The Federal Reserve - A Reverse Robin Hood

By Grant Davies

While some wring their hands over the "wealth gap" but cannot tell you why, others wonder just how so much money has flowed to the already wealthy, and why.

In recent years have most of them lately done it by providing goods and services that their fellow man desires? Or is there a giant wealth transference going on due to the Fed printing money like crazy?

I'm in the second group and of the second opinion. The left hates the "wealth gap" but loves Obamanomics. It's a pretty good example of cognitive dissonance IMO.

So while the left worries about "tax breaks for the rich" transferring wealth upward, the man behind the curtain has an entirely different plan that works much better.

The following article may contain some things I disagree with, but it's a good place to start if you want to look at all this government meddling from a different perspective than what you get from the usual talking heads.

Druckenmiller: Fed robbing poor to pay rich
Robert Frank | @robtfrank
Thursday, 19 Sep 2013 | 11:06 AM ET

"The Federal Reserve isn't just inflating markets but is shifting a massive amount of wealth from the middle class and poor to the rich, according to billionaire hedge fund manager Stanley Druckenmiller.

In an interview on "Squawk Box," the founder of Duquesne Capital said the Fed's policy of quantitative easing was inflating stocks and other assets held by wealthy investors like himself. But the price of making the rich richer will be paid by future generations.

"This is fantastic for every rich person," he said Thursday, a day after the Fed's stunning decision to delay tightening its monetary policy. "This is the biggest redistribution of wealth from the middle class and the poor to the rich ever."

Read the rest here.*

*We do not have permission to reprint the article in it's entirety but "fair use" allows us to use a lead in and a link. We apologize for asking you to leave this page to continue.

If Abbott and Costello Were Economists

By Grant Davies

Today I received a forwarded email from one of our crack staff who keeps an eye out for stuff on the internet that can be used to educate and amuse our readers. I think this one may have been going around for a while but I have never seen it before.

And since I am interested in economics, and even more interested in laughing, I thought this would be a good post to start 2014 off with.

So who's on first? Why, Bud and Lou of course!


COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good subject ... terrible times. It's 7.8%.

COSTELLO: That many people are out of work?

ABBOTT: No, that's 14.7%.

COSTELLO: You just said 7.8%.

ABBOTT: 7.8% Unemployed.

COSTELLO: Right 7.8% out of work.

ABBOTT: No, that's 14.7%.

COSTELLO: Wait a minute. Is it 7.8% or 14.7%?

ABBOTT: 7.8% are unemployed. 14.7% are out of work.

COSTELLO: If you are out of work you are unemployed.

ABBOTT: No, Congress said you cannot count the "Out of Work" as the unemployed. You have to look for work to be unemployed.

COSTELLO: But THEY are out of work!

ABBOTT: No, you miss his point.

COSTELLO: What point?

ABBOTT: Someone who doesn't look for work can't be counted with those who look for work. It wouldn't be fair.

COSTELLO: To whom?

ABBOTT: The unemployed.

COSTELLO: But all of them are out of work.

ABBOTT: No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you're off the unemployment roles that would count as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don't look for work?

ABBOTT: Absolutely it goes down. That's how they get it to 7.8%. Otherwise it would be 14.7%. Our government does not want you to read about 14.7% unemployment.

COSTELLO: That would be tough on those running for reelection.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to have people stop looking for work.

ABBOTT: Now you're thinking like an Economist.

COSTELLO: I don't even know what the hell I just said!

ABBOTT: Now you're thinking like Congress.

Hat Tip To Staff Researcher Jerry Vandenberg for finding this gem.

It's Only Money

Editors note: The following post was published this morning on our other blog, Cheeky History. That blog is devoted to short historical musings and has nothing to do with any particular ideology. I call it "History with an attitude."

Having said that, today's story has plenty of crossover appeal for people who read this blog. If you enjoy the style you might want to visit there regularly to see what we are blabbering about when we aren't pushing the freedom philosophy.



By Grant Davies

On this day in 1933, the Congress of the United States passed a law, (HJR 192), that took the country off the gold standard.

Ho hum, just some legalistic, monetary, mumbo jumbo that doesn't affect the common man, you might say. In fact, it might help the common man because it's designed to stop those evil rich guys from hoarding gold. And everyone knows that's what's causing the depression.. right?

Anyway, what's the big deal? The little guy doesn't have any gold so who cares what happens to the fat cats?

The law was just the rubber stamp that FDR's puppets applied to his "executive order 6102", which had been signed just three months earlier by the king, er, President. That order was the one that made every citizen in the country a criminal if they didn't turn in their gold by May 1st of the same year.

Oh, I forgot to mention, these laws and executive orders were preceded by, yep you guessed it, a Presidential Proclamation. "Proclamation 2039" to be exact. (It does sound a bit like what a king might do, but it's not like what the Wizard of Oz did when he gave out hearts, brains, and courage. But I digress.)

What all this meant was that the government took away all your gold coins and bullion. (Silver was included too. We'll leave that for a future story.) But not to worry, these nice men were allowing you to keep grandpa's gold watch and mom's wedding band. And what's the big deal? They will pay you $20.67 per ounce for it; it's not like they are stealing it from you.

So you get the paper, the government gets the gold (and the power to make the paper worth anything, or nothing, it wants) and all is right with the world. Surely this will fix the depression, so it's worth the minor inconvenience.

Before I forget, it should be mentioned that just a short time after they took all the gold they could get their hands on, they arbitrarily raised the price of gold to $35 an ounce. It was a stroke of genius for the Federal Reserve who was able to realize a 69 percent increase in the value of what they had just stolen, er, bought. It wasn't such a good deal for the home folks though because it made the value of their currency worth 40% less.

Another way to devalue the money would be to print it like crazy, but don't worry, they would never do that. After all, ever since the Fed began defending the value of the dollar it has lost 95% of its value, and who can argue with a track record like that?

To celebrate the day, stop down at the Yellow Rock Saloon and have a shot of Goldschlager schnapps. But just because it's about 40% alcohol don't assume you broke even on the deal.

How to Create a Shortage - 101

By Grant Davies

If you want to create a shortage in a hurry, just pass a law to "freeze" the price of the target commodity. In this case, the commodity is food and the place is Argentina. The news came out yesterday in this story.

The economically ignorant people in Argentina are about to get a lesson in "How to create shortages 101." I suggest they get in line at the grocery store now while they can because it will be a while before the alternate retailers of food and other grocery items - also known as the black market - are set up to deliver the needed commodities to the Argentinian populace.

In case anyone needs a refresher course in "unintended (and bad) consequences", I refer them to the long lines at the gas stations that people my age had to endure just a few decades back, 1979 to be exact.

The price of gas was frozen by the economic literates back then and the lines became blocks, sometimes miles, long. Soon there was rationing schemes of every type being tried, and corruption and favoritism became rampant. The same thing happened with the supply of impossible to find "rent controlled" apartments in NY and other goofy places that tried the same nonsense with the housing commodity.

Here's what it looks like in Venezuela 

Sellers and buyers will soon find "workarounds" to the wonderfully low food prices in Argentina, but it will be messy as it all unfolds. And the people at the front of the line will be able to profit on whatever they can obtain - but don't need themselves - by selling it at a higher price to those who didn't get in line. So the commodity will find its price anyway.

Can't find what you need? Just buy something else while it's still available so you can trade it for what you do need. Just don't expect the quality or selection to be too high because the sellers will only be offering products that don't have sufficient demand to warrant higher prices, if they can find any, that is.

It's possible, perhaps likely, that hunger will find its victims if the nitwits running the show don't back down quickly.

In the end, since inflation (in the words of Milton Friedman) " is everywhere and always a monetary phenomenon" it cannot be stopped by trying to control the price mechanism. The law of supply and demand will always win out. It's a law the politicians never made so it cannot be repealed.

So what about us here in the good old US? Higher prices are coming to this country soon. They have already begun to show themselves in many commodities despite slack demand. So, the only question is; will the politicians here make the same stupid mistakes they have made before and copycat the Argentinian illiterates? Take a guess.

Deck the Halls with Macro Follies

With all the recent stories of people stealing Christmas gifts;

• the theft of the baby Jesus figure from the nativity scene,
• the men who followed the UPS truck to steal the Christmas packages that were being delivered,
• and the thief who stole all the donated gifts from the church,

I thought I would join in the fun and steal another video from Dan Mitchell and give it to all of you for Christmas. That clears up my list!

So here is the great vid full of wonderful songs for the holidays that I carted away from his site. They are about my favorite subject. You guessed it... Keynesian economics!

Merry Christmas!

Who Buys the Keynesian Snake Oil?

By Grant Davies

The Center for Freedom and Prosperity Foundation is a smart organization. They know that if you use pretty girls to get your message out more people will see the message. Even other women are more attentive when pleasant looking females are talking. It doesn't hurt if the girls themselves happen to be smart as well.

Many of you know about my love for the art and science of economics. So it won't be surprising for you to read that I think Obamanomics is as nonsensical as the Keynesian notion (upon which it is based) that you can raise the level of a swimming pool by taking the water from the deep end and pouring it in the shallow end.

This video won't change a lot of minds because a large part of supporting Obama and his ilk is the practice of closing one's mind to logical discourse in favor of hero worship, tribal affiliation, and a general feeling of moral superiority over others who support anyone else.

Having said that, this video is worth watching for rational thinkers so they can keep the outrage over the scandals alive until November when the country will decide for the second time whether it wants freedom or slavery.

The real scandal is how many people buy the Keynesian snake oil even though it has never worked anywhere it's been tried. It's a scandal of mis-education purchased at a high price.

Enjoy, and be sure to circulate the video widely so you can remind those of your friends who think logically while driving your liberal friends crazy. It's great sport.




Hat tip to International Liberty.

Motives vs. Results

Image courtesy of Cafe Hayek

By RUSS ROBERTS 

A fan of liberty writes me of her struggle of being surrounded by people with a different world-view–people who make her feel that in defending liberty, she is greedy, selfish, and uncaring. I wrote a novel  on this issue–here’s a shorter answer…

Are you greedy, selfish, and uncaring? A little. We all are. Even people who oppose liberty. But I don’t think self-interest explains your view of the proper role of government intervention.

But it’s not surprising that you worry about your motives. In our daily interactions, motives are nearly everything. I want friends and family that care about me and whose motives count me in, alongside their own concerns.

So we pay a lot of attention to motives because they’re important. But the motives of strangers are much less important. For starters, by definition, it is hard to know strangers as well as my friends and family. So their motives will be much harder to read. But there is a much worse problem which is that by definition, strangers don’t have much information or knowledge of my needs, desires, and dreams. They can’t. They’re strangers. It’s hard enough for my friends and family to know me well. But strangers can’t know me well. So even with the best of motives, they may not be able to help me. In fact, they may end up hurting me despite their motives. We know that we sometimes hurt our friends and family even with the best of motives because of our imperfect knowledge of who they are.

This suggests a humility for intervening in the lives of strangers. Those on the other side of the spectrum of government intervention often lack this humility. They claim to know what is best for others–what they should eat, how they should behave in the bedroom, whether they purchase health insurance, and what is the best use of other people’s money. When these plans go awry, when they cause harm to those they would help, they fall back on their motives–after all, they meant well.

But when dealing with strangers, with people outside our circle of friends and family, results trump motives. Or at least they do for me. For you see, I too, have good motives. I just believe, perhaps naively, that sometimes, it is better to leave things alone than to intervene. Not always. Sometimes. We know that is true in public policy just as it is true in parenting where the motives are very powerful. Sometimes good parenting means letting children make mistakes and learn from those mistakes. Sometimes it means letting children come to grips with responsibility.

So we teach our children to drive and let them take the car. We know it’s dangerous but we accept the risk. We do so not because we do not care about our children. It’s just the opposite. We accept the risk because we care about them. We respect them. We want them to leave the nest and learn to fly on their own.

So my opposition to a minimum wage or government schools or agricultural price supports or bank bailouts or mandatory health insurance or mandatory retirement contributions or mandatory eating habits doesn’t come from my selfishness or greed. Rather it comes from respect for my fellow human beings and a belief (not a faith) that leaving people free to choose what is best for themselves usually works out better than strangers making decisions for them.

The other day a friend of mine was defending a regulation related to smoking. I hate smoking. I’ve never smoked in my life. But I think people should be free to smoke if they want and I believe that private establishments–restaurants and apartment buildings and businesses–should be free to allow people to smoke on their premises. My friend doesn’t. He’s a great guy and knows as I do, that smoking has some very damaging health consequences. He feels very self-righteous about his quest to regulate smoking even more throughly than we currently do. Part of that self-righteousness comes from his motives. He knows they are pure and they are. He is a fine person. I respect him. He also happens to be overweight. I wonder how he would feel if I explained to him that I have been doing a lot of reading lately on diet and health and that I thought he should eat fewer carbohydrates and spend more time at the gym? I do wish he were thinner. I think it would be good for him. But I would never want to force him to change his habits and even more than that, my respect for him would keep me from even making the suggestion. I think he knows he’s overweight.

He’s not a close friend. He’s a casual friend. With a very close friend or a sibling, I might say something about the virtues of diet and exercise. But a stranger? I can’t imagine going up to a stranger on the street and lecturing him about his weight. Forcing a stranger to do something about his weight is even harder to imagine. But I don’t think my motives are the issue. It’s a question of respect and imperfect knowledge.

One of the points I make in The Invisible Heart  is that those of us who want smaller government because we think it will make the world a better place are the allies, whether we like it or not, of purely selfish people who want smaller government in order to avoid taxes and who have no intention of giving to charity. That should give us pause. At the same time, those who care so much about others that they would run their lives for them are allied with those who would run the lives of others because of less attractive motives–for power and profit.

So don’t lose any sleep over your motives. And don’t let others who are no better than you are, convince you that there is something wrong with you because you don’t want to use the power of the state to try to improve the lives of others. Their strategy has a very mixed track record. They are always saying this time will be different. But it is unlikely to be different because of the knowledge problem and because the other side centralizes power. And centralized power doesn’t attract nice people. Just the opposite.

Both sides want to make the world a better place. We just disagree on how to get there.

Be Sociable, Share!

The above article is re-published here in it's entirety with Professor Roberts express permission. Please visit the excellent site Cafe Hayek to enjoy and enlighten yourself with the fine articles concerning liberty to be found there.



Russell Roberts is Professor of Economics at George Mason University and the J. Fish and Lillian F. Smith Distinguished Scholar at the Mercatus Center, and a research fellow at Stanford University's Hoover Institution.


His latest book is The Price of Everything: A Parable of Possibility and Prosperity (Princeton University Press, 2008). Told in the form of a novel, it's the story of how prosperity is created and sustained, and the unseen order and harmony that shape our daily lives.

Why People Don't Save Enough

Recent developments caused by the Congress, the President, and the Supreme Court may have changed things for the country in a fundamental way. Having said that, some things never change.

The laws of economics are such things. And since the study of economics is fundamentally about how people respond to different stimuli and the choices they make because of them, a discussion about unchangeable things is appropriate now.

The following TV exchange took place recently and our friend Dan Mitchell posted this video on his blog, International Liberty, along with the accompanying excellent commentary concerning the points he made.

You can read the whole post here. My own comments can be found below the video.

Excellent points and well made. I would take this opportunity however to make an additional point which Dan possibly didn't have time to raise during a short TV spot. Or perhaps he disagrees and therefore didn't make the point purposely. (Dan has a PHD in economics and I got a "C" in high school Econ 101, so enough said about that.)

My point is:

Even in a low inflation environment (on a relative basis) the value of the currency has declined steadily and can be expected to deteriorate much more quickly in the future as the velocity of money movement causes the Fed’s printing to cause a much more virulent inflationary cycle.

That money devaluation does not encourage saving, but rather consumption, as people realize that the value of their savings is declining faster than the paltry interest earnings can keep pace with.

It’s only one more way that the government has changed the culture for average Americans and encouraged financial behavior that is deleterious for them over the longer term.

(I’m not an economist, but I sometimes pretend I am one on this blog.)

What's the Problem? Taxes Too Low? Or Spending Too High?

Most of the readers of this blog already know the answer to the question. The real question is, will the less than three minutes it takes to watch this excellent video convince any of your left leaning friends (who think that taxing  the "rich" more can solve the problem) that the country has a spending problem? The only way to get the answer to that question is to circulate this video widely.



As usual, hat tip to Dan Mitchell for posting the video on his terrific blog - International Liberty - where you can read more about this subject. (And just about anything else worth knowing about the country's fiscal woes.)

Note- The professor in this video, Anthony Davies, is no relation to the author of these comments, but he seems almost as clever.

Editor's note: The video on the side bar concerning how much tax it takes to support the spending has been there for many months. It stays there because the goofy ideas it refutes are still being passed around. If you haven't watched it, you should. If you have, you should do so again. And no matter what, you should circulate it as widely as possible.

Answer the Doorbell

It's clever, and it would be funny, except it's not.


Hat tip to Homer.

Is Obama from Keynesa?

Did you hear the one about the economist who walks into a bar with an imbecile on his arm? The bartender asks him.......

The University of Michigan is a Good Place for a Pander Party

As President Obama attended his latest campaign pander party (thinly disguised as government business instead of the taxpayer supported campaign trip it actually was) the things he said in his speech reminded me of something Dr. Walter Williams has said; "Politicians exploit economic illiteracy.”

So as the professor also often says, "Let's look at it."

Putting aside the inane headline in the paper that read; "Obama Targets College Costs" (a supposition that getting the federal government involved in those costs is actually part of his job description), let's look at what causes costs to rise for higher education, or for that matter any commodity. As always it's the ratio between demand and supply. In this case, the government has caused the demand to rise by subsidizing the potential students and the colleges themselves. (As an aside, they did the same thing in causing the housing crisis.)

The story goes on to describe the "college affordability ideas" Obama is promoting. One is that he threatens that if the colleges and universities don't cut costs they risk losing some of the federal aid he is promising as part of the ideas. The law of carrots and sticks will never replace the law of supply and demand. And the law of supply and demand is one of only a few laws in existence that wasn't written by politicians. It has the added benefit that it enforces itself, so they are left out of the force equation as well, which drives them insane.

According to the newspaper article (Chicago Tribune) the President stated that "schools can't just jack up tuition every single year and simply expect people to pay it!" So, as usual, he said at least something that made sense. Unfortunately, after citing that basic tenet of economics 101, he screwed it up on the follow through (as he also usually does) by showing his utter illiteracy on the subject (or contempt, as the case may be) when he calls for the use of coercion to correct that condition instead of assuming the consumers of the product will make other arrangements. The truth is, the people he says can't be expected to just pay the "jacked up" tuition do not expect to pay it, they expect you to pay it. Because people like Obama keep promising them things, and delivering.

Republicans don't get a free pass on this one. They have had similar plans to jawbone prices down as well. If they think that it will work any better for them they are just as dumb or just as cynical as Obama is. They both would like to think that powerful people like them can just order education costs to go down.

The reason for the speech is not to "fix" the college affordability problem, it's to buy votes with taxpayer money and shore up his support. It's text book pandering, this time to university students who backed him last time but don't look like they will deliver in big numbers this time around. After all, they are in school to learn and at least some of them have learned a thing or two about hope and change in the last three years. Large numbers are rallying to the campaign of a seventy-six year old doctor who has great appeal to the Democrats among them.

So while most of us are planning our super bowl parties, Obama is in the Democrat stronghold of Michigan hosting a pander party. At halftime the meal they are serving up is pulled pork, but the pork will be pulled from the taxpayers pockets.

This Country Needs More Undertakers

About a month ago I was fortunate enough to attend a book signing luncheon in downtown Chicago,  sponsored by the Heartland Institute, where I had the opportunity to hear Tom Palmer make a presentation on the topic of a new book that he edited, titled The Morality of Capitalism.  A small book full of big ideas, it's very readable and I recommend it highly.

During that speech*, Palmer (who, because I was a few moments late, was lucky enough to be seated next to me for lunch) referred to a term that I immediately knew would, at some point, be used when I got around to writing about what I consider to be a huge, but often ignored, problem. Even though I'm a know-it-all, somehow I always learn something fun and useful at these luncheons.

The term was "undertaker" and the etymology was explained as; "an old English phrase meaning; one who undertakes some activity or task", or as it might be expanded, a risk or a business. The more modern term is entrepreneur.

A reflection on my personal experience as a successful "undertaker" has led me to conclude that in today's environment, the seed of that undertaking could never have been planted, much less come to fruition. The barriers to starting a business as a floor broker on the trading floor of the exchange were so small as to be almost non-existent. You simply qualified for exchange membership (a minimal and relatively inexpensive task) and hung up your shingle.

Success or failure was in your hands, not the result of being able to comply with myriad regulations and large capital requirements. Government hacks were not allowed to divine how many brokers were "too many" or if a person was clever enough to get a good execution of the stock orders for their clients instead of just "filling and billing" them. The clients themselves, or lack thereof, would decide that. Today, sadly, it's a novel concept to many.

It was 1981 when I hung up our shingle and it was a simpler time in a much freer America. I was from an extremely modest financial background, barely escaped high school and scholastically unprepared for a formal college education. In other words, I was unintentionally perfect to test the theory that hard work and the drive to succeed were all that was necessary to achieve the American dream.

There was nothing particularly compelling about my story back then. I personally knew tons of people who did better than we did with even less going for them than I began with. If it wasn't the norm, it certainly wasn't unique. And back then, it never occurred to me that someday I would mourn the loss of such an expected environment.

But this isn't a piece about the past, it's about turning things around for the future. And hoping it's not too late for others to reach for the dream themselves. It's about our kids and our neighbors. It's about poor people not being poor anymore. It's not about hitting the target, it's about having a shot at it.

So let's not waste time talking about government job programs that never work. Instead, let's examine how we can get back to what does work and always has. Identifying the problem is always the first step in fixing it.

Barack Obama recently read a speech in Kansas that made the same points as I just did when he referred to his grandparents generation by saying;

"They believed in an America where hard work paid off, responsibility was rewarded and anyone could make it if they tried - no matter who you were, where you came from, or how you started out. These values gave rise to the largest middle class and the strongest economy the world has ever known."

Unfortunately the writer then descended into a predictable diatribe about corporate greed and the mythical notion that the government doesn't have sufficient regulatory power to keep those values alive today. As usual, and probably on purpose, they missed the whole point. In fact, they got it precisely backwards.

When it comes to job creation, over-regulation at all levels of government is the wrench in the works. And worse than that, it is the most harmful to our economic liberties. The loss of those liberties is the most under reported story in the history of a news media that should be the target of a reverse class action suit for malpractice. (A suit I just made up where there are many defendants and only a few complainants.)

Luckily, there is a group of lawyers at a place called The Institute for Justice  who not only understand the gravity of the situation, but have been suing various governments on behalf of ordinary citizens for decades in an effort to re-secure our rights. It's good to know that people with legal expertise are there to back us up in a world where we don't stand a chance on our own against a cabal of crony capitalists and power hungry politicians.

You and I can rely on our common sense to inform us that when two parties agree to engage in a legal activity for mutual benefit, no one - least of all the very government who is supposed to be defending our rights - should be allowed to interfere. But common sense alone won't prevail against governments who spend our own money to beat us back in court. Governments exist to defend rights, not to usurp them. It's more than a legal question, it's a moral imperative.

What are some of these cases, you ask? There are more than can be tallied that we will never know about, but the "merry band of litigators" (as George Will has dubbed them) are working on a few right now that I think will help highlight how deep the country has become mired in the muck of lost dreams and jobs that never got created.

One such case will make your hair stand on edge, but only because a state government is preventing a citizen from braiding it for you. It's Clayton v. Steinagel, a case about a lady who wants to braid hair for people who want her to do it for them.

The Institute describes the situation; "Jestina Clayton, a college graduate, wife, mother of two and refugee from Sierra Leone’s civil war has been braiding hair for most of her life.  Now she wants to use her considerable skills to help provide for her family while her husband finishes his education.  But the state of Utah says she may not be paid to braid unless she first spends thousands of dollars on 2,000 hours of government-mandated cosmetology training—not one hour of which actually teaches her how to braid hair.  In the same number of class hours, a person also could qualify to be an armed security guard, mortgage loan originator, real estate sales agent, EMT and lawyer—combined.  Such arbitrary and excessive government-imposed licensing on such an ordinary, safe and uncomplicated practice as hairbraiding is not only outrageous, it is unconstitutional."

So ask yourself; why the hell do we need permission from anyone to engage in a business anyway? And why doesn't Barack Obama, the first black President, stand with black people who want to work instead of receive government assistance? Politically it's a no brainer. But then again, maybe he doesn't have a brain.....oh never mind. I digress and this isn't a bash fest. Plenty of time for that in the next eleven months.

Then there is the case of Courtney v Goltz.  The Institute describes the case of government granted monopoly;

"Jim and Cliff Courtney have a plan to bring economic prosperity to their small community of Stehekin, located on the north shore of Lake Chelan in the center of the state.  Because Stehekin is accessible only by boat or plane, the Courtney brothers want to provide convenient ferry service across Lake Chelan so more people can enjoy the natural beauty and outdoor activities in the community their family has called home for four generations."

"Unfortunately, the state of Washington has sunk their plan.  A nearly century-old state law requires Jim and Cliff to obtain a certificate of “public convenience and necessity” from the state in order to pick up and drop off passengers along Lake Chelan.  This requirement, which was implemented to protect existing ferry providers from competition, has resulted in a government-imposed monopoly on Lake Chelan ferry service since the 1920s."    Read more..

All of us have our rights trampled upon when these laws are allowed to stand. Not to mention the jobs that never got created.

And then there are the cases of making people get a license to speak to others about sightseeing in Washington DC (and elsewhere) and the case of the dangerous Interior Designers. You might enjoy the videos concerning those cases I have added below.

So the point is that in all times and places our economic rights are just as important as our other rights if we are to remain a free country. But it's especially disconcerting to see the President talking about how greed caused lost jobs and how taxing the rich during a class war or borrowing more money to finance failed solar companies and the like will create new ones when a large part of the problem is that government is the biggest impediment to fixing the problem. And despite all the attention presidential wannabes give to them, it's not just big companies that are over-regulated, it's everyday folks like you and I too.

Mr. President, and all you other geniuses who are trying to get his job, try getting the hell out of the way. The country needs more undertakers, not fewer. We have to get back to leaving them alone or the only thing we will need an undertaker for is to arrange a cremation for the economy. From the looks of it, it's halfway to cinders already.

* A presentation almost exactly like the one I attended can be found here. It's an hour long, but if you watch it, it's quite likely to be the best hour you spend this month.

Why We Need to be Wonks Once in a While

People who read this blog on a regular basis know who Dan Mitchell is. For those of you who do not, here is quick bio.

Dan is an economist who works at the Cato Institute - a think tank which promotes civil society from a free market, liberty minded perspective. His work is frequently featured on this page because I hold his ideas and his wonderful ability to communicate them in high esteem. He is also kind enough to allow me to re-post some of his commentaries in order to dress up this otherwise piggish blog in mink from time to time.

He doesn't do that because he likes me, (aside from some email exchanges, we have never met in person) but because he is utterly committed to the ideas of freedom and rational choices. He wants the message to be spread widely and I'm happy to help in any small way I can.

If you read his blog at International Liberty regularly you know he is also a very funny and engaging fellow who can easily hide the fact that he is as wonkish as any of the those boring guys who we agree with, but who we somehow manage to avoid at cocktail parties. Most of those guys are more boring than I am.

But now that we are only a few days away from hearing our hopefully lame-duck President make a speech extolling the Keynesian approach to keeping our country in this mess for the foreseeable future and possibly introducing some more useless "stimulus" measures, I thought Dan's timely video on the subject should be presented here in case any of you missed it. (I suspect most or all of you did)

This video is a tad longer than the average American attention span (7 min) but I really suggest you spend the time it takes to watch it. It makes the case very well and even if it might make us all a little more wonkish at the next BBQ conversation, it probably won't make us more boring than we already are.

Just watch the eyes of the people you are boring and if they start to glaze over too much just reach into the cooler and fish a new Sam Adams out of the icy water for them and they will forget that you weren't talking about football.

Speaking of football, even with the President retreating from his plan to go head to head in a TV ratings battle with the Packers/Saints season opening game on the 8th, (He will speak a bit before the game) I would wager a few beers that the pregame show will outdraw the President's snooze fest speech to congress about his newest Keynesian scheme to interfere with market forces.

I'm sure the short video below will be more interesting than the speech and it has the added advantage that you don't have to watch it during the game. I know I'll be watching the pregame show. Maybe I'll ask Willie Wonka to drop by and watch it with me.

The Political Septic Tank is Overflowing

By Grant Davies

When something goes wrong, even if it is an accident, the question is always the same. Whose fault is it?

There certainly is no dearth of contestants for the blame game. In fact, if it were an Olympic sport most of us could vie for a medal.

So where do we begin when we want to list the starting line-up for the finals of the contest called "whose fault is it that the country is disappearing into the political sewerage system?"

The obvious place would be with some of the all star players like the fat guy with the microphone or the comedian who pretends to be a news anchor. Those two might be appointed the captains of the opposing squads, but the teams wouldn't be hard to fill out from either the left or the right of the "entertainment" world.

Maybe a better place is the "news" world. MSNBC or FOX would be rich pools of talent from which to recruit. But that's no good, because they have melted in with the above group until there is very little distinction between them anymore.

Politicians would be the third place to look. They have taken the blame game from a sport to an art form. And the "new" media, blogs like this one, or those on the left or the right can't be overlooked either. I plead guilty as charged for my part in the crime.

Republicans blame Democrats, liberals blame conservatives, and Obama blames everybody.

TV pundits tell us that everyone, or at least most of us, want the politicians to be less partisan and "get things done." But even if that's sometimes true, it's only if it's what we want done.

The most overlooked group to scout from for the "blame team" is the same group who actually deserves the blame. Curiously, it's the same group who is to blame for all the incompetent dolts who have been elected to represent us, and by extension, all the problems we have. You might hazard a guess on who is in that group. A mirror might be helpful if you get stumped.

So whose side are you on? What team do you belong to?

Are you one of those who blame "Dimocrats" because "they can't think logically and just want to take things from some people and give it to others in the name of fairness?" "And everyone knows that Democrats/liberals think that everyone else is too stupid to run their own lives." Right?

Or are you one of those who believes that anyone who is a Republican/conservative is a knuckle dragging moron who just wants to control your life with their version of morality while enriching the already rich with the labors of the poor and downtrodden? Oh, and they are racists too.

Liberals are "for the little guy", while conservatives are just for big businesses and rich people who don't pay their fair share of taxes. Right? "Obama is going to fix things that George W. Bush screwed up." "And he's a black guy (sorta) and I voted for him, so I must be an enlightened person who wants progress!"

Conservatives are for America while liberals hate our country and think we should be just like the enlightened Europeans. "Bush was fighting the bad guys and Obama is surrendering our exceptionalism and trying to make the USA into a socialist utopia." And anyone on any form of government assistance is a lazy slob who wants nothing more than the fruits of someone else's work.

Of course none of those attitudes apply to everyone on either team, nor does it describe what you or I think. After all, we are above all of that, it's only the other fellow who is so petty and ignorant. At some point, commonsense needs to prevail over the childish distractions all of us have fallen for at one time or the other.

One thing is certain however. The time for all that stuff is coming to a fairly rapid end, at least temporarily. It will be pushed aside at some point in the near future as our currency collapses under the weight of the state and national debt. When monetization causes everyone's money and savings to be worthless, all bets are off and the game is over. Both teams lose, and the other guy's attitudes don't matter much anymore.

A little math and a dose of commonsense will tell anyone (who abandons the above notions for a while) that even if we confiscated all the wealth of all the rich people we couldn't sustain the current system and its overwhelming costs. We need to spend less, a lot less. And we need to start right now (not in a few years or over a decade) before Greek style riots, or worse, begin.

If we don't, surely we will drown in the political sewerage we all have contributed to at one time or another.

I'm Too Busy to be Alarmed

I'm sure the guy in the video below must be exaggerating. I mean, it couldn't be true could it?  Obama and GWB and all those guys on MSNBC and CNN (etal) must be right that this is not a big issue.

Why else would they ignore it and quibble over bigger issues like gay marriage and the like? Why else would we be wringing our hands over whether the government is correct about our our dietary selections?

"Chicken Little" theories about whether the planet is getting warmer and whose fault that might be must be more important, right?

I dunno, I'm just a Teablogger passing around alarmist videos that readers send me. You figure it out. Or go ask ten of your friends what they think is the most important issue in the country right now. Or ask ten people on the street the same question.

I have to go find out why LeBron James and company lost the NBA championship if he is the best player who ever lived. After that I'm going to see if I can get one of those swell jobs with the NY Times sifting through Sarah Palin's emails looking for things that might embarrass her. Or maybe I'll see if I can find out if a NY congressman can keep his job (spending more borrowed dollars) after he wagged his wiener on twitter.

You figure it out, I have more important things to do.



Hat tip to Homer for another great video find.

Everything from the origin of central banking to calls to "End the Fed" in less than 5 minutes

Networking for Liberty is the phrase I have settled on to describe the way information is passed around the Internet to advance the cause of smaller government and more freedom.

It includes blogging, Facebook friendships and forwarded emails with links to news stories and interesting and informative videos. It's not a bad way to earn a living either. Just ask Matt Drudge.

So far I haven't earned a nickel doing it, but a blogger is always just one viral posting away from enough advertising revenue to pay for a whole month's worth of greens fees.

I feature a lot of the videos, cartoons and other information I receive from those sources on the sidebar of this site and I frequently write commentaries about the ideas contained in them so we can share the wealth of ideas without spending all day web surfing or all night arguing politics over adult beverages in our favorite watering holes. (OK, the last one is kinda fun).

I've met some interesting people along the way and I've learned a lot as well. The net is the best way I know of to surround myself with folks who are smarter than I am without actually paying them.

One of the people I network with is the semi-famous Dan Mitchell of the Cato Institute. Like many of my "networkers", I've never met him in person.  Dan gives me (along with an unknown number of other bloggers) the heads up on new things he's working on that he would like to see widely disseminated. I'm happy to oblige because his stuff is a good fit for the kind of people who come to this site.

He sent a link to the following video. It's one I think will appeal to the busy folks who nevertheless find time to come here for some interesting informational snacks to chew on between making a living and giving most of it to the government. It's the first in a series and I'll be featuring the rest as they become available. It runs a mere five minutes. I hope you enjoy it (and the rest to come) and learn some history while you do.

In the meantime, please keep networking because the work we do here on the net may turn out to be the work that allows us to regain our liberty. China doesn't seek to censor and repress the Internet because it's helpful to statism.

It's Not the Economy, Stupid!

Calvin Coolidge

If I'm wrong about that and it is the economy that's driving the people away from Obamism and Democratic candidates, the battle might be won but the war is surely lost.

A Democratic operative back during the 1992 Presidential campaign of Arkansas Governor Lewinski chided then President G H W Bush with the slogan, "It's the economy, stupid!" Of course it was the author of that line who turned out to be stupid, but not because his candidate wasn't successful. The tactic worked (or some other tactic did) and the criminal conspiracy commonly called the Clinton administration was off and running into a successful Lincoln bedroom leasing program.

That's the history, but as is often the case, history repeats. Although not exactly. This time the same operatives are trying to use it to spin away what they are afraid will become a rout in the November elections. They would like you to believe that any losses in their power will have been caused by the continuing slumping economy (caused of course, by others) and not for the actual reasons.

I'm not here to tell you that the bad economic conditions are not a factor, they certainly are. But the "Tea Party" movement and the disillusioned former supporters of the Hopester in Chief didn't gather at the clown hall meetings and huge political rallies because they agreed with everything except the rate of the employment. They have bigger issues, much bigger issues.

When the congress and the President conspire to ignore the American electorate as they did when they jammed a two thousand page re-make of US society down their throats against the wills of over sixty percent of the people, they broke the number one rule that almost everyone in this country (even liberals) holds sacred. That rule is that they are supposed to represent us, not dictate to us. That includes the dim witted supporters of government controlled health care. They instinctively know that government didn't operate as it normally does. In the privacy of their hearts, they are scared of this kind of unchecked power.

When millions of people, including Democrats, saw that even though they worked hard and saved and didn't spend over their heads, it was their hard earned money that was being used to bail out those who paid for huge houses and sexy cars and electronic gadgets and HDTVs with credit they never should have been given, they joined tea party gatherings and carried home made signs. They told the pollsters that they were not voting for those who promised fairness but delivered unfair demands on them.

They know it's one thing to feel compassion for the less fortunate, but quite another to pony up for irresponsible spendthrifts and incompetent big business owners. Bailing out gutless auto makers who pay greedy organized workers way more than any but a few of them could ever dream of making, to make cars no one could afford unless they used five year financing or started leasing the cars instead of owning them, was not in their vision of hopeful change. Bailing out crazy investors and big banks who all owned the same "insured" mortgage backed "securities" without considering what would happen if they all had to head for the exits at the same time, was not what they signed up for when they decided it was time to show "compassionate conservatives" the door.

There are other things, like the division of America into mutually resentful groups of people who have been divided even further than before by an administration who demonizes its opponents despite promising to unite them. It's the political payoffs and back room deals that they promised to end and instead turned into an art form. It's these and more, important things, even if they resonate at different levels for different people, that have people gathering their metaphorical pitchforks for the mobbing of the polling places in November.

The most underrated President in the short history of this republic, indeed one of the most ridiculed, was Calvin Coolidge. It was American humorist Will Rogers (1879-1935) who observed, "Coolidge is the first president to discover that what the American people want is to be left alone." I share that opinion with Coolidge. And I think that's what is driving people to re-assess their view of the legitimate role of government since this whole thing went south.

 So, it's not just "the economy, stupid." Because if it is, then there has been no fundamental change in American values and no great awakening of a slumbering populace. After all, Obama, Pelosi, Reid and the rest of the anointed elite promised us a fundamentally different country if they took office. The question is; will the people buy into the notion that all is on the right track except the economy, or will this election be the first big battle of the second American Revolution? We won't have to wait much longer to find out.

The Economics of Medical Care

Dr. Thomas Sowell is well known to readers of this blog, but sadly, if you turn to the person next to you where ever you happen to be and ask them who he is, you will get the same look that you get from American teenagers in a Chinese algebra class. I guess that's not terribly shocking in a country where a huge number of those quizzed on the street about the name of the Chief Justice of the Supreme Court, answer - "none of the above". In fairness, given the prevailing preferences of what passes for the press in this country, they can't be expected to have heard of Sowell.

For those who are new to this site or to Sowell, the link found below contains a biography, but the content of the series of articles is the real attraction. It is a nine part series carried on the Op-Ed page of the Investors Business Daily and as a courtesy to my readers who do not subscribe to that excellent publication, but who do check on this site often, I will be adding a link on the right hand side each day so that we may together follow along on an economics lesson extraordinaire. As with all of his writing, it is perfectly readable.

The series is actually an entire chapter of his new book, "Applied Economics" and will be reprinted in its entirety on the pages of that paper. He has also recently written a book entitled "The Housing Boom and Bust" which will inform its readers of what actually happened during the recent meltdown of government "fixes" and the attendant economic crash.

I hope you enjoy it so you can roll your eyes (in an informed way) whenever someone at your favorite watering hole tells you how great it's going to be when "free" government healthcare finally arrives to save us from those enemies of the people, the insurance companies and drug manufacturers.

Once You Read This, Your Troubles Will be Over Forever.

As most of you know, I'm a golfist. Since that word isn't in any dictionary I use, it can mean whatever I want it to mean. One thing it sure doesn’t mean is that I'm good at golf. Although "good" in this case can be a relative term, in absolute terms, I'm terrible. (Already, I digress)
As a golfist, I read lots of golf magazines and books. And since my niece has suggested that I write an essay on pet peeves, I'm going to expound on one of my own pet peeves.

Golf magazines always have a "hook" headline on the front cover. Not to be confused with the shape of the ball flight that has caused people to throw their $400 drivers into the trash, the "hook" I'm referring to is the preposterous headline on the cover that infuriates you so much that you feel compelled to read the article inside even when you know it's an outright lie.
One of my favorites is; "Never Slice Again!"  Seemingly, I have read every article written which promised that result, and I've tried everything that was instructed, but after almost a half a century of golf, at least fifty percent of my tee shots still slice. It's gotten to the point that I don't know if I want to be a good golfer or just an ex-slicer.

By now you may have figured out that this piece isn't about golf or slicing. The above title is the same type of "hook" the golf magazines use to peeve me off. Once you read what I want you to read, your troubles will not be over. In fact, they might just be beginning, because it may change the way you think about problems and solutions, particularly the political ones we are currently facing. And almost everyone hates change even if they don't admit it.

So this opinion piece is about economics.         Huh?        Indulge me once again if you can.
I have never heard a trained economist describe it this way, but my definition of economics is; the study of human nature. One branch of it anyway. And as a way to distill it a bit more, it has been described by an actual economics professor as "a way to approach problems". A methodology for thinking things through, if you will.
People make choices all the time even when they do not realize it, and since utopia is not an option, solving problems means making tradeoffs. Everywhere and always. An economist knows that and it shapes the way he views the world.

The seminal event in my intellectual life occurred when, as a young man, I was given a well thumbed, used paperback book as a gift from a man named Walter Ramsey who was a broker on the trading floor where I worked. I don't know if I believe in fate, but I do believe in good fortune because my life has been one example of it right after another. For me, meeting Walter was fortunate for sure and perhaps even fateful.

The book was Economics in One Lesson, written by Henry Hazlitt. Although I certainly recommend that you read it, I know that most of you won't for one valid reason or another so I will copy the essence of it, as he defines it in "The Lesson".

"the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. 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."

That simple sentence may not seem profound to you right now, but it is. And if you take it to heart, I'm guessing you will agree with that assessment after a time.

Here is what that lesson has done for me;
 I still care what other people think and I still seek their opinions, but my own opinions have been less shaped by what friends think, or what they will think of me if I come to a different conclusion than they do. And I think that although polls have their place, I ignore them even more than I did before I took the above lesson to heart. I replaced those things with my own analysis based on asking myself the question in the quoted sentence. Now, why do I write these things about my approach? It's because of the title of this blog. It's the WHY, in the "what we think and why".

So, I "hooked" you in, and although your troubles are not over forever, I promise that if you take the lesson to heart and apply it to your thinking, you will hit fewer "slices" when you ponder most of the nonsense that the political busybodies foist upon us.
The birdies promised by the "I will mind your own business" crowd, almost always get carded as triple bogeys and the above picture of Fidel Castro and his golfing partner Che playing a match in the Caribbean workers paradise seem to be a good illustration of the consequences of not knowing the Lesson.

A Postscript

Walter, if you are out there, I owe you more thanks than I can ever repay, even if it's likely that you have forgotten the gift, and perhaps even me, for that matter. But another lesson I learned from this event is that sometimes we have an impact on young people by what we say or do that outlives our memories. And that is a par worth making.