Not exactly the catchiest title in the world I know, but this is simply a reflection on 2008. Anything and everything about 2008. Hopefully it won't get to heavy, just some of my own personal thoughts on this year. Not trying to shake the heavens or get anyone thinking too deeply here; its the hollidays after all! We saw many firsts in 2008, first time the DOW lost 777 points in one day; the first black president was elected to the white house in a landslide. The first time the government bailed out both Wall Street and the auto industry in the same year. First time gas reached over 4$ a gallon. The first time we had a serious female contender for the white house, in Sen. Hillary Clinton. The first time an athlete won 8 gold medals in one Olympics, the Super Hadron Collider was finally operational and, this is probably one of the most important ones for me, the PlayStation 3 FINALLY released an exclusive title I could be proud of in Little Big Planet! Of course there were many more big firsts, I'm sure many of which I am unaware of. However with 2008 drawing to a close, and my inevitable 2 day hangover that seems to always accompany the new year, I think it is important to say goodbye to 2008 the right way, and get hammered.
We have seen many great things this year. Michael Phelps winning 8 gold medals at the Olympic games was the highlight for me. We all seemed to take a break this summer. Wall Street had not yet totally crashed, the auto makers weren't down on their knees in their 5,000$ Armani suits asking for a bailout and we all seemed to come together for a couple of weeks and rejoice in the glory that is competition. Of course my Cleveland Indians couldn't get back to the playoffs, and the Browns were an abysmal failure...again, but for those few weeks in August we all cheered on our country's athletes. After the games, everything seemed to go down hill. The economy, the bailouts, the debt etc etc etc. If you have a pulse and have not been living under a rock the past year I'm sure you are all well aware of this. So this begs the question, what does this all mean? Where do we go from here?
Well, and this my sound cynical, I have very little optimism about where we are headed. I see the policies enacted by congress, the politicians grabbing more power, and Bill Cowher deciding not to come to the Browns next year as all signs that we are in big trouble, especially for those who are partial to football teams from northeastern Ohio. Most people do not want to change the game, they simply think that they can manage the game better. In fact with all the recent firings of many NFL head coaches maybe the leaders could look to the NFL for some guidance. In that line of work, if you suck you don't get to stick around; well unless you are the head coach of the Buffalo Bills. Simply look at how the Atlanta Falcons turned their team around, now that my dear readers is "change." However, with what I see our nation doing, ie more of the same and in areas of change its change for the worse, I am not optimistic at all. Maybe this will spark a counter movement where the libertarian wing of the conservative party picks up some steam. So in a way I'm glad to see 2008 end, but I'm also very concerned for 2009 and beyond. What if Wall Street fails again? What of the auto makers ask for more money? What if there is another terror attack? What if the Browns don't get Eric Mangini or another quality head coach? What if the PlayStation 3 can't deliver on its promises for its games in 2009!? These are all questions that keep me up at night tossing and turning in my luxury 10x12 dorm room.
However these are also questions that I can not answer, no one can really. We just have to do our best. Fearing these things is not practical. As Ovid once said "It is foolish to fear that which can not be avoided." So embrace the new year and all the trials and tribulations that are bound to come with it, political or otherwise. Yes I know its trite, unoriginal and overused advice; but I see so many people not listening to it. I intend to embrace this new year with my eyes open, and ready to tackle its problems. Of course my ability to do so won't be untill sometime on January 2nd or 3rd. Happy New Year everyone; peace and goodwill.
In Liberty (and beer),
Mr. Jefferson
"That government is best, which governs least."
-Thomas Paine
Wednesday, December 31, 2008
Saturday, December 20, 2008
America Embraces John Maynard Keyens
Things run in cycles I suppose. The 19th and beginning of the 20th Centuries saw a move towards liberalism and for the most part embraced relatively free markets. The bulk of the 20th Century however saw an explosion of statism and big government. It was not untill the Berlin Wall fell near the end of the century that most of Europe began to liberalize. Now, nearing the end of the first decade of the 21st Century, it seems as though we are headed back to the times of central plannng that people such as Hitler and Stalin were such big fans of. What makes me believe this is so? Well simply look at the actions taken by the United States government and the majority of the people voting in a liberal radical like Barack Obama. I do not believe that America will take a similair path socially that Germany and the Soviet Union did, and I by no means beleive that Obama would engage in such actions. However, I do think that he will hinder, and do so severly, our economic freedom. And simply be proxy this will to some degree affect our social freedom as well.
America has a problem, a spending problem. For some reason the answer to our economic problems proposed by most economists, analyists, "experts" and government officials is to spend. We spent too much, our economy is in a hole so the answer is....more spending?? I've heard some analyists actually say things such as how Fed Chairman Ben Bernanke debacing our currency is "helping us." I've also heard some analysist say that they agree that spening more now will be a temporary fix but hey thats a problem to deal with later on. This is exactly the problem. Most politicians, such as presidents, can not see past their own term nor do they care what happens past their own term in office. They only care about rhetoric and being re-elected.
Simply look at the root causes of almost all of our problems. We spend too much over seas to maintain our empire, billions every month. We spent to much to gurantee home ownership now banks, financial institutions and lenders are bankrupt and people have been evicted. Our economy is a service heavy economy where we do not produce or make anything. The answer to our problems is not more spedning, it is producing and saving. Our parents and grand parents did not use credit to buy clothing, or auto mobiles. They saved and produced untill they could afford those items. Credit is not all bad, sometimes loans and credit are necessary. However saving and producing have to be the main factor or else the economy becomes unstable. This process of government spending to "stimulate" the economy comes directly from Keyens. It was an absurd idea in the 1930's and time has not sweetened it.
Peter Schiff made a great anaology in his book "Crashproof: How ot Profit From the Coming Economic Collapse." He said "Imagine there are 3 people stranded in an island. One is Japanese, one is Chinese and the last one is American. They decide to divide the work load in order to survive. The Japanese person hunts, fishes and forages for food. The Chinese person builds the shelter and provides other needs that come with housing, such as chairs, tables etc. The American is assigned the role of eating. The modern economists sees this and says, hey good thing the American is there. He makes everything go! Without him the two other men would have nothing to do with their food and shelter! This is absurd of course. The Chinese and Japanese men will soon realize that the American simply consumes and does not produce. Soon they will stop providing for him. This is how the American economy is structured."
Mr Schiff is absolutely right. We keep borrowing, spending and consuming like this and soon the countries that loan us money will stop doing it, they will realize we can not afford to pay them back and that they can make just as much money selling to their own citizens. China has over 1billion people, America has only around 300 million. Then we will have to tax our own citizens into the dirt and print more of our own money, which will destroy us even more. This tactic of government spending and big government policies is what is bankrupting America. 700 billion for Wall Street, 17 billion to the auto industry, billions over seas, billions in domestic spending, high corporate taxes, high income taxes, high property taxes etc etc etc. Now Obama promises a "Second New Deal." You know what deal I want and a lot of Americans want? The deal where we get to keep our money and are not punished for being successful. The deal where we tackle big government and get the government off our backs and out of our pockets! That deal is something that has not been tried in quite a long time, and I believe it is over due. This idea that politicans can simply give us things is insane. Simply because they pass legislature or pass a bill does not guarntee anything. This rhetoric about job creation, education and anything else in the grab bag of promises these politicans promise is nuts. Politicans and the government DO NOT create jobs, hell they do not create anything! Business owners create jobs. Risk takers who want to make money are the innovators and creators not politicans. They promise and declare to give us all these goodies and they can not do a damn thing about any of them. They are banking on the fact the we believe that by simply declaring or wishing something we can get it. The question should be "should the government do this, what can I do for myself?" Not "What can the government do for me?" Americans need to become more self reliant. However in light of the recent election I am not optimisitic that any real "change" is coming. Rock the vote indeed.
In Liberty,
Mr. Jefferson
"Hell hath no fury like a bureaucrat scorned."
-Milton Friedman
America has a problem, a spending problem. For some reason the answer to our economic problems proposed by most economists, analyists, "experts" and government officials is to spend. We spent too much, our economy is in a hole so the answer is....more spending?? I've heard some analyists actually say things such as how Fed Chairman Ben Bernanke debacing our currency is "helping us." I've also heard some analysist say that they agree that spening more now will be a temporary fix but hey thats a problem to deal with later on. This is exactly the problem. Most politicians, such as presidents, can not see past their own term nor do they care what happens past their own term in office. They only care about rhetoric and being re-elected.
Simply look at the root causes of almost all of our problems. We spend too much over seas to maintain our empire, billions every month. We spent to much to gurantee home ownership now banks, financial institutions and lenders are bankrupt and people have been evicted. Our economy is a service heavy economy where we do not produce or make anything. The answer to our problems is not more spedning, it is producing and saving. Our parents and grand parents did not use credit to buy clothing, or auto mobiles. They saved and produced untill they could afford those items. Credit is not all bad, sometimes loans and credit are necessary. However saving and producing have to be the main factor or else the economy becomes unstable. This process of government spending to "stimulate" the economy comes directly from Keyens. It was an absurd idea in the 1930's and time has not sweetened it.
Peter Schiff made a great anaology in his book "Crashproof: How ot Profit From the Coming Economic Collapse." He said "Imagine there are 3 people stranded in an island. One is Japanese, one is Chinese and the last one is American. They decide to divide the work load in order to survive. The Japanese person hunts, fishes and forages for food. The Chinese person builds the shelter and provides other needs that come with housing, such as chairs, tables etc. The American is assigned the role of eating. The modern economists sees this and says, hey good thing the American is there. He makes everything go! Without him the two other men would have nothing to do with their food and shelter! This is absurd of course. The Chinese and Japanese men will soon realize that the American simply consumes and does not produce. Soon they will stop providing for him. This is how the American economy is structured."
Mr Schiff is absolutely right. We keep borrowing, spending and consuming like this and soon the countries that loan us money will stop doing it, they will realize we can not afford to pay them back and that they can make just as much money selling to their own citizens. China has over 1billion people, America has only around 300 million. Then we will have to tax our own citizens into the dirt and print more of our own money, which will destroy us even more. This tactic of government spending and big government policies is what is bankrupting America. 700 billion for Wall Street, 17 billion to the auto industry, billions over seas, billions in domestic spending, high corporate taxes, high income taxes, high property taxes etc etc etc. Now Obama promises a "Second New Deal." You know what deal I want and a lot of Americans want? The deal where we get to keep our money and are not punished for being successful. The deal where we tackle big government and get the government off our backs and out of our pockets! That deal is something that has not been tried in quite a long time, and I believe it is over due. This idea that politicans can simply give us things is insane. Simply because they pass legislature or pass a bill does not guarntee anything. This rhetoric about job creation, education and anything else in the grab bag of promises these politicans promise is nuts. Politicans and the government DO NOT create jobs, hell they do not create anything! Business owners create jobs. Risk takers who want to make money are the innovators and creators not politicans. They promise and declare to give us all these goodies and they can not do a damn thing about any of them. They are banking on the fact the we believe that by simply declaring or wishing something we can get it. The question should be "should the government do this, what can I do for myself?" Not "What can the government do for me?" Americans need to become more self reliant. However in light of the recent election I am not optimisitic that any real "change" is coming. Rock the vote indeed.
In Liberty,
Mr. Jefferson
"Hell hath no fury like a bureaucrat scorned."
-Milton Friedman
Wednesday, December 10, 2008
The Big 3 Bailout Failout
I believe it was the 9th Commandment that said "Thou shalt always have the Big 3 in operation." Of course I may be remembering that incorrectly. This latest proposal however would surely make one believe that it was written in scripture or in stone that the Big 3, which consists of GM, Ford and Chrysler, must never be allowed to fail. I have a very simple question, why? Why not let these companies fail? Besides the amount of many they are asking for, over 20 billion $ will only keep them afloat until February anyway. All three of these companies are losing around six billion $ a month. Yes that's correct, six billion a month! What good is 20 billion? There are a few very simple routes that the government and the CEO's of these companies could pursue. First, let them go bankrupt. Pretty simple really. Now bankruptcy does not mean death. For example, Kmart, Continental Airlines, Delta Airlines, United Airlines, Fruit of the Loom, Texaco, Toys R Us etc all declared bankruptcy. However these companies didn't disappear. They were simply restructured, reorganized and put under new and better management. So this rhetoric about millions of jobs being lost is most certainly not true. Bankruptcy can be a good thing. It shows people that they are doing the wrong thing. Henry Ford had plenty of failures before he started Ford Motor Co. What if Ford had been bailed out after his first failure? Failure teaches people, and those who have the drive to succeed can learn from their mistakes. That is how progress is made. Sometimes failure is and should be an option so that we can learn from it and become better people because of it.
Another option is to cut short term costs. This is the option that most appeals to me. There is one simple way to cut short term costs; tell the union, in this case the UAW union, that their contracts are null and void. Yes that is correct, tell the UAW one of the strongest unions in the country that their contracts are being suspended. Now the economy as a whole is definitely having a huge negative effect on the Big 3. However I believe that the long term cause of the problems of the Big 3 consist of two major problems. These problems are the UAW and the absolute idiocy of the management of these companies. First though is definitely the UAW. Let us examine this further. How come companies such as Honda, Toyota, Nissan and others are not asking for a bailout? If it truly is just the economy's fault, claims Ron Gettelefinger head of the UAW, than all these other car companies should be at risk as well. Nissan, Honda and Toyota have all recently opened up new plants here in America. In fact Handa just recently hired over 900 Americans to work in one of their car manufacturing plants. So obviously the economy is not the only cause of the Big 3's problems. The main problem is the UAW. According to Daniel J. Ikenson, Assistant Director of the Cato Institute, "The average compensation for an hour of work at GM is $74. While at Toyota it's about $47." In fact economist Dr. Peter Morici has said that "Honda pays an average $18.41 and hour." He also argues that along with the absolute insane wages and benefits that the Big 3 offer, in order to make money they have to cut corners. Cutting these corners screws us, the consumer. They use cheaper materials for things such as upholstry, and it shows. The quality of GM car is nowhere near the quality of a Nissan or Handa car. Much of this is due to the outragious and I would argue criminal demnads made by the UAW.
For example, the UAW has entities called Jobs Banks. What are Jobs Banks? They are buildings that the UAW forced the Big 3 to create where laid off, or ex Union workers for any number of reasons go to get paid. What do they do there? Nothing, absolutelty nothing. Many of them simply sit around and watch TV or read magazines. Many times they have the continue to pay these idel employees for as many 4 years after they are let go. This actually made headline news on 20/20. I will link at the end of this article to that story and anyone who is interested can watch it. It is only around 5 mintues long.
A final option that they could pursue is trying to sell their company to a successful company. However with the power of the UAW hindering these companies, they may be hard pressed to find a company who is willing to take them over so quickly. They could attempt to weaken the union but doing this is easier said than done. The CEO's are also to blame for this. They made cars that consumers did not want. They also have a less effecient assembly line than companies such as Honda or Toyota. Handa and Toyota CEO's didn't waste money on private jets either. These CEO's need to be held responsible for their actions and their mismanagement of these companies.
The simple fact of the matter is this; no company is "to big to fail" and that the American tax payers should not be on line to bail these companies out. With the recent Wall Street bailout, the biggest redistribution of wealth in this country's history, these auto companies are thinking that maybe now they can grab a slice of that pie. To them I have one thing to say, the buck stops not here with the taxpayer but with YOU; deal with your own problems.
-In Liberty,
Mr. Jefferson
"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all."
-Frederick Bastiat.
Here are a few links to the video sources I quoted in the article
http://www.youtube.com/watch?v=73c-1YwEPH4
http://www.youtube.com/watch?v=SEPJFWWprMo
Another option is to cut short term costs. This is the option that most appeals to me. There is one simple way to cut short term costs; tell the union, in this case the UAW union, that their contracts are null and void. Yes that is correct, tell the UAW one of the strongest unions in the country that their contracts are being suspended. Now the economy as a whole is definitely having a huge negative effect on the Big 3. However I believe that the long term cause of the problems of the Big 3 consist of two major problems. These problems are the UAW and the absolute idiocy of the management of these companies. First though is definitely the UAW. Let us examine this further. How come companies such as Honda, Toyota, Nissan and others are not asking for a bailout? If it truly is just the economy's fault, claims Ron Gettelefinger head of the UAW, than all these other car companies should be at risk as well. Nissan, Honda and Toyota have all recently opened up new plants here in America. In fact Handa just recently hired over 900 Americans to work in one of their car manufacturing plants. So obviously the economy is not the only cause of the Big 3's problems. The main problem is the UAW. According to Daniel J. Ikenson, Assistant Director of the Cato Institute, "The average compensation for an hour of work at GM is $74. While at Toyota it's about $47." In fact economist Dr. Peter Morici has said that "Honda pays an average $18.41 and hour." He also argues that along with the absolute insane wages and benefits that the Big 3 offer, in order to make money they have to cut corners. Cutting these corners screws us, the consumer. They use cheaper materials for things such as upholstry, and it shows. The quality of GM car is nowhere near the quality of a Nissan or Handa car. Much of this is due to the outragious and I would argue criminal demnads made by the UAW.
For example, the UAW has entities called Jobs Banks. What are Jobs Banks? They are buildings that the UAW forced the Big 3 to create where laid off, or ex Union workers for any number of reasons go to get paid. What do they do there? Nothing, absolutelty nothing. Many of them simply sit around and watch TV or read magazines. Many times they have the continue to pay these idel employees for as many 4 years after they are let go. This actually made headline news on 20/20. I will link at the end of this article to that story and anyone who is interested can watch it. It is only around 5 mintues long.
A final option that they could pursue is trying to sell their company to a successful company. However with the power of the UAW hindering these companies, they may be hard pressed to find a company who is willing to take them over so quickly. They could attempt to weaken the union but doing this is easier said than done. The CEO's are also to blame for this. They made cars that consumers did not want. They also have a less effecient assembly line than companies such as Honda or Toyota. Handa and Toyota CEO's didn't waste money on private jets either. These CEO's need to be held responsible for their actions and their mismanagement of these companies.
The simple fact of the matter is this; no company is "to big to fail" and that the American tax payers should not be on line to bail these companies out. With the recent Wall Street bailout, the biggest redistribution of wealth in this country's history, these auto companies are thinking that maybe now they can grab a slice of that pie. To them I have one thing to say, the buck stops not here with the taxpayer but with YOU; deal with your own problems.
-In Liberty,
Mr. Jefferson
"Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all."
-Frederick Bastiat.
Here are a few links to the video sources I quoted in the article
http://www.youtube.com/watch?v=73c-1YwEPH4
http://www.youtube.com/watch?v=SEPJFWWprMo