Why it failed????

There are some of you that have been wondering how we got into the current mess. The best way is to stay away from the current problem, at least for now, and explain the theoritical structure of the business cycle: boom and bust as said in the streets or the halls of the Harvards of America.



The first part of the normal production cycle, not yet the business cycle, we will call a period of inflation when consumers are buying and spending their money supplies in the present, bidding up prices in the consumption markets. But after a while, investors and savers [i.e. consumers who have slowed their consumption down] postpone consumption in the present and receive interest for greater consumption in the future. They give their present cash away with the understanding of a premium being paid later for waiting. If the interest is high enough many people will join the game. Or there are so many savers that even with these lower rates continue to prefer future consumption. If either of these occur, interest rates will signal entrepreneurs to stop producing consumption goods for the time being and to begin an increase in capital formation: factory expansion, adding additional machines, higher workers to produce these capital of production goods. When workers of the wages, and lenders of capital, and landlords receive their money, they begin to think about spending. When income now exceeds the need to wait, consumption now begins. People start spending instead of saving, this begins to raise the interest rates, slowing capital investment, and producers see the signals to begin conversion to consumer goods. But again interest rates will continue to rise in order to attract savings again, eventually interest rates will be great enough to slow consumption, raise savings and we begin anew. NO Boom and NO BUST!!!



So where do the swings up and down come from???? BANKS!!! Banks increase the amount of money in circulation, and with the big daddy of all banks--a Central Bank, or our Federal Reserve--banks are allowed to loan money they don't have. Under current Fed law, banks are only required to keep 8% of any money it "has" in the actual vaults. The rest is loaned out in a manner to stimulate the economy in either more savings (raising the savings rates) or more spending (lowering the rate) or more borrowing for spending or capital growth. The only problem is that this is a fake version of the above normal production-consumption cycle. When the big boys get scared, they usually contract the money supply causing a recession/depression.....BUST!!!!!!!!!! Or they try to blame the market for not working (even though it has been chained up and teased), then they want more regulations, intervention, ad infinitum....

Good Morning America!

I first need to address this to the countless generations to come: my Children's children and their children. I apologize for the world you are to inherit. I have spoken of the insult to the Great Document (Our Constitution!) before when writing in the 1800s. Yet, like Prometheus in Ayn Rand's Anthem, it may be too late:



“Perhaps, in those days, there were a few among men, a few of clear sight and clean soul, who refused to surrender that word [i.e. "I",]. What agony must have been theirs before that which they saw coming [i.e. the incremental coming of extreme collectivism,] and could not stop! Perhaps they cried out in protest and in warning. But men paid no heed to their warning. And they, these few, fought a hopeless battle, and they perished with their banners smeared by their own blood. And they chose to perish, for they knew.”



We have now seen the last of the fears of the Founders: Government owned and run banking. O! Where is Andy Jackson when we need him?? National banking, the war[s] in Iraq and soon Iran, AIG, Fannie and Freddie, what is left?

Reading the bailout "law" I am nearly beyond words. It allows Hank and Ben, two unelected bureaucrats, unlimited authority (This is called a coup in any other country!), uncheckable by Congress, any agency, not even the US Supreme Court. Not even the King of England at the time the Founders decided "enough was enough" had this unlimited, unconstitutional power. The Constitution died at the signing by president Bush. Remember the date, 10/4 a date which will live in infamy, the death of the Greatest Document in the History of the World: now a mere artifact of a failed experiment of the Republic.

"So this is how liberty dies—with thunderous applause."
―Senator Padme Amidala

My sons, and their sons. I am truly sorry, please forgive us.

Step One in the Solution!

There are numerous steps to fix the current economic and political situation we are bogged down in.

Step one: DEREGULATE all American businesses, unions, and foreign trade. Business is evil I hear the screams from the bureaucrats! Foreigners are stealing our jobs cry the protectionists! Management exploits the workers whimper the Commies (Democrats and other assorted Pinks!).

All are misguided and WRONG!

Business, free do do its job (Satisfy the Consumers!), will produce more, more efficiently and more satisfying than government can, or business burdened by government. The argument is that they are self-serving, greedy and care for no one except the bottom line. Yes, that's true....Thank God. The self-interest and greed and bottom line guarantee that they will serve the masses very well. Without the confidence of the consumers, business will fail. Business regulations done by My Evil Uncle (Sam) merely allow weak, inefficient and wasteful business to exist. Environmentalists take note, Government regulation causes waste of the limited resources this world contains. 

Unions and minimum wage laws (see Government above) cause unemployment, misallocation of labor, and lower productivity in all business areas. If minimum wage worked to solve the problem of a "just, fair wage," why not set it a little higher: $25.00? $25,00 would be a good way to even eliminate welfare! No more poor people....Correct??? Wages above a "fair" wage create unemployment. People whose productivity is less than the minimum will have to be unemployed. Business cannot stay in business paying more for the factors of production than those factors produce. Thus, if unskilled, or with poor work records, many people whose wages would be below the minimum are sitting at home stealing from the taxpayers instead of earning a wage they qualify for. They wallow in low self-respect, at welfare rates and hopelessness. At equitable wages, all would have jobs, prices would be lower, and men would do a good day's labor for a good day's pay. Ah, Utopia!

Protectionists, do not read further, you will get soon distraught and probably confused. NAFTA, GATT, etc. aside (Most of which are not really free trade agreements!) foreign trade, unhampered by military, trade agreements and government subsidies, tariffs, quotas, makes all participants wealthier. Just like in the internal workings of an economy, we should do what we are comparatively best at and buy those things which others do better, trade works the same. Jobs are lost only in weak, failing, and government-supported businesses. And those skills wasted in bad businesses, let alone the wasted resources, will quickly be reallocated into those areas Americans now choose to spend their money in. If Japanese TVs are cheaper, I buy them, Americans making TVs that I cannot afford, are out of jobs, but now I have left over money to buy the stuff they are now producing. I will have a TV, more money, the Japanese have more money to buy more Wisconsin cheese, etc, etc, etc.... Seems pretty logical. Why are some businesses protected from free trade, they cannot compete at their wage rates, high profits, etc. Who is hurt, the sovereign consumers.

Deregulate and Prosper. 

Lysander

PS John Galt for President! 

http://www.cafepress.com/john__galt.13699681

Critical Issues Survey

Today I received my "weekly" survey of issues (request for donations!!!) It is a typical gimick to ask you to be concerned, and then send $25 to $1000 donations to help the Party. If you are unable "please send $15 for processing." The irony is I have filled out numerous surveys, yet never received any response, let alone change in policies. Let's take a look at a few of the "questions."

"Do you think Congress should respond to the economic slowdown with a plan of tax cuts to stimulate the economy?" Well of course (plus spending cuts, deregulation, elimination of the Fed, cutting back government, etc........ Those extra parts they don't ask about!!!!!!

"Do you believe our economy will grow if we cut taxes and put more money in the hands of hardworking Americans who pay taxes?" See above morons!!!! Oh, by the way you aren't puuting money into the hands of Americans, you stole it in the first place. In criminal law we would add restitution!

"Do you believe that reducing the federal deficit should be a priority?" Easily done, see above. By the way I see [p]resident Bush asked for nearly a trillion for bailouts of failures (doesn't failure mean you SUCK!!!) See the deficit is Congress' "top priority!"

Then you get the impossible to answer questions, like "Do you still beat your wife?" "Do you think the government should reduce regulations and provide tax incentives to encourage small busines growth?" Yes, well no, ummmmmmm I know economics, let alone honesty is not an attribute of politicians (save Ron Paul). But tax incentives is government regulations (they are choosing who gets extra credit!) Who determines who is a "small busines"? How much do they get? How much bureaucracy is that going to take? Don't consumers do a much better job with that incentives thing? It is called profits.

When we turn to foreign policy........my stomach turns sour. " Should the first foreign policy of the next president be winning the war against radical Islamic extremists?" Other than the fact that they are radical due alot to us, should our first priority be not to piss off the rest of the world? Pat Buchanan's editorial today was very much to the point, we are at the end of an era.......I have children and grand children, what era are we about to give them: 100 years of war we can't win, crusade after crusade (at least the Crusaders were Christians!)

"Should America surrender in Iraq regardless of the consequences in the Middle East?" My Lord, the Middle East is not the MidWest; democracy is not their history, their choice, nor their character. Giving back Iraq to an Iraq that has now asked us to leave, is not surrender; it is respecting self-determination (I know government knows what's best for us ignorant Americans, they must know what's best for ignorant Sunnis and Shi'ites.)

Rest easy this week, seeing that Government is taking so great a concern for us.

Panem et circenses= $10 trillion

Lysander

9-11 Remembered

Today's is the anniversary of a terrible tragedy in American history. It is the day Americans began to accept the slide towards fascism. What you say! Don't turn to belittling the fallen heroes of 9-11! The people who died in the Towers of 9-11 are not heroes; they are clearly innocent victims in a terrible act by lunatics. Those attempting the rescue were heroes: attempting to care for others' welfare over the possible harm to themselves. Those who crashed the plane in Pennsylvania gave their lives to prevent the loss of others' lives they are heroes. I honor the fallen.....



What my concern is that we have dishonored them by accepting a loss of the freedoms they innocently or heroically died for. The wars of imperialism by the current, and regardless of who is elected, the next regime have been disastrous to our soldiers, Marines and sailors abroad, not to mention those we have swore to "help." The acquiescense of our "leaders" in the decay of this country is a sham to those whop were murdered during 9-11. Homeland Security??? Weren't we paying the Military to protect this country? How did the Military-Industrial-Congressional Complex spend the money? Maybe they should have saved it and invested in Fannie and Freddie....

Good Morning America!!!!

Today begins I hope a long series of explanations as to why America has gone astray. When one watches the recently decaying political conventions, wonder emerges as to when someone of substance will stand up for and defend that for which this country was founded. My predecessor, Lysander Spooner www.lysanderspooner.org/, was a firm advocate is the inherent power of man to rule himself with little or no government. The moves we have made since his lifetime are bringing a slow strangulation to this people, once free and progressive. This morning's papers bring calls for handouts to the Big Three Autos. Fannie and Freddie, who were having their hands held, have been confiscated by the system. People having made disastrous gulping of cheap mortgage rates (thanks to Ben and the boys at the Fed), are begging for handouts so as not to lose Hummer #2. Government has caused unemployment, loss of real wages, wealth and brain drains, poor education, crime and drug abuse, racial tensions, everything immigrants come here to avoid, are being nurtured and propagated here, with some of the best fertilizer the world has ever seen.

This writing begins a small voice calling for change in a desperate wilderness. Over the course of ensuing weeks I welcome your concerns, and will layout a plan of action, maybe somewhat revolutionary for many: a retaking of this nation, its, I hope, not yet dead Constitution, and breathing life back into that for which our fore fathers and mothers died, struggled and created on this planet that New Jerusalem, the Light upon the Hill.

Lysander