July 10, 2009, 5 p.m. By Paul Singer Roll Call Staff
Freshman Rep. Alan Grayson (D-Fla.) lost $3 million in a stock swindle between 2000 and 2005, a Florida television station reported this week.
According to Orlando’s Local 6, Grayson was an investor in a Ponzi scheme run by the company Derivium Capital. The scheme allowed Grayson and other investors to turn over stock to Derivium in exchange for cash loans and redeem the value later if the stock prices increased.
The station cited court filings indicating that Grayson transferred about $29 million in stock to the fund, taking out about $26 million in cash. A South Carolina court ruled earlier this year that Derivium shareholders were owed about $270 million in lost profits and that Grayson’s share of that would be about $34 million.
Grayson, an attorney who started a lucrative telecom company, has not yet filed financial disclosure forms for 2008, but even with his losses, he is likely to rank among the top 10 richest Members of Congress this year. As a candidate last year, he reported assets worth more than $25 million.
He is a member of the Financial Services Committee.
Oh, wait. Grayson is my congressman. I guess the joke is on me.
In the 1950s, Ed Sullivan paid Elvis Presley $50,000 to appear several times on his show. It wasn't Sullivan's choice; The Steve Allen Show had had Elvis on previously and had crushed Sullivan. So Elvis was booked, singing Don't Be Cruel and Love Me Tender. Famously, Elvis was shot mostly from the waist up, because his gyrations were deemed too controversial to show.
Every generation of youth must find a way to rebel, to shock the older generations. In the 1950s, Elvis was controversial. Today, he's elevator music.
In my day, Madonna was shocking and controversial.
Today, she's elevator music. Well, that's not strictly true... nobody listens to her anymore.
And so it goes. KISS and Ozzy? Fodder for reality TV nowadays. Marilyn Manson? Pftttt. So '90s. Gangsta rap? Yawn.
Sure we look disgusting But whose chops are we busting? In a year, maybe two, we'll seem tame
I feel bad for today's kids. It must be harder and harder to shock the squares, to make your parents wonder where they went wrong. Music has broken so many taboos that there really aren't very many left to break. Hairstyles, clothing, nothing shocks anymore. Things that even back in the 1990s would have had parents brandishing pitchforks and torches are ignored or simply waved off with a "what a dumbass" (for example, the "prison bitch" style where pants are pulled down to show underwear and butt crack).
See, kids, your parents listened to rockers sing songs about Satan, had piercings, had premarital sex, did drugs. You can't shock them.
Is there a point to all this? Surprisingly enough, yes.
North Korea today threatened to wipe the United States off the map. Now, discounting for a second that they can't actually do that even if they have a few nukes, and discounting the fact that attacking us would result in North Korea becoming a glass parking lot, this sort of extreme rhetoric has become the equivalent of a teenager coming home with six piercings, green hair, and a swastika t-shirt. Threatening to simply go to war doesn't impress anyone nowadays. Dictatorships threaten this all the time. Every recent action coming from NK has been designed to ratchet up the shock and tension. The recent withdrawal from the Korean War armistice (which, technically, means we're already at war with them), their nuclear program, their almost daily insane threats, all of this is intended to provoke a reaction, to get the United States back to the table to give the failing NK government more stuff. Kim Jong Il needs us to prop up his Orwellian disaster-area state for a few more years.
Like a teenager's attempts to shock his parents, there are limits as to what we can tolerate. Kim Jog Il isn't dressing in dark clothes, listening to devil-rock, and cutting himself to get attention anymore... he's moved on to animal torture and threats against the neighbors. When someone is threatening to KILL YOU, there comes a point when the amused ignoring can't go on. We've reached the end of what the rebellious kid can be allowed to do to shock us.
There is actually a historical pattern for what is going on right now. World War I, the "War to End All Wars," is largely forgotten nowadays, at least compared to the much more romanticized Second World War. We've forgotten just how brutal, how horrific, it was. Whole generations of young Europeans were sacrificed for a few hundred miles of bombed-out wasteland. Compare Iraq's casualties of less than 5000 in six years with the body count of 146,000 French and British cdeaths in the Battle of the Somme, which took place from July to November 1916. The British alone had over 19,000 dead on the first day. That war was a meatgrinder in an almost literal sense. When it was over, the nations of the world were desperate to prevent another war like it.
We like to mock Neville Chaimberlain over his appeasement of the Nazis, but what we fail to understand is that for him and the men of his generation, the First World War wasn't a chapter in a history textbook. They'd lived it only twenty years before. Nobody reasonably expected that Hitler wasn't bluffing. "After all," they reasoned, "It would take a madman to willingly start another World War." Best just give Hitler what he wanted, because it was assumed that he was just blustering, but we don't want to risk it. Let him have the Rhineland, Austria, Czechoslovakia. Better that than sacrifice another generation to war.
Hitler had a weapon that his opponents were unwilling to use: ruthlessness. His first choice wasn't war with France and England, but he was willing to start one if he had to. HE WASN'T BLUFFING. He couldn't be appeased. He was willing to do the unthinkable to get what he wanted. Eventually even Chaimberlain understood that, but only after it was too late.
Kim Jong Il is playing the same game. He may or may not be willing to risk a real war, but we can not assume he is bluffing or can be appeased. He must be treated as if his threats are real. The only weapon one has against ruthlessness is ruthlessness. This does not mean glassing his country (unless he uses a nuclear weapon), but his threats must be met with threats, his provocations must be met with steely resolve. That ship carrying weapons we've been tracking? It should be seized. All aid to North korea should be shut off, sanctions should be brought into play, and diplomatic efforts towards South Korea, Japan, and China should focus on isolating North Korea even more.
And if he pulls the trigger, we must be prepared to go to war to stop him.
A commenter named Nemo over at Gateway Pundit replied to me in a troll-filled thread. Since the Haloscan system won't let me post a long reply, I brought my reply here. Trolls from that thread... you are unwelcome. Anyone can comment if you are polite. If you behave like you do in that thread, I will either delete your comments or alter them so they are more amusing to me. Probably the latter.
Nemo's comments are in green.
---------------------- Nemo, I'm going to go through your post point-by-point, since you raise many issues that need to be addressed.
Alight Evil Otto you got us. I can't defend all of President Obama's policies because quite frankly I don't agree with all of them.
Glad to hear it, Nemo. For the record, most of us here didn't agree with all of Bush's policies. I agreed with more of Bush's policies than I disagreed with, but we're talking about 60-40 here, give or take. I skew more libertarian than conservative, but the Democrats haven't run ANYONE for president that I could stomach since I came of age to vote.
Infact if the President were now to try to start up relations with Iran after their election was so obviously rigged I'd be quite upset.
Me too, but I'm in a general "quite upset" mood ever since Obama got into office and started spending that made George Bush's spending look like nothing. Obama has quadrupled Bush's worst deficit, all in only a few months. He's bankrupting the country, and we're going to suffer as the recession is joined by massive tax increases and inflation.
As for national healthcare it could work, look at most of the European nations.
I did. And I came to the opposite conclusion. It CAN'T work, not long-term. The US government has been incompetent in running Medicare, Medicaid, the VA, and every other medical program it's tried. Am I somehow to believe they'll be competent in running ALL health care?
National health care will destroy our health care system.
I understand our taxes would be much higher than they are now. If there was an alternative that made let's say insurance more affordable I would have no problem with that.
I would start with tort reform. Limit lawsuits (a major cost in medicine is malpractice insurance), possibly with a "loser pays" system for legal fees. Then I would encourage employers to get out of providing health insurance... give me the money my employer spends on health insurance and let me hunt the free market for the best deal. Competition lowers prices. Encourage more small clinics like the ones run by Wal-Mart, Walgreens, and others. Most minor medical issues don't require a doctor, and the savings would reduce costs.
If there is ever a viable alternative for any idea I would be more then willing to listen.
Good to hear. Personally, I want the government out of the way as much as possible.
Now as for hating conservatives that's just ridiculous.
Again, good to hear. However, I wasn't just addressing you. Look in this thread... tell me that most of the liberals here aren't filled with hate towards conservatives.
Infact the only point I was trying to make earlier was that politics, and therefore the government itself, would run more efficiently if we took out all of the partisanship.
That's not possible. As a (mostly) libertarian, I understand that it is not in the nature of government to be more efficient, nor is it in the nature of government to be less partisan. It's the very nature of the beast. The government is POWER, and as long as it exists there will be competition for power... in other words, partisanship.
The way I would like to handle the problem is to shrink the government. Smaller government means less opportunity for power to be abused. More... MOST decisions should me made at the state and local level. The federal government should be reduced to its Constitutional limits.
Now in no way am I accusing just the GOP of this. It's just quite sad how low we've sunk as a country when it comes to politics.
It's always been like this. Read what some of the Founding Fathers said about each other... makes our little spats seem like nothing.
When it comes to my own personal spelling I'll be the first to admit that I rely a little to heavily on spell check.
At least you use it.
But honestly if the best you can do to tear down an idea is pick it apart like an english teacher, then get a job as an english teacher.
I believe that how one presents an argument is important. When someone posts a comment that looks like a 12-year-old texting his friends, I'm inclined to treat that person as a 12-year-old.
And I really don't mean that in a mean way. When we are freely exchanging ideas it's the ideas we should be dissecting and not the grammer.
I do both. Honestly, I don't care about a few spelling or grammar errors, but look at the comments of "noname" above and tell me you're glad to have him on your side. I'm guessing you think the same thing as I do: "What an idiot."
Finally as for the atheist thing, would it be any better if I were a Muslim? Or would that make you respect my ideas even less (if that's even possible)?
It's not that... I'm agnostic. I just wonder why time and again virtually every liberal I run across on blogs is an atheist, often obnoxiously so. On the conservative side here you have Christians of every stripe, atheists, agnostics, you name it. But it's like liberals I come across on blogs like this are ALWAYS atheist.
Where is the diversity of thought? Where are the comments from Christian liberals? I know they exist.
I went to a Christian school as a child for some time. I admit I met some Christians I really didn't like, but then again I also had the greatest teacher of my life at that school. Just because I don't share the same beliefs as you doesn't mean I don't respect yours. And I hate to even say this but if you are a Christian that blindly hates all Muslims simply because they're Muslims then you are not a true Christian.
I'm not a Christian at all. I don't blindly hate Muslims... however, Islam is a belief system and as such is open for criticism as much as any other. And what I see from too many Muslims is NOT open-mindedness and a willingness to live-and-let-live.
The old testiment may have some heavy stuff about cursing thine enemy but I look to Christ's example. You know the guy who died for ALL of our sins, the same guy who taught to turn the other cheek.
That's the thing... most Christians believe the same thing. In Christian tradition, the New Testament supersedes the Old. If there's a conflict, the Christian is supposed to follow Christ's teachings.
Now I don't believe I've said anything offensive, but I know I think differently than most of you. So if I have offended you I am sorry.
I'm not offended. I give as well as I take. If someone is polite to me, I'm polite back. One reason I got involved in this thread was the sheer volume of nasty, hate-filled liberals commenting here. Tearing their "arguments" apart is great sport.
In his first official visit to China since becoming Treasury Secretary, Mr Geithner told politicians and academics in Beijing that he still supports a strong US dollar, and insisted that the trillions of dollars of Chinese investments would not be unduly damaged by the economic crisis. Speaking at Peking University, Mr Geithner said: "Chinese assets are very safe."
The comment provoked loud laughter from the audience of students. There are growing fears over the size and sustainability of the US budget deficit, which is set to rise to almost 13pc of GDP this year as the world's biggest economy fights off recession. The US is reliant on China to buy many of the government bonds it is planning to issue but Beijing's policymakers have expressed concern about the strength of the dollar and the value of their investments.
The Chinese understand what the average American voter doesn't... we're driving towards a cliff, and the Obama administration's plan of action is "drive faster!"
Half the harm in the world is due to people who want to feel important. They don't mean to do harm, but the harm doesn't interest them. Or they justify it because they are absorbed in the endless struggle to think well of themselves. - T.S.Eliot
We conservatives and libertarians are often painted as hating the poor. We want poor people to go without medical care and housing, at least in the eyes of the more unhinged liberals. We want them to work for low wages, be denied vacations. We're just, well, evil.
No. We're not. We're just realists. We understand that reality can not be altered simply by wishing it to be so. We understand that the attempt to make things better sometimes makes things worse, so judgment and wisdom must be used. And we understand that when government attempts to intervene, the problem will usually get worse.
Out of every hundred new ideas ninety-nine or more will probably be inferior to the traditional responses which they propose to replace. -Will Durant
Our job is to stand in the way, to shout "you shall not pass" whenever the leftist proposes his latest idea for shredding society in the name of making things better.
Thomas Sowell, in his excellent book "A Conflict of Visions," defines the essential conflict as not "liberal vs. conservative," but constrained vs. unconstrained visions. The constrained vision (which views human nature as flawed but fixed) believes that some problems are due to man's nature and will always be with us. The unconstrained vision (which views human nature as malleable) believes that all problems can be solved. Poverty, crime, hatred, these can all be eliminated with enough effort, money, and knowledge. Most people on the right politically tend towards the constrained vision, while most on the left tend towards the unconstrained vision, though obviously there are elements of both on both sides of the political aisle.
The goals of those with the unconstrained vision are often noble. They want to lift people out of poverty, they want to eliminate crime, they want to end racism. However, their belief that any problem can be solved often causes them to push ideas that have consequences that are far worse than the problems they were meant to solve. When people stand in their way, holding up signs saying STOP!, they are vilified. When the flaws in their noble plans are explained, they ignore them and barge forward. And when things collapse, they are never there to take responsibility.
Let's look at what is arguably the trigger for the current financial crisis, the collapse of the housing bubble. The effort to help poor people buy homes was, in and of itself, a noble end. What actually happened, though, was that government guarantees prompted banks and mortgage companies to lend money to people who never would have otherwise qualified (the so-called subprime loans). In fact, laws required companies to make a certain percentage of these loans. Low interest rates (the result of Fed attempts to stabilize the economy after the dot-com crash and 9/11) combined with easy-to-get loans resulted in a rush into home building and purchasing. People bought houses they couldn't afford, many bought houses as investments rather than places to live, and "flipping" houses (buying a beat-up house and renovating it, then selling at a huge markup) became a get-rich-quick scheme. Of those people who bought into that market, many were convinced that if interest rates went up they could simply renegotiate their loans. After all, while prices were going up, they were still building equity, even if they could barely make their payments.
In short order, cookie-cutter housing developments sprung up like mushrooms. Overpriced, high-rise condos were built in many cities. Many apartment complexes renovated themselves and became condominiums. Housing prices hit low orbit.
Of course it couldn't last. As defaults inevitably skyrocketed, lenders began to go bankrupt. Thanks to Fannie Mae and Freddie Mac, the US taxpayers were on the hook for many of them. Housing prices started to fall, and suddenly people began to realize that the $750,000 they had paid for that two-bedroom condo may have been a wee bit much.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' Rep. Barney Frank, 9/11/2003
Do you get it? Part of the reason we're in this mess is because politicians, claiming the best intentions, screwed with the housing markets. In trying to do good, they did greater evil. As the old saying goes, the road to hell is paved with good intentions.
"The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'" -Ronald Reagan
This is by no means the only time the government has created a crisis while trying to help people. Social Security was started as a program to help the elderly retire with at least a moderate amount of money. Medicare and Medicaid were created to provide health care to those who could not afford it, the elderly and poor. In a few decades (or years, depending on who you're asking), they will collapse, creating a financial crisis that will make this one look like nothing. Food stamps were created to feed the poor, welfare was created to provide them money, but the result was generations of families who relied on government assistance in order to survive; rather than ending poverty, welfare continued it. Gun control laws were enacted in many cities and states, resulting in higher crime rates as criminals ignored the law and victims were not allowed the means to fight back. Internationally, DDT bans intended to protect nature have resulted in tens of millions of deaths from malaria. The list goes on and on.
And yet those of the unconstrained vision never learn. Obama's latest goal is clearly to take over control of the United States health care system. After all, prices for health care are outrageous, and he believes that the government can do a better job. He believes this despite all evidence of history that government CAN'T do a better job in anything. He believes this despite overwhelming evidence from other nations that socialized medicine results in ridiculous wait times, decisions made by bureaucrats rather than doctors, and excessive taxation. He believes this because he wants to believe that he can "fix" health care. Those of the constrained vision know exactly where this leads, because we can look at history.
Or let's look at the proposal of Rep. Alan Grayson, the congressman for my home town and arguably one of the biggest pinheads currently in congress: the Paid Vacation Act, which would mandate paid vacation time for all employees (full and part time). Grayson claims he got the idea while at Disney World, which makes sense. I wonder if he was in Fantasyland.
The bill would require companies with more than 100 employees to offer a week of paid vacation for both full-time and part-time employees after they’ve put in a year on the job. Three years after the effective date of the law, those same companies would be required to provide two weeks of paid vacation, and companies with 50 or more employees would have to provide one week.
The idea: More vacation will stimulate the economy through fewer sick days, better productivity and happier employees.
“There’s a reason why Disney World is the happiest place on Earth: The people who go there are on vacation,” said Grayson, a freshman who counts Orlando as part of his home district. “Honestly, as much as I appreciate this job and as much as I enjoy it, the best days of my life are and always have been the days I’m on vacation.”
An employee on vacation is not making any money for his employer, which means a loss of productivity which will have to be made up somewhere else, by someone else. Having the government mandate such vacation does not magically make up for that loss of productivity. Employers will be forced to either raise prices, hire fewer workers (and work those already employed harder), or fire some already working. The result of Grayson's infinite generosity will be... wait for it...
HIGHER UNEMPLOYMENT.
Higher unemployment at a time when unemployment is already approaching double digits, and is expected to go higher. Higher unemployment during the greatest economic crisis since the Great Depression.
"That's your plan? Wile E Coyote could come up with a better plan than that!" -John Crichton, Farscape
It doesn't matter, of course. Grayson means well, and believes that he can make everybody's lives better by just ordering their employers to give them vacation time. And that there will be no negative consequences. After all, the employers will make up for the loss in productivity because their employees will be rested and happy. And people will eat it up, because the negative results of a policy or law are often far harder to discern than the positive. (Two weeks vacation! Yay!)
To those of the unconstrained vision, its often as simple as that. Order vacation time. Take money from rich people and give it to the poor. Give everyone free health care. The consequences are often slow to develop and the politicians that propose them are usually out of office by the time the shit hits the fan. Or, like Barney Frank, they apparently represent a district of insane people who vote for that idiot over and over again.
If you get anything out of this rambling, poorly-written rant, hopefully it will be this: sometimes, just leave well enough alone. If someone comes along and proposes a scheme that sounds like it will fix a great societal ill, demand to know what the long term consequences will be. If he can't tell you, or if he tells you there will be none, understand the danger. Don't trust someone's intentions, ever.
Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades.
So we've got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it's putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off.
So we have a short-term problem and we also have a long-term problem. The short-term problem is dwarfed by the long-term problem. And the long-term problem is Medicaid and Medicare. If we don't reduce long-term health care inflation substantially, we can't get control of the deficit.
Obama saying we should stop spending is like Keith Richards telling people not to do drugs. In the words of Dennis Leary:
I was reading an interview with Keith Richards in a magazine and in the interview Keith Richards intimated that kids should not do drugs. Keith Richards! Says that kids should not do drugs! Keith, we can't do any more drugs because you already fucking did them all, alright! There's none left! We have to wait 'till you die and smoke your ashes! Jesus Christ! Talk about the pot and the fuckin' kettle.
Of course, this is Barack Obama we're talking about, so of course the solution to being out of money is never to stop spending. Instead, he'll push boldly ahead with his plans to nationalize health care, will continue to pump money into failing automakers.
When Obama says "we're out of money," what he means is "I'm raising taxes." And not just on the hated rich. You middle class and poor people who voted for this corrupt asshole, assume the position. Here it comes.
"John, it's been your president who you said you agreed with 90 percent of the time who presided over this increase in spending. This orgy of spending and enormous deficits; you voted for almost all of his budgets." -Barack Obama, 9/26/2008
Hmm. Turns out the budget deficit is going to be a wee bit... larger than President Teleprompter promised. As in 1.8 trillion dollars.
Roll that around in your mind for a moment. 1.8 TRILLION.
And that's just this year. Personally, I'll be shocked if this turns out to be the last "revision" we see. In future years, the annual deficit is going to hover around the one trillion mark, piling on the debt we owe, year after year.
The title of this post comes from the classic book "Economics in One Lesson" by Henry Hazlitt, which I've been reading lately. The "one lesson" he writes of is this: The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
The tools in Washington, Democrat and Republican alike, have never understood this. They don't need to; it simply isn't part of the job description. As Thomas Sowell wrote in his book "Basic Economics,"
One of the big differences between economics and politics is that politicians are not forced to pay attention to future consequences that lie beyond the next election. An elected official who keeps the public happy up through election day stands a good chance of being voted another term in office, even if those policies will have ruinous consequences in later years.
Obama is trying to keep things at a slow simmer, as did Bush before him. The problem is that they keep turning up the goddamned heat. They keep borrowing, keep printing, keep SPENDING. Obama is tossing gasoline on the fire with his out-of-control appetite for more and larger government.
So, anyway, I had been wondering something: who is going to pay this all back? Well, we are. We are in for massive, ball-breaking, double-digit inflation. Years worth. I don't know if this will be intentional or simply a result of gross incompetence, but it will happen. The only way to pay down those trillions is if you pay them off in worthless money. This will have the unfortunate side effect of wiping out people's savings and investments.
Hezlitt explains:
And this is precisely its political function. It is because inflation confuses everything that it is so consistently resorted to by our modern "planned economy" governments. We saw in chapter four, to take but one example, that the belief that public works necessarily create new jobs is false. If the money was raised by taxation, we saw, then for every dollar that the government spent on public works one less dollar was spent by the taxpayers to meet their own wants, and for every public job created one private one was destroyed.
But suppose the public works are not paid for from the proceeds of taxation? Suppose they are paid for by deficit financing- that is, from the proceeds of government borrowing or from resort to the printing press? Then the result just described does not take place. The public works seem to be created out of "new" purchasing power. You cannot say that the purchasing power has been taken away from the taxpayers. For the moment, the nation seems to have gotten something for nothing.
But now, in accordance with our lesson, let us look at the longer consequences. The borrowing must some day be repaid. The government can not keep piling up debt indefinitely; for if it tries, it will some day become bankrupt. As Adam Smith observed in 1776:
When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid. The liberation not the public revenue, if it has even been brought about at all, has always been brought about by a bankruptcy; sometimes by an avowed, one, but always by a real one, though frequently by a pretended payment.
Yet when the government comes to repay the debt it has accumulated for public works, it must necessarily tax more heavily than it spends. In this latter period, therefore, it must necessarily destroy more jobs than it creates. The extra-heavy taxation then required does not merely take away purchasing power, it also lowers or destroys incentives to production, and so reduces the total wealth and income of the country.
The only escape from this conclusion is to assume (as of course the apostles of spending always do) that the politicians in power will spend money only in what otherwise would have been depressed or "deflationary" periods, and it will promptly pay off the debt in what would otherwise have been boom or "inflationary" periods. This is a beguiling fiction, but unfortunately the politicians in power have never acted that way. Economic forecasting, moreover, is so precarious, and the political pressures at work are of such a nature, that governments are unlikely to ever act that way. Deficit spending, once embarked upon, creates powerful vested interests which demand its continuance under all conditions.
If no honest attempt is made to pay off the accumulated debt, and resort is had to outright inflation instead, then the results follow that we have already described. For the country as a whole cannot get anything without paying for it. Inflation itself is a form of taxation. It is perhaps the worst possible form, which usually bears hardest on those least able to pay. On the assumption that inflation affected everyone and everything evenly (which, we have seen, is never true) it would be tantamount to a flat sales tax of the same percentage on all commodities, with the rate as high on bread and milk as on diamonds and furs. Or it might be thought of as equivalent to a flat tax of the same percentage, without exemptions, on everyone's income. It is a tax not only on every individual's expenditures, but on his savings account and life insurance. It is, in fact, a flat capital levy, without exemptions, in which the poor man pays as high a percentage as the rich man.
But the situation is even worse than this, because, as we have seen, inflation does not and cannot affect everyone evenly. Some suffer more than others. The poor are usually more heavily taxed by inflation, in percentage terms, than the rich, for they do not have the same means of protecting themselves by speculative purchases of real equities. Inflation is a kind of tax that is out of control of tax authorities. It strikes wantonly in all directions. The rate of tax imposed by inflation is not a fixed one: it cannot be determined in advance. We know what it is today; we do not know what it will be tomorrow; and tomorrow we shall not know what it will be on the day after.
Like every other tax, inflation acts to determine the individual and business policies we are all forced wot follow. It discourages all prudence and thrift. It encourages squandering, gambling, reckless waste of all kinds. It often makes it more profitable to speculate than produce. It tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men towards desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls. It ends invariably in bitter disillusion and collapse.
Note again what Hazlitt says: inflation is a form of taxation. Obama, who promised to never raise taxes on the middle class and poor, is going to be doing exactly that, and in a far more ruinous manner than a mere tax increase. Is it intentional? Is it due to his utter incompetence?
Does it even matter?
Batten down the hatches, folks. I have the feeling that when this hits, it will hit suddenly. An investment portfolio heavy on rice, beans, and ammunition might be your best bet.
President Obama during his prime time news conference Wednesday night said he is hopeful Chrysler will remain a viable company--and that the federal government will be able to remove itself from the auto industry.
"I don't want to run auto companies, and I don't want to run banks," Mr. Obama said. "I've got two wars I've got to run already--I've got more than enough to do."
That is true, to a point. He doesn't want to "run" the auto companies or the banks. Rather, he and his cronies want control of them. They want to be able to tell the banks and automakers what to do and have them do it, without having to take responsibility for the actual success or failure of the companies. Obama can thus claim that what he is doing isn't socialism... however, it's more accurate to say that it's almost textbook fascism.
"Mr. Rearden!" moaned Lawson. "What's the matter?"
He turned his head, saw Lawson's eyes watching him fearfully and guessed what look Lawson had caught in his face.
"We don't want to seize your mills!" cried Mouch.
"We don't want to deprive you of your property!" cried Dr. Ferris. "You don't understand us!"
"I'm beginning to."
A year ago, he thought, they would have shot him; two years ago, they would have confiscated his property; generations ago, men of their kind had been able to afford the luxury of murder and expropriation, the safety of pretending to themselves and their victims that material loot was their only objective. But their time was running out and his fellow victims had gone, gone sooner than any historical schedule had promised, and they, the looters, were now left to face the undisguised reality of their own goal.
"Look, boys," he said wearily. "I know what you want. You want to eat my mills and have them too. And all I want to know is this: what makes you think it's possible."
"I don't know what you mean," said Mouch in an injured tone of voice. "We said we didn't want your mills."
Of course, the corporate execs of companies like GM and Chrysler, the banks taking government money, are not archetypal Randian heroes like Hank Rearden who only wish to be left alone to make money. They are more akin to Orren Boyle (head of Associated Steel), people who have used the government (and been used by it) for decades to further their own aims. Now that their business models have left them unable to survive, they must rely on the politicians and their control of the government pursestrings.
What's the first rule when dealing with the Devil? Don't.
If Chrysler can't survive as a company, it should go bankrupt. The same goes for the other banks and automakers and every other company that is failing right now. Failure is part of capitalism; indeed, it is a requirment of capitalism. History is littered with the bones of companies that couldn't compete, companies that were giants in their day, companies that were "too big to fail." Yet fail they did.
Awesome! Obama is finally listening and is going to cut spending!! By 100 million dollars from each cabinet position!!! That's what... one and a half billion total? Why, that more than makes up for the trillions he's spending!!!! What a fiscal conservative he's turned out to be!!!!! It's so exciting I'm running out of exclamation points!!!!!!
And in the next few weeks we expect to cut at least 100 current programs in the federal budget
Even more awesome!
Oh, wait, he's not cutting those programs, he's just moving the money around.
so that we can free up those dollars in order to put them to use for critical areas like health care, education, energy, our foreign policy apparatus, which is so important.
Here's an interesting combination of online game and pyramid scheme: MyBrute. Create a brute, pound the living crap out of other people's brutes, and recruit friends to create more brutes, giving you more experience points. There's no button-pushing involved; you just sit back and watch. Oh, there's nothing more involved here than a little fun... no names, personal information, credit card numbers, or anything else, so don't worry. I wouldn't send you to a REAL pyramid scheme.
So click here and create your brute. Then fight me. And don't complain when I beat the snot out of you with a giant turkey drumstick.
