Wednesday, January 30, 2008

The End of Fiscal Conservatism

The only party that has represented economic conservatism in the U.S. in the 20th century has been the GOP. At least they've always talked about it. Quite often, they have done something different.

With McCain's win in Florida, the fate of the party has now been sealed so that fiscal conservatism and conservatism in general are now the outcast extremist views of the party. This could have been predicted based on the original field of candidates and how they were being received in polls, but now the remainder of the primary season has been spelled out.

Rudy will leave and almost all of his votes will go to McCain. Huckabee has no money, but he will do well is several states on Super Tuesday. When he drops, his supporters will also go to McCain. That will leave Romney and Ron Paul. Paul is in for the long haul since he has the money and enthusiastic supporters like me. He will not get more than 15% nationally when all is said and done though. Romney, on the other hand, is doomed now.

A Florida win would have been enough to convince the three minutes before you enter the poll booth crowd to vote for Romney and given him a serious boost for Super Tuesday. The problem now though is that with the 2nd place finish, he is facing races in Super Tuesday where he is mostly 2nd or 3rd behind the McCain and either Huchabee or Giuliani. The Giuliani votes will now go to McCain in significant numbers which will likely mean overwhelming victories for McCain in nearly all of the Super Tuesday states. At that point, Romney will have to drop out.

I would not vote for Romney now under any circumstances based on the closer look that I've taken at him this past week, but he was the closest thing to sounding like a conservative of the four remaining candidates who had the big numbers. When the likes of Rush Limbaugh, Ann Coulter, and George will are essentially screaming from the hills that McCain and Huckabee are not conservatives and no one is listening, then we know that the conservative movement in the GOP is now officially dead. Politics has always been a personality contest. Genuine conservatives got to be in the limelight from 1981 to 2001 because the personalities in charge at least paid lip service to conservatism. Now we still have the lip service, but the platforms being called conservative are the exact opposite of what they stood for 20 years ago.

Tuesday, January 29, 2008

Fundamentals of Libertarianism

Too much von Mises on the brain:

Everything around you, everything you wear, all of your material goods were produced by society. They were produced by individuals specializing in certain trades to make goods that you decided to purchase to make your life better or more enjoyable. That is the benefit bestowed upon individuals by their decision to participate in society. Society is not the same as government. Government did not create anything you use.

This country's foundation lay in the fundamental philosophy of Locke that government's sole purpose should be to protect life, liberty, and property. When government goes beyond that role, its function then becomes not the creation of wealth, but merely its reallocation. Government does not produce anything. Government can only take from those who produce and give to another group whether in the form of individual welfare to those who do not produce or corporate recipients who are either failed producers or who merely add the extra income to their positive bottom line.

Once you see the benefit of society and that society is not a zero sum game, but something mutually beneficial to all participants, then you begin to see the advantage of free markets. Once you see that any extension of government power beyond protecting life, liberty, and property is contrary to the goals of society, you will start to embrace the basic tenants of libertarianism.

Rome was not built in a day. The Roman Republic did not fall in a day either. It was gradually altered by politicians with the consent of the governed who were willing to exchange freedom for security in steps of various sizes until the momentum became to great for anyone to resist the anti-republican forces. Julius Caesar was assassinated because he was the culmination of anti-republican forces personified in the role of permanent dictator. A label that even those who clung the fiction that the Republic still existed could not tolerate. The problem is that after the killed the general, they failed to see that the republic was already dead, not because of Caesar, but because of the previous generations of Roman citizens who let their freedom go rather than take responsibility for their own lives.

That is what we are awaiting in this country every time we expect a new tax code revision or tax giveaway will somehow improve our situation.

Stimulus Package

So why, if everyone out there seems to agree that the bi-partisan "stimulus package" is basically a phony one-time giveaway gimmick for the election season is there no objection to it. Why? Because the money is going to us.

It is also interesting that the op-ed writers who consistently state that cutting taxes to stimulate growth is an outdated, unsound, discredited, and naive economic theory seem to have no problem with this giveaway, which is being touted as a tax rebate, but is really going to anyone below a certain income level. If giving people money cures all economic woes, why not just cut a check to every American for $50,000?

The truth is that buying things from China does not make us richer. It may improve our lives a bit, but all this giveaway will do is send more money abroad or perhaps make one month's mortgage payment and that is about it. Then, after a month, we are all a little more in debt with nothing to show.

Monday, January 28, 2008

Hyperinflation on the way?

We already know that the Fed is contributing to inflation by lowering interest rates again in an effort to artificially expand credit in the market. And we know about the recently signed tax "rebate" deal. Beware of government when both parties agree to something. It usually involves spending money with no purpose.

But these superficial measures, while they will likely have a detrimental effect on the economy and inflation, are not the elephant in the room. The question is whether or not more countries will stop using the U.S. dollar and T-Bills as a safe haven for money. Now that the Euro has been established for a decade, there are indication that more countries are moving to Euro as a safe haven. But here is the prisoner's dilemma. Those countries with enormous U.S. currency reserves cannot sell them without setting off a panic that will wipe out there value before they are even sold.

The best that any of these countries can do is gradually shift their reserves to the Euro, the Pound of something else. But with Japan and China and other mercantilist nations, they apparently have no choice but to continue buying T-Bills as a store of value with the extra dollars their central banks retain in order to keep their currency value artificially low to encourage export and discourage imports. The question is what happens when the U.S. ceases to be their largest market? So long as we are their biggest trading partner, mercantilist policy dictates that they keep their currency pegged to the dollar. What happens though when Europe's buying power exceeds the U.S. as it likely will in the near future?

Will they start pegging their currency to the Euro, or is there enough momentum in enough markets to keep them from switching from the dollar any time soon. Keep in mind that the dollar is now the de facto currency in many nations and even the official currency in nations like Ecuador.

So in short, I don't know the answer. The factors are there to make hyperinflation happen, but it appears that there is still too much vested interest in the rest of the world to keep the dollar propped up. It may only take a minor event to convince the rest of the world to abandon the dollar. When that happens, our market is going to be flooded with dollars and that will be when hyperinflation occurs. In the short term, however, we can almost certainly expect inflation to get much worse.

Wednesday, January 23, 2008

Investing Money Wisely in Education

Fulton to pay students in after-school program
Creekside High and Bear Creek Middle will pay students $8 an hour for "Learn & Earn" program

I believe I've advocated this before, but I would take this to a much higher level in terms of payouts. When students enter their first year of high school, give them a menu with attached bonuses scaled to their GPA. A 4.0 gives them $2,000, 3.5 and up, $1,000, 3.0 and up, $500. Do this every semester. Do the same for SAT exams. When students are given a direct and immediate incentive to get better grades, they will devote more hours to studying that playing on their Nintendo. With some groups of students, you could probably even eliminate the teacher and see grades shoot up right away:

"Here is a stack of books. Read them and understand in six months, and here is what you will get in return."

The biggest problem in education is not that the teachers aren't paid enough or that school aren't nice enough inside or that there aren't enough books or computers. The problems is that students are not motivated to learn and don't read enough. Every year their reading comprehension goes down, rich or poor, because they are exposed to too much leisure time that involves passive activities like video games, movies, and TV. They will have to learn reading comprehension skills at some point and if they are already so far behind by the time they reach high school, why not provide them with the ultimate incentive to learn it on their own?

Tuesday, January 22, 2008

Abortion

I've been wrestling with the whole abortion question in my mind for decades now. Here is my current temporary final conclusions, all of which would make everyone unhappy if they cared and I were someone important.

  • Life begins at conception.
  • Abortion is murder: the unjustified taking of an innocent life.
  • Abortion is immoral.
  • Abortion is not health care and should never be paid for by the government or health insurance.
  • Roe v. Wade should be overturned as an unconstitutional overreaching of the Supreme Court into the rights of states to regulate morality as expressed in the 10th Amendment.
  • Abortion should be safe and legal during the first trimester.

Confused? Here is the rational. I am utterly convinced that abortion is an absolute horror. I would never ask (and have never asked) a woman to have one. I knew that if I ever got a woman pregnant by accident, then that was who I was going to marry (assuming she chose to have the child). I have never really slept around, so I have been afforded that luxury of only having sex with women I cared for. So, the pro-choice stance has pretty much always been my rule for me.

The opinion of Roe v. Wade is strictly an objective determination and would remain the same whether I took to one side of this issue or another. When you have to rely on the Code of Hammurabi instead of the plain language of the Bill of Rights, you are full of shit.

So why the last point? I figure that one of the reasons we are on this Earth is to perpetuate our genes by producing children to send out in the world and mix with its gene pool. Right or wrong, most humans have the urge to reproduce and raise children. And although sex may be God's devious method of tricking us into having children, there is a void for many people if they do not produce and raise their own children as some pint in their life. So, if someone wants to avoid filling this need and at the same time eliminate their own genetic heritage from the gene pool, who am I to stop them?

Why only the first trimester? Because if you can't make up your mind in the first three months, then you are probably going to regret having an abortion later on in life. In addition, the pain and suffering that the fetus will have to endure does not justify your own procrastination in making a decision. You should know the answer before you even engage in the act of getting yourself pregnant. It's called responsibility.

Monday, January 21, 2008

MLK

One of my mottoes has always been that you should emulate behavior, not people. No person is perfect. And when we devote so many statues, dollars, buildings, and days to the individual rather than their ideals, we do both them and ourselves a slight disservice.

I really believe that MLK day should be replaced with something more broad in its terms: Civil Rights Day. It would include not only what he accomplished or attempted to accomplish through his principles, much of which was only realized later, but also everyone else who struggled toward greater civil liberties for all.

While we're at it, let's remove all of our presidents from the various dollar bills and put on authors, artists, and others who have made the country great through individual efforts rather than through the positions they held. Ben Frank can obviously stay because despite his status as a politico, he was a lot more. Keep in mind that the cult of personality of putting presidents on coins is more of a 20th century creation.

Saturday, January 19, 2008

Hail to the Populists

The GOP is now finished as a party. Rather it is now an animated corpse dancing to the tune of the populists. Fiscal conservatives are now an extinct species. It used to be that when money got tight, true fiscal conservatives would get angry and ask government to cut spending and lower taxes so that people would have more control over their lives. Now they turn to whoever says they will save us with more spending. McCain and Huckabee have won a combined total of over 60% of the vote in South Carolina. They will both continue to pick up steam and one will eventually get the nomination. In November we will get to choose which flavor of socialism we prefer. One that says it is favor of small government and lies about it (the GOP) or one that will increase government control a little bit more than that but will be honest about it (the dems).

Tuesday, January 15, 2008

Pat's Problems

Subprime Nation - Pat Buchanan

As always, the ever insightful Pat Buchanan points out the obvious problems with our nations foreign, domestic, and personal spending problems. These are problems which most Americans ignore or dismiss and problems which politicians either don't understand or don't want to mention. He doesn't offer solutions in this column, but he has already done so on numerous occasions. I tend to agree with him on foreign policy, but on domestic and economic policies, he is essentially a moralist and a populist. This puts his heart in the right place for the most part, but his policy recommendations would lead to more problems than than they would solve in our economy.

The one dilemma that comes up time and time again concerns free trade. Almost every country is guilty of some form of mercantilism. We seem to do it a lot less in this country compared to other nations though. Many free traders say that mercantilism does more harm than good to the economies that practice that policy and so we should not be upset if free trade appears to be very one-sided in nature. I believe the argument goes that in the long term, the free trade economy will always win. I'm not sure if that is the case or if that is even the argument, but it sure does appear at first glance to be a problem and potential downfall for a nation extolling the virtues of free trade if no one else is practicing it.

I believe that we have to pursue free trade however because that is the only way our economy will survive. The rest of the world will pass us by at some point if we keep competition out and markets closed. Right now, our markets are relatively open and free. The question is though whether we should join the WTO and insist that other countries abide by Free Trade, or if we can just ignore mercantilist policies with perhaps only the faith (maybe proof exists) that in the end, we will be better off with or without the WTO and trade negotiations.

Monday, January 7, 2008

Ron Paul excluded

Fox News: "We decide what you decide."

The excuse for excluding Ron Paul is that there wasn't enough room at the table. Give me a break. The good thing for Ron Paul is that the five of them looked like kids who were being punished for making to much racket by running all around the house. Sit down and keep your hands to yourselves! It may even be what shot up his polling numbers to 14% (3rd in that poll) although that may just be an anomaly. He is still landing somewhere around 8%. Ahead of Fred Thompson in all polls, ahead of Giuliani about 60% of the time, and behind Huckabee about 80% of the time, but still close.

So here is what grinds my gears. Bob Novak's predictions for the race are as follows:

1st Place: McCain, but vulnerable.
2nd Place: Romney, but rallying.
3rd Place: Huckabee.
4th Place: Giuliani.
5th Place: Former Sen. Fred Thompson (Tenn.).

Where is Ron Paul? Just because Fox News has banished him, he is still going to be ahead of Fred Thompson tomorrow. He has a good chance of beating Giuliani. He may even beat Huckabee since most pundits think he had a poor showing during Sunday's debate.

The interesting thing to see is if the lack of coverage by Fox actually helped him or hurt him. Drudge is reporting that the ABC debates, which did include Ron Paul, had 2 million more viewers than Fox (on a Saturday night no less). New Hampshire is not the bastion of conservatism it used to be and there probably a lot of registered Republicans and independents who don't like Fox for one reason or another. It is quite possible that based on a purely emotional reaction, they will vote for Ron Paul, just to stick it to Fox.

The other question is what independents that are more interested in the Dems will do. It was imagined that a lot would want to get involved either for Obama or Clinton. But now that the bandwagon has started rolling for Obama among democrats, will independents prefer to jump on the bandwagon or stick it to Fox by voting for Ron Paul? That may be an important factor not so much because Ron Paul will run away with a third place finish, but it may be just enough to put him over Huckabee. Fox will look a bit ridiculous then, but who knows what will happen.

We may even see Ron Paul carrying his exclusion as a badge of pride. He has a lot (A LOT) of young supporters, many of whom seem to be a bit on the liberal side and perhaps even hostile to a lot of conservative ideas. Losing Fox may even help them to convince more young people to get on board. Back in the day, I was excited at the idea of a conservative based new network. Nowadays though, they are anything but conservative in ideology. They are conservative only in the preserving the status quo sense.

One other thought. If anyone is the voice of the conservative movement in the U.S. right now (and for quite some time) it is Rush Limbaugh. The only disparaging thing I have heard him say about Ron Paul is that he can't win. He rarely mentions him on the show otherwise, which is fine. So hear is the question. The dems and media LOVE Huckabee, but Rush, Ann Coulter, and others are pulling out all of the stops to derail Huckabee. Rush has said that McCain is not a conservative and has indicated that Romney and Giuliani have some shortcomings in their credentials as well. He seems to think Fred Thompson is a conservative, but not perhaps a shining star.

So what if Huckabee keeps winning as appears likely? Fred Thompson drops out. Where do his votes go? Maybe to Romney or McCain. Giuliani drops out. Where do his votes go? Probably McCain or Romney, but almost certainly not Huckabee. So now the Huckabee juggernaut is riding strong and McCain and Romney are still attacking each other non-stop. One eventually drops out. Where do those votes go? Well, if there is enough animosity, they may go to Huckabee, but what if they went to Paul instead. McCain supporters may not like Ron Paul, but if he has kept himself out of the fray, not attacked anyone, and stayed away from the bible-thumping populism of Huckabee, they may go to Paul. What about if Romney drops out? His supporters are not likely to go to Huckabee either for various reasons. He is not a social conservative; neither is McCain, neither is Giuliani. Would they give Ron Paul a second look to avoid Huckabee? Would they be turned off enough by Huckabee's use of religion to vote for Paul? It's quite possible. What about genuine conservatives? Would they start to have second thoughts after Huckamania dies down? Especially if Rush, Coulter, Will, and anyone else with conservative followings is crying from the high hills: this is no conservative!? Would they go with Ron Paul who is otherwise a social conservative but also has the fiscal conservative arguments in his favor?

Who knows. Just some thoughts to toss around.

Sunday, January 6, 2008

Slow Day - so I will pick on public school teachers

The vast majority of what I hear from public school teachers is that they are not paid enough. And they have done a great job convincing everyone else, even those without health insurance or pensions, that they are not paid enough. I frequently remember being told specifically by many of my teachers that they were not paid enough through either the direct appeal or your garden variety grumbling.

The question that we were not allowed to ask, of course, is why these incredibly talented underpaid pour souls didn't quit teaching to get jobs where they would be paid well for the extremely valuable skill set. After all, they weren't being forced to be teachers were they? Were they? Oh, that's right, society would fall apart without them and since they invested all that time and effort into getting a teaching certificate, they owed it to society to continue teaching.

Here's a question though. How many men and women do you know in the 20s and 30s who have teaching certificates that are still doing substitution work after 10 years because there aren't enough full-time teaching positions available? Here's an economic question: if there are people who want to do a job than there are openings for that type of job, is it is an indication that the wages and benefits of the job are too low? If I believed my teachers for the twelve years they complained about their paychecks, I would have to assume that every new teacher I met must either be some kind of moron or masochist. The couldn't be that dumb though, right, they have a teaching certificate. They must be masochists!

Now, of course, the argument could be made that the shortage is artificially caused by the school boards and taxpayers who are not giving enough money to the schools to hire the correct amount of teacher to achieve the right level of student-teacher ratio in the classrooms. Then I, the partial owner of a standard 20 year old suburban house with 2.4 kids who are not yet of school age look at my annual tax bill of $4,000 and wonder how much money could possibly be enough. And, of course, my school taxes just went up again this year.

There may be some other arguments out there to explain why we have such an abundance of 20 and 30 year-olds looking for full-time employment in a job that apparently pays so little, but I'll have to ask a few more people for that.

Friday, January 4, 2008

Iowa

Noonan on Iowa

A lot of pundits are gushing on and on about Obama and how Clinton is done. Having spent the 16 years reviling Clinton and everything she stands for, I can tell you that I would much rather have her as President than Obama or Edwards. I may even vote for Clinton if one of the scarier candidates becomes the GOP nominee. Let's hope it doesn't come to that.

Here is the scarier part. This is how Obama is winning. The quote is from the article and the italics sounds like the BS I heard on TV last night coming out of several camps not just Obama's

"He did it with a classy campaign, an unruffled manner, and an appeal on the stump that said every day, through the lines: Look at who I am and see me, the change that you desire is right here, move on with me and we will bring it forward together."

What the hell does that mean? Bring the country together, solve the nations problems, move forward? That God the term "proactive" has finally left the quiver of BS terms.

One can only conclude that this is nothing more than a personality contest. Leader, proven, experience, etc. Then they ask us to look at their record by very selectively choosing facts. Then when the opponents bring out the parts of the record they don't want us to know about it is called "negative" advertising. Except in Huckabee's case.

He not attacking anyone's record, he is going straight for attacking their religion. And it's working. Or at least it worked in Iowa. And that is what makes this whole process truly frightening. It is nothing more than a High School presidential campaign. Even the empty rhetoric about the issues is gone. Now it's: Jesus and the Devil were brothers under his religion. "We're going to move the country forward, not backward, sideways, not forward, and always twirling...twirling...twirling."

The Simpsons seem to have the best understanding of American politics. It's too bad the average voter doesn't. The episode with the Bear and the Bear Tax comes to mind as well. "Are these morons getting dumber or just louder?"

Wednesday, January 2, 2008

Open Space

After turning the idea around in my head some more, I believe that Open Space preservation or whatever government wants to call it, should never be done at anything higher than the municipal level. Even that strikes me as being a bit opposed to the simple morality of the free market, but at least at the municipal level those who enter such a program against their own better judgment will at least receive some benefit since they are located close to the open space. People in a developed end of the county will not, however, receive a benefit from preserving open space in another part of the county.

So, in summary:

Spending taxpayers money to preserve open space is wrong for two reasons:

1. It takes money away from people against their will for something they do not support and that is not an essential function of government.
2. It makes government a player in the market for real estate (and probably the largest at that) albeit it in a more passive role than, for example, a developer.
3. It,like all government programs, is open to abuse and bad decision making based on things other than market forces; in fact, there really isn't any criteria for determining what should be preserved.