The Red Pill Journal

Quote of the Day - Safety and Liberty

noreply@blogger.com (RPJ) — Thu, 18 Nov 2010 06:15:00 +0000

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."

- Benjamin Franklin

Quote of the Day - Safety and Liberty

noreply@blogger.com (RPJ) — Thu, 18 Nov 2010 06:15:00 +0000

"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."

- Benjamin Franklin

An Open Letter to Janet Napolitano

noreply@blogger.com (Nicodemus) — Wed, 17 Nov 2010 02:38:00 +0000

Secretary Napolitano,

Like millions of Americans today, I take issue with the fact that, upon entering an airport, we are all (well, not including the “elite”) considered guilty until proven innocent. As you know, the Fourth Amendment to the United States Constitution established the right of Americans “to be secure in their persons, houses, papers, and effect, against unreasonable searches and seizures” without probable cause. But one TSA employee put it this way: once a passenger purchases an airline ticket that passenger forfeits many of his rights, including constitutional rights. Do you actually believe that the purchase of a plane ticket is sufficient cause to suspect an American of malicious intent? If this simple act of engaging in commerce can negate one's constitutional rights, then what is to stop the government from saying once an American purchases a hot dog they forfeit their right to own a gun, or once a citizen checks out a book from the library they forfeit their rights to privacy (oh, wait, the government already did that.) Despite being a fairly decorated Iraq war veteran – who supposedly fought against those airplane destroying terrorists – I, too, become a suspected terrorist the moment I walk into an American airport. But I guess that should be no surprise to me. After all, your own department issued a memo just last year warning that young veterans like myself are likely candidates to become domestic terrorists.

You recently said that the TSA is doing what it needs to do “to protect the traveling public.” This notion that the TSA makes Americans safer by destroying America's foundation of liberties is the same tired falsehood that was used to justify the last several hundred expansions of government into American lives. According to you, if I go through the porno-scanner or get sexually assaulted by a uniformed government agent I will somehow be made safe, correct? Please explain to me how I am made safe by enduring these blatant violations of my privacy. Despite the TSA's habitual claims, how many terrorist plots have been stopped at the screening gates of American airports? How many bombs have TSA agents discovered in Americans' tighty-whities? I suspect you know the answer, but that suspicion may be a bit generous based on what I know of you and your ability to reason. Well, the answer is none. I apologize for my lack of faith, but I assure you it is based on reason (that strange concept I was talking about a minute ago).

Since September 11, 2001, not one single terrorist attempt has even occurred on a domestic U.S. flight. All attempts – the “shoe bomber,” the “underwear bomber,” and the latest cargo plot – all were on flights that departed from foreign countries. This means that the chances of an American dying while performing a number of mundane tasks are far greater than the chances of being a victim of a terrorist attack on a domestic flight. I am more likely to die in a car accident on the way to the airport or when I get hit by a car crossing the street from the airport parking lot. I am more likely to get infected with e-coli from a restaurant in the airport, or test positive for HIV after an unforeseen sexual excursion in the lavatory of a commercial airplane. And, like I said, it's not that and attacks on domestic flights were prevented, but they were never even attempted. In other words, the government agents that stand at the front of airport security lines did nothing to prevent them. Yet the TSA continues to ramp up its efforts to prevent terrorist attacks, even on domestic flights.

Secretary Napolitano, we know that you lied about the clarity of the scanned images. But you say passengers have the option to opt out of the scanners and instead undergo an enhanced pat down. Under 18 U.S. Code Section 2244, " 'sexual contact' means the intentional touching, either directly or through the clothing, of the genitalia, anus, groin, breast, inner thigh or buttocks of any person with an intent to abuse, humiliate, harass, degrade." This degrading procedure would be considered a crime if it were perpetrated by anyone but the government. Never mind the psychological effect that it could have on abused children and rape victims.

Even if going through a virtual strip search machine or undergoing an “enhanced pat down” does make me safer, as you suggest, then wouldn't it do the same for you? I can't help but wonder, why don't you go through the two screening procedures yourself? If the soldiers that fight on our front lines – supposedly against terrorism – become terror suspects themselves the moment they step foot in an airport, then why not politicians and bureaucrats? Why not Janet Napolitano, or President Obama?

Furthermore, if the imaging procedures “in no way resemble electronic strip searches,” as you say, then I presume you would be willing to broadcast your own scanned image to the American people, right? If you want to gain the trust and support of Americans, then you ought to be willing to endure the same violations of privacy (which are, in fact, not violations of privacy according to you) that you expect all flying Americans to endure. If it is really not a violation of privacy and is in no way harmful to have your scanned image broadcast to some stranger in another room, then I'm sure you will not hesitate to to take this step to broadcast your image (which, I remind you, in no way resembles an electronic strip search) to hundreds of millions of American strangers, right? In fact, why even bother hiding the screens in the first place? According to you, the image of a nude child when seen through the eyes of an x-ray machine is not child pornography at all, otherwise TSA agents would be violating federal law. Why not broadcast the images to all the passengers standing in line, or even across the entire airport. That way, passengers could really feel safe by confirming first hand that the passengers boarding their flights are not carrying any explosives in their underwear (by viewing the images that in no way resemble electronic strip searches) or, god forbid, hiding nail clippers in their bra or a bottle of water in their pockets.

Secretary Napolitano, let's stop the elitism and hypocrisy in Washington. Will you follow your own agency's security regulations? Will you enforce them on all the politicians and bureaucrats in Washington? Or are you and your friends above laws and regulations?

Don't worry, you won't look bad if you say no to enforcing these regulations on America's elite. In fact, you'll still look the same. You'll still be what you are. “Big sis'.”

Sincerely,
Nicodemus

Whither Tax Cuts

noreply@blogger.com (RPJ) — Thu, 04 Nov 2010 16:57:00 +0000

With the lame duck session of Congress set to take up debate on whether to extend the Bush tax cuts to everyone, including the wealthy, I thought I'd take a moment to examine some of the rhetoric for and against.

The dividing line on this issue involves whether or not the Bush tax cuts should be extended to so-called wealthy Americans earning more than a certain amount per year. These would be the top 1 or 2 percent of Americans, depending on where the line is drawn. The Republican argument for extending the tax cuts for everyone is that the wealthy produce jobs, and that by including them in the tax cut extension we're enabling them to create more jobs. Democrats counter with the argument that American businesses are currently sitting on 2 trillion dollars in cash, and are not likely to create jobs for any reason other than an increase in demand.

Whether you believe in the philosophy of low taxation or not, the Republican position on this issue is fundamentally flawed in that it fails to explicitly draw the connection between being a wealthy American and being in a position to create jobs with that personal wealth. There is, in fact, no necessary connection between these two things.

So why are we even having this debate if the premise on one side is flawed at the outset? Perhaps we can chalk it up to lazy journalism for not forcing an honest debate. Whatever the reason, it seems simply another example of a serious issue being debated in terms of half truths. It should be no surprise when the outcome of such a debate produces unexpected results.

Constitutional Rights Are Human Rights

noreply@blogger.com (Nicodemus) — Thu, 04 Feb 2010 07:55:00 +0000

The partisan bickering over the trial of Khalid Sheikh Mohammed continues:

Several senators announced legislation Tuesday that would cut off funding for the federal trial of alleged 9/11 mastermind Khalid Sheikh Mohammed and four accused accomplices, saying the five should be tried in a military court.

"We believe we're at war," said Sen. Lindsey Graham, R-South Carolina, who stood with a number of senators that included Democrats and Sen. Joe Lieberman of Connecticut, an independent.

"The law enforcement model being used by the Obama administration should be rejected," Graham said. "We're not fighting a crime, we're fighting a war."

But, I ask, when did Congress declare war, and with what nation are we at war? The last time Congress declared war was on December 11, 1941, in response to Germany's declaration of war against the United States.

Congressman Ron Paul declares, "The process by which we’ve entered wars... and the inconclusive results of each war since that time, are obviously related to Congress’ abdication of its responsibility regarding war, given to it by Article I Section 8 of the Constitution."

Sadly, it appears that an honest understanding of the Constitution is a very rare anomaly on Capitol Hill. Our representatives in Congress have continuously and deliberately circumvented the precepts of the Constitution in order to advance their rotten agendas at the expense of the people's liberty over the last century.

Senator Joe Lieberman also commented on the impending trial:

"Putting Khalid Sheikh Mohammed in a public courtroom in full view of the public gives him a better platform than any member of al Qaeda has been given to recruit new members," Lieberman said.

I find Senator Lieberman's initial comment to be somewhat ironic. Indeed, no better platform for al Qaeda recruitment could be provided than was provided by the United States government when they repeatedly attacked, occupied, and manipulated various countries throughout the Middle East. As I wrote in a previous post, there is undeniable evidence that American involvement in the Middle East has helped recruitment in terror organizations immensely. Again, Ron Paul was correct when he said of the then looming U.S. invasion of Iraq, "The greatest beneficiaries of the attack may well be Osama bin Ladin and the al Qaeda. Some in the media have already suggested that the al Qaeda may be encouraging the whole event. Unintended consequences will occur – what will come from this attack is still entirely unknown."

Senator Lieberman continued:

"To try them as common criminals, giving them the constitutional rights of American citizens in our courts, is justice according to Alice in Wonderland."

Fortunately, the Constitution clearly distinguishes between persons and citizens, and the Fifth and Sixth Amendments - the right to due process and a speedy trial respectively - declare persons to have these rights. The founders understood that these were inalienable rights - essentially human rights - rights that all men should have. Thus, I refuse to accept the notion that the Bill of Rights applies only to those that are fortunate enough and extraordinary enough to be American citizens.

If Americans want to encourage liberty to take hold across the world then we should do so - not through imperialism, not by force - but by example. We should restore our country to the confines of our Constitution and bring these men to justice. In doing so, we can demonstrate to the world the compassion that is the foundation of America and the morality that resides in all of us.

Have We Passed the Point of No Return?

noreply@blogger.com (Nicodemus) — Tue, 02 Feb 2010 03:48:00 +0000

The projected budget deficit for the coming year approaches 11 percent of the total economic output of the United States. While budget deficits have soared during past wars, the government's commitment to the Global War on Terror - essentially a war on an ideology that cannot be destroyed - provides little optimism that an end to conflict could return the deficit to reasonable levels (i.e. no deficit).

Current deficit projections effectively leave no room for the new entitlement programs that crowd Obama's agenda. Even while the President tries to play politics with ineffective spending freezes and optimistic projections, the White House's own numbers admit that the deficit will again increase by 2019. But with a history of deficits that reach back to the founding of America, we cannot expect that Obama or his predecessors will adhere to any true policy of fiscal responsibility.

With the current climate of endless wars and ever increasing deficits, how long can the world's first superpower retain that power? The course on which America is headed can only have one ultimate result: disaster. The only solution is for Americans to stand up and elect true fiscal conservatives that will stop the endless theft of wealth from future generations.

More Debt for Students, More Cash for Universities

noreply@blogger.com (Nicodemus) — Sun, 31 Jan 2010 07:32:00 +0000

While the White House continues to spew rhetoric about not passing on the debt burden to future generations, the President proceeds to make decisions that are counter-intuitive to that refusal. The “change we can believe in” that we have witnessed to date has, in reality, only been a renewal of the welfare-warfare state of presidents past.

In his 2010 State of the Union address, Wednesday evening, President Obama reasserted his administration's commitment to increasing the debt burden on America's students and raising tuition costs at the nation's universities when he unveiled his debt-for-diploma plan to “make college more affordable.” The President's plan would afford students' families a $10,000 tax credit and “increase Pell Grants” while requiring students to pay only ten percent of their income on student loans, with the remainder of the debt to be forgiven after twenty years. For students that chose to enter a “public service” profession – whatever that may be – the debt will be forgiven after only ten years of payment. But who, I ask, will pay the debt? Why, we'll just pass it on to the next generation!

This policy of subsidizing student loans stands to perpetuate the rising costs of education in America, just as the students of today's college generation are already feeling the debt pile on. USA Today reports that the average debt of peoples age 22 to 29 increased 10% over the five years from 2001 to 2006 to $16,120, and student loan balances rose to an average of $14,379, while nearly half of them have stopped paying on that debt.

Following his proposition for more student debt, President Obama sent an ironic message to America's schools:

It's time for colleges and universities to get serious about cutting their own costs.

If the government is going to make financial aid even more accessible to students, then why shouldn't the universities raise tuition? Consider this hypothetical: If every college student in America had sudden access to $100,000 for school, then why should we expect universities to only charge $1,000? The easy money policies of Washington will essentially make every student wealthy in regards to school tuition by making American students more likely to take on debt, affording universities the ability to make education more costly. Moreover, if every citizen of America is able to obtain a college degree, then that degree will become essentially worthless as an asset in the marketplace.

Now, consider the following – a scenario in which market forces put downward pressure on the costs of tuition: If the government were to no longer subsidize student loans then creditors would be more skeptical of lending students money, as students traditionally do not have high incomes or steady jobs. Consequently, if students were no longer able to afford college due to their inability to acquire loans, then market pressures would necessarily lower tuition costs – colleges and universities would not simply sit empty, they would have to lower their tuition in order to fill up their classes.

The politicians and policy-makers in Washington have repeatedly displayed a blatant ignorance of economic principle. Rather than allow markets to put downward pressures on college tuition, they opt to expand the welfare-state and subsidize education costs, further entrenching our students in debt. If our nation and its economy are to survive, we must abandon the savior-based economy and return to a savings based one – we must let the free market work to reign in the high costs of education. For to continue subsidizing our costly lifestyle at the expense of future generations is simply immoral.

The Reality of Reality

noreply@blogger.com (Nicodemus) — Sun, 31 Jan 2010 01:37:00 +0000

As the cameras moved along one of the cell blocks, a prisoner with a thick Arabic accent said sarcastically:

Al Qaida used to be only 50 people, now it is about half a million! Thank you America!

This was the scene in a recent National Geographic Channel Explorer episode entitled, “Inside Guantanamo.” The documentary provides an eye opening look at the United States government's unlawful detention camps at Guantanamo Bay, Cuba. While the episode makes a valiant effort to validate America's need for the prison, it also gives the prisoners a voice – a voice that America should listen to. Why, though, do so many Americans fail to hear these warnings?

During the Republican primary debates, prior to the 2008 election, Congressman Ron Paul regularly and correctly cited the CIA's “blow-back” theory as an explanation for the escalation of the threat of terrorist activity against the United States. However, every time Dr. Paul reiterated that argument, it was met with the inevitable rhetoric, “Are you suggesting that we invited the attacks of September 11th?” Well, the short answer is, yes! The ignorance that our nation's leaders exhibit towards the adverse effects of our interventionist foreign policy undoubtedly perpetuates the hatred and contempt that Al Qaida and other terrorist groups around the world display towards the West. While Americans did not invite the attacks of September 11th – nor were the thousands of deaths justified – America's policies over several decades provided the terrorists with ample motivation to carry out their attack.

Many Americans are unaware of the history of our involvement in the politics of Middle Eastern states. Since the end of World War II, America and its allies have found themselves engaged in the affairs of several Middle Eastern countries - the CIA's coup to overthrow the democratically elected Shah of Iran, US Marines in Lebanon and Beirut, and America's current involvement in Afghanistan and Pakistan only represent a small portion of the extensive list of military and political involvements by the US and its allies in the Middle East Region. And all of this in an effort to “protect American interests” - in other words, to protect big oil and other corporate concerns. Although I, in no way, wish to validate the arguments of radical Muslims, what is essential to their position is that these are countries that are on land that is often regarded as sacred by the Muslims that inhabit the area.

For another perspective, let's look at what is happening in Iraq and consider what we Americans may think if we were in their position: What would we do if another country kicked in America's door, wiped out our military, and occupied us so that they could set up a government that better serves their interests. Would anyone expect Americans to accept this scenario? Why then should we expect these middle eastern nations to accept the United States frequently meddling in their affairs?

This prisoner at Guantanamo Bay offered a unique perspective to which Americans should pay much attention. Unfortunately, rather than heed their warnings, the leaders of our country have repeatedly ignored the words of our enemies. The current US foreign policy will only continue to intensify the threat of violence on our citizens unless we promptly reverse our course. To reverse course is not to give in to the demands of our enemies, it is to abide by our nation's commitment to freedom from tyranny and government coercion - freedom for its own people and the people of all nations. If we are to be respected around the world again, the era of American imperialism must end. We must halt our interventionist foreign policy and return to the foreign policy of Thomas Jefferson – a policy of “peace, commerce, and honest friendship with all nations – entangling alliances with none” – for these are the principles on which this great republic was founded.

Quote of the Day - Totalitarianism

noreply@blogger.com (RPJ) — Tue, 06 Jan 2009 00:56:00 +0000

Nevertheless the theory of output as a whole, which is what the following book purports to provide, is more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output under conditions of free competition and a large measure of laissez-faire.

- John Maynard Keynes, Preface to The General Theory, September 7, 1936

Something for Nothing

noreply@blogger.com (RPJ) — Mon, 05 Jan 2009 00:46:00 +0000

As the drumbeat for stimulus policy grows louder, following closely behind the recent slew of widely criticized bailout attempts, the majority of analysts and economists still do not seem to understand the root cause of our financial crisis and recession. This was never more evident than in a remark made last week by Janet Yellen, President of the Federal Reserve bank of San Francisco:

Typically, recessions occur when monetary policy is tightened to subdue the inflationary pressures that emerge during a boom. This time, the cause was the eruption of a severe financial crisis.

For anyone with a basic understanding of cause and effect, this statement is painful to read. While the recession might have been the result of the financial crisis (this is disputable), what was the cause of the financial crisis itself? Is it not important? Did it occur magically? Without knowing its cause, how can we be sure that our solution will be equally magical in preventing further financial crisis and resolving the recession?

The solution, as proposed by Janet Yellen and other like-minded economists who have yet to fully understand the cause of our recession, is stimulus. In order to grow the economy, create jobs, and solidify the financial infrastructure, the government will borrow money and spend it. Unfortunately, this idea falls flat at the outset without first understanding how we came to where we are.

The fact is, the root of our current economic troubles and the solution being proposed by Yellen are one in the same: debt. Debt is a wealth destroyer. It enables over-consumption, malinvestment, asset bubbles, and perpetuates non-productive economic behaviors that otherwise would not have been possible. All of these side-effects of debt played a role in creating the current recession, yet as can be seen with Yellen's comment, the ultimate culprit of the recession is noticeably absent from public discussion. Perhaps it is no wonder, considering that the expansion of debt in the US is controlled by the Federal Reserve. But while this might explain Yellen's support for stimulus, it doesn't explain the broad support from so many others.

The idea that stimulus can combat a recession is rooted in the idea the economy can be forced to grow faster than it otherwise would, without excessive side effects. But the very existence of recession, an economic contraction resulting from overcapacity, overspending and malinvestment, seems to indicate that the economy needs to correct itself when such abuses occur. The idea that we can prevent such a correction from occurring via stimulus fails to acknowledge the real cost that economic abuses have. It attempts to defy age old adage that you cannot get something from nothing.

But attempting to get something for nothing sure does sell. The government loves it, Wall Street loves it, economists love it, and Americans sure love it. Ultimately, it is no wonder that we try, futile as it may be, to manipulate the economy into giving us what we want while not giving us what we don't.

Wisdom on Bailouts

noreply@blogger.com (RPJ) — Fri, 12 Dec 2008 22:49:00 +0000

Ron Paul recently spoke on the subject of bailouts:

We must remember that governments do not produce anything. Their only resources come from producers in the economy through such means as inflation and taxation. The government has an obligation to be good stewards of these resources. In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones.

By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use. An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned. But instead with a bailout, the rewards are reversed - the proceeds from successful entities are given to failing ones. How this is supposed to be good for our economy is beyond me.

Shooting in the Dark

noreply@blogger.com (RPJ) — Wed, 10 Dec 2008 03:19:00 +0000

Paul Krugman, a proponent of fiscal stimulus, recently published some of his thoughts on the subject:

Nearly every forecast now says that, in the absence of strong policy action, real GDP will fall far below potential output in the near future

...

we need a fiscal stimulus big enough to close a 7% output gap

These brief statements highlight a major problem with Keynesian economics, the assumption that there is one ideal "potential output", or worse, that the ideal level of output is that which is the greatest. What this fails to consider is that output based on debt is generally not good. To put it another way, growth based on debt and speculation is false growth. As we've seen recently, false economic growth eventually reverts, which can lead to quite severe crashes. So this leaves us with some questions: What sort of growth should we look to achieve? Is perpetual growth by any means possible the goal? Is contraction always bad, and if not, is there some magical level beyond which contraction becomes bad?

In the Keynesian view of the economy where consumer spending drives growth, merely stimulating consumer spending is the theoretical key to prosperity. But if this were so, why not take on unlimited amounts of debt, stimulating unlimited amounts of consumer spending in good times and bad? The fact that such a scenario would lead to disaster is not lost on Keynesians, which is why they instead look to achieve optimal growth, and stimulate spending if needed via the optimal amount of debt, whatever those things may be. If consumption can be stimulated just enough to increase output, but not so much that the cost of the stimulus outweighs the increase in production, then we've achieved something good. But how can we measure the result of our stimulus to know if it's been successful? How do we know if we've not simply created more false economic growth?

Keeping in mind that increased production based on consumption is the goal of fiscal stimulus, the success or failure of stimulus would clearly lie in what is or isn't consumed. This brings us to an important distinction, productive consumption versus nonproductive consumption. With productive consumption, a participant consumes based on what they produce. Their production not only enables them to maintain their well-being through consumption, their consumption sustains their ability to produce. Obviously not all consumption is productive though. While some economic participants are able to produce much more than they need to consume, which is clearly productive, other participants consume much more than they are able to produce, or they produce goods which are not useful for sustaining further economic production - this is clearly nonproductive. If the goal of fiscal stimulus is to grow production, we would certainly want to support the economic activities that produce the most useful production sustaining goods with the least amount of input. But herein lies the problem with stimulus policy, it makes no distinction between productive and nonproductive consumption, nor can it.

So what happens when we implement a fiscal stimulus? Realistically, it is impossible to measure and distinguish those economic activities which are productive from those which are nonproductive. Therefore, the result of stimulating consumption is a blanket subsidizing of both productive and nonproductive economic activities. Unfortunately, subsidizing those economic activities which are nonproductive results in false economic growth, which as always, will painfully revert at some point. Looking at recent history, we can clearly see that the growth of the housing and financial services sectors were beyond what was needed to sustain other economic participants. While their growth was measured as increased output, clearly it was false growth and has since receded.

Getting back to the original topic of implementing stimulus in order to achieve "potential output", two things are now clear: some portion of growth resulting from stimulated consumption will inevitably be false, and stimulating nonproductive activities is not only counter-productive, it is harmful to productive activities that are competing for the same resources.

Ultimately though, all that anyone is cares about is whether or not the end will justify the means. Do the benefits of fiscal stimulus outweigh the costs? Can we achieve potential output through fiscal stimulus, and more importantly, do we even know what an optimal output is? The problem with the calls for fiscal stimulus isn't the idea of stimulus itself, but with the fact that such calls fail to address the many inherent problems and questions raised here. For all of the very real costs that stimulus carries, we should hope for more from its proponents including Krugman. Anything less is shooting in the dark.

Innocence and Freedom

noreply@blogger.com (RPJ) — Sun, 02 Nov 2008 19:01:00 +0000

Consider a recent argument in favor of a housing bailout:

I know many, many innocent people who just wanted to buy a home...Now the innocent people have houses worth $200,000 less than their 2005 purchase price.

The innocence of a homeowner relative the innocence of an uninvolved taxpayer is arguable. But innocence isn't the key issue pertaining to bailouts. They key issue is personal responsibility, an idea that is closely tied to freedom.

If someone bought an overpriced home, that was their decision, just as if someone decided to invest in beanie babies or NASCAR collector plates, that too is their decision. They, and nobody else, are responsible for the outcome. Forcing that responsibility onto someone else who had no involvement is a most clear violation of the other person's freedom.

Is it sad that people make bad economic choices? Of course. But what is most sad is the idea that anyone thinks it is ok to force the outcome of their bad decisions onto others. In the same way that we would not sentence one man for another man's freely executed crime, we should not burden one man with another man's freely made economic decisions.

As I've shown before, government economic policies such as subsidies, bailouts, stimulus and inflation are counter-productive, but even more important to recognize is that they are also counter to individual freedom.

Freedom to make bad decisions is inherent in the freedom to make good ones. If we are only free to make good decisions, we are not really free.

- Ron Paul

Rationalizing Theft

noreply@blogger.com (RPJ) — Thu, 30 Oct 2008 01:37:00 +0000

A writer for the NYT recently called for something to be done about housing:

Yes, there were lots of Americans who were not greedy or foolish during the housing bubble, and many resent the idea that their neighbors might get a bailout they don’t deserve. They need to get over themselves. If housing prices keep falling, many millions of additional homeowners will find themselves, through no fault of their own, with underwater mortgages. Besides, foreclosures damage property values for everyone, not just those losing their homes.

It's interesting that certain parties should be protected from the harm brought on "through no fault of their own", but not others. In case you had trouble understanding this rationalization for a bailout, let me translate:

Wealth needs to be taken from party A (taxpayers) and given to party B (homeowners), because even though party B was foolish the outcome of their foolishness might hurt party C (other homeowners). And while party C might also have been foolish, though clearly not as foolish as party B, both parties are somehow more deserving of party A's wealth than party A itself. Allowing harm to come to parties B or C as a result of their foolishness is somehow worse than harming party A by stealing its wealth.

Since the government has nothing and produces nothing, all it can do is use its powers of coercion to redistribute wealth from one party to another with the hope that this redistribution will bring about the greatest overall benefit for society. This is the reason given for such intrusions, that the end will somehow justify the means. But how is it that the redistribution of capital from economic activities that are succeeding to those which have failed will some how bring about a better outcome? How do failing activities produce more wealth for society than those which are not? Perhaps it is important to look at who the activity is producing wealth for and for whom it is not.

A successful market economy depends on fairness and justice. These aren't just ideas that appeal to us as individuals, they are necessary in order for a market economy to function properly and to its full potential. A market economy that lacks fairness and discipline, where winners and losers are picked by the coercive power of the government, is an economy that disincentives participation, work ethic and innovation. It is the same problem that caused the failure of classical socialism - why work hard when the product of your labor may be taken away and given to someone else?

An economic system which allows for the forceful redistribution of wealth with the thought that it is for our own good, ultimately and ironically, disincentives economic productivity and brings about the very economic harm that it claims to protect us from, subsidizing activities that the economy cannot afford and that consumers do not want, violating freedoms all along the way.

Why did the gold standard fail?

noreply@blogger.com (RPJ) — Wed, 29 Oct 2008 01:48:00 +0000

If the classical gold standard worked so well, why did it break down? It broke down because governments were entrusted with the task of keeping their monetary promises, of seeing to it that pounds, dollars, francs, etc., were always redeemable in gold as they and their controlled banking system had pledged. It was not gold that failed; it was the folly of trusting government to keep its promises.

- Murray Rothbard

Behind Closed Doors

noreply@blogger.com (RPJ) — Sat, 27 Sep 2008 16:45:00 +0000

From Marketwatch:

Pelosi said the exact timing of the House vote would depend on the outcome of closed-door meetings currently underway on Capitol Hill.

Freedom is won on the field and lost behind closed doors.

$700,000,000,000.00

noreply@blogger.com (RPJ) — Sun, 21 Sep 2008 02:26:00 +0000

I wonder what $700,000,000,000.00 could buy, you know, if we were to actually put it to some constructive use as opposed to, you know, handing it over to Wall Street.

One can only imagine.

Quote of the day

noreply@blogger.com (RPJ) — Mon, 25 Aug 2008 01:56:00 +0000

We are little lost children who believe in fairy tales. We believe in Santa and the Tooth Fairy. But we don't believe in the Big Bad Wolf. That would be an impossible conspiracy or organized planning. We are in denial. We are part of the conspiracy of silence. There is no such thing as organized crime on the international level. The economy is just a series of random events and unpredictable black swans.

- The Guest

Boston Globe reader: On the Bailout

noreply@blogger.com (RPJ) — Tue, 05 Aug 2008 03:14:00 +0000

A letter to the editor from a Boston Globe reader:

I have an idea for a piece the Globe should write ('Inside Congress’s housing repair kit,' July 31): an analysis of two buyers who bought roughly the same house in the same neighborhood for the same price (say $500,000) at the peak of the market. The first buyer does things the right way: 20 percent down, documents income, fixed interest rate, mortgage = 28 percent of monthly income. The second puts nothing down, lies about his income, gets a negative amortization adjustable rate mortgage that resets so that he now pays 40 percent of his income. Home prices drop 20 percent since they bought.

The first guy has lost all his equity. The second guy gets to participate in Barney Frank’s and Chris Dodd’s great bailout plan. He negotiates his loan down to $360,000 and gets a lower fixed rate than the first guy since his new mortgage is subsidized by the Federal Housing Administration (read: the US taxpayer). He is rewarded for stupidity and lying.

Do I have this right? Is this still the USA we live in?

I have never in my life been more sickened by a piece of legislation than this one.

What more could I say.

They didn't understand

noreply@blogger.com (RPJ) — Sun, 20 Jul 2008 16:09:00 +0000

The great housing crash is rolling on and lately there's a lot of talk about what happens next, the bailouts. There is a strong contingent of support for bailing out homeowners based on the fact that the government has already held no hesitation towards bailing out Wall Street players. So the argument goes, if they can be bailed out, why can't homeowners? A better question might be, why should anyone involved be bailed out?

Gretchen Morgenson at the New York Times was writing about the bailout controversy over the weekend and brought up that point above about Wall Streeters enjoying bailouts while homeowners have not (so far):

Borrowers who are in trouble on their mortgages have seen their government move slowly — or not all — to help them. But banks and the executives who ran them are quickly deemed worthy of taxpayer bailouts.
...
The message in this disconnect couldn’t be clearer. Borrowers should shoulder the consequences of signing loan documents they didn’t understand, but with punishing terms that quickly made the loans unaffordable.

This is a common premise coming from the pro-bailout crowd, roughly, that borrowers didn't understand their loans. As the basis for an invasive, socialist, taxpayer funded bailout, it is inadequate. Many homeowners clearly did understand their loans, yet they chose to take a gamble on a home purchase with the idea that their home's value would increase and net them a reward.

So how is it that such gambles should be subsidized by the hard-earned money of others who had no involvement whatsoever?

Freedom to make bad decisions is inherent in the freedom to make good ones. If we are only free to make good decisions, we are not really free.

- Ron Paul

Quote of the day - Power Grab

noreply@blogger.com (RPJ) — Fri, 04 Apr 2008 03:09:00 +0000

Quote of the day

The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

I Can't Make This Stuff Up

noreply@blogger.com (RPJ) — Thu, 27 Mar 2008 05:46:00 +0000

As you may or may not be aware, Senator Clinton recently tapped former Fed chairman Greenspan to head a committee charged with finding a solution to the current housing crash. As hundreds of bloggers have pointed out (yet the mainstream media fails to grasp), it is stupifyingly outrageous to think that Greenspan, the very man who helped create the housing bubble, should be charged with finding a solution to it.

In light of this, The Philadelphia Daily News asked Senator Clinton why she would pick Greenspan to head up this effort. Her response:

"He has a calming influence still to this day on Wall Street - don’t ask me why because I never understand what he’s saying - but nevertheless people respond to that Delphic oracle approach. I think it would be wise to include him. And recently he’s come out, and very smartly so, that we have to deal with housing and maybe we need to have some kind of buyout mechanism for mortgages. So he’s moved on his understanding and depth of the problem - but you know you could pick three others. You just have to have some demonstrable involvement of presidential leadership."

Brilliant.

This, to me, is kind of like saying we should put a mobster in charge of dealing with a crime problem. The only solution they're going to give you is the very thing that caused the problem in the first place (government intervention).

What is Freedom?

noreply@blogger.com (RPJ) — Sat, 08 Mar 2008 03:03:00 +0000

I see and hear a lot of misperceptions about what freedom is. For example, many think that consumer choice is freedom, but this goes without recognizing that those choices come at a price that is mostly unseen. Really, it seems that that most people don't at all understand what freedom really is. The Creed of Freedom defines it perfectly:

INTRINSIC NATURE OF RIGHTS

I believe that only individuals have rights, not the collective group; that these rights are intrinsic to each individual, not granted by the state; for if the state has the power to grant them, it also has the power to deny them, and that is incompatible with personal liberty.

I believe that a just government derives its power solely from the governed. Therefore, the state must never presume to do anything beyond what individual citizens also have the right to do. Otherwise, the state is a power unto itself and becomes the master instead of the servant of society.

SUPREMACY OF THE INDIVIDUAL

I believe that one of the greatest threats to freedom is to allow any group, no matter its numeric superiority, to deny the rights of the minority; and that one of the primary functions of just government is to protect each individual from the greed and passion of the majority.

FREEDOM OF CHOICE

I believe that desirable social and economic objectives are better achieved by voluntary action than by coercion of law. I believe that social tranquility and brotherhood are better achieved by tolerance, persuasion, and the power of good example than by coercion of law. I believe that those in need are better served by charity, which is the giving of one's own money, than by welfare, which is the giving of other people's money through coercion of law.

EQUALITY UNDER LAW

I believe that all citizens should be equal under law, regardless of their national origin, race, religion, gender, education, economic status, life style, or political opinion. Likewise, no class should be given preferential treatment, regardless of the merit or popularity of its cause. To favor one class over another is not equality under law.

PROPER ROLE OF GOVERNMENT

I believe that the proper role of government is negative, not positive; defensive, not aggressive. It is to protect, not to provide; for if the state is granted the power to provide for some, it must also be able to take from others, and once that power is granted, there are those who will seek it for their advantage. It always leads to legalized plunder and loss of freedom. If government is powerful enough to give us everything we want, it is also powerful enough to take from us everything we have. Therefore, the proper function of government is to protect the lives, liberty, and property of its citizens; nothing more. That government is best which governs least.

Everything is just fine

noreply@blogger.com (RPJ) — Fri, 07 Mar 2008 02:03:00 +0000

My man Mish explains that everything is fine:

Other than overleverage, bad debts, sinking home prices, no jobs, shrinking wages, cash strapped US consumers, rising oil prices, a sinking US dollar, $500 trillion in derivatives not marked to market, rampant overcapacity, underfunded pension plans, looming boomer retirements, no funding for Medicaid, no funding for Medicare, and no Social Security trust fund, everything is just fine.

Quote of the day - Punishment for Prudence

noreply@blogger.com (RPJ) — Fri, 07 Mar 2008 01:52:00 +0000

"Our own tax dollars will be used to prevent us from getting a good deal on a house"

- Patrick.net