30 January 2009

Stimulating, in so many ways, I'm sure

Well, some time this weekend, I begin the arduous process of reading His Beatitude's stimulus bill. At 334 pages it looks to be quite scintillating, right up there with The Bourne Identity the biggest thing since -- I don't know -- the Bible, The Complete Works of Shakespeare, The National Industrial Recovery Act. Want to read it, too? It's right here. Enjoy.

I just know I haven't had this much fun since I read the comprehensive immigration bill. What a knock-about of pure fun that all was!

What's for sale on the political market

Power, like I said. And while most critics look at the cost of all these bail-outs and stimulus packages, when they're not looking at the furthering of an obvious socialist agenda, Thomas Sowell, like me, looks at the power which politicians buy with bail-outs.

What are the Beltway politicians buying with all the hundreds of billions of dollars they are spending? They are buying what politicians are most interested in— power.

In the name of protecting the taxpayers' investment, they are buying the power to tell General Motors how to make cars, banks how to bank and, before it is all over with, all sorts of other people how to do the work they specialize in, and for which members of Congress have no competence, much less expertise.

This administration and Congress are now in a position to do what Franklin D. Roosevelt did during the Great Depression of the 1930s — use a crisis of the times to create new institutions that will last for generations.

To this day, we are still subsidizing millionaires in agriculture because farmers were having a tough time in the 1930s. We have the Federal National Mortgage Association ("Fannie Mae") taking reckless chances in the housing market that have blown up in our faces today, because FDR decided to create a new federal housing agency in 1938.

Who knows what bright ideas this administration will turn into permanent institutions for our children and grandchildren to try to cope with?
I taught him everything he knows. And now -- he never writes; he never calls. Oh well.

All this bailing out and stimulating reminds me of a passage in Genesis:

Joseph provided his father and his brothers and all his father's household with food, according to their little ones. Now there was no food in all the land, because the famine was very severe, so that the land of Egypt and the land of Canaan languished because of the famine.

Joseph gathered all the money that was found in the land of Egypt and in the land of Canaan for the grain which they bought, and Joseph brought the money into Pharaoh's house.

When the money was all spent in the land of Egypt and in the land of Canaan, all the Egyptians came to Joseph and said, "Give us food, for why should we die in your presence? For our money is gone."

Then Joseph said, "Give up your livestock, and I will give you food for your livestock, since your money is gone." So they brought their livestock to Joseph, and Joseph gave them food in exchange for the horses and the flocks and the herds and the donkeys; and he fed them with food in exchange for all their livestock that year.

When that year was ended, they came to him the next year and said to him, "We will not hide from my lord that our money is all spent, and the cattle are my lord's. There is nothing left for my lord except our bodies and our lands. Why should we die before your eyes, both we and our land? Buy us and our land for food, and we and our land will be slaves to Pharaoh. So give us seed, that we may live and not die, and that the land may not be desolate."

So Joseph bought all the land of Egypt for Pharaoh, for every Egyptian sold his field, because the famine was severe upon them. Thus the land became Pharaoh's. As for the people, he removed them to the cities from one end of Egypt's border to the other. Only the land of the priests he did not buy, for the priests had an allotment from Pharaoh, and they lived off the allotment which Pharaoh gave them. Therefore, they did not sell their land

Then Joseph said to the people, "Behold, I have today bought you and your land for Pharaoh; now, here is seed for you, and you may sow the land. At the harvest you shall give a fifth to Pharaoh, and four-fifths shall be your own for seed of the field and for your food and for those of your households and as food for your little ones."

So they said, "You have saved our lives! Let us find favor in the sight of my lord, and we will be Pharaoh's slaves."

Joseph made it a statute concerning the land of Egypt valid to this day, that Pharaoh should have the fifth; only the land of the priests did not become Pharaoh's. ~ Genesis 47.12 -- 26 (NAS), emphases added.
Sad to say, but it makes Joseph a bit of an anti-hero to me. Where did all the grain come from in exchange for which the people eventually sold themselves as slaves to Pharaoh? Why, the people who sold themselves as slaves to Pharaoh! That grain was taken from them in the form of taxes. And they had to sell themselves in order to get it back.

Egypt's distance past.

Our near future?
28 January 2009

Neither capitalist nor socialist, just political

The "free-market" talk continues. But the fact of the matter is the number of people who believe in a free market system could probably fill just a football stadium. And there is probably only one person in our government who believes in a free market; and that is Ron Paul.

Briggs Armstrong proposes a new rule:

[N]eomercantilists, neoconservatives, and statists are no longer allowed to call themselves "free marketers." People who call themselves free marketers such as Bush, Paulson, Greenspan, and Bernanke are the primary threat capitalism faces. These false prophets of capitalism are the greatest friends that proponents of socialism have.
Mona Charen piles on also:

President Bush, along with a sloppy and incontinent Republican majority in Congress, managed the feat of discrediting free market economics without ever practicing it. It was the Republicans who passed the Medicare prescription drug bill, and the bloated farm bill, and the transportation pork. This disqualifies most Republicans from challenging the gigantic new trough feeding that is about to begin under the Democrats.
Yup. That's pretty much it.

What these men really believe in is a "convenient" market, not a free one. The only question being for whose convenience the market operates. In a good world, a market operates for two people, and for two people only: buyers and sellers. Third parties have no business interfering in the market, no business interfering in the exchange between buyers and sellers: it doesn't really concern them. (That is to say, for clarity's sake, that, at the point of its interference, this third party is acting as neither buyer nor seller, but rather as an agent, not an agent for either buyer or seller -- though it will pretend to be one or the other, or, worse, neutral -- but as an agent for itself, in pursuit of its own ends and employing whatever means necessary to advance its agenda over against either buyer or seller.) But the convenient market operates precisely to benefit people who are not participants in the market, third parties, parties who are not buying and selling but doing something completely different. Specifically, the convenient market operates for the convenience of politicians, who can parley every problem into a crisis which requires their benevolent -- and empty -- hands to fix.

It's not a free market. It's not a social market. It isn't market socialism. It's a political market. It serves the interests of politicians.

So, we get bail-outs and stimulus packages to get the economy going again -- supposedly. But can that really work? One wonders if these men really do know what they're doing. Do they even know what gets economic activity going? They act as if the only thing that needs to happen is that people just start borrowing and spending, and banks start lending. Just like that.

So far it doesn't seem to work:

"Lending Drops at Big U.S. Banks," reports the front page of the Wall Street Journal. Even those banks that have just received an infusion of $148 billion in taxpayer dollars as part of the TARP saw their loans drop by 1.4 percent between the third and fourth quarters of 2008, the paper reports. The economy seems to be shedding jobs like a dry fir tree losing needles. People speak of a "consensus" that only a huge stimulus plan by government can save us. ~ Mona Charen, here.
We've heard what some of these institutions are doing; and they do not seem to be lending. They seem to be buying jets and remodeling bathrooms. I don't think those are necessarily the best things to do with bail-out money, but at least some people had to build the plane and remodel the bathroom. And those two activities required prior stages of production, which is important because the little-known secret of economics as it relates to employment is this. The important thing is not full employment. The important things is full production. Production must precede consumption. (This is not a little-known secret if you buy into Austrian economic theory.)

So, it's really great (okay, not really) that all this bail-out money went out. But that's one thing. It's another thing to determine where it should go in the form of loans.

To whom is this money to be lent? Should it be lent for the purchase of capital goods, or consumer goods. If for capital goods, then it is to be lent for some type of production. Great. But what is to be produced? Unlike the auto industry, our masters on the Potamac seem not to have told us. (And when they do they will not determine investment by rational calculations in terms of money, but will be guided by political expediency, e.g., no construction jobs for white people, so Robert B. Reich.) It's difficult to see how banks are to be lending any money, or to whom. Normally, we could rely on entrepreneurs to make predictions about future consumption and appropriate capital goods successfully. But there is too much government interference in the market, and this interference sends signals to entrepreneurs about realities that don't really exist. This is what a "bubble" is. The housing bubble was created by our government, virtually by fiat. If I were an entrepreneur I would have no idea how to make any sort of forecast. I wouldn't know how many of the markers I'm looking at (like, for example interest rates) would be telling me the truth. Government manipulation of interest rates sends false signals to entrepreneurs about what people are doing with their money. It also sparks mis-allocation of goods and services, which is how we got into this mess. (And of, course, the name of the game for the political market is, blame the mis-allocators, not the ones who deceived the mis-allocators.)

Apparently, there's plenty of money for entrepreneurs to borrow. Normally that would mean people are saving, putting off present consumption in order to consume later. And here's the entrepreneurial question: When people do that put-off consumption, what will they be consuming?

But the fact is, while there is, arguably, plenty of money for entrepreneurs to borrow, we know that this money is not there because people are putting off present consumption. It's there because the government put it there, probably by just printing up money. This creates a further problem: inflation. By sending more paper money after a shrinking number of goods and services, the government causes inflation. So there's money there, sort of. But the money that is there now is fiat money and it's going to result in price increases. For what purposes is the entrepreneur to borrow? To produce something that is going to cost consumers more tomorrow than it does today?

So much for one type of borrowing, let's look at another. If this newly-available money is to be lent for consumer goods, then which consumer goods? iPhones? Blackberries? Tricorders? Better question: people are already debt-burdened due to borrowing for consumption goods in the first place. To listen to politicians, this consumer debt has been incurred because workers' dollars are buying less and less and they have resisted, if not flat out refused, to alter their standards of living. So they have had to borrow just to maintain a standard of living they can no longer afford. Are they to borrow still more money? Yes? And pay it off with what? Another loan?

Do these people really know what they're doing? They certainly don't give that impression. They throw money into the market and hope that it causes another boom. And it might do that. It's highly likely, though, that the next boom will just be another bubble, which will also burst, in time. It's the boom-bust cycle: it's always just a matter of time. The other game in the political market: make sure you've got a place to sit when the music stops.

That's the purpose of the political market, to provide politicians with future employment. They don't have to fix it. They just have to be the ones in power when it finishes fixing itself, assuming they don't screw it up beyond belief, first. Then they can, post hoc ergo propter hoc, take credit for fixing it and buy more votes. All they have to say is, "Hey, we implemented the PQR Stimulus policy and within two years the economy was healed." They don't have to demonstrate any causal relationship between the stimulus package and an economic turn-around. How many Americans could understand such an explanation, anyway? No, wait! How many Americans know enough even to ask for such an explanation?

All they have to do is position themselves in front of the avalanche and then stay ahead of it. Then, if they can keep moving faster than the avalanche is chasing them, they can claim the avalanche was simply following their leadership! All they have to do is keep moving. All they have to do is something, anything. It doesn't matter, because when the economy corrects, they'll say it was a result of their policies.
27 January 2009

A god they can believe in

That, according to Cal Thomas, is what the media have:

The media have at last found a god in whom they can believe. They are worshipping at the altar of the church of Barack Obama. Journalists and some of their ideological cable TV allies have so much invested in Obama's success that they will be hard-pressed to criticize him for anything and can probably be counted on to explain and justify any mistakes he makes, at least in the first two years.
Obamistas like to make comparisons of His Beatitude with other presidents. Thomas makes a comparison, of sorts, as well:

In his inaugural address, Herbert Hoover spoke of America's "fruits of accomplishment." He added he had "no fears for the future of our country. It is bright with hope." There followed by just a few months the stock market crash of 1929 and the Great Depression. Hope can be dangerous if it is misplaced.
24 January 2009

Innocent Gitmo detainee joins peace movement in Yemen

Okay, actually, he joined al-Qaeda in Yemen.

Texas Fred comments:

I have, for several years now, been highly critical of what I consider to be a lack of war fighting ability on the part of former president George W. Bush. Ladies and Gentlemen, before this is over, Mr. Bush may appear to have the war fighting acumen of Gen. George Patton.

I don't care who you are, that's funny.

I had mixed feelings about Gitmo. On one hand, I think any nation should be careful about treating all foreign nationals within its borders as if they all were citizens. On the other hand, once a government has certain powers against non-citizens, it could also one day be empowered to use those powers against citizens, in the name of national security, especially if those citizens are "dis-loyal" -- making them even worse than aliens. On yet another hand, I've never liked the idea of fighting the war on terror as a simple law enforcement problem like, for example, the war on drugs (of which I'm not a fan), treating terrorists like soldiers, or even mercenaries. (And I really like mercenaries!)

My biggest problem with keeping the detainees at Gitmo was the whole idea of keeping them there because it would have been illegal, here, to hold them in the way we were holding them there. It's a what-happens-at-Vegas-stays-at-Vegas sort of thing. If you can't do it within your own borders, it sends the wrong sort of message.

It's not that I have a problem with things like water-boarding. I don't. But if you have that sort of confidence, you should do it here. And if you don't do it here because, among other things, you know that the courts would probably put a stop to it. Then it just looks like you're trying to operate outside the law, which, of course, you are.

As a practical matter, one could argue that we needed a place like Gitmo in order to fight this war on terror. As a philosophical and military-science matter, one might consider that the need for a place like Gitmo may have served better as an argument on the impossibility of actually, and successfully, fighting a war on terror.

It's still amusing though, to see a Gitmo detainee (innocent as the wind-driven snow) leave his prison -- free at last, free at last, thank God Almighty, free at last -- and go join his compatriots in al-Qaeda.
23 January 2009

What we don't know about Obama Epiphanes

That's what The Politico wants to know.

We know a lot more about Barack Obama than we did on Election Day. He wastes little time making big decisions. He was serious about surrounding himself with seasoned people, even if they are outsized personalities likely to jostle one another and unlikely to salute on command. He intends to move quickly to put his personal stamp on government and national life.

Yet much about how the 44th president will govern remains a mystery—perhaps even to Obama himself.

The stirring rhetoric witnessed on the campaign trail and in Tuesday’s inaugural address is laced with spacious language — flexible enough to support conflicting conclusions about what he really believes.
Only decisions, not words, can clarify what Obama stands for. Those are coming soon enough.

Until then, here are the questions still left hanging as the Obama administration begins....


Well, like Dr. McCoy said in Star Trek V: The Final Frontier, "Hell of a time to ask."

Ah, if only we lived in a time, once again, when it didn't really matter very much who is the president. I bet it was a beautiful thing.

I don't have a nest egg and I agree with Limbaugh

"Well Rush must have a lot of acorns squirreled away not to share everyone else's hopes that the economy does come back."

According to Chris Matthews, and others, to oppose Obama is to hate one's country.

I am one of those who heard Rush Limbaugh say he hopes President Obama fails.

This is what Matthews quotes Rush as saying:

I disagree fervently with the people on our side of the aisle who have caved and who say, "Well I hope he succeeds. We've got to give him a chance." So I'm thinking of replying to the guy, okay I'll send you a response but I don't need 400 words. I need four. I hope he fails.
This is the quote in its context:

I got a request here from a major American print publication. "Dear Rush: For the Obama [Immaculate] Inauguration we are asking a handful of very prominent politicians, statesmen, scholars, businessmen, commentators, and economists to write 400 words on their hope for the Obama presidency. We would love to include you. If you could send us 400 words on your hope for the Obama presidency, we need it by Monday night, that would be ideal." Now, we're caught in this trap again. The premise is, what is your "hope." My hope, and please understand me when I say this. I disagree fervently with the people on our side of the aisle who have caved and who say, "Well, I hope he succeeds. We've got to give him a chance." Why? They didn't give Bush a chance in 2000. Before he was inaugurated the search-and-destroy mission had begun. I'm not talking about search-and-destroy, but I've been listening to Barack Obama for a year-and-a-half. I know what his politics are. I know what his plans are, as he has stated them. I don't want them to succeed.
Well, I too hope Obama fails. I know who his heroes are: Lincoln and Roosevelt. Those heroes succeeded. They succeeded in making the un-federal government more powerful. First, Abraham Lincoln fought a war to ensure there could be no significant opposition to un-federal power. Consent of the governed? The heart of the American colonies' secession from the British Empire? "Consent?" said Lincoln. "I don't need no stinking consent." Second, Roosevelt "readjusted" our national life, giving us a centrally supervised, though not centrally-planned, economy. Democrats have consistently sought a more perfect democratic-socialist union; and Obama promises to do as much as possible to further that agenda.

Some of us don't want the socialism we have. We certainly don't want more. We think socialism, even the least tincture of it, is not good economics. We also think the lost liberty is too high a cost for the pay-off. It doesn't deliver; and it costs too much for what it doesn't deliver.

But, as far as Chris Matthews is concerned, to hope that Obama fails is to hate the country. Matthews and his ilk are the kind who, even if they did not say they hoped Bush would fail, certainly did as much as possible to him help fail, dogging him at every step of the way. We were told that their opposition to Bush, their hope for his failure and their work to bring it about, was an expression of their patriotism, their love of country. Indeed, Hillary Clinton once yelled at the top of her lungs:

I'm sick and tired of people who say that if you debate and disagree with this administration, somehow you're not patriotic. We need to stand up and say we're Americans, and we have the right to debate and disagree with any administration.
All righty then. I'll say it. I'm an American and I have the right to debate and disagree with any administration. And why disagree with an administration but for the fact that you think the administration's policies are bad for the country. And if you think an administration's policies are bad for the country then -- whether or not you come right out and admit it -- you hope the administration fails in the implementation of those policies.

The difference between Rush Limbaugh and Chris Matthews is just this. Unlike Matthews and his ilk, Limbaugh doesn't pretend to be unbiased and nonpartisan.

Matthews asserts that the desire that Obama fail is a desire that the economy not improve. "Well Rush must have a lot of acorns squirreled away," he said, "not to share everyone else's hopes that the economy does come back."

That's the problem right there: to equate Obama with the economy in such a way that Obama's success is the economy's success and his failure, the economy's failure. Typical leftist hubris. Right up there with President Bush's you're-either-with-us-of-with-the-terrorists rhetoric.

For Matthews, the President of the United States is at the steering wheel of the economy: "But the bigger question to everybody is, if this guy fails, the only President we have, on the economy, taking office as it’s going down that’s killing everybody. How can you root for the failure of the only guy at, at the lever? At the steering wheel?"

It's not that we want him to fail at driving the economy. It's more that we don't think he is, or even should be, driving the economy. We don't want him, or anyone else, driving the economy. We don't think he really has the steering wheel. We want him to fail to get that wheel. We don't think any politician should have that wheel. We think it's bad in the long run and demonstrates refusal to accept how simple (but difficult) economics really is on the one hand, and, on the other, the fact that every attempt at government control fails and, when it fails, the irrational conviction that government can and should steer an economy results in a seizure by government of ever more control of the economy.

We think socialism is impossible; it's not that we don't like it. And we're not going to pretend otherwise, certainly not out of mis-placed deference to the man in the Imperial Office. For there is no giving these policies a chance. Over and over we have seen that once democratic-socialist policies are in place there is no going back, no getting rid of them. And every time they fail, that failure is used as justification for more democratic-socialist policies.

There is only one thing at which I hope His Beatitude succeeds, the defense of the country. That alone should keep him busy enough.
20 January 2009

Hail to The Leader

"The War between the States established...this principle, that the federal government is,...the final judge of its own powers." ~ Woodrow Wilson,Constitutional Government in the United States, p. 178

This day we have inaugurated our Twenty-eighth Constitutional Dictator (a.k.a., our Forty-fourth president), under the "American System". In true, "American" fashion it was a peaceful transfer of power from one ruling junta to another. Well, it's change anyway. We can be thankful for it. Such as it is. The machine over which our new Leader will preside, however, has been there for about one hundred fifty years, and still is. That didn't change.

I know it sounds (what's the word?) disrespectful to call him a dictator. But the fact is, he is, not because of any fault or moral failure on his part, but by virtue of the nature of the office to which he has ascended. He now presides over a government which is, as Wilson observed, the final judge of its powers. Such a government is of the essence of dictatorship, however benevolent, however democratic. And so have they been since good ol' (dis)honest Abe, who would be rolling in his grave to see a black man at the head of the tyrannical government he fought so hard to establish. I can take great pleasure in that, anyway. Anything Lincoln would despise is something I can take pleasure in.

Our government is dictatorial by virtue of its justifications for its increasing size, power, and scope. In his book Constitutional Dictatorship, Clinton Rossiter argued that constitutional democracies must learn the lesson of the Roman Republic (oh, how I wish they would!): adopt and use emergency procedures that empower government to deal with crises beyond the ordinary capacities of democratic constitutional governance while at the same time ensuring that crisis procedures are subject to constitutional controls and codified temporal limits. This government -- this constitutional dictatorship -- has moved non-stop from one national crisis to another since the War for Southern Independence. Such a government is, by virtue of operating beyond the ordinary capacities of democratic constitutional governance, dictatorial. It exists in its present form (and has done for almost one-hundred fifty years) for no other purpose than to manage crises. It is simply a crisis-manufacturing-and-managing machine. (At the very least, if it does not actively create crises, then it does so inadvertently. And when it does not create crises, it certainly baptizes them.) If we could ever be crisis-free (yeah, right) we could dispense with the need for the machine.

The machine over which Bush (America's sole dictator, to listen to left-statists) presided is not only going to be left in place, it is likely to get even bigger, if His Beatitude's inauguration speech is a true indicator of his "change we can believe in". Change which will still be dictated from the top down in order to respond to ever more threatening crises -- education, healthcare, economic unfairness, global climate change, cats and dogs co-habitating. That much won't change. Just like he said: The question is not whether our government is too big or too small, but whether it works. The crises are there; they are real, and they are insurmountable without big government. If they were smaller crises, then, no doubt, we could get by with a little government. Sadly, little government is not on the side of history.

There is one thing I wish Rossiter had taken into consideration. It's one thing to speak glowingly of a "constitutional disctatorship". It's another thing to have one. It's not much of a constitutional dictatorship when the ruling junta is the one deciding whether it has exceeded its constitutional limitations. And let's not have any talk about the Supreme Court being there to reign it in. This is likely to be a Supreme Court, soon, populated in the main by judges who buy into the Living Document Hypothesis. A "constitutional" dictatorship whose powers are limited by a living document, is a dictatorship whose powers are not limited by that document. It's a dictatorship whose powers are limited only by judicial fiat.

Of course, that could mean that, rather than a constitutional dictatorship, we have a sort of consular government, with the Executive playing the role of one consul and the Supreme Court playing the role of the other. Of course, in this case only one of the consuls has veto power of the other.

A constitutional dictatorship. The Founders would be so proud.

Note: With this posting, I do not strike out in any sort of new direction. Anti-"federalism" has been a consistent theme of this blog since I started it. If there is anything new here, it is in making clear that my sentiments are not limited to Congress and the Federal Courts. My failure to be explicit in regard to our Twenty-seventh Dictator was out of a habit of deference, and an attempt to give due consideration to the fact that we are at war. I think an ever-increasingly hostile tone toward both the Big Government Left (i.e., Democrats) and Big Government Right (i.e., Republicans) has been more than evident since at least the campaign season. I know it would have been nice to make this new tone more explicit after Obama's term. But I have no desire to wait another four years (or, gulp, eight) before I cease this habit of deference. Had McCain been the winner he'd be getting this. The people have spoken.
19 January 2009

Obama wants to be both Abraham Lincoln and FDR

Yikes! Those two power-grabbing, constitution-slashing statists make the current President seem as inocuous as Warren G. Harding.

I suppose we can be thankful he doesn't want to be Lincoln (who waged war against the principle of consent of the governed), Roosevelt (who, paraphrasing his own words, tremendously "readjusted" our national life) and Wilson (whose Espionage and Sedition Acts, would be unconstitutional even in the worst caricature of Bush's America).

Thomas DiLorenzo has more to say, much, much more.
18 January 2009

A Needful Wisdom

[W]e may see what wisdom is required in the guiding and management of our hearts and ways before God. Where the subjects of a ruler are in feuds and oppositions one against another, unless great wisdom be used in the government of the whole, all things will quickly be ruinous in that state. There are these contrary principles in the hearts of believers. And if they labor not to be spiritually wise, how shall they be able to steer their course aright? Many men live in the dark to themselves all their days; whatever else they know, they know not themselves. They know their outward estates, how rich they are, and the condition of their bodies as to health and sickness they are careful to examine; but as to their inward man, and their principles as to God and eternity, they know little or nothing of themselves. Indeed, few labor to grow wise in this matter, few study themselves as they ought, are acquainted with the evils of their own hearts as they ought; on which yet the whole course of their obedience, and consequently of their eternal condition, doth depend. This, therefore, is our wisdom; and it is a needful wisdom, if we have any design to please God, or to avoid that which is a provocation to the eyes of his glory. John Owen, Remainders of Indwelling Sin in Believers, Chapter One.
16 January 2009

One term for Epiphanes?

It will be, if his stimulus plan doesn't work.

If his stimulus plan "doesn’t work out, he may very well be a one-term president,” said Jeff Zeleny, who covered Obama’s campaign. “It’s hard to imagine that he could be reelected if the economy’s in the exact same position four years from now.”
So far nothing the government has done which has resulted in a correction. It could be that government intervention never works. It could be that FDR -- the model for government intervention in the market -- really did not, as some have argued (and as Thomas Sowell mentions) end the Depression with his policies. (On the contrary, FDR's policies amounted to nothing more than a power grab, justified on the grounds that something, anything had to be done. "Exigent circumstances demand it," the tyrant always says.) And on the hypothesis that government action ended the Depression, our government continues to intervene in hopes of repeating FDR's success, meaning, of course, that it hopes to succeed in garnerning ever more power for itself. If, on the other hand, FDR did not end the Depression, that would mean that the government is implementing policies that have never really worked, at least not to solve economic crises.

So often, though, what matters is only what is seen. FDR was in office when the US (arguably) came out of the Depression. And he was busy the whole time doing "something" rather than "nothing" -- unlike Hoover, supposedly. We've seen all the pictures of crews working, put to work by the WPA. So, there you have it. FDR, government involvement, ended the Depression.

That's what was seen. And what is not seen is irrelevant: out of sight, out of mind. What was not seen, as Sowell observes in the afore-linked article is how many people whom FDR put to work were first put out of work by his policies.

As Henry Hazlitt observes again and again in his little book, Economics in One Lesson, what is not seen is more important. For example when the government takes our money and puts it toward some project, what is immediately seen is the project and all the people employed on the project. What is not seen is where those dollars would have gone if left with the taxpayer.

So when His Beatitude takes our money to create the jobs he's going to create, we should wonder: Who created jobs before government decided to do so? We should also wonder: If the money for those jobs is really there, why are those jobs not being created?

Jobs are normally created in the following manner. A man starts a business. For simplicity's sake, let's say it's a one-man operation. At first, the amount of work, including the paper-work, is not so much that he cannot do it all himself. Over time, both his production and his administration labor require him to hire help. He needs one person to help him with the production, the meat of his operation. Thanks to his government, he also needs one person to help him with his paper-work, especially all that paper-work related to taxes. (That second person can clearly thank the government for his job!). Yet some more time goes by and while one person can continue to do his paper-work (with the help of the most recent computer technology), he finds that he must hire two more people to help with his production. He has now employed four people. We might ask: Where did the money come from to employ these people, if not from the government?

We might also ask: How did this entrepreneur know where to invest his capital? How did he know to put his money into this particular business?

Those are important questions because those are questions that a government must ask when it wants to put people to work. In what businesses should government get people to work? We could say that government doesn't really have to ask these questions. The questions can continue to be asked, and answered, by those who've already demonstrated talent for doing so, entrepreneurs. All the government has to do is spur the economy by giving tax breaks, or even tax credits, to entrepreneurs who successfully ask and answer these questions as demonstrated by their putting ever more people to work.

But His Beatitude wants also to give money away. To whom? To what specific industries should this money be given? Obama, as Entrepreneur-in-Chief, must today make judgments about future consumption in order to make decisions about present capital investment. I'm sure he has a lot of practice doing that. But, of course, as Entrepreneur-in-Chief, he does not have to make forecasts about what the future will hold: he can dictate the future and throw money in the appropriate, fore-ordained direction. It's all about creating jobs. Not just any kind of jobs, but good jobs, the kind that can't be shipped overseas, as he explained to employees at a wind turbine plant in Ohio. And that's easy when you have unlimited capital. It's also easy for an Entrepreneur-in-Chief not to ask if anything done by enterprising government may be at all responsible for bringing about the shipping of those jobs overseas. Why do those jobs get shipped? In the end, at some point, our government increases the cost of doing business. Sadly, labor is one of few controllables business has. And that is not saying too awfully much, when one considers the role our government plays in tampering with labor costs.

And that's why the money must be taken out of private hands. Those private hands may create jobs, but those jobs may not be what the state wishes to classify as "good" jobs. And decades from now, those jobs may be shipped overseas.

When government gets involved to create jobs then creating jobs is the business operation. Ford creates automobiles; Uncle Sam creates jobs. Whereas the most important question about a bridge, for the bridge-building entrepreneur, who wants to ensure efficient utilization of limited resources (limited because they cost him everything), might have been, "Where does a bridge need to be built?", the question, for the job-creating entrepreneur, who need not worry about efficient utilization of unlimited resources (unlimited because they cost him nothing), is "Where can a bridge be built?" And when a bridge is built where it can be built, rather than where it needs to be built, the bridge and all the people put to work on it are easily seen. What is not seen is all the people who might have been put to work elsewhere, if only the money which would have put them to work was not taken from people to build a bridge. (But, of course, that doesn't matter, because those jobs might not have been "good", unshippable jobs after all.)

Think of it this way. When you pass the site where the bridge is being built, take note of the fact that the government, in its infinite wisdom and compassion put them to work. But as you pass by other places where you see people work, ask yourself, "Who put these people to work?" Ask yourself that question of the teller at the bank, the cashier at the supermarket, the mechanic who services your car, the cable guy (no, not Carrington). Who put them to work? Did money have to be taken, at gun-point, from taxpayers to put them to work? If not, then where did it come from? Wherever it came from, it wasn't taken at gun-point.

Too many people in this country, no, in the world, are plagued by fear. They fear the unseen hand. The unseen hand of free commerce, even when it puts people to work, is a source of fear precisely because it is unseen. It cannot be predicted; it must be anticipated, or immediately reacted to. Fearful of this unseen hand, they take great comfort in the hand -- the benevolent hand, to be sure -- the seen hand of their governments. They may not know who put the teller, the cashier, the mechanic, or the cable guy to work. But they know who put those bridge-builders to work. It was Uncle Sam. And God bless him for it.

Note: One could argue the stimulus is already failing: Circuit City is closing; Pfizer is laying off 800 researchers worldwide. Don't they know help is on the way? Okay, the stimulus plan wouldn't have helped Pfizer very much anyway. The problem there is patent expiration. On the other hand, if the stimulus plan had included an extension of patent protection, that might have been something. Curious, isn't it, that Epiphanes, in all his beatific wisdom, did not foresee this opportunity to save the jobs of 800 researchers around the world, or at least those researchers here in the USA.

Signs of credit market thaw begin to emerge

So says, an AP article in the Seattle Post-Intelligencer.

That would be great news -- if the credit market had been frozen in the first place, which it wasn't.

First, we have false news about a credit crunch, based on false assumptions. Then, when the truth is realized (not discovered) we're told the non-existent problem is starting to be corrected. No doubt, post hoc ergo propter hoc, we'll be told that all the recent government intervention was the solution to the problem. And this will, of course, be used to justify further intervention. Naturally.
15 January 2009

The Federal Reserve: The Handmaiden of Tyranny

As long as I'm still thinking about the "obsolete" Fed, here's video of a speech by Maxwell Newton. Yes, it's thirty-one minutes, but worth it:

En paz descanse, Don Ricardo

I awoke to news this morning of the passing of Ricardo Montalban, one of my absolute favorite actors, who sounds, when he talks, a lot like my dad (but with just a tad more accent).

I'm posting clips from some great moments in his career.

From the Planet of the Apes series of movies:

In this preview of Star Trek (TOS) episode, "Space Seed" (which you can watch, here):

Dancing La Bamba with Cyd Charisse:

This "spoof" of his Chrysler Cordoba commericial:

Talent. The man had so much talent. So much talent.
13 January 2009

Five reasons the Fed is obsolete

Jim Jubak explain them, here.

Sadly, Jubak, while pining away for a new financial system for a new global financial system is really pining away for a new version of the present system with it paper money, a system which, like the one which is obsolete, will nonetheless be based on credit.

That's what we need. A different sort of more of the same.
12 January 2009

Be generous: give your dollars to CARE

When I was a child CARE had a frequently-run TV commercial with that message.

Now, we need to send our dollars elsewhere.

His Beatitude says that everyone of us is going to have to give.

I wonder, along with Rush Limbaugh, whether, "everybody" also means those who presently aren't "giving."

Moreover, if he's talking about taxes (what else could it be?), then, in a sense, I don't know what he's talking about. We don't give the money; it's taken from us. Right out of our paychecks. Bam! Just like that.

If you gave to your church like that, some people would say you belonged to a cult. Indeed, if your church leadership knew as much about your life as your government, some would say you belonged to a cult.

Guess what. In the USA we all belong to the same cult. Whether we want to or not.

H/T: Hot Air
11 January 2009

A sad and horrid spectacle

Unto Adam also and to his wife did the LORD God make coats of skins, and clothed them. And the LORD God said, Behold, the man is become as one of us, to know good and evil….

[T]hough Adam was confounded and astonished at his calamity, he yet did not so deeply reflect on its cause as to become weary of his pride, that he might learn to embrace true humility. We may add, that God inveighed, by this irony, not more against Adam himself than against his posterity, for the purpose of commending modesty to all ages.

The particle, “Behold,” denotes that the sentence is pronounced upon the cause then in hand. And, truly, it was a sad and horrid spectacle; that he, in whom recently the glory of the Divine image was shining, should lie hidden under fetid skins to cover his own disgrace, and that there should be more comeliness in a dead animal than in a living man! The clause which is immediately added, “To know good and evil,” describes the cause of so great misery, namely, that Adam, not content with his condition, had tried to ascend higher than was lawful; as if it had been said, ‘See now whither thy ambition and thy perverse appetite for illicit knowledge have precipitated thee.’ Yet the Lord does not even deign to hold converse with him, but contemptuously draws him forth, for the sake of exposing him to greater infamy. Thus was it necessary for his iron pride to be beaten down, that he might at length descend into himself, and become more and more displeased with himself. (John Calvin, Commentary on Genesis, at 3.21, 22, emphases added.)
Think of it. After the loss of that original glory, the skins of dead animals are more attractive than the naked bodies of living humans.
09 January 2009

Liberty and Property

In the wake of the financial crisis, Clark Carlton, posted two podcasts (here and here) to the Ancient Faith Radio website on the subject of liberty and property. In these two podcasts, Carlton explains what capitalism is (you might be surprised) and how ours is not a capitalist economic system. To those who are afraid that we are drifting into socialism, Clark has this to say (at the end of the first podcast): "That boat sailed a long time ago."

Both podcasts are about twelve minutes long, well worth the hearing, I think.
08 January 2009

Rest in peace, Father Neuhaus

Joseph Bottum anounced the passing of Father Neuhaus at the First Things website this morning. His fight -- and not the fight against the cancer with which he suffered -- is over.

Bottum's tribute,

I weep, rather for all the rest of us. As a priest, as a writer, as a public leader in so many struggles, and as a friend, no one can take his place. The fabric of life has been torn by his death, and it will not be repaired, for those of us who knew him, until that time when everything is mended and all our tears are wiped away,
reminds me of something General Lee said of Stonewall Jackson:

He has lost his left arm; and I have lost my right hand.
I would like to offer my own tribute, but Kevin, at After Existentialism, Light, does better than I have time to offer:

During the early semesters of my undergraduate studies, a close friend of mine introduced me to First Things. We would read and discuss the articles, and both of us (he, a confessional Presbyterian, and myself, a devout Baptist) were freed from the limitations of our heritage. Christian scholars were more than just exegetes; they were scientists, philosophers, social theorists, and so on. Strange as it may sound, FT played no small role in saving our faith; otherwise, we would have been overwhelmed by the coherence and interpretive power of the secular narrative, a mechanistic existence presupposed in our coursework.
I also discovered FT during my undergraduate years as I experienced my own struggle not to have my new-found faith "overwhelmed by the coherence and interpretive power of the secular narrative, a mechanistic existence presupposed in [my] coursework."
06 January 2009

Technical Difficulties, even in the twenty-first century

So, a guy is driving down the country road off of which I live and crashes into and destroys an entire row of those steel boxes which contain the phone lines for my area.

On one hand, it's easy to see how this could happen. I live so far off the beaten path out here, that one could drive down the road at 70 miles per hour and never get caught. On the other hand, the speed limit is 45 miles per hour. And, one would think, if you want to drive 70 miles per hour down a straight-away, you might at least slow down for the curves, especially when there's a warning sign telling you to do so.

Thankfully, no humans were injured, despite this guy's having ended up in someone's front yard.

It took two days, working non-stop, for several shifts of repair crews to restore our phone (and dsl) lines.

Do you know, life without the internet almost seemed impossible.
02 January 2009

It's North against South, again

And, of course, the issue, as usual, is economics. (Yes, that little-discussed if not forgotten element of those tensions which resulted in the War for Southern Independence.)

Autoworkers in the North, Detroit, to be precise, are declaring "war" on the South.

Detroiters continue to embarrass themselves by placing the auto industry collapse into an us-versus-them framework. In the midst of all the whining and begging for a bailout, the South has been declared the new enemy, along with the foreign-car manufacturers who are producing cars — in Southern plants — that consumers want to buy. The army of politicians and opinion columnists in Michigan who lay the groundwork for resuscitating this fading industry don't bother to acknowledge that it is in the best interests of any public company to maximize quality for its customers and efficiency of production and profits for its shareholders. Karen DeCoster, here.

DeCoster is commenting on a column by John McCormick, who thinks its time for another smack-down of the South, deserved because of opposition to the bail-out of the Big 3:

The problem here centers on certain southern states -- Mississippi, Louisiana, Georgia and, in particular, Alabama -- where certain bone-headed senators seem to have forgotten that the Civil War ended, with the appropriate outcome, almost 150 years ago.
Wait a minute! Appropriate outcome? What the --? What appropriate outcome? The defeat of southern capitalism by Yankee mercantilism?

Oh. Sorry.

During recent Congressional hearings, these 'good old' southern boys made it clear they could care less about Detroit's survival and blocked passage of emergency loans in the Senate, leaving it to a decidedly reluctant President George W. Bush to approve the financial relief package

What's more, these Alabama representatives argued that they and other southern states had plenty of automotive manufacturing capacity to take up the slack and keep the country's economy going if Detroit was to go belly up. Specifically, Alabama's Republican senator Richard Shelby called Detroit a 'dinosaur' and said bankruptcy was a better solution to the problems facing U.S. carmakers. The state's other senator, Jeff Sessions, also a Republican, said Detroit's collapse would "not be the end of the world. We have a very large and vibrant automobile sector in Alabama."

On one hand, like a strike of government workers, it's hard to know who to root for. McCormick correctly points out the amount of "corporate welfare" foreign autoworkers received to set up shop (in the form of "billions in tax and infrastructure concessions"). On the other hand, since these types of "concessions" don't usually involve giving any money to corporations, but, rather, declining to take money from them, I'm not inclined to see the hypocrisy. But, of course, as a true liberal, McCormick no doubt believes that any time a government doesn't take someone's money it is the same as giving them money. So when he cites UAW President Ron Gettelfinger as saying that Alabama spent "$175,000.00 per employee to create its automotive work force" I'm not sure -- having not researched it -- if any money was actually spent in the normal usage of the word.

But let's say that the money was spent (in the normal usage of the term). Liberals like to speak of tax expenditures as "investments", which they're not (in the normal usage of the term). So far, Alabama has received a net return on that "investment". Those car companies, unlike the Big 3, have not been mis-managed, producing cars people don't really want; and they have put people to work. They aren't asking for more tax "investments" to keep mis-managing executives and unions employed.

And those car companies, as well as their employees, are net taxpayers in the State of Alabama, creating more money (i.e., taxes) to "invest" -- or not (preferably, not).

Besides, when it comes to this hypocritical "corporate welfare" McCormick's talking about, it's interesting, and relevant, to note that "Michigan [did] the same to lure high-tech companies to the state, and most recently, it offered huge incentives to Volkswagen to build a new plant in the state. The game is played the same everywhere". I guess we must conclude that corporate welfare is right only when it inures to the benefit of unions.

Well, at least McCormick isn't blaming the "free" (ha!) market. If only we had such a market.

The free-market method would be to allow for a business environment that would be ideal for businesses to thrive (no taxes or stifling regulations); thereby encouraging companies to relocate to low-cost states on a mutually cooperative basis. This would engender competition among states that would drive down all costs everywhere. But that would mean that the people in power — the politicians and government planners — would become less influential and less wealthy; it is for that reason the free market has not prevailed. DeCoster.
A free market would have required the Big 3 to build cars that people (the market) wanted to buy. Normally, that works quite well. And to the extent that market principles work, they have worked quite well for automakers other than the Big 3. Those other automakers, disciplined by the market have made product people are willing to buy. Of course, and this is where unions come in, a free labor market wouldn't work as well for unionized labor. In a free market, price ultimately comes to what the market, operating freely, will bear. One of the factors is the buyer, precisely, how much the buyer is willing to pay for the product (i.e., labor). In the labor market, the price of labor will come to what the buyer (i.e., employer) is willing to pay for labor. And it doesn't always work to labor's disadvantage: sometimes the market is a seller's market. But they wouldn't know that, because they've been exempt from the market.

It is interesting to hear McCormick talk about hypocrisy. The Big 3 have lost money due to the discipline of the auto market; they have not been exempt from this discipline. The UAW have operated, and wish to continue to do, exempt from a free market of labor. The union operates with a government-backed exemption from market discipline, and then cries foul when those who have not done succeed and object to being asked to pay for this continued exemption from market discipline.

Naturally, some want to force this exemption on southern auto workers. One of these is Michael Lind, for whom "The South will have risen by bringing down the North." (O, cry me a river.) Bringing down the North -- by, get this, delivering products, like labor and automobiles, that people want. And by objecting to continued financing of UAW exemption from labor market discipline.

I love the way this guy talks. First he points out that E.U. member states collaborate with each other against foreign economic rivals. Then he accuses the South of "collaborating" with the enemy.

Any British or French or German leader who proposed collaborating with Japan or the U.S. in order to wipe out industry and destroy jobs in neighboring EU member states would be jeered out of office. But it is perfectly acceptable for American states to connive with Asian and European countries in the destruction of industry elsewhere in the U.S.
The reason for this "collaboration" is, of course, because for many of us in the South market participants are not enemies. The only enemy is any enemy of the market, the biggest of which is The State. The State is an enemy of the market because it is an outsider to the market, entering into the market uninvited, with nothing to sell that anyone wants freely to buy, and no money of its own with which to buy, and dictating at gun-point the price it shall pay for goods and services, as well as the medium of exchange. It is an enemy of the market because it is parasitic upon the market; it is a leech.

Then (and secondly) Lind claims the South "poached" an entire industry from the North. Apparently, by means of unfair economic practices in the early 20th century, "the Southern states were the first to adopt conscious statewide economic development policies, which then as now meant poaching industries from New England and the Midwest where wages and public spending and regulation were greater." (According to Lind.) Think of the mind-set one has to have about ownership here. The industries which left New England and the Midwest were owned, not by the owners of the industries, but the states in which these industries were located. And when they moved, for reasons that seemed good to them, this move was an act of illegal hunting, fishing or harvesting on the part of the locations to which these industries moved. (According to John F. Kennedy, in this 1954 Atlantic Monthly article, in which he blames "sub-standard" wages, among other things, including unnatural advantages, in contrast with "natural" advantages. "Sub-standard", and "natural" according to whom? The one who defines the key terms "wins" the argument. Kennedy, for example, does not refer to anything called the "unnatural" dis-advantages of doing business in New England.)

"Now," after the aforementioned poaching, the South is at it again, "with the help of Nissan, Toyota, and BMW...trying to replace Detroit as the center of U.S. automobile production, using low wages, anti-union laws, and low taxes to benefit from the outsourcing of industry from societies more advanced than the South, like Japan and Germany. The economic Axis is collaborating with the neo-Confederates against their common opponent -- the American Union."

The American Union is an opponent. Sorry, but it's true. Like The State, organized labor claims an exemption from market discipline. Instead of bringing marketable skills to the labor market, organized labor brings a stick and forces people to buy their product, over-priced or not. But I digress.

Naturally, instead of saying, "Hey, let's make it even easier to do business in New England (or Detroit)," they say, "We need (un!) federal action to force those neo-Confederates to make it as difficult to do business in the South as it is in New England." Those Yankees (they started the North-South business) could easily employ the same practices as the South. If they did that, those "southern" practices would no longer be unfair.

Besides, those aforementioned textile industries, which the South "poached" have since moved on to Asia. You see, those textile industries eventually were put under strictures in the South similar to those once placed upon them in New England. And not surprisingly, Asia is now "poaching" those industries. Thank you, Yanks. Just think, at least those industries stopped in the South on their way out. If the South had been engaging in the same practices as New England, those textile industries might have gone straight to Asia (or elsewhere), utterly by-passing the South.

One is reluctant to hold one's breath waiting for Yankee statists (and their carpet-bagging fellow-travelers in the South) to embrace the idea that the solution to a problem created by government pre-emption of the market is not more government pre-emption of the market. What was it they kept saying to the President? Oh, yes: If you find yourself in a hole, then stop digging. Government pre-emption of the market drove the textile industry to the South. Government pre-emption is now driving the textile industry out of the South and overseas. And the Yankee solution? Why, more government pre-emption, of course.

Same thing, now, with the automobile industry. That's Yankee ingenuity for ya.

Back to the whole North-South thing, raised by McCormick. He ends his piece by asking, "Is it time the South is reminded that a mean-spirited attitude is not a smart play when the whole country is on the ropes?"

Let's just ignore, as he does, the question of just how "the whole country" got put "on the ropes". I'll give you a hint: Government pre-emption of the market. That's rich. Moan and groan because the same people who have always opposed government pre-emption of the market, now oppose government pre-emption of the market.

Here we go again. In the new struggle for southern independence -- southern economic independence -- darn imperialistic Yanks respond with threats. At least they're not threatening armed invasion this time. (I would speculate on how unsuccessful that would be if not for the fact that all troops are now federalized. All other things being equal, however, I don't think it would be as successful as the last invasion.)

No, it's not an invasion. This time, the Yanks want to boycott us. To which I can only respond: Oh, would you please?

I mean if the new war for southern economic independence is going to fought by means of boycott, then by all means: Fire away.

Nanny, nanny, boo, boo.

About Me

James Frank Solís
Former soldier (USA). Graduate-level educated. Married 26 years. Texas ex-patriate. Ruling elder in the Presbyterian Church in America.
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