmentalism (or, “ecologism,” as he calls it) “a rational and scientific answer to a genuine ecological crisis.” Rather, he sees it as a general rejection of “the current form of civilization.” The radical thought of “green religion” is that hidden “in the very essence of modern society” are the seeds of some impending ecological disaster, even though the “green religion” adherents have been shown repeatedly to have to lie and distort their so-called “facts” and “findings” in order to “prove” (falsely) that this is so.

Czech economist Karel Kriz also sees environmentalism as “a new religion,” when he cleverly asks: “Who was responsible for the vanishing of the glaciers from the Czech mountains? Was it, perhaps, the Urnfield people?” The implication being, of course, that the vanishing of these glaciers far predated any of the forces the environmentalists now see at work in the modern society they are determined to undermine.

Think about it: If Al Gore really believed what he claims to believe, would he be living in a home known for its massive and wasteful use of electricity or flying a private jet hither and thither to garner large honorariums for speaking?

But, what do leaders and adherents to this “green religion” really believe? Consider this quote from Paul Ehrlich, professor of population studies at Stanford University, and author of The Population Bomb (1968):

“We’ve already had too much economic growth in the United States. Economic growth in rich countries like ours is the disease, not the cure.” [As quoted by Christopher C. Horner in The Politically Incorrect Guide to Global Warming (2007)]

They really do want to return America and the world to the scarcity, want and deprivation experienced by societies centuries ago and which innovation and hard work have striven to overcome.

See also:

Monday, December 12, 2011

The bizarre essence of environmentalism

“The bizarre essence of environmentalism becomes manifest when we observe how the character of the environmentalist attacks has changed over time—for the environmentalists, the particular object of the criticism is not that important. What is important is to evoke the sense of peril, to foresee a danger of undreamed-of magnitude, to show the acuteness of the threat. As this kind of atmosphere is created, a new obligation emerges: to act quickly (possibly right now), without paying attention to details or costs of the newly employed measure. In this atmosphere, the rule becomes to ignore entirely the opportunity costs (that is, the expenses and profit wasted by rearranging priorities); to omit the usual, allegedly slow procedures of representative democracy; to disregard the common, ordinary people (because explaining everything to them would be too time consuming); and to decide directly, with the aid of those who know how things work.” (p.5f)
Blue Planet in Green Shackles Vaclav Klaus
This brief excerpt explains both the duplicity of the anthropogenic global warming and climate change radicals and their willingness to bypass the normal controls and limits established by a constitutionally limited democratic republic.

Sunday, December 11, 2011

Spelling Lesson… Test on Nov. 6, 2012

The last four letters in American..........I Can
The last four letters in Republican........I Can
The last four letters in Democrats.........Rats

End of lesson. Test to follow in November 6, 2012

November 2012 is to be set aside as National Rodent (and RINO) Removal Month.

Saturday, December 10, 2011

Obama–The Post-Turtle President

It is becoming increasingly clear to me that Pres’ent Obama (I call him that in honor of the number of times he has chosen to vote “present” in his political career, and because he does not seem to know what to do when he is put into the situation where he cannot simply vote “present.”) is the “tool” of some large effort to damage America, the American economy and what we have known as the American way of life. Perhaps this effort is led by the likes of George Soros or other international money-brokers. Who knows?

Obama - PostTurtlePresident

I don’t like this “Change”!

Let’s change it back!

Remember to vote November 6, 2012, and get your friends and family to do the same.


Friday, December 9, 2011

Socialists have been effectively destroying human freedom…

“In the past 150 years (at least since Marx), the socialists have been very effectively destroying human freedom under humane and compassionate slogans, such as caring for man, ensuring social equality, and fostering social welfare. The environmentalists are doing the same under equally noble-minded slogans, expressing concern about nature more than people (recall their motto “Earth First!”). In both cases, the slogans have been (and still are) just a smokescreen. In both cases, the movements were (and are) completely about power, about the hegemony of the “chosen ones” (as they see themselves) over the rest of us [read: “the masses”], about the imposition of the only correct worldview (their own), about the remodeling of the world.” [p.6]

Blue Planet in Green Shackles by Vaclav Klaus

Thursday, December 8, 2011

Senator Al Franken and Big Government Hypocrisy on Privacy

Senator Al Franken claims to be concerned about your privacy, but he know that “the government… [actually pays] billions to corporations to spy on you, both for monitoring technologies and wiretap fees. So maybe the fears are not entirely unfounded. But surely people should recognize that without politicians to fund a huge government-industrial anti-terrorist/IP pirate complex, and without highly-regulated government-granted monopolies of telecom services, spying on your customers would not be a huge profit center.

“It gets worse. Senator Al Franken chairs the Senate’s Subcommittee on Privacy, Technology and the Law and is a co-sponsor of the COICA and PROTECT IP (SOPA) acts, which would create a censorship firewall around the USA in the name of protecting us from piracy and allow the government to seize any website without any due process whatsoever. He also voted twice to extend the Patriot Act – after many years of criticizing the Bush administration for the same. Furthermore, he is a leading champion of net neutrality – or ever stricter “fairness” rules for telecoms.” [Emphasis added.]

[Full article found here: ] Thanks to Mises Institute.

The government is concerned about your privacy, in much the same way that many politicians are concerned about private property rights. The primary concerns appears to be that we citizens might have too much privacy and too many private property rights.

Wednesday, December 7, 2011

The Case for Cuts

Chris Edwards, writing in the headline article for the Cato Policy Report, says,

“To avert a Greek-style fiscal train wreck, we need much larger spending reforms than the leaders of either party are currently talking about. Most experts agree that we need to reform Social Security and Medicare, but the reality is that we need to pursue cuts in every federal activity from A to Z – from agriculture subsidies to the National Zoo. We should cut entitlement benefits, aid to the states, subsidies to individuals and businesses, and military spending. In many cases we should eliminate whole programs, or privatize activities where possible to remove them from the federal budget altogether.”

Edwards is the director of tax policy studies at the Cato Institute and editor or

Tuesday, December 6, 2011

Part of the legacy of George W. Bush and the Republican Congress

Under George W. Bush and the Republican-controlled Congress there was an explosion in the growth of big government on virtually every front. Large increases in spending were accompanied by huge deficits and a doubling of the national debt. Corporatism exploded, too, in the form of bailouts and there was increasingly centralized power in education, expansion of Medicare and rapid growth in government regulation.

George W. Bush did not veto a single spending bill in his eight years in office.

Monday, December 5, 2011

Free Trade (or Politicians bought-and-sold)

"If politicians can determine what can be bought and sold, the first thing to be bought and sold will be politicians." – P.J. O’Rourke

O’Rourke is right in this matter, of course. And it is precisely because politicians are willing to hand out special favors to corporations (corporatism), their big political supporters (crony capitalism), unions (unionism and protectionism) and other special interests that monies keep flowing from these groups to “buy and sell” politicians election after election.

Democrats on government spending and job creation

The William Jefferson Clinton Presidential Center web site claims that the country "Moved from record deficits to record surplus" and "Began paying off the national debt" while "[creating] nearly 23 million jobs" and supporting the "[f]astest and longest real wage growth in over three decades." The site also claims that during this time:

  • "Family income reached record highs”
  • "Unemployment was the lowest in over three decades"
  • "Lowest overall poverty and child poverty rates since the 1970s"
  • "Lowest percentage of Americans on welfare in 32 years"

So, how did the Clinton administration achieve all these wonderful things?

Well, according to the web site, they reduced the size of government, achieving the "[s]mallest federal civilian workforce in 40 years." They also reduced the burden of federal spending on the economy by having the "[l]owest federal spending as a share of the economy since 1966" and the "[s]lowest per capita growth of government spending since the 1950s."


And, remember, the Clinton administration only achieved these things with the help of a Republican-controlled Congress.

Sunday, December 4, 2011

Had enough…?


Remember to vote on November 6, 2012!

2012 nOpe sticker

Saturday, December 3, 2011

Some optimism and common sense…

I think the American people broadly remain wise; broadly remain convinced that a benevolent government is not always a benefactor; broadly remain convinced that capitalism does not just make us better off--it makes us, in some sense, better. They're broadly convinced that when Jack Kennedy said, "Ask not what your country can do for you. Ask what you can do for your country," one sensible response is that one thing you can do for your country is to reserve a spacious portion of your own life for which you--not your country--are responsible.

I think most Americans still understand what Milton Friedman meant when he said: Take any three letters from the alphabet, put them in any order you want, and you will have an acronym designating a federal agency we could do without.

I think most Americans still understand what Robert Frost meant when he said, "I'm against a homogenized society because I want the cream to rise."

And, most of all, I think they understand what Ronald Reagan meant when he said, "I don't want to go back to the past; I want to go back to the past way of facing the future."

George Will

Friday, December 2, 2011


Obama - Teleprompter

Obama voted “present” so frequently while in the U.S. Senate that I refer to him as “Pres’ent of the United States.”

Thursday, December 1, 2011

What Obama said when he was a senator…

Remember this quote from Senator Barack Obama?

“The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America 's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” ~ Senator Barack H. Obama, March 2006

If he was insincere then, what do you think he is now?!? Remember that quote in the coming election.