And a Happy New Year!

Hope your new year is more prosperous and happy, and that 09 brings us all more freedom instead of less.

Merry Christmas

Merry Christmas to all my readers. You make blogging worth it when you visit here.

Mike N

Sign of Things to Come?

Fred: I'm tired of standing in line all the time.

Sally: What this time, the unemployment line?

Fred: No

Sally: Job application line?

Fred: No.

Sally: What then?

Fred: The line to buy a newspaper!

Expanding

I have been honored to have been accepted as a contributor at The New Clarion with Bill Brown, Myrhaf and Dismuke for whom I have very high respect. My posts on political topics will be posted there. I will still maintain this blog for non-political subjects.

Government Interference and Encouragement

Speaking about governmental encouragement of the arts, novelist/philosopher Ayn Rand (link below) identified the principle that: "Governmental encouragement does not order men to believe that the false is true, it merely make them indifferent to the issue of truth or falsehood." This principle is equally true regarding other forms of governmental encouragement. But the truth of the above principle has never been so glaringly obvious as in the current mortgage crises which involves both government interference and encouragement. Government encouragement is usually in the form of government financing of various initiatives.

Governmental interference and encouragement in this fiasco is plentiful and widespread. It starts with the Federal Reserve bank which is a political animal created by the government in 1913. It would not exist in a free market. The Fed under former chairman Alan Greenspan held interest rates ridiculously low earlier this decade. That policy was continued by current chair Ben Bernanke. At his website economist George Reisman (link below) writes: "For the three years 2001-2004, the Federal Reserve drove the Federal Funds Rate below 2 percent and from July of 2003 to June of 2004, drove it even further down, to approximately 1 percent." This created an atmosphere of easy money and credit in the market place. Easy money here means money can be had at less than market rates would provide. It encourages a certain amount of recklessness in financing.

Add to that the government's implicit policy--ever since the bailout of the S&Ls--of bailing out companies that are deemed 'to big to fail' and you have even more encouragement to recklessness in financing. The Fed was seen as the lender of last resort and the congressional policy was seen as a corporate safety net.

But these encouragements weren't the only ones. There is Fannie Mae and Freddie Mac created by government to buy up risky mortgages and pool them with good ones and resell them for even more money that would be used to make more risky loans. The justification was to provide "affordable housing" to those who couldn't afford it. There is the Community Reinvestment Act which provided a rating agency by which mortgage companies would have to get a good rating in order to expand or merge. To get a good rating they had to have a certain number of risky mortgages. Again, these lesser encouragements contributed to and magnified the meltdown.

The pushers of 'affordable housing' were clever about their interference in the marketplace. They cited documents showing that a small percentage of people just under the economic threshold below which private banks would not lend are in fact able to pay off loans therefore the government must help this under served part of society with cheap loans. Of course none of this was needed. As Thomas Sowell pointed out, there are always some people in the poverty or working poor category who are there only temporarily through job loss or injury or just entering the job market at a low wage. These people don't stay there for long and don't need the government trying to saddle them with debt just because Congressmen and Senators want to feel good about themselves.

If no financial recklessness or greed existed in the market place, these governmental encouragements would--and did--create it.

When Fannie Mae and Freddie Mac are cleaned up they need to be shut down. The Community Reinvestment Act should be repealed and the Fed can be eventually shut down as we return to a gold standard We do not need a central bank. A great deal of the encouragement is on the state and local level. I did a google search for 'affordable housing initiative' and got 339,000 results.

The solution is not more governmental encouragement but an end to it: a discovery of laissez-faire capitalism.

Sources:
1. Rand quote from essay "Establishing of an Establishment" in her book "Philosophy: Who Needs It."

2. George Reisman's Blog on Economics, Politics, Society, and Culture. "Essay on The Myth that Laissez Faire Is Responsible for Our Financial Crisis"

Last Blogroll Update for 2008

As most already know, Myhraf has a new site called The New Clarion at which he teams up with Bill Brown for some very rational posts. I've added it to my blogroll.

I'm also adding "Wealth Is Not the Problem" where Beth posts on the similarities between now and the Great Depression.

The Ayn Rand Center for Individual Rights (ARC) is the site of the new Washington D.C. office of ARI. They have videos and lectures available for those who want to know more about individual rights. They are advocating individual rights in the one place where they are violated the most and least understood, Washington D.C.

Next is Ms. Think hosted by Paula Hall who also posts sometimes at NoodleFood. Her latest post is about:

A group called the National Community Reinvestiment Coalition (NCRC) has filed a complaint with the the federal Department of Housing and Urban Development, claiming that the ratings agencies Moody's and Standard & Poor's facilitated the subprime mortgage meltdown -- to the disadvantage of minorities. As stated by succinctly by Overlawyered: NCRC's claim is that "you rated our constituents as too creditworthy."

Why don't they sue Fannie and Freddie and the Community Reinvestment Act who really did rate people as too creditworthy? Blame everybody except yourself is what they're doing.

Another addition is The Sidereal Messenger where David posts a review of the 'epic' movie Australia. Dave suggests you save your money.

Still another is the site of Dr. Andrew Bernstein who has written an introductory book on Objectivism for those new to it or just curious. (Friendly plug--Dr. Bernstein's site is managed by Robert Nasir who is also on my blogroll--just in case you're thinking about improving yours.)

Next is Robbservations where Robb examines a long article by Roger Cohen who looks favorably on Castro's Cuba.

Lastly for now will be George Reisman's blog on economics and culture. His last post looks at a NYTimes article on the appointment of Larry Summers to Obama's cabinet.

Pathetic Congressional Hearings

While I was babysitting my 7mo. old grand daughter, I happened to catch the beginning of the Congressional hearings of the big 3 auto co. CEOs. UAW chief Ron Gettlefinger was in the same panel. What I saw was really sad, no, sickening. Three titans of industry groveling before an inquisition of people who were clearly their moral inferiors.

These men were begging for permission to continue to exist and then apologising for not having done the impossible--to make cars with super gas mileage, using alternative fuels, no emissions, affordable to the poor, and that everyone wants to buy.

What was really pathetic was how many of the Representatives insisted that they have to be careful with taxpayers' money. What a bunch of two-faced hypocrites. These are the same humans who a few weeks ago were tripping over themselves to give Henry Paulson $700 billion as soon as he cried wolf! But loaning $34 billion requires several weeks of intense interrogation examining every feather in the pillow. As if they really cared!

That $700 billion wasn't to bail out Wall Street. It was to bail out Congress. To bail out their own hides while blaming greed. And the American people are swallowing it whole. These hearings are just the icing on the cake that was the biggest congressional power grab and money grab ever.

In a way, I don't feel sorry for those CEOs. They deserve this treatment for not defending their rights or capitalism or free enterprise.

If you want, CSPAN is reshowing the hearings at 8 PM EST Tonight. They're about 6 hours long. No doubt, Cspan will repeat them later also. Take some Bufferin before watching.

Obama Seeks Power Sharing

The Detroit News of Tuesday Dec. 2nd carries a news analysis titled "Obama chooses 'strong.'" The subtitle is "Selection of Clinton, Gates, Jones for security team show his deference to pragmatism over ideology." So pragmatism equals strong. Strong what? No answer given but I can tell you that his picks are all strongly committed to abiding by any consensus that may arise. Why? Because it allows each of them to share power and this is what each one 'strongly' desires. The photo accompanying the article testifies to this fact at least for Hillary.

The first paragraph further reinforces this theme:

"The selection of experienced centrists -- Hillary Rodham Clinton, Robert Gates and James L. Jones -- to head President-elect Barack Obama's national security team points to the possibility that, on Iraq, the incoming commander-in-chief may take a more measured path to ending American military involvement than he described during the presidential campaign."

A 'centrist' is one who walks the middle of the road on everything; who takes a spoonful of poison with every spoonful of food and who is willing to compromise on every savage's claim that America is evil and needs to be reshaped into the savage's notion of ideal and most of all, that every American value is something that can and should be negotiated away for some temporary, range of the moment satisfaction.

Surrounding himself with 'experienced centrists' makes Obama's choices 'strong'? These 'strong' choices means there is no chance any of them will support extreme positions like individual rights, freedom, justice, equality under the law, earning one's way through life, letting people chose what's in their self-interest etc.. And what is "...a more measured path..."? Measured according to what standard? Compared to Bush's or the leftists who think Obama will pull the troops out right away? No. It's more measured than his campaign rhetoric which was only said to evoke emotions of approval. It worked nicely.

Obama likely will rely on Jones, who spent 40 years in the Marine Corps but has never served in the executive branch of government, to lay the groundwork by melding the views of Clinton and Gates.

What does 'melding the views" mean? How does one meld the views of "strong personalities and strong opinions" of Clinton and Gates? Can 'strong views' even be melded? These words are just meaningless nonsense meant to convey not ideas but feelings. One feeling is 'there, there now, daddy is here and everything is gonna be ok because daddy is doing everything right and he will take care of you.'

It's obvious that James Jones's job is to make sure that everyone shares in the administration of power and gets the appropriate prestige. Our government will be run by committee like baking an apple pie by committee. One person will decide what kind of apples to use, another how many to use, still another what temp to cook it at and still another how long to cook it while others will decide whether to cut in in 6 pieces or 8, and so on. And when it turns out to taste horrible, they'll all scream "It's not my fault!" That's what we have to look forward to.

The underlying theme of the article is that Obama will be getting the benefit of the best expertise possible and all will be well. Unfortunately, most of those people don't have a clue as to how to fix things except by more government intervention. It's going to be interesting to see how this power sharing works out in reality.