About This Blog

Ludwig von Mises (1881-1973) was the greatest economist of my time. His greatest works can be accessed here at no charge.

Mises believed that property, freedom and peace are and should be the hallmarks of a satisfying and prosperous society. I agree. Mises proved beyond a shadow of a doubt that the prospect for general and individual prosperity is maximized, indeed, is only possible, if the principle of private property reigns supreme. What's yours is yours. What's mine is mine. When the line between yours and mine is smudged, the door to conflict opens. Without freedom (individual liberty of action) the principle of private property is neutered and the free market, which is the child of property and freedom and the mother of prosperity and satisfaction, cannot exist. Peace is the goal of a prosperous and satisfying society of free individuals, not peace which is purchased by submission to the enemies of property and freedom, but peace which results from the unyielding defense of these principles against all who challenge them.

In this blog I measure American society against the metrics of property, freedom and peace.

Thursday, August 25, 2011

Tax Increases Create Jobs And Stimulate "The Economy"

You don't believe it? Then you must be one of those neanderthal Republicans or conservatives or libertarians or classical liberals, etc. etc. etc.

Read a liberal/progressive blog these days and your bound to be bombarded by headlines such as these: AGAIN - The Bush Tax Cuts Did Not Create Jobs! and At Town Hall, GOP Rep. Hultgren Can't Explain How Bush Tax Cuts Created Jobs.

Blog posts such as these are extremely popular now because the left is trying to gin up support for tax increases on the "rich." These posts regularly mention the "fact" that while the Bush Tax Cuts didn't create jobs the Clinton tax increases of 1993 created 22 million jobs in eight years and balanced the federal budget.

[By the way, the chart included in the links above does not show monthly jobs created or lost during the period shown. It illustrates the difference between jobs actually created and jobs predicted to be created by the Bush administration due to the Bush Tax Cuts. In truth, 2.4 million jobs were created during the period shown in the chart. The questions progressives refuse to answer are: Who created these jobs and why? How many of these 2.4 million jobs were created due to the Bush Tax Cuts? How many would have been created without the Bush Tax Cuts? What is the theoretical economic argument which explains the contention that tax increases create jobs?]

If you want the full and truthful scoop on all this, read or re-read: The Clinton Tax Myth by Yossi Gestetner.

If you want the full and reasonable economic theory, read Ludwig von Mises.

Monday, August 15, 2011

Warren Buffett: The Ass Of Omaha

This op-ed in the NY Times is outrageous: Stop Coddling The Super-Rich, by Warren Buffett.

Buffett is the third, richest man in the world. On May 19, 2008 Buffett endorsed Barack Obama as his preferred candidate for President of the U.S. Buffett's man won. As Buffett writes in his op-ed, he has "friends in high places." In fact, he writes that his friends in high places have been giving him and and his buddies tax breaks since roughly 2000.

"Back in the 1980s and 1990s," Buffett writes nostalgically, "tax rates for the rich were far higher, and my percentage rate was in the middle of the pack." In fact, Buffett seems to long for the really good old days "when capital gains rates were 39.9 percent in 1976-77."

In his editorial Buffett pleads with his President to raise his taxes and the taxes of his "super-rich" friends. The richer they are the more Buffett wants them to pay. Why? Buffett wants Obama to force him and his "mega-rich" buddies to share the "sacrifice" of... ...I don't know. I know Obama has called for sacrifice from all Americans. But I don't know exactly what we are to sacrifice for.

The federal government is a bloated bureaucracy, fat beyond belief. Everyone knows this. Lobbyists scurry about Washington, D.C. like roaches. Bureaucrats strut about like tin-pot dictators; politicians, like regal authority. The thought of sacrificing so that life can go on in Washington without missing a beat is odious. Of course, I am not a member of Buffett's club of the "super-rich." Why should I care if Buffett and his friends want to feed the bloated, federal pig?

Here's why.

First, that bloated Washington pig is sitting on me and all of my non-super-rich neighbors. Federal regulations govern just about every aspect of my life. There seems to be a government agent knocking at every door nowadays wanting to "help." We get frisked by these agents at the airport and looted by them at the gas pump. We're forced to buy gasoline that fouls our lawn mowers and light bulbs that cost an arm and a leg. And now Buffett's good friend has forced us to buy our healthcare from federally mandated physicians and druggists.

In short, by feeding the federal pig, Warren Buffett is keeping us rabble under the federal thumb. Does all this affect Buffett and his mega-rich buddies? Does anyone seriously believe that Buffett and his super-rich friends worry about gas or light bulb prices? Does anyone seriously believe they go to a government-approved doctor or wait in line for a cat-scan with the rest of us chumps?

Second, Buffett's plea for higher taxes is so very elitist it's sickening. He should get off his high horse. The idea that higher taxes is a "sacrifice" for Buffett is a cruel joke. He and his mega-rich buddies won't feel a thing if capital gains taxes are raised. If they did feel a sting, then they wouldn't be super-rich. You've all heard the old saying, if you have to ask "how much," then you can't afford it. That's the way Buffett operates.

Buffett is calling for progressive increases in capital gains taxes. You make more than a million bucks per year, you start paying through the nose. I don't make a million bucks a year, so why should I care?

I care because once the floodgates open, they're impossible to close. The feds could tax 100% of the income of the super-rich and it wouldn't put a dent in the federal deficit. So it's legitimate to worry about what tax increase is next? The infamous VAT tax that insures the viability of the mega-welfare state?

Buffett reminds me of the wealthy, connected Jews in pre-War Germany who defended the Nazi's. These collaborators thought they were beyond the reach of the state. They felt their "friends in high places" would protect them. You wash miy hands, I'll wash yours.

Well, it didn't work that way. The Jewish elite collaborators made it easier for the Nazi's to suppress the Jews and eventually exterminate them. And these elite themselves eventually took the ride to Dachau in a railroad boxcar.

I don't care what happens to Warren Buffett. If the government (or the mob) eventually turns on him and takes ALL his wealth, I won't shed a tear. But I will decry the loss of the principle of private property in this country and the prosperity it fosters.

Make no mistake. Despite his billions, Buffett is no friend of the principle of private property. He's got his and his super-rich friends have theirs. These elitists aren't truly concerned about us in fly-over country. He's not concerned about his secretary or his employees paying a higher rate of taxes than he does. If he was, he'd call for the elimination of the onerous payroll taxes his employees (and us saps) pay to support the world's biggest and richest Ponzi scheme that will eventually turn us all into wards of the state. No, not a single word from Buffett criticizing these life-sucking entitlement programs. Instead, he advocates higher taxes for himself.

Lastly, and this is most galling, if Buffett and friends truly feel they should be feeding more slop to the federal pig, why don't they simply sit down at their teakwood desks and write checks to Uncle Sam?

The reason is simple: These elites detest individual freedom, especially freedom for individuals who make up the mass of the general public in America. They believe in the authority of the state which, coincidentally, is run by their friends in high places. By making their pleas for higher taxes and more sacrifice public, they denounce the principles of property and freedom, honor the authority of the state and ratify the principle of statism.

Warren Buffett, go to hell.     

Friday, August 12, 2011

Last Night's Debate: A Sign Of The Times

Eight candidates, that I can understand. But why four moderators/questioners?

This was a media event, plain and simple. The questions were inane (I still can't believe Michelle Bachmann was asked if, as President, she would be submissive to her husband!). The answers were scripted as the candidates ripped off catchy sound bites in hopes of earning a headline on the Drudge Report. Romney said he won't eat Obama's dogfood. I wonder how much time he and his consultants spent coming up with that one?

Here's my impression of the candidates:

In general, they were weak. I thought to myself several times as the debate progressed: Is this the best we got?

Honestly, you have to hand it to Barack Obama. He is more comfortable in his skin and in his philosophy than any of the eight on stage last night. Obama has been steeped in Marxist thought since birth. He's personable and likeable. Except for a streak of obnoxious arrogance, Obama comes across as an ordinary guy who really believes what comes out of his mouth. When he responds off the cuff to individuals like Joe the Plumber the Marxist/leftist tripe he spouts seems natural and from the heart. This is the sincerity and genuineness that Americans are drawn to. Frankly, the Republicans on stage last night don't measure up.

Romney, the supposed frontrunner, is a man who would say anything to get elected. He did so in Massachusetts several years ago and now, when confronted, he must eat his words. He does so smoothly and without hesitation. Romney reminds me of his father, an establishment politician who talks a good game but in the end is a rudderless pragmatist, a stereotypical big government, elitist, compassionate conservative. You want another George Bush, vote for Romney.

Bachmann is a puzzle. I like her as a person, but I don't know if I'd like her as President. She reads von Mises at the beach, so her philosophy and economics are sound. However, she is a bit iconoclastic. Does she pick her fights because she believes in them or because she's trying to please her minions? She's a populist who, I think, listens too much to her "expert" advisors. That's a dangerous combination in any executive, much less a President. In the end, she's weak.

Pawlenty is Romney lite. And that's really, really lite.

Santorum is Bachmann heavy, in that he is a bigger enigma than she is. He speaks with sincerity, but is a sincere televangelist really what the country needs in a President? When the chips are down, I want a President who looks to the Constitution for guidance, not the bible. Beware of candidates prepared to do what is "right" come hell or highwater.

Ron Paul is Santorum heavy. He merely subscribes to the religion of libertarianism rather than Christianity. Don't misunderstand. Christians and libertarians are, in general, good people but they can be insufferable. If I were marooned on a desert island with a single companion, I wouldn't mind that companion being Santorum or Paul. On the other hand, it would have to be a huge island! I don't want a President who is so driven by ideology he can't see the forest for the trees. Both libertarianism and Christianity are flawed ideologies. On a desert island those flaws are inconsequential. However, those flaws in the mind of the most powerful politician on earth could be fatal.

Herman Cain is a nice guy and a great businessman. He'd make a poor President. He'd be the conservatives' Jimmy Carter. In business, the job of the chief executive is to identify problems and solve them. Not so in government. I don't want a problem-solver in the White House. I want a dismantler, someone who is inclined to say: This is not a problem government should solve. It is a problem best solved by the people. Therefore, I recommend we do away with such and such agency or program. Ron Paul is the dismantler type I want, but Paul doesn't know when to stop dismantling.

Gingrich and Huntsman were the most sincere and genuine candidates on the stage last night. Gingrich's problem is that he is a policy wonk, albeit a sincere and genuine one. I tend to trust his instincts, but too often his instincts are subsumed by wonky policy and slick program recommendations that are so convoluted they'd make Rube Goldberg proud. If Dr. Frankenstein could transfer Gary Johnson's sincere, genuine, level-headed management style and philosophy into Gingrich's personality, we'd have a winner.

Huntsman showed me something last night. I distrust his philosophy and his tendency to play ball too enthusiastically with the other side, but he talked a good game last night and showed the sincereity and genuineness we need in a candidate. Perhaps Huntsman is so much the gentleman that I've been mislead about his convictions. I'll keep my eye on him.

In the meantime, I think the Republicans must keep searching for the standard-bearer they need to defeat the Obama machine. This standard-bearer must be fearless, quick-witted, humble, humorous and a great communicator. He or she must be an experienced executive with sound judgement, an attachment to old school, traditional American culture and an instinctual love of property, freedom and peace.

Know anyone like that?


Monday, August 8, 2011

Managing The Economy Easier Said Than Done

Through the Drudge Report we get this: "Fed forced to consider fresh stimulus." The article outlines four or five possible courses of action that the Fed could take to "do something" to improve the economy.

I'm not going to take the time to go over each "something." Suffice it to say that any "something" the Fed does will only create another set of circumstances that requires it to do another "something" and another and another.

Economic theory and practice proves that a free market which is unhampered, i.e., free from any kind of governmental intervention whatsoever, most efficiently satisfies the desires of the consumer. The problem is that an unhampered free market does not produce success stories only. The process of serving the consumer takes it toll on producers that are not up to par. Thus, failure as well as success is the mark of an unhampered free market. And the problem with failure is that many self-important entrepreneurs do not suffer failure well. In fact, they don't accept it. They will bribe, cheat and steal in order to avoid failure. And plenty self-serving politicians are eager to accommodate them.

It's time the Fed and the federal government take their hands completely off of the economy. Allow the market to work...unhampered. Allow entrepreneurs to experience fantastic success and abject failure. As a consequence, consumers will be best served and prosperity will return to all Americans willing to pursue it.

Saturday, August 6, 2011

Reid Is Not An Honorable Man

I am through granting Senate Majority Leader Harry Reid the benefit of the doubt. Ignorance of economics cannot explain what this man says and does. He is a self-serving, partisan hack. He is not an honorable man. If I were introduced to him, I would not shake his hand. I would be tempted to spit in his face.

The country is teetering on the edge of a double-dip recession and  running a budget deficit of about $100-billion per month. Standard and Poors has just downgraded the country's credit rating for the first time in history. And Reid's response? A call for "closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners."

Reid's statement also said: "This makes the work of the joint committee all the more important, and shows why leaders should appoint members who will approach the committee’s work with an open mind - instead of hardliners who have already ruled out the balanced approach that the markets and rating agencies like S&P are demanding."

(For those who don't speak "Washingtonese," a "balanced approach" means an increase in taxes.)

Even Keynes advised against raising taxes in a recession. Even if all the "giveaways" Reid mentions were ended, the resulting increase in revenue would barely make a dent in the deficit.

Reid has no intention of cutting spending. All the "spending cuts" his Debt Crisis plan contained were illusory, budgetary tricks meant to look and sound like cuts but in reality are merely tiny reductions in spending increases.

The US deficit cannot be brought into balance without severe and real reductions in spending in every area of government, including social security, medicare and medicaid. We all know it. Harry Reid knows it. He is an arrogant, power-corrupted statist.

Virtually every entrepreneur in the US has had to deal with a slowing economy at some point in his career. I was in business for almost 20 years. I had to deal with the recession of 1990. Business owners take their cues from the market. When sales are going strong and business is booming, entrepreneurs expand production and hire sales people. When sales contract, entrepreneurs are forced to pull in their horns, which means get mean and lean. This means cutting the fat, i.e., all unnecessary or unsustainable expenses and working harder with what is left. This often means laying off unneeded production and sales staff. Only a foolish business owner, faced with a drastic slowdown in sales, would expand production and hire more workers in a vain attempt to "raise revenue." Business owners know that spending is the only category they can directly control and that any savings in spending goes directly to the bottom line.

Yet, Harry Reid is not interested in spending cuts. His prescription for America today is increased revenue. He is apparently of the belief that the US government doesn't spend enough!

Anyone who tells me that the federal government has no fat to cut and cannot get lean and mean is a damned liar or a moron or he is sleep walking through reality.

Harry Reid is a damned liar.

UPDATE: Reid's statement mentioned the "balanced approach that the markets and rating agencies like S&P are demanding." Well, as it turns out, S&P is not demanding more taxes. This from Weasel Zippers:

The decision by Standard & Poor’s to downgrade the U.S. credit rating to “AA+” at once laments the possibility that cuts to entitlement programs will not materialize and the decreasing likelihood of new tax revenues. But it appears to give more weight to the need for more spending cuts, as it warns that a further credit rating downgrade is in the cards if the U.S. does not trim spending.
In contrast, while the report indicates that new tax revenues would help mitigate the debt crisis, failing to find these revenues does not immediately put the U.S. at risk of another downgrade.
Besides being a liar, Harry Reid is a jerk and a moron.

Who's To Blame?

The recent farce, known as the Debt Ceiling Crisis, was typical Washington spin and pin. Supposedly, politicians struggled for months to do the right thing: reduce spending and decrease the debt. In reality they spun abstruse schemes that would allow them to have their cake and eat it too, all the while pinning blame for the trumped up “crisis” on political rivals. In short, nothing has changed. It’s still business as usual in Washington, DC.

But surely someone must be truly to blame for the sorry state of this country’s finances. Is it a malevolent President? A crooked, self-serving Congress? An engorged Washington bureaucracy feeding at the trough of government largesse? The infamous, favor-seeking corporate lobby? The biased and incompetent mainstream media?

No. In truth all the above are mere henchmen of the true villain of our national melodrama: ourselves. This country, despite its slide into statism, is still a democracy. The President, Congress and their hangers on are in Washington for one reason: we put them there; we allow them to stay there. In short, in the United States we get the government we deserve.

If lovers of property, freedom and peace are looking for someone to blame for the political defeat of their principles, they should start by looking in the mirror. How often have we rationalized not voting? By forfeiting our vote we cede political power to the other side. We invite the collectivism, regulation and conflict that the other side is eager to visit upon us.

There is a sizeable segment of Americans who are ignorant of the principles of property, freedom and peace. Such individuals are not ideological. They live in a perpetual fog of fear and uncertainty. They remind me of savages who believe that their fate is in the hands of some inscrutable, evil force that must be appeased lest they suffer sickness, accident or famine. Totally unaware of how reality works, they turn to their protectors in government who promise to care for them from cradle to grave. They willingly trade property and freedom for promises of welfare and security never realizing that such a course must inexorably lead to the loss of both.

It is incumbent upon us to educate these sleepwalking Americans on the principles of property, freedom and peace every chance we get. When they spout nonsense, we must challenge them – no matter who they are, no matter what the consequence. 

There is another sizeable segment of Americans who despise the principles of property, freedom and peace. These rabid ideologues believe that American society is akin to a living on a lifeboat. As a result, they conclude that resources, goods and services must be shared and rationed so that each individual has an equal chance of survival. The believe that any individual who refuses to share what he possesses with others, whether it be food, water or productive talent and ambition, is a threat to the survival of all. They believe such “uncooperative” individuals must be censored and controlled, in short, forced to go along, to live according to the will of the majority. They are willing to cede the use of force to a strong and charismatic “Captain,” a leader who can and will maintain harmony, law and order by threat if possible, by violence if necessary.

The only problem with this analogy is that it is false! We do not live in a lifeboat. Cooperation among people in society is a voluntary human action. Involuntary cooperation is a contradiction in terms.

Again, when we are confronted by such ideologues we must confront them with the truth. If they continue to spout their party line, then we must stand our ground and disassociate ourselves from them.

During the spectacle of the “Debt Crisis,” pundits of all stripes were fond of berating representatives of The Tea Party for not compromising. Tea Partiers were called terrorists and accused of holding the country’s economy hostage to their rigid demands.

Pray tell, how does someone who believes in private property and individual liberty compromise with a “lifeboat progressive” who believes in wealth redistribution and intense government regulation of the individual? How does someone who believes in peace compromise with the Captain of the Lifeboat who is eager to rule by force, violence and fiat?

Please, folks, stand on principle! There is no such thing as property that is a little bit private, or freedom that is a little bit repressive. The only sane rule for society is: What's mine is mine and what's yours is yours! And the only way that what's mine can become yours is by means of a free and uncoerced trade. If any man accepts that another man has some imagined "right" to violate the principles of property and freedom in whatever small way, he has conceded the "right" of the thief to steal and the “right” of the dictator to dictate.

"But all property cannot be absolutely private," screams the collectivist. "And all individuals cannot be absolutely free. We can't have anarchy. We must have rules and a police force!”

Don't fall for such sophistry! Yes, voluntary cooperation in society is impossible without self-imposed and self-enforced taboos against murder and theft, but does this fact of reality prove that involuntary cooperation is possible? Does it justify the imposition on the people by means of force and violence any rule – no matter how banal or arbitrary?

When does a society based on voluntary cooperation become a society based on involuntary servitude? I say that tipping point is reached when citizens of that society compromise away the principles of private property and freedom.

Why are we living in a political free-for-all, wherein each individual sides with a particular political faction to wrest goods and services from individual members of another political faction? Why in these United States is there no peace, only political conflict and turmoil?

The answer is obvious. The principles of property and freedom are the only means to the ends of societal harmony and peace and, as lovers of these principles, we have compromised away both once too often.