Apr 5, 2010 | Economy
By Doctor Zero
I often hear people on the Left accuse the defenders of capitalism of wanting completely unregulated markets, in which helpless citizens will be stripped of all legal protection, and placed at the mercy of rapacious bankers and businessmen. This is a straw man of such towering size that Nicholas Cage can be glimpsed inside its head, holding his broken legs and howling for his agent to land him a part in a better movie.
There are other choices besides anarchy, or a regulatory State that directly controls over half of our economy. Far from opposing all regulation, I maintain that clearly written, honestly enforced, minimally intrusive laws are both just and essential for wealth creation. A nation’s wealth lies in transactions between its citizens, and the pace of those transactions would be greatly reduced if consumers had no confidence in providers. Shopping malls would be considerably less active, if the shoppers had to assume every food product was potentially poisonous, every piece of consumer electronics could explode, and all of the merchants were thieves.
Clearly written and honestly enforced regulation is not easy to come by, these days. To understand why, imagine that two football teams assemble for a game, under the supervision of a single referee.
As the first play begins, one of the players complains that the referee has made illegal movements across the field. The referee laughs and explains he cannot be bound by the same rules that constrain the players, or he wouldn’t be able to do his job properly. He must be able to move up and down the field at will, in ways that would earn penalties for the players. Common sense supports his assertion, and the game continues.
The referee begins calling all sorts of penalties, invoking rules he has created on the fly. The players object, saying the rulebook accepted at the beginning of the game should be used without alterations. The referee mocks this notion. The field has grass, but the rulebook was written for a dirt field. It’s cold outside, and there have been some snow flurries. The game will continue into the night, under electric lights. The teams include players of different sizes and fitness levels. More complex rules are needed to ensure a good game!
By the end of the first quarter, the ref announces it’s too hard for him to administer such complex rules by himself. He begins pulling players off the teams, and deputizing them as assistant referees.
Early in the second quarter, the home team begins complaining of unfair calls, made in favor of the visiting team. To their astonishment, the referees actually begin tackling home team players, intercepting passes, and running touchdowns! The chief official explains that he felt the visiting team was outmatched, and had little chance of winning on its own, so he decided to make things “fair.” The home team is particularly upset that the biased referees retain all their special advantages – they can move around the field at will, and ignore the play clock. The chief official dismisses these complaints, assuring everyone his actions will enhance the “competition.”
The spectators are initially amused by the wild spectacle of referees tackling players, but the game quickly becomes boring. The home team becomes so confused and demoralized that their players begin to leave the field.
After the final whistle, the chief official is seen collecting money from a shady character near the locker room. It turns out the official had bet heavily on the outmatched visiting team. He had a financial interest in the outcome of the game all along… and he’s the only real “winner.”
Like the referees of a football game, the government must remain completely outside the markets it regulates. Contrary to the absurd sales pitch for ObamaCare, the State cannot enter the health insurance market as a “competitor.” It shouldn’t develop interests that will sour its regulatory powers into corruption.
By its very nature, government has access to power and resources which no private enterprise can equal. It can’t work any other way. We can’t treat the military as a business enterprise, to be shut down if it doesn’t rake in sufficient profits. We must have government resources to address disasters, and most citizens would insist the government be provided with funds to care for the desperately poor and sick. Those who enforce the law must have a measure of power beyond the law: sky marshals carry guns onto airplanes, soldiers have access to heavy weapons and high explosives, government auditors can demand access to information a business would never share with its competition.
To be trusted with such power and resources, the State must practice strict adherence to a basic set of laws which constrain its behavior, and which it cannot easily disregard or change. The rulebook for the American game is her Constitution. Fidelity to those rules would produce a small State with less influence to satisfy the appetite of hyper-competitive players who wish to cheat at the game… or its own appetite for purchasing votes and imposing its ideas of “fairness.” Disdain for the Constitution has led us to the present spectacle of referees who outnumber the players, unemployed players sitting dejectedly on the sidelines, and a dwindling number of investors willing to bet on a rigged game that will be decided by the whims of the officials.
The idea of a large, and yet scrupulously honest State is fraudulent to its core. As the State expands in size, it inevitably develops interests that lead to corruption. Its power becomes so valuable that bribery is an everyday transaction, camouflaged in sanctimonious rhetoric. Taking responsibility for errors and wrongdoing will always be less attractive than dipping into the public treasury for a few billion greenbacks to paper over the damage. As industries are first taxed, then regulated, and finally nationalized, the referees begin tackling players and running touchdowns. The only honest government is small government, so if you’re sincerely opposed to political corruption, that’s what you should insist on.
To read more articles by Doctor Zero, visit his website at www.doczero.org
Mar 30, 2010 | Economy
By Dr. Harold Pease
“Outdated. Ancient. Irrelevant.” Those are some of the words used to describe the United States Constitution by many who wish to dismantle the freedom it protects. What many people fail to recognize is that at no other time in history has a nation been more prosperous, industrious, and innovative as America has been under the guidance of that document. At least 80% of all inventions on the planet came from our soil because the Constitution unleashed freedom and incentive as never before.
The answer to how we create jobs would be the same as the founding fathers: get the government’s nose out of business. Imagine if I offered my grandson an hourly allowance for mowing the lawn, and yet I required him to spend extra money on environmentally friendly gas, forbade him to work on days where the air quality was poor, and forced him to purchase health insurance, mower insurance, and unemployment insurance. To make ends meet, my grandson would have to double his cost. The whole operation becomes too expensive, so I lay off my grandson and hire the illegal immigrant down the street who will practically mow my lawn for free.
Excessive regulation smothers the free market, resulting in reduced profits, increased expense, decreased productivity, and devastating job loss. I watched Kern County’s version of this scenario play out on January 11, 2010, as I rushed to Sacramento to testify in opposition of the proposed 12.5% oil severance tax. I went in support of Assembly Woman Jean Fuller, along with some 350 industry workers, to fight what would have resulted in at least 7,000 lost jobs in Kern County alone. We think we have won this particular fight- for now. But the threat to the free market philosophy that provides our jobs is real, and there is no telling who Sacramento and Washington will choose to be the next victim of their self-imposed budget crisis.
President Reagan pulled us out of the most serious economic recession outside of our own since the Great Depression. The answer was Constitutionally based tax cuts, deregulation, budget cuts and a strict anti-inflation monetary policy. We must now do the same. We need to freeze additional hiring in all publicly financed entities just as the private sector does when the funds do not exist. California in particular needs to strengthen the borders, across which a half million illegal immigrants annually walk without penalty, taking jobs, draining social services, and costing the taxpayer an estimated 10.5 billion annually.
Most importantly, the free market needs a government-ectomy. George Washington said, “The marvel of all history is the patience with which men and women submit to burdens unnecessarily laid upon them by their governments.” Marvel no more, President Washington. Our patience has been exhausted and we are ready to reclaim the free market and restore this great land to prosperity and liberty. After all, it’s about liberty.
Mar 30, 2010 | Economy, Taxes
By Dr. Harold Pease
Sept. 19, 1796, just prior to leaving the presidency, President George Washington issued his famous Farewell Address. In his usual stately manner as the father of this great nation he warned posterity of possible pitfalls that could undermine or destroy this great experiment in liberty. His warnings may well be timelier nearly 220 years later as we near his birthday February 22.
Avoid Debt
In strong terms he asked that we avoid debt. He said: “As a very important source of strength and security cherish public credit… use it as sparingly as possible, avoiding occasion of expense… [Use the] time of peace, to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.” Today our national debt sits at over $12 1/3 trillion—the highest in our history. To put this in perspective, if we laid dollar bills on top of each other a trillion dollars would take us upward 68,000 miles into the sky—a third of the way to the moon. Twelve trillion dollars stacked on top of one another would take us to the moon and back twice. Obviously today neither party has taken Washington’s advice. Presently the debt per taxpayer is $113,151. We are spending our way into oblivion (See USDebtClock.org).
Preserve Religion and Morality
Washington pleaded with the nation to keep religion and morality strong. He said: “Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports…. Let it simply be asked, where is the security for property, for reputation, for life, if the sense of religious obligation desert the oaths which are the instruments of investigation in courts of justice? Reason and experience both forbid us to expect that national morality can prevail in exclusion of religious principle.” The founding Fathers never supported the notion of separation of religion and government—only the separation of an organization of religion from government. What would Washington say of the immorality that prevails today?
Foreign Policy
Our first president even had advice with respect to how we should deal with foreign nations. He advised that our commercial policy “should hold an equal and impartial hand; neither seeking nor granting exclusive favors or preferences…diffusing and diversifying by gentle means the streams of commerce but forcing nothing.” This is a far cry from the bullying tactics we’ve too often employed the last 100 years. But the warning about foreign aid was especially good. He basically told us gift giving in foreign affairs is a good way to be universally hated. He said it placed us “in the condition of having given equivalents for nominal favors, and yet of being reproached with ingratitude for not giving more.” Today there is hardly a nation in the world that does not have its hand out and when, after once giving, the amount is reduce or terminated we are hated all the more for it.
Special Interest Groups
He warned against the origin of “combinations and associations” whose intent was to suppress the desires of the majority in favor of the minority. He called them artificial power factions. We call them special interest groups. What would he say upon learning that a third of the cabinet of every president since Herbert Hoover belonged to the Council on Foreign Relations? Such factions, he said, “May answer popular ends and become potent engines by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government….” The antidote for this, Washington explained, was “to resist with care the spirit of innovation” upon basic constitutional principles or premises no matter how flowery, appealing or “specious the pretext.”
Hold Leaders Accountable
Washington worried about posterity not holding their elected officials strictly to the limits imposed by the Constitution. He knew many would seek to undermine that document by twisting it to give power they could not acquire without the distortion. Sound familiar? He said: “But let there be no change by usurpation; for though this, in one instance, may be the instrument of good, it is the customary weapon by which free governments are destroyed.” Today much of what the federal government does is not even mentioned in the Constitution. But freedom fighters are not likely to be popular, he said: “Real patriots, who may resist the intrigues of the favorite, are liable to become suspected and odious; while its tools and dupes usurp the applause and confidence of the people, to surrender their interests.” One need not look far for the tools and dupes; they seem to be everywhere. If we wish to return this nation to liberty and prosperity, we must adhere to the council of George Washington. We must choose leaders who strictly follow this formula, and we must continue to involve ourselves in holding these leaders accountable. After all, it’s about liberty.
Aug 18, 2009 | Economy
The federal government’s Cash for Clunkers program is riddled with potential problems. It is an excellent example of why the Founding Fathers limited the federal government to just a handful of areas of jurisdiction in Article I, Section 8, of the Constitution leaving all other matters to the states and the people as per Amendments 9 and 10 of that document; essentially to protect them from their own ineptitude. Everything that the federal government does has consequences and if all consequences are not understood then it is better that nothing is done.
The program began July 24, with a grant of yet another billion dollars we did not have outside of borrowing and the printing press. It was spent within a week when 85,000 older automobiles were turned in for the $3,500-$4,500 allotted per automobile reducing the averaged priced vehicle from $26,000 to potentially $21,500. Now another two billion has been approved. The money provided simply increased the national debt by a few billions. China will have no problem adding this to the 10% they already own of the national debt and our grandchildren, yet unborn, will be paying interest on this loan long after the new car is dismantled.
It is true that with this program the automobile industry was stimulated and people are buying new cars once again. But is it sustainable and will it not artificially drive prices upward? Would not these same buyers purchase anyway a few months down the road? Most purchasers had good credit or bought with cash and most were the upper class. Most were trading in their 2nd or 3rd older vehicles. Others without the cash or good credit may have, in effect, been lured to buy beyond their means as happened in the housing fiasco. Living beyond ones means is seldom good.
But the biggest problem is what it did to the other end of the automotive industry. The used car businesses and the repair shops who find employment selling or fixing the older automobiles and those manufacturing and distributing older parts now have less work and are now hurting because of the additional bailout given by the government to the big auto companies on the other end. And what of the middle class and the poor who will never have a new car and depend upon the availability of the older cars such as college students? What of them? Automobiles transcend from the rich to the poor until some one finally drags it to the auto wrecking yard; each step benefiting a portion of the population. Now the shortage created by governmental short sightedness will drive up the cost of the fewer older cars.
Even those required to crush the still good cars are expressing reservations about the program. They are observing that the cars they crush are often in good condition, clean and useable. Some say that the cars they are forced to destroy are better than the ones they themselves drive.
Pouring liquid glass into the motor and then running it until it seizes up making certain that that engine is never used again is unconscionable waste reminiscent of the government programs of the Great Depression. Then freshly planted fields were plowed up and baby chicks and pigs were slaughtered all while hunger stalked the land. Will we never learn?
But back to my main point, which is government involvement without a through understanding of all affected (which is nearly impossible unless you are God) benefits but a few and is almost always detrimental to the rest. The Founders understood this and made a short list of things that the federal government could be involved in. Everything else was considered unconstitutional. The Cash for Clunkers program is a million miles outside that list. (See supporting videos to this article below.)
httpv://www.youtube.com/watch?v=5upNq0FGe_A
httpv://www.youtube.com/watch?v=lZBeTZhzUpI
httpv://www.youtube.com/watch?v=h5eRbw93h8A
httpv://www.youtube.com/watch?v=0h9EgIFyN7o
