Jeff Neal for C.U.R.E. - Certain Unalienable Rights Endowment

Archive for the ‘Economics’ Category

Give me Elmo or give me NASCAR: A profound Choice?

In Economics, Financial, Opinion, Political Critique on December 29, 2011 at 10:22 am

Not really . .  . Give me liberty or give me death.  That’s profound.

A few months ago, FoxNews reports on the [low] level of the debate on the National Debt.

See Link Here (Debate over Army funding of NASCAR sponsorship)

When the fight is over which unconstitutional government expenditure should be kept in place, it’s a power struggle akin to a food fight; it is not a political discussion.  Maybe the Army’s NASCAR sponsorship is constitutional – after all, raising an army is a power granted the federal government by the people.
That question is open to discussion.  But NPR, PBS, Sesame Street – not even a close call.  Other government spending programs that are not close calls would include Dept of Education, Dept of Energy, health care law, Medicaid, corn subsidies, grants to states to build bike paths . . .Debating spending on the merits, goodness or effectiveness of the program makes for an enormous government, because there is a constituency for everything – see mohair subsidy and Murtha Regional Airport.
On the other hand, debating spending and other government actions on constitutional grounds makes the argument finite, unemotional and, in the end, lititgable by the non-political branch, the judiciary.  Could be a plan.  I think that the US Constitution was meant to work that way.  That would take a completely new group of legislators, because the current Congress is full of men and women who think their job is to bring home the bacon.
Or, we can elect politicians who will keep debating whether we should have the government feed the hungry – – – and watch the definitions of ‘feed’ and ‘hungry’ morph until debates over providing for the common defense, giving heating oil to the poor or buying viagra for grandpa are virtually indistiguishable, and more and more and more money will be taken from ‘rich’ person A and given to every erectile dysfunctional man, I mean ‘hungry‘ person B for his viagra, I mean,  ‘food‘.
How’s that working out for us so far?  The choice is simple and stark.
(A) 1789 – A limited, constitutional, democratically-elected government that protects individual rights – and nothing more, or
(B) circa 1917, Russia – A fair tyranny that wants income equality and leads to totalitarianism – we’ve all seen the movie.

Let’s prevent crime by making up some new laws. Sure, that’s the answer. NOT.

In Economics, Financial, Opinion on December 6, 2011 at 5:38 pm

In the Washington Post of December 6 (Link HERE) Katrina vanden Heuzel joins the chorus of pundits who:

(1) falsely accuse bankers, hedge fund managers and others of crimes,

(2) long for the days before “irresponsible de-regulation” (99% of them mention Glass-Steagal, the repeal of which I find very difficult to blame for the housing bubble or its collapse, but, HEY it sounds smart to mention a law by name),

(3) fail to mention one specific law or regulation the continuation or re-inactment of which would have or will prevent the next “crisis,”

(4) criticize GW Bush and everyone in his administration for using “tax-payer money to bail out” the banks,

(5) suggest that the solution to preventing more bad government decisions is (a) the enactment of a new and different set of laws and regulations that look nothing like the ones that were repealed, and (b) vesting unelected government officials with more power via those new laws and regulations.

Really?  The answer to the government over-stepping its bounds, having and mis-using too much power is  . . . give it ever more “regulatory” power to make banks and other institutions beg for permission before they do this or that?

I suppose that we’re meant to assume that the next Secretary of the Treasury will be more a pure-hearted, more honest man who will not have any friends or former colleagues in the hedge fund business (and will not have anyone on his staff who does).  That way, when one of those all-seeing, all-powerful, clairvoyant regulators spots “systemic risk” or some other such deviation from acceptable behavior that Dodd-Frank purports to have outlawed, no one will get a secret meeting or phone call.  We’re going to outlaw cronyism, damn it, because we’ll keep people with friends and acquaintances in high places from ever occupying an office of power – that’ll work!

Presto!  Outlaw breaking all the new laws and you’ve got perfection!  I’ve got another idea – let’s pass a new law that says murder is really, really bad; so bad that we’re going to start anticipating it (yeah, like in Minority Report with Tom Cruise) and that will have a huge effect on the number of murders, right?  That’s exactly what Dodd-Frank purports to do – the newly empowered regulators will have perfect vision into the future and will prevent any more icky stuff from happening.

Grow up Ms. vandan Heuvel.  If you know of crimes committed by bankers or hedge fund managers, report them immediately to the proper authorities so they can prosecute them under the laws as they existed pre-Dodd-Frank.  If you know not of any such illegalities, I beg you to stop implying that criminals are running free in the streets of mid-town Manhattan with the blessing of the Republican party.

And, with regard to your desire to prevent all the future bad deeds, I suggest that for one to think that the government can “regulate” out of the system all bad risk and the concomitant potential for failures and losses is naive; . . . no it’s dumb and evil.  The only way to accomplish such immunity from loss would be a complete take-over and shut-down of the financial markets – is that what you want?

It boggles the mind to contemplate the conceit necessary for one to believe that the government can imagine, predict, categorize and outlaw only the ‘bad’ versions of the innumerable ways capital is directed to productive uses.  Furthermore, beyond preventing fraud and theft, why should the government decide what is good or bad?

Bottom line:  What is the ideal regulatory regime for the capital markets?

Two laws:

1.  No Fraud – Check.

2.  No theft – Check.

And, since the state has the exclusive power to compel a party to honor any contract it enters of its own volition, the state must exercise that power (a) as necessary and (b) without regard to what the enforcer thinks the ‘fair’ outcome of the business transaction should have been.

Any other laws will give protection or otherwise give preference to one party over another, and the (unconstitutional) power to pass such preferential laws will lead to perversion and abuse of the law.  (See Frederic Bastiat, The Law  See in particular, the chapter Property and Plunder.)

Don’t change plunderers.  Stop the plundering.

That new little baby: Mouth or Mind?

In Economics, Opinion on October 25, 2011 at 12:47 pm



And Baby Makes Seven Billion –

Is a newborn an asset or a liability to his fellow man?  Your answer will reveal all we need to know about your world view.  Mr. McGurn of the Wall Street Journal says the newborn is a mind that will feed itself and others, not a mouth to be fed.

I say he’s correct and add that it depends on whether you let him be free.

Humans, free to use their minds, produce more than they consume.  Modern life is proof.

Humans, dependent on others, merely consume and learn to feel entitled – they’re not born that way.

A free man produces until he can produce no more.  He accumulates knowledge and wealth for himself and his posterity.  He and his billions of co-workers do things for YOU that you’d never accomplish on your own.  Think of the thousands of men who made the pencil you used to take your SAT or the one man, Steve Jobs, who created things you never imagined but seemingly can’t live without.

A slave produces just enough to subsist and escape punishment.  He makes it through today so he might breathe tomorrow.

Free newborns are assets.  Let’s hope there are more of those born today.

Let freedom ring anew with every birth.  The more the merrier!

Money, Politics & Corruption . . . or Chickens & Eggs

In Economics on October 13, 2011 at 11:22 am

A Note to “Occupy Wall Street” crowds

It appears that one thing motivating and energizing your ‘movement’ is the seldom questioned belief that money corrupts politics.  I suggest you have it inside-out and upside down.

Money is the way we accumulate, store and then trade the value of our having lived and worked, first, for things that sustain life and, then, for other luxuries – iPads, thongs, tattoos, bottled water, private jets, Jack Daniels, and deodorant, just to name a few.  Voluntary trading and bargaining between and among men with money precludes force from being the coin of the realm.

Un-touched by political favoritism and other forms of fraud, money never lies and is never corrupt.  Only in the hands of the corrupted man can money do harm.

Money corrupts politics?  NOPE!  That is exactly backwards.  Politics corrupts money.

You will never eliminate avarice or greed from human endeavors, but if you limit the power of the state, you will eliminate the power of avarice and thereby elevate, indeed make paramount, the powers of merit and accomplishment.  And that results in freedom for everyone – no exceptions.

Reset Button – Break the Glass

In Economics, Opinion on July 1, 2011 at 12:16 pm

We can only keep the promise by breaking it.

A good friend had a moment of brilliance a couple days ago. Terminate Medicare and Social Security.  No cuts.  No new formulae.  No delayed increases.  End them, PERIOD.

For a moment, forget the political feasibility. Think about it.

The country has incurred debts it can’t repay.  Our balance sheet, as it were, can’t be fixed short of a tectonic shift in our thinking. The estimated net worth of all of the households and businesses in America is estimated at between $60 and $75 trillion. Our total unfunded liabilities (i.e. the future cost of all promises made by the US Government under Medicare, Medicaid and Social Security) is approximated at $114 trillion.  TILT!

Now, go back now to political feasibility: what’s the likelihood that the men and women of this country will stand by and let our government TAKE all of our wealth and give it to itself to pay for those promises? Not bloody likely, eh?! But that’s what we’re letting them do, all day and every day.

Social Security and Meidcare are inaccurately described as an insurance program – funds we pay into in exchange for a promise of future payments to support us in retirement. They are more accurately described as a Ponzi Schemes. You pay retirees’ benefits now, future workers will pay for yours later. Only the math doesn’t work.

So, eliminate the programs and, drum roll . . . the resultant creation of wealth will fulfill the promises. The stock market will soar. Commodities’ prices will decline. The US Dollar will rise in value against all other currencies.  The wealth produced will dwarf the liability of the ‘broken promises’ because we will have freed ourselves to keep those promises.

See, we owe all that money to ourselves, right? Asked that way, the question sounds a little different. We made those promises to ourselves. This approach suggests that we let ourselves pay ourselves back instead of relying on the anti-productive government machine to do so. We’re the unsecured creditors in the US Government bankruptcy. But we’re also the shareholders (to stretch the metaphor) – we own the place (the country, not the government) AND we are the assets that have been pledged to fulfill the promises. Let’s foreclose and take the assets back.  Let’s let ourselves off the government hook so we can go back to producing wealth.

It will cause some dislocation and serious discontent, of course. But those are manageable and safety-nets raised by newly-freed men and women of America will care for the elderly and the sick who are temporarily displaced – we always have. On the other hand, the inevitable catastrophe we face  as a result of politicians’ constant tinkering with the cancer, repeatedly moving the tumor from one part of the corpus to the other, is not manageable. It’s deadly.

Let’s keep the promise. There is no choice.

Just Let Me Fish

In Economics, Opinion on May 11, 2011 at 10:52 am

Our government does a lot of things –  none of them are properly called ‘creating jobs.’

One popular government act that purports to stimulate job growth in the private sector is granting a tax credit or other similar gimmicks.  “Giving” tax preferences to small or large businesses can have no measurable effect on job growth.  Subsidizing new hires or new investments on the margin and otherwise trying to dictate or steer economic activity into more politically popular areas or industries ought not be the goals of good government policy.

A “tax credit” is not free, found money, a gift from the sky, with which a small business man is going to make some investment he otherwise would not make.  An entrepreneur invests in the future; letting him keep more of last year’s profit does not change his view of what will happen next year or improve his chances of success in his next venture.

These government acts are ostensibly intended to make capital available to businesses for investment.  Capital scarcity is not the problem our economy is facing – there are trillions of dollars of capital invested in stagnating businesses and industries just waiting to pounce on innovative, profitable opportunities – capital is fluid and mobile.  Further, good investment ideas are no more scarce today than at any other time in history.  What is scarce, what is missing, is the belief that an investor can trust that the rules will not change in a fashion that will make his planning and projections moot.  An entrepreneur willingly takes the risks that his customers won’t buy his product or that the cost of the component parts of his widget will increase beyond his control – those are the things he can assess and address with contingency plans, knowing that success or failure hinges on the accuracy of his judgments.  The risks he can not underwrite, the risks he will not take, are risks that at half-time the government will move the goal-line or decide that a touchdown is really worth only 4 points.

The uncertainties heaped upon business decision-making by the Obama regime are what paralyze the businessmen who would love to be making decisions that would require them to employ more workers so he can make a profit – that’s ‘job creation.’  Job growth is not a magic trick that works when the government says ‘Abracadabra’ or ‘pretty please.’  Job growth occurs if, and only if, a businessman concludes there is demand for a product or service at a price that exceeds his cost of delivering it, at which time he will hire hungry laborers to produce the product.  No amount of government action or encouragement makes those productive acts and decisions more likely to occur.  Instead, government inaction makes productivity inevitable, since man has a most acquisitive nature and an insatiable thirst for being productive – oh, and an empty stomach if he isn’t.  How do we know?  See “History, the advance of mankind.”

You know the old parable: “give a man a fish, he eats for a day.  Teach him to fish, he eats for life.”  I say “let me fish, damn it; just let me fish.”

Are we spending too much or taxed too little?

In Economics, Opinion on April 25, 2011 at 2:41 pm

Is there any correlation between The Tea Party and Rational Thinking?

There seems to be some confusion about how the government can routinely run what is generally considered to be an ‘unsustainable’ deficit.  Most of the conversations seem to place the blame on one or both of (1) high government spending and (2) the “irresponsible and unpaid for Bush tax cuts.”

I need someone to explain to me how a tax cut, in and of itself, causes a deficit.  It stands to reason that, unless taxes are $0 or there are no non-essent­ial (i.e. unConstitu­tional) expenditur­es, a deficit is caused if, and only if, the government spends more than it collects in taxes, not because it taxed too little.

After all, isn’t it true that the same congress that writes the tax code also passes the annual budget.  To suggest that one hand of the government (the tax collector) has no responsibi­lity to coordinate its actions with the other hand (the spending machine) is misleading and, I suggest, is born of an intent to deceive or distract the voters from the facts.

Some of the voters who have opened their eyes to that deception are sometimes called Tea Partiers.  Others with similarly open eyes could be described as rational, thinking humans.  Uncovering the deception makes it easier to remember that money the government spends is taken from someone who earned it.  Furthermore, they realize that it’s time to stand up for lower taxes because – well, because it’s moral. Free men should not be compelled to spend their money in ways that Paul Ryan and Harry Reid think are best.  It’s not the politicians’ money.  Let’s take it back.  (see also “Ryan’s Plan – Deeply Flawed Compromise”)

Pink Ribbons, Health Care and Money

In Economics, Financial, Health Care Reform, Opinion on April 23, 2011 at 12:18 pm

Who can argue with wanting the most affordable, high-quality health care for the most people? An abundant supply of a good thing is a desire that is unassailable by any one who wants to be a welcome participant in the public discourse. So, our challenge is to discover the best means of maximizing the supply of the unarguably good thing, right? Read the rest of this entry »

Debt Ceiling – Did that alarm-thingy go off again?

In Economics, Financial, Opinion, Political Critique on April 21, 2011 at 4:32 pm

If you want to know how serious or knowledgable any of the politicians are about taxing and spending issues, just ask one of them “how large an increase in the debt ceiling do you recommend?”  If their answer is anything less than, say, $10 Trillion dollars (the amount the debt is expected to increase over the next 6-8 years) then that politician is merely pretending to be paying attention to the situation and actually has no sense of what is going on in the country they “govern” much less what are the consequences of his actions.

You’ll get an answer like “up to $17 Trillion” (up from $14.5T now) and you’ll know beyond doubt that they’re not serious, because that increase will last about a year, maybe two . . . and we’re right back where we started.

That’s really the point the Republicans are making (and not very well, by the way).  Unless we pair the increase to major reform in the budget process and serious spending cuts, we’re just kicking the can down the road and solving nothing – like pushing the snooze button on the alarm clock and rolling over for another few winks.

Wake up America – they’re toying with issues that can do irreparable harm to our country and the freedoms we seem to take for granted.  The politicians have no clue what they’re doing – seriously, they don’t – and the ‘media wing’ of the government is complicit, because they think the explosion might be good for ratings.

Budget Cuts – Congress plans to ban charitable deeds!

In Economics, Opinion, Political Critique on April 18, 2011 at 11:24 am

Why do some people equate what our government does with what our country does?

This nation is comprised of individuals, men and women, all of whom have the freedom to act on their own beliefs – they may help the poor, feed the hungry, abort the babies of the unfortunat­ely pregnant, or subsidize the purchase of windmills for T. Boone Pickens.  I will not object to Harry Reid’s efforts to raise a fund to pay for any and all of those things, so long as he keeps the power of Congress and the IRS out of the process.

The question is, why does he, and his ilk, think those things are only possible if plann ed and done by the federal government­.  And why are they deemed worthy only after the IRS has forceably taken money from men who, maybe, wanted to invest those dollars in a new farming process that might double the output of corn per acre of farmland, thus making food more affordable for millions of children?

Reducing government spending does not vaporize money or ban good deeds – it simply lets the men and women who OWN that money choose for themselves how it should be deployed.  Who, other than a member of Congress and lobbyists, believes that 535 men/women in Congress know better what to do with YOUR money than you do?