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The Question is, “What’s the Answer?” September 26, 2013

Posted by Dr. Robert Owens in Politics.
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In politics and economics as in everything in life there always seems to be more questions than answers.

Some answers previously shared:

Politically speaking, I have said before in these columns that I no longer consider myself to be a conservative because there is nothing left to conserve.  Instead I consider myself a Liberal in the classical sense: in the tradition of Jefferson and Paine a believer in human liberty.  The once proud name of Liberal has been coopted and fundamentally transformed by the Socialists who have followed the advice of one of their early leaders, Norman Thomas, “The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.”

I say it is time to reclaim the name.

In the economic realm, I am unabashedly a believer in capitalism.  The reason for this is that it is the only system ever devised by man that requires freedom as a foundation for it to exist.  Every other economic system ever tried is a centrally-planned command system.  The king, the dictator, or the politburo decides how many widgets the country needs and that is how many widgets the country gets and everyone works at the widget factory.

As a child of the Cold War who had Marx shoved down his throat by Socialist teachers from grade school through college, I rebelled when one of my History professors told me that economics was the lynchpin of History.  It wasn’t until after the fall of the Evil Empire that I was able to appreciate this truth.  It is interesting to note that before we adopted the German style of College education in the 1890s Economics, History and Political Science were all one discipline.  How can we understand any one of them without the others?  One legged stools do not stand very well.  Information in a vacuum is still a vacuum.

So what is the question?

How can America continue to exist politically as a Republic with a constitutionally limited government dedicated to personal liberty, economic freedom and individual opportunity if our central government destroys competition?

The support of competition does not make someone an anarchist as Senate Majority Leader Harry Reid accuses.

The use of competition as an organizing mechanism in society precludes the use of certain types of coercive regulations.  However, it does not preclude the use regulations or guidelines.  There are important reasons why the negative aspects of this statement have been stressed by the advocates of competition while the positive have been neglected by its opponents.

It is necessary that all parties in the market place must be free to buy and sell at any price which they can agree on. It is also necessary that everyone should be free to produce, sell and buy anything that can be produced or sold.  It is also necessary that everyone has equal and free access into the trades.

Any attempt to control or regulate prices or quantities of commodities deprives competition of its ability to bring about the effective coordination of individual efforts because price changes then are no longer able to correctly act as a reliable guide for an individual’s actions.

This is not an iron-clad rule.  As long as any restrictions placed on all potential producers affect all producers the same and are not used as an indirect method for controlling prices and quantities.  All such restrictions impose extra costs however if they are imposed evenly competition can survive if not thrive.  For example, it is generally agreed that regulations to control the use of poisonous substances, to limit working hours, or to require sanitary conditions are both desirable and necessary.

The only question here is: are the social advantages gained by these regulations greater than the economic costs they impose.  Neither is the existence of social services incompatible with freedom as long as their organization and operation is not designed to restrict competition.

Thus it is shown that the advocates of competition and economic freedom are not anarchists demanding a Laissez-faire anything goes free-for-all.  They admit the need for safety and agree that as long as things are equal things are fair.

The fairness of competition is shown in one of its primary foundational principles: that the owner of private property benefits from all the useful services rendered and is liable for all the damages caused to others by its use.  When it becomes impossible to make the enjoyment of certain services dependent on payment or if the damages from its use are deflected then completion is ineffective as a social organizer because the price system has been disrupted.

Thus both restrictions on the use of property and bailouts which transfer the cost of failure from those who made the bad decisions to the taxpayers cause the market to become unhinged from reality and the creature of government direction.  We see licenses, permits, and other regulations control who can engage in what economic activity.  Look at the stock market.  Does it rise or fall because of innovation?  Do the efforts of people to create and market new products lead the DOW to new heights?  No.  The market rises and falls on whether or not the Fed is going to continue pumping fiat money into the system.

The rules of the game have been so distorted by the government that honest and open competition is almost impossible.  This is why the underground economy flourishes, because it the only place where free competition still exists.  And people will always yearn to be free.  No matter how governments try to chain their citizens down with webs of regulations and nets of laws Gulliver will always struggle and strain against the ties that bind until he breaks free.

It is obvious to all that President Obama has succeeded in his goal of fundamentally transforming America.  For example, his massive stimulus that paid off campaign debts to unions and donors and his mountains of new regulations on everything from banking to coal to student loans. There is the never-ending FED pump which just keeps pouring more money into an already bloated bubble in an effort to make a socialized crippled economy at least look like it works. And of course there is Obamacare which effectively socializes 1/6 of the entire economy.  The combination of these policies breaks the back of competition and sound the death knell of the great experiment in freedom begun in 1776.  Drip by drip, inch by inch we have been moved closer to the goal.  Now it is the Health Care take-over and the flood of fiat currency that are leading to a terminal case of bankruptcy, a systems collapse, and as our Progressive leaders hope the dawn of a new day.

When the invisible hand has been tied and competition weighted in favor of government chosen winners and losers, when the electoral game has been stacked in favor of a two headed Progressive Republicrat party of unlimited power, pride and ambition, when equal justice under the law applies only to citizens and not to officials, the Question is, “What’s the Answer.”

That answer might be, “How long?”

How long before we the American people demand that our nation founded in revolution against tyranny reject the empire and restore the Republic?  We can all see that the emperor has no clothes.  We all know the deck has been stacked, the game rigged, and the winners chosen.  How long before we demand that we are allowed to live in a nation where we will be judged by the content of our character and not by our membership in a protected or favored group, our political contributions or whether or not we have saluted the party line?

As we watch our beloved nation transformed it might be well to remember what our second President John Adams once said, “a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.”  Then again he also said, “Remember democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”

Dr. Owens teaches History, Political Science, and Religion.  He is the Historian of the Future @ http://drrobertowens.com © 2013 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens

 

If We Blow It Up Again It Will Blow Up Again April 18, 2013

Posted by Dr. Robert Owens in Politics.
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Back in 2007 when I was speaking of the crash to come I noted that we really didn’t have to worry because our fearless and infallible leaders intuitively know the remedy.  When the bubble bursts they will blow up another bubble.

The absolute triumph of Keynesian economics in America and the West has never been more on display than during our rocky journey through the Great Recession.  An economic contraction which our leaders say is over and those of us who work and live in flyover country know is still grinding us down to the new normal.  TARP was going to save the economy.  It didn’t.  President Obama’s porkulus stimulus was going to save the economy.  It didn’t.  QE 1 and QE 2 were going to save the economy.  They didn’t.

Then along comes QE 3 with an open ended commitment to pump 85 billion per month into the economy, and presto-changeo alakazam and miraculously the stock market is breaking new highs and the real estate market is beginning to revive.  Unemployment keeps inching down and even the Neocons over on Fox are telling us the cratered economy is showing signs of life.  It turns out if you magically create trillions of dollars and drop them from helicopters across the country there seems to be more money blowing in the wind.  As one very profitable prophet once said, “It doesn’t take a weatherman to know which way the wind blows.”

Hang on to your hats because a booming economy has to become part of the Obama legacy so that the transition to a centrally-controlled economy can ever be hailed as the prescription for success.  Just as the booming economy of the 90s is constantly brought up as “The prosperity we experienced during the Clinton years” so to if any politician ever attempts to restore economic freedom, or when there is another crash it can be blamed on too much regulation, a pathological fear of deficits, and return to the old days of greed and avarice.

Those of us old enough to remember the Clinton years should know that it was the peace dividend and the Tech Boom Bubble which fueled the prosperity of the 90s.  We should also remember that it was a phony peace dividend since our military was engaged in interventions around the world during Clinton’s depredations in the oval office.  We should also remember that the Tech Boom flew through the air with billions in stock values for companies that made no profit and eventually delivered not prosperity but the crash of 2000.

Our Constitution was not written to be not a living document that evolves over time.  The words were never meant to take on new meanings with every passing generation.  The accumulation of case law and judicial proclamations was not meant to supplant the written political contract that the Sovereign States individually decided to ratify.  However, contrary to the oft stated desires of the Founders of our nation and the Framers of the Constitution the United States has evolved into a behemoth bureaucracy.  In all bureaucracies instead of the best and the brightest rising to the top those who learn to pull the levers the best end up controlling the machine.  Often the official leaders are merely telegenic front men for the powers behind the throne.   The grifters who have gained power through elections filled with ineligible voters, outright fraud, gerrymandering, and a two party system where-in Progressives control both parties use the living document ruse to turn the Constitution into a dead letter.

Crony capitalism has replaced free enterprise.  Just watch the big gaming table at the New York Stock Exchange.  Its volatile swings are dictated not by innovation, profits or production they are instead moved by real or projected government actions.  Will the Fed keep creating money out of thin air?  Will the EPA impose Cap-N-Trade?  Will the imperial presidency use a foreign adventure to grasp more power?  The banks act as willing accomplices of the Fed borrowing money at 0% interest and buying Treasuries at 3% helping to maintain the fiction that we aren’t monetizing our debt and printing our way to prosperity.  The foreigners who used to crowd the treasury auctions know what is going on.  Today the biggest purchasers of American debt are American banks using the Fed’s funny money.

How many times must this Ponzi scheme economy show itself for what it is?  How many times must this self-serving Progressive cabal be exposed for the hypocritical central-planning neo-fascists that they are?  How many articles like this must be written before enough people wake up and do something?  We glory in the American Revolution.  It overthrew tyranny and established personal independence, individual freedom, and economic opportunity on a scale that had never before been seen in the world.  This is something worth celebrating.  However, the counter revolution has been in progress since Hamilton founded the first bank and John Adams threw his opponents in jail.  The cost of freedom is eternal vigilance, and today’s generation may be too busy watching the game to notice their country is being transformed into something they won’t recognize by the time they get up for their seventh inning stretch.

Any semblance of a freely functioning economy has vanished since Progressive leaders like FDR, LBJ, and BHO birthed government control and intervention as an 800 pound gorilla on steroids.  The mirage of false prosperity is once again raising its crowned head out of the sea of financial calamity it created with the last bubble.  A new bubble is forming and happy days will soon be here again with a chicken in every pot and a flat screen in every home.  How many of our fellow citizens will be swept up in the coming Obama Boom?  How many will be devastated when it all comes crashing down again?

The too-big-to-fail friends of the government will be made whole.  The perpetually re-elected and their handlers will have their golden parachute pensions and plush jobs on K-Street and at Fannie, Freddie, and crony filled board rooms across the country.  The only ones hurt will be those who do the real work, those who play by the rules.  When the new bubble blows up the remedy is ready made: we’ll just blow up another bubble.  How could this ever go wrong?

Dr. Owens teaches History, Political Science, and Religion.  He is the Historian of the Future @ http://drrobertowens.com © 2013 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens

 

Economics 102 February 22, 2013

Posted by Dr. Robert Owens in Politics.
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People avoid silence because they’re afraid of what they might hear.   Although we value our freedom of speech, polite conversation in America is subject to one crushing rule, “Don’t talk about religion or politics!”  Most of us were raised with this stifling warning in our ears.  The purpose was to avoid arguments at the dinner table but the result is a population unconcerned in the two subjects affecting life the most.  I can only talk about the weather for so long which displays the wisdom of memorizing sports stats and watching American Idol.  With the two biggest topics off the table we’re faced with either trivial pursuit or silence.  Bored with the weather and having neglected my memorization and viewing options I propose a topic to stimulate vigorous conversation without causing any bickering: economics.

Barry, Harry, and Nancy knew they had to take us through-the-looking-glass in four short years.  With no effective break on their power for the first two years, Congress moved so fast their yesterday became our tomorrow.  That tomorrow is now today.  The ruling party rammed their agenda through without one opposition vote.  Every revolution needs an emergency to justify radical surgery and the economy is the emergency available. Consequently, these descendants of FDR and LBJ shoved a raw deal down the throat of a great society.

Almost everyone is in agreement that the first stimulus failed.  According to MSNBC, “In January, Obama’s economic team predicted unemployment would rise no higher than 8 percent with the help of $787 billion in new government spending.”  However, according to the LA Times the unemployment rate in May reached a 25-year high of 9.4 percent.  The President may see glimmers of hope but Say-it Ain’t-So Joe said he couldn’t rule out a second stimulus telling us the administration which ran on the slogan, “The worst economy since the Great Depression” misread how bad the economy was.  How bad is it?  What’s worse than the Great Depression?  What’s their answer to this baddest of bad economies?  What’s their Plan B?  Try Plan A again, and again, and again?  I think what our leaders need as they drive the largest economy the world has ever known over the cliff is Economics 102, Macroeconomics or how an economy works.

Most people, including the best-government-money-can-buy, look at the economy as if it were controlled by magic having no idea where the rabbit goes or where the doves come from, and since I doubt I’ll convince any of our all-knowing leaders to enroll in freshman macroeconomics I want to offer a crash course in Economic Reality.

  1. Government regulations distort markets and inflate bubbles.
  2. Every generation experiences at least one bubble and at least one bust.
  3. Every bubble bursts.
  4. Every burst bubble is followed by a panic.
  5. Panics inspire economic regulations.
  6. Economic regulations reflect political ideologies not economic realities.
  7. Economic regulations always regulate the excesses of the last bubble.
  8.  Economic regulations are always blind to the excesses of the next bubble.
  9. Since consumption is the purpose for production any economic regulation that ignores this fact always leads to the misapplication of resources and the misdirection of effort.

10. Depressions are recessions with government help.

11. It is impossible to spend yourself into prosperity.

12. It is impossible to tax yourself into prosperity.

13. Higher taxes lead to smaller revenue and black-markets.

The New Economy leads straight to the Second World, from freedom to conformity from capitalism to Obamanomics.  Instead of a fair race with the rapidly transforming economies of Asia, America runs hobbled like a child in a three – legged race strapped to the stiff-legged ideas of collectivism.

Why would our leaders want us economically hobbled?  What would they gain if we fall into the swamp of poverty engulfing most of the world?  Wouldn’t they be right there with us?  Go to any Second or Third World country and you’ll see the rich and powerful behind walls in gated-communities where they live in the First World while everyone else sits in the dust eating leaves.  In America, we avoided this fate with the growth of a massive middleclass.  Under assault with stagnant wages, rising prices, and disappearing jobs the middleclass is being outsourced.  How is this being accomplished?

Remember the mantra of the Clintons?  “It’s the economy stupid!” That’s still the Liberal’s strategy, riding like a flea on a rat cradle-to-grave social engineering in the guise of economic policy.  The Progressives drive the economy into the ditch all the while saying it is someone else’s fault and shrieking that we need more of what is causing the problem: bloated government and runaway spending.  A lack of basic economic understanding is destroying the greatest economy ever forged.  A zero sum game causes divisions and arguments about who gets what when we used to all strive for the same thing: success.

America is splintering as the melting pot becomes a smelting pot.  What is its cause?  The divisiveness of class-warfare encouraged by the only people who win through America’s split between red and blue, rich and poor, us and them.  Who are they?  If it isn’t us I guess it’s them.

Dr. Owens teaches History, Political Science, and Religion.  He is the Historian of the Future @ http://drrobertowens.com © 2013 Robert R. Owens drrobertowens@hotmail.com  Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens

 

 

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