Archive for April, 2009

To find my happy place, I usually pick up an Ayn Rand book. (No jokes please).  So, yesterday, I was in a really bad mood and picked up Ayn Rand’s Capitalism: The Unknown Ideal.

The book is a collection of essays by Ayn and a number of her followers (including the great Greenspan who, ironically, wrote about the need for a gold standard so that our nation didn’t go about printing money willy nilly). There are over 20 essays in this book with at least 18 of them pertinent to today’s discussion of expanding governmental powers.  This book alone will provide me with loads of blog content.  Lucky you!

In this post, I wanted to highlight her essay entitled “Let Us Alone” which starts with this:

“Since ‘economic growth’ is today’s great problem, and our present Administration is promising to ‘stimulate’ it – to achieve general prosperity by ever wider government controls, while spending an unproduced wealth – I wonder how many people know of the term laissez-faire?”

Interesting, no?  She could have written this yesterday (if she was alive, of course).  She opens the essay describing seventeenth century France under the rule of Louis XIV and then goes on with the following.

“Colbert, chief advisor of Louis XIV, was one of the early modern statists.  He believed that government regulations can create national prosperity and that higher tax revenues can be obtained only from the country’s ‘economic growth’; so he devoted himself to seeking ‘a general increase of wealth by the encouragement of industry.’  The encouragement consisted of imposing countless government controls and minute regulations that choked business activity; the result was dismal failure.

“Colbert was not an enemy of business; no more than is our present Administration.  Colbert was eager to help fatten the sacrificial victims – and on one historic occasion, he asked a group of manufacturers what he could do for industry.  A manufacturer named Legendre answered:  ‘Laissez-nous faire!’  (‘Let us alone!’)

“Apparently, the French businessmen of the seventeenth century had more courage than their American counterparts of the twentieth, and a better understanding of economics.  They knew that government ‘help’ to business is just as disasterous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.”

Timeless observations.  Do you think the banks and auto companies are rethinking their pleas for help?

We don’t need to confine this to the past 6-9 months’ financial crisis we are currently experiencing.  It has been a trend of this country and its government for the past century.  I believe the current breaking of our banking system is the evidence of excess/improper/corrupt/whatever regulation and does not serve as an example of our need for more.  And yet we find ourselves asking for more.  Global Climate Regulation.  Universal Health Care.  More Social Security.  No Child Left Behind.  Prescription Drug Plans.  The list goes on and on.  I’m afraid it only stops when, as many have stated many times before, no one will take our promissory notes and we will be sitting there with “great ideas” and “great needs” and no money or skills to execute them.

But there may be a happy ending…  Refer back to the last paragraph of Ayn Rand’s that I presented above where she mentions government help is no better than government persecution.  The two are attached at the hip as we see in the current environment.  Bonuses for bailouts show how government help can quickly move to persecution, mostly of the innocent as the corrupt sit hand in hand with the politicians doing the persecution.  That, my friends, is what gives me hope that there is a light at the end of the tunnel.  The faster we can have individuals realize that the helping hand of government quickly turns into the heavy hand of coercion, the faster we will see individuals strive for self sustaining private solutions.

I have just returned from a weekend in our nation’s capitol, and can report that there is no recession in the district. Walking through much of the area around GW and Georgetown, I must have seen 25 cranes and over 30 houses undergoing renovation. A quick look at the state-by-state per capita GNP statistics shows a Washington DC that ranks first among all 50 states, over twice the next highest (Connecticut) and challenging oil producing nations if treated as its own nation. Remind me again what we produce in DC.

I plan to access that same statistical information to compare per capita GNP growth rates over the last 25 years. I suspect that I will find that our fastest growing product will be legislation and regulation.

I read an editorial in the Post bemoaning the difficulty of finding the 600,000 workers who will be needed to fill government jobs over the next few years. Not one of those workers will have to worry about producing revenue, selling a product, or making a payroll.

A nice opinion piece in the Wall Street Journal concerning the US auto manufacturers and how they, to evade bankruptcy, will essentially give themselves to the federal government and to the unions; the two forces that can be directly tied to their failure.  I find it perverted to see that the companies can so blantantly treat some obligations so differently from others by attributing more value to the union and federal government obligations over those of the other debt holders.  Instead of going through the LEGAL route of filing for bankruptcy protection which would lead to a better chance of fair treatment of all concerned, the government’s heavy hand of injustice prevails once more. 

Once finalized, let’s see if we have the same choices of buying from Toyota, Honda, Kia.  Also let’s watch to see if the government gets involved with unionizing the implants.  They, the government and union, have increased the stakes and are dealing from a stacked deck. 

Actually, this gives a new meaning to ‘public transportation.’

I want to thank all of you for your support and Mrs. H in particular for her love, support, and tolerance.  Though the month is not over yet, I thought I would let you all know that April has been a big month for CIRCLE.  We have more than doubled site traffic (yes, from a small  but not insignificant base) and now have visitors from 12 countries (including Great Britain, Poland, Panama, and China to name a few).  

A recent poll by Rasmussen suggests that we are not alone in our desire for individual liberties.  With 77% of those polled in the US wanting free markets, our message should ring clear.  However, within that study, 11% think government controlled economies are the way to go and right now, many of them are in a position to make it come true. 

So, we will continue to state (hopefully clearly) the positive message that individual liberties produce the best chance for a stable and self-sustaining ecosystem.  I ask that you continue to invite others to join.  Do not be afraid to invite those of varying political party affiliations as our only bias is our respect and optimism for the Individual.

Be well,

JBH

The I in CIRCLE stands for Individual and signifies that all rights reside at the individual.  This may seem so obvious that it doesn’t need to be stated but recent events make me think otherwise.  It should be obvious yet almost all discussion occurring now on what is the right thing to do neglects the rights of individuals.  Our world has become so infatuated with grouping individuals in order to simplify the problem that we run the risk of placing rights at the group level.  And by doing so, we take them away from the individual.

First, why is this distinction important?  Well, I’m very glad you asked.  From my viewpoint, individuals are dynamic and groups are static.  Individuals’ priorities change through life and change once certain desires are fulfilled.  They go from being employed to unemployed.  Renters to homeowners.  Single to married.  And, in many cases married to single.  Unemployed to employed.  Homeowners to renters.  We are beings that have the ability to adapt to the situation we are placed into and we typically find ourselves in various situations through our life.  Groups, on the other hand, do not change.  Pro-lifers are, by definition, not going to become pro-choicers.  The middle class, as a group, will never become the affluent group.  Christians will never, as a group, become agnostic.  When we attempt to depict a problem at the group level, we fall into the trap of looking for a static solution, forgetting that we are a mobile and evolving society. 

Secondly, it tends to complicate and divert the process away from the real issue.  Think of “Joe the Plumber.”  As much time was spent talking about his lack of a plumber’s license as was spent on his concern, as an individual, of individual liberty.  Our nation wanted to encapsulate him into a known category so that sides could be drawn and judgements passed rather than identifying him as an individual looking for assurances that his individual liberties were sacred to a particular candidate.  Let’s look at the discussion on gay marriage.  For sides to be taken, we have had to lump people into two groups; pro-gay rights and pro-whatever they call it.  Looking at the issue from a different perspective where you couldn’t label the group (therefore unable of providing it rights above those of an individual) the question would logically come down to “is there anything wrong with letting two consenting adults share their lives as one?”  All the current arguments (‘gays may try to turn me into one of them’ or ‘it starts us down a slippery slope where  someone tries to marry a goat’) fall to the side as it is now all about arbitrarily restricting the rights of some individuals.  When we ask the question as stated above, the first question that should come back is “does allowing their action impede the rights of others to pursue their goals and desires”  If the answer is no, then the discussion ends.  Life goes on.  Emotion is taken out of the equation.  Logic and rational thought prevail.

There are many other examples, too numerous to offer up here.  But please think about this:  The next time you get in a debate, see if the person wants to apply rights to a group of people and, therefore, reduce the rights of the individual.  They may say that it is for the common good, but applying arbitrary and static restrictions on some so that more benefits can flow to others is never good.  It elevates some above others (which leads to fascism) and removes an individual’s identity, making the elimination of their rights easier to justify.

There is a nice opinion article in the Wall Street Journal concerning a potential solution to the ever growing federal government. Here is the link.

Mr. Bogle,

You sure have an odd way of apologizing. Having read your letter as printed in the April 21st Wall Street Journal Opinion section, I was taken aback by your hypocrisy. I am one of those “agents” you mention in your article. I actually take my fiduciary duties very seriously and feel extremely responsible for my investment decisions. You, the spokesperson for passive investing, neglect to mention your role in this “agency society”. Your method of “investing” has taken the responsibility for shareholder voting away from millions of individual investors and professional investors and placed it into the hands of the back-office proxy managers at index firms. So, before you place blame, please look to the facts to accurately frame the problem.

flickr:entobox

I ask that you take credit for your success. Index (passive) investing has been taking share within equity markets since you introduced the idea in 1975. As recently as 2006, according to a 2007 paper presented at the American Finance Association annual meeting by Bhattacharya and Galpin, the stock trading volume associated with active investing has declined by a third over the past decade and represents less than 30% of the trading volume in the United States. You have also succeeded at reducing the idea of long-only, long-term investing to a commodity by telling individuals that they can invest blindly in 500 companies, selected by a small committee at Standard and Poors, not caring if the business managers of those anointed companies are good stewards of capital or not. Passive investing was a nice idea when it (as a parasite) was small versus the overall stock market (it’s host). Unfortunately for all of us now, the parasite dwarfs its host, making it increasingly difficult for it to survive.

But passive investing is only one of many guilty parties. Should we look towards Reg FD that prevents me from interviewing lower level product managers? Or FAS 158 and the Pension Protection Act that, in an effort to protect pension participants, pushed plan sponsors away from long term equity ownership as market volatility would become magnified on their financial statements? Do you think more federal oversight would help the matter?

Maybe what we need is less federal oversight. Similar to the impact of lower tax rates leading to higher tax revenue, could we see the same with regulation? With excessive regulation attempting to protect the individual, our government’s actions have pushed those very investors into higher risk, unregulated investment products. We don’t need more regulation. We need non-politicized regulation that punishes crooks and less regulation that assumes we all are crooks.

Not your whipping boy,

JBH

Photo by Steve Wampler

It has been interesting to watch the gnashing of teeth related to Wall Street bailouts and bonuses.  I clearly understand the outrage associated with allowing those who benefit from Washington largess being allowed to take home $millions.  For the record, I am not a big fan of the “too big to fail” argument.  As one who must compete with Wall Street types to pay my kid’s college tuition, too big to fail was preceded by “big enough to have massive competitive advantage in the marketplace.”  So, do not count me as one who feels a need to defend Wall Street.  (They still have funds necessary to pay for their respective PR agencies.)  I merely react to the argument that those who get Washington hand-outs should have limited incomes.

In our economy, we have plenty of examples of industries in receipt of government subsidies (bailouts / handouts / welfare / etc.) where employees are made very comfortable through the generosity of taxpayers.

The last time I looked, Major League Baseball was benefiting from a government granted monopoly.  By law, only 30 organizations (owners) have the privilege of paying A-Rod $25 million or more a year to play baseball.  According to ESPN, in 2008, the average franchise value for a major league baseball team is $471 million.  In the absence of the government blessings (read “bailout”), would a baseball team fetch much?  While not the $5 Billion threshold provided in the Wall Street legislation, each of these franchises is receiving a healthly little gift from Uncle Sam.  Even though, you would be hard pressed to find “employees” of these organizations taking home less than $250k, and I do not see outrage directed at players (not counting strikeouts and blown saves).

Lets go right to the meat of the matter.  Consider also broadcast TV.  Those major networks are given bandwidth each year by the FCC.  While difficult to value, surely access to the airwaves is worth a pretty penny.  A good proxy might be the wireless bandwidth auctions that require telecom providers to pay $billions for the right to use little pieces of frequency.  Should Jerry Seinfeld be asked to repay the $1 million per episode he was paid in compensation?  Brian Williams reportedly makes $4 million per year selling airtime that we taxpayers could otherwise sell, but give to NBC.  Where is the outrage?

Conclusion:  Yes, I am one of the millions who feel that Wall Street misbehaved.  Sure, I think that paying a bonus to the guy who made the mistakes is wrong.  But, we have to admit that Wall Street is not the first industry to benefit from the trough, and that most of the employees in these organizations had no decision-making responsibility and caused no problems.

If a tree falls in a forest and no one is around, does it make a sound?  Unless you are a philosophy major sitting in a Starbucks drinking a double humped something-or-other, your first answer most likely will be Who cares?  At least that’s mine.  Of course, implicit in my answer is the assumption that the tree was not right next to a person’s house and said tree falls on top of the house.  What I’m getting at is two part; first, the question as asked tends to side track the importance of the event, and second, even if the event was not witnessed by you doesn’t mean it doesn’t carry lasting implications for you.

I bring this up as an analogy for what appears to be occurring in Afghanistan (and other parts of the world) with respect to women’s individual rights.  When we (the US and partners) went into Afghanistan, our government needed to justify it as a way to bring to justice the man behind 9/11 and the government that supported him.  For Iraq, our government used the threat of WMD’s and continued infringement of UN resolutions.  After many years in both and using those reasons for our efforts, many see our actions as failures.  Our government sits in a state of mental paralysis analyzing the information that led to the fears of WMD’s and where bin Laden could be hiding.

To me, all of that misses the greater point.  In the aftermath of 9/11, we finally had enough.  We were fed up with groups that had taken control of people and repeatedly shown no respect for human life and personal advancement.  When I look back at that time, I think we had to use these other excuses because it had become wrong to think a culture could be evil.  Wait, you say.  How dare you, JBH,  impose your definition of evil onto a whole mass of people and their beliefs.  We, the enlightened, are not to judge if a culture outside of our own is right or wrong.  Well, that is where I disagree with “enlightened ones.”  Any group that institutes a culture that condemns rape victims to death, that marries off young girls to old pervs, that allows anyone to look down on and enslave someone based on sex IS wrong.  Actually, that culture just SUCKS.  And IF the religion behind that culture encourages those actions, it sucks too. 

For some reason it is okay for us to protest the Japanese for whaling but we can’t condemn those in the Middle East for beating the crap out of women.  It’s their religion and who are we to judge their religionmay be said by some.  It’s not their religion, it’s a group of bad individuals that have taken people hostage and stood behind religion as a way to defend themselves.  In my opinion, we needed no other justification for using force to topple the governments of Afghanistan and Iraq than that of freeing at the minimum half of their population and to break the leadership of nations built on fear and tyranny.  But it’s not our place to take these actions.  We can’t ask our soldiers (our children) to sacrifice their lives for non-Americans may be the response.  That, to me, is a desire to turn away and hope it changes on its own.  That is the way of most European governments.  If we ignore the problem, it’s no longer a problem.  I find that very short sighted and irrational at its core.  (Like it or not, we have to interact with these nations.  They control a lot of the oil production and our opium supply.  If we trade with them, we are enriching them.  If we are enriching them, we are empowering them.  And I have no desire to empower a group of individuals that thinks of us as the enemy and their women as sheep).

We have become disengaged when it comes to combating basic evil with that evil being the infringement of individual liberties.  And when we do engage, we need to provide an excuse that, for some strange reason, avoids our underlying desire to help people out from underneath oppression.  Now, some will suggest that there is a fine line of helping and imposing our belief system which I would agree with but do we need to be diverted into inaction/misaction now when the evil is so obvious? 

I would point you to this article and this one that got me stirred up.

Courtesy of The Washington Blade

The Supreme Court Justices of Iowa need to be praised for upholding individual rights.  Their decision on April 3rd stating that preventing gay marriage is unconstitutional was a huge milestone for gays, and just as importantly, for all individuals. 

Before I get into this ruling, I need to make it clear that I’m not a lawyer and know little law stuff.

Some, such as Newt Gingrich, will state that the justices went beyond their authority in making this decision, that they went against the people of Iowa, that they are making laws in the courtroom.  Newt, I’ve liked you in the past for your fiscal conservatism, and I thought of you as a peer when it came to favoring individual rights, but you lost me on this.  How could you honestly stand on your soapbox, proclaiming that the Iowa SCJ’s overstepped their duties.  Their duties consist of checking the other two branches of government and ensuring the legislature makes no laws that go against the state constitution.  You have narrowed the job description to “interpreting the law” but that is wrong.  The justice system is there to police the government, not citizens.  Remember Ayn Rand’s words when it came to the U.S. Constitution (and I am extending it to state constitutions):

“Ours was the first government based on and strictly limited by a written document—the Constitution—which specifically forbids it to violate individual rights or to act on whim. The history of the atrocities perpetrated by all the other kinds of governments—unrestricted governments acting on unprovable assumptions—demonstrates the value and validity of the original political theory on which this country was built.”  -from Philosophy:  Who Needs It? by Ayn Rand

That is exactly what they did.  As stated in their summary, “The court reaffirmed that a statute inconsistent with the Iowa Constitution must be declared void, even though it may be supported by strong and deep-seated traditional beliefs and popular opinion.”  How is that inconsistent?  The law, as enacted, attempted to treat some people differently than others based solely on their sexual orientation.  How could anyone defend that?  And even more importantly, the justices did something admirable by suggesting that the definition of marriage should not and can not be defined by the government.  That would just open the door to more government involvement in our personal lives.  They evade my space enough.  I don’t want to provide them with the right to decide who I can and cannot marry.

Now, those that were defending the infringement of individual rights were hoping to convince the justices that it would hurt the stability of opposite sex marriages, that children would be hurt by same sex marriages, and that it would increase the costs to the state government.  Let’s take these one at a time.  I’m straight and happily married to Mrs. H (not Mrs. Hart from Hart to Hart but someone even more sexy and elegant than Stefanie Powers).  If I read the summary opinion correctly, the defendants were arguing that I may be at risk of leaving my wife if same sex marriages were legal.  News Alert:  THE LAW IS NOT PREVENTING ME FROM LEAVING MY WIFE FOR A GUY.  I’m not gay and making gay marriage legal won’t “turn me.”  Concerning the second issue of putting children at risk by allowing gay mariage makes no sense to me.  There are way too many crappy straight parents that should be outlawed before we even think of worrying ourselves about gay parents (yes, Angela Suleman, I’m thinking of you).  Lastly, gay marriages will cost the government too much money?  Please.  Willing to sacrifice basic human rights to save a buck?  Was that used to justify slavery?  The lawyer that put that in should be bitched-slapped.

Lastly, let’s talk about Newt’s comment that the court went against the people of Iowa.  According to a Big Ten poll conducted in Decemeber, only a third oppose recognizing gays’ individual freedom to form a legal bond with a person of the same sex.  Call it ‘marriage’ or ‘civil union’.  It doesn’t matter.  The majority of Iowans believe it is none of their business to get involved in a relationship between two consenting adults.  And you, Newt, should too.

While doing some actual work I came across this poll performed by Gallup.  The title presents the findings quite clearly, “Majority Receptive to Law Making Union Organizing Easier.”  Well, there you have it.  A majority (narrow at best when considering error rates in polls) think organized labor is a good thing.  Yes, that makes sense.  Let’s make it easier for a group to dictate inflexible work rules and above market pay scales not tied to productive output.  Go America!

Oh well, I’m getting use to be in the minority. 

With a name such as “Employee Free Choice Act “, it could be surprising to some that the number in favor is not higher.  I mean, who could be AGAINST employee’s free choices?  Well, like much in this world these days, the intent is not always in sync with the words used.  In this case, the main goal of the union lobbyists is removing the secret ballot, allowing organizers to bully the employee ranks.  That sure sounds like freedom to choose to me, no?

What made me laugh a little was this graph:

Interesting how the more people closely following it (implying how much they know of it), the more they are against it.  Hmmm.

What does this say to you?  To me, it says that more people need to say “No Opinion” if they have no clue.  An uninformed opinion only dilutes the conversation and allows for some to take advantage of many.

I’m not a big fan of demonstrations.  From my limited experience with them, most of the passersby didn’t care about the demonstration and hated us more because we were making their commute inconvenient.  It just turns out most people aren’t as emotional about stopping the Hooter invasion as me…

However, this coming Wednesday is April 15th and many cities across the country are having demonstrations supporting a 2009 “Tea Party”.  I plan on attending.  I have more hope in this one than past public displays of dis-satisfaction (aka PDDs).  The past presidential election was conclusive but not “mandate worthy”.  Some are celebrating as though it was.  It wasn’t.  It was definitely worth celebrating as a large hurdle was  jumped; a young black man took the office.  Doesn’t matter what your politics are, that was a truely impressive event for our country. 

Unfortunately, many on one side of the aisle have gotten carried away and think they are entitled to force their agenda on all of us.  They can’t.  They shouldn’t.  Winning the office with a slight majority doesn’t provide them the opportunity to trample over our individual rights.  This event is to remind them that they really do work for us rather than the other way around.  Yes, many of the events were organized by supporters of the other party, but that doesn’t change the fact that the current holders of government power are enacting an agenda that less than 30% approve (see recent Gallup polls). 

It’s time to let them know our mandate; protecting individual liberty.  Hope to see you there.

From my perspective, he bowed.  And he bowed deep and long.  It doesn’t matter if he was mistaken in protocol or was in awe of meeting a king.  To me, it shows a lack of regard for his position and a lack of understanding of America’s foundation.

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I found your March 28th Opinion piece insulting to my intelligence and demeaning to the accomplishments of all American Individuals. The article displayed your conceitedness, thinking you could mischaracterize past events, take facts out of context, and misstate the thoughts and words of individuals to justify your fantasy land. To respond, I’ll start at the beginning of your manifesto.

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