Why governments can’t make things better for everyone

 

Consider this:

In the absence of coercion, every individual will choose to do only those things—make those exchanges—that he or she feels will improve his or her condition for having undertaken such action.

That is to say, if there is no fraud or coercion, every transaction between two individuals will only be consummated if both participants believe their personal condition will be improved by engaging in the transaction. Both parties walk away "happier" or more "satisfied" as a result of the transaction.

Note: This does NOT mean that both will actually be happier. Individuals sometimes miscalculate in economic transactions just as they do in emotional transactions (such as marriage). But they would only complete the transaction if they sincerely believed (at the time) they will be better off after the transaction than before.

Since such a "free market" transaction always results in an increase in the relative "happiness" or "satisfaction" of each participant (at least at the point of consummation), happiness or satisfaction in society is always maximized by free-market transactions without coercion or fraud.

The only need for coercion is when someone—usually the government—wants a different out come in exchanges than a free market would generally produce.

Note: If government wanted the same outcome as a free market would produce, the government would take no action whatsoever.

Since coercion produces a result in which at least one party to the transaction must take an action that differs from the result a free market would have produced, then at least one party has his or her "happiness" or "satisfaction" reduced rather than increased following the transaction.

THEREFORE, it can be stated conclusively that, while a free market is predicated upon individual actions and individual "happiness" or "satisfaction," the free market, nevertheless, increases the happiness or satisfaction across all individuals and therefore raises society’s level of satisfaction to its highest possible degree.

The coercion of government, on the other hand, can not produce the highest levels of happiness or satisfaction in a society because at least one individual must be less happy or satisfied in each coerced transaction.

Make sense?

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.

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

On ObamaCare’s manipulation of markets

Imagine this:

Obama—”We need to bend the health care cost curve. I want the food industry to cut chocolate sales by 25 percent."

Industry—“But we would lose $100 million from the cutback.”

Obama—“Just raise the price of celery to recoup the $100 million.”

Industry—“Nobody will buy celery at the inflated price.”

Obama—“Not to worry. We'll impose a fine on any family that doesn't buy a sufficient quantity of celery.”

Sounds ridiculous, doesn't it?

Try this:

Obama—“A lot of sick people can't get insurance. I want the industry to cover pre-existing conditions.”

Industry—“But we would lose a fortune if we did.”

Obama—“Just raise the premiums paid by healthy people and sell more policies to those who aren't insured.”

Industry—“If we have to cover pre-existing conditions, healthy people won't buy policies until they're sick.”

Obama—“Not to worry. We'll impose a fine on any family that doesn't buy a policy now.”

---

[Thanks to Robert Levy in the “Cato Policy Report” (March/April 2010)

The false economy of government “stimulus”

In its ongoing attempts to “stimulate” the economy, the government takes money out of the economy (in the form of cash through taxes or credit through deficits), consumes part of it in waste and administration, and then spends some part of it for a stadium, a bridge or whatever.

All the government can do, at best, is to move some jobs from that portion of the economy where the private sector would have used the money to that portion of the economy for which the politicians can take credit in hopes of reelection. Nevertheless, due to the manifest inefficiencies in government, more jobs would have been created in the private economy had the money not been unceremoniously extracted from the taxpayers' wallets in the first place.

Hence, while the politicians get to take credit for some job creation, the net number of jobs created will always be less than had the private sector been left with the money and regulation reduced.

Milton Friedman on greed

The miracle of capitalism is its ability to transform man’s natural proclivity for “greed” and “self-interest” into service for others.

On income inequality versus economic growth

Income inequality has long been a favorite rhetorical device to promote such disparate policies as tariffs, immigration restrictions, or subsidies to builders of low-income housing.... The mantra of "rising inequality" is incessantly used as a rationale for punitive tax policies toward high-income taxpayers and even middle-income investors—proposals rarely defended on their economic merits. "Fairness" arguments often seem to drown out serious debate about the potential impact of higher marginal tax rates on economic efficiency, incentives, tax avoidance or economic growth. This [unending] campaign for higher tax rates on upper incomes invariably relies on measures of incomes among the "top 1%" as reported on individual income tax returns....

— Alan Reynolds, senior fellow at the Cato Institute
and author of Income and Wealth

On inviolable economic principles

All of the speculations and ruminations of socialist or Marxist economists and thinkers will never find a way for their post-revolution utopian society to avoid the curse of scarcity (witness Soviet Union history). Neither will government welfare schemes devised by liberal or progressive economists escape the ethical limitations found in the intimate and inviolable connection between man's willingness to work ("sweat") and his own wellbeing.

On economics, human action and capitalism

Every individual is constantly making choices in the marketplace. This is what we mean by “human action.” With each decision, the consumer decides how to use his or her limited resources (and they are limited whether one is a pauper or millionaire).

You and I are constantly making choices such as: "Will I be better off if I spend my money for this television or that television?" (comparisons between similar products) while, at the same time, we are also considering, "Will I feel better off if I spend my money by paying off my credit cards and getting another latte instead of buying a new TV?"

Even though we sometimes may feel coerced into buying a product (say, fuel for our car), we are still making a free-will decision. We are asking and answering questions like: "Will I be better off putting gas in my car or taking the bus to work? Or maybe I could just hitch-hike to work. Then again, maybe I'd be better off just quitting my job and not putting gas in my car ever." Even the things we feel we must do when we'd rather be doing other things—like going to work when we'd rather be fishing—are free-will choices based on which decision we feel will make our situation better (either in the short-term or the long-term).

Capitalism does not favor the alert! Life, in general, favors the alert.

People who pay more attention when they drive, operate heavy equipment or cross the street are more likely to survive and prosper than those who do not. People who are more willing to respond as effectively as possible to changes in their environment that will affect their short-term or long-term welfare will generally be better off than the lazy, indolent, lethargic or foolish.

That's not because capitalism is opposed to such people, but because such people fail to seize opportunities for surviving and thriving when the opportunities present themselves.

As they say, “Opportunity only knocks once.” But even if it knocks a multitude of times, there will still be those who will miss it.

That is not capitalism’s fault.

---

For more about what capitalism is or is not, read here.

An Open Letter on Ayn Rand, Objectivism and Christianity

In the July 16, 2011, issue of World magazine, editor/publisher Marvin Olasky wrote a piece entitled "Taking a Stand Against Rand." In it he suggested that Christians should repudiate Ayn Rand's anti-Christian rhetoric. In the following letter, I suggest that Christians and traditional Christian teaching and thought are likely what kept Rand from seeing something further. In fact, these same traditional Christian teachings cause Christians who endorse free-market capitalism to appear to be hypocrites. We are not! But classical biblical interpretations fail to show this clearly.

---

Mr. Olasky:

I am writing in response to your article “Take a Stand Against Rand” (World, 16 July 2011), but I do not expect my letter to be published. First, because it will be too long to fit conveniently into “Letters to the Editor” standards and, second, because I do not think the contents of the letter can be sensibly edited to some 200 words or so. Nevertheless, I feel compelled to address your message in the article.
I do not disagree with anything you said about Ayn Rand and, of course, as a Christian I abhor any form of idolatry—of which there is no shortage in this age.

What I wish to point out is that I believe Ayn Rand’s disdain for Christianity and, for that matter, much of the present world’s disdain for Christianity is due in no small part to traditional Christianity’s short-sighted understanding of the economy of God.

The word "economy"—for the Greek, oikonomia and its cognate forms—appears frequently in the scriptures. The New Testament Book of Ephesians (especially chapters 1 and 3) tells us even that, while God’s economy is mysterious, it is God’s will that we all should be enlightened to see what this mystery holds for us. God is very intentional. He first has a will and a good pleasure. His will and good pleasure bring Him to have a purpose, and His purpose necessitates a plan and, therefore, an economy—a household order or rule and a dispensing—by the which it is His intention to accomplish His will and obtain His good pleasure.

It is, indeed, strange that the general teaching of Christianity is that God does what He does out of nothing but “love” in the sense that God Himself gains nothing by His actions. The scriptures, however, clearly say that God had done what He has done to accomplish His will and to obtain His good pleasure. Even Hebrews clearly say that Christ gave Himself up for us—not without thought of gain—but “for the joy set before Him.”

You see, I believe that we really are made in God’s image. As such, we are made in the same purposeful way. (I’ll get to self-sacrificial love shortly.) God has made us like Him—capable of being intentional and with a desire to achieve our “good pleasure.” Our sin—our “missing the mark”—is not our failure to be “obedient” to God. Rather, our failure—our thoroughgoing missing of the mark—is that we have failed to allow God to become the one living in us and to allow God to make us one with Him by making His home in our all our hearts (Eph. 3:16f—also connected with His economy) so that our desires—our intentions—become one with His intentions. Our “good pleasure” and our intentions are, in our sin, solely selfish and self-serving.

I say that our failure is not a failure of simply “obedience” because, if all God wanted was obedient creatures, He could have formed us to be obedient. What He wants is “sons” and “a bride” who share His life and His nature (but not being in the eternal godhead) with whom He can dwell eternally in a mutual love and a mutual coinherence. Luke 15 shows this clearly in the three parables. These three parables show how the whole Divine Trinity is working to bring sinners through the Son by the Spirit unto the Father.

In the Gospel of Luke 15, the sequence begins with the Son (as the shepherd), goes on to the Holy Spirit (as the woman who enlightens the whole house and sweeps), and culminates with the Father who receives the son into mutual feasting and enjoyment. The Son came in His incarnation—in His humanity—as the shepherd to find the lost sinner as a lost sheep, and to bring him back where he belongs. The Spirit seeks the sinner as a woman seeks carefully for one lost coin until she finds it—and thus rejoices. The Father receives the sinner—who returned with a heart of servant: “Tell me what to do, and I’ll do it”—but is received as a son (one who shares the father's very life and nature) unto feasting and enjoyment. Note that this sequence is the same as that in Ephesians 2:18: “Through Him we both have access in one Spirit unto the Father.”

Throughout the New Testament we find that the emphasis is more upon the love of the Divine Trinity than on the fallen condition and repentance of the penitent sinner.

This does not belittle repentance. Rather, Luke 15 clearly shows us that man’s sin did not surprise nor disappoint the omniscient creator God. How could it? If it did, He could not be omniscient. This fact is emphasized by the fact that the Lamb of God was slain “before the foundation of the world.”

No.

In God’s good pleasure and His intention was His desire to have a creature with whom He could share His divine nature—bringing God into man through incarnation—and with whom He could find mutual and eternal love (as a bride, in the Book of Revelation 22). In order to obtain real love from man, man must also be capable of not loving God.

God’s nature and essence as “love” caused Him to create the entire universe to obtain man. And, from before the foundation of the world, He knew that the price He would have to pay to obtain His eternal purpose and His good pleasure would be for the infinite God to become limited (finite) in incarnation and for the author of life to pay the price of death. God was willing to pay this price—make this investment, if you will—not for “nothing,” not as a “waste” or senseless “self-sacrifice,” but—to obtain His purpose and good pleasure.

Was it a great sacrifice?

Surely, it was!

Could God have been self-sufficient without doing so?

Surely, He could have or He could not be God.

Was it, therefore, a genuine “sacrifice?”

Indeed, it was.

But it was a sacrifice that Ayn Rand could have understood and embraced had Christianity not been depicted—as it so frequently is—as pure folly. Sacrifice with no gain in mind.

The “miracle,” if one might use that word in such as case, is that since man was made in God’s image—since man is intentional and purposeful in seeking his “good pleasure”—the economy founded on free-market capitalism uniquely transforms man’s God-given proclivity for seeking to improve one's own condition into service for those around him in the same way that God’s seeking for His own heart’s satisfaction was transformed into loving service for all mankind.

Free-market capitalism is the unique economic system that transforms what some view as “selfishness” into genuine altruism—and profits are the reward and measure of this altruism.

If what I have said above is an incorrect analysis of God’s economy, then surely those who claim that free-market capitalism is pure “selfishness” are correct and Christians should abandon, not only the concepts promulgated by Ayn Rand, but capitalism itself. But I do not believe it is wrong, which is why free-market capitalism has led to blessing and prosperity wherever it has been allowed to flourish.

And, if we, as believers, cannot gain converts—such as Ayn Rand—it is, in large part, due to the fact that our understanding and presentation of God’s economy is askew.

Let’s not idolize Ayn Rand.

But, as Christians, let’s stop promulgating a gospel that is too small, too shortsighted and does not thoroughly reveal God’s ultimate intention in the universe. I think it is the general presentation of “purposelessness” in Christianity that too frequently turns thoughtful persons away from Christ.

Thanks for listening.

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.

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.

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?

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.

Thanks.

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."

TODAY'S DEMOCRATS ARE WRONG!

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

Stop blaming CEOs! 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 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 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 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 corporations.

The difference between a million and billion -- or a trillion

"We have a lot of senators in there that have been elected on nothing but a slogan. But what have they cost us after they got in? You take a fellow that has never juggled with real jack, and he don't know the value of it; a billion and a million sound so much alike that he thinks all the difference is in the spelling."
-- Will Rogers

It was bad already in 1955, and it has gotten worse, I suspect

In 1955, the Daily Worker (official publication of the Communist Party USA) reported with some pleasure the results of a U.S. Chamber of Commerce survey of 1,200 seniors, in 86 high schools, throughout the U.S. that showed that six in ten seniors believed that profits are unnecessary to making the economy work.

Judgment Day: We're out of time

"Over the years we've let negative economic forces [like government spending, government debt, inflation and taxes] run out of control. We stalled the judgment day, but we no longer have that luxury. We're out of time." -- Ronald Reagan

See post below to TAKE ACTION TODAY!

Thank you.

Together, we must chart a different course

"[G]overnment policies... [are] responsible for our economic troubles. We forgot or just overlooked the fact that government -- any government -- has a built-in tendency to grow. Now, we all had a hand in looking to government for benefits as if government had some source of revenue other than our earnings. Many, if not most, of the things we thought of or that government offered to us seemed attractive.

....

"It's time to recognize that we've come to a turning point. We're threatened with an economic calamity of tremendous proportions, and the old business-as-usual treatment can't save us. Together, we must chart a different course." -- Ronald Reagan (1981)

Over-regulated and over-taxed

"Regulations adopted by government with the best of intentions have added $666 [in 1980, that is $1,745.57 in 2009 dollars] to the cost of an automobile. It is estimated that altogether regulations of every kind, on shopkeepers, farmers, and major industries, add $100 billion [in 1980, that is $262.1 billion in 2009 dollars] or more the cost of goods and services we buy. And then another $20 billion [in 1980, or $52.4 billion in 2009 dollars] is [taxed away from you and me and] spent by government handling the paperwork created by those regulations." -- Ronald Reagan (1981)