Tuesday, May 11, 2010

Obama: Stuck on Begrudge

Off the teleprompter for a few seconds while stumping for financial reform recently in Illinois, President Obama had this to say about money, incomes and success: "Now, what we're doing, I want to be clear, we're not trying to push financial reform because we begrudge success that's fairly earned. I mean, I do think at a certain point you've made enough money."

No begrudging of success? That's what the left does -- begrudge, envy and resent, robotically. That's what makes them leftists -- and bitter. Sufficiently empowered, they've been more than willing more than once to kill millions of their fellow citizens who refused to admit to the guilt of individualism and independence, refused to obediently transfer their assets to a regime of organized looters.

Why would Obama even have the words "begrudge success" right there in front of his mind, ready for a quick ad-lib, if the begrudging of achievement wasn't an integral part of his mindset, a key motivator in his desire to grab wallets and redistribute wealth and income.

Obama did add a qualifier. There's no begrudging of success if it's "fairly earned." And who decides what's fair? Steeler quarterback Ben Roethlisberger got a $25 million signing bonus while the median annual salary last year for physicians practicing family medicine in the U.S. was $160,000? So 156 family doctors worked all year and their combined paychecks were slightly lower than Ben's signing bonus. Is the White House okay with that?

Should the central committee of White House czars decide how much of Ben's $25 million was due to the lucky inheritance of a good throwing arm and how much was "fairly earned" due to hard work?

And what'll they do about Lady Gaga earning more than General Motors?

More troubling than the "fairly earned" dilemma is the bloated cockiness of the "I do think at a certain point you've made enough money" remark, especially coming from a president who is explicitly on record as being in favor of redistributing America's incomes in a downward direction.

It was in October 2008 that candidate Obama, in another unscripted moment away from a teleprompter, told Joe the Plumber why he wanted to raise taxes on upper income households: "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everyone," explained Obama. "I think when you spread the wealth around, it's good for everyone."

So who decides when we've "made enough money"? Should we tell Julia Roberts not to make another movie, tell her she's "made enough"? And what about the stage hands and popcorn sellers who lose their jobs as a result?

Should the czars tell Tiger that he's way past that "certain point" when he's earned "enough," unless he wants to play for free or donate 100 percent of the winnings to the needs of the collective?

Should the government have told the owners of Pittsburgh-based 84 Lumber to stop at 83? At last count, the company had about 4,000 employees in 289 stores in 34 states. Some 200 stores ago, what if an overreaching government had decided that the owners of the lumber company already had "enough" cars, houses, jewelry and investments? What good would have come from putting a lid on the company's expansion, a lid on the owners' success, a lid on the hiring of thousands of new employees?

Rather than worrying about who has too much, President Obama should be thinking about what made the United States the most successful nation in human history, both in terms of economic prosperity and individual freedom. Hint: They're directly linked.

Instead of giving greater power to the central government, the power to decree, for instance, what we should drive, what we should eat, what we'll be permitted to hear and see, what income has been "fairly earned," and when at "a certain point" we've "made enough money," the founding philosophy of the United States called for a society based on an exactly opposite set of principles.

"Were we directed from Washington when to sow and when to reap, we should soon want bread," warned Thomas Jefferson. It's a lesson that was tragically learned firsthand by millions of starving farmers in both China and the Soviet Union.



Crony Capitalism Is NOT Capitalism

It’s all the current fashion to dump on “capitalism.” It was the greedy free market, supposedly, that created both the housing bubble and the housing bust and led, inevitably, to the “great recession.” Capitalism, according to most liberal pundits (and even Alan Greenspan in a bad mood), is an inherently risky and unstable system that requires government regulation to correct its flaws and moderate its excesses.

Let me dissent sharply from that conventional wisdom and argue that what talking heads are calling “capitalism” is actually “crony capitalism” and that it is crony capitalism that is responsible for most of our current economic difficulties.

A genuine capitalist economy assumes that each adult individual and business is free to buy and sell anything that they own and then keep the rewards (or suffer the losses) of enterprise. The only legitimate role for government (the political system) is to protect property rights, that is, to enforce contracts and prohibit theft and fraud.

So under capitalism, there would be no price controls on milk or mandates to purchase health insurance; BUT polluters who spill crude oil or corporate bandits like Bernie Madoff who commit blatant frauds would be prosecuted to the full extent of the law.

Crony capitalism, by contrast, assumes a far, far larger role for government in the economy. In this system, government employs various regulations, taxes, and subsidies to encourage or discourage specific economic activity that the political system considers desirable. For example, in crony capitalism, farm prices and outputs could be regulated; selected companies could get TARP money for commercial research projects; states could regulate liability and health insurance companies; and Freddy Mac and Fannie Mae could both exist to subsidize the real estate market.

And most importantly, in crony capitalism private firms that are considered “too big to fail” could be bailed out by government; and a central bank (the Federal Reserve) would exist to “print money” (unrelated to any gold reserve) and regulate the supply of credit in the economy.

It is hard to argue that the current economic malaise was in any way produced by anything resembling pure capitalism. But it is fairly easy to conclude that interventionism, i.e., private markets that were propped up with fraud and funny money was, in fact, the culprit.

First, the Federal Reserve kept interest rates too low for too long (2001–2006) and pumped excess money and credit into the economy. Second, numerous quasi-governmental agencies (Freddie and Fanny) encouraged excessive mortgage lending and home ownership out of all relationship to sound financial practices.

Third, much of the under-capitalized and over-leveraged banking industry collapsed when (federal) credit dried up and housing prices turned downward. And fourth, the federal government taxpayer and international lenders (mostly China) funded the trillion-dollar government “stimulus” plan and the bailout of inefficient business organizations (Chrysler, GM, AIG, etc.) that should have been allowed to go belly-up.

This is free market capitalism? Hardly.

Yet the political class, always absolving itself of all blame, would have you believe that capitalist greed caused the recession and that political regulators need more power. Not so. What we actually require are constraints on monetary growth, more competitive markets, balanced budgets and less output-restricting regulation. But first and foremost, before we spend and regulate further, we require an informed media and an enlightened public that can distinguish real capitalism from phony, crony capitalism.



BrookesNews Update

Is the US economy recovering or isn't it? : Obama's regulatory zeal will have the effect of making the US economy increasingly sclerotic, slowly squeezing out of it the entrepreneurial spirit that once made it the economic envy of the world. But one should think of Obama's regulatory straitjacket as the anvil and his spending and borrowing programs as the hammer with America as the work in progress according to Obama's dream of a New America, one that has been transformed by his socialist vision
Kevin Rudd and the mining industry's super profits myth: The tax on so-called super profits is first cousin to the rent resource tax and is equally fallacious. We have reached this sorry situation because the mining industry overlooked the fact that ideas — particularly bad ideas — really do matter. Judging by the comments from industry leaders they still haven't absorbed the lesson
The monetary system is beyond reform : The question of whether the global monetary system is beyond help is a vitally important one for economic progress and political stability
George Soros' currency dealings: No speculator, no matter how rich, ruthless or bold can break any sound currency. So how did Soros make a fortune from a sinking British pound. And what did German officials have to do with it?
Jimmy Stewart's Thunder Bay — Hollywood Prophecy : The greens and their media stooges are calling the BP oil spill in the Gulf of Mexico a disaster. And it is — for the families of the 11 oil men who lost their lives. These are the forgotten people. What the media and the greens refuse to tell the public is that drilling in the Gulf has been an environmental bonanza for marine life
Illegal immigrants are useful tools Of the left : Illegal immigrants are now just pawns serving the far left, something that. Newspapers like the Los Angeles Times and wire services like the Associated Press and Reuters know but refuse to report. So who are the leftist groups organizing these rallies and why do they want open border? Because a country with open border will eventually cease to be a country
America's growing vulnerability to an economic catastrophe : If Obama refuses to change course the USA will face a debt-to-GDP ratio of 104 percent and an annual budget deficit of 9.7 percent of GDP by 2019. This nation will become the next Greece. The United States, unlike Greece, will not have the European Union or the IMF to turn to. Where, then, will the monies come from if the worst occurs?



An anti-military justice?: "For me, the key obstacle to Elena Kagan’s confirmation is pt. 5 in Ed Whelan’s NRO post, which is also the question raised by Peter Berkowitz in these pages several years ago and by Peter Beinart just recently: Her hostility to the U.S. military. Hostility? Isn’t that harsh? Kagan has professed at times her admiration for those who serve in the military, even as she tried to bar military recruiters from Harvard Law School. But how does one square her professed admiration with her actions — embracing an attempt to overturn the Solomon Amendment that was rejected 8-0 by the Supreme Court — and her words?”

A vote for Kagan is a vote for homosexual marriage: "A vote for Elena Kagan is a vote for ‘marriage equality,’ which features in two key cases that will shortly be before the Supreme Court: Perry v. Schwarzenegger, which arises out of California’s Prop 8 but will apply to all 50 states, since it seeks to establish a federal constitutional right to gay marriage; and Gill et al. v. Office of Personnel Management, which seeks ‘only’ to overturn the federal laws defining marriage as one man and one woman.”

Kagan’s inexperience is troubling: "Kagan is being characterized as a ‘brilliant’ legal scholar, but there is scant evidence for this claim. She certainly was a smart law student, graduating summa cum laude from Harvard Law School. But her legal scholarship since then is scant and undistinguished. It is also limited to two narrow topics — First Amendment law and administrative law, specifically presidential powers. Given the breadth of issues the Supreme Court considers — securities law, complicated constitutional law, environmental law, to name just a few — her narrow scholarly experience is troubling.”

Kagan a lightweight: "Observers say Kagan is meant to be an 'intellectual counterweight' to Chief Justice Roberts and Justice Scalia. Intellectual counterweight? She'd be better described as marginal and outside the mainstream. In the signature case she led as dean of Harvard's law school — preventing military recruiters on her campus — she not only lost, but she lost big. Not one justice took her side. Is Kagan truly the best candidate Obama could find, or the one most palatable to his far-left base?"

Kagan’s Pragmatism? No, Cheap Moral Posturing: "An article in today’s New York Times—“Potential Court Pick Faced Dilemma at Harvard”—tries to paint former Harvard law school dean Elena Kagan as a “pragmatist” for railing vehemently against the Don’t Ask, Don’t Tell law while being careful not to jeopardize the flow of hundreds of millions of dollars of federal funds to Harvard. I think that it’s far clearer that she was just engaging in cheap and contemptible moral posturing. If Kagan genuinely believed that the Don’t Ask, Don’t Tell law was “a profound wrong—a moral injustice of the first order,” why would she make herself complicit in implementing the grave evil? Yes, of course, it’s true, as the article points out, that “barring the recruiters would [have] come with a price.” But, as George Bernard Shaw would have said to Kagan for selling out her supposedly deeply held principles, “We’ve already established what you are, ma’am. Now we’re just haggling over the price.”



USA comes to the rescue of Europe again: "After months of quietly watching from the sidelines, the United States finally intervened in the European debt crisis on Sunday night. The Federal Reserve announced that it would open currency swap lines with the European Central Bank — in essence, printing dollars and exchanging them for euros to provide some liquidity for European money markets and banks. The Federal Open Market Committee, the Fed’s policy-making arm, approved the swap lines in a vote taken by videoconference on Sunday morning. The European Central Bank’s president, Jean-Claude Trichet, asked for the Fed’s help in a telephone call on Saturday with the Fed’s chairman, Ben S. Bernanke."

The choice haters’ error: "The plain fact of the matter is that most of us don’t go shopping expecting to peruse everything that’s on display from which we could make our selections. No. Even when one goes to a grocery store — one of these huge ones that used to amaze European, especially Eastern European visitors to North America — one usually knows the places where what one is after can be found. Yes, there are a lot of cereals available to choose from but people don’t explore all of them but a few — say, the several varieties of granola or oatmeal. Or one goes straight to the seafood or cheese sections. In other words, not everything is on display for everyone who enters. Thousands of people come to these markets and most of them know where their kind and range of merchandise is to be found. No psychological trauma will afflict them — as suggested by the choice-haters who write these books, aiming therewith to undermine the merits of the market place where all these things may be found — because of some kind of mental overload.”

A businessman defends free markets: "In this climate, most businessmen hide, or worse, embrace regulation that may give them an advantage over smaller competitors. It’s interesting that both Goldman Sachs and JP Morgan support more regulation. That’s why its refreshing to hear from Cliff Asness, who runs the AQR hedge fund, a rare businessman publicly making the case for freedom. In an open letter to Congress titled ‘Keep the Casinos Open,’ he argues against banning ‘derivatives’ and other financial assets. He points out that market activity is good for society, and that there should be a high burden of proof before government acts …”

Health bill floods business in paper: "The health care bill that the Democrats rammed through Congress at the end of March seems to be the gift that keeps on giving. Unfortunately, most of what it is giving is about as welcome as those little treats your cat drags in. Almost every day we discover some new little gem hidden in the 2,500-page, 400,000-word redesign of the American health care system. Regulations we hadn’t heard about, new costs, new taxes, new mandates; it’s a bad bill that just keeps getting worse.”

Regulations, regulations everywhere: "Federal regulations cover everything from the size of holes in Swiss cheese to the label text on over-the-counter flatulence medication. There are so many rules, it takes 157,000 pages to list them all. And they cost us $1.187 trillion, according to ‘Ten Thousand Commandments,’ a new study from the Competitive Enterprise Institute. That entire trillion-plus is off-budget, too. This year’s $3.8 trillion federal budget understates government’s true cost by nearly a third.”

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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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