Tuesday, April 5, 2016

Socialism is the Darwin Award for Economic Ignorance


Pop quiz:   
  1. Who is the father of modern socialism/communism?  
  2. Who is the father of modern capitalism? 
Odds are you will be able to answer the first question correctly and can name Karl Marx as the father of modern socialism/communism.  You probably can do a decent job of explaining Marxism without even looking it up on Wikipedia.  You may even be familiar with the Marxist slogan, "from each according to his ability, to each according to his need".

Conversely, if you are asked who the father of modern capitalism is, odds are you'd either draw a blank or be mostly wrong.

You may not realize it but socialists have been influencing you your whole life. Prior to the 1960's there were prohibitions on government workers joining organized labor.  That's because there was an obvious conflict of interest;  organized labor and socialism have been synonymous throughout their shared history in the U.S.. But that changed in the 1960's under Democrat John F. Kennedy, and since then, government workers including school teachers have flooded into organized labor.   Most likely every teacher who taught you in a U.S. public school was a member of organized labor.  That's not to say all teachers and organized laborers are socialists, but the politics of organized labor in the U.S. leans undeniably in that direction.  

"Hold on!", you say, "Just because public schools are unionized and organized labor leans socialist doesn't mean it has had any real impact on our country!"  Actually it has.  After half a century of this, Karl Marx is now the most assigned economist at U.S. colleges today.  And by far.  Did you know this?     


So how did you answer the second question?  In one sense the answer to that one is again... Karl Marx.  Yes, Karl Marx is both the father of modern socialism AND the father of modern capitalism. Karl Marx was the person who defined capitalism for the masses in his scathing critique of 1860s capitalism, "Das Kapital".  He constructed a convenient dichotomy between socialism and capitalism based on his own definitions to support his political theories .

Many scholars credit a Scotsman named Adam Smith as the person whose ideas most influenced our economic system.  Adam Smith’s book, “An Inquiry into the Nature and Causes of the Wealth of Nations” was actually published in 1776.  (That date rings a bell, no?)  But the word capitalism didn't exist in Adam Smith’s day.  He never used it.  We mistakenly call our economic system capitalism because that's what Marx and the critics called it.  The name unfortunately stuck. 

If everyone knows what Marxism is, why doesn't everyone know what Smithism is?  Because it’s not taught, except to select economics majors.  "Smithism" never became a word.  If you want to learn about Adam Smith you most likely have to do it on your own.  You can go through K-12 and well beyond in schools in the U.S. and never hear the name Adam Smith, never learn about his ideas, and never understand the influence those ideas had on the founding of our country.  If you go to Wikipedia and look up Marxism you’ll find plenty.  If you go to Wikipedia and look up Smithism you’ll get crickets. 

Pop quiz:  
  1. What is Supply Side Economics?  
  2. What is Demand Side Economics?
You are probably familiar with the first term, but can you accurately define it?  Have you ever heard of its opposite, Demand Side Economics?  

·         Supply side economics is the theory that people will SUPPLY (create) more value if they are allowed to function in a free market.
   
·         Demand side economics is the theory that people will DEMAND (consume) more value if wealth is redistributed to them.    

These are opposite approaches for achieving different economic goals.  Supply Side seeks to optimize overall economic vitality (Smithism).  Demand Side at times seeks to stimulate consumption (Keynesianism), or at times to achieve egalitarianism (Marxism).

If you look up supply side economics on Wikipedia, you’ll find a thorough entry along with plenty of criticisms.  If you look up demand side economics, you’ll get zip.  The language in this case does not favor the Marxist/socialist demand side ideology.   Hence, it is not even defined.

Pop quiz:
  1. What caused the financial crisis of 2008?
Chances are you know for certain that it was caused by greedy bankers, deregulation, George W Bush, and the failures of capitalism.  You are completely wrong.  

No event has had a more profound impact on this country's recent tilt towards socialism than the financial crisis of 2008.  It is said that history is written by the victors.  That has never been more true than in the wake of the financial crisis.  Democrats controlled the government commission that wrote the post-mortem.  Barack Obama won the presidency.  Democrats had both houses of congress.  And liberals made the movies and wrote the books explaining the crisis to the masses. Unfortunately, everything they told you was a deliberate deception designed to exonerate socialism, and scapegoat capitalism.   

The fact is the financial crisis of 2008 was a perfect demonstration of the failures of socialism. Redistribution of wealth, in this case redistribution of mortgage credit, was at the heart of the financial crisis.  At times, the support for this redistribution was bi-partisan, but the ideology behind it was socialist regardless of who was advocating.

It all began with the affordable housing goals promoted by Democrats in the early 1990s, which lowered mortgage requirements.  It accelerated in the mid 1990s under Democrat Bill Clinton with further loosening of mortgage standards, pressure on banks to write loose loans, and mandates for government backed companies FNMA (Fannie Mae) and FHLMC (Freddie Mac) to buy all the new mortgages.  It finally reached it’s apex in 2007 under Republican George W. Bush, while Democrats, including Senator Barack Obama, ran both houses of congress.

All the risk from this socialist redistribution was supposed to be assumed by the federal government in the form of the afore mentioned government backed companies.  Fannie and Freddie were ground zero for the financial crisis.  No government official took more money from these two companies, and at a faster rate, than the junior Senator from Illinois named Barack Obama.  His closest competitors in that money grab included Barney Frank, Chris Dodd, and Hillary Clinton.  If this is news to you,  it's because they wrote the history.

What they told you was that it was a perfect storm involving greedy bankers, deregulation, and the natural flaws of capitalism.  It was a plausible argument designed to deceive.  Bankers today are no greedier than their banking forebears.  So why did they suddenly engage in subprime lending for the first time in history in such large numbers? Because they were coerced to do so by their government.

Deregulation also had nothing to do with it.  Canadian banks are lightly regulated compared to their U.S. counterparts and none of them failed.  Why the difference?  Only in the U.S. was mortgage credit redistributed to those unable to pay in a weak housing market.  Unfortunately, when the scheme went bad the damage spread to the private banking and investment sector bringing the entire global financial system to its knees.

The deceptions about this animated the Occupy Wall Street movement, got Barack Obama elected twice, and are responsible for the acceptance of openly socialist candidate Bernie Sanders today.   They are also part of the continuing campaign that has mischaracterized the mortgage market as an example of free market failure.

The frightening thing about this is, if history is written by the victors and they engage in deception, aren't we doomed to repeat it?  Fannie and Freddie own just about every new mortgage written since 2008, and the socialist policies promoting home ownership and borrowing have accelerated under Barack Obama.  We are currently in the process of building a second real estate bubble.  Adding to that are new socialist bubbles in national debt, student loans, auto loans, and equity prices.

Pop quiz:

  1. If socialism is so bad, how come Scandinavian countries like Sweden that have free healthcare, free college, and tons of benefits rank among the richest, healthiest, and happiest in the world?
Scandinavian success came long before their experiment with socialism.  They were happy, healthy, productive, and prosperous prior to the 1960s when they began the turn towards socialism.  Socialism had nothing to do with their success.  Sixty years of high taxes, however, has slowed their growth and momentum and now they are "feeling the Bern".  Sweden and Denmark currently spend more than 100% of their national income on government services - an obviously unsustainable level.  In response, socialist Europe has been freeing their economies and sharply turning away from their recent socialist models.  Switzerland, Ireland, and The U.K. are economically freer today than the U.S., and Sweden, yes "socialist" Sweden, is essentially tied with the U.S. in economic freedom according to the Heritage Foundation rankings.

Pop quiz:

  1. Are all forms of socialism equally destructive?  

Here's the thing:  National socialism has never produced anything long term other than misery, starvation, poverty, and authoritarianism.  Think Soviet Union, Cuba, and Venezuela.  That's at the national level.  And long term.  At the local level, socialism can survive a bit longer.  Local socialism does not eliminate the incentive killing aspects of socialism, but it does avoid the inevitable monetary collapse.  That's because local governments cannot create money. State and local governments must be more disciplined.  Therefore, they tend to be more fiscally responsible. National governments can hide their insolvency much longer, plunder future generations, devalue currencies, manipulate interest rates, and cause much bigger problems down the road.

This is an important point that deserves repeating;  socialism cannot work long term at the national level.  The national level is where money is usually created and controlled.  The Euro countries are a recent exception now that money is no longer controlled by the individual countries.  The Euro is controlled by the European Central Bank, which is a consortium of 19 Eurozone countries .  It's almost like they recognized the fatal flaw and are trying to work around it.

But in the U.S. we have no such arrangement.  We borrow and print money at the federal level. Our system was never designed to be a socialist system.  The constitution implied that the states were the proper place for redistributive experimentation.  Why do you suppose many of the states are called commonwealths?   At the national level the conflict of interest is just too great for elected officials to re-distribute wealth.  National politicians will eventually destroy the currency, borrow too heavily, undermine the work ethic, and undermine national defense in an attempt to gain and maintain power. The founders knew that, and it is happening today. We have doubled our national debt in just the last seven years.  Interest rates have been artificially held near zero for that entire time.  If and when rates normalize to historical levels, the debt service alone will cause the kind of pain socialist nations have felt throughout history. We are not immune.
  
In summary: You were indoctrinated to be a socialist. You were indoctrinated to call our system capitalism.  You've been deceived about the benefits of socialism.  You've been deceived about the evils of free markets.  And you've been deceived about the perils of national socialism.  If you still think socialism is great after all that, congratulations, you've earned a Darwin Award in Economics.

Friday, April 1, 2016

Newt Gingrich - The Untold Story!




Newt Gingrich has been all over the news this election cycle opining on this or that, and acting as a sort-of GOP elder statesman.  What very few people know though is that Newt Gingrich has a secret love child, the actor/comedian Jack Black!  Here now the shocking proof ICYMI:  


Newt Gingrich and son Jack Black share a laugh.



"She just has one of those asses you gotta grab!”












The Family Christmas Card



“Why can’t you f*%#ing idiots understand this?"
   

"Temper?  Who's got a temper?"                             

Me and Dad



Me and Dad when we used to drop acid together.





(Happy April Fools Day!)  

Tuesday, March 29, 2016

Is Donald Trump the Golfing Gorilla?



There's an old golf joke that goes something like this:

A guy trains a gorilla to hit a golf ball and then takes wagers claiming his gorilla can beat any golfer. Several golfers take the bet only to pull out and lose after seeing the gorilla hit the green with a 500 yard drive.  Finally, an astute pro takes the bet and stays in long enough to see the gorilla putt.  The gorilla steps up to the ball, lines up his putter, eyes his 18" putt, and WHAM...hits the ball another 500 yards!

This reminds me of Donald Trump's campaign.  He has been like the gorilla off the tee up to this point, outdriving the field of seventeen wanna-bees with his bold, brash, unapologetic, and downright nasty play.  But now he's on the green and putting for the win.  Does he have the wisdom and discipline to dial it back and act more like a seasoned pro than a Twitter addicted low-brow primate?

Donald Trump is comfortably in the lead in the delegate count at this point.  His 736 dwarfs Ted Cruz's 463.  So, what does he do?  He attacks Heidi Cruz for not being as young and hot as his wife, thus further alienating the female half of the electorate.  He continues with his Twitter rants against enemies real and imagined, thus alienating the remainder of the electorate.  And he stands by his campaign manager after he's charged with battery for grabbing a reporter, an act caught on tape, thus showing what a great and just manager he'd be as president!

Ummm...looks like he's stepping up to his putt with a driver.  Unfreaking believable...

(UPDATE: This was written BEFORE his insane abortion, nuclear weapons, and Supreme court comments!)

Saturday, March 19, 2016

Forget What The Donald Says

Donald Trump talks some serious shit.  His mouth is like a perpetual motion BS fountain, spewing nonsense and ignorance into the atmosphere where it gets inhaled and sickens anyone who gets within range.  So, I guess that makes him exactly like just about every other politician... ever!?

OK, maybe Trump's BS has another gear beyond what most politicians have, but I chalk most of that up to the fact that this is his first foray into politics.  And this is the big stage.  Also, years ago I read his book, "Art of the Deal" and know that his technique involves a boat-load of hyperbole, which is just a civilized word for BS.      

So when it comes to politicians, I tend to focus more on results than words.  When a politician says the debt is too high, and then doubles it, I have a problem with that.  When a politician promises me my premiums will fall, I can keep my doctor, I can keep my plan, and none of that is true, I've got a problem with that.  When a politician tells me a video caused a terrorist attack and it turns out to be a bold faced lie, I've got a problem with that.

At some point a politician's words become meaningless and all we are left with is... his actions.  What has he done?  What were the results?  Did his BS produce the Shangri-La he promised?  This becomes all that matters when it comes to politicians.

With that in mind, and with Donald Trump looking all but inevitable as the GOP nominee, I offer the following comparison:

      

Wednesday, March 16, 2016

Who’s Inciting Violence?





There’s lots of talk about coarse rhetoric inciting violence in this election.  Most of it directed at Donald Trump.  He’s been bluntly critical of those disrupting his rallies, he's offered to pay the legal fees of those who are charged after confronting disrupters, he praised a man who punched a disrupter, and he's said and done a number of insensitive things regarding his detractors.  

Pretty bad stuff, I agree.  But if you are looking for a real villain inciting actual violence, which has resulted in actual death, destruction, and civil unrest, I contend you are looking in the wrong place.  The real inciter of violence is not at Mar-a-Lago; he’s in the White House. 

By now everyone knows that “hands up, don’t shoot”, the narrative after Michael Brown’s shooting, was a lie.  What everyone seems to forget is that Trayvon Martin, and later Michael Brown, were the sparks for Black Lives Matter, which in turn began a war on police, which in turn spawned an unprecedented spike in the assasination style murders of police around the country along with widespread riots in numerous cities.

Do a Google search of “Obama speaks out against Black Lives Matter” or “Obama speaks out against hands up, don’t shoot”, or “Obama speaks out in support of the judicial system after Trayvon Martin.”  You’ll get crickets.  In fact, you’ll get the opposite.  Obama spoke out and offered tacit support to those calling for violence in all cases.  These movements have openly called for murder.  They have chanted things like, "What do we want? Dead cops. When do we want it?  Now!" and, “Pigs in a blanket, fry ‘em like bacon!”.  Actual deaths have resulted.  Actual riots have resulted.  Millions in property damage has resulted.  And Obama tacitly supported it all. 

Moreover, Obama has used violent rhetoric throughout his political life.  In 2008 in Philadelphia he told supporters:  “If they bring a knife to the fight, we bring a gun, because from what I understand, folks in Philly like a good brawl.”  He was given a pass.  He has subtly, but obviously, given his detractors the middle finger.  Not figuratively, but literally.  His supporters laughed and applauded.  He turned the IRS into a Gestapo to harass his opponents.   His supporters looked the other way. 

So you tell me, who has actually incited violence?  Who has actually incited murder?  Who has actually divided this country? 


If you are of the opinion that Donald Trump cannot be forgiven for his failure to set a tone of reconciliation, that's your right.  I am not defending Trump here.  What I am doing is pointing out hypocrisy.  In other words, show me where you spoke out against Barack Obama's more serious transgressions, which resulted in actual violence and death, or I gotta call BS on your selective outrage.

(Update:  Trumps critics on both sides are accusing him of calling for riots if he is denied the nomination despite being the clear leader.  He did no such thing.  I myself have speculated the equivalent for either side if a clear leader were denied at either convention.  This is just common sense.  Trump was clear to say he would have no part in such nonsense, but this is ignored by his detractors.  Anyone who thinks millions of Sanders supporters, or Trump supporters, would quietly accept their votes being nullified after they lead the vote count in a smoke filled room is seriously delusional.)        

Tuesday, March 1, 2016

Understanding Trumpism – A Noteworthy Coincidence


No doubt about it, Donald Trump is a different kind of politician.  Politics has always been a nasty business, but it is usually done quietly through delegation.  Politicians will publicly smile, speak in platitudes and niceties, and then privately turn their goons on their enemies.  They will weaponize the IRS, have your cat killed to send you a message, issue threats through third parties, or have surrogates break into your campaign office.  Never do they personally and publicly get mean.  Not Trump.  He has cut out the middleman.  He’ll publicly call you a bimbo, stupid, fat, loser, liar, weirdo, mock your disability, threaten to sue you, say everyone hates you, etc.  And his fans love it.  Why is this?  What has changed?

Most of us grew up with some form of the Golden Rule being drilled into our heads.  “Do unto others as you would have others do unto you.” In other words, be a decent person, and don’t be a jerk.  But there was also another maxim we grew up with, “Nice guys finish last.”  Obviously, we got conflicting advice. 

Trumpism is the triumph of the latter over the former.  The Golden Rule, otherwise known as the ethic of reciprocity, a principle found in just about every religion in the world, is dead in America today.  And it was slain by the ethic of “Nice guys finish last.”  So I got to wondering, what was the origin of “Nice guys finish last”?

It turns out that Donald J. Trump and “Nice guys finish last” were born at the same time and in the same place!  Both were born around the summer of 1946, and both in New York, NY. Interesting, no?  

Leo Durocher was the manager of the Brooklyn Dodgers in 1946 when he said what eventually got boiled down to its sound-bite form as “Nice guys finish last.”  Donald Trump was born at the same time in the bordering borough of Queens and had that aphorism germinating in his brain his entire life.  Now we are reaping the fruits. 


One bit of irony and hypocrisy in all this is that many of the people who are apoplectic over Trumpism have for twenty years supported the most beloved man in the Democrat party, Bill Clinton, who did things that make Donald Trump look like a boy scout.  So to those freaking-out over Trumpism who support Clintonism I say, “You might want to put some ice on that.”  ;-)

Wednesday, February 24, 2016

Donald Trump - Some Perspective


Granted, Donald Trump has his flaws.  He's certainly not my choice.  At this point, a rehashing of Trump's strengths and weaknesses is useless.  It is becoming increasingly clear that he can win the GOP nomination.  So, it's time to put Donald Trump in perspective.  

By that I mean, who will he likely be up against?  It looks like Hillary Clinton will not be indicted by Barack Obama's DOJ (big surprise!), and will likely be the Democrat nominee.  So how does Trump stack up?  

Sure, The Donald has his flaws, which I have touched-on here and here, but he's no Hillary on the evil scale.  Not even close.

The thing about our government that is truly sad in 2016 is that we have abandoned the founders design.  The thing that made us exceptional among nations, the thing we call "American Exceptionalism" was the founders design of a strictly limited government designed to do a few basic things and then focus on securing the natural individual rights of the people.  We long ago abandoned that model.  Like it or not we have a totalitarian democracy at this point.  Combine a totalitarian government with a jackass charismatic leader, like Barack Obama or Donald Trump, who you don't like, and it's a recipe for large scale discontent.  Presidents were never supposed to be this important or this powerful in the U.S.  

   

Saturday, February 20, 2016

GOP: Is this really your guy?

Donald Trump reminds me a lot of the Al Czervik character played by Rodney Dangerfield in the classic comedy, "Caddyshack".   Both are real estate developers, golfers, over-the-top obnoxious people, and both are entertaining and oddly... lovable.  (Of course, the standards for comedic celluloid love and oval office love are... somewhat different.)

Also of note:  In Caddyshack, the brash real-estate developer disrupts the status quo at the "establishment" country club, which has the prophetic name, "BUSHwood".  They say that art imitates life.  Sometimes it's the other way around, with about 36 years in between.

So, watch my short Trump overdub of this famous scene from "Caddyshack", and tell me, seriously GOP, if this is your guy...          

Thursday, February 18, 2016

Barack Obama, Constitutional Scholar


I love hearing Barack Obama spout off on the U.S. Constitution.  His latest invocation was on the death of Supreme Court Justice Antonin Scalia.  "The constitution is clear...", he lectured.  Then went on to righteously proclaim that anything less than senate confirmation of a radical liberal justice like Elena Kagan or Sonya Sotomayor would be tantamount to an unprecedented breach of his constitutional rights.  This from the man who as a U.S. Senator joined a Democrat filibuster of Samuel Alito.  Neither of his two nominations were filibustered by Republicans.  You can cut Obama's hypocrisy with a knife.  His own party once passed a resolution barring Supreme Court appointments in a presidential election year!  Now they are all suffering amnesia.  Ever hear the verb "Borking"?  

But, let's forget about all that nonsense.  Barack Obama did once serve as a college lecturer on the subject of the U.S. Constitution.  Yet, he has publicly aired his disdain for that document on numerous occasions.  So why study it?  Why teach it?  Same reason a thief studies security.  You need to know the weaknesses, the defenses, the loopholes, the strengths if you want to crack a safe or rob a bank.

So yes, Barack Obama became a constitutional scholar the same way bank robbers become bank security scholars.  They are all just casing the joint.




Sunday, February 14, 2016

Ted Cruz is Awesome! XII


What no one seems to know about Ted Cruz's time at the FTC:         (From: PJ Media)  
At the FTC, Cruz’s agenda could have been written by Milton Friedman. 
Cruz promoted economic liberty and fought government efforts to rig the marketplace in favor of special interests. Most notably, Cruz launched an initiative to study the government’s role in conspiring with established businesses to suppress e-commerce. This initiative ultimately led the U.S. Supreme Court to open up an entire industry to small e-tailers. Based on his early support of disruptive online companies, Cruz has some grounds to call himself the “Uber of American politics.” 
Moreover, and perhaps surprising to some, Cruz sought and secured a broad, bipartisan consensus for his agenda. Almost all of Cruz’s initiatives received unanimous support among both Republicans and Democrats
Ted Cruz a consensus-builder? He was, at the FTC.