Monthly Archives: May 2008

Thoughts on the Devastating Chinese Earthquake

China was recently struck by a very devastating earthquake.  Nearly everyone knows this.  Tens of thousands died.  Schools were hit particularly hard.  Why schools?

This article discusses that the central economic policies directly lead to poor school construction: compromising materials to get the job done.  It’s another question of incentives and responsibility: who is responsible, and what is their incentive for being responsible?

Can the free market provide safe products?  Many individuals point to current unsafe products as evidence that the market cannot, and that it consistently fails to do so.  But we must ask: who is responsible for safety?  Individual consumers?  The companies that produce their products?  The governments that regulate them?  Until we understand who is ultimately responsible, it is difficult to assign blame.

Can the free market provide dangerous products?  Sure, but for a very limited time only.  Competition immediately shuts them down, unless, of course, the market regulates competition, acting as a barrier to development and growth.

Can the government make dangerous products?  Hint:take a look at the “safe” record of NASA spaceflight as evidence of government safety.

It is quite sad to hear millions of Chinese unable to care for themselves, unable to take care of their families, even in an emergency situation.  It is sad to see them continually rely on the government for all sorts of aid, from emergency supplies to rescue operations to money to shelter to rebuilding.  This is such a contrast to the attitude of self-reliance prophets have continually impressed upon us. 

One wonders the level of devastation should the market have been responsible for safety, for school construction, and individuals for emergency preparation, insurance, etc.  And this is certainly an admonishment to us to get our houses in order and prepare for what may come.

This indeed was a tragedy.  But the scope could have been much lower if freedom and liberty had a larger role.

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Filed under Libertarian, Mormonism, Personal, politics, role of government

Ron Paul: The Revolution Continues

This article, an interview with the man himself, and this article, a thorough review of The Revolution: A Manifesto, are highly recommended.  The book is still a hot seller.

The word “manifesto” is an interesting word choice.  It really makes us think of the unabomber or Karl Marx.  But what is a manifesto?  It is a statement meant to manifest, or show, one’s beliefs, especially those with social and political underpinnings.

The word “revolution” is also an interesting word choice.  In this sense, Ron Paul is referring to an ideological revolution, a change in the way we think and perceive man’s relationship to the state.

Is the state really the benevolent benefactor it’s cracked up to be?  Or are the perpetual failures linked with governments (war, waste, dependency, corruption, etc.) indicative of some sort of pattern?  Why are we considering the state as the necessary instrument to resolve poverty, to clean up the environment, to wage war, to control our transactions, and to punish an individual’s conception of wrong-doing at the expense of another individual’s way of life?  Why does the state keep expanding in power, despite its constant, unfailing ineptitude, greed, and corruption?

Why are we silently complicit to this monstrous, perpetual, fantastical growth?

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Filed under Libertarian, politics, role of government, Ron Paul

Scott McClellan’s Memoirs: Former Press Secretary Speaks Out

Scott McClellan, a former Bush press secretary, recently released his memoirs, What Happened: Inside the Bush White House and Washington’s Culture of Deception.  There are some things cited in this article that impressed me.  One of them was how Mr. McClellan admires and respects the president as an individual, but had a hard time with the manner some things were carried out.

I also like his humility, as evidenced by this statement:

I frequently stumbled along the way…My own story, however, is of small importance in the broad historical picture. More significant is the larger story in which I played a minor role: the story of how the presidency of George W. Bush veered terribly off course.

He had a hard time with some members of the Bush administration.  Regarding the ardent defense of the war in Iraq and the war on terror, he remarks:

But he {President Bush] and his advisers confused the propaganda campaign with the high level of candor and honesty so fundamentally needed to build and then sustain public support during a time of war. … In this regard, he was terribly ill-served by his top advisers, especially those involved directly in national security.

His biggest issue was with the Iraq war.  He writes:

History appears poised to confirm what most Americans today have decided: that the decision to invade Iraq was a serious strategic blunder. No one, including me, can know with absolute certainty how the war will be viewed decades from now when we can more fully understand its impact. What I do know is that war should only be waged when necessary, and the Iraq war was not necessary.

Simple, clear, and concise.  “War should only be waged when necessary, and the Iraq war was not necessary.”  I like it.

A few more interesting tidbits the article points out about the book:

• Steve Hadley, then the deputy national security adviser, said about the erroneous assertion about Saddam Hussein seeking uranium, included in the State of the Union address of 2003: “Signing off on these facts is my responsibility. … And in this case, I blew it. I think the only solution is for me to resign.” The offer “was rejected almost out of hand by others present,” McClellan writes.

• Bush was “clearly irritated, … steamed,” when McClellan informed him that chief economic adviser Larry Lindsey had told The Wall Street Journal that a possible war in Iraq could cost from $100 billion to $200 billion: “‘It’s unacceptable,’ Bush continued, his voice rising. ‘He shouldn’t be talking about that.’”

• “As press secretary, I spent countless hours defending the administration from the podium in the White House briefing room. Although the things I said then were sincere, I have since come to realize that some of them were badly misguided.”

The long list of disgruntled administration insiders (including Larry Wilkerson, Jack Goldsmith, John Ashcroft, Richard Clarke, and others; watch No End in Sight, for instance, to get a flavor) makes a negative imprint on the Bush administration, in my opinion.

In closing, let me quote from Scott McClellan’s thoughts upon seeing Scooter Libby and Karl Rove get together for a confidential pow-wow, during a time when the Valerie Plume incident was very visible and very problematic:

I don’t know what they discussed, but what would any knowledgeable person reasonably and logically conclude was the topic? Like the whole truth of people’s involvement, we will likely never know with any degree of confidence.

And so it goes.  There are so many things we can “never know with any degree of confidence.”  We can never see exactly what transpired and why.  But we certainly see enough to make some judgments.  Why did President Bush attack Iraq?  We may not know.  But certainly the evidence indicates that no matter what his motivation, it was a tragic move for nearly all parties, and continues to be so.

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Filed under foreign policy, Libertarian, politics, role of government

Questions the Oil Executives Should Have Been Asked

  1. What would happen if gas prices were forced down? Thankfully, they were asked this, at least with respect to Katrina. Yes, as supply and demand would indicate, lowering price sends an artificial signal that supply is greater than it actually is. This always results in a shortage.
  2. What can the government do to decrease the cost of oil and gasoline for everyone? Blaming others on profits is typical Washington politics: let’s blame someone else for our problems and avoid taking any responsibility ourselves. Frustratingly typical, and of course, completely pointless.
  3. How can an adversarial Senate committee on a crucial election year possibly have the country’s best interests at stake?
  4. How can an adversarial Senate committee on a crucial election year actually think to accomplish anything by grilling oil executives?
  5. How can an adversarial Senate committee on a crucial election year determine what level of profits, for you or anyone else, are “reasonable?”
  6. If your pay was cut to zero, what would be the next effect on gas prices in America? As salaries here are three orders of magnitude less than profits, the cost benefit to you and I, even for executives to work for free, would be negligible; a couple of pennies per gallon at most.
  7. How many U.S. jobs are associated with the oil and gas industry?
  8. How do record profits affect shareholder earnings?
  9. What is the relationship between shareholder earnings and the American public?

Answering these questions would show that it is in the country’s best interests to have a strong oil and gas industry: our economy depends upon it. It would also show what the government can do to lower gas prices: stop restricting and regulating oil exploration and refining, and instead let the market go to work, providing low-cost, efficient energy producing fuel for all of us.

Who will teach our Senators that we are a capitalist nation, not a communist one?

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Filed under Austrian Economics, Libertarian, politics, role of government

China Coal Shortage: Real Problem with Price Fixing

I ran across this article which highlights a real problem with price fixing.  Let me quote from the article itself:

BEIJING (AP) — Chinese power plants are running out of coal, with less than a three-day supply in some areas, the government said Tuesday, adding to China’s logistical headaches following a devastating earthquake.

It is the second time in three months that Chinese power plants have run short of coal, an unintended effect of government-mandated price controls — a throwback to communist central planning — to shield the public from rising global energy costs.

Beware of price ceilings!  Shortages are real problems that actually happen when governments decide to fix prices.  Let’s hope we do not forget this, especially with rising food and fuel costs.  Fixing prices at some arbitrary high point would cause shortages.  If high prices cause this much headache and turmoil, what would a large-scale food or gas shortage do?  What would happen if electricity, gas, or food was simply not available, at any price?

I don’t mean to be an alarmist, but I do want to make it clear that when we start monkeying around with the pricing mechanism, as recent Senate and House grillings of oil executives have hinted we are headed towards, there is a real danger of these type of effects.

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Memorial Day Thoughts

Memorial Day is a time to reflect on the country, on where it’s been, and where it is headed.  I was watching a documentary recently on the Cape Verde islands.  We think we have poverty in America.  Perhaps we do.  But that is nothing compared to the poverty in Cape Verde.  Or Honduras.  Or much of Africa, or Central and Southern America, or large parts of Asia.  Billions of individuals simply living from day to day.  In America, we fret and worry about whether our economy will take a tumble, and have what we feel to be justified concerns over our economic and political stability.  But too often we forget how much we have been given.

With this in mind, there are many things in the American tradition I am grateful for.

I am grateful for a tradition of liberty and freedom that our country was founded on, that all are endowed by their Creator with inalienable rights.

I am grateful for freedom of speech, freedom of the press, and the freedom to assemble.  I’m most grateful for the accompanying freedom of religion which allowed for the establishment of The Church of Jesus Christ of Latter-day Saints.

I am grateful for checks and balances, and for separation of powers.

I am grateful for the portion of my paycheck I can take home.

I am grateful for private property.

I am grateful for the gold standard, that it was actually in force in this country for over a century.

I am grateful for a brain to use.

I am grateful for times of peace, and for ambassadors of peace.

In short, I am grateful for many freedoms and liberties I may take for granted.  But all is not well.  I am no Pollyanna.

I am not grateful for encroachments upon our liberties, including the fourth amendment: unlawful search and seizure.  The PATRIOT Act has really done a number on this one.

I am not grateful for the big chunk of my paycheck I cannot take home.

I am not grateful for an overtaxed and over-regulated economy.

I am not grateful for the general apathy (or even support) towards our growing military-industrial complex.

I am not grateful for a growing feeling of militarism, or militant nationalism, that we somehow equate with true patriotism.  For instance, to “support the troops” now means to support a certain foreign policy ideology rather than to actually support the general welfare of the troops.

I am not grateful for the flood of pornography, of obscenity, of profanity, of graphic and gratuitous violence that seems nearly inescapable today.

I am not grateful for the general sense that war in an inescapable, inexorable and necessary (for some, even beneficial) temporal force used to shape history, rather than the avoidable tragedy is always turns out to be.  We too often forget the high costs of war, both at home and abroad, and the nature of fallen mortals who decide what wars to wage, and how to wage them.

Finally, to end on a positive note, let me say that I am most grateful for hope, for education, and for the possibilities of change, of restoration, and repentance, both individually and as a nation.

What are you grateful for?

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Filed under foreign policy, Libertarian, Personal, politics, role of government

Thoughts on Questioning Oil Executives

It’s frustrating to see our head lawmakers head down the failed path of Soviet Russia: increased central economic planning.  Since when is the government the best organ to question business ethics, considering the copious lobbying scandals in recent years?  For some reason, few bat an eye when Senators somehow ascertain or can determine what level or profits are reasonable for one of the biggest U.S. industries.  How can they really know what is “reasonable?”  Do I want the government telling me my company’s profits are unreasonable, or telling me my salary is “too high?”  This is sheer madness.

This is really the central premise of communism, or central economic planning: some wise individual, or oligarchy, better yet, can ascertain prices and fix supply and demand more accurately than the market can.

This fallacy is a proven failure.  It was proved in Ludwig von Mises 1920’s work on Socialism, and has been proven many times over as central economic planning has failed to compete with free enterprise.  So why are we turning to this failed dinosaur?  How can adversarial Senators really know when prices are “too high,” or even the reasons for those high prices?

The idea that profits can be skimmed off, or are some excess that can be removed at will, is a Marxist notion that the owners’ and the proletariat are inextricably at odds.  Are we really Marxist?  Does Marxism accurately describe our world view?

The height of my frustration probably came at questions like this one by Dick Durbin: “Does it trouble any of you when you see what you are doing to us, the profits that you are taking, the costs that you are imposing on working families, small businesses, truckers, farmers?”

How can a Senator presiding over the largest deficit spending in history really say this with a straight face?  How many hundreds of billions of dollars are being confiscated by the taxpayers, even by low and middle-income families? For the average low and middle-income family, how much is spent on taxes, regulatory, and compliance costs?  How much money is being literally taken from us by Congress?

For a high-income individual, how much is spent on providing jobs and services for lower income individuals?

How much lower could prices be if taxes were lower?

On the other hand, what happens to the money they make?  Where do they invest it?  Who benefits?  Oil companies, including the executives that preside over them, have a job to do: preserve shareholder value and provide a high value service to the customer (that’s you and me).  That’s it.

If Congress thinks there’s some sort of collusion going on, then for goodness sakes make it easier for a new competitor to prove their point by providing a high quality service at a lower competitive price, thus siphoning away money, profits, market share from these supposedly greedy oil companies and the executives that head them.

Why does greed come and go with the business cycle?  Why were these oil executives not greedy in the 90’s, for instance?

To Congress, I say stop being hypocritical.  Focus on your own problems and that which you can solve (What can Congress do to decrease oil prices, or make it easier for low and middle-income families to make it?), not inextricable market forces beyond your control.

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Filed under fiscal policy, Libertarian, politics, role of government