The Daily Switch

Archive for March, 2009

Earth Hour 60 Minutes Too Long

Posted by maker on March 31, 2009

If you have had the pleasure of getting to have to sit through an esurance commercial recently, you are probably aware that Friday March 27th marked what was touted as ‘Earth Hour’.  This was nothing more than an hour of self-congratulatory, symbolic ‘abstinence’ from any use of electricity. The reason for this ‘world wide’ statement was to help curb the effects of man-made global warming. The following day snowstorms ravaged Texas, which begs the obvious question. Did the environmentalists overreach?

Of course the two had nothing to do with one another, as it is becoming increasingly evident, man-made carbon emissions had nothing to do with the warming trend we experienced in the 90s that has somehow gone missing of late. So why all the fuss? In the rush to save the world and ultimately ourselves, we seem to have forgotten to ask if it (or we) really needs saving.

Scarier than global warming?

Ignorance is bliss

Propaganda is easy. If anyone says otherwise, simply observe Michael Moore and his burgeoning protege Al Gore. What they lack in intelligence, charm or talent, they more than make up for in hubris and outright lies. If propaganda isn’t easy, how do we explain Al Gore’s Nobel Prize? But here lies the beauty and ease of Al’s and Michael’s positions. Make outlandish claims loudly enough, or with the right hint of serious monotone, and you don’t have to be right. Heck, you can even make a ‘scientific documentary’ that includes CGI laden clips from a disaster movie about the next ice age and be hailed as a seer, if your politics are correct. Where are the shouts of, ‘Proof, proof, give us proof!’ ? Or at the very least, ‘Why is it so damn cold?’ How is it that CNN and other ‘serious’ news stations consult Michael Moore for his opinion on myriad topics despite his admission of being nothing more then a propagandist dressed as a documentarian? Why is no one held to account for the horrendous inaccuracy in the ‘evidence’ of melting ice caps? Why is ‘global warming’ a given when nothing definitive even suggests it?

Much to the contrary of Al’s seminal work, the answer to these questions seems to be that ‘global warming’ is a very convenient lie. A crowning achievement in the left’s long line of exaggerations, half-truths, contrivances and complete fabrications all in the name of empowering the government to control and protect us from ourselves.

I am not writing to say that this issue has been decided.  I am writing to say there is no issue to decide. It is as if we have all been convicted of a crime that no one can prove occurred (for a similar case read this by ender). Until a crime has been proved I refuse to stand trial and so should you.

Keep reading The Daily Switch in the weeks and months ahead for more on environmental fascism. We’ll delve into, not only the comical inanity of it all, but the very real dangers as well.

Posted in Conservatism, Culture, Environment, Liberalism, Media, Politics | Tagged: , , , , , , , , | 18 Comments »

Fighter of Inflation

Posted by Ender on March 31, 2009

Proponents of the Federal Reserve say that you need the Fed to control monetary supply and inflation. In our series on the Federal Reserve we argued that the Fed itself creates inflation. So, in light of recent events it appears that the Fed is doing its best to “control” inflation. Here is how they are doing it; by spending or lending $12.8 trillion of cash/credit. Yes, that is a TRILLION. Let’s put that into perspective:

1. That is about forty two thousand dollars per individual living in the US. That’s a good thing right?

2. It equals about 90% of the US’s GDP (2008). (GDP is the total amount in dollars of everything produced in the entire country.) That’s a good thing right?

Inflation?  Not on his watch

Inflation? Not on his watch

So, how does this fight inflation? Don’t look at me for an answer because I don’t have one. My question is, are they done destroying our currency and economy? “FDIC Chairman Sheila Bair warned that the insurance fund to protect customer deposits at U.S. banks could dry up because of bank failures.” Oh…well I guess we can all take respite that the Fed is there to control this kind of stuff.

Posted in Capitalism, Economics, Socialism, The Federal Reserve | Tagged: , , , , , , | 2 Comments »

Here We Go Again

Posted by Ender on March 30, 2009

What exactly does Obama know about running a car company? As far as I can tell he has never worked in the industry. And what about Geithner? Does he know anything about running a car company? I’m pretty sure he has never worked in the industry either. So, why am I supposed to believe that these two guys know the first thing about getting the car industry back on track?

Obama’s latest battle in the War on Business is over who can run General Motors. “The Obama administration used the threat of withholding more bailout money to force out General Motors Corp. Chief Executive Rick Wagoner.” (Wall Street Journal) Obama and his team have decided that Wagoner (former CEO of GM) is no longer fit to run the company. Which brings me back to my initial question: What exactly does Obama know about running a car company? Why is it not arrogant and ignorant of Obama to presume that he knows more than the board who hired and has the power to fire Wagoner?

I can already hear the chorus of complaints: (when reading, please muster a nasally, whiney voice) “If GM is taking our money then we should have say in who runs it”, “they couldn’t get it right, let’s give Obama a chance”, blah blah blah.

The auto industry with Obama at the wheel?

The auto industry with Obama at the wheel?

Bailouts do not give the government the right to micromanage the day to day operations of the business that receive the bailout. We don’t need or want Obama to make the hiring decisions for these companies. He knows absolutely nothing about the auto industry. He knows absolutely nothing about running a business. Geithner knows absolutely nothing about the auto industry. I think Geithner has had real jobs in his past so I’m not going to say he knows nothing about running a business, yet.

This is why controlled economies do not work, ever. You have uniformed people making decisions on behalf of other people and businesses. Please President Obama, no matter what you have heard and what the media have told you, you are not omniscient. Just leave business to people who have actually worked in the industry before, thanks.

Mickey Kaus asks the following pertinent questions “won’t Obama now “own” the GM problem? If the company shuts down in the near future, costing tens of thousands of blue collar jobs, it will be under executives implicitly or explicitly chosen by Obama. It will be Obama’s failure, not simply GM’s failure, no?”

I have posed several questions in this post. Just to make sure everyone is on the same page with the answers…Obama and team know nothing about the auto industry and should not be taking a role in running it. Obama and team will be responsible for its inevitable failure.

Posted in Capitalism, Conservatism, Economics, Obama, Politics, War on Business | Tagged: , , , , , , , , | 4 Comments »

The Perils of Multiculturalism

Posted by Ender on March 28, 2009

Since we seem to be on a video kick here at The Daily Switch, I figured I’d talk about a video that I found last year and have watched several times since then.

In the video Mark Steyn says, “Multiculturalism is the slipperiest ‘ism’ because it doesn’t invite an argument.  It says there’s no point to having an argument.”  This philosophy is based on a “cult of ignorance.”  It is a belief system that ignores or disregards fact.  Steyn talks about the British Empire in the video, he says that it was a multicultural country in that it knew tons and tons about every culture.  It learned how to speak obscure languages that no one would ever hear outside of the small tribe where it originated.  The difference between that kind of multiculturalism and the one we see today is that it “objectively [knew which culture was] superior to the other.”  It had the ability to distinguish which culture was better and why.

Today, we are told that every culture is of equal value.  There is a reason America is the most prosperous nation in the history of the world.  There is a reason that Britain spawned the world’s regional super powers.  The reason is that its culture, its core beliefs are in fact better than other cultures.  There is no question that a free economy brings prosperity to all in any country it is found.  There is no question that totalitarian governments enslave their “citizens.”  And yet, we are told we must give these backwards cultures equal footing when discussing values and beliefs.  For a more concrete example think about how the media and elites excuse the atrocities occurring in the Middle East.  We are talking about cultures that treat women like dogs, hunt down homosexuals and force everyone to follow the same religion.  Any objective observer can see that these cultures are not equal.  Steyn calls it a denial of reality, which it is.

The multiculturalist does not stop and cannot stop at this point.  Earlier this week Maker posted a video of Evan Sayet entitled “How Modern Liberals Think.”  In the speech, Sayet asks how the Modern Liberal ends up on the wrong side of every issue.   The reason this happens is because of moral relativism and its descendant multiculturalism.  In order to validate their view that every culture is equal, they must show that what thinking people view as wrong is actually the same as, or on the same level as, what is right.  Or they must take what is right and make it wrong.

The UN’s Human Rights Council is a perfect example.  In its first meeting in June of 2006, it chose not to condemn any of the following:“Darfur, there are three quarters of a million people beyond humanitarian reach, 2.5 million people displaced by the violence, 385,000 people in immediate risk of starvation, and over two million dead in 22 years of violence and deprivation. But it wasn’t genocide in Sudan that interested the Human Rights Council. Nor was it a billion Chinese without civil and political rights. Not 13 million women in Saudi Arabia whose lives depend on hiding from sight in public places and never being caught behind the wheel of an automobile. Not the dire human-rights conditions of 23 million people in North Korea. Not Iranian President Ahmadinejad’s incitement to genocide or his country’s legal system, which includes crucifixion, stoning and amputation.” (Bayefsky)

It chose to condemn Israel.  Israel, the only country in the region where a citizen can actually choose to be a Christian, Muslim or Jew.  Insane, right?  This is the sickness of multiculturalism.  In order to remain relevant; it must degrade what is good and promote what is wrong. Which in effect smears the black and white of truth into a gray sea of moral ambiguity.

Posted in Britain, Capitalism, Conservatism, Culture, Liberalism, Liberty, Politics | Tagged: , , , , , , , , , , , | 1 Comment »

Jaw Droppingly Amazing

Posted by Ender on March 26, 2009

Here is an amazing video of Daniel Hannan absolutely obliterating the UK Prime Minister Gordon Brown. It’s a short clip, about 3 minutes long.

He lambastes the PM for his reckless spending and ignorant economic policy. Hannan perfectly describes the crisis Great Britain is in. He states that going into the economic recession, the UK is ranked last out of the G20 in readiness to weather the storm.

One of my favorite quotes from the speech, “You know, and we know, and you know that we know that it is nonsense. Everyone knows that Britain is worse off than any other country as we go off into these hard times. The IMF has said so. The European Commission has said so. The Markets have said so, which is why our currency has devalued by 30%. And soon the voters too, will get their chance to say so. They can see what the Markets have already seen. That you are the devalued Prime Minister of a devalued government.”

Keep in mind that this was said to Brown’s face, not through the media. We need more politicians like Hannan in US and the rest of the world. Cut the charade, stop playing politics and get the country back on track.

Posted in Britain, Capitalism, Conservatism, Economics, Liberalism, Politics | Tagged: , , , , , , , , | 1 Comment »

The Modern Liberal Defined

Posted by maker on March 26, 2009

Ender sent me a link to this video recently. Evan Sayet, a Hollywood writer, comedian, producer and 9/11 conservative, delves into the mind of the modern liberal and expands on the differences between left and right. I encourage one and all to set aside the time to watch it in its entirety. For the conservative, it will shed light on things previously perplexing. For the liberal, it may well lead to the first step in the recovery process.

 

Though Sayet’s excessive use of  ‘always’, ‘all’, ‘never’ and ‘every’ makes me hesitant to endorse every word, the argument made here is one worth discussing.   Will the strong language and black and white nature of his position cause us to disregard his views altogether? Or will these aspects of the speech serve to shock us into looking at the two sides with an adjusted perspective? To quote Hillary Clinton’s ill-fated primary campaign slogan that sent men throughout the country shifting their support to one of the dudes, “Let the conversation begin!”.

Posted in Conservatism, Culture, Liberalism, Politics, Words to Lib by | Tagged: , , , , , | 12 Comments »

The Federal Reserve: How it Hurts You-Part 5

Posted by Ender on March 25, 2009

This is Part 4 of of a series on the Federal Reserve. In Part 1, we discussed Money, Fractional Reserve Banking and a brief history of the Federal Reserve. In Part 2, we discussed Inflation. In Part 3, we discussed the Austrian Business Cycle. In Part 4, we discussed the Tech Stock Bubble.

Moral Hazard

What is Moral Hazard?  Wikipedia has the following definition “Moral Hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions.”  If you threw a party without your parents’ knowledge in high school you probably experienced moral hazard.  The kids that you invited over most likely did not treat your house like you did.  They broke vases or windows or any other cliché object in the house because they knew they would not bear the responsibility for their actions.  For all those nerds out there who never threw a party like this just watch Can’t Hardly Wait or any other teen movie for an example.

Risky? Sure, but no Moral Hazard

Risky? Sure, but no Moral Hazard

How does the Fed create a Moral Hazard?  The answer lies in a term you may have heard before, which is “lender of last resort.”  A lender of last resort will lend to banks or institutions that cannot find a lender on the open market.  The first problem with this is that the Fed can be lender of last resort and not absorb any of the cost associated with it.  They can just print money in order to finance these bailouts.  The Fed does not have to act like a normal business and borrow money to give to the bankrupting companies.   

The second problem with this is that having a lender of last resort encourages risky behaviors by banks and other businesses.  These banks know that the Fed will be there to bail them out if things go sour.  They can ignore sound business practices to an extent because they are not taking the full burden of the risk.  Hulsmann writes, “To sum up, bailouts through monetary policy socialize the costs of bad investment decisions. This creates a moral hazard on the side of all the beneficiaries. Financial agents can worry less about risk and concentrate on possible profits. They become exuberant and turn to excessively risky business practices such as reducing the equity ratio.”  This sounds remarkably similar to what we have been hearing about AIG, Fannie Mae, et al during this financial crisis. 

Some probably doubt that Moral Hazard exists, but how can this be?  The Fed has a long history of bailing out companies in trouble.  If you recall, in Part 4 we discussed how the gpvernment bailed out LTCM during the Tech Boom.  More recently, they bailed out AIG.  The Fed has proven over and over that it will rescue companies and ultimately make the taxpayer pay for their mistakes. 

Price Fixing

If you ask any Free Market advocate if we should just fix the oil price at $1.75 per gallon they would invariably look at you like you were crazy and scream NO!  You would likely get the same answer with any good from cheese to cars.  However, for a reason I cannot comprehend, some of these same “Free Market advocates” will argue FOR the Fed to fix the interest rates and discount rates.  Why would this ever work?  It seems to me that they do not understand they are actually arguing that we need to socialize part of the Free Market in order for it to work.

The Bliss of Price Fixing

The Bliss of Price Fixing

Ron Paul writes “One of the primary means the Federal Reserve uses to stimulate the economy is manipulation of the federal funds rate and the discount rates, which are used as benchmark rates throughout the economy. The interest rate is the price of time, as the value of a dollar today and the value of a dollar one year from now are not the same. Just like any price in the market, interest rates have an important informational signaling purpose. Government price fixing of the interest rate has the same deleterious effects as price controls in other areas.”  We have discussed these effects in nearly every part of this series on the Federal Reserve. 

What people need to understand is that Money itself is a good, perhaps the most important good, in the Free Market.  We allow (for the most part) the market to determine prices of other goods, so why not money?  Why allow the Fed to fix interest rates so insanely low that it hurts the economy and the individual? 

Paul goes on to say, “Under Chairman Greenspan’s tenure, the federal funds rate was so low that the real interest rate (that is the nominal interest rate minus inflation) was negative. With a negative real interest rate, someone who saves money will literally lose the value of that money.”  This destroys the effort of the individual to save money for the future.  The Fed’s price fixing is not the answer to whatever problem people think it might be stopping. 

Conclusion

The Fed, as argued throughout these articles, is an immoral force in the Free Market system.  It steals from the individual through inflation, it causes misery through booms and busts, it encourages companies to engage in overly risky behavior and is unaccountable to the American people.

A lot of research went into this series, here are some of the sources and further reading for those interested.
Inflation
Postrel, Fed Up
Coster, Socialist Man
Williams, Counterfeiting vs Monetary Policy
White, Inflation
Hazlitt, What you should know about inflation
Mises, Economic Freedom and Interventionism
Paul, The Inflation Tax
Busts
Thorton, Economics of Housing Bubbles
Karlsson, Yes, Greenspan Did It
Englund, The Fed and Housing
Other
Sowell, Bailout
North, Moral Hazard
Hulsmann, Moral Hazard

Posted in Capitalism, Conservatism, Economics, Liberty, Politics, The Federal Reserve | Tagged: , , , , , , , , , , , | 1 Comment »

War on Executive Pay

Posted by Ender on March 22, 2009

We are going to be starting a new segment on The Daily Switch.  It will be exclusively devoted to covering Obama’s War on Business.  All of the articles will be filed under that category “War on Business” on the left.

This week’s article is from the New York Times, the title pretty much says it all “Administration Seeks Increase in Oversight of Executive Pay.”

Obama’s new plan, which will be revealed this week, will give the Government the role of oversight of executive pay at “[ALL] banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.”  Not only that but it will seek to give the Fed more power than it already has.  (Learn More Here) The Fed will “oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.”

I was and always have been against any Government control over parts of the Free Market, including salaries.  Salaries are a private contract between the individual and the employer.  The Government is lacking two things in this area:

1.  The right to take part in this contract and…

2.  Any knowledge of how the business works and how much anyone should be paid.

If anyone would like to debate either of these two points leave a comment.

Can anyone explain to me how controlling executive pay will help the economy?

Making calls to cap your pay

Making calls to cap your pay

This action will only accomplish one thing.  It will drive the best and the brightest away from these positions.  Is that what we should do during a economic crisis?  Strive to put second rate executives in charge of banks and investment firms?  Like it or not, executives work for money and they are going to want to get paid like the best that they are.  They want the American dream just like you and I, they want to strike it rich in the most prosperous nation in the world.  They are shooting for the stars and are not going to settle for whatever amount the Government says they should be getting. How long until it’s not just executives anymore?

But maybe that’s the point, maybe Obama wants to drive the top tier executives away so that these institutions fail and the Government can step in and expand its power.  Devious…

Posted in Capitalism, Economics, Obama, Politics, War on Business | Tagged: , , , , , , , , , | 11 Comments »

The Federal Reserve: How it Hurts You-Part 4

Posted by Ender on March 20, 2009

This is Part 4 of of a series on the Federal Reserve.   In Part 1, we discussed Money, Fractional Reserve Banking and a brief history of the Federal Reserve.  In Part 2, we discussed Inflation.  In Part 3, we discussed the Austrian Business Cycle.

The Tech Boom  (Cliff’s Notes at the Bottom)

The Backdrop

A few factors occurred prior to the actual bust cycle of 1995-2001 played a part in the bubble. The first was the Plaza Accord of 1985, which was an agreement between the G-5 powers (France, Germany, Japan, UK and the US) to “subsidize U.S. exporters by artificially lowering the exchange rate of the U.S. dollar.” (Callahan) This pulled the US out of the recession of the early 90s, by 1993 the stock market began to rise and the Fed in an effort to battle inflation started to raise their rates. From late 94 to early 95 the rate rose from 4.73 to 5.53.

In 1995, the US, Japan and Germany decided to bail out the Japanese manufacturing industry by agreeing to the Reverse Plaza Accord, which reversed the lowering of the exchange rate established in the original Plaza Accord. This is the problem with trying to control aspects of the economy. The “solutions” only cause more problems in the future. To help Japan, the three countries decided to subsidize German and Japanese products for the American buyer. To do this they lowered the Japanese interest rates, increased Japanese purchase of US Treasury bonds, Germany and the US purchased dollars as well. “Driving the dollar up against foreign currencies would allow the U.S. government to maintain a stance of monetary ease without raising the CPI, since the artificially lowered price of imported goods would tend to counter the price-raising effect on the increased liquidity.” (Callahan) They did this in an attempt to hide what would be rising prices from the CPI (Consumer Price Index.) Although they hid the extra liquidity from the CPI it had to manifest itself somewhere. One of the places it ended up was the US stock market.

In the middle of 1995 through early 96 the Fed lowered its interest rates from 6 to 5.22. Japan also lowered its rate from 1.75 to 0.5. This led to a situation where Asian investors could borrow yen to invest in US securities and make profit with no risk. The arbitrage situation created here further drove up the price of financial instruments in the US.

Scary, But True

Historically, the full employment level leads to an unemployment rate between 5% and 6%. During one of the longest “booms” in the Federal Reserve’s history the rate fell below 5% and stayed below until 2001. It bottomed out at around 3.9%. The chairman during this time of prosperity was Alan Greenspan. He took the lowering of the unemployment rate along with the growth in productivity to mean that we as a nation had reached a new level in economic progress. It was dubbed the “New Economy.” History buffs or extremely old readers of this site might recall that the US has gone down this path before. Anyone willing to guess when the term “New Plateau of Prosperity” was coined? Anyone? Well it was developed in the 1920s, (coincidentally?) prior to the Great Depression. Whether through arrogance or ignorance I know not, but Greenspan thought the macroeconomics of old no longer applied and there did not have to be a bust after a credit induced boom.

Feeding the Bubble

Attempts to control the worldwide economy such as the Reverse Plaza Accord always end in failure. In the late 90s, Japan (among other Asian countries), Germany and Brazil all went through financial crises. The economies could not afford to keep subsidizing US imports. They began to collapse. In the US, the Long Term Capital Management hedge fund which had a large stake in the Russian and East Asian financial markets started turning losses instead of profit.

To stem the panic, the Fed dropped the rate from 5.56 to 4.63 in eight months including a rate cut in between its meetings (which never happens.) During this timeframe (Jun 98-Jan 99) the NASDAQ Composite (tech heavy) went from a low of 1419 to a high of 2193. The tech composite rose over 80% in 1999. Again in the final quarter of 1999 to stem Y2K panic the Fed cut rates below 4%. From September 1999 to March of 2000 the NASDAQ tech composite rose 83% to hi 5048.

It is important to note that just because instruments like the CPI aren’t showing increases doesn’t mean we don’t have an inflation problem. One important measure to look at during all of this are the monetary supply calculations. These are described as M0, M1, M2, MZM etc. During the Tech Bubble M2, M3 and MZM all dramatically increased. The most important one to look at is MZM. See the graph below:

MZM

From 1995 to 2000 it grew 52%, is there any doubt that this was feeding the bubble?

But What About The Berries?

Think back to the situation that resulted with the “berry receipts.” The same thing happened in the US economy during the Tech Boom. The economy was driven forward by both an increase in consumption and investment, which was fueled by the Fed. In the berry scenario, we saw that only a savings induced boom can be sustained. Was there an increase in savings during the Tech Boom? The answer is a resounding NO. Brenner writes “Between 1950 and 1992, the personal savings rate had never gone above 10.9 per cent and never fallen below 7.5 per cent, except in three isolated years. But, between 1992 and 2000, it plummeted from 8.7 per cent to -0.12 percent.”

“The divergence of investment demand and savings supply [characterizes] the ‘policy-induced boom,’ where monetary expansion drives a wedge between savings and investment.” (Callahan) This wedge causes businesses (and consumers) to start spending more on capital investments than would normally be deemed reasonable. Business equipment (up 74%), construction (up 35%) and debt (reaching 9.9% of the GDP vs 3.4% in the early 90s) all rose during this timeframe.

The Collapse

Architect of the Bubble

Too much investment and current consumption leads to price increases as business compete for resources, which are becoming more and more scarce. For instance in the Tech Industry, prices started rising for programmers, developers, office space and web domains. In an effort to cool the economy the Fed raised the interest rates. This coupled with the rising prices popped the Tech Bubble. The companies scraping by on cheap loans now started to take losses. The NASDAQ lost over 77% of its value. The drastic drops did not only affect lesser known tech companies. Qualcomm dropped from 136.12 (‘00) to 25.18 (‘02). Cisco dropped from 136.37 (’00) to 12.07 (’02). Yahoo dropped from 178.06 (’00) to 11.50 (’02).

This also affected business that supported the Techs. Construction companies who purchased capital goods such as real estate, cranes, dump trucks etc. because their demand was so high now have to pay for all that investment even though the demand dropped off. Computer manufacturers now have rising inventories and no one to sell to because the bubble burst. People who were hired to deal with the new business are now laid off because business fueled by inflation and easy credit has ceased.

Cliff’s Notes

Cliff's Notes

In short, the Fed tried to control the economy through interest rate manipulation and credit inflation. This is clearly evidenced by the MZM’s insane rise over the 6 year stretch along with the Fed’s rate dropping. The extra liquidity was hidden (for a time) from measurements like the CPI, however, it needed an outlet which ended up being the stock market. Due to non-economic factors much of the growth went towards the new and seemingly profitable Tech Stock industry. Once, the Fed stopped its tactics and prices started dramatically increasing the bubble burst.  Misery ensued.

In Part 5, we will wrap up and take a look at a few odds and ends.

For sources and further reading:

Austrian Business Cycle, Callahan
ABCT, Best
Greenspan: The Liar, The Fraud, Karrlson
The Dot-Com Future, Rockwell
He’s Forever Blowing Bubbles, North
Money and the Stock Market: What is the Relation, Shostak
Sound Money and the Business Cycle, Cochran

Posted in Capitalism, Conservatism, Economics, Liberty, Politics, The Federal Reserve | Tagged: , , , , , , , , , , , | 2 Comments »

Private Property: RIP???

Posted by Ender on March 19, 2009

Private Property?

Private Property?

Prosperity cannot exist without the Free Market. The Free Market cannot exist without Private Property. Private Property cannot exist without the Rule of Law. When you attack the law, you attack Private Property, the Free Market and Prosperity.

Last week I linked to an article that stated Obama had started a War on Business. With each passing minute I agree with the theory more and more. One of his latest attacks has been on the Rule of Law. In particular, he is attacking contract law.

When the AIG bonus story broke Obama and Dodd among others were left with egg on their faces. They knew the bonuses were in the package and yet Dodd passed it and Obama signed it. Now, after the fact they are both “outraged” and want to change history. These bonuses are contractual obligations. It doesn’t matter that you don’t like it, it doesn’t matter that it stinks, what matters is the Rule of Law. That’s the funny thing about Law; you don’t get to pick and choose when you follow it. The Law exists to protect our rights, our prosperity. If the Government can decide to subvert the law because it was too ignorant/dumb/oblivious/stupid to realize what it was doing then what is to stop them from doing whatever they want to its citizens? Think about that. If the Government can pass a bill, sign a contract (in effect) and then back out after the fact, what can’t they do?

Now, Congress is trying to pass a special tax, which will tax the AIG bonuses by 90%. The actions of Obama and Congress show they have no respect for the Rule of Law. They are so worried that they will be held accountable for their actions they are trying to change the law to save their hides.

The Law is what protects us from each other and the Government. When people disregard the law, they start murdering, stealing and create bedlam. When Governments disregard the law it creates tyranny.

Posted in Capitalism, Liberty, Obama, Politics, War on Business | Tagged: , , , , , , , , | 10 Comments »