Archive for ◊ October, 2008 ◊
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”
None other than Thomas Jefferson, 1802.
Hat tip to Fred
Do you know how to catch wild pigs?”
You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side. The pigs, who are used to the free corn, start to come through the gate to eat, you slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.
This is exactly what is happening to America. The government keeps pushing us toward socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tobacco subsidies, dairy subsidies, payments not to plant crops, welfare, medicine, drugs, etc. All the while we lose our freedoms — and more importantly, our initiative. One should always remember:
There is no such thing as a free lunch!
“A government big enough to give you everything you want, is big enough to take away everything you have.” – Thomas Jefferson
Hat tip to Mark Clower
A great article in the National Review about the “reincarnation” of Jimmy Carter:
A newcomer to national politics, he claimed to transcend partisan labels. He moved to the center during the campaign, at a time when the Democrats held large congressional majorities. In a troubled economy, he told voters he would keep taxes down for most Americans, limit spending, and balance the budget, all while implementing ambitious social programs. He planned to cut military spending to free money for other purposes, but assured moderates and conservatives that when it came to America’s enemies, he would be tougher than the Republicans. The media, droves of moderates, and some conservatives believed him, having pegged him as a man of character.
His name was Jimmy Carter, the year was 1976, and he won. His presidency helps us predict the likely results of an Obama victory in 2008…
Carter and the Democratic Congress generated 18 percent inflation and economic stagnation at the same time. Unemployment rose. Americans came to regret the votes they had cast — Carter’s approval rating sank to 21 percent in 1980, the lowest in the history of polling…
Before casting a vote for Obama, Americans must consider the likelihood that he will follow the path of Jimmy Carter — that he will wreck the fragile economy by reneging on promises to cut taxes and spending, that he will be tough on America’s allies and soft on its enemies.
Will we see a rerun?
Leonard and I spent a couple of hours at the Air Force Museum on Saturday, concentrating our visit on exhibits associated with the aerospace industry from 1900 to 1920. We discussed how the Wright brothers depended upon the work of Octave Chanute, and how Glenn Curtiss worked with Alexander Graham Bell (yes, that “Bell”) to build the first large-scale airplane company.
Len was perplexed that the Wrights could invent the airplane, yet very quickly lose their business advantage. I mentioned that much of American business success has been created by invention and the notion of reward from hard work. The company that is innovative and has access to investment capital to bring ideas to reality is typically the business that succeeds…
Ironically, later that day I came across a great interview in the Wall Street Journal with Fred Smith, founder and CEO of FedEx. After reading this timely article, I realized that Mr. Smith reinforced many of the same beliefs that I shared with Len. A few excerpts from the Smith interview:
He attributes the financial crisis to “the intersection of four long-term developments.” Reckless mortgage lending policies; high energy prices; mark-to-market accounting rules; and national policies that favor what he calls “the financial sector over the industrial sector.”…
So how do we fix this problem and retool our industrial sector in a pro-competitive fashion? “We’ve got to reduce the taxes on equity. Let companies expense their capital purchases.”…
We’re now at a point where a very large part of the population pays no federal income tax at all. When you have a majority of the population that realizes that you can transfer money from the productive to themselves, that’s one of the great questions for the future of civilization, as far as I’m concerned.”…
“That’s where all wealth comes from . . . It’s not from the government. It’s from invention and entrepreneurship and innovation. And our policies promote a legal and regulatory system which impedes our ability to grow entrepreneurship. Lastly, if we want to make [America’s workers] wealthier we have to quit demonizing quote, big corporations.”
We must support the 3i — invention, innovation, and investment.
Today on my way to lunch, I passed a homeless guy with a sign that read, “Vote Obama, I need the money.” I laughed.
In the restaurant my server had on a “Obama 08” tie. Again I laughed, as he and the homeless guy had the same political preference a coincidence I just could not let go.
When the bill came, I explained to the waiter that I was exploring Obama’s redistribution of wealth concept. He stood there in disbelief while I told him that I was going to “redistribute” his tip to someone who I deemed more in need – the homeless guy outside. The server angrily stormed off.
I went outside, gave the homeless guy $10 and told him to thank the server inside as I’d decided he could use the money more. The homeless guy was grateful, of course.
At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for money he did not earn, but the waiter was pretty angry that I gave away the money he did earn, even though the actual recipient “needed” the money more than the waiter did.
I guess redistribution of wealth is an easier thing to swallow – as long as it’s happening to someone else.
Hat tip to Mike Morris
This article in the Wall Street Journal from famed econmist Arthur Laffer, sums it up best:
“Giving more money to people when they fail and taking more money away from people when they work doesn’t increase work. And the stock market knows it….
The stock market is obviously no fan of second-term George W. Bush, Nancy Pelosi, Harry Reid, Ben Bernanke, Barack Obama or John McCain, and again for good reasons.
These issues aren’t Republican or Democrat, left or right, liberal or conservative. They are simply economics, and wish as you might, bad economics will sink any economy no matter how much they believe this time things are different. They aren’t.
An interesting story in the Wall Street Journal about economist Anna Schwartz. She was Milton Friedman’s coauthor on their classic work, “A Monetary History of the United States”, and she has some interesting comments on the recent financial crisis:
Credit spreads — the difference between what it costs the government to borrow and what private-sector borrowers must pay — are at historic highs… This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. “The Fed,” she argues, “has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.”
…”firms that made wrong decisions should fail,” she says bluntly. “You shouldn’t rescue them. And once that’s established as a principle, I think the market recognizes that it makes sense. Everything works much better when wrong decisions are punished and good decisions make you rich.” The trouble is, “that’s not the way the world has been going in recent years.”
“I don’t see that they’ve achieved what they should have been trying to achieve. So my verdict on this present Fed leadership is that they have not really done their job.”
Thomas Jefferson wrote, “The government is best which governs least.” So what happened to the Party of Jefferson, the once-great Democratic Party, the champion of limited government? An interesting parody from the PatriotPost on reasons to vote with the Democrats:
“I think the government will do a better job of spending my money than I could. When we pull out of Afghanistan and Iraq, I know the Islamic terrorists will stop trying to kill us. I believe people who can’t tell us if it will rain in two or three days can now tell us the polar ice caps will disappear in a century if we don’t comply with Orwellian government economic oversight. English has no place being the official language in America. I’d rather pay $4 for a gallon of gas than allow drilling for oil off the coasts of America or in that vast Alaskan wasteland, ANWR. ‘Big Oil’s’ five-percent profit on a gallon of gas is obscene, but the government tax of 18 to 35 percent on the same gallon of gas is just fine.”
“I believe businesses in America should not be allowed to make profit—it should be confiscated by the government so politicians and bureaucrats can redistribute that profit as they see fit. I believe guns cause crimes and murder, not the sociopaths using them, and, thus, should be confiscated. Besides, when someone threatens my family, I know the government can respond faster with a call to 911 than I can with a gun in my hand. It’s a right to kill millions of babies while objecting to the death penalty for murderers. I believe five elitist liberal judges should rewrite the Constitution by diktat to suit Leftist agendas that could never pass proper amendment.”