More Thoughts Upon Reflecting on the Fourth of July

I had a series of thoughts this morning that started with social security and ended up at G(overnment) Motors and Chrysler.

Remember when there was a conservative party, and they espoused privatization of a small portion of individual social security accounts, allowing individuals to invest as they saw fit and potentially earn higher returns. The opposition has always seen themselves as better stewards of personal earnings that those who actually earn, and scared the retired or near-retiring population into pressuring their “representatives” to “save” social security from those evil conservatives. Their reasoning was that you could lose money through investments you choose yourself, which is, of course, a potential. Especially if you invested your money in corporate bonds, which we now know can be completely devalued by government intervention even more than by free market pressures and fluctuations.

Fast forward to today, when the current government is spending money that we do not have at a rate that would embarrass even the most profligate spenders. Surely they realize that this spending will – someday – have to be covered.

It may seem a bit Machiavellian, but how about this? We use all the government and political machinations at our disposal to drive a major segment of US industry into the ground. We mandate what they produce in spite of market demands and hobble them with Corporate Average Fuel Economy standards. Insist they build tiny, unsafe plastic cars that won’t carry a family, never mind the buying public wants, and is willing to pay for, a mini-van, mid-sized SUV, or a full sized pick-up. When the industry finally succumbs to government/political intervention, we use the power of government printing presses to bail them out, and then mandate how they are divided up in a “surgical bankruptcy”. Ignoring all established bankruptcy case law, not to mention the constitutional prohibitions against government “taking”, people who have never managed a lemonade stand divide up the remains. They give the lion’s share to the unions, claim a disproportionate share of the remains to the government, and leave the stripped bones to the rightful, secured creditors, the bond-holders. Now we have “labor” in a position where they can fire “management”, and the government in position to pocket a large percentage of any potential profits, assuming there is an improvement in the market someday in the future. Does that not define nationalization?

Consider this definition of fascism, from The Library of Economics and Liberty (www.econlib.org)

“Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest” — that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.”
(emphasis added)

So … back to how we pay for all the “stimulus spending in which we are engaged. We nationalize large, wealth producing segments of the economy and use the proceeds to pay off the vote-buying spending in which we have recently wallowed.
Hey … isn’t that what Hugo Chavez would do?
Is this “Change We Can Believe In”?
Is this change we can survive?

Thoughts on the 5th of July

After re-reading the Declaration of Indepenence over the weekend, I invite your attention to a few things we should all ponder (just might win me a spot on Secretary Napolitano's A-list) :

Consider the utter disregard for case law and precedent in the actions surrounding the federal acquisition and distribution of GM and Chrysler.

Consider the aristocratic questioning of corporate CEO’s use of business jets by members of congress whose travel budgets have skyrocketed over the past few years. Please have someone explain to me how a congressional delegation’s trip – including family members – to the Galapagos Islands is of any lasting benefit to ANY of their constituents other than themselves and their family members. And guess how many of them fly commercial?

Observe the ongoing and continuous revelations that many members of our elected aristocracy have, by their own admission, committed actions for which we – their “employers” - would undoubtedly be tried, convicted, and sentenced to at least make recompense if not incarceration. Just try not claiming income, for which you have been advised that you owe taxes, on YOUR tax forms, or “forget” to declare a rather substantial amount of rental income (at least for those of us who actually PAY our taxes)– over a period of years. The hypocrisy of men like Charles Rangel, Christopher Dodd, and Timothy Geithner establishing national fiscal policy and determining how OUR money is spent is positively stunning.

Look at your taxes! Not just your withholding at the end of each pay period, but ALL your taxes. After the aristocracy takes their piece, you are left with something in the neighborhood of 75% of YOUR earnings on which to live and raise your family. But wait … most of what spend is inflated with a sales tax burden, making it cost 7-9% more than it should, and that’s just the direct sales tax. It doesn’t factor in the impact on your budget of the taxes levied on everyone involved in getting that product to your hands. Then look at your monthly bills and add up all the taxes, levies, “program” support charges and such that city, county, and state governments have added to your monthly cost of living. Just take a line by line look at your utility, phone, cable/satellite/internet, water & sewer, and almost any other bill you receive. Then there are taxes to register your car, taxes to fuel your car, taxes to stay in a hotel room, Add up those charges and see how much deeper the government has its hand in your pocket. “Tax Freedom Day” this year in California – the day when you finally started earning for yourself – was calculated to be April 20th. You worked about 110 days – almost a third of the year - for someone else.

Remember. The government aristocrats do not produce wealth, they merely take it from those who do, and use it to buy votes from those who do not. Anything the government gives to one person it must take from another.

I then invite your attention to the second paragraph of the Declaration of Independence. It seems particularly relevant recently.