As reported in the Wall St. Journal: U.S. Could Take Stakes in Big 3 - WSJ.com
This, and the recent financial bailout boondoggle is very reminiscent of the early stages of the downward spiral in Atlas Shrugged, where the government kept stepping in further and further to "save" the industries. It didn't work out too well in that fictional environment, and I don't think we can expect better results in reality either.
Why do we, the taxpayers, have to bail out any failing company, be it a bank or an auto maker? What is wrong with letting these companies declare bankruptcy and get bought up by other private interests? I know it means pain for the auto workers and investors... But it would be short-lived, and if they are still viable entities they'll recover, and the jobs will increase. Or the auto-workers will have to find new line of work (fact of life). The government has no business getting involved at this level.
I've been saying for months that Obama's plan for the economy would be massive government spending increases, and eventually tax increases as well. He's tried to placate some people by putting on hold his tax increase on the "rich", but has made his spending plan clear. He wants to initiate the largest public-works spending spree since 1950. We're in a recession, but rather than incentivize private industry to produce more (e.g. tax cuts for everyone, so people spend more money), he wants to spend more of our federal tax money on government-run projects. Most of these (schools, roads, etc) are not even in the federal purview; they should be handled at the state or even local levels of government.
I see our country inevitably headed toward a more socialistic government, and only hope that it happens fast enough to shock the public into action: In the next major election, I hope we vote the socialists out of office and replace them with people who believe in the principles on which this country was founded!
Tuesday, December 9, 2008
Tuesday, October 28, 2008
Is Obama a Marxist?
One of Barack Obama's key items in his platform is his promise to "tax the rich". He's garnered a lot of support from people who make less than $250K per year because they assume they'll get a larger piece of the pie under his administration.
Obama and his running mate, Joe Biden, have tried to deflect criticism that he's espousing Marxist doctrine by claiming he just wants to transfer back the wealth that was "stolen" from the middle class by the upper class. However, he has said in his own words not only that he thinks redistribution of wealth (a decidedly Marxist principle) is a good thing, but how he believes it can be accomplished using the courts or legislative branch!
Obama Affinity to Marxists Dates Back to College Days - From the article: "To avoid being mistaken for a sellout, I chose my friends carefully," the Democratic presidential candidate wrote in his memoir, "Dreams From My Father." "The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists." This article also delves a little bit into the not-widely-publicized issue of his affiliation with the unapologetic William Ayers, a self-proclaimed Marxist and domestic terrorist.
I cannot understand why people can't see him for what he is. Do people in this country really not look at more than the glossy rhetoric he uses during his ads and speeches? Or do the liberals actually want our country to become a Socialist/Marxist/Communist state?
Someone asked me what the problem was with taking money from the "rich" and giving it "back" to the middle-class. I have several problems with statements like this.
First, the definition of rich... If you only make $20K per year, you would probably consider someone making $100K to be rich. If you make 60K, you probably consider $200K to be rich. At $100K maybe the line is at $250K, and so on... So, who is right? Why does anybody have the right to decide how much is too much to earn? Shouldn't someone who makes $250K have the same right to their own hard-earned money as the person who makes $10K?
Second, the claim that the upper-earners have somehow unfairly stolen this money from the middle class. Joe Biden keeps saying he and Obama just want to give the money back where it was taken from. The implication is that the rich have stolen this money from the middle class due to the Bush tax cuts. Obama's tax plan in fact even wants the top 2 brackets restored to what they were pre-Bush, and wants it to be retroactive. They see it as correcting a past wrong. However, they didn't steal anything from the lower classes, they simply got to keep some of the money they'd earned in the first place. In fact, they still paid a much higher percentage of their income in taxes than the middle class did.
Third, the whole idea that the government has any business taking money from one group and redistributing it among another group is absolutely ridiculous. The only way that holds water is if that money was truly stolen through fraud or other illegal action. Last I checked, none of the rich folks have ever broken into my house to steal my money.
I've also heard the argument that since the rich are able to make money off the poor and middle class it's only fair to give back some of that money. This flies in the face of Capitalism (which is probably the arguer's goal), since the difference is that the business owners are making money by selling goods and services. Nobody has a right to a TV, air conditioner, computer, board games, roller skates, designer shoes, car, or any of the other millions of products that people buy every day... They buy them because they want them and feel that the price they pay is worth whatever they get out of the product. So by even trying to cry foul after they've bought something that the people they bought it from made money off of them is ludicrous.
The only fair way to redistribute wealth is through jobs. But you cannot force a company to hire more workers, they have to have a reason to do so, and the means to accomplish it. In other words, they have to need more workers to produce or sell their products, and the funds or credit to pay their wages. Increasing taxes is going to take away the companies' ability to hire more workers. That in turn means the workers have less money to spend on things, meaning the companies will sell less products, and need less workers.
Obama claims he wants to write a check to every person and family who works but makes less than about $150K (though doesn't mention that his plan is actually only for those who do not itemize, which excludes a large number of middle-class families, especially homeowners). That includes people who pay no taxes now because their income is below about $28K! How is it fair to increase taxes on someone making $250k and give a $500 check to a person who doesn't even pay taxes in the first place? That's just another form of welfare, and is not fair. Fair is when everyone gets paid for what they actually produce. An even exchange of money for products or services.
Value for value.
Obama and his running mate, Joe Biden, have tried to deflect criticism that he's espousing Marxist doctrine by claiming he just wants to transfer back the wealth that was "stolen" from the middle class by the upper class. However, he has said in his own words not only that he thinks redistribution of wealth (a decidedly Marxist principle) is a good thing, but how he believes it can be accomplished using the courts or legislative branch!
Obama Affinity to Marxists Dates Back to College Days - From the article: "To avoid being mistaken for a sellout, I chose my friends carefully," the Democratic presidential candidate wrote in his memoir, "Dreams From My Father." "The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists." This article also delves a little bit into the not-widely-publicized issue of his affiliation with the unapologetic William Ayers, a self-proclaimed Marxist and domestic terrorist.
I cannot understand why people can't see him for what he is. Do people in this country really not look at more than the glossy rhetoric he uses during his ads and speeches? Or do the liberals actually want our country to become a Socialist/Marxist/Communist state?
Someone asked me what the problem was with taking money from the "rich" and giving it "back" to the middle-class. I have several problems with statements like this.
First, the definition of rich... If you only make $20K per year, you would probably consider someone making $100K to be rich. If you make 60K, you probably consider $200K to be rich. At $100K maybe the line is at $250K, and so on... So, who is right? Why does anybody have the right to decide how much is too much to earn? Shouldn't someone who makes $250K have the same right to their own hard-earned money as the person who makes $10K?
Second, the claim that the upper-earners have somehow unfairly stolen this money from the middle class. Joe Biden keeps saying he and Obama just want to give the money back where it was taken from. The implication is that the rich have stolen this money from the middle class due to the Bush tax cuts. Obama's tax plan in fact even wants the top 2 brackets restored to what they were pre-Bush, and wants it to be retroactive. They see it as correcting a past wrong. However, they didn't steal anything from the lower classes, they simply got to keep some of the money they'd earned in the first place. In fact, they still paid a much higher percentage of their income in taxes than the middle class did.
Third, the whole idea that the government has any business taking money from one group and redistributing it among another group is absolutely ridiculous. The only way that holds water is if that money was truly stolen through fraud or other illegal action. Last I checked, none of the rich folks have ever broken into my house to steal my money.
I've also heard the argument that since the rich are able to make money off the poor and middle class it's only fair to give back some of that money. This flies in the face of Capitalism (which is probably the arguer's goal), since the difference is that the business owners are making money by selling goods and services. Nobody has a right to a TV, air conditioner, computer, board games, roller skates, designer shoes, car, or any of the other millions of products that people buy every day... They buy them because they want them and feel that the price they pay is worth whatever they get out of the product. So by even trying to cry foul after they've bought something that the people they bought it from made money off of them is ludicrous.
The only fair way to redistribute wealth is through jobs. But you cannot force a company to hire more workers, they have to have a reason to do so, and the means to accomplish it. In other words, they have to need more workers to produce or sell their products, and the funds or credit to pay their wages. Increasing taxes is going to take away the companies' ability to hire more workers. That in turn means the workers have less money to spend on things, meaning the companies will sell less products, and need less workers.
Obama claims he wants to write a check to every person and family who works but makes less than about $150K (though doesn't mention that his plan is actually only for those who do not itemize, which excludes a large number of middle-class families, especially homeowners). That includes people who pay no taxes now because their income is below about $28K! How is it fair to increase taxes on someone making $250k and give a $500 check to a person who doesn't even pay taxes in the first place? That's just another form of welfare, and is not fair. Fair is when everyone gets paid for what they actually produce. An even exchange of money for products or services.
Value for value.
Friday, October 3, 2008
The Financial Bailout Bill: The Other White Meat
Having read the full text of the Senate's latest financial bailout bill (click here to read it for yourself), I saw one of the biggest problems with our legislature. This bill is so full of pork that only the first 100 pages of the 451 page bill even addresses the economic crisis! I could understand some of the tax incentives that were added in to try to get more conservative votes, and at least have a tangential relationship to the financial situation, but some just strain credibility.
For example, there are provisions giving tax breaks for production and sale of wooden arrows for children. Karim Bardeesy did a good job in the article Bailout Baloney of describing some of these types of these items. Also, check out the New York Post article on this bacon-infested piece of legislation.
There's also another piece of legislation snuck in there that I haven't heard anything about on the news. The Paul Wellstone Mental Health and Addiction Equity Act of 2008 was added in as another earmark (and a huge one at that). I haven't taken the time to really examine that section in detail, except to be able to tell that this has nothing to do with the economic situation. The problem isn't the measure itself, the problem is that this was tacked onto this high-profile bill as an earmark. It should have simply been debated and voted on based on its own merits and not slid into another piece of legislation to sneak it in under the radar. This process has got to stop before it completely destroys our country.
On the Bill Itself:
I'm not a fan of the bailout... I do think that the tax provisions may help the economy somewhat, but the government should not be in the business of buying up troubled assets, even with the provisions that they be unloaded to private investors as soon as possible. This goes way beyond the government's role.
The one piece of the legislation that I whole-heartedly agree with is the FDIC limit increase, except I would have made it permanent, and tied it to inflation. That limit was set way back in 1980, and has not been adjusted for inflation (it would have been around $260,000 by now if it were). This would largely have reduced or removed the psychological effect of troubling news causing runs on the banks.
The other piece I agree with is the controls on golden parachutes for executives when these companies are failing. While I believe that very high executive compensation is completely OK when a company is being run well (meaning the executives are doing a good job and providing value), the execs should not be rewarded for running a company into the ground.
Don't Panic!
The major reason we've seen bank failures and stock price drops is simple:
The panic effect
People hear or read some pundit or "journalist" say that a bank is in financial trouble, and they run out to pull their money out down below the $100,000 limit, so they don't lose it. They are only being prudent, but the trouble is that makes the predictions of the aforementioned "journalist" come true. This run causes the bank to fail because the bank ends up over-extended. If it weren't for the media causing a panic, the bank would likely have been able to recover.
Day Trading
The same thing happens with the stock market. When people hear on the news that "The Dow Jones average dropped X points today," they pull their money out of their investments.. This is a lose-lose scenario, because that both means they take a loss on their investments, and they cause the stock prices to drop further. Now, there are plenty of smart investors who wait for such a thing to happen, watch for the price to bottom out, then buy up as much as they can... Because the market will recover!
Perhaps the thing that is causing many of the issues with the stock market is the advent of day-trading. This whole segment of quick-turnaround investing is not tied to the actual value of a company, but is purely psychological. People try to make small incremental profits throughout the day, often by using the technique of short selling. This allows them, when they see the market is taking a dive, to sell a bunch of stock that they don't own, and then when it bottoms out, to buy back the stock at the lower price. So, if a stock is trading at $100, and they short-sell 1000 shares, then buy it back at the a price of $80 per share, they've made a profit in just a few hours of $20/share (or $20,000). And all the while, they've provided not actual investment capital nor value to the company. It's purely betting on failure.
A real economic recovery plan should have included provisions to ban the practice of short-selling permanently, and provided disincentives to day-trading in general. The stock market would be much less volatile if it weren't so easy to buy and sell stocks (which are supposed to be an investment in the company you've purchased a piece of) based on momentary fluctuations. If that weren't such a profitable "industry", then perhaps that practice would stop and people would instead focus on long-term gains tied to the actual production and performance of the companies they invest in.
For example, there are provisions giving tax breaks for production and sale of wooden arrows for children. Karim Bardeesy did a good job in the article Bailout Baloney of describing some of these types of these items. Also, check out the New York Post article on this bacon-infested piece of legislation.
There's also another piece of legislation snuck in there that I haven't heard anything about on the news. The Paul Wellstone Mental Health and Addiction Equity Act of 2008 was added in as another earmark (and a huge one at that). I haven't taken the time to really examine that section in detail, except to be able to tell that this has nothing to do with the economic situation. The problem isn't the measure itself, the problem is that this was tacked onto this high-profile bill as an earmark. It should have simply been debated and voted on based on its own merits and not slid into another piece of legislation to sneak it in under the radar. This process has got to stop before it completely destroys our country.
On the Bill Itself:
I'm not a fan of the bailout... I do think that the tax provisions may help the economy somewhat, but the government should not be in the business of buying up troubled assets, even with the provisions that they be unloaded to private investors as soon as possible. This goes way beyond the government's role.
The one piece of the legislation that I whole-heartedly agree with is the FDIC limit increase, except I would have made it permanent, and tied it to inflation. That limit was set way back in 1980, and has not been adjusted for inflation (it would have been around $260,000 by now if it were). This would largely have reduced or removed the psychological effect of troubling news causing runs on the banks.
The other piece I agree with is the controls on golden parachutes for executives when these companies are failing. While I believe that very high executive compensation is completely OK when a company is being run well (meaning the executives are doing a good job and providing value), the execs should not be rewarded for running a company into the ground.
Don't Panic!
The major reason we've seen bank failures and stock price drops is simple:
The panic effect
People hear or read some pundit or "journalist" say that a bank is in financial trouble, and they run out to pull their money out down below the $100,000 limit, so they don't lose it. They are only being prudent, but the trouble is that makes the predictions of the aforementioned "journalist" come true. This run causes the bank to fail because the bank ends up over-extended. If it weren't for the media causing a panic, the bank would likely have been able to recover.
Day Trading
The same thing happens with the stock market. When people hear on the news that "The Dow Jones average dropped X points today," they pull their money out of their investments.. This is a lose-lose scenario, because that both means they take a loss on their investments, and they cause the stock prices to drop further. Now, there are plenty of smart investors who wait for such a thing to happen, watch for the price to bottom out, then buy up as much as they can... Because the market will recover!
Perhaps the thing that is causing many of the issues with the stock market is the advent of day-trading. This whole segment of quick-turnaround investing is not tied to the actual value of a company, but is purely psychological. People try to make small incremental profits throughout the day, often by using the technique of short selling. This allows them, when they see the market is taking a dive, to sell a bunch of stock that they don't own, and then when it bottoms out, to buy back the stock at the lower price. So, if a stock is trading at $100, and they short-sell 1000 shares, then buy it back at the a price of $80 per share, they've made a profit in just a few hours of $20/share (or $20,000). And all the while, they've provided not actual investment capital nor value to the company. It's purely betting on failure.
A real economic recovery plan should have included provisions to ban the practice of short-selling permanently, and provided disincentives to day-trading in general. The stock market would be much less volatile if it weren't so easy to buy and sell stocks (which are supposed to be an investment in the company you've purchased a piece of) based on momentary fluctuations. If that weren't such a profitable "industry", then perhaps that practice would stop and people would instead focus on long-term gains tied to the actual production and performance of the companies they invest in.
Wednesday, October 1, 2008
A little bit about myself.
First, an introduction. I'm a 34 year old geek, working as a computer consultant. I have been married to my soulmate, a wonderful woman named Wendy, for 13 years. We have a 1 year old son, Trevor, who is our world, and we would give anything for him. I never knew being a father would be so rewarding, and while I'm glad we waited until we'd lived our lives as a couple first, I'm also glad we did decide to have children. Hopefully we'll give Trevor a sibling within the next couple of years.
I like to read fantasy books (Lord of the Rings series by Tolkien, The Wheel of Time series by Robert Jordan, etc). About 6 years ago, my wife bought me a copy of Soul of the Fire by Terry Goodkind (part of the Sword of Truth series). I liked it enough that I decided to go back to the beginning of the series (the first book is Wizard's First Rule) and read the whole thing.
After I finished that series about a year ago, I was curious about the philosophy and political viewpoint that was obvious in the books. I looked on the Terry Goodkind Forums and found that is actually based on Objectivism which I'd never heard of. I was intrigued, and found that Ayn Rand is regarded as the founder of this philosophy and I immediately went to buy some of her books. I started with Anthem, then read the Fountainhead, and I just finished "Atlas Shrugged" a few months ago.
After reading these books, my view of the world was clarified--not changed, because I have always held an individualistic viewpoint (I've been called selfish by my parents since I was a baby)--I wasn't swayed over to this newfound philosophy, I simply realized that it articulates the way I've always viewed the world. It helped me to firm up my own views of what is good and bad in society. My favorite book from the Sword of Truth series was Faith of the Fallen, which was the one that really made everything "click" for me.
When I was 18, I registered as a democrat, because my parents are liberal democrats, and I really didn't know anything about politics. All I "knew" was that democrats=good, republicans=evil. Funny thing is that in 1992, my favorite candidate was Ross Perot, because I liked the way he talked about fixing the broken system. I think deep down I must have been starting to realize I had a libertarian at my core. But I didn't vote because I was young and somewhat apathetic about politics.
Later, in 2000 was the first time I actually cared enough to vote. At this point I was married, working as a computer sysadmin making a middle class salary after working hard for the past 8 years. So, I looked into the candidates positions, thinking I'd go with Clinton (I was registered Dem after all). Well, after I really looked at the platforms, I realized I didn't agree with the democrats at all on most issues! I changed my registration to republican, and voted that way because I had more in common with the conservatives.
Since then I've gotten more interested in politics and current events because I realized how much it does affect me. My parents wonder where they went wrong with me because I hold such different viewpoints than they do. They've always called me selfish, and it used to hurt. I've always been willing to help people who really need it, and have donated to charities that I believe do good work. After reading Fountainhead and Atlas, I finally realized that to be called selfish is not an insult. My mother called me that again recently, and I said "yes, I am selfish but that's not a bad thing."
All my life, I've been labeled as heartless, selfish, uncaring, etc, because I've always taken an analytical view of the world instead of an emotional one. I have recently come to finally realize and accept that this is the only proper way to live, and that anyone who "thinks" with their heart instead of their using their mind is doing themselves and society a great disservice. I'm not selfish when it comes to actually helping people who truly need, but I don't base my determination of need on an emotional response to a plea. It's up to each of us to decide where our help is actually needed and whether we feel the person we're asked to help deserves it.
I'm no longer going to accept that living for my own happiness is a character flaw. I'm now proud to assert that I have a right to my own life, my property, and my ideas; and that everyone else has a right to their own, but not to any part of mine unless I give it freely.
As Richard (the main character from The Sword of Truth series) said:
"Your life is yours alone. Rise up and live it!"
I like to read fantasy books (Lord of the Rings series by Tolkien, The Wheel of Time series by Robert Jordan, etc). About 6 years ago, my wife bought me a copy of Soul of the Fire by Terry Goodkind (part of the Sword of Truth series). I liked it enough that I decided to go back to the beginning of the series (the first book is Wizard's First Rule) and read the whole thing.
After I finished that series about a year ago, I was curious about the philosophy and political viewpoint that was obvious in the books. I looked on the Terry Goodkind Forums and found that is actually based on Objectivism which I'd never heard of. I was intrigued, and found that Ayn Rand is regarded as the founder of this philosophy and I immediately went to buy some of her books. I started with Anthem, then read the Fountainhead, and I just finished "Atlas Shrugged" a few months ago.
After reading these books, my view of the world was clarified--not changed, because I have always held an individualistic viewpoint (I've been called selfish by my parents since I was a baby)--I wasn't swayed over to this newfound philosophy, I simply realized that it articulates the way I've always viewed the world. It helped me to firm up my own views of what is good and bad in society. My favorite book from the Sword of Truth series was Faith of the Fallen, which was the one that really made everything "click" for me.
When I was 18, I registered as a democrat, because my parents are liberal democrats, and I really didn't know anything about politics. All I "knew" was that democrats=good, republicans=evil. Funny thing is that in 1992, my favorite candidate was Ross Perot, because I liked the way he talked about fixing the broken system. I think deep down I must have been starting to realize I had a libertarian at my core. But I didn't vote because I was young and somewhat apathetic about politics.
Later, in 2000 was the first time I actually cared enough to vote. At this point I was married, working as a computer sysadmin making a middle class salary after working hard for the past 8 years. So, I looked into the candidates positions, thinking I'd go with Clinton (I was registered Dem after all). Well, after I really looked at the platforms, I realized I didn't agree with the democrats at all on most issues! I changed my registration to republican, and voted that way because I had more in common with the conservatives.
Since then I've gotten more interested in politics and current events because I realized how much it does affect me. My parents wonder where they went wrong with me because I hold such different viewpoints than they do. They've always called me selfish, and it used to hurt. I've always been willing to help people who really need it, and have donated to charities that I believe do good work. After reading Fountainhead and Atlas, I finally realized that to be called selfish is not an insult. My mother called me that again recently, and I said "yes, I am selfish but that's not a bad thing."
All my life, I've been labeled as heartless, selfish, uncaring, etc, because I've always taken an analytical view of the world instead of an emotional one. I have recently come to finally realize and accept that this is the only proper way to live, and that anyone who "thinks" with their heart instead of their using their mind is doing themselves and society a great disservice. I'm not selfish when it comes to actually helping people who truly need, but I don't base my determination of need on an emotional response to a plea. It's up to each of us to decide where our help is actually needed and whether we feel the person we're asked to help deserves it.
I'm no longer going to accept that living for my own happiness is a character flaw. I'm now proud to assert that I have a right to my own life, my property, and my ideas; and that everyone else has a right to their own, but not to any part of mine unless I give it freely.
As Richard (the main character from The Sword of Truth series) said:
"Your life is yours alone. Rise up and live it!"
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