The Daily Switch

Archive for the ‘Capitalism’ Category

Clueless

Posted by Ender on June 27, 2010

Vice President Joe Biden, “there’s no possibility to restore 8 million jobs lost in the Great Recession.”

http://www.cbsnews.com/8301-503544_162-20008924-503544.html

This guy literally has no clue what he is talking about.  How can someone so ignorant to economics hold the position of Vice President of the United States of America? 

I am curious.  Joe, how did the economy create those 8 million jobs in the first place?  Was it magic?  Did people just wake up one day and decide “Hey, I think I’ll have a job today”?  Please Joe, help me out here…

I mean, I’m no Vice President of the United States so I don’t expect to understand how  the economy works, however, historically speaking it looks like low taxes, pro business laws, less restrictions on the free market have all led to an increase in jobs and prosperity.  But, like I said, I’m no Vice President.

In closing, the intellectual, liberal, elites have spoken and I am truly, truly sorry if you were one of the 8 million that lost their job.  My heart breaks for you, since you will never, ever, be able to work again (not my words, Joe’s).

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Posted in Biden Watch, Capitalism, Economics, Politics, The Daily Switch, War on Business | Leave a Comment »

Bring on 2010

Posted by maker on January 7, 2010

Thank God for Bill Whittle and others like him. Enjoy…

Posted in Capitalism, Conservatism, Culture, Economics, Environment, Liberalism, Liberty, Politics, Socialism, The Daily Switch, War on Business | Tagged: , , , , , , , , | Leave a Comment »

New Era of Obama = Same Old Politics

Posted by maker on December 18, 2009

As much as this characterizes our government, it is also becoming a universal sentiment of an entitled society.

Last week, President Obama lashed out at the financial institutions on Wall Street, again.

When the President of the United States flippantly refers to private citizens and their businesses as ‘fat cat bankers on Wall Street’ there is a problem with the president. When the public sees nothing wrong with this, there is a larger problem with the public itself.

The irony of this particular instance of class warfare populism exhibited by Barack Obama, is that as he delivers these remarks, we learn that government employees are much better paid than private workers. This may seem unrelated at first glance, however, the president petulantly proclaimed these so called ‘fat-cats’ the architects of our current recession, seemingly excusing the federal government of any and all responsibility in the matter. I won’t get into all the intricacies and arguments here, but suffice it to say this is a more than generous revision on the president’s part. So the age old question ‘cui bono?’ does not reflect well on those ‘fat cats’ in D.C. if we understand their role in the unraveling of our economy compared to their ever increasing compensation.

The cycle is a vicious yet convenient one: Support and push policies that loudly proclaim help for the helpless while quietly destroying the free market, which action directly creates more ‘helpless’ to promise more for while also creating the circumstances in which people will more likely cede power to ‘the only people’ who can fix things. Oh, and they need to be better compensated for all the extra work of saving us.

In fact, USA Today reported the following:

  • On average, federal employees earned $71,206 per year, compared to $40,331 in the private sector.
  • From December 2007 through June 2009, average federal employee salaries increased by 6.6 percent, while average private-sector salaries increased by 3.9 percent. Federal employees at the top of the pay scale received pay increases of 8.6 percent during that period.
  • Federal employment is getting top-heavy. Federal employees making more than $100,000 increased from 14 percent to 19 percent of total government employment. In fact, the number of federal employees making more than $100,000 has more than doubled in less than two years. There are now more federal employees making more than $100,000 per year than $40,000 per year.

How could anyone say no to this face?

In light of these facts, how can any government employee begrudge any private citizen their salary? The fact is that these ‘fat cats’ on Wall Street are creating something. They are creating jobs and wealth for millions. The ‘fat cats’ in Washington are best known for creating hurdles for those that would create jobs and wealth.

Worse still, Obama warns that the ‘fat cats’ had better stop opposing government control of their pay and strict oversight of their day-to-day operations because, basically, they owe him for the bailout, which coincidentally many of them have paid back and others have been deterred from paying back.

Obama’s ignorance seems only matched and perhaps exceeded by his unmitigated arrogance. These comments were made just before the president was to meet with said ‘fat cats’ to persuade them to comply with his wishes.

Who says this guy isn’t smooth?

Posted in Capitalism, Conservatism, Culture, Economics, Liberalism, Liberty, Obama, Politics, The Daily Switch, War on Business | Tagged: , , , , , , , , , , , , | 1 Comment »

Quick Links

Posted by maker on November 12, 2009

Some useful reading… Unintended consequences are fine as long as our intentions were good, right?

 

 

  • Stephen Spruiell on the SEIU

 

 and viewing…

 

 

Health-care…

 

 plus

 equals an

 that will prove

 

 

Posted in Capitalism, Conservatism, Economics, Health care, Liberty, Obama, Politics, The Daily Switch, War on Business | Tagged: , , , , , , , , , | Leave a Comment »

Health-Care as Marriage

Posted by maker on November 9, 2009

Health-care is to marriage as...

Can either marriage or health-care reasonably be labeled a right?

I’ve recently been involved in a few debates over at a liberal blog called meoutsidethebox . The irony of the name is made clear by hopelessly captive thinking which permeates each leftist-talking-point-turned-article on the site. Regardless of the slant, the editor doesn’t shrink from a good debate, no matter how much he may avoid answering a direct question.

The latest article on the site poses the question ‘Is health insurance a right?’ . The obvious answer is, ‘no’ with the reason being, ‘because it’s not.’ But for people who might need a little more hand holding let’s explore it a bit further.

First, let’s clarify that there is a difference between health care and health insurance, the latter simply being one of many means of providing the former. I think that the title of the article is a bit misleading because what is subsequently discussed is care, not insurance. So let’s focus on the care.

 In the resulting arguments surrounding this issue, a constant analogy seems to be that the Constitution does not directly grant the right to marriage, but that over time we have confirmed marriage to be a right and recognize it as such. Thus, we should follow the same track for health care. Despite the analogy’s gaping holes I am fine with it. Let’s agree that healthcare should be treated as a right just as marriage is.
 
 
Is anyone proposing that the government should pay the financial, not to mention the emotional, costs of marriage? Should the government pay for the wedding? Or even the engagement ring? Should the government be tasked with finding someone willing to marry you, despite any baggage you might have? And if unwilling should the government impose regulations forcing a spouse to accept a marriage despite any and all baggage? Should this right be forced on everyone so that the singles of our society must pay a penalty for not acquiring the right of marriage? Should any man be made to marry Nancy Pelosi?
 

‘That’s ridiculous’ you might say, to which I’ll respond, ‘we are finally beginning to agree’. Let’s call it a right if that makes for a more amiable starting point. Now that we agree on the labels we still have the solution to flesh out.

Good news for America's divorce rate, bad news for growing old together.

Government run health-care means 'til death do us part may not seem so long.

Calling health-care a right does not mean we suspend our knowledge of history or our tendency toward logic. The idea that determining health-care a right automatically translates to support for this ruinous and ignorant proposal is embarrassingly short-sighted. As some people are painstakingly thorough to claim, ‘we are all in this together’, so let’s figure out what works so we don’t screw things up for everyone. Does history tell us anything about socialized medicine? Do economics tell us anything about incentives, or competition? Where quality is paramount, can we afford to eliminate these considerations?

Perhaps, as with marriage, government should more appropriately leave well enough alone so as to allow the American people to pursue their rights, and the ensuing costs, as they see fit.

Posted in Capitalism, Conservatism, Culture, Economics, Health care, Liberty, Politics, Socialism, The Daily Switch, War on Business | Tagged: , , , , , , , , , | 18 Comments »

School Choice

Posted by maker on May 5, 2009

Thank God for the folks over at Reason.TV . In their typically succint and clarifying manner they pose some simple yet devastating questions to the current administration specifically and leftist ideology at large. 

 

How can we explain this issue being politicized? Is there any conclusion to be drawn other than undue influence of, and pandering to, special interest groups like the NEA?

There are moral dilemmas involved as well as straightforward pragmatic implications. What message is sent to those who were involved in the program and experienced success only to have it taken away? More importantly, what message does it send to those who hoped to one day be part of the program? If it works and it’s cheaper why not do it?

This seems to be yet another example of the government squashing the success inherent in a competitive free market. Let’s treat it as an opportunity to reverse the tide. Talk to your family, friends and neighbors about it and then call your representatives, senators or even the White House.

Like the democrats always say, it’s for the children.

Posted in Capitalism, Conservatism, Culture, Education, Liberalism, Liberty, Obama, Politics, The Daily Switch | Tagged: , , , , , , , | 2 Comments »

Common Misconceptions

Posted by Ender on April 24, 2009

Recently, a commenter in this post voiced a few common misconceptions about Bush and Obama. Here is the quote: “As I said, taxes would have needed to be increased anyway as a result of the Bush’s spending. I know this sounds like I am saying [Obama’s] spending ok, Bush’s spending bad. I can’t deny that and I won’t back down from that argument. With [Obama’s] budget though you see the results of the country fighting 2 wars. W buried that and never had it reflected in his budget. So people need to take the wars into account when they see [Obama’s] budget.”

Deficits

Deficits

Aside from the glaring inaccuracies there are other problems with this statement. I think we have to address the tax issue. The commenter claims that taxes would have to be raised as a result of Bush’s spending. The purpose of raising taxes I would assume would be to get rid of the deficit. Please reference the chart on the right. These numbers include all war spending. Now if we look at this chart we can see that even including the wars Bush’s deficit was drastically less than the proposed Obama deficit. So, if the purpose of raising taxes is to reduce the deficit then I am thoroughly confused. What is the point of raising taxes if you are going to increase spending by astronomical amounts? Even with tax increases Obama’s deficit will be more than all previous Presidents’ combined.

The commenter also claims that Obama had to reflect the wars in his budget which is causing it to look so bad. Although it is true that Bush funded the wars through emergency supplementals; it is false to say that this is the reason Obama’s budget is horrible. The spending although not in the budget had to surface somewhere. It surfaced in the deficit. Riedl writes, “President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.” So, forget about the budget and focus on the end result, the deficit.

Another similar misconception (not voiced by the commenter) is that Obama is creating $2 Trillion in savings with his plan. “During his recent address to a joint session of Congress, President Obama previewed his budget by asserting that the Administration has “already identified $2 trillion in savings over the next decade.”[9] This is simply not true. His budget increases spending by $1 trillion over the next decade, which he attempts to offset by reclassifying as “savings” $1.4 trillion in tax increases and $1.5 trillion in reduced spending in Iraq. However, gov¬ernment savings have always referred to spending cuts that save taxpayer dollars, not tax increases that feed the government. Furthermore, the Iraq “sav¬ings” are measured against an implausible spending baseline that assumes a permanent $180 billion bud¬get for the global war on terrorism, without any troop withdrawals through 2019. This is the equiv¬alent of a family deciding to “save” $10,000 by first assuming an expensive vacation and then not taking it. Without these false savings, only the $1 trillion spending hike remains, and that does not account for the extra $250 billion proposed for another round of financial bailouts in the current fiscal year.”

The poster also wrote “I don’t believe in a recession that giving tax breaks to the rich is the answer.” This is also hopelessly false. Firstly, the cuts benefit everyone. Secondly, “In the 18 months following the 2003 tax rate cuts, economic growth rates doubled, the stock market surged 32 percent, and the economy created 1.8 million jobs, followed by 5.2 million more jobs in the next 27 months.” The fact of the matter is that tax cuts encourage spending, investment and growth. Even extremely liberal and economically ignorant people like Alec Baldwin admit this. In an interview, Baldwin said “I’m telling you right now, if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television production is going to collapse, and it’s all going to go to California.” The only thing Baldwin got wrong here is that the business will not move to California where the taxes are already worse and driving the movie industry to places like New Mexico, Montana and Canada. Taxes hurt business more than anything else. Reducing taxes on businesses as well as individuals will bring us out of the recession. To look back at the Bush years as having no economic prosperity is completely shortsighted and biased. Even taking into account the housing bubble burst; the economy is still better off then before.

Unfortunately, arguments based on false information never end well. The fact of the matter is that Obama has drastically increased unaccounted for spending to levels that will be detrimental to the economy. I’ll end with a quote:

Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.-John Adams

Posted in Capitalism, Conservatism, Economics, Obama, Politics | Tagged: , , , , , , , , | Leave a Comment »

Creative Destruction & Failure

Posted by Ender on April 18, 2009

Schumpeter

Schumpeter

The term Creative Destruction was coined by Joseph Schumpeter in 1942. Creative destruction is the process where old established companies or technologies are destroyed by new or more efficient ones. Schumpeter argued that creative destruction “is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in…” (Schumpeter) What he means is that creative destruction drives capitalism, which makes sense. Capitalism is the only economic theory that encourages innovation and efficiency. With innovation comes the necessity of ridding yourself of the old. Out with the old in with new, if you will. Seems right, why would we want to keep the horse and buggy industry alive when we have cars, right?  With industries constantly evolving and improving lagging companies and technologies will be left behind.

History is rife with examples of creative destruction. Even the youngest of our readers are witnessing creative destruction as we speak. The music industry is a perfect example we have gone from records to 8 tracks to cassettes to CDs to MP3s. This is creative destruction at its finest replacing costly, low quality, inefficient products with cheap, high quality, efficient products. Other examples include iron to steel, Polaroid to digital camera, warehouse sized computers to the iPhone. One generally can’t complain about these advances.

In my opinion there is another branch of creative destruction that is usually poorly received. This type of creative destruction is the failure of businesses. The media, politicians and consumers in general decry the failure of business. But to be good citizens we must reject this urge and ask “why do businesses fail?”

At the most basic level businesses fail because a.) they are not satisfying the consumer and/or b.) they are using resources ineffectively. We should view this failure as a triumph of the free market because a.) who wants to keep a company around that is making warehouse sized computers these days? And b.) inefficient companies failing frees up valuable resources for efficient companies. Both good things.

Walmart is a good example of this second type. Walmart discovered a way to use its resources more efficiently thus lowering the cost of its products for the consumer, which in turn drove inefficient companies like KMart or various mom and pops out of business. The failure of these other businesses benefited the consumer. Unfortunately, failure of business is fought to the inevitable death (of the business) by politicians looking for votes. All this fight does is waste the taxpayers money and delay the inevitable.

Watch this video for a debate on GM going bankrupt.

In the video Gillespie tells us why we need to let GM fail. They are not too big to fail. He really summed it up perfectly in the opening minute when he says [to paraphrase] “that GM and Toyota sold about the same amount of cars worldwide, GM lost $38B and Toyota made $19B.” Clearly, there is something fundamentally and systemically wrong with the way GM runs its business. It just cannot compete in today’s economy. We need to let creative destruction or failure take place to free up resources for the better companies. Gillespie brings up several other good points about GM and bailouts in general. He also has to defend a cheap pot shot from his counterpart when he says something to the effect that the free market only works on paper.

Let these companies fall into bankruptcy, restructure their business and come back with the ability to compete.  Don’t spend taxpayer money on corporate welfare.  Don’t throw good money after what is clearly bad.  Don’t follow the politicians and drones in the media down the path of state run economies and massive systemic failure.  Rejoice that the free market separates the wheat from the chaff.  Appreciate creative destruction.

Posted in Capitalism, Economics, Socialism | Tagged: , , , , , , , , , , , | 3 Comments »

From the Field

Posted by maker on April 15, 2009

Can you feel it?

Can you feel it?

Today I was driving through western Tennessee for work.  One of the real benefits of my job is the privilege to get to know this country a little better, first hand. I was struck by the beauty of the land even on a cool and overcast day. The rolling hills and quaint little towns seem so far away and insulated from the rest of the country which is reportedly rife with turmoil and despair. I also noticed that more than any other area I’ve travelled, northwest Tennessee and southwest Kentucky seemed packed with birds of prey. Nearly every mile I travelled brought with it the sight of an owl, hawk or bald eagle. At the risk of  inordinate sappiness, I’ll tell you that every time I see a bald eagle I find myself overcome with a sense of nostalgia and patriotism. I try to imagine what the founders must have intended with the choice of this majestic bird as a national symbol and I am proud. 

As I passed by small town after small town I listened to a long line of callers reporting in to conservative talk radio shows about their experiences of the Tax Day Tea Parties they attended. I was struck by the unique nature of today’s events. When do we as conservatives ever do something as a group? When do we clearly articulate a feeling, belief or sentiment in a way so attractive to so many?  These thoughts caused me to regret being away from home and unable to participate.  I even looked up locations in Tennessee just in case I might have time to stop on the way to the airport. Unfortunately, the event in Nashville was scheduled to end before I would arrive. I resigned myself to live vicariously through the callers speaking of their ‘electrifying’, ’empowering’ and ‘encouraging’ experiences.

Original Tea Party Tea

Original Tea Party Tea

As I navigated my way through the town square of Springfield, TN (pop. approximately 16,000) on my way to Franklin, KY, I noticed a large crowd forming in front of the courthouse.  I checked the clock and was thrilled that I had an hour and a half  to spare before my next appointment about 30 minutes down the road. I turned around, parked and walked towards the courthouse to find that the crowd I had seen just moments before had already grown and was continuing to do so.  I approached the outskirts of the crowd and was struck by the diversity of the assembled throng. Business men and women in various levels of formal work attire mixed with obvious farmers who rubbed shoulders with young mothers pressed up against men in full revolutionary war garb. It seemed as though everyone in the crowd, regardless of dress, held something in their hands, whether it be a sign, child, camera, placard or breifcase (no pitchforks or torches. Sorry, acorn).

As I pressed in a little closer I noted the countenance of the people around me. Despite the reported rage that was fueling these ‘radical’ protests, I was met with bright eyes and ready smiles, doubly surprising if you knew what I look like. This was not an angry mob. This was a peaceful gathering of good-willed citizens exercising their constitutional right to assembly, many for the first time.

I caught the attention of a nearby participant to ask what time things were scheduled to start. He informed me that they were running behind because of a court proceeding that was running long that they didn’t want to interrupt. Twenty minutes, two renditions of This Land is Your Land, God Bless America, countless chants of U.S.A! and one Pledge of Allegiance later, a local pastor named Bob Carroll stepped up to a podium to deliver his speech. The speech was well written, well delivered and well received. It was met with loud applause at times, shouts of encouragement and agreement at others. It was stirring and surprisingly non-partisan. The greatest strength of the speech, however, was its seamless inclusion of direct quotes from the constitution.

Sadly, at this point I had to hit the road again. Nonetheless satisfied, I proudly returned to my work comforted by the knowledge that even in what some would label a “backward’ southern area these tea parties were being conducted in a respectful, peaceful and effective manner.

My sincere hope for this country is that these Tea Parties might stir something up within the citizenry. I pray that we would consult history to learn from what our leaders are so eager to repeat. I pray we would each set aside our prejudice and party affiliation and embrace common sense and respect for the constitution upon which this great country is founded.

Posted in Capitalism, Conservatism, Culture, Economics, Liberty, Politics, The Daily Switch | Tagged: , , , , , , , | 12 Comments »

The Great Overreach

Posted by Ender on April 4, 2009

The problem with the Liberal philosophy is that it has an unquenchable thirst for power. When was the last time you heard a Modern Liberal, not to be confused with a Classical Liberal, call for a decrease in Government? I guess I should clarify, when have they asked for a decrease in Government outside of Law Enforcement and the Military? This should not be a surprise even to Liberals because the idea that the Government can solve any problem is at the core of their belief system. “Failure is not the product of his beliefs but merely want of power and resources.” (Levin) A belief system with this at its heart will invariably lead to severe overreaches when they are in power. In only about two short months we have seen several examples of overreach.

Salaries

Barney Frank

Barney Frank

On March 22nd, I wrote a piece about how the administration was seeking to control executive pay. I asked “How long until it’s not just executives anymore?” Well, unfortunately, it appears the answer was 2 days. On May 24th, the House Financial Services Committee Chairman Barney Frank passed the Pay For Performance Act of 2009. The act “is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.” It would give power to the Treasury department to determine if salaries are unreasonable.

Initially, this would be justified by only applying to companies that took bailout money. The problem I see is the problem of the slippery slope. Just look at where it has taken us so far, from just executives to all employees of bailout companies to…..what? I am reminded of Wickard v. Filburn, a case tried before the Supreme Court. In the 1940s (through today) the Federal Government has the ability to regulate interstate trade. In the Wickard ruling, the Supreme Court decided that it could regulate whether a private citizen could grow crops on his own land to use for his own consumption. How could the Court do this, you ask? Well, the Court said that by not participating in interstate trade the farmer affected interstate trade, thus opening him up to regulation. With rulings like this it doesn’t take much to imagine a situation where the Government declares it can control all salaries.

Running a Business

Giethner and Bernanke

Giethner and Bernanke

Treasury Secretary Geithner and Federal Reserve Chairman Bernanke argued for the ability to “regulate and even take over financial goliaths whose collapse could imperil the entire economy.” Shockingly, Obama agreed. This is such a large overreach/power grab that I am surprised they had the audacity to ask for it. The Government has no right to take over companies like this. The only thing Geithner and Bernanke disagreed on was which of them should have the power. In another post I wrote I talked about how Obama and his team decided that they knew more about the auto industry than the board of GM. The Government cannot run a car company, a bank, a financial institution, a hospital (see Walter Reed) or a post office. A commenter asked what Wagoner (former CEO of GM) knew about running a car company. I ask what does the Government know about running an economy, specifically Geithner. You can learn all about how Geithner devastated the Indonesian Economy in the 90s. In a post on what caused the Tech Boom I briefly mentioned part of its cause was due to the Asian crisis. Guess who was behind it? “[B]y frightening the Chinese into building their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed to the global financial crisis which has since devastated the world economy.” Three cheers for Geithner!

Free Speech

Supreme Court

Supreme Court

There have been many attacks on Free Speech in the last few years. Most of them are under the guise of fairness. McCain-Feingold was a blatant attack on free political speech. “Just last week, the Obama administration argued before the Supreme Court that it has no principled constitutional problem with banning books.” (Goldberg) The Supreme Court is hearing a case about a documentary called Hillary: The Movie. “Several justices asked the deputy solicitor general, Malcolm Stewart, if there would be any constitutional reason why the ban on documentaries and ads couldn’t be extended to books carrying similar messages. Stewart, speaking for a president who once taught constitutional law, said Congress can ban books “if the book contained the functional equivalent of express advocacy” for a candidate and was supported, even slightly, with corporate money. Such advocacy, Stewart conceded, could amount to negatively mentioning a politician just once in a 500-page book put out by a mainstream publisher.” I guess these words just aren’t clear enough “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” (Before people start commenting on McCain being on the Right, give me a break. He has more in common with the Left than the Right, which is why he lost the election.)

These are just a few examples of the overreaches we have seen lately. Let’s hope the American people remember Liberty and wake up soon.

Posted in Capitalism, Conservatism, Culture, Economics, Liberalism, Liberty, Obama, Politics, Socialism, War on Business | Tagged: , , , , , , , , , , , , , , , , | Leave a Comment »