By Stephan Zimmermann, on January 30th, 2009
It is usual to provide an incoming President with a hundred days following the inauguration. This common courtesy permits the electorate to see and feel first-hand the substance of the chief executive’s leadership potential. Unfortunately, the country does not appear to have that luxury of time.
President Barack Obama is obviously cognizant of his role as chief executive and the power contained in Executive Orders. His first orders dealt with morality and ethics in the halls of the government, including the White House. He also emphasized the role of law in his order to the Guatanamo military establishment.
He could, however, take a major – perhaps unprecedented – step forward to assure the nation of his boldness of leadership and incisiveness of economic options. Despite the Democratic Party’s majority in both the House and Senate, partisan bickering already continues the rift concerning the proposed “stimulus package.” Pork-barrel bills under the guise of “make-work” programs may eventually help an incumbent in his or her constituency in two years. It is doubtful whether they can institute rapid employment or renewed investment to help solve the current crisis. From many sections of the document it is obvious that it is pet projects, rather than meaningful emergency legislation, that are intended.
Obama could handily issue an executive order labeling the current economic crisis as a “national emergency,” operate with a minimum of federal bureaucracy, and continue his effectiveness and popularity with the electorate.
The executive order would be based on existing precedents.
It would immediately suspend the Federal Income Tax in its entirety.
It would simultaneously institute a flat, national sales tax to offset the loss of federal revenues to continue smooth operation of existing governmental infrastructure and mandated programs.
It would allow the President a minimum of six months without Congressional interference and partisan bickering to establish the priority of needs and wants of the country in the national, not merely partisan, interest.
The main benefit of such an executive order would be to renew the confidence of the electorate in the stability and predictability of government leadership. Markets thrive and prosper on predictability, rather than chaos.
It would free individuals from the time and money involved in complying with the complex and unpredictable legislation affecting the annual tax codes.
It would permit the individual to decide where and how to spend his or her own money, instead of working for roughly four months each year for income tax withholdings. The various states could emulate the federal program within their own jurisdictions if they so desired. California’s Governor Arnold Schwarzenegger took the way of a state executive order on December 19, 2008 to stave off immediate bankruptcy. While taking various steps to stop that state’s hemorrhaging spending, Schwarzenegger stopped just short of mandating a change from the state’s income tax to a consumption tax.
Strict constitutionalists, no doubt, will immediately howl and point to the potential danger inherent in the chief executive’s application of such an executive order. They have done so from George Washington to George W. Bush and every President in between. The existence of Executive Orders now applies to physical dangers to the country, as well as less defined “national emergencies.” Few, if any, have been effectively challenged.
Previous Executive Orders set ample precedent. Qualified attorneys can point out the obvious benefits and drawbacks for President Obama.
From his campaign to his inauguration, Barack Obama has often invoked the image of Abraham Lincoln. Perhaps he can take the step further by emulating Lincoln’s courageous use of executive orders to solve today’s crisis in the United States.
By Dan McLaughlin, on January 29th, 2009
“A government which robs Peter to pay Paul can always depend on the support of Paul”. That quote was, interestingly enough, made by George Bernard Shaw, an avowed socialist. It rings true for many of us because of what we see in every day experience. Present day government is the formalization and enforcement of the business of robbing Peter to pay Paul.
Our current stimulus plan is one massive transfer from Peter to Paul. The American Recovery and Reinvestment Act of 2009 is an amazing document. It is 258 pages of funding opportunities, grants and programs totaling $825 billion, in addition to all of the previous and parallel efforts by the Treasury, Fed and FDIC. It sounds like trick or treat time. A billion for you, a few billion to you, and here, here’s an extra three and a quarter billion for you. That’s mere pocket change when everyone is thinking in terms of trillions now. However, if you own a casino or gaming organization, a swimming pool, aquarium, zoo or golf course, forget it. You’re not eligible. You have to find a different sugar daddy. All other comers are welcome.
Where is Peter in all of this? Look in the mirror. If you are a taxpayer, or if you use money, the value of which will be inflated away, or if you have children or grandchildren who will be footing the bill in the future, then say hi to Peter. You are him.
The stimulus plan injects mountains of previously non-existent cash into the economy, money that is made from nothing. The idea is that, if you use enough money to “prime the pump”, the economy will start working on its own. The problem is that the government has been priming the pump for decades. The booms and busts are the result of constant priming.
The underlying assumption behind the pump priming and the stimulation is that there is not enough demand for goods. Our fearless leaders want to stimulate us to buy, even though we were being condemned for consumerism when it was convenient for them. If our government really wants to stimulate our economy to the maximum amount, I have the foolproof solution.
I propose that the government buy printing presses with official currency plates for every family in this country, the bigger the denominations the better. That way, we, as consumers, wouldn’t have to wait for the banks to get stimulated in their own good time. We wouldn’t have to wait for dinosaur car companies to have a miracle rebirth. We each could stimulate our own economy.
Let’s say that printing presses would cost $10,000 each. If we use a nice round number of 100 million family units in America, it would take a measly $1 trillion to forever solve the problem of not having enough demand. Politicians could save all of the trillions of dollars of stimulus wasted by pouring them down the black hole they’re trying to fill now.
People could print money for everything their heart desired. They could dine at five star restaurants, drive luxury vehicles, live in huge mansions. They would be able to support a level of demand reserved now only for politicians, bankers, mega corporate execs, lobbyists, United Nations representatives and environmentalists.
It is obviously preposterous to believe that everybody making their own money would stimulate the economy. Nothing is produced by counterfeiting except dollar bills. There is no productivity, no real wealth creation. All that would result is a vast increase in worthless dollars. In that case, the winner in the economy would be the one who could counterfeit the most, the one who inflates the money supply and devalues the dollar the most. The losers are the ones who don’t counterfeit, or counterfeit the least.
The reason that it is preposterous to believe that the stimulus will work when private citizens do it is precisely the same reason that it is preposterous for government to do it.
The false stimulation may give some people profits, but those profits will come from the loss of purchasing power of the buying and tax paying public, not from the wealth creation process of free markets. It is inevitable that there will be a large number of “stimulus multi-millionaires”, those who most efficiently rape the system and the taxpayer.
The problem for investors these days will not be finding what industry or what business will be most productive, but rather, who will win the stimulation game. Good luck, Peter, you’re going to need it.
By G.L.C., on January 28th, 2009
In January 2000, President Bush signed the No Child Left Behind (NCLB) Act with great fanfare. The Act had noble intentions and was sold on the guarantee that there would be no student left behind and the strong arm of the government would ensure that the poor would have the same as the rich.
Although the law has noble aims, there is a hug difference between the language and actions of the government. While the law seeks to set high educational standards, the nation’s commitment to wealth to its schools is mediocre. The United States is amongst the least equitable nations when it comes to equality for children. A study by the United Nations Children’s Fund gave the U.S. a low ranking of 21st out of 24 industrialized nations in educational equality. NCLB promised equality for all, but the government has failed to provide funds to meet the cost of turning this promise to reality.
What NCLB has done is that it has raised the standards without providing for the resources. This may have the undesirable effect of setting up many children for failure. While the socio-economic benefits of funding the national educational obligations to the poor and the needy are enormous, the fact is that funding alone will do little to prevent the existing system from randomly denying funds to the schools that need it the most. NCLB holds schools with well educated patents and generous resources and improvised schools to the same standard and does not distinguish between them. The system as it exists today does not recognize that a child with poor parents may not be as focused on education as a child with rich parents.
There are schools that need to make changes in order to improve the performance of their students. Most of these are schools that do not have the resources that other schools in more wealthy communities have. While the schools meeting NCLB receive more funds, the schools which fail are denied the very funds they need to improve. These schools are labeled as failing. Most schools that have been labeled as failing are in poor or diverse neighborhoods.
To improve the education system, the funding must be adequate. There must be new investments, particularly in poor, rural, and inner-city environments not because it is the law but because it is the need of the hour. The major obstacle to funding is not the lack of funds but the lack of political will. As things stand today – tax cuts, sluggish economy, and the wars in Iraq and Afghanistan – the federal government is unlikely to provide funds for improving the education system. From a legal perspective, the federal government cannot be sued to provide adequate funds under NCLB.
NCLB is therefore nothing but a very good example of a law passed with noble intent but not followed in its spirits to achieve its goals.
By Stephan Zimmermann, on January 27th, 2009
In a settlement with New York State Attorney General Andrew Cuomo and the North American Securities Administrators Association (NASAA), Credit Suisse agreed to buy back nearly half a billion dollars of individual investors’ securities purchases and a $15 million fine. Credit Suisse is Switzerland’s second largest bank. (www.swissinfo.ch)
The settlement concerned sales of auction rate securities (ARMs,). It provides for Credit Suisse to “buy back the securities from individuals, charities and small businesses with accounts valued up to $10 million” according to Swissinfo. Securities brokers often understated the potential risk of ARMs, especially to unsophisticated smaller investors. (www.cfo.com 16 Sep 08)
Cuomo suggested that “The industry is taking responsibility for correcting a problem they helped create, and that’s a good thing,” .
Karen Tyler, president of NASAA, described the Credit Suisse settlement as “another step on the road to recovery for thousands of Main Street investors who have been trapped in the auction rate securities meltdown”.
UBS, Switzerland’s largest bank, similarly settled earlier this year with various American authorities. It announced in August a settlement for customers owning ARMs. UBS, which has seen a dramatic drop of more than forty-three percent in its share value, reserved an additional US$900 million to the US$8.3 billion. Buybacks are planned to start as early as October.
Citgroup, Merrill Lynch, JPMorgan, Chase and others reached similar settlements, all on or before August 15 this year, before the big “meltdown” in the financial markets.
The buybacks of ARMS for smaller investors intensify a closer scrutiny of the necessity or desirability of a federal bailout of illiquid American financial companies.
While the candidates for the presidency stress the potential necessity of such a bailout for the effects on “the small guy” it becomes critical to understand exactly how small investors might be impacted by the potential failures of financial firms.
By J.D. Seagraves, on January 26th, 2009
Last week, I produced a list of the Top 10 Worst Presidents (from a free-market perspective), #s 6-10. Starting with #6, they were Richard Nixon, George Washington, George W. Bush, Ronald Reagan, and Theodore Roosevelt. Now here are the “top” 5:
5. Lyndon Johnson : In addition to the pointless death and destruction of Vietnam, Johnson’s “Great Society” also caused irreparable damage to the U.S. economy and the American family. Even his “civil rights” initiatives, for which conservatives give him begrudging praise, are condemned by libertarians. The Civil Rights Act, for example, amounted to the nationalization of private property and ushered in Affirmative Action, which arguably exacerbated racism. LBJ’s hyper spending was monetized by the Federal Reserve — according to the current head of the Dallas Fed, Johnson once physically beat a Fed chairman until he agreed to “print the money” Johnson “needed.” The huge amounts of new money created under Johnson’s reign as chief executive made the severing of the gold standard virtually inevitable, and set us on the path to monetary oblivion we’re currently on.
4. Harry Truman : The bombing of Hiroshima and Nagasaki killed tens of thousands of innocent women and children — and it was all unnecessary. Although we’re not taught this in our government-funded schools, Japan had already offered a conditional surrender, but the U.S. demanded unconditional surrender. The Japanese were worried that the U.S. would kill or humiliate their Emperor, a religious figure, if their surrender was “unconditional.” Truman used this as an excuse to display the U.S.’s horrible military might — and put the Soviets on notice, igniting the Cold War.
Nothing can top the immorality of mass murder, but in terms of precedent, Truman’s unilateral invasion of Korea — without congressional consent, let alone a declaration of war — ranks as his worst deed. Truman considered his power as commander in chief to be absolute, and U.N. resolutions to overrule the U.S. Constitution. Since Korea, no U.S. president has sought a formal declaration of war — it’s “anachronistic,” they say. Oh, and when steel workers threatened to strike in 1952, Truman nationalized their mills (until blocked by the Supreme Court) because the steel industry was “vital” to the nation’s defense.
3. Franklin D. Roosevelt : No executive has ever assumed more absolute power than FDR. One of his first actions as president was to dictatorially close U.S. banks. Shortly thereafter — in an episode that has been censored from our history books — he made it illegal to own gold, which then backed the U.S. dollar, and sent government agents into the homes and businesses of gold “hoarders” to confiscate the precious metal. Once all the gold had been turned in or seized, FDR revalued the dollar from 1/20 an ounce of gold, to 1/35 — an outright theft. Later, under the Bretton Woods System, this stolen gold — which is what filled Fort Knox — flowed out of the country, never to return.
We are taught in government schools that FDR “lifted us out of the Depression.” Numerous economists have shown this to be false. In fact, FDR’s New Deal policies made the Depression longer and more painful. For example: to keep food prices from dropping (as if that would have been a bad thing), FDR ordered millions of pounds of crops to be destroyed — while much of the nation went hungry. Later, unemployment did drop precipitously, but only after FDR had drafted a huge portion of the American work force into war. And, by the way, many contrarian historians believe FDR provoked Japan into bombing Pearl Harbor — and had foreknowledge of the attack.
One more thing about FDR: Today, he is celebrated as one of our greatest presidents by both the left and the right. But little is made of his internment of Japanese-American citizens in concentration camps. That he is held high as a symbol of liberalism (by the left) and war-statesmanship (by the right) is a disgrace.
2. Woodrow Wilson : “Woodrow Wilson makes George W. Bush look like a pro-bono lawyer for the ACLU,” says historian and author Bill Kauffman. And he’s right. Cindy Sheehan might have been unfairly ridiculed by Bush’s proxies in the right-wing media, but she wasn’t thrown in jail. Thousands of World War I critics, however, were. Among them, Socialist Party presidential candidate Eugene V. Debs, who gathered nearly 6 percent of the vote against Wilson (and T.R. and Taft) in 1912, and then ran for president from a jail cell — thanks to Wilson — in 1920.
Wilson, a former Klansman, re-segregated the Capitol, which had been integrated under President Grant. He gave us the Federal Reserve Act, the income tax, the direct election of senators (which entirely crushed “states’ rights”), and lied us into the completely counterproductive World War I — which led the way to the rise of Hitler and World War II. His ascension to the top of the Democratic Party ticket also, once and for all, crushed classical liberalism (Jeffersonianism) as a serious political tendency, and set up the bi-partisan monopoly of “Hamiltonianism,” leaving Americans with no real choice on Election Day.
1. Abraham Lincoln : “But didn’t Lincoln free the slaves?” No. If, in fact, the Civil War had been a crusade to free the slaves, then perhaps it would have been morally justifiable, says Real Lincoln author and Austrian economist Thomas J. DiLorenzo. But Lincoln was a white supremacist who favored a different 13th amendment — one that would have forbidden the federal government from ever interfering in slavery where it already existed. And, as the Civil War was coming to a close, he actually appropriated money for the deportation of freed blacks to Africa. Lincoln’s Emancipation Proclamation only applied to regions not under his control: not only were northern slave states excluded, but so were northern-controlled areas of southern states! The rest of the Western world, save for Haiti (which had a righteous slave rebellion), ended the evil practice of slavery without bloodshed. For merely the monetary expense of the Civil War, to say nothing of the hundreds of thousands of lives, the North could have purchased the freedom of every slave and given him or her 40 acres and a mule.
The real motivator behind the Civil War was economic mercantilism. Lincoln believed ardently in protectionism and corporate welfare, and the states that would comprise the Confederacy were for free trade. The system that Lincoln advocated received 75 percent of its revenue from the net-exporting South, and then spent 75 percent of that money in the North — the South was getting fleeced, and that’s why they seceded. Lincoln said that his priority was “preserving the union,” and if it meant that there would still be slavery in the South, that’d be fine — just as long as the tariff was collected.
But what makes Lincoln the worst president ever? Well, he literally destroyed the founders’ republic, which was a federation of independent states — a voluntary union. Lincoln made it an involuntary one and abolished state sovereignty. He also imposed the first income tax, conscripted men into the army and paid them with fiat money (another first), illegally suspended habeas corpus, shut down opposition newspapers, imprisoned political opponents in the North, and ultimately forced his Hamiltonian agenda — which had lost for sixty years at the ballot box — on the country via a one-party monopoly that stretched from his election to that of Democratic-Hamiltonian Woodrow Wilson.
Where will President-Elect Obama rank on this list? Hopefully nowhere. Although the parallels between Hoover and Bush (both hyper-interventionists who are mischaracterized as “free-market” ideologues that”did nothing” to avoid crisis) are stunning, and Obama seems to fit the theme as a new FDR to supplant Bush’s Hoover, it must be remembered that FDR campaigned against Hoover’s interventionism and for a return to the laissez-faire Jeffersonianism of Grover Cleveland and only flip-flopped once he was in office. Perhaps Obama, who campaigned as an FDR-style Democrat, will do the same and flip-flop to the side of limited government and free markets. We can hope, can’t we?
By Dan McLaughlin, on January 23rd, 2009
Why doesn’t the truth win out over fallacy? It would seem that the hard hand of reality would smash every fallacy and make the truth obvious to everyone. The struggles between truth and falsehood, however, often seem to be won by the purveyors of false doctrines and misguided politics. It is a bit disconcerting and difficult to understand until you get to the root of the issue.
Economist Henry Hazlett had one answer 60 years ago. His view was that bad policy is the result of the special pleadings of selfish interests. While that seems to be part of the answer, and explains why people push unsound policy to help their own cause, it doesn’t explain why so many people gather behind the causes, even when they are fundamentally flawed. The missing part of the answer is that people crave a scapegoat. They need someone to blame so they don’t have to take responsibility for their own lives.
Even back in early biblical times, there is evidence of the blame game. The account of Moses describes the people continually complaining and blaming him, even though he was leading them out of brutal slavery. They couldn’t understand the freedom they had been called to. They had gotten too used to servitude and dependency and the small level of security that slavery offered. Freedom is not easy. It has a price that they didn’t like paying.
Down to this very day, people have always been on the lookout for a convenient person or group or thing to blame everything on. The vast majority of people don’t believe they are where they are today because of the decisions they made in the past. They refuse to be responsible for their lives. It is always someone else’s fault.
The entire philosophical structure of Karl Marx’s movement was based on fallacies, yet that philosophy became one of the most significant movements in history. It is still pervasive in many forms today, in spite of the fact that it’s underpinnings have been repeatedly demolished as false. When you recognize the powerful urge to blame someone else, it becomes clear why Marxist ideas refuse to go away. Like the thousands of fallacies that find their way into laws, textbooks, classrooms and newsrooms, the heart of Marxism and socialism lies in blaming others rather than taking responsibility. The more people willing to blame the same target, the more powerful the movement will be.
Scapegoats come in many different sizes, shapes and colors. Other races, other classes, other political parties, other businesses, other countries, other ______ (fill in the blank). There is always someone or something to fill the bill for every perceived wrong.
Freedom is the concept that individuals are capable of making their own decisions for their own lives. The early settlers and pioneers were free and, luckily for us, they chose the hardship that comes with it. Freedom is the natural state of human beings and is the state in which humankind is most able to find prosperity and progress and happiness. It is the reason that America prospered and surpassed all other countries in a very short period, on the historical scale of time.
The corollary to freedom, however, is responsibility. The chooser is free to make a choice, but he is not free to choose the consequences of that choice. He must live with the results of the choices he makes. If people don’t take responsibility and pay the consequences, they are inviting others to make the choices for them. The more responsibility people relinquish to “authorities”, the less freedom those people possess.
Today’s politicians give lip service to freedom, encourage patriotism and flag waving, and then take actions that bleed the life out of our founding ideal of liberty and justice for all. Most contemporary laws have the effect of making some group of people dependent on “Father Government” rather than encouraging independence and responsibility. Politicians generate support for the laws by finding an appropriate villain and recruiting a large enough chorus of blamers to show that the need for intervention is “genuine”.
Liberty has been having a very difficult time in this country for decades. It’s identity is being confused with democracy, either out of ignorance or intentionally, out of malice toward the very concept of individual freedom. Freedom and tyranny of thd majority are poles apart and have vastly different consequences.
Let us all demand real liberty, not lip service. But first, let’s take responsibility, reject paternalism and quit the blame game.
By Moyo Mamora, on January 22nd, 2009
The Fed clearly is not letting up on its battle against “deflation”, we continually witness the call for further monies to be spent, with congress approving of it. If you are a Keynesian economist this is the right thing to do. Many Keynesians believe the Japanese economic collapse in the early 90s could have been avoided if the government had intervened earlier on in stimulating the economy. The first question however is whether this is really a battle against deflation. The current bust cycle in the economy is viewed as necessary in wiping out all excesses that may have arisen during the economic boom. So rather than calling this deflation, is this just a situation were prices across board are resetting to more appropriate levels or is this the meaning of deflation?
Do we really believe the economy can continually grow for years at a steady rate without a painful correction? Yes, in theory this is possible, but like economics teaches us, human behavior cannot be predicted, hence there will always be excesses, the party will always get wild once there’s liquor and no cops around, and the recession or bust is supposed to end the party, and clean up the mess in the system. In addition, the beauty about an economic bubble bursting is that ideally, it provides an opportunity for wealth to be spread across broad, people who have been conservative now have an opportunity to make carefully analyzed investments that are currently at bargain prices. In times like this cash is king, for anyone who has been prudent enough to save cash, or anyone who has access to low cost funds, these monies will be handy in a time like this.
Given this exciting fact, where are the opportunities then? We are witnessing a situation in which there’s more of a social system in place, and cash injections are going to big corporations that have been irresponsible in their behavior (we all know this and I wont rant on this). If in a capitalist environment, the consumer is the key driver; won’t it make more sense to have a bigger bailout for the consumer? If more money was put in the pockets of the American tax payer, this money will ultimately be spent and there will be somewhat of a recovery in the system. The Fed’s balance sheet in the course of this economic crisis has grown by $1.2 trillion, which is approximately $4000 for every American. Compared with a $500 dollar check, that’s more likely to be stimulating.
Now with the measures being employed by the Fed to combat this “deflationary cycle”, 0% interest rate, stimulus checks, absorbing bad debt, all done by money printing, the expected result is to have a bounce back in the economy. But when does the Fed know when to stop? Is it when we begin to see CPI come in at 0.5% over a couple of quarters, what economic indicators will tell the Fed that they can take their feet of the economic gas pedal? At any point the Fed get’s to this discovery, they most likely would have shot too far in stabilizing the economy. So will inflation in the system say to us that the Fed has done a good job?
From the current look of things the market is pricing in a long deflationary period, this is evident from the spread between the 10 Year Treasury bond and the 10 Year Treasury Inflation Protected bond. The current spread is approximately zero, which signifies the bond market believes that over the period of 10 Years, the inflationary concerns of the economy is priced in, and this is very misleading. Except one believes that just enough money that’s needed to restore the economy will be printed, inflation is definitely going to rise. In which case there will be a new economic crisis to deal with, so then again, does inflation really symbolize a recovery in the economy?
By J.D. Seagraves, on January 21st, 2009
Now that the 2008 election is history, and George W. Bush’s presidential tenure has come to an end, historians will begin to evaluate where Bush-43 ranks among the best and worst chief executives in America’s history. My prediction: Ultimately, they’ll rank him highly. That’s because, if you look at traditional presidential rankings, the presidents who advocated and achieved the biggest increases in government are typically ranked the highest, and few presidents have ever grown the government like George W. Bush.
There is a shared consensus among conservatives and liberals about who the greatest presidents were. This consensus is not shared by free-market libertarians. With an emphasis on their economic policies, I have compiled a list of the 10 Worst Presidents from a libertarian perspective. I will share #s 6-10 in this blog entry, and #s 1-5 in a future post. So, without further ado:
10. Theodore Roosevelt : Selecting #10 was difficult, and T.R. just narrowly edged out the “dishonorable mentions” of John Adams, James K. Polk, and Herbert Hoover. Like historian Thomas E. Woods says, we’ve had better presidents than Theodore Roosevelt, and we’ve had worse presidents — but we’ve never had a crazier president.
T.R., says Austrian economist Thomas DiLorenzo, was obsessed with war and killing. He was the first president who totally eschewed the foreign policy of Washington and Jefferson and said that the U.S. needed to be the world’s policeman — he even warned of the “menace of peace.” He imposed price controls and unprecedented regulation, and championed “progressive” reforms that came into being with the 16th (income tax) and 17th (direct election of senators) amendments.
The only thing that saves Roosevelt from ranking “higher” on this list is that he (thankfully) presided over a relatively calm period of American history. After leaving office for four years, he campaigned for the White House as a third-party candidate in 1912. If he had won, America would have certainly plunged into the unnecessary World War I much earlier, and who knows what the outcome would have been.
9. Ronald Reagan : Although the Gipper mouthed libertarian rhetoric, the facts are that he imposed one of the greatest tax increases in U.S. history (taking away many tax deductions and raising the payroll tax), ramped up the disastrous War on Drugs, and accumulated more debt than all of the previous 39 presidents combined. His fiscal policies, along with his appointment of Alan Greenspan to chair the Fed, sowed the seeds of America’s monetary ruin.
8. George W. Bush : Bush-43 was not “the worst president ever” by any objective standard. But he was among the worst and, by his own stated objectives, a total failure. After all, this is a president who began his second term by trying to privatize Social Security and ended it by socializing the banking sector. Bush’s two terms were characterized by massive federal-government growth, huge deficits, expensive and immoral wars, the Medicare prescription drug benefit (which is bigger than Social Security and will eventually bankrupt the nation), the loss of civil liberties (i.e., the Patriot Act), and the nationalization of “education” (No Child Left Behind). Bush will leave the White House by turning it over to Democrats with huge congressional majorities. Fail.
7. George Washington : The first truly sacred cow on the list, George Washington is typically above criticism. But it was he who appointed the initial federal judiciary, and he stocked it with Federalists to the exclusion of his political adversaries. This meant that anyone who was skeptical of the new Constitution — which increased central power over the states from the original Articles of Confederation — was automatically disqualified. In practice, this led to a judicial monopoly of monarchists and nationalists that lasted well into the long Jeffersonian reign of 1800-1860. Also, Washington signed the (unconstitutional) first Bank of the United States into law, and led an army against his own citizens to crush the Whiskey Rebellion. Imagine George W. Bush doing that!
6. Richard Nixon : In addition to his well-known criminality, lying, and illegal warring, Nixon truly deserves our ire for his imposition of price and wage controls and “closing of the gold window” — making the U.S. dollar into a pure fiat currency. In fact, it was in protest to these things that the Libertarian Party was founded in 1971.
So there’s the list: Four Republicans and one Federalist. But if you think I’m letting the Democrats off the hook, you have another thing coming — four of the five Worst are Democrats. Check back next week to see who they are.
By J.D. Seagraves, on January 20th, 2009
Abortion is a hot-button issue. To people of the pro-life side of the debate, abortion is nothing less than the legally condoned murder of innocent babies. To people on the pro-choice side, the opponents of abortion want to enslave women by claiming literal ownership of their bodies. There are people in the middle of the road, but how can they be? Either the pro-lifers or the pro-choicers are right — you can’t have it both ways.
Ultimately, the issue comes down to whether or not an unborn baby (i.e., a fetus) is an individual with rights. If he/she is, then abortion should be criminalized. If he/she is not, then it should be a completely unregulated procedure.
That’s the moral side of abortion. But what about the economic, or utilitarian side? The authors of Freakonomics made the case that abortion was a societal good in that it led to a drop in crime rates. But did it really? Here’s a contrary view:
Students of economics know that people make decisions based on incentives. If something costs more, then people are less likely to do it. The illegality of abortion, whether right or wrong, made the “cost” of sex higher than it is today. When abortion was illegal, women could still theoretically get an abortion if they really wanted one, but they faced criminal penalties and greater expense, not to mention the comparative difficulty of procuring the service. The nation-wide lift on America’s forty-five state abortion ban “lowered the cost” of sex for women, and for men — who had previously been expected to marry a woman should she become pregnant. Roe v. Wade specifically lowered the “cost” of unprotected sex in the pre-AIDS era, undoubtedly contributing to the explosion of STD rates.
Now when something becomes cheaper, people do more of it. Making no moral judgment on the behavior, the fact is that Roe v. Wade did lead to a a massive increase in casual sex. This put tremendous pressure on girls to have sex — after all, they could always have an abortion if they got pregnant, right? And if they decided to keep their baby — as many did — then the man in question could wash his hands of the situation: “it was her choice — she could have had an abortion!”
This Austrian analysis of “human action” is supported by statistics and is the subject of a chapter in John Lott’s Freedomnomics , an answer to Freakonomics . Out-of-wedlock birth rates soared from 5 percent pre-Roe to 16 percent in 1989. Amongst African Americans, the rate went from 35 percent to over 60 percent. And these children from single-parent homes were much more likely to engage in violent crime later on.
The idea that legalized abortion led to the births of fewer unwanted children, and that this led to a drop in crime makes intuitive sense. However, upon deeper inspection, it just isn’t true.
By Dan McLaughlin, on January 19th, 2009
In case you may not have heard it yet, our economy is a little under the weather lately. The patient is, however, under the watchful eye of a crack team of economic physicians, led by doctors Benanke, Paulson, Bush and, new to the team, Dr. Obama.
Their diagnosis is that the patient is sick. They have been trying various treatments, and when the treatment turns out to hurt the patient, they assume that all that is needed is a bigger dose. The analogy they use is that of a heart attack patient. They think they need to apply massive stimulation, stat!
Unfortunately for the patient, the doctors are the ones that made it ill in the first place. The real problem from the start was over-stimulation syndrome. What the patient needs is bed rest and a vacation from the doctors.
If the consequences weren’t so serious, the doctor play would almost be funny. Through most of the 2000’s, the economic medical team was applying serious stimulation. Interest rates were held significantly below market rates. The intravenous pump was cranked up and money poured in at a furious rate. Inflation appeared to be under control, so they kept the pump going strong. What they didn’t notice, however, was that their measurements of inflation don’t include half of the economy. The half that they measured was just fine. The other half was blowing up like a balloon. When the measured half started to inflate, it was already too late.
The real estate market is not included in the measurements of inflation, nor the credit markets, nor the financial markets. Massive bubbles in these areas didn’t set off the inflation alarm to our doctors, so they ignored the obvious symptoms that were building over the course of years. When, all of sudden, the bubble popped and became an open wound, they started running around franticly looking for someone to blame their incompetence on. The free market is, again, their scapegoat. It had worked so well in fooling the patient all of the other times, why not use it again.
The stimulus continues, and the dose is being cranked up to really serious levels. Uh, excuse me doctors. How well has that stimulus worked so far? Not so well, you say, the patient is getting worse? Hmmm, do you think that maybe the medicine could be the problem? Oh, you’re trying different brands. The stimulus checks to individuals didn’t work a year ago. So you switched to stimulating wealthy bankers. The patient still was getting sicker, so you started to stimulate wealthy non-bankers. You say you think you have the solution now?
Dr. Bernanke has come up with a brilliant treatment, sure to make the patient healthy. It is the transfer of toxic assets in the system from the wealthy, politically connected class to what they consider the slimy, worthless taxpaying class. Since mega-bankers made lots of money making incredibly irresponsible loans, and their wealth is now in jeopardy because those irresponsible loans are becoming uncollectible, the good doctor has come up with the idea of a “bad bank”. Seriously. No, I’m not kidding. The federal government, aka the American taxpayer, should, under this plan, establish an official bank for the express purpose of paying good money from taxpayers to wealthy bankers in exchange for the bad loans that they have on their books. That way, international bankers wouldn’t have to worry their little heads about how to collect on them. They can get back to business as usual, making stupid loans, which the taxpayer will purchase if they become uncollectible.
The good part about the bad bank idea is that the American taxpayers would own all of these valuable assets that they can collect money from to pay back their “investment”. The bad part of the idea is that they are generally uncollectible. That is the very reason that they are called bad loans. Hello, is anybody home!
It is becoming painfully obvious that 1. politicians have nothing but disdain for taxpayers, and 2. our economic medical team is a fraud. They have absolutely no idea what they are doing and are stabbing their scalpel in the dark. Even if the economy starts to come back, the massive amount of medicine they are applying is guaranteeing the next bubble in a few years, the resulting massive hemorrhage, and the further abuse of the patient as time goes on.
It’s time for the patient to dismiss the quacks. They have done enough damage. The next step should be to sue the economic physicians for incompetence and malpractice.
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