Search Results for: label/Government in exile

Big Government: Pendulum or Runaway Train?

Ever since FDR “saved” the economy – either through his welfare and public works programs if you like his fiscal model or by entering World War II if you believe the country was going to turn around on the basis of a business cycle anyway – despite his inept handling of the Depression – the size and role of the federal government in the business life of America has continued to grow.

Truman was too busy fighting wars and dealing with new international realities with our Soviet allies to leave a huge mark on America Inc., but conservative president, DDE, built the interstate highway system with a heavy dose of liberal spending, a symbolic and tangible symbol of a more federally driven America economy.

JFK we hardly knew you. We’ll never know his spending agenda based on his short tenure, though his activism in other areas might lead us to believe he would have been big government in all ways.

Inspired by political activists like author John Steinbeck – and in a well-documented strategy to secure minority votes, LBJ attempted to build a ‘Great Society’ – a phrase he borrowed from Steinbeck – to further expand the government’s role and responsibility as the provider and protector of the people’s welfare.

Let’s break from this historical free for all for just a second. Everyone, including politicians of all stripes, is concerned with the welfare of “the people” and individual persons. Whether one cares is not what is being debated, though in the political world it is posited by big government proponents that if you don’t want government to take responsibility for people’s welfare you don’t care about people’s welfare. The fiscal conservative or political libertarian will argue that he or she cares just as much about the welfare of individuals, he or she just does not think government does a very good job of supplying it. They want an old school model that limits the role of government to good laws and national defense – and leaves individual welfare up to individual effort, which will be much more productive and efficacious in a free enterprise system the thinking goes.

But what happens when that doesn’t work, big government proponents ask? Some free enterprise advocates agree with having clearly defined and limited temporary aid measures in place – others argue for the “family and friends” need to save you program. But based on what we’ve seen so far in our historical foray, there really haven’t been too may free enterprisers in control, no matter what we might assume from party affiliation.

RMN actually toyed with price controls, which would made him a hero among Marxist ideologues and an enigma to his independent, puritanical forebears, but ultimately, he poured his attention on foreign policy and then shifted his focus to another set of problems that were a little more personal in nature.

JC. We hardly knew you. Stagnation and malaise were the order of the day. The result of bad business or too much government intervention? Carter wasn’t sure there was a possible solution from the government or private sector and suspected we might be headed for leaner days. He spoke about those suspicions a little too forthrightly and the electorate lost as much confidence in JC as in the country’s future.

That ushered in the reign of RWR, who was sure it was the latter, too much government intervention, that was the problem. No one in the media and not even his vice president believed in his “voodoo” economics, but he get elected. He cut capital gains taxes, eliminated and simplified regulations to doing business, and cut income taxes for the middle and upper middle classes. (He would have done the same for the lower and wealthiest classes but it is impossible to cut anything from nothing.) It can be argued that he restored America’s business star, setting the stage for the largest capital growth campaign in history and the rise of Bill Gates. What he didn’t do, however, was cut government spending. And it wasn’t just because he built up the military. Liberals and columnists – I would have said Liberal columnists but why be redundant? – bemoaned all the benefits he cut from the poor. Not true. He did occasionally cut government program increases but never spending.

GHB (W’s dad). We hardly knew you, either. I do recall H was kinder and gentler than Reagan – at least he said he was – and raised taxes to prove it despite the protests of lip readers to the contrary.

WJC got his butt kicked on socialized medicine early in his first term. His solution? Keep Hillary away from Congressional hearings and enjoy Reagan’s promised ‘peace dividend.’ Then he started experiencing the joy of balancing the budget and reducing the federal deficit so much he went out and tweaked some welfare policies so that they became workfare policies. For the first time in 60 years people were involuntarily cut from welfare rolls. Bill might be the last and the only fiscal conservative of the past 100 years. Deep down, I suspect that still bothers him.

GWB. Or just W. A man of principle, faith, and profligate spending habits. He and the man who followed him, BHO, are architects and builders of an expanded role for government through TARP(s) that might have made FDR’s head spin. Even the German socialists are confused. When they throw money at economic problems it is at least to save unnecessary jobs. In America’s iteration of corporate welfare, it is to eliminate jobs and save companies.

The latest Obama move has been to appoint a ‘Special Master for Compensation’ to oversee executive and employee pay at companies that accepted government bailout money. Any wonder so many are fighting like crazy to give this ‘free’ money back? Any wonder Hugo Chavez, left-wing socialist president of Venezuela, claims he is more right wing than Obama?

So is the size and scope of the federal government cyclical – a pendulum that is simply on a high note of growth? Or is it a runaway train navigating hair-pin turns as adroitly as possible?

If these economic days are tough on your personal welfare and you see a bright shining light ahead, it might mean there is hope at the end of the tunnel for you. Or it might mean you better jump off the track in a hurry if you don’t want to get hit!

Charles Darwin Discusses the Housing Bailout

Charles Darwin turned 200 years old on Feb. 12. Happy belated birthday.

I’m not going to touch his evolutionary theory in relation to biology and the origin of humans with a ten-foot pole – and I’m going to avoid cheap and gratuitous humor, like, “Charles you don’t need a match to light your birthday candles where he went,” or anything else juvenile.

No way am I getting anyone from any side of that debate mad at me. What I thought I’d do is get people mad at me for other things, like imagining what Darwin might have to say about Bailout Fever in Washington, D.C., applying aspects of his theory of evolution like natural selection, adaptability, and fitness.

Note: The views expressed may or may not be the views of the blogger in whole or in part. The character named Charles R. Darwin did in fact exist (Feb. 12, 1809 – April 19, 1882) but he probably did not state nor even think any of the following thoughts. This blogger is also not positing any theories of whether dead philosophers would agree to be interviewed. This is intended for entertainment only!

MG: Charles, what do you think of all the money the U.S. Government is spending to save companies and industries?

CD: They are simply rearranging chairs on the Titanic. The ship is sinking. And so will the whole fleet called Western Civilization if they keep pursuing such poppycock.

MG: Wow. How did you know that? The Titanic sunk in 1912 and you had already been dead almost 30 years.

CD: I have my sources.

MG: Like?

CD: Unnamed.

MG: I’ll leave it at that … but don’t you think it’s compassionate for a government to step in and relieve millions of people of the misery caused by such dramatic failures?

CD: Compassion? What does that have to do with survival? In fact, I’d say that rewarding weak and bumbling practices is the opposite of compassion. It hurts everybody.

MG: But it worked in the 1930s when FDR saved our nation from the Great Depression. Oh, I forgot you were already dead when that happened.

CD: I know the whole story.

MG: That’s right, you have sources.

CD: Exactly. In fact, I blame FDR and his adopted son LBJ for creating the conditions that will eventually lead the American economy into a death spiral.

MG: That’s rather dramatic. So are you saying that government assistance and intervention is always bad?

CD: First of all, I think government has an important role in economic evolution. I think Teddy Roosevelt got it right when he kept the Rockefellers from taking over the country and building an oligarchy that would have made Medieval feudal lords roll over in their graves with envy. You could argue that Teddy, not FDR, set the economy in motion. This opened up many more entrepreneurial opportunities. As a believer in letting natural selection take its course in a free market it doesn’t mean I don’t believe that there should be no accountability of corporations. For example, I believe they should pay for defrauding consumers. Nature has laws. Business should too. The business culture thrives when it adheres to good laws.

What FDR did may have helped America in the short term. But the course correction would have happened naturally, even if slower. And the companies that would have survived would have been much stronger for their resilience in face of adversity. But don’t be fooled. America is paying for FDR’s largesse with a populous that has screamed ever since, WHY AREN’T YOU SAVING ME? Maybe things are better for what he did and any argument about how history might have unfolded otherwise is pure speculation, either direction. I won’t say whether the payback is reasonable or not. But ask the Romans. Once the masses are promised that government will be the great problem solver, do they ever stop asking for their due? As a society you are constantly looking for money to fund the kinds of programs rolled out by FDR and accelerated by LBJ with his Great Society. Kennedy may have been from Boston but he would never put up with that kind of ethos. His dad taught him to exploit opportunities with the best of them. I digress. I’d just say again, the expectation and demand for more help, even after a crisis ends, never ends. People will ask for more and more government and more and more funding, which rewards ineptitude and punishes success. As glum as it looks in America right now, check out the economies of the more progressive social democracies. They won’t admit it but they would love to have your problems.

And ultimately natural selection finds a way anyway. When you crash and burn under the burden of compensating for a lack of fitness, you‘ll be singing a new tune, WHY COULDN’T YOU JUST LET US BE FREE?

MG: What about things like universal health care? Surely you can’t be so cold-hearted as to withhold that as a basic responsibility of the government?

CD: Again, I can’t think of a single country in the world that doesn’t envy your health care system. But I believe that when you move to socialized medicine America will absolutely love it. For a while. That is until services devolve and the governmental bureaucracy demonstrates it can no longer manage it. Then typical of America, you all will cry, UNFAIR!

MG: But it isn’t fair is it?

CD: Uh, who said anything about fair? I didn’t prescribe a theory of adaptation and fundamental fitness, I just described it. You all can do whatever you want.

MG: You seem awfully negative when it comes to government. Government gets a lot of things right.

CD: Sure they do. Other than eternal potholes around Chicago, Eisenhower’s interstate highway system was great. But when priorities and plans come from above, what happens to productivity? There ceases to be the kind of entrepreneurial spirit that feeds new design and development. There is no motivation to adapt to changing circumstances. So what you see is the eventual collapse of a healthy, breathing, growing economy. Capitalism does have to clean house in a big way every once and a while and incrementally on a daily basis, and yes people are hurt financially in the process. But you Americans worry too much about setbacks and love your histrionics. It sells newspapers! You take a snapshot and declare it is moving picture that will endure for 10 years! Almost as long as that Titanic film that came out a while back. I remember your end-of-the-world-as-we-know-it handwringing of 1987, which lasted about a month – and yes, I was already dead, but I do have my sources, so don’t ask how I remember. But in a fit and adaptable society, there are enough opportunities for people to get back on their feet. And don’t fool yourself. In a government-sponsored economic system, cataclysm comes as well. When the government can’t feed and clothe its wards the result is often violent and ugly in ways Americans can barely imagine.

MG: But owning a home has always been the American dream. Are you willing to kill that dream?

CD: You can manipulate the housing market with government rebates and incentives but it’s not going to solve the problem. Actually, if everyday Americans want to solve the housing crisis they can do so right now. Joe Homebuyer can go out and start a trend of buying and that will effect comparable sales and begin the process of price stabilization and even appreciation. But Americans aren’t doing that. Why? Not because of greed or corruption. It simply doesn’t make sense right now to buy. It’s not the investment it once was. The market was artificially inflated with government mandated lending policies and it’s still undergoing correction. Once it nears rock bottom people will buy again. Lenders will create new affordable lending practices to accommodate the demand. This will perpetuate appreciation. It will happen naturally. Just leave it alone.

MG: Where’s the compassion?

CD: Who said anything against a neighborliness that isn’t federally enacted?

Again, do what you want. Just make sure you have counted the cost of asking government to be the great financial problem solver. Does the make you more or less of a free nation? Does that fuel innovation and productivity or hinder it? Are you personally more responsible or less?

Having a government define and deliver what is good for the collective sounds compassionate and just might solve some short terms problems. But will government pull back from such a mandate? I’ve not seen such a tendency. One of my contemporaries, Karl, made a lot of utopian promises in an economic environment that was much more dire than it is today. Make sure the promises that have your heart thump thumping so excitedly today aren’t as empty!

Overheard and Observed in China: Part 2: The Dalai Lama

There is something surreal about opening the morning newspaper at the breakfast table in your hotel each day and reading a polar-opposite, diametrically opposed point of view on an issue that perhaps you haven’t given much thought to–at least I hadn’t–but that you already know the answer to because it is so universally accepted in the media pool in which you swim.

One topic that jumped off the pages of the China Daily (the national English language newspaper of China) with a clang and a bang for me was the different perspective on the Dalai Lama, who is also on the front page of many Western newspapers, particularly in the wake of protests that accompany the Olympic Torch each step of its trek to Beijing for opening ceremonies. Oh, and that March 14 riot thing in Lhasa, Tibet, which included monks. Maybe. (Not “maybe” on the riot but on whether the monks were monks or soldiers dressed as monks.)

Here are just a few of the juxtapositions:

Western View: Tibet was a free country since a treaty that ended 200 years of fighting was ratified in 821 A.D., but was forcibly seized and annexed by China as part of Mao Zedong’s 1950 invasion with the People’s Liberation Army that was ratified under coercion in 1951. China View: Yes, Tibet and China separated in 821 A.D., but Tibet became an intrinsic part of China between the 13th and 15th Centuries in response to Mongolian invasions; China was granted formal sovereignty in 1751 to protect Tibet from the Nepalese Gurkha invasions.

Western View: The Independent Tibet movement rectifies historical injustices by returning sovereignty to the Tibetan people. China View: There is no historical validity to a Greater Tibet, administratively, religiously, and especially ethnically–at least 10 other groups have been living on the Qinghai-Tibet Plateau for generations, including Han, Hi, Mongolian, Tu, Monba, and Lhoba.

Western View: China wants to suppress religious expression in Tibet. China View: China has shown more than 50 years of restraint and respect on Tibetan culture, particularly in regards to religion. In fact, all of China is prospering and experiencing new freedoms, including speech and religion, to a much greater degree than Tibet, with its theocratic leanings.

Western View: The Dalai Lama is a man of peace and goodwill. China View: The Dalai Lama is a political operator–and sometimes instigator–who was part of theocratic feudal regime that enslaved and impoverished the Tibetan population; nobles and senior monks owned and controlled 90% of the land.

Western View: On March 14, awakening echoes of Tienanmen Square, the Chinese government once again crushed a peaceful demonstration of people who seek freedom. China View: The Tibetan Government in Exile, with the fundraising savvy and organizational skills of the international “Dalai clique” orchestrated a violent riot that resulted in $35 million (U.S.) in damage.

I spoke with one U.S. businessman who has lived in Hong Kong for a number of years and he commented:

Maybe I’ve lived here too long and have been brainwashed, but I’m no longer convinced that the Chinese government is all wrong on this Tibet issue and, in fact, may do more for the everyday Tibetan people than the separatist movement. For example, the government in exile has no plans on accommodating a multi-ethnic population.

So has he been brainwashed? The obvious answer is, yes, of course he has–and it’s tied to the simple notion that the official Chinese media can’t be trusted to produce anything more than propaganda. I’m glad that I don’t have to worry about that danger in America because I have objective, reliable, and trustworthy news sources like The New York Times to protect me. Okay, cheap shot. But there is a strong resentment in China that they aren’t getting a fair trial in the international court of opinion. A Western expatriate made this statement:

The official Chinese media may be clumsy, but at least they are not as hypocritical as the Western media which always claims to be impartial, yet are actually biased on many issues related to China … and in their own countries!

Well, I’m no expert on Chinese politics, but this exercise has helped me come to one iron-clad conclusion: to fight media bias on the issues near and dear to my heart, I’m going to hire the PR firm the Dalai Lama uses, not the one the Chinese government has on retainer.

Thomas Jefferson on America, Tyranny, Commerce, Alliances, and More

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

It is quite evident in these immortal words that Thomas Jefferson is a historical giant for his thoughts on government – and a host of other topics.

Jefferson was a political philosopher, primary author of the Declaration of Independence, and our third president, serving two terms. His presidency was marked by the Lewis and Clark Expedition and the Louisiana Purchase. He is the only two term president to never veto a bill from Congress.

Jefferson was a true Renaissance Man and was accomplished in areas as diverse as horticulture, archeology, and architecture. He was a gadget inventor with a fondness for clocks and was a student of the Bible, though not known for his orthodoxy. Even after his presidency he kept busy, founding the University of Virginia – another of his singular achievements among his presidential colleagues.

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned – this is the sum of good government.

All tyranny needs to gain a foothold is for people of good conscience to remain silent.

All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression.

An association of men who will not quarrel with one another is a thing which has never yet existed, from the greatest confederacy of nations down to a town meeting or a vestry.

As our enemies have found we can reason like men, so now let us show them we can fight like men also.

Books constitute capital. A library book lasts as long as a house, for hundreds of years. It is not, then, an article of mere consumption but fairly of capital, and often in the case of professional men, setting out in life, it is their only capital.

But friendship is precious, not only in the shade, but in the sunshine of life, and thanks to a benevolent arrangement the greater part of life is sunshine.

Commerce with all nations, alliance with none, should be our motto.

Conquest is not in our principles. It is inconsistent with our government.

Delay is preferable to error.

Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.

The $700 Billion Bailout: Overheard Conversations

Who created a situation that required a $700 billion bailout? Hint: The same group that promised to fix it.

Prelude

Government: Everyone in America should have the right to pursue the American dream, which everyone knows is owning a house. But not everyone can afford it. The dream or the house. Therefore we will legislate that lenders must give loans to anyone who meets certain minimal criteria – and lower the criteria.

Part 1 At the Broker

Customer: I’d like to borrow money for a house but I’ve not saved any money.

Broker: No problem. Since the price of houses will always go up, we don’t require a down payment any more.

Customer: Cool. Oh, and one other thing. My employer is a jerk sometimes and might not fill out the earnings verification form.

Broker: No problem. We have a new financial instrument called the “Liar’s Loan” – we let you verify your own wealth, employment, and income.

Customer: Really? Cool! You’re not worried even a little I won’t pay you back?

Broker: Nah. It’s not my money. A bank will provide the actual funds. I get my commission whether you pay it back or not.

Customer: Cool!

Part 2 At the Bank

Banker 1: We’ve got to get rid of some of these loans. They smell bad. And they’re attracting flies.

Banker 2: But how do we get rid of them?

Banker 1: We’ll sell them.

Banker 2: Who would be dumb enough to buy these stinky things? Especially with all the flies on them.

Banker 1: Nobody will buy them one at a time, but there are people who will buy a whole bunch of them.

Part 3 At the Wall Street Investment Bank

Real Estate Fund Manager: Man, we’ve got to get some fresh money into these mortgage funds. They stink! And they’re attracting flies.

Assistant Real Estate Fund Manger: Have you seen default levels? Who would be dumb enough to buy these stinky things?

Part 4 At the Institutional Investment Firm

School Board Pension Guy: You sure this is a good investment opportunity? I hear there are problems in the mortgage industry.

Advisor: No problemo.  These things are as safe as anything in America. The Investment Banks wouldn’t buy a bunch of stinky individual mortgages and put them in one basket and say they are good would they? Besides, they’ve divided the security into three traunches: good, okay, and bad. Since we’re dealing with your pension funds, we’ll only buy the good ones. They are AAA rated securities. I’d like to get a higher rate of return but that is available only on the bad securities – and you know how the Investment Banks are; they save the good bad stuff for themselves. If you’re still worried just be aware that the Investment Banker even bought bond insurance on your good ones.

School Board Pension Guy: Cool.

Part 5 Back at the Wall Street Investment Bank

Assistant Real Estate Fund Manager: Boss, I know those new securities you came up with are strong sellers but I have one question. Don’t we have to show the mortgages on our books?

Real Estate Fund Manager: (Rolls eyes and gives a little laugh.) Nope. The Government allows us to set up something called an SPV – a special purpose vehicle. We did ours in the Cayman Islands. The SPV carries the stinky loans on their books, not ours. We are AAA rated for those wanting a safe investment. Heck, even our so so securities in the second traunch are rated BBB for those with a little more risk tolerance. The question is irrelevant anyway.  Housing prices always go up.

Assistant Real Estate Fund Manger: Boss, you’re a genius.

Real Estate Fund Manager: I know.

Interlude

Government: We are going to hold companies accountable through Sarbanes Oxley and make them declare Market Value on their books every day. Plus we’ll punish rogue CEOs who inflate values. Now everyone knows we mean business. We demand transparency from our investment companies, too. That’s why we have the SEC. The only problem is, too much transparency gets a little confusing. And Americans don’t like confusing.

Part 6 A Meeting of the Minds

School Board Pension Guy: Hey, where are our payments?!

All Others: Sorry, the jerks who borrowed money on the houses can’t make payments.

School Board Pension Guy: But you said that housing prices always go up and they could refinance their mortgages with low interest ARMs if they got in trouble.

All Others: Sorry. We’re as upset as you are. But there’s nothing we could have done to see this coming. Housing prices always go up you know.

School Board Pension Guy: But I only bought the good securities. The AAA ones. That means I get paid back first. That’s what you said.

All Others: Sorry. There are more problems with the loans than we thought. Sarbanes Oxley isn’t helping either. No one is getting paid back squat right now.

School Board Pension Guy: But you bought bond insurance in case this happened!All Others: (Laughter.) Do you really think an insurance carrier has set aside that much money? Sorry.

School Board Pension Guy: Is all you can say, “Sorry.” You’ll pay for this you know.

All Others: Listen, no time to finish the conversation right now. We have a high-powered meeting to attend at a resort in the Cayman Islands.

School Board Pension Guy: You haven’t heard the end of this. Like I said, you’ll pay for this!

All Others: You really think so?

Postlude

Government: People are so gullible and get themselves in such messes. I guess it’s up to me to save them from themselves again. My work is never done. But I’m up to it. I’m about giving them the American dream after all!