An interview with Byron Donalds, candidate for Congress (FL)

I am so pleased to find a fresh new crop of folks who appear to be well-grounded and firmly principled conservatives running for office in 2012. It is especially gratifying to see so many young blacks stepping forward as Republicans and conservatives to take as stand against the Democrat Party and Barack Obama’s constant race baiting.

Here in Minnesota we have Chris Fields challenging far-left Congressman Keith Ellison. In Utah, Mia Love looks to be an outstanding Congressional candidate who will bring fresh ideas to Washington. In Florida, candidate for Senate Deon Long appears to be solidly conservative, and Byron Donalds, running for U.S. Representative, also has his feet firmly planted in conservative principles.

Recently, I had opportunity to interview Byron Donalds. Donalds is running for Congress from Naples, Florida, “because he still believes in the power of the American people and the future of the American dream,” as his Web site says.

On limited government

When I asked Donalds about “limited government” and its implications for Americans, he pulled no punches. He said that he believed “the federal government” should be “restrained by a detailed list of powers” as enumerated in the U.S. Constitution. The federal government, Donalds went on, “should do only what the States and the people lack [the] ability to do” for themselves. Furthermore, he said, the government in Washington “must not decide to do things that the States have chosen not to do.”

“Limited government,” Donalds stated clearly, “in not only important to Americans, it is important to the liberty of all men. An intrusive government erodes liberty….” and it is liberty that, in the final analysis, “creates economic prosperity.”

On free markets

Donalds is affixed in the free market camp. He understands that only the free market offers the best of opportunities to “all people” and the fairest exchange of “the fruits of [their] labor” for the goods and services they need or desire. He also clearly articulated to me that the most broadest opportunity for save and “accumulate” wealth for upward economic mobility also rests on free market principles. He is convinced that only the free market can create lasting jobs and the kind of durable economic growth that will be necessary to pull the U.S. out of its mountain of debt.

He said that the government should refrain from being “a player”—unduly influencing—the free market.

On monetary policy

Equally sound is Donalds’ position on monetary policy. He stated that “the Fed” (Federal Reserve Bank) should have one—and only one—“mandate.” That is to supply the nation with “a stable currency.” The Fed, he stated flatly, should “have nothing to do with controlling inflation.”

On being effective when in office

The candidate articulated a clear method for becoming a change agent in Washington after his election. He clearly recognizes that “the only way [to bring about] real change is [to have] the will of the people behind you.” It is “the will of the people” that allows an officeholder to “resist the political establishment” once inside the beltway.

Like Ronald Reagan, Donalds sees the need for being “clear and frank with the voting public” and that means “consistency” in both “message” and “effort.” As a political pragmatist, he enunciated how the Left (e.g., progressives, liberals) have invested 100 or more years of relatively consistent energy in dragging America into its present economic and political morass. Therefore, overnight change will not be possible, but the change must begin today—before it’s too late.

Summary

My brief interview with Byron Donalds revealed to me a bright, articulate and principled young man with a strong will and the kind of message that I believe can and will galvanize support for the kind of conservative change that these United States need so desperately right now.

If you would like to learn more about Donalds candidacy and his positions, please visit http://www.byrondonalds.com/. Offer your support and, if you live in Florida, offer to be boots on the ground. I know a good campaign can always use more volunteers.

On the TSA, bailouts and needless economic interventions

The TSA (Transportation Security Administration) was a G.W. Bush bailout for the airlines because, after 9/11, there was a genuine fear of flying amongst the American public. So, the U.S. government stepped in to give Americans confidence to fly again.

However, all this action did was create a moral hazard for the airlines. Every time there is a failure in TSA's security, the airlines are not be held responsible, the U.S. government is. As a result, there is an ongoing degradation of liberty and the humiliation of the U.S. traveler at the hands of government officials.

If the airlines were responsible for security, there would be competition in security. That competition would drive toward maximum security with minimum damage to the travelers' liberties accompanied by minimum cost and inconvenience, as well.

Some airlines would do better than others. Prices might even be affected by how well airlines do in the security department. All-in-all, there would be improved security at a lower cost—and the travelers would bear all of the cost. The American taxpayer would not be held hostage as the payer of last resort in the event of ongoing failures or the need for new technologies.

Already the Obama administration has handed out favorable contracts for the production of the new x-ray machines and other TSA equipment to manufacturing firms strongly connected to unions. It is just one more way of intervening in the economy where the government need not be present at all.

To the credit of capitalism and free markets

It is to the credit of capitalism and relatively free markets that there are many, many more people living on the earth’s surface today than at the eve of the “industrial revolution,” and that, in the nations that are most advanced in capitalism, virtually all of the people enjoy a more comfortable life than even the well-to-do of earlier ages.

Becoming a bee...

“The social insects [such as ants and bees] demonstrate a near approach to the ideal of the socialist society…. The wishes of the individual insect are not allowed to come in conflict with his bounden duty to the colony. Unlimited cooperation, with a total lack of competition within their society, seems to prevail. In fact, the individual insect seems incapable of either a thought or a wish.

….

“These insect colonies are highly materialistic. Moral and spiritual considerations play no part…. Population is rigidly controlled. By killing those that do not work and by ruthlessly destroying the ill and the aged, full employment and ‘high’ productivity is maintained…. A high ‘national income’ is maintained by imposing compulsion of labor at an early age, by compulsion of long work weeks and by prohibiting vacations either with or without pay. Whereas the individual insect exhibits no self-interest, the self interests of the colony are substituted therefore; the two are in one sense similar, though the colony-selfishness operates on a huge scale whereby the mass of insects are driven into supporting it by blind allegiance.”

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

All this is becoming much too real a possibility to me. Keep writing your Congressmen and Senators. Many of them have forgotten the first principals of these United States.

Management "plunder" on the Shareholders' behalf

"Paper entrepreneurialism is both cause and consequence of America's faltering economy. Paper profits are the only ones easily available to professional managers who sit atop organizations designed for a form of production that is no longer appropriate to America's place in the world economy. At the same time, the relentless drive for paper profits has diverted attention and resources away from the difficult job of transforming the productive base. It has retarded the transition that must occur, and has made change more difficult in the future. Paper entrepreneurialism thus has a self-perpetuating quality that, if left unchecked, will drive the nation to further decline."

-- Robert B. Reich, "The next American frontier," Atlantic, March 1983, pp. 43-57.

It's been 25 years! Haven't we learned anything.

An Open Letter to U.S. Leaders

22 December 2008


President George W. Bush,
Honorable Senators, and
Honorable Representatives:

W. Edwards Deming, writing in Out of the Crisis (Massachusetts Institute of Technology), p. 98, a book written when U.S. automaker Chrysler sought federal loan guarantees more than 25 years ago, says:

“As William E. Hoglund, manager of the Pontiac Motor Division, put it to me [Deming] one day, ‘Blue Cross is our second largest supplier.’ The direct cost of medical care is $400 per automobile (‘Sick call,’ Forbes, 24 October 1983, p. 116). Six months later he told me that Blue Cross had overtaken steel. This is not all. Additional medical costs are embedded in the steel that goes into an automobile. There are also direct costs of health and care, as from beneficial days (payment of wages and salaries to people under treatment for injury on the job); also for counseling of people depressed from low rating on annual performance, plus counsel and treatment of employees whose performance is impaired by alcohol or drugs.”

I should think that the U.S. automakers have had more than sufficient time to get their house in order. It is clear that short-term thinking – the desire to earn quarterly bonuses – has overtaken any constancy of purpose on the part of executive management to keep the U.S. automakers viable (let alone successful).

The assets owned by U.S. automakers will NOT evaporate overnight if they must declare bankruptcy. Other firms with fresh new ideas will soon take advantage of the void in the marketplace and will leverage the labor and assets that become available to establish successful and profitable new manufacturers.

It is NOT the responsibility of the U.S. taxpayer to underwrite the long-term failure of private sector managers (or the failures of union managers to properly assess their own organization’s long-term viability). Please, NO MORE BAILOUTS to “save us” from the BAD ECONOMICS of Democrats and their cronies in the unions and elsewhere. Let the Democrat economics FAIL so that we can move onward, upward and away from more socialist means and methods.

Going "Green" Means Going "Red"?

Cato Institute's "techknowledge" newsletter reminds us that the whole "going green" approach by the federal (and state) governments will likely lead to more "going red" in two ways:

1. Increasingly socialist political manipulation of the economy, and
   
   
2. Increasing government debt (and taxes) as the politicians push agendas that are counter to growth, productivity and private investment.

One of the problems with the government throwing money at "green" initiatives is that some businesses will be incented to participate simply because they will benefit from the federal monies in the program. They will do this for short-term gain, even though the net and long-term effect on the general economy may be negative.

Take for example the foolishness of making our machines competitors for our food supply via the government-back ethanol subsidy programs. The corn supply -- a staple in the food chain -- is being diverted to provide fuel while there is a severe shortage of corn for food products such as livestock feed (leading to increased prices for meats), corn meal, corn syrup, and more.

Despite this craziness, major players like ADM and others are participating in the ethanol market simply because it is presently beneficial for them to do so. The problem is, on the one side, ADM's willingness to sacrifice the larger marketplace "good" for short-term gain. However, if the governments (state and federal) were not throwing non-market-driven money into the arena and distorting the market value, this foolishness would be entirely unsustainable.

Think about it.

Bailout Parade Panic and the Benefits of Bankruptcy

Let's not allow Congress and members of the bailout parade panic us into allowing them to do things, as was done in the 1930s, that would convert a mild economic downturn into a true calamity. Right now the Big Three auto companies, and their unions, are asking Congress for a $25 billion bailout to avoid bankruptcy. Let's think about that a bit.

What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate. What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.

Chapter 11 of the U.S. Bankruptcy Code, where the control of its business operations are subject to the oversight and jurisdiction of the court, gives companies a chance to reorganize. The court can permit complete or partial relief from the company's debts and its labor union contracts.

A large part of the problem is the Big Three's cozy relationship with the United Auto Workers union (UAW). GM has a $73 hourly wage cost including benefits and overtime. Toyota has five major assembly plants in the U.S. Its hourly wage cost plus benefits is $48. It doesn't take rocket science to figure out which company will be at a competitive disadvantage. Then there's the "jobs bank" feature of the UAW contract where workers who are laid off workers get 95 percent of their base pay and all their benefits. Right now there's a two-year limit but in the past workers could stay in the "jobs bank" forever unless they turned down two job offers within 50 miles of their factory. At one time job bank membership exceeded 7,000 "workers." GM, Ford and Chrysler face other problems that range from poor corporate management and marketing, not to mention costly government regulations.

Two vital marketplace signals are the profits that come with success and the losses that come with failure. When these two signals are not allowed to freely function, markets operate less efficiently. To be successful a business must take in enough revenue not only to cover wages, rents and interest but profits as well. In order to accomplish that feat executives must not only satisfy customers but they must do it in a manner that efficiently utilizes all of their resources. If they fail to cover costs, it means that resources are not being used efficiently and/or consumers don't value the good being produced relative to some other alternative. When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital become available to someone else who might put them to better use. When government steps in with a bailout, it enables executives to continue mismanaging resources.

How much congressional involvement do we want with the Big Three auto companies? I'd say none. Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about the automobile business than they know about the banking and financial businesses that they've turned into a mess. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers. The belief that Congress poses the major threat to our liberty and well-being is why the founders gave them limited enumerated powers. To our detriment, today's Americans have given them unlimited powers.

-- by Walter E. Williams

Found at: Capitalism Magazine (online)

Born in Philadelphia in 1936, Walter E. Williams holds a bachelor's degree in economics from California State University (1965) and a master's degree (1967) and doctorate (1972) in economics from the University of California at Los Angeles.

Auto industry ailing???

Apparently it's not the "auto industry" that's ailing.

See this article in the Detroit Free Press.

It's bad management by the auto companies and wrong-headed thinking on the part of the U.S. trade unions that caused the disease afflicting U.S. auto manufacturers.