For those of you who don't know, my foundation within economics is the Austrian School. The Austrian Theory of Laissez-Faire Capitalism has been vastly ridiculed by mainstream economists, politicians, university scholars, pundits on television, etc.
Peter Schiff, president of EuroPacific Capital, has been predicting a economic collapse as early as 2002, while the Keynesians continued to maintain all the way until the collapse that the markets were fine, economic growth was great, the fundamentals are great, fed policy and monetary policy couldn't be better, so on and so forth.
When the collapse happened, the Keynesians decided that it would be best if the federal government guaranteed all of the bad debt by printing up money, and bailing out corporations that should have otherwise failed. And so this pattern continued for a little while. AIG, CITIGROUP, BANK OF AMERICA, JP MORGAN&CHASE, GENERAL MOTORS, all received bailouts. They even made some banks who had too much capital take the bailouts. Many of the bailouts that were handed out so easily weren't even reported in the news.
People were protesting angrily in the streets over the bailouts. Bankers were receiving death threats, and some politicians were even being hanged-in-effigy. It's strange to me that the world's ELITE INTELLECTUALS can't figure out the simple things, like it's a bad idea to spend more than you save, it's bad to print money because that makes your currency worth less, it's bad to intervene and create artificial supply/demand, it's bad to create artificial savings by rigging interest rates really low.
This is simple stuff that a high-school ECON student could understand, yet, the ELITE INTELLECTUALS WHO HAVE THE COLLEGE DEGREES AND ARE RESPECTED EVERYWHERE IN ACADEMIC CIRCLES can't get it.
While the mainstream media continues even to this day to avoid the topic of Keynesian economics and it's disastrous effects, there are a few independent media sources who take it upon themselves to talk about what the mainstream media doesn't want to acknowledge.
The irony is the fact that we let "educated fools" run our nation, our schools, our economic and foreign policy. Until we as a society wake up and realize that a college degree doesn't make you intelligent, we're doomed beyond all hope.
Monday, March 28, 2011
Sunday, March 27, 2011
Gordon Gekko was right. Greed IS Good.
Gordon Gekko is a fictional character from the Oliver Stone movie "Wall Street" and a favorite example of Keynesians/Socialists to point to as an example of what happens when you don't have Government oversight of the markets. In the movie "Wall Street", Gordon Gekko makes a speech where he not only denounces corporate bureaucracy as wasteful, he also makes the case that greed is good.
It's extremely hard to refute what he says in the above video, simply because he is 110% correct. We don't NEED new phones or new computers. The old ones work well for their purpose. We don't NEED new movies, or faster means of delivering information. The old ways worked just fine. But, someone figured out that they could get wealthy if they created these new products for the consumer to purchase. The result is a boom of new products and ideas that wouldn't have existed otherwise.
While greed IS good, like anything good, it can result in disaster if misused. Enron is a perfect example of this. But before I get into Enron, let's look at a Socialist's point of view.
Bill Maher points to examples of greed having disastrous consequences, like Health Insurance Companies screwing over their customers to save a little money, Food Companies cheapening their products with sugar and fats to save money, Credit Card Companies charging outrageous interest rates, and Environmental Dumping, but what he fails to realize is very simple.
We've had Managed Care since the 70's when the government started endorsing HMOs (Health Maintenance Organizations) during the Nixon administration. We made it cheaper through taxation to buy insurance through your employer .We made it illegal to buy Health Insurance across state lines. Government handed the Health Insurance Industry a monopoly through regulation, and somehow it's a surprise when they start behaving badly?
We have the FDA (Food&Drug Administration) approving dangerous and ADDICTIVE medications like Prosac and Xanax. We have the FDA subsidizing BIG PHARMA by protecting them against competition from alternative medicines, and somehow it's a surprise that BIG PHARMA not only puts mediocre medications out on the market, but grossly overcharges for them?
The Department of Agriculture subsidizes major farming corporations by protecting them from competition of small farmers, and somehow it's a surprise that Major Farming Corporations place tainted food unto the market?
The point is that Greed IS Good, but Greed CAN'T be subsidized by the Law of the Land through legislative and Bureaucratic regulations. The Keynesians would say in response, "Well, the Free-Market fails because it doesn't control corporate greed."
Oh, but that's where you're dead wrong. The free-market doesn't have a LEGISLATIVE PROCESS to control greed, but it has something much more efficient. It has a trigger. A trigger that is built into each and every one of us as human beings, and as societal animals. That trigger is called FEAR! FEAR OF PERSONAL LOSS!
When faced with a HIGH RISK/HIGH REWARD scenario, the company may decide to invest, or to not invest. If there is a major fear that it's a bad investment, then the company won't invest. But when the government eliminates the fear, there is only the HIGH REWARD. So, is it any surprise that corporations would be quick to jump into a bad investment if there's no risk to the investor and could pay off big if the investment succeeds?
Enron is often used as an example of why we need government intervention and regulation, but Enron had received $1,600,000,000 in Corporate Welfare. What happened to Enron is what should've happened to Enron. Bear in mind, that Enron was considered to be invincible. Here we have a power company that's been turning out a profit for close to a century. There's no way they could fail... right?
WRONG!
Enron collapsed. Did the world suddenly stop receiving energy? No, another company took it's place. The TOO BIG TO FAIL DOCTRINE also subsidizes Corporate Greed. Now you might be stupid enough to ask, "Well, what does Corporate Greed being 'subsidized' have to do with anything?"
When you subsidize something, you get more of it. Enough said.
The major philosophical problem with Keynesians/Socialists is that they don't understand human nature, and until they learn the basic principles of Human Nature and Human Action, then there's no hope for any idea they have.
It's extremely hard to refute what he says in the above video, simply because he is 110% correct. We don't NEED new phones or new computers. The old ones work well for their purpose. We don't NEED new movies, or faster means of delivering information. The old ways worked just fine. But, someone figured out that they could get wealthy if they created these new products for the consumer to purchase. The result is a boom of new products and ideas that wouldn't have existed otherwise.
While greed IS good, like anything good, it can result in disaster if misused. Enron is a perfect example of this. But before I get into Enron, let's look at a Socialist's point of view.
Bill Maher points to examples of greed having disastrous consequences, like Health Insurance Companies screwing over their customers to save a little money, Food Companies cheapening their products with sugar and fats to save money, Credit Card Companies charging outrageous interest rates, and Environmental Dumping, but what he fails to realize is very simple.
We've had Managed Care since the 70's when the government started endorsing HMOs (Health Maintenance Organizations) during the Nixon administration. We made it cheaper through taxation to buy insurance through your employer .We made it illegal to buy Health Insurance across state lines. Government handed the Health Insurance Industry a monopoly through regulation, and somehow it's a surprise when they start behaving badly?
We have the FDA (Food&Drug Administration) approving dangerous and ADDICTIVE medications like Prosac and Xanax. We have the FDA subsidizing BIG PHARMA by protecting them against competition from alternative medicines, and somehow it's a surprise that BIG PHARMA not only puts mediocre medications out on the market, but grossly overcharges for them?
The Department of Agriculture subsidizes major farming corporations by protecting them from competition of small farmers, and somehow it's a surprise that Major Farming Corporations place tainted food unto the market?
The point is that Greed IS Good, but Greed CAN'T be subsidized by the Law of the Land through legislative and Bureaucratic regulations. The Keynesians would say in response, "Well, the Free-Market fails because it doesn't control corporate greed."
Oh, but that's where you're dead wrong. The free-market doesn't have a LEGISLATIVE PROCESS to control greed, but it has something much more efficient. It has a trigger. A trigger that is built into each and every one of us as human beings, and as societal animals. That trigger is called FEAR! FEAR OF PERSONAL LOSS!
When faced with a HIGH RISK/HIGH REWARD scenario, the company may decide to invest, or to not invest. If there is a major fear that it's a bad investment, then the company won't invest. But when the government eliminates the fear, there is only the HIGH REWARD. So, is it any surprise that corporations would be quick to jump into a bad investment if there's no risk to the investor and could pay off big if the investment succeeds?
Enron is often used as an example of why we need government intervention and regulation, but Enron had received $1,600,000,000 in Corporate Welfare. What happened to Enron is what should've happened to Enron. Bear in mind, that Enron was considered to be invincible. Here we have a power company that's been turning out a profit for close to a century. There's no way they could fail... right?
WRONG!
Enron collapsed. Did the world suddenly stop receiving energy? No, another company took it's place. The TOO BIG TO FAIL DOCTRINE also subsidizes Corporate Greed. Now you might be stupid enough to ask, "Well, what does Corporate Greed being 'subsidized' have to do with anything?"
When you subsidize something, you get more of it. Enough said.
The major philosophical problem with Keynesians/Socialists is that they don't understand human nature, and until they learn the basic principles of Human Nature and Human Action, then there's no hope for any idea they have.
Monday, March 21, 2011
Raising taxes is an idiotic idea!
Ok, so Robert Reich, who we ALL know is my favorite Keynesian *sarcasm*, wrote an article for The Huffington Post on why we should raise taxes on the top earners in the country in order to get our economy back on track. Now, he isn't the first idiot to suggest this. Socialists have been screaming for years that the rich don't pay enough taxes. Of course, common sense should kick in and say to you, "The only time the government raises taxes like that is when they're trying to pay for whatever they're spending on. If they simply cut spending, there wouldn't be a need to raise taxes on anyone because the tax dollars that we pay in would go further, because the government isn't spending so much, thus it has more money, etc etc."
Of course, expecting Keynesians like Robert Reich and his ilk to have any common sense is like expecting the weather to clear up when you scream STOP RAINING at the top of your lungs. Here is the full article in question. Now, I'm going to debunk this type of nonsense step-by-step, like I usually do.
"My proposal to raise the marginal tax to 70 percent on incomes over $15 million, to 60 percent on incomes between $5 million and $15 million, and to 50 percent on incomes between $500,000 and $5 million, has generated considerable debate. Some progressives think it's pie-in-the-sky."
Umm... that's probably because what you're talking about IS pie-in-the-sky.
"Incidentally, during these years the nation's pre-tax income was far less concentrated at the top than it is now. In the mid-1970s, for example, the top 1 percent got around 9 percent of total income. By 2007, they got 23.5 percent. So if anything, the argument for a higher marginal tax should be even more realistic now than it was during the days when it was taken for granted."
This is a major talking point for the idiots who spew Keynesian nonsense. "The top 1-2% have all of the wealth so we need to distribute income through taxation."
The entire problem with this argument is the fact that the major talking point that is the argument's entire foundation is completely moot. How much money the top 1-2% has is completely irrelevant. Instead of asking, "How much does the top 1-2% have?", you should be asking, "How much does the top 1-2% earn?" Look closely at those two questions. HAVE and EARNED are two different things.
If they're earning their money, then you simply need to stop complaining. If they have this money, but they didn't earn it in the market place, AND THE VAST MAJORITY OF THEM IN FACT DID NOT EARN THEIR MONEY IN THE MARKET PLACE, then you have a problem.
If companies are earning their income, then the income is coming from the consumer. If they aren't earning their income, then their income is coming from, more often than not, the government. And in that case, restrictions need to be placed on the government, not the private sector.
So this clown's argument is falling to pieces already. Most of his article is just "RALLY THE PROGRESSIVES" nonsense, so I'll cut to the next point.
"More importantly, it will soon become evident to most Americans that the only way to reduce the budget deficit, preserve programs deemed essential by the middle class, and not raise taxes on the middle, is to tax the top."
Actually, most of the government programs that we have today are not only not essential, they are failed attempts to meet a certain end. For instance, the Department of Energy was created to rid us of our dependence on Foreign Oil. When the department was first created, our dependence on Foreign Oil was about 60%. Now, it's about 70-80%. The Department of Education was created to increase Test Scores in public schools. We all know how that's worked out so far. They continue to put billions of dollars into these departments, but they not only continue to fail in their purpose, they prevent others from succeeding by taking up valuable resources that could be allocated elsewhere. 0.58 of every tax dollar collected goes to paying for military spending, and only 1/5th of military spending is DEFENSE spending.
It's also worth noting that Keynesians, when they talk about taxes, that they NEVER factor inflation into their equations. Inflation is a form of taxation as well. So factor inflation, these proposed tax hikes, AND all of the spending together. The end result is not good at all.
"Some critics worry that if the marginal tax is raised too high, the very rich will simply take their money to a more hospitable jurisdiction. That's surely possible. Some already do. But paying taxes is a central obligation of citizenship. Those who take their money abroad in an effort to avoid paying American taxes should lose their American citizenship."
I laughed my ass off when I read this, because this quote BY ITSELF reveals the sheer stupidity that Robert Reich and his ilk represent. Saying that you have to pay ridiculous tax rates unnecessarily or lose your citizenship? Forget the fact that imposing such a choice on the top earners will simply make them take the entirety of their businesses to another country, thus costing this country possibly MILLIONS of jobs, thus adding to our already disastrous list of problems, thus decreasing the hope of economic recovery... I'm trying my best not to bang my head against the wall. Seriously. How can someone be this stupid and still be taken seriously?
This guy is making me sick to my stomach. I provided the link to the full article above. Go read it.
Of course, expecting Keynesians like Robert Reich and his ilk to have any common sense is like expecting the weather to clear up when you scream STOP RAINING at the top of your lungs. Here is the full article in question. Now, I'm going to debunk this type of nonsense step-by-step, like I usually do.
"My proposal to raise the marginal tax to 70 percent on incomes over $15 million, to 60 percent on incomes between $5 million and $15 million, and to 50 percent on incomes between $500,000 and $5 million, has generated considerable debate. Some progressives think it's pie-in-the-sky."
Umm... that's probably because what you're talking about IS pie-in-the-sky.
"Incidentally, during these years the nation's pre-tax income was far less concentrated at the top than it is now. In the mid-1970s, for example, the top 1 percent got around 9 percent of total income. By 2007, they got 23.5 percent. So if anything, the argument for a higher marginal tax should be even more realistic now than it was during the days when it was taken for granted."
This is a major talking point for the idiots who spew Keynesian nonsense. "The top 1-2% have all of the wealth so we need to distribute income through taxation."
The entire problem with this argument is the fact that the major talking point that is the argument's entire foundation is completely moot. How much money the top 1-2% has is completely irrelevant. Instead of asking, "How much does the top 1-2% have?", you should be asking, "How much does the top 1-2% earn?" Look closely at those two questions. HAVE and EARNED are two different things.
If they're earning their money, then you simply need to stop complaining. If they have this money, but they didn't earn it in the market place, AND THE VAST MAJORITY OF THEM IN FACT DID NOT EARN THEIR MONEY IN THE MARKET PLACE, then you have a problem.
If companies are earning their income, then the income is coming from the consumer. If they aren't earning their income, then their income is coming from, more often than not, the government. And in that case, restrictions need to be placed on the government, not the private sector.
So this clown's argument is falling to pieces already. Most of his article is just "RALLY THE PROGRESSIVES" nonsense, so I'll cut to the next point.
"More importantly, it will soon become evident to most Americans that the only way to reduce the budget deficit, preserve programs deemed essential by the middle class, and not raise taxes on the middle, is to tax the top."
Actually, most of the government programs that we have today are not only not essential, they are failed attempts to meet a certain end. For instance, the Department of Energy was created to rid us of our dependence on Foreign Oil. When the department was first created, our dependence on Foreign Oil was about 60%. Now, it's about 70-80%. The Department of Education was created to increase Test Scores in public schools. We all know how that's worked out so far. They continue to put billions of dollars into these departments, but they not only continue to fail in their purpose, they prevent others from succeeding by taking up valuable resources that could be allocated elsewhere. 0.58 of every tax dollar collected goes to paying for military spending, and only 1/5th of military spending is DEFENSE spending.
It's also worth noting that Keynesians, when they talk about taxes, that they NEVER factor inflation into their equations. Inflation is a form of taxation as well. So factor inflation, these proposed tax hikes, AND all of the spending together. The end result is not good at all.
"Some critics worry that if the marginal tax is raised too high, the very rich will simply take their money to a more hospitable jurisdiction. That's surely possible. Some already do. But paying taxes is a central obligation of citizenship. Those who take their money abroad in an effort to avoid paying American taxes should lose their American citizenship."
I laughed my ass off when I read this, because this quote BY ITSELF reveals the sheer stupidity that Robert Reich and his ilk represent. Saying that you have to pay ridiculous tax rates unnecessarily or lose your citizenship? Forget the fact that imposing such a choice on the top earners will simply make them take the entirety of their businesses to another country, thus costing this country possibly MILLIONS of jobs, thus adding to our already disastrous list of problems, thus decreasing the hope of economic recovery... I'm trying my best not to bang my head against the wall. Seriously. How can someone be this stupid and still be taken seriously?
This guy is making me sick to my stomach. I provided the link to the full article above. Go read it.
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