Tuesday, September 30, 2008

Politics 101

I have been a political junkie all my life.  Really.  I remember my parents talking about the political races in Texas when I was just four or five.  Mom and Dad used to discuss Goldwater, LBJ, Nixon, and John F. Kennedy.  Being brought up in Texas with the name of Lynda, and the last name of Johnson, everyone use to ask me if I was "Lady Bird."  In junior high, still in Dallas, I plastered the bathroom shower with Bush bumper stickers, where I got them I do not know, and why my mother wasn't mad, I do not know that either!  I mean they were all over the tile in the shower.  I followed politics through high school and into college when I once voted for the wrong President, but we never mention that.  When my hero, Ronald Reagan ran for President, I honestly thought that the world was going to end if he did not make it into office.  What a great man.  
With this election cycle, the political, economic, civic, and historic side of me has taken over and invaded my heart, mind and soul in a bad way.  My husband would probably say I was demon possessed.   I am literally eating, sleeping, and following all my political web sites, talk shows, and congressional information that I can possibly put my hands on.  My family is really getting tired of hearing, "did you know what went on in the House today,"  or "you will never believe what (so and so candidate) said on the campaign trail today."  Although it is very gratifying when your twelve year old sits down and listens to the entire Presidential debate Friday night with you, and comments about socialism and it's evils.  Which brings me to the goal of this blog post.  As I have followed the candidates and the peoples comments of the candidates, I have noticed that ordinary people like you and me do not have a handle on the rudimentary fundamentals of civics, government or economics.
Whether you are very interested in this subject or not, you as a voter really need to be aware of the  issues that are driving our politics in this country.  I would like to recommend some resources to you for you perusal.  First of all if you haven't read the Constitution and the founding documents of this our great country, get a copy, read it and become familiar with it.  You can get free resources like this anywhere on the net, or go to The Heritage Foundation'sweb site and they will send it to you.  Check out Townhall.com, Drudge Report, American Thinker, and Politico.com.  

I would also like to recommend to you some books.  I was listening to Tony Snow one day on the radio, and he said that F. A. Hayek's book called The Road to Serfdom changed his life.  Well, I had already heard it was essential reading, but had never read it, so I pulled it off the shelf and read it.  Giving background and analysis about the road to National Socialism and Facism in Germany, Hayek warns against the same thing happening in our nation.  A chilling evaluation that could happen here too.  Modern Facism Gene Edward Veith is another one of those essential reads that pulls you in immediately.  Animal Farm by George Orwell should also be read by your junior high students as well as you.  Basic Economics by Thomas Sowell gives you the basic terms of the conservative, capitalist view point from one of the most brilliant ecomomists in the nation.   The Roots of Freedom; A Primer on Modern Liberty by John Danford  in a short 200 page book, Danford expains where our system came from philosophically, and why any other system leads to the loss of liberty.  He does a superb job of condensing the thoughts of Locke, Hume, and Adam Smith.  Which brings me to An Inquiry into the Nature and Causes of the Wealth of Nations written by Adam Smith.  Smith is the political and philosophical founder of the modern capitalistic system.  ReadAmerican Democracy by Alexis De Touqueville.  Go to David Barton's web site and you can find all the resources you would ever need about the founding fathers of this country, and what they really thought, did, and believed.  
I think I have given you at least a beginning.  And more importantly, I hope I have piqued your interest.  Send me your favorites too. 

Looking for the One and only One who can usher us His children into the Ultimate Utopia.........Lynn

Economics 101-There's no such thing as a free lunch!

My mind is not in a fog today,  but it has many, many concepts, current events, and cultural considerations flitting around from one synapse to another one, and I cannot figure out which concept to write about.  
My previous blog was on economic and civic considerations, and because of this I will continue on with more economic principles.  This is where it gets very difficult.  How do you make a blog on economics interesting enough for people to read it, research it, and then regurgitate it?  The politics and the media of the last century, with the exception of Ronald Reagan and Margaret Thatcher, have propagandized the American public into believing that they are victims, individual responsibility has been given over to the government, class warfare (including rich and poor, black and white, gay and straight, religious and atheists, and  radical feminism) has been used to separate Americans from their moorings as Americans.  The schools have carried this philosophy to the young, and parents, to a certain extent, have abdicated their roles to teach their children not only (on our side) Christian beliefs, but what and why the United States is successful, and what it took to get where we are today, and the frailness of liberty if people are not vigilant at advancing freedom.  Christians have rarely seen the importance of teaching their young the link between the Biblical Worldview and Freedom, or to put it another way the link between Christianity and our way of life in this country.  They have taught the Bible well, but have placed a dichotomy between the sacred and the secular, instead of teaching that Christ is Lord of All of life; including economics, civics, psychology, etc, etc.  
I heard on the radio yesterday a man from either ABC news or CBS news giving his opinion on what the congressmen on the floor of the house were saying about the bailout.  I apologize for not getting the name of the man right, or the exact quote, but I have searched the web for an hour and have not found the quote or the opinion.  He was quoting one of the congressmen as saying that we should not go down this slippery slope to socialism by voting for the bill in question.  He said if he had to choose between bread and freedom, freedom would win out easily.  The commentator said that this thinking was empty headed and that he and most people in the US want their bread and their freedom.  I wanted to weep.  Have we come this far in our thinking that freedom should not cost us anything?  I was angry.  What about the men and women that not only chose freedom over bread, but counted their own lives as something worth laying down for the cause of freedom.  When we as an electorate want bread, we have already lost our freedom.  We are one of the few nations in history that have ever had freedom.  But that does not mean that we will always have it.    
Our framers were very wary of government.  When government becomes bigger and bigger, our freedom is slowly eroded.  This bailout of 700 billion dollars is so dangerous, to you and to me.  Whoever owns your treasure owns you.  Why should the American public through tax payer dollars pay for bad decisions and the consequences of those bad decisions?  Should we bailout the people who gave or took loans knowing that they could not pay for them?  Votes are bought through the bailout money from your pocket and mine.  This is not free market economics this is socialism pure and simple.  Capitalism is based on the free movement of all economic resources.  This is a reliance on the private ownership of property so that the allocation of those resources are encouraged by a decentralized government.  
At a recent women's retreat I struck up a conversation with a retired woman who was very upset about the government not giving the poverty stricken more money, houses, and resources.  I went to work.  Expressing to her the fallacies of her arguments.  It doesn't work, it doesn't encourage growth, it causes generations of a dependent class of individuals that in turn will vote for those that give them the handouts.  She mentioned the children of these people.  I told her of the example of Desire Street Ministries who moved into the worst part of New Orleans and over time, built a church, school, and resources for the children all without government help.  I enjoyed my talk immensely with this wonderful, generous woman.  She started the conversation saying "well if this feeds the children then I am all for being a socialist."  She said she could not trust the private sector and big corporations to be givers.  I asked her, "what makes you think that government can be trusted not to be greedy?"  "Power corrupts, and absolute power corrupts absolutely." (Lord Acton)  
Think about it this way.  Maybe if these loans, that should never have been granted in the first place, go under it will be better in the long run for the ones that are directly affected and for those of us that are indirectly affected.  If the loans are harder to obtain than they used to be, then the people of the US will be more responsible with their money.  If loans are harder to get even for those who want student loans and car loans this will be better in the long run for us all.  One of the reasons why the cost of college and universities, houses, and cars have risen is because loans have been so easy to obtain.  Those people selling their goods know that anyone can get the loans it then drives up the price of goods and services.  The government has made it so easy to get loans, and the market is then driven by government not supply and demand, so the people with the goods and services to sell, know this and the price of things rise.  If the opposite was true, it would then drive down the cost of things.  There is no guarantee for banks, businesses, etc to stay afloat, this is not a right that is written into our Constitution.   The government needs to get out of the way.  I just heard that the feds pumped more money into the market to help loans.  This is exactly what happened in the great depression and inflation eventually went out the wazoo.  What a mistake.  The feds in essence are saying, come, buy, loan, on the backs of green that do not add up to anything, those monies are just a psychological ploy.  
I was shifting from the blogs and news websites that I peruse everyday, and went to Drudge who linked to an article that was saying exactly what I have been saying.  I am so glad someone agrees with me! I was just going to link to it, but it is so good, I decided to print in all here.  
Bailout marks Karl Marx's comeback
Posted: September 29, 2008, 8:03 PM by Jeff White

Marx’s Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout 

By Martin Masse

In his Communist Manifesto,published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him. 

Indeed, analysts at the Heritage and Cato Institute, and commentators in The Wall Street Journal and on this very page, have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001. 
“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder. 

At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments. 

So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets? 

The rationale for intervening always seems to centre on the fear of reliving the Great Depression. If we let too many institutions fail because of insolvency, we are being told, there is a risk of a general collapse of financial markets, with the subsequent drying up of credit and the catastrophic effects this would have on all sectors of production. This opinion, shared by Ben Bernanke, Henry Paulson and most of the right-wing political and financial establishments, is based on Milton Friedman’s thesis that the Fed aggravated the Depression by not pumping enough money into the financial system following the market crash of 1929.

It sounds libertarian enough. The misguided policies of the Fed, a government creature, and bad government regulation are held responsible for the crisis. The need to respond to this emergency and keep markets running overrides concerns about taxing and inflating the money supply. This is supposed to contrast with the left-wing Keynesian approach, whose solutions are strangely very similar despite a different view of the causes.

But there is another approach that  doesn’t compromise with free-market principles and coherently explains why we constantly get into these bubble situations followed by a crash. It is centered on Marx’s Proposal Number Five: government control of capital. 

For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.

Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices. 

As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With “liquidities” in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels. 

During that manic phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years. 

Now, what should be done when that pyramidal scheme starts crashing to the floor, because of a series of cascading failures or concern from the central bank that inflation is getting out of control? It’s obvious that credit will shrink, because everyone will want to get out of risky businesses, to call back loans and to put their money in safe places. Malinvestments have to be liquidated; prices have to come down to realistic levels; and resources stuck in unproductive uses have to be freed and moved to sectors that have real demand. Only then will capital again become available for productive investments. 
Friedmanites, who have no conception of malinvestments and never raise any issue with the boom, also cannot understand why it inevitably leads to a crash.
They only see the drying up of credit and blame the Fed for not injecting massive enough amounts of liquidities to prevent it.

But central banks and governments cannot transform unprofitable investments into profitable ones. They cannot force institutions to increase lending when they are so exposed. This is why calls for throwing more money at the problem are so totally misguided. Injections of liquidities started more than a year ago and have had no effect in preventing the situation from getting worse. Such measures can only delay the market correction and turn what should be a quick recession into a prolonged one. 

Friedman — who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances — was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools. 

As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about ...” 

The confusion of Chicago school economics on monetary issues is so profound as to lead its adherents today to support the largest government grab of private capital in world history. By adding their voices to those on the left, these confused free-marketeers are not helping to “save capitalism”, but contributing to its destruction.

Martin Masse is publisher of the libertarian webzine Le Québécois Libre and a former advisor to Industry minister Maxime Bernier.

Sad Day for the Country

I feel like the little old lady in the picture.  I am so very sad about what is happening in the country today.  The nationalization, another name for socialized financial market, bill that the House and the Senate democrats want to pass is a travesty.  Please before it is too late call your congressmen and your representatives.  Pray that this bill does not go through.  
Read the Preamble to the Constitution and see if it aligns with what some of the people in Washington want to do with this bill.  

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense,promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

 Our Constitution does not say that all of our financial decisions will be or should be taken care of by the government, but that is what this bill is all about.  Please go out there today, read The Communist Manifesto.  The Communists, as written down by Marx and Engels, advocate stirring up the lowly populace in a crisis, and manipulate them to hand over their liberty to the powers that be.  I am so sad.