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Catholic Mass, Andy Reid, School Choice And Dumb Security Measures

 A compilation of random observations

The best thing about being a columnist is that there’s never a shortage of material — especially the kind that leaves you shaking your head.  The bad part is that there isn’t enough time to cover all those topics thoroughly.

So the following is a brief perspective on various events, many of which the media has missed:

Pennsylvania School Choice Disaster:  For the last year, those fighting for educational reform (comprehensive choice in education) but against Senate Bill 1, the fatally-flawed bill in Harrisburg that would have neither educated nor reformed (and is now dead), were lectured on the merits of “incrementalism” by SB 1 proponents. “You have to get a little at a time,” they scolded.

Well, despite never actually trying to pass a broader bill that would include the middle class, which is why school choice failed, the SB 1 folks pushing the incremental approach were, admittedly, smashingly successful.  They set the entire Movement back incrementally.  Comprehensive school choice passed the senate in 1991, and garnered 89 votes in the House (of the needed 102). In 1995, an even broader bill had 101 votes — just one shy.  Yet in 2011, with a Governor who made vouchers a number one priority, major Republican majorities in both chambers, and literally millions at their lobbying disposal, the SB 1 forces couldn’t even get 90 votes, as evidenced by the vote this week.

So let’s see. In 20 years, we went from 89 to 101 to 90.   Not exactly progress, but definitely incrementalism. 

Political Motivation: The “politically motivated” charge is an overused — and   meaningless — line uttered by those who refuse to confront the truth.  Consider two recent examples, with the typical lack of follow-up by the media to call the complainers on the carpet:

Herman Cain is certainly an affable chap, but had no business running for President for two reasons.  First, he was simply clueless on the issues, as his entertaining responses illustrated.  Second, if you’re going to be under the most intense spotlight in the world, you need to be up front with your skeletons so that they are revealed on your terms. But Cain didn’t do that, and he got burned.

How could he possibly think that three sexual harassment suits wouldn’t come to light? In his announcement speech, he could have denied wrongdoing, blamed bloodthirsty trial lawyers and wimpy settle-happy insurance companies, and moved on.  Instead, he just kept blaming Rick Perry and later the Democrats for leaking it, self-righteously stating that the story was “politically motivated.”

Hey Herman, here’s a newsflash.  You were running for President of the United States! Of course it’s politically motivated!  So what? It’s not whether something is politically motivated but whether the allegations were true — which the national media never seemed to ask. Politicians leak things about their opponents all the time, motivated by their desire to win.   If he had just been honest from the beginning, he might well still be in the race.

And locally, we have all the Democratic leaders fuming about the new congressional districts, redrawn every ten years by the party in power in Harrisburg, which happens to be the GOP.  Therefore — you guessed it — we have the Dems leveling the charge that the gerrymandered districts were drawn that way for political purposes (or, as one classicly described the new 7th District, “Meehan-mandered”).

Well, let’s see.  They are congressional seats, filled by… politicians.  They are designed by… politicians.  They will remain unchanged for the next decade, so the drawing was done for … political purposes.  Where’s the surprise?  That’s the way it’s always worked.  Interestingly, the Dems’ statements could be swapped word for word with Republicans when they were out of power.

Wouldn’t it have been refreshing to hear a Democratic official just be honest and say, “Yes, the districts suck for us. Kudos to the GOP.  They got slaughtered in 2006 and 2008, but won when it counted (2010), and now we have to live with the results. It’s our Party’s fault, so we’ll be sure to gear up in 2020 to gerrymander them to our liking.”

But that type of honesty is just a pipe dream in politics.

Catholic Church changes: Church leaders decided that it would be a nice idea to substantially change the liturgy using new translations.  Brilliant move.  It took centuries for most Catholics to even begin mumbling the prayers at Sunday Mass (though singing is still nonexistent), and now they change the whole works?  You can hear the crickets…

Fair or not, it has also left many wondering why the Church spent so much time and energy on such an endeavor while still not cleaning up its own house regarding the (continuing) sex scandals. And not coincidentally, more Catholic school closings will be announced next month.  Sorry, that’s not because of the economy, demographics and population shifts, but lack of leadership, very little transparency and an image of arrogance that will be very hard to break. Amen.

Safe To Fly? Think Again: A hugely important story that got very little attention is the new Transportation Security Administration (TSA) rules that don’t require children under 12 to take their shoes off for x-ray inspection. Additionally, children will receive significantly fewer pat-downs (which, despite the inevitable claims by one or two loud-mouthed whining parents who just want to get on TV, are not intrusive. And the parents are never separated from their children during pat-downs).

Well, at least it’s reassuring that terrorists don’t know about this new policy.  Oh wait…they do.

Not only do we implement such an insane, politically correct procedure, but gleefully announce it to the world.  And since there are numerous examples of terrorists strapping bombs to their children’s bodies in the name of God knows what, does anyone really think they won’t gleefully accept this gift, change their strategy, and place explosives in Junior’s shoe?

And when the next disaster occurs, we’ll all stand around wondering how on Earth this could have happened.  For that answer, just look to the TSA signs announcing the policy.

Of course, before that tragedy occurs, we could end the security theatre and start profiling, make everyone take off their shoes, and have no exceptions for pat-downs.  As always, those who don’t like it can take the bus to Europe.

And finally, for all the Eagles fans who have been praying for Andy Reid’s firing at the end of the season, keep dreaming. The Birds will play just well enough to keep the best three-quarter coach in football right where he is.  After all, this is Philadelphia, and we revel in the misery heaped upon us, year after year, by boneheaded decisions made by our teams.

And you can take that $10,000 bet right to the bank.

Chris Freind is an independent columnist, television/radio commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com  His self-syndicated model has earned him the largest cumulative media voice in Pennsylvania. He can be reached at CF@FreindlyFireZone.com

 

 

 

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December 16, 2011 at 2:43 pm Comments (0)

Nutter’s Tax Increase Makes Him A Joke

Nutter’s Tax Increase Makes Him A Joke

BY CHRIS FREIND

It was a rainy, warm March back in 1936, and the snow in the hills around Johnstown began to melt. This caused the unfortunate city to be leveled by yet another flood. To help rebuild Johnstown, Pennsylvanians were forced to pay a temporary 10 percent tax on all wine and spirits.

The key word being “temporary.”

Even though the town was back on its feet in a few years, the tax remains. And it now stands at a whopping 18 percent.

About the only joke bigger than a politician telling you that a tax will be temporary is the politician himself. And what a laughingstock Philadelphia Mayor Michael Nutter has become.

After two terms of John Street’s incompetence, expectations were high that Nutter would make the city shine again. Many thought the new mayor actually understood what it took to create a healthy business climate in Philadelphia.

Nothing could be further from the truth.

Underneath his monotonous, boring exterior lies a blazing liberal Democrat who believes increasing the power of government is the best way to solve problems. In other words, trampling on the backs of his overtaxed and over-regulated constituents.

You see, Mr. Nutter doesn’t have the guts to make the bold decisions required of a true leader. He won’t take on the special interests, refuses to cut wasteful spending, and has done nothing to rectify the bureaucratic black hole that is city government. Instead of making Philadelphia the economic engine it should be, Nutter has chosen to continue down the disastrous path of business-as-usual.

Because of a lack of both business acumen and courage, Nutter begged the state legislature and Gov. Rendell to bail him out of his fiscal jam. His solution to make Philadelphia prosperous? Tax, tax, tax.

He sought, and unfortunately will receive, the power to “temporarily” increase the city’s sales tax by 100 percent. Wow, that’s going to work wonders for making Philadelphia a desirable place to live, shop and do business.

Any short term gain will be offset by long term losses, and, categorically, there is absolutely no way the tax will be temporary.

The reality is that people will simply cross the city line to make their purchases, from TV’s to refrigerators to washing machines. So not only will the city fail to realize the anticipated revenue of its tax increase, it will lose the sales tax in its entirety. But this isn’t just a Philadelphia issue. When people cross into New Jersey, or better yet, Delaware (where there is NO sales tax), Pennsylvania will lose its 6 percent. And more people will be incentivised to use the internet to shop, yet another way to avoid the tax.

When will elected leaders realize that you cannot tax your way out of a recession? Taxes never lead to prosperity. They simply result in people and businesses fleeing to a friendlier location.

But this obvious truth is lost on Philadelphia’s leaders.

Study after study show what the citizens of Philadelphia already know: that our great city is being devastated because of politicians who care more about themselves than the people they serve.

Philadelphia ranks as one of the least desirable places to locate. It levies some of the highest taxes of any city in the country. Its educational product is horrendous.

Between 2000 and 2007, Philadelphia lost 4.5% of its residents, the largest percentage drop of any Top 25 city. From 1990-2000, the City of Brotherly Love’s population losses were the third largest of the 243 cities with more than 100,000 people. Since 1970, the city has lost 265,000 jobs and 450,000 residents.

How many companies cross Philadelphia off their list of places to locate? We are out of the game before it even begins.

And where is the mighty Philadelphia Chamber of Commerce, who should be leading the charge against such suicidal polices? Nonexistent. Why? Two words: David Cohen.

As Chairman of the Chamber, and one of Gov. Rendell’s closest allies and biggest fundraisers, Cohen can be counted on to be the go-along, get-along guy. So much for a pro-business Chamber.

When does it end?

If the 73 year old liquor tax is any indication, not for a very long time.

Chris Freind, author of “Freindly Fire,” is an independent newspaper columnist and investigative reporter whose readers hail from six continents, thirty countries, and all fifty states. He can be reached at CF@FreindlyFireZone.com

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August 27, 2009 at 11:19 am Comments (0)

Rendell: Always Sticking His Nose Where It Doesn’t Belong

Rendell: Always Sticking His Nose Where It Doesn’t Belong

Gov. Should Not Try To “Partner” With The Media

BY CHRIS FREIND

Ed Rendell just doesn’t get it.

Pennsylvania’s Democratic governor has always had a long history of sticking his nose where it doesn’t belong, but an article in the Aug. 24 New Yorker magazine confirms that Rendell either doesn’t know about the line between government and the media — or just doesn’t care.

It was reported that Rendell had approached billionaire New York City Mayor Michael Bloomberg last year to buy the financially ailing Philadelphia Inquirer and Daily News. Mr. Rendell was quoted as saying, “We discussed a few things, and I tried to convince him to come down and buy The Philadelphia Inquirer and the Daily News.”

After being questioned on his statement, a Rendell spokesman said the governor was just kidding.

Sure he was.

After all, joking about the Inquirer’s demise ranks among the funniest things in the world.

If Fast Eddie didn’t have a track record of wildly overstepping his boundaries, maybe his “joke” excuse would be believable.

Consider:

Earlier this year, Rendell publicly scolded the Sunoco oil company for its decision to lay off 750 workers, calling the company’s action “unconscionable.” Yet he didn’t say a word about the 3,000 layoffs — four times the number at Sunoco — that Comcast has executed in the past year.

Could that disparity have something to do with the amount of campaign money both entities contributed to the governor?

Since the 2002 election, Sunoco’s political action committee (PAC) contributed $55,000 to Rendell.

During that same time period, Comcast’s PAC, its employees, and the spouses of its top executives, have donated $634,350, with Comcast spending an additional $100,000 on the gov’s inauguration festivities in 2007.

But beyond the money trail, the larger question is why a governor is budding into the business affairs of a private-sector company. One of the fundamental principles of this country – at least until recently – is that businesses be allowed to operate free of government interference. Public officials and bureaucrats have no right to force their way into affecting corporate policy because they happen to disagree with a company’s internal business decisions.

Worse than that, however, has been Rendell’s foray into the news media.

The Fourth Estate, as the media is known, is afforded constitutional protections that allow it to be the independent watchdog for America. Once the line is crossed between a media entity and a government official discussing a partnership, all credibility is irreparably lost, on both sides. Attempting to say that such a close relationship would not affect unbiased and objective reporting is simply ludicrous.

But that’s exactly what Rendell has been doing.

Before the current owners of the Inquirer and Daily News bought the papers in 2006, the governor had approached billionaire Ron Burkle, urging him to make a bid. Burkle, a huge player in Democratic politics, contributed $10,000 to Rendell, and another $100,000 to the state Democratic Party. Additionally, he had raised over $1 million for Hillary Clinton.

Oh, and he also contributed $20,000 to the Philadelphia Future PAC, which makes this deplorable situation come full circle.

The Philadelphia Future PAC pumped $471,000 into the Rendell coffers, and is registered at the offices of the Ballard Spahr— the law firm where Rendell worked before being elected governor.

The PAC’s treasurer is David Cohen, arguably the governor’s closest ally, and Executive Vice President at Comcast. Cohen, who has contributed $80,000 to Mr. Rendell, is a longtime Rendell confidant and fundraiser, serving as chief of staff when Mr. Rendell was mayor of Philadelphia. Prior to joining Comcast, Mr. Cohen served as chairman of Ballard Spahr. Cohen’s wife Rhonda donated $156,000 to the governor.

Ballard, which provides legal counsel to Comcast, has come under intense media and legislative scrutiny for the frequency and amount of the secretive no-bid contracts it has received under the Rendell administration. The firm has contributed $481,000 to the governor’s campaigns, with its attorneys donating an additional half million dollars. The address on Gov. Rendell’s campaign finance reports is the 51st floor of 1735 Market Street in Philadelphia — where Ballard Spahr occupies the entire floor.

Mr. Cohen also serves as chairman of the Greater Philadelphia Chamber of Commerce.  Despite Mr. Rendell’s unprecedented intrusion into the private business sector by his attack on Sunoco, a major Philadelphia employer and chamber member, no action was taken by the chamber to defend the company.

See a pattern here?

So it shouldn’t have come as a surprise when yours truly broke the story earlier this year that Rendell was engaged in talks with Brian Tierney, publisher of the Inquirer and Daily News, for a taxpayer-funded bailout for the papers. At Gov. Rendell’s request, meetings also took place that explored the two largest state pension funds bailing out the newspapers.

After a public uproar, Philadelphia Media Holdings, which owns the papers, filed for bankruptcy.

Despite criticism from the Wall Street Journal, which called taxpayer-bailouts for newspapers “the worst bailout idea so far,” George Will’s syndicated column, and the Dick Morris’ New York Times bestseller Catastrophe, Mr. Rendell still doesn’t see anything wrong with exerting his influence in the private sector.

Undoubtedly, he would have been better off focusing on the duties for which he was elected. If he had, Pennsylvania wouldn’t be facing a $3.2 billion deficit, and his approval rating wouldn’t stand at a dismal 39%.

The governor’s repeated efforts to be an integral part of the very media charged with covering his performance is repugnant. If he wants to be part of a newspaper upon leaving office, good for him. But until that time, he needs to do his job— and hopefully the rest of the media will do the same.

Chris Freind, author of “Freindly Fire,” is an independent newspaper columnist whose readers hail from six continents, thirty countries, and all fifty states. His home publication is The Philadelphia Bulletin. He can be reached at CF@FreindlyFireZone.com

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August 21, 2009 at 7:26 am Comments (0)

Sen. Specter On the Bailout: One-on-One with Chris Freind

Sen. Specter On the Bailout: One-on-One with The Bulletin

Chris Freind’s Exclusive Interview With Pennsylvania’s GOP Senator

BY CHRIS FREIND

Pennsylvania Republican Senator Arlen Specter recently voted in favor of the $800 billion bailout legislation designed to right America’s economic ship. Since he is one of only three Republicans to break party ranks, Specter is attempting to weather a storm of protest from his own party.

Making the situation more intriguing is that the thirty-year incumbent is up for reelection next year. While no primary opponent has emerged, some political insiders feel that Mr. Specter’s vote may well facilitate a potential challenger coming forward.

The Bulletin caught up with Sen. Specter yesterday for a brief discussion on the bailout, the economic outlook for the country, and possible repercussions from his vote.

The Bulletin: Let’s get right to the heart of “bailout politics,” as you have received considerable criticism from some in the Republican Party. You are one of only three senators to buck the GOP establishment, but the only one stranding for reelection next year. As an experienced incumbent, clearly you knew that a bailout vote could generate a primary opponent in 2010, yet you cast that tough vote anyway. Was a potential primary election on your mind as you were making your decision?

Arlen Specter: Absolutely. It’s very much on my mind. The primary is a little more than a year away. But what led me to the vote was that the current economic crisis could turn into a 1929 depression. We have already suffered tremendous losses: three and a half million jobs, millions of foreclosures, and inside information is that the economy is even worse off than is publicly known.

I don’t think it’s too strong to say that there was a potential catastrophe, and in good conscience, I simply could not stand by and see the government do nothing.

TB: Some have criticized the bailout bill as containing a large amount waste and “pork.” From your reading of the legislation, is that your impression?

AS: No, there is not. What we do have are quite a number of items that should have been in an appropriations bill as opposed to a stimulus package, and I tried to stop that. President Obama came to speak to the Republican caucus, and when I had my turn to speak, I asked why he was wedded to Feb. 13 (for passage of the bill). And I reviewed problems in the $700 billion dollar bailout where I voted against releasing the second $350 billion. I said that we ought to proceed in regular order. We didn’t have hearings, we didn’t do a mark-up, line by line, and I said there could be a lot of unintended consequences. But we acted in the need for speed.

There were a number of things that factored into my vote on this bill. One was that we got $100 billion out of the bill. Secondly, we increased the tax cuts from 38% to 46%.

And the Chamber of Commerce, which knows more about status of business in America than nearly anyone else, came out very enthusiastically in favor of the bill. They’re a conservative Republican organization.

TB: There seems to be significantly more outrage on this bailout bill as opposed to the $700 billion bailout passed last October. To what do you attribute this?

AS: Because it’s Obama in office now. It’s political. George Bush did exactly the same thing. He came out with a $700 billion package, which is in the same ballpark. I didn’t get the criticism for supporting Bush because I supported a Republican.

I’m firmly of the opinion that there’s no Democrat or Republican way to handle this situation. It has to be objective and American. What’s in the best interest of the country? I couldn’t sit back and say nothing would be done.

And let me say this. I didn’t want to be the negotiator. Senators Collins and Nelson were doing it, and I stayed in the background. Only when it was necessary did I participate.

Remember, I voted for Sen. McCain’s $450 billion tax cut. I supported President Reagan’s tax cuts in 1981. This was the best arrangement that could be made.

Listen, my Republican colleagues conceded that something had to be done, but no one stepped up to negotiate. Not anybody. There were just two of us in that room – Sen. Collins and me.

TB: From a financial perspective, are these trillion dollar packages going to result in America just printing more money, thereby leading to higher inflation?

AS: If we didn’t do something, we would have a lot more unemployment, more loss of productivity, a lot more loss of taxes. Will this succeed? Economics is not a science. No one knows for sure. But one thing I think is pretty sure. If we’d have done nothing, it would have gotten a lot worse. A lot worse.

Chris Freind can be reached at cf@thebulletin.us

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February 13, 2009 at 9:21 am Comments (0)

Inquirer’ Bailout Talks Raise More Questions

Inquirer’ Bailout Talks Raise More Questions
Publisher, Governor Make Conflicting Statements
By Chris Freind, The Bulletin

The Bulletin and other media outlets have recently disclosed ongoing discussions between Pennsylvania Gov. Ed Rendell, D, and Philadelphia Media Holdings (PMH) Publisher and CEO Brian Tierney. A possible taxpayer bailout of the struggling media company stands at the heart of the issue.

PMH bought the Philadelphia Inquirer and Daily News in 2006 for $562 million, and approximately $400 million remains in debt. The company is in default because it has not made a payment on its loan since June of last year.

There has been significant public opposition to a media entity seeking financial support from the government, including a Wall Street Journal editorial labeling it “the worst bailout idea so far.” 

Despite this, the governor’s press secretary, Chuck Ardo, stated earlier this week that Mr. Rendell is still open to continuing the bailout discussions.

Complicating the matter are contradictory statements made by Mr. Ardo and Mr. Tierney. 

According to a story on KYW News Radio, Mr. Ardo said there were discussions about state agencies renting space in the newspapers’ building.

Additionally, Mr. Ardo stated that some bailout conversations involved two of Pennsylvania’s large state pension boards, the State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS).

“I don’t know the specifics of the conversations, but the governor did suggest that Mr. Tierney speak with the pension boards to see what kind of arrangements could be worked out,” Mr. Ardo was quoted as saying on KYW.

Mr. Tierney made a contradictory statement, according to the news radio website, by claiming that discussions did not involve the use of pension fund dollars to buy any of the papers’ debt. 

Yet according to a Jan. 31 article in the Inquirer, “Gov. Rendell said he arranged a recent meeting between the publisher of The Inquirer and Daily News and the two largest state employee pension funds in hopes of helping the newspaper company lessen its large debt burden.”

The article elaborated on the bailout discussion timeline, stating that Mr. Tierney “…said that he first sought Rendell’s help about a year and a half ago. He wanted to see if there were any state agencies interested in moving into The Inquirer and Daily News Building.”

Mr. Tierney then approached the governor “to determine what, if any, economic-development funds were available from the state. As a result of those discussions, Rendell set up a meeting last autumn between the publisher and the pension funds.”

A spokeswoman for PSERS told The Bulletin that the pension board did not invest in companies such as Philadelphia Media Holdings, and was unaware of a leasing arrangement of PMH office space.

State Rep. Robert Godshall, R, Montgomery, who serves as a Board Member of SERS, told The Bulletin he too was not aware of any investment in PMH.

The Inquirer declined to comment, while calls from Ardo were not returned as of press time.

Chris Freind can be reached at cf@thebulletin.us

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February 13, 2009 at 9:11 am Comments (0)

Obama’s address to the nation – Ugh

I listened to Obama’s address tonight.

I could go into a detailed analysis of what I thought, but I’ll give you the short version based on what I heard:

This administration has no faith in the private sector. We are heading for a full speed train wreck. This administration is a disaster waiting to happen.

This is one of those time when I really hope I’m wrong – I’m being dead serious too.  Being wrong would make me very happy right about now.  I don’t feel confident about being wrong though for one simple reason – The fact that Obama has history wrong – Bush did too much and too much of the wrong thing, not too little as Obama suggested, which is why we are in the shape we are in.  Throw in the bad history lesson on the New Deal and you’ve got a lasting economic situation that doesn’t have to last as long as it will last.  I just quoted Chief Executive Magazine yesterday on the real deal with the New Deal.

If you’d like to learn how we should be dealing with this – it would be wise to learn some history about the depression of 1920 – not the Great Depression starting in 1929. That depression lasted about a year.  Here’s a couple of resources to get you started – here and here.  And in case you think the link to von Mises is BS – remember this – in 1928, when the economy was rolling full steam ahead, von Mises predicted the 1929 crash would happen.  Sounds like he knew his stuff.  But gee, why would we want to listen to what he has to say right?  No, instead, we’d rather take a cue from government officials who didn’t see the current economic situtation we are in, or who evade paying taxes.  Yeah, that makes perfect sense.

As it’s been said before – Those who know not history are doomed to repeat it.

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February 9, 2009 at 11:13 pm Comments (0)

Limits on Exec. Pay

We continue living out Atlas Shrugged.  Hasn’t anyone in Washington read the book?

Today we learn that Obama imposed a $500,000 cap on executive salaries for companies that have recieved federal bailout money.  I get the whole arguement about “well, it’s taxpayer money – and the bonuses and pay is excessive.” I don’t agree with it, not because the government doesn’t have the right to do it since government gave these institutions bailout money, but rather from the standpoint that the government should not have bailed out these institutions in the first place.

MSNBC’s article on the topic started out with this:

President Barack Obama on Wednesday imposed a $500,000 cap on senior executive pay for the most distressed financial institutions receiving taxpayer bailout money and promised new steps to end a system of “executives being rewarded for failure.”

My question is simply this – if we want to end a system of “executives being rewarded for failure,” then why are bailing these institutions out in the first place.  A far less expensive proposition for the American taxpayer would be to let the market do it’s job – that means more business and banking institutions fail on their own because they were run poorly.  Allow the recession to work – it’s a natural part of the economic cycle of growth and retraction.  A recession is nothing more than a correction of overvalued excess.

But if the geniuses in Washington did that, then it would show that we really don’t need them – the economy can self-correct.

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February 4, 2009 at 11:49 pm Comments (0)

Ayn Rand appears right – unfortunately

The Wall Street Journal posted an article by Stephen Moore - ‘Atlas Shrugged': From Fiction to Fact in 52 Years. Wow is all I can say.  Well worth reading the entire article.

We already have been served up the $700 billion “Emergency Economic Stabilization Act” and the “Auto Industry Financing and Restructuring Act.” Now that Barack Obama is in town, he will soon sign into law with great urgency the “American Recovery and Reinvestment Plan.” This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion — in roughly his first 100 days in office.

The current economic strategy is right out of “Atlas Shrugged”: The more incompetent you are in business, the more handouts the politicians will bestow on you. That’s the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies — while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to “calm the markets,” another trillion of national wealth is subsequently lost. Yet, as “Atlas” grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate “windfalls.”

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January 10, 2009 at 10:16 pm Comments (0)

Postponing Reality – Sowell Style

Thomas Sowell wrote an excellent piece on the effect of all these wonderful bailouts.  Think saving the buggy whip industry and you get the idea.  Well worth the read.  Here’s a sample:

The current bailout extravaganza is applying the postponement of reality democratically– to the rich as well as the poor, to the irresponsible as well as to the responsible, to the inefficient as well as to the efficient. It is a triumph of the non-judgmental philosophy that we have heard so much about in high-toned circles.

We are told that the collapse of the Big Three automakers in Detroit would have repercussions across the country, causing mass layoffs among firms that supply the automobile makers with parts, and shutting down automobile dealerships from coast to coast.

A renowned economist of the past, J.A. Schumpeter, used to refer to progress under capitalism as “creative destruction”– the replacement of businesses that have outlived their usefulness with businesses that carry technological and organizational creativity forward, raising standards of living in the process.

Indeed, this is very much like what happened a hundred years ago, when that new technological wonder, the automobile, wreaked havoc on all the forms of transportation built up around horses.

For thousands of years, horses had been the way to go, whether in buggies or royal coaches, whether pulling trolleys in the cities or plows on the farms. People had bet their futures on something with a track record of reliable success going back many centuries.

Were all these people to be left high and dry? What about all the other people who supplied the things used with horses– oats, saddles, horse shoes and buggies? Wouldn’t they all go falling like dominoes when horses were replaced by cars?

Unfortunately for all the good people who had in good faith gone into all the various lines of work revolving around horses, there was no compassionate government to step in with a bailout or a stimulus package.

They had to face reality, right then and right there, without even a postponement.

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December 17, 2008 at 10:08 pm Comments (0)

Bailout commentary

Ok, the bailout is going to go through.  I still think this will have negative long term consequences.  The part that is especially troubling to me is the reasoning behind the bailout – not even the arguments about CEO pay or anything like that.  The statements that are troubling to me are statements about how we need to save our credit system.

Here’s the most recent example – Rich Galen posted the following statement in his most recent Mullings:

I have two Amex cards – one for business use one for personal – a Visa ATM card and a MasterCard. Four. Which, according to an article in the San Jose Mercury News is the number the average American has in his or her wallet.

In fact, there are just short of a BILLION Visa, MasterCard and American Express cards in circulation in the US representing a total debt a little shy of a TRILLION dollars.

Credit cards have been the fuel behind the extraordinary growth in the US economy which has been largely based upon consumer spending.

I’m all for economic growth.  I fully embrace the free market system – which is why I think this bailout is a bad deal.

My problem is this – have we allowed ourselves to grow the economy on money that was not there?  This statement is troubling to me because what it tells me is that the only way our economy can grow is by keeping people in debt.  How is that a good thing?

Debt can be good – it’s how we “buy” our homes because who has a couple hundred thousand dollars laying around to actually buy a home.  I’m not against credit.  I’m against the mentality that says gee I don’t have the $4 for a cup of coffee, I’ll just put it on a credit card.  The $4 cup of coffee turns out to be a $20 cup of coffee after you finally pay it off.  There is no self-restraint for long term gratificition.  It’s all short term gratification and that is very dangerous.  If we are all short term in our thinking about wants and needs, then we are in big trouble.  A $700 billion bailout won’t solve the problem – it will make it worse because it will enable people to continue to live beyond their means, stay in crushing debt, and suffer the consequences of that debt.

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September 29, 2008 at 8:52 am Comments (0)

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