Another Obama Speech, more Shenanigans

I have not been writing my comments on current events lately, partly because I am too busy, but also because there has not been much new. Current political events are merely elaborations on the themes of one or two years ago. For instance, see my post of August 11, 2009, Mixed-Up Economy: We Are All Blood Suckers Now. The war of ideas between the Keynesian outlook and the Free market/Small Government school rages even more today.

Another theme of this blog, which has never been as obvious as now, is the observation that generally liberals accuse conservatives of doing exactly what they do, or plan on doing soon. (Such as their accusations of "uncivil" remarks from conservatives.) Today, Obama waved a newspaper and stated that the Republicans oppose his so-called jobs bill because it is to their political advantage, without regard to the damage to the country of not going along with his latest scheme. In actuality, it would seem to me very politically courageous to oppose Obama's proposal to hand out more stimulus money. For conservatives, who believe that less government intervention in the economy will ultimately bring the best results, it could be political suicide to advocate abandonment of bailouts and other government largess.

On the other hand, it may not be difficult to make the point that the "jobs bill" would not save any jobs, and is intended primarily to save Obama's job. He asks that our congressional representatives pass the bill right away, presumably before they have time to read it, just as they passed the other masterpieces of the Harry Reid bill writing factory. Those bills are never what we are told they are. We have to pass the bill "to see what is in it," as Nancy Pelosi tells us. (For instance, we just learned that if congress does not adopt the suggestions of the super-committee of bipartisan spending cutters, we will automatically get cuts to the military and cuts to what medical providers are paid by medicare. It was advertised that there would be cuts to medicare but it was not explained how the cuts would come about. Doctor fees are already cut to the bone.) No telling what will be lurking in the hundreds of pages of the latest Obamination.

What does seem obvious is that the new bill is the same as the old bill. It is a way of looting the treasury and giving the proceeds to his constituents, i.e. to serve Obama's political ends. The primary constituents to be rewarded are, as usual, the unions, especially government unions. There was little or no economic stimulant effect the first time. The Austrian school of free market economics, as well as the Gods of the Copybook Headings, would explain that only the free market can allocate recourse's to fill our most urgent needs. Government intervention only makes things worse with unintended consequences. Bailing out state government workers, for instance, only prolongs the problem of wages and benefits being too high. A 5% cut in government salaries would be a better way to avoid government layoffs. Longterm changes in government pension systems also are needed as soon as possible.

Glenn Beck had a guess the speech segment this morning. He played cuts from Obama's speech advancing the 2009 stimulus bill and his speech the other day pushing the "jobs bill'" You had to guess which speech was which. The only difference that I heard was the new strident, almost threatening tones of the president. He seemed to be ordering congress to pass this latest bill. I guess he was desperate, and ought to be.

Full Court Press against Wall Street

I wrote the following letter to the editor of the Seattle Times today. Of course they won't publish it or any in a similar vein, even if more eloquently stated. They want government to have more say in where the funds of investors go (maybe to them).

"Today's editorial regarding Madoff and Wall Street reform avoids the question of what form regulation should take. Based on the track record of the current administration, it appears that the Madoff Affair is the cause celebre that is being used to usher in regulation that will give government control over important business decisions of financial companies. This is de facto socialism and is the goal of the executive branch and many in the legislative branch. Allocation of capital for its best use is the primary function of financial markets and only further disasters could come from government trying to play that role. Conflicts of interest, government corruption of business and visa versa, and outright fraud are enforcement problems that deserve more attention. We cannot allow these problems to be used as excuses for a power grab by the political operatives and technocrats who allowed and created those problems in the first place."

I think there is a real danger that the BHO gangsters are attempting to control finance so that they can better direct the flow of capital to their political allies and to themselves. Doing it through congress has its limitations. There seems to be a heightened attack right now against banks and investment companies. This also enhances the suffering public image of the Democrats and the BHO White House. Bankers are an easy target and we are seeing and hearing the most blatant populist styled propaganda being directed against them. Little matter that it is nonspecific in its calls for reform. The important thing to the left right now is to bloody the noses of bankers and Wall Street.

The current edition of Mother Jones is a prime example. The cover story: "Too Big to Jail" shows a monopoly style cartoon banker using his get out of jail free card. Two of the Mother Jones writers appeared on Bill Moyers tonight to deliver orchestrated one-two punches against capitalism. "Oh no, not against capitalism. We're for capitalism, we want to fix it. We're against them, the big bankers, who do those things..." they would claim while they employ every Marxist trick in Rules for Radicals. What bothers me is that they were so slick that 99% of the audience will be taken in. Of course, I am taking into account that since they're watching public TV, most of the audience is taken in to begin with.

This is very worrisome because finance and economics seems to be the biggest weak spot in the American public's collective understanding. The 'public' will go along with a bad idea wrapped in a populous cloak every time. With this administration, we can expect maximum exploitation of this weakness. With our defenses spread thin by global warming and health care, they will make enormous gains against liberty and democracy. With control of finances, they will be difficult to dislodge.

The American Banking Association chairman, Art Johnson, apparently was mildly successfully in holding back the congressional hoards while compromising on some regulatory changes. He was attacked on Bill Moyers. The bankers and Wall Street should make some sensible proposals for oversight aimed at preventing fraud and sharp practices. More importantly, they need to go on the offensive with public promotion of their ideas. American financial markets have worked because American securities are more secure. The industry needs a public image make over that will show that they are not avoiding regulations that will actually further that goal.

See my regulatory ideas in following posts.

Free Trade: No Stimulus Please

The following quotation and link to an article by William Graham Sumner refers to free international trade as opposed to trade barriers such as tariffs. He also talks about other modes of government intervention and the principals discussed apply to any government intervention aimed at helping a particular party to obtain a better position in the market place. This could refer to government aid for the biggest industrial corporations or for workers in a given trade. His clearly stated view is that any government aid meant to stimulate one enterprise, hurts others, the national economy as a whole, and eventually the favored enterprise itself:

"The free trader further holds that protection is all a mistake and delusion to those who think that they win by it, in that it lessens their self-reliance and energy and exposes their business to vicissitudes that, not being incident to a natural order of things, cannot be foreseen and guarded against by business skill; also that it throws the business into a condition in which it is exposed to a series of heats and chills, and finally, unless a new stimulus is applied, reduced to a state of dull decay. They therefore hold that even the protected would be far better off without it." -- William Graham Sumner; from the essay "What is Free Trade," first published in The Forgotten Man and Other Essays (1918). http://mises.org/story/3604

Economic Freedom

“Special interests…can think of the most ingenious reasons why they should be the objects of special solicitude. Their spokesmen present a plan in their favor; and it seems at first so absurd that disinterested writers do not trouble to expose it.” So begins Chapter 13 of Henry Hazlitt’s 1946 book, Economics in One Lesson. He was speaking of the folly of the New Deal agricultural price fixing scheme which FDR wanted and got. This chapter is an informative example of how government meddling causes all kinds of problems that need to be fixed by further meddling. Each step along the way impoverished the farmers and consumers who it was suppose to help and took away personal choice and liberty.
When will they ever learn? Apparently the current administration learned a lot about how demagogues (those who gain control by playing on public fears) can maneuver into positions of power and profit. The chief instrumentality is a gullible and/or duplicitous press. Our times have become very interesting for those who are interested in economics theories. For years “free market fringe economists" have been explaining how a demagogue or a party apparatus can take control. They explained how propaganda is the main tool. Promises of great prosperity at the cost of a little freedom only lead to less prosperity followed by more loss of freedom. I thought they were talking about South American dictatorships or European fascists. It is interesting to see it now play out with only the thinnest of disguise.
Henry Hazlitt’s book gives several examples and works out the logical consequences of government intervention in the economy. It was meant to be and is an introduction to how economics works. This is simple stuff that many politicians don’t want you to know. This has really never been widely debated because one side in the debate controls the forum of any debate. Mr. Hazlitt’s books are for sale at the regular on-line outlets and at some bookstores. The Ludwig von Mises Institute specializes in that sort of book.
(Professor von Mises, The Last Knight of Freedom, escaped from Austria just before the Nazi take-over and taught and wrote in this country. His work systematizes the school of thought known as the Austrian School. He shows over and over in his work that only economic freedom can make us politically free and prosperous.)