By Dan McLaughlin, on December 21st, 2009
Many decades ago, George Orwell wrote a book called Animal Farm. It used a farm as a metaphor for society and depicted the transformation of a productive enterprise into a totalitarian regime. The progress toward dictatorship took small steps that were held to be in the best interests of “the people.” Equality of conditions was affirmed as the highest ideal. The redistribution of wealth from the productive led to universal dependency and slavery, which are the ultimate end results of socialism.
There is no universal definition of socialism, so it may be helpful to state mine here. It is the idea that individual rights are subordinate to the good of society, as determined by those in power. The varieties of socialism only diverge over the degree of suppression of which particular rights.
The key phrase from the book, one that resonates so clearly today, is “All animals are equal, but some are more equal than others.” When it is all said and done, equality is only for the peons, the lesser folk, the non-intellectual, non-wealthy proletariat. The political leaders, the elite, represented in the book by the pigs, are above equality. They proclaim that they need their wealth and power to do what is good for society. As Dr. Evil of Austin Powers fame would mockingly say, “Riiiiiiiiight.” The most influential promoters of socialist ideals are fabulously wealthy. They have vast opportunities to put their money where their collective mouths are. Yet, those selfless acts of mercy are strangely absent.
Paul Krugman, a high profile New York Times columnist, is a so-called economist who, in spite of being an economics professor, actually rejects all economic principles in favor of demagoguery and ideology. Last year he was awarded the Nobel Prize in Economics by the unabashedly socialist central bank of the socialist, egalitarian country of Sweden. One of his hot topics is income inequality and he decries the large salaries of corporate executives, yet he has no conscientious objection to accepting $50,000 for a speaking engagement or a million dollar Nobel award. With his salary, consulting, speaking and sales of best selling books, he earns many multiples of the average income. He does not, however, volunteer to donate all of his excess to those who are under the average. Might that call into question his egalitarian motives?
George Soros is a multi-billionaire, who earned his wealth from free market capitalism. He has become a leading voice in international socialism and is putting together a panel of socialist economists to develop a “new economics.” Included on the panel is Joseph Stiglitz, another wealthy Nobel Prize winner in economics. He also happens to be on an advisory board to the Socialist International, called the Commission on Global Financial issues. Soros has committed $50 million to establish the Institute for New Economic Thinking. Rather than donating his billions to the poor all over the world, he instead, finds it appropriate to use his incredible influence to promote redistribution schemes for you and me and anyone not lucky enough to be one of the exalted elite.
Redistributionist President Obama and his wife Michelle both had high paying jobs before the presidency, and made millions on best selling books. Did they redistribute their own excess to the less fortunate? No, they lived instead like wealthy capitalists in their $1.6 million dollar home. At one time, he worked with the radical socialist ACORN organization, learning the Saul Alinsky method of community organizing, igniting division and agitation and fanning the flames of victim mentality. As president, he has a stable full of wealthy socialists and international bankers, who have no qualms about taking away your rights and redistributing your income.
We are at a dangerous crossroads. American government in all branches has become infected with socialists who would like nothing better than to see our nation crumble. They would replace our constitution, based on freedom and the rights of every individual, with the United Nations Declaration of Human Rights, which is an appropriate statement of rights for the former Soviet Union or the present North Korea.
The Orwellian “pigs” are taking over the farm. We, the people, are cheering them on. If we continue down this road, there will come a time when we are disarmed and dependent on benevolent government bureaucrats. Dependency is slavery. That is what socialism is all about. It is no surprise that many influential people tend to support socialism and “spreading the wealth”. They are, after all, the pigs who are “more equal.”
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By Russ Nelson, on October 19th, 2009
I just cringe whenever I hear Obama or his minions talking about how they created or saved N jobs. As an economist, I’m trained to look for the other side of the coin. Yin and Yang. The coin cannot not have another side if it is to be a coin. So when the government takes money from taxpayers, or prints up new money, or borrows money from China, to spend on creating jobs, I have to ask: how many jobs did the stimulus destroy?
By Thersites, on August 26th, 2009
1. A White House report shows that H1N1 may kill 90,000 – I’m going to come out out right now and say that I don’t know how exactly the White House is going to play this, or what tactics they are going to use, but they are going to try to use this virus as a crisis to increase federal power. They can use it to sell national healthcare, or they can intervene with the states’ handling of an outbreak, or try something far more nefarious like using the flu to declare martial law and subvert our liberties. Right now, they are just releasing these reports to pave the way for increased intervention down the road.
2. Van Jones – Continuing in the line of moderate, sane czars prudently chosen by President Obama, we have this man:
It’s not as if Obama just surrounds himself with lefties. He goes for the most radical, vitriolic and just plain batty people. There is no real oversight over these aptly named czars, and this extra layer of government allows Obama free rein over the system of checks and balances. It is very telling that the people in our government who he has sole power to pick are the craziest and most destructive.
3. NY AFL-CIO head named chairman of the NY Fed – I couldn’t believe this the first time I read it, but then again when you look at the big picture this makes perfect sense. The banking cartel needed to make amends for having their political brethren in important government positions. Labor is gaining inordinate power under the Obama administration and are probably the constituency that he is most banking on for his re-election in 2012. This move follows the strategy of the politicians to a tee – the government will do whatever it takes to bail out the moneyed interests and the union laborer’s interests, while screwing everyone else in-between. They bribe the moneyed interests to keep them paying the taxes to subsidize the poor. They bribe labor at the expense of the real capitalists and entrepreneurs who create labor’s jobs. The middle class and those who create the prosperity around us pay the price.
4. Eric Holder will pursue CIA interrogators – “Holder said that he realizes the move is controversial, but that it was the only responsible course to take. The decision does not reflect a sharp division between the Justice Department and the White House, government officials said, given the limits of the preliminary review and the respect that Obama says he maintains for the role of an independent attorney general.” I mean wow. First, what brilliant politics by Obama. He allows Holder to go after prosecuting members of the CIA because of the role of the “independent attorney general,” so he gets what he probably wanted all along but can always tell the critics that he is merely allowing for the proper separation of powers. Second, WTF is wrong with you Eric Holder. You go after the people that are doing their job to defend our country ex post, threatening the CIA and deterring anyone from ever joining the agency from this point forward, yet fail to go after members of the Black Panthers threatening to bludgeon people at the voting booths.
5. Obama on the Vineyard – The President always seems to come up smelling like roses. While the world goes to hell, and his party is taking bullets at townhalls (sometimes arguing that they should use bullets themselves), Mr. Obama gets to hit the links and sip on cocktails. Now I have absolutely no problem with President’s taking vacations (though it is garbage that they use taxpayer dollars to do so), as I understand that a “vacation” for a President is hardly a real vacation, and that their job is highly stressful all the time. That being said, imagine if a Republican President during a time like this when the country is running $9 trillion deficits over the next ten years (Barry’s guys were $2 trillion off on the math there mind you) and unemployment numbers are high decided to head to a ranch in Crawford or worse some lush pad out in Orange Country for some R&R. The media would be up in arms. But it seems that hypocrisy is the way of the world today. At least Obama should have the courtesy to invite some of his poor community organizing friends out to the 29-acre estate.
 
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By D H Smith, on July 13th, 2009
If you want to understand Democrat fantasies in the absence of financial constraint or common sense, read Reed Hundt’s book, “In China’s Shadow.” Reed Hundt is a permanent member of the American political class, a Yalie, a partner in a high-powered law firm, head of Bill Clinton’s FCC, and a member of Barack Obama’s transition team.
Free money is Reed Hundt’s great idea. Muggins, that is you me, the hard-pressed American taxpayer, should buy everyone from Nome to Tierra del Fuego a pension, healthcare, and education. By these means, the United States will win in the economic competition with China that furnishes the title of his book and a small fraction of its other content.
No, it’s not a joke. People with power and influence really think this way.
By D H Smith, on July 6th, 2009
As one of the large number of Americans who depends on a positive business and investment environment for his prosperity, I regarded the election of Barack Obama as president with Democrat majorities in the House and Senate with considerable concern.
But more than the usual number of my fellow businesspeople and investors supported them, contrary to their own interest as it always seemed to me. Of course many of these unlikely Obama voters were as eager for hope and change anyone else. If they gave consideration to the implications of Democrats supermajorities led by Obama for the economy from which they draw life and livelihood, they allowed their desire to believe to outweigh more sober analysis.
Obama took them in totally with the charisma, the gaseous uplift, and the promise of racial reconciliation; they convinced themselves that the redistribtionist, high-tax, anti-business, anti-capital policies to which he rallied his party constituted red meat for their base, not a program for governing.
This misapprehension survived the election, and permitted modest financial market recovery through the end of December 2008, followed by modest declines through Inauguration Day. On Inauguration Day, President Obama delivered a speech that any fair-minded listener would have to admit was far less than a rhetorical tour de force, and far more evocative of class envy and racial struggle than was expected.
Financial markets tanked that day and kept tanking for weeks, pressured further by the stimulus package that offered little real economic stimulus, but a shocking grab bag of packages to traditional Democrat constituencies and not the merest nod to the rights or concerns of the minority.
We experienced headlong collapse from Inauguration Day through first week of March. Obama Democrats in the business and investment community awoke too late to the realization that the Democrat program now encompasses nationalization of vast swathes of industry on the pretext of emergency (autos and banks) or necessity (health care); that owners’ property rights are provisional and expendable; that the ideological attachment of our rulers’ to the green agenda trumps their duty of care to the free-market economy; and that they mean to bleed the productive sectors of the economy to feed the non-productive to the full extent that they can get away with.
So far, so bad. But then something interesting happened — we had a dramatic bounce in stock markets from March through early May. Some of this is probably pricing out the possibility of a 1929-37 depression; some might even be what I regard as an unrealistic pricing in of a rapid economic recovery, when what we still have in prospect is a deep and long recession as in the 70s and early 80s.
But some of the bounce is almost certainly due to the business and investment interest of this country re-assessing President Obama’s grand and ambitious schemes and concluding that they represent impossible over-reach. Rightly or wrongly, they came around to the view that he has expressed extreme initial positions as a negotiating tactic to get more than he could with conventional bipartisanship, but less than he asks. Republicans and responsible Democrats in Congress will push back on the crazier ideas. The American people will not go along, will resist with mute passive aggressiveness and loud argumentation, once the full implications are clear. And if it is not just a tactic, if Obama really insists on every bit of what he says, Republicans will gain enough seats in 2010 to apply the brakes, if not an outright majority. On this view, one way or another, the entire Obama agenda can be resisted.
After stock price gains of over 30% from March to May, markets have stalled since then, and fallen into a few air pockets. The public policy problems for the markets at this point remain the administration’s apparent readiness to overturn our carbon energy-based economy and radical intentions toward the 15% of the economy that health care represents. But the overarching sentiment problem comes from a second reassessment among business people and investors: even if the entire Obama agenda can be resisted and its worst effects rolled back later, on this view a tremendous amount of violence can still be done to the U.S. economy now. In the meantime, we are still losing jobs at a sickening pace while Obama and the Congress wastes unimaginable sums of money on projects lacking any other point beside paying off their friends and allies. In the background the Chinese, our principal creditors, are objecting more and more forcefully to American fiscal unsustainability and the debasement of the U.S. Dollar that this portends.
At the very least, these mid-year movements call upon investors to review their portfolio allocations with care. My own view is currently defensive on U.S. Dollar assets, and seek for growth in Chinese stocks.
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By Thersites, on May 27th, 2009
Franklin Delano Roosevelt proposed a “Second Bill of Rights” during his State of the Union Address in 1944. He noted that while “under the protection of certain inalienable rights…our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness….true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.” He argued that we “cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.” Under the auspices of “economic security and independence,” FDR laid out the following list of rights for the American people:
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
During and after FDR’s presidency, many programs were taken up to establish these so-called rights. The US government implemented a minimum wage with the hopes of providing people with a baseline level of income to be able to pay for life’s necessities, and created unemployment insurance so that people would have sufficient money to purchase goods when they lost their jobs. They created agricultural subsidies to protect farmers. They implemented all sorts of regulations and restrictions to stop (certain) companies from dominating their competitors. They created HUD and devised the CRA to force lenders to finance housing for those who were less well off, to ensure the “American dream of home ownership.” They provided healthcare for the old and poor. They created Social Security to allow the old to receive checks after they were retired. They expanded public education and pushed for everyone to receive a college degree. They empowered the Federal Reserve to flatten the business cycle and protect against recessions.
Today, King Obama looks to be finishing off the dirty work of the progressives of the last century. He is pushing for “fair” credit card charges, universal healthcare, onerous governmental control of business under the guise of environmental protection, government control of college loans and empathetic justices who understand the concerns of everyone who is not white, male or wealthy.
Essential to the justification for this platform is FDR’s argument that there be equality in the pursuit of happiness, and that “individual freedom cannot exist without economic security and independence.” What those like FDR and Obama mean is that there is not equality as an outcome of the pursuit of happiness, i.e. equality of condition. By economic security and independence, FDR and the King mean that people need safeguards so that they can keep their jobs, pay for products and be comfortable in retirement.
All of the ends that these progressives seek seem admirable, but the means to achieve them end up making it impossible for the ends to be obtained. Nobody wants to see masses of unemployed, sickly or uneducated people. But the government policies implemented to protect against these problems – to guarantee the “rights” listed above – end up leaving people unemployed, unhealthy and uneducated. They impoverish the citizens by destroying the inalienable rights that even FDR admits allowed the US to gain its strength as the world superpower.
It was not economic security or independence that allowed our country to thrive, but a system in which people voluntarily traded and had the opportunity to innovate and take entrepreneurial risks. Failure, not economic security, had to be a motivator because there was no safeguard against it; no notion of being too-big-to-fail. If you failed, you simply had to pick up and try again. The Federal Reserve in attempting to protect against failure ends up leaving the people economically insecure by decreasing their purchasing power and savings through inflating the money supply, and by incentivizing people to allocate resources improperly through the manipulation of money and credit which leads to the painful boom and bust cycle. The moral hazard created by providing safeguards against failing, be it in business or in one’s own life ends up weakening the people.
Economic security and independence come as a result of our rights to life, liberty and property, not the other way around. The best thing the government can do to ensure these rights, the rights that lead us to maximum wealth, the fullest employment for those who seek it, the best and cheapest medical care and the most practical and affordable education is simply to protect its citizens from attacks on their individual rights. Individual rights, not entitlements. Entitlements beget more entitlements. Entitlements breed laziness in the citizenry. Entitlements cause people to take things for granted. Freedom is the one thing that cannot be taken for granted. As Reagan put it, “Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.”
If you disagree with this in principle, then look at the results of the governments’ policies, those policies representing the antithesis of freedom. The US populace is probably dumber than it has been at any other time in history, even though a greater number of people are graduating from public high schools and attending colleges than ever before. Our economy teeters on the brink of collapse. Our government is larger, more intrusive and more corrupt than it has ever been. It is also effectively bankrupt minus its monopoly power to print money; interesting that it can have this monopoly power while also protecting people from “unfair business competition and domination by monopolies at home or abroad.”
Other examples of government failures abound. Amtrak is a money-loser, as is essentially all public transportation. If public transportation is not a money-loser, then I would venture to guess that it still isn’t as cheap or efficient as private alternatives. The US postal service is nowhere near as effective as FedEx. The DMV is a joke. The purchasing power of our dollar has decreased by over 95% since being under full control of the Federal Reserve, and we have had more frequent recessions than prior to the Fed’s creation. In countries with nationalized healthcare, we see that the price of better-quality, private healthcare increases, while public healthcare services leave people waiting sometimes for months on end for essential medical procedures. People flee to the US if their lives are in danger with good reason. If King Obama gets his way, they will have nowhere to flee anymore. Ironically, when it comes to almost every sector of our economy, while economists would have you believe that government corrects market failures, it appears that we would be far better if markets corrected government failures.
In the final analysis, there is not one good or service that the government provides that is cheaper and better than the equivalent one in the private sector, with the caveat that in terms of defense, only the government can coordinate the forces necessary to effectively protect us. And even then, the government outsources weapons development and certain tactical supports to private defense companies. And even then, the government screws up at times in the way it carries out its wars.
I want to reiterate that only the market can provide the people with the best goods and services at the best prices. This is the same for credit as it is for housing as it is for healthcare. If you take the market out of the equation and try to centrally plan, in the end you impoverish society and leave a nation to anarchy and revolution. Through a dictatorship, which is what the Second Bill of Rights effectively creates (a tyrannical government), you create the unemployed and the hungry that FDR speaks of.
With the burgeoning deficits at the state and national levels, the impending tsunami of inflation and the undermining of the rule of law and protection of life, liberty and property by our leaders, it looks as if in their quest to grant us the Second Bill of Rights, they have also destroyed the rights granted to us by an authority higher than that of our politicians, our natural ones.
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By D H Smith, on April 3rd, 2009
Whatever you think of the young administration of President Barack Obama, you have to admit the man does not lack for ambition. He promised that sea levels would fall and the lame would walk, and everyone understands that will take at least a couple more months. But taking over the motor industry, well that’s just the work of a couple of the President’s bright sparks over the weekend. It’s great knowing that I’ll be able to go into my Congressman’s constituent services office when I need parts for my old Dodge truck.
My sources in Washington tell me that the next thing to come out of the salvation lab is a major currency reform. The American Dollar, the Yankee Greenback, it has served us so well for so long, but now it’s lame too. Better just to repudiate all claims and start over, as they are wont to do in the countries of South America that have lately emerged as models of public administration.
I hear the new buck will be called the O-buck.
By Thersites, on March 3rd, 2009
When I started Socialist Watch, I did not anticipate how quickly things would unravel in the US and abroad. Perhaps it is because despite my best judgment, I did not want to believe it. Unfortunately, my worst nightmares are being realized. This time, things are different. When Rahm Emanuel said, “You never want a serious crisis to go to waste,” he meant business, like Ari Gold negotiating on the High Holidays.
Glancing over the headlines of the week, it is clear that a creeping sense of socialism in this country is no longer creeping — it is a very real threat that no future administration may come close to being able to stop. If I am reading this situation correctly, we are at a true turning point in world history. The forces of freedom and liberty are fast being swept aside. We are heading into a Rousseaun era in which the United States and indeed all other states will degenerate in a large collectivist cesspool. Ayn Rand said, “We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.” How right she was.
As I forewarned, other states, besides just New York are beginning to come up with creative ways to tax their citizens. One policy analyst says, “The most common phrase you hear from the states is, everything is on the table.” A California legislator says “We’re all jonesing now for money.” States are throwing out creative “solutions” to their shortfalls like making marijuana legal so as to tax it, or allowing gay civil unions in order to boost tourism.
But think this through for a second. If people are struggling to make ends meet, why should taxation to support government be the number one priority? Why does a state have a right to our property to support itself before we do? Why in the hell do they have these big budgets to support in the first place? If we are having trouble paying our own bills, then forget about the state’s bills. Let it wither away! If I sound angry, it’s because I am.
Meanwhile, on a national scale, things are no better. We continue to throw money down the bottomless pits that are AIG and Citi. If what we are doing is not nationalization, then I don’t know what is. We are nationalizing everything: banks, insurance companies, automobile manufacturers and the housing market. We are burdening future generations with insolvent and bankrupt institutions that should have been allowed to go under months ago. I thought this was America, but alas, we have car czars (call it the Presidential Task Force on Autos, same thing) and urban czars too. Lenin is blushing in his grave right now.
Then we have this whole green issue. I largely ignore reading what environmentalists have to say because it generally enrages me. Being at Columbia, everywhere I go everything is green anyway. It’s not that I have anything against nature…I like clean air and clean parks just like everyone else. But this stuff is not about a clean world. This is about politics. Al Gore has made a fortune selling global warming to idiots across the world. Scientists have made their careers off of pandering about this stuff. But the bottom line is, as I understand it, there is no consensus at all as to whether or not what we do on Earth even makes so much as a dent in the overall climate patterns that occur over thousands of years.
Even if we did, how could anyone honestly feel that their livelihood should be sacrificed to nature. If people want to reduce themselves to foraging for berries then they can go right ahead, but they should bear in mind that they wouldn’t be able to survive without that food taken from nature. I for one will continue eating what I want, driving cars, using my computer, television, lights and paper because I want to live my life. It is not the government’s job to tell me what I can and can’t consume.
If we followed this kind of philosophy from the start, we would still be cavemen. There would have been no Industrial Revolution. A million of the things that we take for granted today would have never come to be. If we didn’t use the fruits of nature, we would not be able to live. But I suppose the Democrats might prefer this.
Their cap-and-trade bill looks to me like Smoot-Hawley’s little grandson in terms of its disastrous implications and terrible timing. For a little taste of what we might be looking at, listen to what Obama himself had to say about it:
“You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”
But forget about specifics. What this represents is a commitment to the environment over the people. It seems like a great idea to me to raise the price of all types of energies, while putting hundreds of people out of business by imposing these costs on our economy in the midst of a depression.
There is also talk of funding roads with a tax based on how many miles we drive. The government would be able to implant some kind of chip in our cars to keep tabs on us. I mean is there any way possible that this could be considered Constitutional? What justification is there for this based upon the limited powers we are supposed to grant our government? This stuff is sickening. They are literally looking to make robbery legal.
More sickening are Gordon Brown’s a musings on a “global New Deal,” led largely by President Obama and himself. This sounds like another brilliant idea — what better way to shepherd in socialism then to subject everyone in the civilized world to it. What is so ironic about it all is that Brown calls for a world “where we defeat not only global terrorism but global poverty, hunger and disease.” Yet socializing one’s nation creates these very things. It brings civil unrest and leads to poverty, hunger and disease for the masses. This also factors into the discussion of having a world government. We see the problems that have befallen the EU now that some states aren’t quite carrying their weight, yet with the world putting their blind faith in Barack Obama, there is more and more talk of global solutions to problems, and perhaps even a global regime. When all the paper currencies collapse, I won’t be to surprised if at the least we move to a global currency, so we can all enjoy the hyperinflation together.
It is dizzying how fast this is all unfolding before us. Dizzying and also sobering. I for one do not want live in a world in which I have to pay for someone else’s mistakes. I don’t want to live in a world in which the government has a claim on my property before I do. I don’t want to live in a world in which the government determines that the environment takes precedence over my life. I don’t want to live in a world in which free speech is protected, yet I have to be afraid that everything I say is “politically correct.” Most of all, I don’t want to live in a world in which the rights of the smallest and most important minority, THE INDIVIDUAL, are sacrificed to the mob for the public good.
One of the reasons I look to Rousseau in all of this is that his love of the state of nature is reflected in the socialism of the day. Rousseau said of leaving the state of nature that “most of our ills are of our own making…we could have avoided nearly all of them by preserving the simple, regular and solitary lifestyle prescribed to us by nature.” Of imagination he says, “Imagination, which wreaks so much havoc among us, does not speak to savage hearts.” Rousseau marvels at the barbarian whose, “desires do not go beyond his physical needs. The only goods he knows in the universe are nourishment, a woman and rest; the only evils he fears are pain and hunger.” Of private property he said, “The first man who, having fenced in a piece of land, said “This is mine,” and found people naive enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.” Clearly ’tis better to be a savage than a civilized human being.
This is the philosophy that is waging its war on whatever shreds of Lockeanism are left in this once great place. We need to fight this. People should be in the streets rioting over the ridiculous usurpations of power that the state is making right now, yet most seem to go on with their lives in many ways completely unaffected and ignorant of the terrors surrounding them.br /br /But these ignorantly blissful folk are getting the government they deserve to be sure. This is the ultimate result of a democracy in which every man seeks to gain at the sake of every other man through the instrument of legal plunder that is the state.
Turning back to Rand, she said that, “It only stands to reason that where there’s sacrifice, there’s someone collecting the sacrificial offerings. Where there’s service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master.” Barack Obama is the man collecting the sacrificial offerings and being served. But I don’t want to sacrifice my life to him. Deep down, I don’t think most Americans desire to either. But if the people do not awake shortly, they may find that one day soon they may not recognize the land they once called home, nor will they much appreciate the masters of the house.
By Dan McLaughlin, on February 23rd, 2009
President Obama is taking a harsher stance on antitrust and monopoly than President Bush did. According to a New York Times story, the president will “take a more active approach than his predecessor in scrutinizing deals that could hurt consumers.”
Hurting consumers presumably involves restricting output and raising prices, as antitrust theory goes. Preventing that sounds heroic, like being the champion of the people, but the reality is that antitrust actions have a much better record of protecting inefficient companies at the expense of more efficient competitors and consumers. It is a fact that most antitrust actions have been brought about not on behalf of customers but, rather, on behalf of competitors. Many businesses support antitrust laws because they serve to cripple and break up their more effective competitors. The Microsoft antitrust case was concocted in a secret meeting between competitor Netscape, their state’s Senator and justice department representatives. It wasn’t about customers, but about using political power to deal with competition. The late Yale Brozen from the University of Chicago concluded that antitrust was almost always anticompetitive.
Think for yourself what your boss would say to you if you worked for an auto manufacture and said “I’ve got a great idea. Let’s use predatory pricing and drive our competitors out of business. We will sell each car at a loss and lose billions of dollars a year, but in 5 or 10 years we could capture the entire market and then charge double the price we charge now to make up for the losses.” Before your boss signed your pink slip, he would probably remind you that, once you raised the prices, the door would be open for competitors again and the losses would never be made up.
All of this is not to say that monopolies or cartels don’t or haven’t existed. Of course they have, but if you look at the record, those that have remained for any length of time are either government operated or private organizations that are protected from competition by the government. AT&T was the sole long distance provider for many decades, not because it had any special technological advantage or operational efficiency. It was only because all competitors were excluded by law. You will find that to be the general case for any monopoly or cartel.
You will also find that the sectors of the economy that are in the worst shape are those dominated by government cartels. The banking system is one of the largest cartels, with the United States system dominated by the Federal Reserve Bank. The financial meltdown, not surprisingly, rests on the manipulations by the cartel of the money supply and interest rates. The educational monopoly is failing the millions of students growing up in America. The science monopoly is producing dangerous and damaging politically motivated pseudo-science. And on and on.
The whole antitrust-monopoly industry, a multi billion dollar a year lawyer enrichment program, is based on entirely false premises. The idea that anti-competitive behavior consists in doing things that make it difficult for your competitors is an absurdity. That is what competition is. You become more efficient to get more customers. That includes economies of scale. The very things that bring prices down and increase production in a free market economy are precisely those things that are considered anti-competitive. The government should actually be congratulating those businesses that have low unit costs and efficient processes, and thus are able to offer customers lower prices.
Economist Dominick Armentano conducted a study of the most famous antitrust cases and published the work in the book “Antitrust and Monopoly: Anatomy of a Policy Failure. It details the cases and highlights the lack of evidence of consumer injury. The conclusion was that the entire antitrust system has worked “to lessen business competition, and lessen the efficiency and productivity associated with the free market process.”
In his book “How Capitalism Saved America”, Professor Thomas DiLorenzo described the state of the sectors that were the most subject to early 1900’s antitrust hysteria: “Those industries targeted as “monopolies” grew seven times faster than the rate of the economy as a whole.” Prices decreased significantly faster than in the rest of the economy. States legislation was actually passed to suppress “unhealthy competition”, by which they meant low prices.
The late 1800’s and early 1900’s was the heyday of anti-monopoly sentiment. Big businesses were definitely formidable organizations. Standard oil controlled 88% of the infant oil industry in 1890. By the time the Supreme Court reaffirmed the ruling that Standard Oil was a monopoly in 1911, its market share had dropped to 64%. By 1911, there were 147 oil companies. Costs were continuously declining and prices dropped to a fraction of what they were a couple of decades earlier. Output was increasing, not just for Standard, but for most of growing number of producers. The core justifications for antitrust were false.
The epitome of antitrust irrationality was the 58,000 page Alcoa decision. It concluded that Alcoa’s skill, foresight and industry were exclusionary. It forestalled competition by stimulating demand and then supplying it. Judge Learned Hand opined that “…we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connection and the elite of personnel.” Quite obviously, if they faced each opportunity with new capacity, they were not restricting supply in the least. Others could not compete because Alcoa was so efficient and prices were so low. To antitrust lawyers and judges, up always seems to be down. Very smart people can say and do very dumb things.
Obama has apparently surrounded himself with very smart people. Unfortunately for the citizens of the United States, the smarter they are, the more arrogant the approach seems to be, and the dumber the things they do. Larry Summers, chief economic advisor to the president, intends to use “behavioral economics” in antitrust cases, the use of psychology to determine how “real people” should act. This opens new avenues of attack, and will possibly add billions of dollars to the tabs of taxpayers and to the customers who have to pay for the defense and the increased prices due to crippled competitiveness of the top producers.
I am sure Mr. Summers and his bureaucratic colleagues are sincere, and may even think they are doing the right thing. Being smart and powerful, however, doesn’t make you right, and it doesn’t make sense out of nonsense.
By J.D. Seagraves, on December 5th, 2008
On
w:st="on">December 1, 2008, the National Bureau of Economic Research
(NBER) made the shocking announcement that the
w:st="on">U.S. economy is in recession. In
fact, NBER says we’ve been in a recession since last December. That this was
considered “news” is yet another indictment of the mainstream media. Who
exactly didn’t know that the U.S.
was in the midst of a recession? NBER’s
class=GramE> declaration of the obvious merited no more serious news attention
than a proclamation by NASA that the earth in fact orbits the sun. After
all, the ongoing debate of the past several months hasn’t been whether or not
we’re in recession, but who precisely is to blame for it?
There’s No Painless
Fix for the Economy
Austrian economists accurately predicted this recession,
even as statists of all stripes (monetarists to
Keynesians, as if there’s a difference) predicted permanent prosperity.
Therefore, I think the Austrian take on who’s to blame is worthy of a hearing.
As I’ve discussed in other articles on Citizen Economists,
the Austrian theory of the business cycle holds that it is the government’s
artificial creation of money and credit that causes asset bubbles that
eventually have to burst. But interventionists of the left and right want to
blame other culprits—greedy businessmen, unions, speculators, foreigners,
immigrants, welfare recipients—take your pick. Thus in misdiagnosing the cause,
liberals and conservatives also err in prescribing a cure.
A tremendous amount of faith is being put in President-Elect
Barack Obama’s ability to
“fix” the economy. But unfortunately, the odds of him “fixing” our current mess
are only slightly better than the odds he’ll reveal himself to be the
reincarnation of Grover Cleveland. Obama, well-
class=GramE>intentioned or not, cannot possibly “fix” the economy—at
least not without causing a lot of pain in the meantime. And that option is not
on the Obama menu.
Paul
class=SpellE>Volcker’s Orchestrated Recession
What needs to be done? Well, Obama
should rely on the wisdom of Paul Volcker, who is on
class=SpellE>Obama’s economic-advisory team. When Volcker
was tapped to chair the Federal Reserve in 1979, the country’s economic outlook
was nearly as bad as it is today. Four decades of pseudo-socialism under FDR,
Truman, Eisenhower, JFK, LBJ, Nixon, and Ford had wrecked the foundations of
the U.S.
economy—even the gold standard had been sacrificed. Austrians predicted
hyperinflation, the end of the dollar-reserve system, and maybe even the
implosion of the U.S.
government. They made these predictions because they were confident that no one
would have the political will to do what needed to be done—raise interest rates
through the roof, choke off monetary growth, and intentionally throw the
economy into a deep recession.
That’s just what Volcker did—and
he was hated for it. In fact, Ronald Reagan tried to get Volcker,
who had been appointed by Jimmy Carter, dismissed. But while
class=SpellE>Volcker’s orchestrated recession was deep, it was also
short. Coming out of it, the U.S.
economy boomed. In fact, Reagan even reappointed him in 1983. But four years
later, the Gipper goofed with his appointment of
hardcore inflationist Alan Greenspan to succeed Volcker,
and the same story began to play out again. Now we’re right back to where we
were in 1979—and 1929.
style='mso-bidi-font-weight:normal'>U.S.
style='mso-bidi-font-weight:normal'> Economy Headed For Credit O.D.
Why is it that the Fed and the politicians keep on wrecking
the economy? Two reasons: ignorance and greed. They truly don’t understand
economics, and who can blame them? Most economists don’t, either. Secondarily,
while politicians are quick to accuse businessmen and Wall Street speculators
of being “greedy,” it is the political class that’s greediest of all—greedy for
power. Inflation of the money supply allows them to buy more votes without
raising taxes, and so they direct the Fed to perpetually expand money and
credit. Why should the politicians care? Most of them will be out of office by
the time the fiat money hits the fan.
So when the chickens start coming home to roost, as they are
now, the government and the Fed pursue a policy of throwing gasoline on the
fire. They try to cure the problems of inflation with more inflation. A more
accurate analogy is that of the heroin addict. When he starts having withdrawal
symptoms, another shot of junk will make him feel better for the moment. But as
time goes by, it requires more and more H to keep him balanced, and eventually,
he dies of an overdose. This is where the
w:st="on">U.S. economy is headed.
What
class=SpellE>Obama Could Do – But Won’t
The best case scenario would be for Obama
to follow an even more aggressive version of Volcker’s
1979 playbook and direct Ben Bernanke to pursue a
hard-money course. Despite being an arch-inflationist Keynesian,
class=SpellE>Bernanke would undoubtedly follow the long line of
supposedly “independent” Fed chairmen by doing exactly what the president
ordered. This would mean raising interest rates, preferably by closing the
Fed’s discount window, selling its entire hoard of government bonds (and other
assets), and possibly buying gold with the proceeds (or simply retiring the dollars).
This would help put the economy back on sound footing for
the first time since 1913, but it would also be very painful in the short run.
It would definitely cost Obama any chance at
re-election, and the next president would undoubtedly reverse course.
Therefore, even if Obama were aware of the Austrian
theory and believed in it, chances are he wouldn’t pursue this course of action
until into his second term. And we don’t have four years to wait.
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