Friday, April 27, 2012

Socialism: the big lie

Socialism is the “Big Lie” of the twentieth and twenty-first centuries. While it promises prosperity, equality, and security, it has shown itself historically—in the long run—to deliver only mediocrity, poverty, misery, and (ultimately) tyranny.

The theoretical, and much longed-for equality, has never actually been achieved except in the sense that everyone (except the political class, of course) is equal in his or her sharing of the society's scarcity and mediocrity.

Thursday, April 26, 2012

Capitalism’s role in the expansion of liberty and prosperity

Capitalism is continuing to play a major role in the global revival of liberty and prosperity around the world. Capitalism was the "camel's nose in the tent" under the "glasnost" policy in the former Soviet Union (USSR) that contributed greatly to the ultimate collapse of the Soviet regime.

Over the last couple of decades, it has been China's opening to limited capitalism that has led to increasing liberty, a rebirth of hope, and a rising standard of living among its billions of people.

Capitalism works because it nurtures the human spirit, inspires human creativity, and promotes a spirit of enterprise. By providing a powerful system of incentives that promote thrift, hard work, and efficiency, capitalism creates wealth—something that socialism has no mechanism to do.

Saturday, April 21, 2012

On social democracy and the financial debacle of 2008

The financial crisis that erupted for real in 2008 was just another convulsion in the corpulent body of social democracy. "Social democracy" is the relatively modern and sadly mistaken notion that government should solve social problems as they arise.

The body of "social democracy" is the huge mass of laws that has grown up over time, each law with little or no connection to the underlying cause of the issues that initiated the creation of the new legislation. There is little or no connection to the actual underlying issues because the vast majority of such laws are triggered by emotion—and "sold" to the voters based on tugs on the heartstrings—not rational thought.

When voters demand "action" [You've probably heard it hundreds of times. Something "bad" happens and people shake their heads and say, "There ought to be a law...."] and when politicians and bureaucrats provide "action", they are all naturally proceeding according to some theory as to the cause of the problem they are trying to solve. Furthermore, they are proceeding according to the theory of "social democracy"—that somehow it is the government's responsibility to protect every individual from virtually every stupid act, wrong decision, or bad choice.

If their theories are mistaken—and they generally are—the regulations are likely to produce unintended consequences that, later on, in principle, could be recognized as "mistakes" and rectified by repeal. In practice, however, regulations are almost never repealed. Instead, new government interventions and new regulations are instituted in further misguided attempts to "fix" the problems now created by the prior set of regulations.

Adapted from an article by Jeffrey Friedman appearing in the "Cato Policy Report" (Jan/Feb 2010).

See also:

Engineering the Financial Crisis: Systemic Risk and the Failure of Regulation

What Caused the Financial Crisis

Friday, April 20, 2012

The miracle of capitalism

The miracle of capitalism is that, first of all, it makes the correct assumption about mankind and how people function. That assumption is that human beings will virtually always act in a way that tends to increase their own happiness or satisfaction. This may be described in various ways:

  • Self-defense
  • Self-preservation
  • Self-serving
  • Selfishness

The actions may range, for example, from building an improvised shelter when lost in a wilderness to buying an iPhone. These are both acts of that put self ahead of other options. For example, I may destroy trees or kill an animal to survive when lost in a wilderness area.

What most liberals, progressives and leftists, however, fail to consider is that the buying of the iPhone was just as selfish an act as selling the iPhone was—as was the creation and manufacture of the iPhone.

  • If you bought an iPhone, you did so because you felt that you would be happier, more satisfied or better off for having purchased it than by not purchasing it and keeping your money or using it to throw a big pizza party for your friends. Your act was purely selfish. You did not make the decision on whether the world would be a better place if you had an iPhone. You also probably did not consider: “Maybe I should just mail my money to the federal government so they can help more poor people with it.”
  • If you sold an iPhone, you did so because you felt that your own situation would be improved by having sold it. This holds true whether you were the salesperson behind the counter, accepting a wage—and maybe a commission—for selling the iPhone; or if you were the owner of the franchise or store that sold the iPhone to the end-user. Indeed, it holds true down the entire supply chain—the distributor, the wholesaler, the manufacturer. Each of these were acting in their own self-interest when they acted to sell the iPhone.
  • If you manufactured an iPhone, chances are you did so because it was in your own best interest to do so. (This is where it gets touchy.) Things are not so wonderful in China. It is quite possible that an eleven-year-old working ten hours a day manufacturing iPhones in China is not being coerced—at least not by Apple®. It is not at all unlikely that the parents of the eleven-year-old feel that it is better for the entire family for this child to be working in the factory than to be in China’s schools of indoctrination, where the treatment of the students may be no better than the treatment in the factory. It is even likely that the eleven-year-old worker feels that it is better for him or her to be in submission to his parents than to rebel. In fact, this young worker may even feel a tingle of pride and satisfaction that he or she is able to contribute to a better life for his whole family by working in the factory. (Granted, this is not the American way—to put children into factories—but we are not in a position to prejudge how other cultures grow and evolve over time. For more on this topic, please read here.)
  • If you created the iPhone, if you were part of the product design team or even an inventor of one of the components, you, too, decided to create the product and work to get it into production because you were selfish. You did it because you thought you would be more satisfied or better off for having done so than in not doing so. It may have been because you were paid by Apple® or some other company to do the work. Or it may have been that you were simply so enthralled by the invention and innovation that the only way you could find satisfaction was to see it produced and distributed—even if your financial reward was relatively small by comparison. Either way, you selfishly sought whatever it was that brought you satisfaction or happiness.

So, what is the miracle of capitalism? It is the fact that capitalism turns your selfishness into service to the satisfaction of others.

Apple®, in the absence of government coercion, has no power to force anyone to buy an iPhone or an iPad or an iPod. The buyer—as indicated above—buys the product voluntarily (choosing it above all the alternatives, which are not just other similar products, but every other option—including just keeping the money) because the buyer sees the value of the product/service provided by the creators, manufacturers and sellers who bring the product/service to him.

This is the miracle of capitalism: transforming serving for self-satisfaction into service for the satisfaction of others.

Thursday, April 19, 2012

On leadership and leading us out of this morass

Leaders, to the extent that they have any real leadership or authority, tend to be those who create—or, at least, greatly influence—the views of their larger constituencies more than they follow them.

This must be true of any so-called “leader” if he or she is going to have any significant part in pulling this nation out of the grasp of its monumental debt and restoring an economy foundering under a huge dead-load of taxes and over-regulation.

This is an educational and marketing process more than a political one. You must become a teacher of economics in the mold of von Mises, Hayek and others.

We are here to help.

Tuesday, April 17, 2012

Federal aid to states versus a healthy economy

The theory behind federal aid to state and local governments is that the federal government can operate programs in the national interest to efficiently solve local problems.

Now that whole concept is laughable on the face of it. I’m not sure how any politician can even say that sentence with a straight face! When has the federal government ever operated more “efficiently” than anything with which it might be sensibly compared?

No. No! I don’t think this theory holds water on the “efficiency” factor.

But let’s take a look at this other matter of “programs in the national interest.”

Let’s be serious here!


Outside of those few matters for which the people should truly look to the federal government—such as our national defense—politicians do almost nothing from Washington, DC, “in the national interest.”

In fact, a great deal of the time and money spent by the staff of Congressmen and Senators is not, in fact, spent in “the national interest.”

Instead, they spend a huge portion of their time and energy on “local interests” and (worse) “special interests,” for which the reader might instead read:

“Securing ‘pork’ for their local constituents in every effort to leverage the taxpayers’ money to buy votes from the very taxpayers they have pick-pocketed.”

Federal aid to states and localities is nothing short of politicians hoodwinking the taxpaying public into believing that by giving some of the money they have confiscated from the taxpayers back through “aid,” they have somehow done the citizens a great favor.

In short, through federal aid to states and localities, the politicians have managed to trick voters and taxpayers into believing that, as “political doctors,” they can somehow magically make the patient healthier by draining blood out of the leg of the patient in massive amounts and injecting small portions of the blood back into the patient’s arm.

Saturday, April 14, 2012

Higher inflation will not reduce jobless rates

Even the Federal Reserve Bank disputes the view that higher inflation can lead to lower unemployment. At least, that was the view expressed by the FRB of San Francisco. "Almost all economists have followed [economist Milton] Friedman in accepting that there is no long-run trade-off that would allow permanently lower unemployment to be traded for higher inflation." ["Nobel Views on Inflation and Unemployment," FRBSF, Jan 10, 1997.]

The Marxist roots of “political correctness”

Friday, April 13, 2012

Hyperinflation warning

Many economists believe the U.S. has avoided [serious] inflation [perhaps even hyperinflation] only because the other developed nations of the world have been willing to finance our excesses. Whatever the reason for this aberration, we can consider ourselves fortunate [so far]. However, most economists would argue that the trend is not sustainable. – Gerald Swanson, Ph.D., Economist at the University of Arizona

Thursday, April 12, 2012

ObamaCare will NOT reduce the deficit

ObamaCare will not reduce the deficit regardless of what the CBO (Congressional Budget Office) says. Here's why:

At, economist Veronique de Rugy rued the “fantasy at work in many official health care cost projections," including a purposely limited report from the CBO that the [NY] Times and Democrats have used to argue ObamaCare as a cost-saver. de Rugy wrote:

"[The CBO report] assumes that Medicare’s sustainable growth rate mechanism, which would have reduced physician payments by 21 percent in 2010 alone, actually takes effect. Medicare reimbursement rates are legislated to decline over time but basically never do. Instead, Congress routinely enacts what's known as the ‘doc fix,’ or upward payment adjustments. As Politico reported in May, ‘In 2010 alone, Congress has already headed off three scheduled payment drops – in January, March and April.’ In fact, as the CBO notes, Congress has kicked the can down the road on payment reductions yet again, putting off the reduction in payment rates until at least December 2010.

ObamaCare doesn't reduce medical costs under even the rosiest of scenarios (that is, projections that take seriously all its creators' assumptions). What we can be certain of is that this legislation increases the amount of money taxpayers will be forced by law to pay for health insurance to the tune of $420 billion over the next 10 years. Claims about ObamaCare’s deficit-reduction effects depend on new taxes growing even faster than new spending. Despite the persistent claims of Peter Orszag and other defenders of the president's health care legislation, ObamaCare has nothing to do with cutting costs."

Let me repeat that last phrase: "ObamaCare has NOTHING to do with CUTTING COSTS." [Emphasis added.]

Wednesday, April 11, 2012

On the building of a free society through the power of ideas

We must make the building of a free society once more an intellectual adventure, a deed of courage. What we lack is a liberal* Utopia, a programme which seems neither a mere defence of things as they are nor a diluted kind of socialism, but a truly liberal radicalism which does not spare the susceptibilities of the mighty (including the trade unions), which is not too severely practical and which does not confine itself to what appears today as politically possible. Those who have concerned themselves exclusively with what seemed practicable in the existing state of opinion have constantly found that even this has rapidly become politically impossible as the result of changes in a public opinion which they have done nothing to guide. Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds, the prospects of freedom are indeed dark. But if we can regain that belief in power of ideas which was the mark of liberalism at its best, the battle is not lost.

Dell, Jim (2011-05-13). Memorable Quotations from Friedrich August Hayek (Kindle Locations 32-39). Jim Dell. Kindle Edition. [Emphasis added.]

* Liberal, here, is used in its classical sense—as it is still used in Europe for the most part.

The god of pragmatism has become the downfall of the Republican Party (GOP). It is no longer the party believing in the power of great ideas (like limited government, personal liberty and sound monetary policy), while the ideology of the Left is making constant, incremental progress towards its ends.

Tuesday, April 10, 2012

On grassroots solutions

The solutions to the problems we are facing here in the U.S. are going to arise from an energized citizenry at the grassroots as a response from people who love and value liberty.

Monday, April 9, 2012

On unions, unionists and their lies

Every page of the history of the past 150 years belies the communist / unionist dogma that they are necessarily "internationally minded" and that there is some kind of unshakable solidarity with the "workers of the world." The fact that unions in more highly-developed economies are consistently active in lobbying efforts against opening immigration from lesser-developed economies proves that these unions and their leaders are willing to condemn their “working brothers” (falsely so-called) in these poorer nations to a life of poverty and poor working conditions in order to protect their own privileged life of higher wages and benefits.

Sunday, April 8, 2012

Capitalism, socialism and equality

The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery. – W.Churchill

Friday, April 6, 2012

How the GOP can regain its political “brand”

How can the Republican Party (GOP) really distinguish itself from the Democrats?

By taking clear, well-articulated positions for:

  1. LIMITED CONSTITUTIONAL GOVERNMENT - Retrenching the expanding federal reach, doing away with federal grants-in-aid to state and local governments while simultaneously reducing the federal tax burden so that state and local governments are at greater liberty to do what needs to be done based on local realities (or not do what does not need to be done, as the case may be). Along with this, Congress should take specific action to re-articulate and reinforce states' rights and the return of greater liberty to U.S. citizens.
  2. FREE MARKETS - Taking a strong and well-articulated stand against corporatism and bailouts for businesses or unions, presenting a new vision for unfettered economic growth to the middle class. This vision should include reducing the regulatory burden on business and industry by granting increased liberty to individuals (the consumers) to decide more about what they want and don't want in products, in services, in their employment and in benefits.
  3. SOUND MONETARY POLICY - Get control of the Federal Reserve Bank (FRB)  to help re-establish the value of the U.S. Dollar ( USD ), which is being gradually destroyed through inflation since the inception of the Federal Reserve banking system.

Thursday, April 5, 2012

A call to steadfastness in the fight for liberty

Men and women of America, my fellow patriots:

It is in your power, by building upon recent electoral victories and with a spirited improvement of the present circumstances, to turn our small victories into real and lasting advantage for the preservation and restoration of liberty.

Those who despise liberty are now more exposed and weaker than before. They find that they must increasingly hide their words and their evil intent to subdue the liberty of men under the guise of some "greater good"—though falsely so-called. We, on the other hand, must remain vigilant and willing to shed constant light upon their evil deeds.

Our all is at stake. Take heart and continue the endeavors of these recent years so that this fight might be continued and liberty might grow once again in these United States of America—for ourselves and our posterity.

God bless the USA!

Wednesday, April 4, 2012

On a political strategy to recover our republic

America’s required systemic transformation in returning to its proper republican form of government cannot be an exercise in applied economics nor an application of political science. It must be understood that these changes will involve human beings and will affect their day-to-day lives.

The necessary changes will create new groups of apparent gainers and losers. I say, "apparent" because, as the market re-establishes itself as interventions are removed and taxes reduced, the "apparent" losers will still be gainers through economic growth, the return of prosperity, lower unemployment, a more sound dollar, and rising wages.

Nevertheless, the relative political and economic strength of various groups will shift as the very necessary transformations occur.

In order to be successful, the leaders must clearly formulate, clearly articulate and, yes, "sell" these necessary changes to the voters with a positive and compelling vision for the future. This was the genius of Ronald Reagan—the “great communicator.”

Indeed, the first task must the formulation of a unified vision within the caucus itself. Every member must 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 of men and women in the center of political spectrum.

The vision and the speaking will require clarity in both “yeses” and “nos.” It must be stated in an "ideal" form, while acknowledging that reaching the ideal will take time and will require a process.

Most importantly, the vision must clearly reject all the 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 the voters—and our political 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."

It will be necessary to make temporary accommodations for the those who see themselves as "losers" in certain transformations. While this is necessary, make it clearly understood why it is necessary and why the accommodations are temporary.

Remember: "Selling" the vision is much more difficult and complicated than it seems at first glance. It will require leaders 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. It will require endurance.

We are here to help.

Tuesday, April 3, 2012

On a third-party in America

The effectiveness of the Libertarian Party and almost all other third-parties in U.S. history in promoting their policy positions has usually been counterproductive, because running a third-party candidate reduces the vote for the least undesirable (aka, lesser of the evils) among the major party candidates.

A disciplined group of grassroots activists and organizations that are prepared to take incremental improvement and political motion in the right direction over some irrational notion that somehow we can recover 100 years of political motion in the wrong direction in one or two election cycles could have a considerable and ongoing effect on the issue positions of both major parties and their candidates.

After all, to win an election—in almost any jurisdiction—requires that the candidate pull a significant portion of the votes from the so-called "swing" voter (the voters in the middle).

According to Cato Institute, about 20 percent of voters have generally libertarian political preferences, but few Libertarian Party candidates win more than one percent of the popular vote. This is because the whole gamut of libertarian policy changes is too much for the general public to swallow in one fell swoop.

Let's get reasonable, shall we?

Despite the upsurge in strongly conservative thinking, in most political races, it still makes fare more sense for grassroots conservatives to search out, recruit, work-for and support conservative candidates with integrity and strong Constitutional grounding within the context of the Republican Party (GOP) than to try to make political gains fielding radical candidates in a third party.

I believe this will remain true until such time as the GOP collapses and becomes virtually totally irrelevant. Unfortunately, I believe that time is approaching at a rapid pace.

The unwillingness for the GOP establishment to embrace the upstart Tea Party movement proved that GOP party leadership was truly out-of-touch with the grassroots of conservatism, libertarianism and the increasingly broad acceptance of Austrian economics. It cannot be disputed that the GOP has no brand and the party’s establishment seems intent on keeping it that way.
My guess is that it will not be long before the Republican Party goes the way of the Whigs unless the party’s leadership wakes up to smell the coffee and learns that the Tea Party movement can help them rebrand the party.

Monday, April 2, 2012

Who is for liberty?

All we want to know in America is simply this: who is for liberty and who is not? Those who are for it, will support it; while those who oppose or seek to betray it for what they deem some higher or nobler cause (falsely so-called) must be exposed for what they really are—enemies of liberty.

This is my work and your work: to expose the enemies of liberty, even if they operate with the best of intentions.

Sunday, April 1, 2012

Justice for all, not fairness for all, is what our Constitution seeks

Some men have a mistaken notion of justice and wish to substitute for justice their particular vision of fairness.

Justice is blind, and fairness cannot be measured but differently by each man and in each case. In America, we hold forth the promise of justice for all, not fairness for which there is no common standard.

Attempts by politicians to bring forth from government fairness rather than justice has tended, as we witness, to dispirit public virtue and promote the growth of public evils. This has been found true in everything from our exercise of law and the courts to the injustices perpetrated upon the American people—both high and low—through the various forms of public and corporate welfare.

Stop the madness!