CityGirl
Silver Member
Excerpt from http://www.financialsense.com/editorials/quinn/2008/1209.html
CAPITALISM WITHOUT LOSS IS LIKE RELIGION WITHOUT HELL
There has been much chatter about John Maynard Keynes in the last six months. Stimulus packages are based on his concept of the government stepping in as the spender of last resort when demand evaporates. I prefer to focus on these wise words of Mr. Keynes and another astute man of the Depression era.
“What a Government spends the public pay for. There is no such thing as an uncovered deficit.” (John Maynard Keynes)
“Politics is the art of looking for trouble, finding it, misdiagnosing it, and then misapplying the wrong remedies.” (Groucho Marx)
There is an overwhelming consensus that government must do something to save us. Whenever I see Republicans, Democrats, supply-siders, and Keynesians all agree about something, I know it will be a calamity. Haven’t they done enough already. Based on the chart below, they have committed our grandchildren to spending more than all the major initiatives in the history of our country.
Our country is now permitting government leaders to pick the winners in our economic system. Their history of picking winners is not comforting.
Government chose ethanol as the winner in the alternative fuels business. It requires more than a gallon of fuel to produce a gallon of ethanol. The windfall profits for farmers gave them incentive to grow only corn. This led to rising prices for other commodities, higher feed costs which led to higher meat costs, and a frenzy of ethanol plant construction. Now that oil is $43 per barrel, ethanol makes no financial sense. Ethanol plants are closing by the hundreds.
The government is now selecting which banks will survive and which will fail. They are practicing protectionism by pouring at least $15 billion into failing American carmakers, at the expense of Honda, Toyota, and Nissan. These three companies employ hundreds of thousands of Americans, make better cars, and are profitable. We are punishing them for running their companies well. Jim Rogers again hits the nail on the head. “They’re taking the assets away from the competent people, giving them to the incompetent people and saying to the incompetent: ‘OK, now you can compete with the competent people, with their money.’ I mean, this is terrible economics.”
The FDIC has been pushing for modification of loans to stop mortgage foreclosures. The latest data shows that 50% of all the homeowners that received modified mortgages are in default again. People that cannot make their mortgage payment must be foreclosed upon. They should become a renter. If the government uses TARP money to delay foreclosures, the housing market will not recover for a decade.
Ten percent of all homeowners in the country are either in foreclosure or in default on their mortgages. Letting foreclosures run their course will contribute to lowering prices and will lead people to buy homes again.
The twisted form of capitalism we are currently practicing is summed up by Winston Churchill, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” The bankers on Wall Street received the blessings of millions in compensation, and the taxpayers are experiencing the misery of bailing their companies out.
RISE AND FALL OF ROMAN EMPIRE – CRITICAL CROSSROADS
“The budget should be balanced. Public debt should be reduced. The arrogance of officialdom should be tempered, and assistance to foreign lands should be curtailed, lest Rome become bankrupt.” (Marcus Tullius Cicero 106 BC to 43 BC)
Even Rome had politicians with some common sense. Decisions we make in the next decade will determine whether the American Republic follows the path of the Roman Empire or can reverse course and fulfill the noble dream of our Founding Fathers. Thomas Jefferson and George Washington foresaw the hazards ahead.
“Yes, we did produce a near-perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom? Material abundance without character is the path of destruction.” (Thomas Jefferson)
“I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” (Thomas Jefferson)
“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible.” (George Washington, Farewell Address, September 17, 1796)
Our country was founded upon the principles of freedom, responsibility, and opportunity to succeed or fail. Government was supposed to play a limited role in our lives. Government’s function was to defend against foreign invaders, provide basic services, enforce the laws, and maintain the public infrastructure of the country. Over time government has incessantly intervened in the economic system and by successive steps has moved the country toward socialism. Millions of Americans are now totally dependent upon handouts from the government. This policy of government expansion through the use of credit at the expense of taxpayers is detrimental to the rest of society. Interventionist wars, undeclared by Congress, and maintaining military bases in 117 countries were not envisioned by the Founding Fathers. The more we consent to government intervening in our lives, the more freedom that we lose. We are now experiencing the utmost intervention by government in our 222 year history.
We are in the midst of a major recession. A $700 billion stimulus package will not eliminate our debt and will not make the recession shorter. It will be a pork filled waste of taxpayer money, but it will be spent. The 156,000 structurally deficient bridges, miles of crumbling water pipes, and antiquated power grid should be the focus of any infrastructure spending.
With the millions of unemployed, funds should be set aside to keep people from being forced onto the streets. We should focus our efforts on the poorest and least able to make it through this recession. These efforts should be funded by reducing our global military empire. Propping up failing companies and artificially keeping home prices from declining to their natural level will be a miserable failure and will lead to economic stagnation for at least a decade. David Walker throws down the gauntlet and we must face up to his challenge.
“We must learn the lessons of history. The Roman Republic was the longest-standing republic in the history of mankind. The Roman Empire lasted over a thousand years. There were many people that said Rome was too big to fail. I am sure that most of the citizens of the Roman Empire felt that way. The simple facts of the matter are that Rome fell for at least four reasons, and please listen carefully.
A decline in moral values and political civility at home; an overconfident and overextended military; fiscal irresponsibility by the central government; and an inability to control one’s borders. Does that sound familiar? It’s time to wake up, study history, learn from it, and take steps to make sure that we are the first republic to stand the test of time.”
It ultimately comes down to courage. The reason I always fall back on the wisdom of Thomas Jefferson, Samuel Adams, George Washington, and John Adams is because they showed true courage in shaping this great Republic. If they had failed, they would have been hung as traitors by the British. It takes no courage to vote for a $700 billion bailout package or a $700 billion stimulus package. Barney Frank and Chris Dodd are not Thomas Jefferson and John Adams. If our leaders do not have the courage to do what is morally right for future generations, we will have to put in place a structure that forces them to appear courageous. Some ideas are:
Put back into place the spending limits that worked so well during the Clinton administration. Any increase in spending must be offset by a cut somewhere else or an increase in revenue. Congressmen could then fall back on this as their excuse to not push for frivolous initiatives demanded by their constituents.
Create a bi-partisan commission that will have the authority to create solutions for our $53 trillion unfunded liability problem. Congress could not tinker with the recommendations. They would need to make a yes or no vote on the entire package.
Limit all citizens to six years of public service as elected officials for their country. They would do what was right for their country and then go back to their regular occupation. Stewardship of our country rather than a lifelong career would be their purpose.
If we kick the can down the road for another decade, it will be too late to reverse course. The choice is ours - decline or redemption.
[FONT=Arial,Helvetica,Verdan]© 2008 James Quinn[/FONT]
CAPITALISM WITHOUT LOSS IS LIKE RELIGION WITHOUT HELL
There has been much chatter about John Maynard Keynes in the last six months. Stimulus packages are based on his concept of the government stepping in as the spender of last resort when demand evaporates. I prefer to focus on these wise words of Mr. Keynes and another astute man of the Depression era.
“What a Government spends the public pay for. There is no such thing as an uncovered deficit.” (John Maynard Keynes)
“Politics is the art of looking for trouble, finding it, misdiagnosing it, and then misapplying the wrong remedies.” (Groucho Marx)
There is an overwhelming consensus that government must do something to save us. Whenever I see Republicans, Democrats, supply-siders, and Keynesians all agree about something, I know it will be a calamity. Haven’t they done enough already. Based on the chart below, they have committed our grandchildren to spending more than all the major initiatives in the history of our country.
Our country is now permitting government leaders to pick the winners in our economic system. Their history of picking winners is not comforting.
Government chose ethanol as the winner in the alternative fuels business. It requires more than a gallon of fuel to produce a gallon of ethanol. The windfall profits for farmers gave them incentive to grow only corn. This led to rising prices for other commodities, higher feed costs which led to higher meat costs, and a frenzy of ethanol plant construction. Now that oil is $43 per barrel, ethanol makes no financial sense. Ethanol plants are closing by the hundreds.
The government is now selecting which banks will survive and which will fail. They are practicing protectionism by pouring at least $15 billion into failing American carmakers, at the expense of Honda, Toyota, and Nissan. These three companies employ hundreds of thousands of Americans, make better cars, and are profitable. We are punishing them for running their companies well. Jim Rogers again hits the nail on the head. “They’re taking the assets away from the competent people, giving them to the incompetent people and saying to the incompetent: ‘OK, now you can compete with the competent people, with their money.’ I mean, this is terrible economics.”
The FDIC has been pushing for modification of loans to stop mortgage foreclosures. The latest data shows that 50% of all the homeowners that received modified mortgages are in default again. People that cannot make their mortgage payment must be foreclosed upon. They should become a renter. If the government uses TARP money to delay foreclosures, the housing market will not recover for a decade.
Ten percent of all homeowners in the country are either in foreclosure or in default on their mortgages. Letting foreclosures run their course will contribute to lowering prices and will lead people to buy homes again.
The twisted form of capitalism we are currently practicing is summed up by Winston Churchill, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” The bankers on Wall Street received the blessings of millions in compensation, and the taxpayers are experiencing the misery of bailing their companies out.
RISE AND FALL OF ROMAN EMPIRE – CRITICAL CROSSROADS
“The budget should be balanced. Public debt should be reduced. The arrogance of officialdom should be tempered, and assistance to foreign lands should be curtailed, lest Rome become bankrupt.” (Marcus Tullius Cicero 106 BC to 43 BC)
Even Rome had politicians with some common sense. Decisions we make in the next decade will determine whether the American Republic follows the path of the Roman Empire or can reverse course and fulfill the noble dream of our Founding Fathers. Thomas Jefferson and George Washington foresaw the hazards ahead.
“Yes, we did produce a near-perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom? Material abundance without character is the path of destruction.” (Thomas Jefferson)
“I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.” (Thomas Jefferson)
“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible.” (George Washington, Farewell Address, September 17, 1796)
Our country was founded upon the principles of freedom, responsibility, and opportunity to succeed or fail. Government was supposed to play a limited role in our lives. Government’s function was to defend against foreign invaders, provide basic services, enforce the laws, and maintain the public infrastructure of the country. Over time government has incessantly intervened in the economic system and by successive steps has moved the country toward socialism. Millions of Americans are now totally dependent upon handouts from the government. This policy of government expansion through the use of credit at the expense of taxpayers is detrimental to the rest of society. Interventionist wars, undeclared by Congress, and maintaining military bases in 117 countries were not envisioned by the Founding Fathers. The more we consent to government intervening in our lives, the more freedom that we lose. We are now experiencing the utmost intervention by government in our 222 year history.
We are in the midst of a major recession. A $700 billion stimulus package will not eliminate our debt and will not make the recession shorter. It will be a pork filled waste of taxpayer money, but it will be spent. The 156,000 structurally deficient bridges, miles of crumbling water pipes, and antiquated power grid should be the focus of any infrastructure spending.
With the millions of unemployed, funds should be set aside to keep people from being forced onto the streets. We should focus our efforts on the poorest and least able to make it through this recession. These efforts should be funded by reducing our global military empire. Propping up failing companies and artificially keeping home prices from declining to their natural level will be a miserable failure and will lead to economic stagnation for at least a decade. David Walker throws down the gauntlet and we must face up to his challenge.
“We must learn the lessons of history. The Roman Republic was the longest-standing republic in the history of mankind. The Roman Empire lasted over a thousand years. There were many people that said Rome was too big to fail. I am sure that most of the citizens of the Roman Empire felt that way. The simple facts of the matter are that Rome fell for at least four reasons, and please listen carefully.
A decline in moral values and political civility at home; an overconfident and overextended military; fiscal irresponsibility by the central government; and an inability to control one’s borders. Does that sound familiar? It’s time to wake up, study history, learn from it, and take steps to make sure that we are the first republic to stand the test of time.”
It ultimately comes down to courage. The reason I always fall back on the wisdom of Thomas Jefferson, Samuel Adams, George Washington, and John Adams is because they showed true courage in shaping this great Republic. If they had failed, they would have been hung as traitors by the British. It takes no courage to vote for a $700 billion bailout package or a $700 billion stimulus package. Barney Frank and Chris Dodd are not Thomas Jefferson and John Adams. If our leaders do not have the courage to do what is morally right for future generations, we will have to put in place a structure that forces them to appear courageous. Some ideas are:
Put back into place the spending limits that worked so well during the Clinton administration. Any increase in spending must be offset by a cut somewhere else or an increase in revenue. Congressmen could then fall back on this as their excuse to not push for frivolous initiatives demanded by their constituents.
Create a bi-partisan commission that will have the authority to create solutions for our $53 trillion unfunded liability problem. Congress could not tinker with the recommendations. They would need to make a yes or no vote on the entire package.
Limit all citizens to six years of public service as elected officials for their country. They would do what was right for their country and then go back to their regular occupation. Stewardship of our country rather than a lifelong career would be their purpose.
If we kick the can down the road for another decade, it will be too late to reverse course. The choice is ours - decline or redemption.
[FONT=Arial,Helvetica,Verdan]© 2008 James Quinn[/FONT]
Well, Didya read the whole thing? CB thinks folks on this forum are too shallow for this stuff. What say ye?
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