Apparently the American public has been convinced by the fork-tongued leading lizards of the New American Socialists (a.k.a. the former Democratic Party) and their propagandists in the press that capitalism in general and George Bush in particular are totally responsible for the financial meltdown that has brought our country to its knees in the fall of 2008. I beg to differ, at the risk of confusing the American public with the facts.
Capitalism had very little to do with the current financial crisis, and its not really hard to identify what did -
1. Growing government interference in America's economy and financial markets. Beginning with the Community Re-investment Act (CRA) of 1977, Congress required lenders to loosen credit standards in order to encourage home ownership. In 1995 the rules were relaxed further, with the quasi-government agencies Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) becoming the repository of the loans the original lenders knew could not be paid back. As a result of the incestuous and sordid relationship between these agencies and their assumed overseers in Congress, specifically Barney Frank (Chairman of the House Financial Services Committee) and Chris Dodd (Chairman of the Senate Banking Committee), both Democrats who received substantial campaign contributions from the two agencies (along with Barack Obama and Rahm Emanuel), Fannie Mae and Freddie Mac grew to dominate the mortgage industry with massive amounts of unpayable sub-prime home loans on their books.
Four Republicans (Charles Hagel, John McCain, Elizabeth Dole and John Sununu) sponsored the Federal Housing Enterprise Regulatory Act of 2005 to address the potential financial disaster that was building at Fannie and Fred, but the Democrats killed the bill. Meanwhile, Barney Frank and Chris Dodd were denying that any problems existed at these agencies right up until their portfolios imploded. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
2. Irresponsible monetary policy by the Federal Reserve. Fed Chairman Alan Greenspan and his successor, Ben Bernanke, kept interest rates too low too long, encouraging and facilitating the massive expansion of credit throughout the economy. The Federal Reserve is the central bank of the United States, and is an independent agency whose decisions are not mandated or ratified by the president or anyone else in the executive branch. The chairman is appointed by the President, subject to confirmation by the senate. The Federal Reserve is subject to oversight and reports to Congress, not the President. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
3. Creative financial instruments that had nothing to do with the functioning of industry and commerce. Wall Street created complex, esoteric, incomprehensible investment vehicles traded among themselves and sold to institutional investors that did not represent the ownership of corporations and private businesses, and therefore were not representative of the true definition of capitalism. Credit Default Swaps, Exchange Traded Notes, Toggle Bonds, hundreds of specially designed securities based on derivatives of other securities, all leveraged up with debt to multiply the returns on invested capital - none of these were necessary for the functioning of a capitalist economy. But you can't legislate against greed. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
And last but not least, capitalism has nothing to do with bailing out businesses and investors who make unwise, high risk mistakes. In fact, capitalism can only work efficiently if those who do make bad investments suffer the consequences. There is no bailing out in capitalism.
Capitalism has everything to do with private enterprise, where individuals rather than the government own the means of production and distribution. This ownership is evidenced by shares of stock in public companies and proprietary or partnership interest in private ones. It is not evidenced by purchasing contrived securities that represent nothing tangible.
Yet today the government is bailing out those wealthy financiers and traders on Wall Street who created the useless financial snake oil. Meanwhile, the Main Street investors in real assets that generate economic growth through the production of goods and services are obliged to pay for it. That is not capitalism. And it is not all George Bush's fault.
Thursday, November 13, 2008
Monday, November 10, 2008
Uniting Americans?
Since the election of Barack Obama as the next President of the United States, there have been a number of columns and editorials from liberal journalists (sorry, that's redundant) about how the new administration and the leadership of congress will now be able to bring the country together and unite us all in a common purpose after the demonic, polarizing years of the Bush presidency. I guess that is possible if we all drink the socialist, pacifist Kool-Aid and have our brains turn to mush.
It is always quite clear these socialists mean we can all sing kumbaya together if we neanderthals who do not agree with them "see the light" and accept their superior understanding of how the world works and what is good for us. Perhaps that means we who have been around a few years and built the country into the greatest economic powerhouse in history and the savior of western civilization against evil, brutal tyrants should no longer be involved in running the country. Obviously the coalition of black and brown minorities and those under the age of 30, or those who put Barack Obama in the oval office, can do a better job of it than us conservative and libertarian old fogeys.
But the reality is that Barack Obama did have the most liberal voting record in Congress, at least when he took the time to do the job he was elected to do. I find it incredulous that those journalists say he will lead from the center and be a unifying figure. Of course, since their idea of the center is the nose bleed seats in the upper deck on the third base side of the left field foul line, I suppose I can sort of understand the thought process. And perhaps, since Obama is basically a blank slate with no track record of making major decisions effecting anyone but himself, no one really knows what to expect. Maybe we should give him the benefit of the doubt until we actually see what direction his actions take us.
Unfortunately, for those who seek to unify us and entertain fantasy's of Barack being the man to do it, they might want to consider the role of the congressional leadership. Nancy Pelosi, Harry Reid and the other riders of the apocalypse have their priorities too, and they aren't about to let an inexperienced rookie lead them by the nose, even if he is a former colleague from their own party. These creatures, who have achieved impressive new standards in taking their traditional tradecraft of creating massive problems for the country, blaming them on their opponents and then claiming credit for attempting to deal with those problems, and who have reneged on every promise they made to voters to take over congress in 2006, will not be easy to deal with.
To mention just a few of their priorities, Henry Waxman from California favors steep energy taxes on oil and gas producers to be used to combat global warming. What a great idea! Limiting the supply and causing price increases on the sources of energy that Americans really need and wasting taxpayer dollars on a politically correct agenda that is not universally accepted as anything more than a natural development that has happened before and reverses over time, and could possibly pour billions of dollars down a black hole of alternative sources that may not become commercially viable. By the way, has Mr. Waxman ever heard of nuclear power?
Charles Rangel of New York wants to bring back the draft. What a great idea! If Barack wants to invade China, Russia, India or Western Europe, Charlie will find him the troops.
Barney Frank from Massachussetts, the poster child for the previously mentioned masters of causing problems then pretending to solve them (in the case of the current credit crisis), wants to slash defense spending by 25%. What a great idea! In a world with easier access to weapons of mass destruction and fanatical people who have sworn to eliminate us from the face of the earth, maybe we should just stick our heads in the sand with our butts high in the air and hope the bad men will go away.
John Conyers of Michigan has called for reparations for slavery. What a great idea! In a country where nearly 620,000 citizens died in a war to end slavery, where no one has legally owned a slave in 150 years, and where a man of African descent was just elected president, what a great way to compensate those who suffered under slavery (wait a minute, they are all long gone) and create harmony among the races. By the way, do you know anyone who has ever owned a slave and needs to be punished?
The perpetually p.o.'d Mr. Conyers also is a sympathizer with our culturally and intellectually superior European "friends" (tell me again, how many times have we bailed their asses out from annihilation or total domination from tyrranical dictators) who want to indict the Bush Administration and officials for war crimes (for trying to save them again, this time from diehard terrorists who want to convert them to Islam or, if they don't submit, kill them). Another great idea by our man from Detroit (talk of war zones)! Particularly in a country where a good many people still support the War on Terror, mainly because we enjoy living and not having to bow five times a day toward Mecca. I can't think of a better way to start another civil war among Americans than to indict a president for doing the job he was elected to do. However, maybe then Mr. Conyers could create someone to make reparations to.
It should be an interesting four years. The lunatics are now in total charge of the asylum. I guess Americans could only stand so much prosperity and freedom. We grew a little too comfortable with the success of capitalism and free markets, unprecedented individual rights, and a strong military to ensure we maintained them. Somebody managed to convince a lot of people that those things were not worth keeping, maybe because somebody somewhere was not fully participating in the good life our way of life has created. Somewhere along the way we forgot that the good things in life were supposed to be earned, and cannot just be given away to everybody. As the old saying goes, sooner or later no good deeds go unpunished. So now we are moving in a different direction. I don't think the members of the "I want it all and I want it now" generation are going to be very happy with what they have done.
It is always quite clear these socialists mean we can all sing kumbaya together if we neanderthals who do not agree with them "see the light" and accept their superior understanding of how the world works and what is good for us. Perhaps that means we who have been around a few years and built the country into the greatest economic powerhouse in history and the savior of western civilization against evil, brutal tyrants should no longer be involved in running the country. Obviously the coalition of black and brown minorities and those under the age of 30, or those who put Barack Obama in the oval office, can do a better job of it than us conservative and libertarian old fogeys.
But the reality is that Barack Obama did have the most liberal voting record in Congress, at least when he took the time to do the job he was elected to do. I find it incredulous that those journalists say he will lead from the center and be a unifying figure. Of course, since their idea of the center is the nose bleed seats in the upper deck on the third base side of the left field foul line, I suppose I can sort of understand the thought process. And perhaps, since Obama is basically a blank slate with no track record of making major decisions effecting anyone but himself, no one really knows what to expect. Maybe we should give him the benefit of the doubt until we actually see what direction his actions take us.
Unfortunately, for those who seek to unify us and entertain fantasy's of Barack being the man to do it, they might want to consider the role of the congressional leadership. Nancy Pelosi, Harry Reid and the other riders of the apocalypse have their priorities too, and they aren't about to let an inexperienced rookie lead them by the nose, even if he is a former colleague from their own party. These creatures, who have achieved impressive new standards in taking their traditional tradecraft of creating massive problems for the country, blaming them on their opponents and then claiming credit for attempting to deal with those problems, and who have reneged on every promise they made to voters to take over congress in 2006, will not be easy to deal with.
To mention just a few of their priorities, Henry Waxman from California favors steep energy taxes on oil and gas producers to be used to combat global warming. What a great idea! Limiting the supply and causing price increases on the sources of energy that Americans really need and wasting taxpayer dollars on a politically correct agenda that is not universally accepted as anything more than a natural development that has happened before and reverses over time, and could possibly pour billions of dollars down a black hole of alternative sources that may not become commercially viable. By the way, has Mr. Waxman ever heard of nuclear power?
Charles Rangel of New York wants to bring back the draft. What a great idea! If Barack wants to invade China, Russia, India or Western Europe, Charlie will find him the troops.
Barney Frank from Massachussetts, the poster child for the previously mentioned masters of causing problems then pretending to solve them (in the case of the current credit crisis), wants to slash defense spending by 25%. What a great idea! In a world with easier access to weapons of mass destruction and fanatical people who have sworn to eliminate us from the face of the earth, maybe we should just stick our heads in the sand with our butts high in the air and hope the bad men will go away.
John Conyers of Michigan has called for reparations for slavery. What a great idea! In a country where nearly 620,000 citizens died in a war to end slavery, where no one has legally owned a slave in 150 years, and where a man of African descent was just elected president, what a great way to compensate those who suffered under slavery (wait a minute, they are all long gone) and create harmony among the races. By the way, do you know anyone who has ever owned a slave and needs to be punished?
The perpetually p.o.'d Mr. Conyers also is a sympathizer with our culturally and intellectually superior European "friends" (tell me again, how many times have we bailed their asses out from annihilation or total domination from tyrranical dictators) who want to indict the Bush Administration and officials for war crimes (for trying to save them again, this time from diehard terrorists who want to convert them to Islam or, if they don't submit, kill them). Another great idea by our man from Detroit (talk of war zones)! Particularly in a country where a good many people still support the War on Terror, mainly because we enjoy living and not having to bow five times a day toward Mecca. I can't think of a better way to start another civil war among Americans than to indict a president for doing the job he was elected to do. However, maybe then Mr. Conyers could create someone to make reparations to.
It should be an interesting four years. The lunatics are now in total charge of the asylum. I guess Americans could only stand so much prosperity and freedom. We grew a little too comfortable with the success of capitalism and free markets, unprecedented individual rights, and a strong military to ensure we maintained them. Somebody managed to convince a lot of people that those things were not worth keeping, maybe because somebody somewhere was not fully participating in the good life our way of life has created. Somewhere along the way we forgot that the good things in life were supposed to be earned, and cannot just be given away to everybody. As the old saying goes, sooner or later no good deeds go unpunished. So now we are moving in a different direction. I don't think the members of the "I want it all and I want it now" generation are going to be very happy with what they have done.
Friday, November 07, 2008
The New Reality
In retrospect, I suppose one could say it is unfortunate Americans did not elect either Al Gore in 2000 or John Kerry in 2004. If we had, the voting public would perhaps be blaming them for any inevitable economic difficulties we may have, even though the news media and congressional Democrats would certainly be doing their best to blame it on Republicans. And even more important, this 2008 election outcome and its potentially fatal blow to the future of our country probably would not have happened.
But it did. We can now try to prepare ourselves for -
1. Redistribution of income from the economic growth generators to the unmotivated beneficiaries of government handouts. By the way, I am one who firmly believes there are way too many enormously overpaid people, primarily in financial services, the legal profession, and CEO's throughout commerce and industry. They make much more money than they are worth, and they should pay significantly higher taxes if their Boards of Directors cannot reign in the outrageous compensation packages. In fact, many hedge fund and private equity managers belong in jail, and all the money they made looting companies over the last decade should be impounded and used to pay for the damage they have done to companies and employees.
But it doesn't make sense to burn down the whole orchard to eliminate some of the bad apples. In far greater numbers are those entrepeneurs and small private business owners who create successful businesses and create the majority of jobs in our economy, and most are worth every penny of the earnings they take home. There is no logical reason to punish them with higher taxes.
2. Higher government spending for existing entitlement programs, new social initiatives and politically correct special interest agenda's, accompanied by astronomical federal budget deficits. The rapid expansion of borrowing by the federal government will lead to higher interest rates for everyone who buys a home, purchases a car or has a business that needs working capital.
3. Higher corporate taxes, which will ultimately be paid for by consumers as businesses raise prices, and result in productive companies moving their operations to foreign countries that allow them to be more competitive.
4. Higher capital gains taxes, reducing the incentives necessary for capital investment that are critical for economic recovery and sustainable growth.
5. Nationalization, or federal government take-over, of the financial and health care industries, as well as possibly the auto and energy industries. This repudiation of capitalism and turn towards government directed and managed industrial policy will ensure the misallocation of capital resources, destroy productivity, suppress workers wages and restrain economic progress and growth for many years to come.
Regarding energy, at a minimum we can expect continued bizarre policies of limited oil and gas production and restraints on nuclear power generation, including probable "windfall profits" taxes. These actions will result in scarcity of energy resources, higher energy prices and continued reliance on foreign sources.
6. Economic isolationism and protectionism. From abrogating existing trade agreements to creating new barriers to free trade, these actions always result in sharp contractions of international commerce due to retaliatory measures from trading partners. This not only leads to higher prices for goods and services, but is well known as one of the primary reasons for the depth and prolongation of the Great Depression of the 1930's.
7. The return of productivity destroying thuggish labor unions to power, and the end of right to work laws.
8. Packing the federal judiciary with liberal judges who use the courts to make law according to their personal viewpoints rather than decide cases by interpreting existing law as it was intended.
9. Irresponsible campaign finance and voter registration laws that ensure elections can be bought by whichever special interest groups contribute the most money, and that fraudulent votes (non-existent or ineligible voters) will continue to be counted.
10. Legislation to limit free speech with the preposterously named "Fairness Doctrine", the sole purpose of which is to prevent opposing opinions from being heard.
11. A reduction in defense spending, which puts our country more at risk in an increasingly dangerous world of belligerent adversaries armed with weapons of mass destruction.
12. Surrender of our national interests to world organizations, such as the United Nations, controlled by bureaucrats, left wing politicians and third world tyrants who protest and oppose everything the United States of America stands for while expecting us to pay for their ability to do so.
Every one of these policies and actions are detrimental to the prosperity and ultimate survival of any nation. And I haven't even mentioned the issues of immigration, education and what can be done to address the out of control entitlements of social security and medicare. Rest assured that these issues will each be handled in the wrong manner by our ultra-leftist new government.
The United States is now clearly on the path to becoming a socialist country, pure and simple. The old Democratic Party does not exist anymore. It has been hi-jacked by the far left elitists who are arrogant enough to believe Americans should live our lives as they see fit. Our new leaders might as well go ahead and change their name to the Communist Party of America. Karl Marx was right. Our democracy did sow the seeds of its own destruction.
But we are not without hope. The majority of Americans are still centrist in nature. The left-wing propaganda machine has been extremely successful in brain-washing the American public into thinking the country was going down the drain and evil Republicans were responsible, even though until recently the economy was growing at above average rates, unemployment was low, nearly anyone could buy any consumer product they wanted, and our country had been kept safe from terrorist attack ever since 9/11/2001. The propagandists proved the word is mightier than the sword, because words can misinform, mislead, deceive and establish false information as fact.
There is no doubt that Americans will discover over the next few years that the socialists have deceived them. Their policies are doomed to failure, and we must make sure we maintain our resolve in protecting the basic freedoms Americans have always enjoyed. We cannot let these socialists hi-jack our country and lead us down the path of declining personal freedom and eroding standards of living. As long as we continue to fight for our constitutional rights that are becoming more and more precarious, conservatives, independents and the more moderate liberals will be able to offer better solutions for renewed prosperity, social justice and individual rights - and we will take our country back from those who rely on lies and false promises to win elections.
But it did. We can now try to prepare ourselves for -
1. Redistribution of income from the economic growth generators to the unmotivated beneficiaries of government handouts. By the way, I am one who firmly believes there are way too many enormously overpaid people, primarily in financial services, the legal profession, and CEO's throughout commerce and industry. They make much more money than they are worth, and they should pay significantly higher taxes if their Boards of Directors cannot reign in the outrageous compensation packages. In fact, many hedge fund and private equity managers belong in jail, and all the money they made looting companies over the last decade should be impounded and used to pay for the damage they have done to companies and employees.
But it doesn't make sense to burn down the whole orchard to eliminate some of the bad apples. In far greater numbers are those entrepeneurs and small private business owners who create successful businesses and create the majority of jobs in our economy, and most are worth every penny of the earnings they take home. There is no logical reason to punish them with higher taxes.
2. Higher government spending for existing entitlement programs, new social initiatives and politically correct special interest agenda's, accompanied by astronomical federal budget deficits. The rapid expansion of borrowing by the federal government will lead to higher interest rates for everyone who buys a home, purchases a car or has a business that needs working capital.
3. Higher corporate taxes, which will ultimately be paid for by consumers as businesses raise prices, and result in productive companies moving their operations to foreign countries that allow them to be more competitive.
4. Higher capital gains taxes, reducing the incentives necessary for capital investment that are critical for economic recovery and sustainable growth.
5. Nationalization, or federal government take-over, of the financial and health care industries, as well as possibly the auto and energy industries. This repudiation of capitalism and turn towards government directed and managed industrial policy will ensure the misallocation of capital resources, destroy productivity, suppress workers wages and restrain economic progress and growth for many years to come.
Regarding energy, at a minimum we can expect continued bizarre policies of limited oil and gas production and restraints on nuclear power generation, including probable "windfall profits" taxes. These actions will result in scarcity of energy resources, higher energy prices and continued reliance on foreign sources.
6. Economic isolationism and protectionism. From abrogating existing trade agreements to creating new barriers to free trade, these actions always result in sharp contractions of international commerce due to retaliatory measures from trading partners. This not only leads to higher prices for goods and services, but is well known as one of the primary reasons for the depth and prolongation of the Great Depression of the 1930's.
7. The return of productivity destroying thuggish labor unions to power, and the end of right to work laws.
8. Packing the federal judiciary with liberal judges who use the courts to make law according to their personal viewpoints rather than decide cases by interpreting existing law as it was intended.
9. Irresponsible campaign finance and voter registration laws that ensure elections can be bought by whichever special interest groups contribute the most money, and that fraudulent votes (non-existent or ineligible voters) will continue to be counted.
10. Legislation to limit free speech with the preposterously named "Fairness Doctrine", the sole purpose of which is to prevent opposing opinions from being heard.
11. A reduction in defense spending, which puts our country more at risk in an increasingly dangerous world of belligerent adversaries armed with weapons of mass destruction.
12. Surrender of our national interests to world organizations, such as the United Nations, controlled by bureaucrats, left wing politicians and third world tyrants who protest and oppose everything the United States of America stands for while expecting us to pay for their ability to do so.
Every one of these policies and actions are detrimental to the prosperity and ultimate survival of any nation. And I haven't even mentioned the issues of immigration, education and what can be done to address the out of control entitlements of social security and medicare. Rest assured that these issues will each be handled in the wrong manner by our ultra-leftist new government.
The United States is now clearly on the path to becoming a socialist country, pure and simple. The old Democratic Party does not exist anymore. It has been hi-jacked by the far left elitists who are arrogant enough to believe Americans should live our lives as they see fit. Our new leaders might as well go ahead and change their name to the Communist Party of America. Karl Marx was right. Our democracy did sow the seeds of its own destruction.
But we are not without hope. The majority of Americans are still centrist in nature. The left-wing propaganda machine has been extremely successful in brain-washing the American public into thinking the country was going down the drain and evil Republicans were responsible, even though until recently the economy was growing at above average rates, unemployment was low, nearly anyone could buy any consumer product they wanted, and our country had been kept safe from terrorist attack ever since 9/11/2001. The propagandists proved the word is mightier than the sword, because words can misinform, mislead, deceive and establish false information as fact.
There is no doubt that Americans will discover over the next few years that the socialists have deceived them. Their policies are doomed to failure, and we must make sure we maintain our resolve in protecting the basic freedoms Americans have always enjoyed. We cannot let these socialists hi-jack our country and lead us down the path of declining personal freedom and eroding standards of living. As long as we continue to fight for our constitutional rights that are becoming more and more precarious, conservatives, independents and the more moderate liberals will be able to offer better solutions for renewed prosperity, social justice and individual rights - and we will take our country back from those who rely on lies and false promises to win elections.
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