The following letter appeared in the Reader's Forum of 9/8/09 NJ Star-Ledger.
Primitive health care
As a species, we seem to believe we are highly evolved. But when I take a closer look, it becomes quite obvious we are really still very primitive because we labor under layers of illusions that allow us to severely mistreat each other.
A dollar bill is a piece of paper, nothing more and nothing less. We allow ourselves to believe a piece of paper with "one hundred" printed on it is more valuable than a piece of paper with "one."
We are smart enough to realize that money is only paper, yet we are willing to allow millions of our fellow humans to live without access to a primary care doctor simply because they lack the proper number of pieces of paper.
Pain and disease is true reality, the need to have constant access to a caring doctor is true reality. Holding back health care from people because they don't have enough paper is an illusion that only a primitive group would allow. We must strive to evolve to the point that everyone has access to care regardless of how much paper they possess.
Perry Leandro, Cranbury
My Commentary:
Posted by Zemack on 09/08/09 at 4:50PM
Perry Leandro of Cranbury writes:
"A dollar bill is a piece of paper, nothing more and nothing less."
Then why do you receive those pieces of paper in exchange for the real products and services your productive work provides for others? And why can you then exchange those pieces of paper for real products and services you need and want, but that are produced by still others?
A civilized man sees money as a noble medium that stands for something - wealth that has been produced by human beings and made available to other human beings through the voluntary mutually advantageous transaction called trade. By making it possible to work for one person and purchase the work of another, the discovery of money led to the division-of-labor market economy that in turn made possible the huge advance from the primitive witch doctor to modern medicine.
A savage sees only that "A dollar bill is a piece of paper, nothing more and nothing less."
Perry Leandro says:
"Holding back health care from people because they don't have enough paper is an illusion that only a primitive group would allow."
There is nothing illusory about earning your own keep. As every civilized man knows, if you can't afford the price of another man's labor, you basically have only three moral choices - increase your earnings so you can afford it, rely on voluntary private charity, or do without. No one else is obligated to provide you with the necessities of life. As every civilized man knows, all wealth is produced and belongs to the individual human beings that earned it, not the primitive tribe. As every civilized man knows, you cannot consume that which you have not produced, nor consume more than you have produced (earned). And above all, you cannot acquire what others have produced except by voluntary, uncoerced means.
A savage sees providing for his own needs by his own efforts ... earning "enough paper" ... as an "illusion". A savage sees human evolution as returning to the brute force rule of the jungle or the cave dweller, where need is a license to steal rather than a spur to productive work - where "everyone has access to care regardless of how much paper they possess."
A savage sees an ant colony, not a human civilization that has discovered the capitalist market economy governed by the justice of voluntary production and trade, the principle of individual rights, and the nobility and vital necessity of money (which should be gold or gold-backed). A savage sees a primitive tribe that can confiscate and redistribute the property of its members at will, rather than a benevolent, non-coercive association of free individuals whose property is protected by a government of laws and not of looters.
The current healthcare debate reveals that we still have a lot of mental savages among us who long for the primitive world of witch doctors and the rule of the jungle. I'm sure that Perry Leandro is not one of them, just an uninformed soul who needs to grasp the primordial implications of what he is saying.
*For a comprehensive explanation on the moral and practical importance of money, read Francisco's "Money Speech" from Ayn Rand's novel Atlas Shrugged.
Showing posts with label Capitalism. Show all posts
Showing posts with label Capitalism. Show all posts
Tuesday, September 8, 2009
Saturday, August 29, 2009
Missing the Real Alternative In the Health Care Debate
In an 8/29/09 editorial, the New Jersey Star-Ledger discusses a growing practice called "medical tourism." In this piece, entitled Seeking affordable health care overseas, the Ledger also exposes the fraudulant choice being presented to the American people.
My Commentary:
Posted by Zemack on 08/29/09 at 10:22PM
Also called "medical tourism", the Star-Ledger hints at what free markets create - competitive conditions under which "patients can receive quality care at lower costs". But the editors don't draw the obvious lesson from their own observations. Instead, the Ledger exposes a gross fraud being put over on the American people by the Left during this health care debate...that the only choice we face is between the status quo and complete socialized medicine. What's missing from this false choice is the third option - the only real antipode to the two choices cited above - a free market in health care. In this, the Left is all too often aided and abetted by conservatives and Republicans who, as the editors point out, merely defend "the world's greatest health system."
Ours does have its strengths. It is still the freest, making America the engine of innovation. If it weren't for America's market, cutting edge medical technology research would dry up, both here and abroad.
But the fact is, our "sick" American health care system is a government created monstrosity. Nearly 50% of healthcare spending is by government, through programs like Medicare, Medicaid, SCHIP, and a host of smaller state-level carbon copies...socialism. Nearly 40% of the spending is through the allegedly "free" part - the quasi-private, government created, government regulated, and government protected cartel of health insurance companies. The third-party-payer system and the state-imposed trade barriers protect them from nationwide competition as well as the necessity of having to compete directly for the consumer's business. Hundreds of government-imposed insurance mandates (nearly 2000 nationwide, from community rating to guaranteed issue to benefit) have turned "insurance" policies into pre-paid wealth redistribution schemes. Our government-crippled insurance market has turned private insurers into conduits for government coercion. This is not indicative of a free market, but is in the nature of fascism...i.e., socialism through the back door. This double-barreled government assault on medicine creates huge and unnecessary administrative expenses, empowers government and insurance company bureaucrats, disrupts the patient/doctor relationship, drives up costs, disconnects the patient from the providers, etc.
The problems in American medicine have grown in lock step with the growth of government intervention over the past 75 years. Any honest and objective healthcare reform debate must begin with an examination of how we got to this point to begin with. That is not what is happening. Instead, we get defenders of the semi-socialist, semi-fascist, semi-free status quo ... against those advocating more government control and/or outright nationalization masquerading as "reform". We get statists on each side, while the freedom alternative gets no major party sponsorship.
The only real alternative to all of the above is a free market. Instead of everyone being forced to pay for everyone else's healthcare, whether through government-run programs or government-controlled "private" insurers, people should be free to assume responsibility for their own healthcare with their own money. Insurers and providers should be free to compete directly for the consumers' business. A free market leaves patients, providers, consumers, and insurers free to contract voluntarily with each other to mutual advantage, based upon the principle of individual rights, without the kind of massive government coercion noted above. The absence of physical force is the hallmark of a free market. That is what the "free" in free market means. The government's only job, but an important one, is to protect against fraud and breech of contract, and to mediate legitimate contractual disputes.
The natural incentives of a free market ... the consumer seeking good value and the provider seeking expanded sales ... have been proven both in theory and practice to lead to increasing quality and ever-expanding affordability. Health care is more valuable and needed than most other products and services, but it is no different in the most basic fundamental respect ... it is man-made. As such, the same laws of economics apply to medicine as to any other economic sector. Most importantly, a free market is the only moral solution, because it forbids the predatory practice of people seeking to force others to provide for them what they perceive to be their "right" to healthcare. Instead, everyone is guaranteed their unalienable rights to their own life, liberty, and pursuit of their own health care (and happiness).
Related Reading:
Patients Without Borders: The Rise of Medical Tourism--by Brittany Hunter, 6/21/18
My Commentary:
Posted by Zemack on 08/29/09 at 10:22PM
Also called "medical tourism", the Star-Ledger hints at what free markets create - competitive conditions under which "patients can receive quality care at lower costs". But the editors don't draw the obvious lesson from their own observations. Instead, the Ledger exposes a gross fraud being put over on the American people by the Left during this health care debate...that the only choice we face is between the status quo and complete socialized medicine. What's missing from this false choice is the third option - the only real antipode to the two choices cited above - a free market in health care. In this, the Left is all too often aided and abetted by conservatives and Republicans who, as the editors point out, merely defend "the world's greatest health system."
Ours does have its strengths. It is still the freest, making America the engine of innovation. If it weren't for America's market, cutting edge medical technology research would dry up, both here and abroad.
But the fact is, our "sick" American health care system is a government created monstrosity. Nearly 50% of healthcare spending is by government, through programs like Medicare, Medicaid, SCHIP, and a host of smaller state-level carbon copies...socialism. Nearly 40% of the spending is through the allegedly "free" part - the quasi-private, government created, government regulated, and government protected cartel of health insurance companies. The third-party-payer system and the state-imposed trade barriers protect them from nationwide competition as well as the necessity of having to compete directly for the consumer's business. Hundreds of government-imposed insurance mandates (nearly 2000 nationwide, from community rating to guaranteed issue to benefit) have turned "insurance" policies into pre-paid wealth redistribution schemes. Our government-crippled insurance market has turned private insurers into conduits for government coercion. This is not indicative of a free market, but is in the nature of fascism...i.e., socialism through the back door. This double-barreled government assault on medicine creates huge and unnecessary administrative expenses, empowers government and insurance company bureaucrats, disrupts the patient/doctor relationship, drives up costs, disconnects the patient from the providers, etc.
The problems in American medicine have grown in lock step with the growth of government intervention over the past 75 years. Any honest and objective healthcare reform debate must begin with an examination of how we got to this point to begin with. That is not what is happening. Instead, we get defenders of the semi-socialist, semi-fascist, semi-free status quo ... against those advocating more government control and/or outright nationalization masquerading as "reform". We get statists on each side, while the freedom alternative gets no major party sponsorship.
The only real alternative to all of the above is a free market. Instead of everyone being forced to pay for everyone else's healthcare, whether through government-run programs or government-controlled "private" insurers, people should be free to assume responsibility for their own healthcare with their own money. Insurers and providers should be free to compete directly for the consumers' business. A free market leaves patients, providers, consumers, and insurers free to contract voluntarily with each other to mutual advantage, based upon the principle of individual rights, without the kind of massive government coercion noted above. The absence of physical force is the hallmark of a free market. That is what the "free" in free market means. The government's only job, but an important one, is to protect against fraud and breech of contract, and to mediate legitimate contractual disputes.
The natural incentives of a free market ... the consumer seeking good value and the provider seeking expanded sales ... have been proven both in theory and practice to lead to increasing quality and ever-expanding affordability. Health care is more valuable and needed than most other products and services, but it is no different in the most basic fundamental respect ... it is man-made. As such, the same laws of economics apply to medicine as to any other economic sector. Most importantly, a free market is the only moral solution, because it forbids the predatory practice of people seeking to force others to provide for them what they perceive to be their "right" to healthcare. Instead, everyone is guaranteed their unalienable rights to their own life, liberty, and pursuit of their own health care (and happiness).
Related Reading:
Patients Without Borders: The Rise of Medical Tourism--by Brittany Hunter, 6/21/18
The more health care is able to function like an actual free market the more options will be provided to consumers.
Friday, June 12, 2009
"Health Care Debate"--What about the Third and Moral Option?
The following letter was published in the Star-Ledger Reader Forum.
Health care debate
I am perplexed and discouraged by the fight over health care. It's pretty obvious that what we're doing isn't working so well.
In the big picture, it seems to me, if we want our businesses to be competitive, getting health care off their backs is a necessity.
I still hear people, even those who love their Medicare, complain they don't want the government involved in their health insurance. They don't want a government bureaucrat telling their doctor what's okay to do and what's not okay. Meanwhile, I guess, they don't mind some insurance company bureaucrat making those decisions.
I've heard some people suggest we be allowed to buy our insurance in another state where it's cheaper. Think they'll have any preferred providers in your state?
I believe in a compromise: single payer via taxes with a government plan in the mix and private insurance companies competing. This would get the premium dollars off of industry, would let those who want private insurance get it, would let those who want public insurance get it, and would insure all the uninsured. It would help our industries be more competitive, and your health care wouldn't be connected to your employment.
John Smith, Hamilton
My Commentary:
Posted by Zemack on 06/12/09 at 8:29PM
John Smith cites a couple of problems such as employer-based health insurance and insurance company bureaucrats making healthcare decisions. His solution, though, amounts to "First, do more harm".
All of the problems in American healthcare can be attributed directly to government intervention. The third-party-payer system was imposed by government via tax-code distortions. Perversely, the insurance company works not for the consumer but for the employer, union, or other third party, even though the consumer's earnings pay for it. The thousands of state and federal mandates imposed on the insurers force consumers to pay for coverages that they may not want, sharply drives up the cost of the policies, and actually creates a system of pre-paid healthcare...not insurance. These mandates are really wealth redistribution masquerading as insurance. State restraint-of-trade laws prevent a competitive national insurance market from developing, also driving up prices and choices down. Medicare and Medicaid, which have made government the largest purchaser of healthcare products, have so corrupted the market that the normal forces that lead to higher quality and lower costs have been inverted. This is just part of the story.
Our system of health insurance is an absurd, government-created Rube Goldberg concoction, administered by quasi-private companies forbidden to tailor policies to market demand; i.e., the choices and budgets of the actual, individual consumers of healthcare. It has created huge administrative costs throughout the system, undermined the doctor-patient relationship, placed undue power in the hands of government and insurance company bureaucrats, and tied people to their jobs.
Yet Mr. Smith's "compromise" would reward the government with totalitarian control over all aspects of healthcare. When the government pays, the government sets the terms...period. You hand your money over to the state, and in exchange you give up your freedom...a lose-lose proposition. This, in essence, is communism. "Allowing" private companies to "compete" against the government-run "option" is merely socialism through the back door, where "private" companies are merely conduits for government control...i.e., fascism. So, according to Mr. Smith, the choices are either the status quo, or some totalitarian combination of communism and fascism.
It's imperative, before we sink to that level, that we consider the third option...the only moral one and the one ignored by both major parties. End the system of compelling everyone to pay for everyone else's healthcare. End all government interference in the insurance market, leaving government to its proper role of protecting individual rights such as through anti-fraud laws and contract enforcement and mediation of disputes. Leave consumers and patients free to decide, along with their doctors, what treatments to use along with prices and payment options. Leave everyone free to plan for their own retirement, to accept responsibility for their own decisions, to take responsibility for their own lives...not be forced to pay other people's expenses. Leave everyone free to decide when and in what capacity to help others, based upon each person's own personal values, assessments of the worthiness of the recipient, and affordability.
Leave insurers and providers free to compete directly for the consumer's business. Leave providers, consumers, insurers, doctors, and patients free to act upon their own judgement, and to contract voluntarily with each other to mutual advantage.
Free market capitalism, the original American system based upon the unalienable and equal rights of every individual, is the only moral path to health care reform. The government's proper role is to protect individual rights, which are guarantees to the freedom to take the actions necessary for the advancement of one's own life and happiness. Rights are not an automatic, unconditional claim on the earnings, property, products, services, or skills produced others. The government's job is not to guarantee health insurance or healthcare to all, but to maintain the societal conditions of liberty and non-coercive association required for people to live their lives and solve their own problems.
Eliminating coercive government interference in healthcare and insurance combined with individual rights in medicine will dramatically reduce the cost and lead to greater quality. That is what always happens when consumers are free to spend their own money and producers to compete for their business. Healthcare, though a high value product and need, is essentially no different than any other man-made product. Consumers seeking the best value for their money, and profit-driven producers seeking to expand sales and grow, places incentives on the side of greater and greater availability and affordability. These basic laws of economics would work no different in healthcare than they would in any other market, when people are left free.
The current healthcare "crisis", if you want to call it that, is not a failure of freedom or free markets. Any honest and objective healthcare reform debate must begin with an examination of how we got to this point to begin with. The problems in American healthcare have grown in lock step with the growth of government intervention. The solution is to discover capitalism. The only just and moral course to take on healthcare reform is to rid healthcare of government interference.
Today's problems in medicine represent a failure, not of freedom, but of statist government intervention. The choice we face is not between a government-run healthcare dictatorship and the status quo, as Mr. Smith, would have us believe. The choice we face...for doctors, patients, drug producers, etc...is between being held in a stranglehold by government central planners, or taking control of our own healthcare in a truly free market.
Health care debate
I am perplexed and discouraged by the fight over health care. It's pretty obvious that what we're doing isn't working so well.
In the big picture, it seems to me, if we want our businesses to be competitive, getting health care off their backs is a necessity.
I still hear people, even those who love their Medicare, complain they don't want the government involved in their health insurance. They don't want a government bureaucrat telling their doctor what's okay to do and what's not okay. Meanwhile, I guess, they don't mind some insurance company bureaucrat making those decisions.
I've heard some people suggest we be allowed to buy our insurance in another state where it's cheaper. Think they'll have any preferred providers in your state?
I believe in a compromise: single payer via taxes with a government plan in the mix and private insurance companies competing. This would get the premium dollars off of industry, would let those who want private insurance get it, would let those who want public insurance get it, and would insure all the uninsured. It would help our industries be more competitive, and your health care wouldn't be connected to your employment.
John Smith, Hamilton
My Commentary:
Posted by Zemack on 06/12/09 at 8:29PM
John Smith cites a couple of problems such as employer-based health insurance and insurance company bureaucrats making healthcare decisions. His solution, though, amounts to "First, do more harm".
All of the problems in American healthcare can be attributed directly to government intervention. The third-party-payer system was imposed by government via tax-code distortions. Perversely, the insurance company works not for the consumer but for the employer, union, or other third party, even though the consumer's earnings pay for it. The thousands of state and federal mandates imposed on the insurers force consumers to pay for coverages that they may not want, sharply drives up the cost of the policies, and actually creates a system of pre-paid healthcare...not insurance. These mandates are really wealth redistribution masquerading as insurance. State restraint-of-trade laws prevent a competitive national insurance market from developing, also driving up prices and choices down. Medicare and Medicaid, which have made government the largest purchaser of healthcare products, have so corrupted the market that the normal forces that lead to higher quality and lower costs have been inverted. This is just part of the story.
Our system of health insurance is an absurd, government-created Rube Goldberg concoction, administered by quasi-private companies forbidden to tailor policies to market demand; i.e., the choices and budgets of the actual, individual consumers of healthcare. It has created huge administrative costs throughout the system, undermined the doctor-patient relationship, placed undue power in the hands of government and insurance company bureaucrats, and tied people to their jobs.
Yet Mr. Smith's "compromise" would reward the government with totalitarian control over all aspects of healthcare. When the government pays, the government sets the terms...period. You hand your money over to the state, and in exchange you give up your freedom...a lose-lose proposition. This, in essence, is communism. "Allowing" private companies to "compete" against the government-run "option" is merely socialism through the back door, where "private" companies are merely conduits for government control...i.e., fascism. So, according to Mr. Smith, the choices are either the status quo, or some totalitarian combination of communism and fascism.
It's imperative, before we sink to that level, that we consider the third option...the only moral one and the one ignored by both major parties. End the system of compelling everyone to pay for everyone else's healthcare. End all government interference in the insurance market, leaving government to its proper role of protecting individual rights such as through anti-fraud laws and contract enforcement and mediation of disputes. Leave consumers and patients free to decide, along with their doctors, what treatments to use along with prices and payment options. Leave everyone free to plan for their own retirement, to accept responsibility for their own decisions, to take responsibility for their own lives...not be forced to pay other people's expenses. Leave everyone free to decide when and in what capacity to help others, based upon each person's own personal values, assessments of the worthiness of the recipient, and affordability.
Leave insurers and providers free to compete directly for the consumer's business. Leave providers, consumers, insurers, doctors, and patients free to act upon their own judgement, and to contract voluntarily with each other to mutual advantage.
Free market capitalism, the original American system based upon the unalienable and equal rights of every individual, is the only moral path to health care reform. The government's proper role is to protect individual rights, which are guarantees to the freedom to take the actions necessary for the advancement of one's own life and happiness. Rights are not an automatic, unconditional claim on the earnings, property, products, services, or skills produced others. The government's job is not to guarantee health insurance or healthcare to all, but to maintain the societal conditions of liberty and non-coercive association required for people to live their lives and solve their own problems.
Eliminating coercive government interference in healthcare and insurance combined with individual rights in medicine will dramatically reduce the cost and lead to greater quality. That is what always happens when consumers are free to spend their own money and producers to compete for their business. Healthcare, though a high value product and need, is essentially no different than any other man-made product. Consumers seeking the best value for their money, and profit-driven producers seeking to expand sales and grow, places incentives on the side of greater and greater availability and affordability. These basic laws of economics would work no different in healthcare than they would in any other market, when people are left free.
The current healthcare "crisis", if you want to call it that, is not a failure of freedom or free markets. Any honest and objective healthcare reform debate must begin with an examination of how we got to this point to begin with. The problems in American healthcare have grown in lock step with the growth of government intervention. The solution is to discover capitalism. The only just and moral course to take on healthcare reform is to rid healthcare of government interference.
Today's problems in medicine represent a failure, not of freedom, but of statist government intervention. The choice we face is not between a government-run healthcare dictatorship and the status quo, as Mr. Smith, would have us believe. The choice we face...for doctors, patients, drug producers, etc...is between being held in a stranglehold by government central planners, or taking control of our own healthcare in a truly free market.
Wednesday, May 20, 2009
On Obama's Christian Strategy
Conciliatory Fighting Words, by E. J. Dionne of the Washington Post, writing on President Obama's recent commencement address at Notre Dame University
My Commentary:
Zemack wrote:
President Obama’s political strategy is clear, a philosophical masterstroke, and devastating for capitalism and freedom. His grand strategy for remaking America into a nation ruled by the collective should be obvious to anyone who understands the power of ideas and of morality.
But to advocate socialism openly and honestly is and always has been a loser in America. After the tyranny, wars, and unprecedented mass murder wrought by the socialist regimes of Soviet Russia, Nazi Germany, Red China, and the many smaller variants of the 20th century, socialism is dead as an intellectual force. Notice how Obama and the American Left run from the socialist label as from the plague, despite the obvious socialist (albeit through the fascist back door) underpinnings of their agenda. How, then, to pursue a socialist agenda in America?
Enter what one might call Obama’s “Christian Strategy”. The President, a philosophically astute man (unlike most of his GOP rivals), is and has been attempting to forge an alliance with Christianity based upon a common moral foundation…altruism. Unlike socialism, religion is a live and growing force in America, and Christianity is the dominant religion. Since socialism and Christianity share the same ethical premise…that the good consists of living for others or putting others above self…Obama’s brilliant strategy is to hitch his socialist agenda to Judeo-Christian ethics.
America was founded on the opposite ethical principle, though those principles were never explicitly defined until the 20th century. The Founding Fathers created a nation based upon the supreme value of the individual possessing the unalienable rights to his own life, liberty, property, and the pursuit of happiness. They rejected the tribal view that man must live for others (i.e., the collective). But it was philosopher-novelist Ayn Rand who comprehensively defined the philosophical underpinnings for the American Revolution. Through her classic novels The Fountainhead and especially Atlas Shrugged…and through her philosophy of Objectivism…she presents the moral case for the American Revolution and capitalism.
It is only Ayn Rand who provides the vital intellectual ammunition to counter the accelerating collectivist trend in America, and thus save our individual freedom, because she can defend the individual’s right to exist for his own sake…and prove it. She offers the anti-dote to the doctrine that “we are all our brother’s keepers”, the moral root of Obama’s policies and the root of all variants of socialism. If Obama is to be stopped, Capitalism must be discovered. For Capitalism to be discovered, our Founding principles must be rediscovered and fully understood. For our Founding principles to be fully understood, Ayn Rand and Objectivism must be discovered and embraced.
The President is right that we are at “a rare inflection point in history”. He intends to steer America away from its Founding ideals by hitching his car to the engine of Christianity. It remains to be seen how successful he will be. But Obama understands fully that morality is the key to the direction America will take. It’s time that Capitalism’s defenders understood that, too.
My Commentary:
Zemack wrote:
President Obama’s political strategy is clear, a philosophical masterstroke, and devastating for capitalism and freedom. His grand strategy for remaking America into a nation ruled by the collective should be obvious to anyone who understands the power of ideas and of morality.
But to advocate socialism openly and honestly is and always has been a loser in America. After the tyranny, wars, and unprecedented mass murder wrought by the socialist regimes of Soviet Russia, Nazi Germany, Red China, and the many smaller variants of the 20th century, socialism is dead as an intellectual force. Notice how Obama and the American Left run from the socialist label as from the plague, despite the obvious socialist (albeit through the fascist back door) underpinnings of their agenda. How, then, to pursue a socialist agenda in America?
Enter what one might call Obama’s “Christian Strategy”. The President, a philosophically astute man (unlike most of his GOP rivals), is and has been attempting to forge an alliance with Christianity based upon a common moral foundation…altruism. Unlike socialism, religion is a live and growing force in America, and Christianity is the dominant religion. Since socialism and Christianity share the same ethical premise…that the good consists of living for others or putting others above self…Obama’s brilliant strategy is to hitch his socialist agenda to Judeo-Christian ethics.
America was founded on the opposite ethical principle, though those principles were never explicitly defined until the 20th century. The Founding Fathers created a nation based upon the supreme value of the individual possessing the unalienable rights to his own life, liberty, property, and the pursuit of happiness. They rejected the tribal view that man must live for others (i.e., the collective). But it was philosopher-novelist Ayn Rand who comprehensively defined the philosophical underpinnings for the American Revolution. Through her classic novels The Fountainhead and especially Atlas Shrugged…and through her philosophy of Objectivism…she presents the moral case for the American Revolution and capitalism.
It is only Ayn Rand who provides the vital intellectual ammunition to counter the accelerating collectivist trend in America, and thus save our individual freedom, because she can defend the individual’s right to exist for his own sake…and prove it. She offers the anti-dote to the doctrine that “we are all our brother’s keepers”, the moral root of Obama’s policies and the root of all variants of socialism. If Obama is to be stopped, Capitalism must be discovered. For Capitalism to be discovered, our Founding principles must be rediscovered and fully understood. For our Founding principles to be fully understood, Ayn Rand and Objectivism must be discovered and embraced.
The President is right that we are at “a rare inflection point in history”. He intends to steer America away from its Founding ideals by hitching his car to the engine of Christianity. It remains to be seen how successful he will be. But Obama understands fully that morality is the key to the direction America will take. It’s time that Capitalism’s defenders understood that, too.
Saturday, May 16, 2009
"National Healthcare"--Star-Ledger Reader's Forum
National health insurance
I have been reading about the various approaches being looked at in Congress to address the creation of a national health insurance plan that would assure coverage to all Americans. I endorse and support that effort.
The federal government already has contracts with almost all of the insurance companies in the United States and the premiums for federal employees are lower than most companies are charged, and definitely lower than what individuals can get.
Why not simply open the federal plan to all businesses and individuals in the country? That would create a rate-base of 300 million and that rate-base would drive down costs.
The federal government can also open up existing federal programs like Medicare to all citizens as a backstop and a way of insuring that private companies do not take unfair advantage of consumers. We will also have to make provision for the indigents, because having people who are not insured is more expensive than covering them.
We can even have graduated levels of assistance for the working poor.
I want to see the current federal insurance system opened to all Americans using an actuarial rate base of all the people in the nation. This will keep the private companies alive as well as assure medical insurance and the health care for everyone.
This can be a win-win.
George N. Wells, Dover
My Commentary:
Posted by Zemack on 05/16/09 at 2:42PM
The basic premise underlying the idea of "universal health care" is the un-American idea that the individual has no rights and is to be subordinated to the group, as represented by the state. It is the deadly ideology of collectivism. I submit into evidence the letter by George N. Wells.
He declares that Congress should set up "a national health insurance plan that would assure coverage to all Americans."
The means by which human needs (and desires) are to be met do not just occur free in nature. They must be created by productive people. There are basically only two ways to acquire the product of another man's labor--by voluntary means such as trade or private charity, or seize it by force. The first is the civilized method; the second is the criminal method. Therefor, the only way that government can guarantee any man-made product such as healthcare is to declare that the people's earnings and the productive labor of the providers belong to "society", and then exercise the totalitarian powers to loot and enslave. There is no other way. When government pays, government sets the terms...on who the money comes from, on who will get what treatment when, prices and salaries, medical technology and innovation, etc.
Mr. Wells declares that "we" should provide for "the indigents" and "the working poor". This is a tacit admission that Mr. Wells believes that the earnings and wealth of others is his to dispose of...the disposition to be carried out by the majority mob's political surrogates. The fact that universal health schemes may be administered by quasi-private companies controlled by the government is nothing more than socialism through the fascist back door.
I support the alternative, free market capitalism. This is the moral system based upon American principles...the principles of individual rights protected by a government limited to that purpose. Rights are guarantees to freedom of action, coupled with the sole obligation to respect the same rights of others...a respect distinctly missing from socialized medicine's proponents. Rights are not an automatic claim on the earnings, property, or wealth produced by others.
In a free market, all associations are voluntary. Consumers, providers, insurers, and patients are left free to contract voluntarily with each other to mutual advantage. Each individual is free to decide for himself when, whom, and in what capacity to help others...free from the predatory, phony do-gooders seeking to practice "charity" with other people's tax money.
Government interference is the source of the problems confronting American healthcare. America currently spends some $7500 per capita per year ($30,000 per family of four and rising) on healthcare. Almost that entire amount represents third parties spending other people's money. This is a fundamental part of the problem.
The only just and moral course to take on healthcare reform is to rid medicine of government interference. End all government insurance mandates, barriers to inter-state competition, and the third-party-payer system; phase out existing "public" plans like Medicare, Medicaid, and SCHIP, and let people take personal responsibility for their own healthcare, as is their unalienable right under American principles. Leave healthcare dollars in the hands of the people that earned it through some vehicle like HSAs, leave providers and insurers free to compete directly for those consumer dollars, and restrict the government to its proper role of protector of the individual rights of all (which includes anti-fraud laws and enforcement of contracts). The natural incentives inherent in a free market provide the proper, moral dynamics for affordable, widely available quality healthcare.
Mr. Wells endorses and supports tyranny, whether he chooses to acknowledge it or not. I support capitalism and individual rights.
I have been reading about the various approaches being looked at in Congress to address the creation of a national health insurance plan that would assure coverage to all Americans. I endorse and support that effort.
The federal government already has contracts with almost all of the insurance companies in the United States and the premiums for federal employees are lower than most companies are charged, and definitely lower than what individuals can get.
Why not simply open the federal plan to all businesses and individuals in the country? That would create a rate-base of 300 million and that rate-base would drive down costs.
The federal government can also open up existing federal programs like Medicare to all citizens as a backstop and a way of insuring that private companies do not take unfair advantage of consumers. We will also have to make provision for the indigents, because having people who are not insured is more expensive than covering them.
We can even have graduated levels of assistance for the working poor.
I want to see the current federal insurance system opened to all Americans using an actuarial rate base of all the people in the nation. This will keep the private companies alive as well as assure medical insurance and the health care for everyone.
This can be a win-win.
George N. Wells, Dover
My Commentary:
Posted by Zemack on 05/16/09 at 2:42PM
The basic premise underlying the idea of "universal health care" is the un-American idea that the individual has no rights and is to be subordinated to the group, as represented by the state. It is the deadly ideology of collectivism. I submit into evidence the letter by George N. Wells.
He declares that Congress should set up "a national health insurance plan that would assure coverage to all Americans."
The means by which human needs (and desires) are to be met do not just occur free in nature. They must be created by productive people. There are basically only two ways to acquire the product of another man's labor--by voluntary means such as trade or private charity, or seize it by force. The first is the civilized method; the second is the criminal method. Therefor, the only way that government can guarantee any man-made product such as healthcare is to declare that the people's earnings and the productive labor of the providers belong to "society", and then exercise the totalitarian powers to loot and enslave. There is no other way. When government pays, government sets the terms...on who the money comes from, on who will get what treatment when, prices and salaries, medical technology and innovation, etc.
Mr. Wells declares that "we" should provide for "the indigents" and "the working poor". This is a tacit admission that Mr. Wells believes that the earnings and wealth of others is his to dispose of...the disposition to be carried out by the majority mob's political surrogates. The fact that universal health schemes may be administered by quasi-private companies controlled by the government is nothing more than socialism through the fascist back door.
I support the alternative, free market capitalism. This is the moral system based upon American principles...the principles of individual rights protected by a government limited to that purpose. Rights are guarantees to freedom of action, coupled with the sole obligation to respect the same rights of others...a respect distinctly missing from socialized medicine's proponents. Rights are not an automatic claim on the earnings, property, or wealth produced by others.
In a free market, all associations are voluntary. Consumers, providers, insurers, and patients are left free to contract voluntarily with each other to mutual advantage. Each individual is free to decide for himself when, whom, and in what capacity to help others...free from the predatory, phony do-gooders seeking to practice "charity" with other people's tax money.
Government interference is the source of the problems confronting American healthcare. America currently spends some $7500 per capita per year ($30,000 per family of four and rising) on healthcare. Almost that entire amount represents third parties spending other people's money. This is a fundamental part of the problem.
The only just and moral course to take on healthcare reform is to rid medicine of government interference. End all government insurance mandates, barriers to inter-state competition, and the third-party-payer system; phase out existing "public" plans like Medicare, Medicaid, and SCHIP, and let people take personal responsibility for their own healthcare, as is their unalienable right under American principles. Leave healthcare dollars in the hands of the people that earned it through some vehicle like HSAs, leave providers and insurers free to compete directly for those consumer dollars, and restrict the government to its proper role of protector of the individual rights of all (which includes anti-fraud laws and enforcement of contracts). The natural incentives inherent in a free market provide the proper, moral dynamics for affordable, widely available quality healthcare.
Mr. Wells endorses and supports tyranny, whether he chooses to acknowledge it or not. I support capitalism and individual rights.
Sunday, March 29, 2009
Money-Chasers vs. Money-Makers
The following is a letter published in the New Jersey Star-Ledger on March 12, 2009, followed by my posted comments. My comments were inspired by Ayn Rand's essay "The Money-Making Personality", originally published in the April, 1963 issue of Cosmopolitan magazine. In her essay, Ms. Rand drew a sharp distinction between what she referred to as the Money-Makers and the Money-Appropriators. The difference between the two is dramatized in her novel, Atlas Shrugged. The essay is reprinted in The Objectivist Forum
Producers Fell Short
I'm confused by your reader who's concerned that President Obama wants to replace the high standard of living through capitalism with socialism by punishing the producers and rewarding the slackers ("Obama policies destructive," March 7). Who are these producers? Perhaps he is referring to the Ponzi scheme specialists Bernie Madoff and R. Allen Stanford.
I also have in mind notable producers from 2008, before Obama was elected. Richard Fuld earned $70 million as CEO in the year that Lehman Brothers collapsed. Let's not forget some of the best producers of our lifetime: AIG, Washington Mutual, Merrill Lynch, Wachovia, Bear Stearns and Countrywide.
A famous comedian had a skit in which he handed out business cards announcing he was a producer. What did he produce? Business cards. Our producers created derivatives and other indefinable investment vehicles, raking billions of dollars off the top, leaving no value for the original investor.
I'm a capitalist like the reader. But my form of capitalism yearns for morality, integrity, clarity, and yes, regulation to assure that destructive greed can be minimized.
-- Richard Kochman, West Caldwell
My Commentary:
Posted by Zemack on 03/14/09 at 9:54PM
Richard Kochman's confusion stems from his equating of money-chasing at any cost with money-making. Money-makers are the producers who give value to money. It's true that the ranks of the money-chasers are growing...and the money-makers shrinking...in our politically corrupted economy. But, think of all of the goods and services available to you which you do not yourself produce, and you'll have proof of the existence of the actual producers. A producer is anyone who puts in an honest day's work producing something of value for others willing to purchase that value through voluntary, uncoerced trade to mutual advantage. Highly productive people are those who produce vast amounts of wealth for trade, thus enriching the lives of thousands and millions. The highest in this regard are the creators and inventors who turn innovative ideas and theoretical science into commercially valuable wealth. The fortunes they earn pale in comparison to the benefits they bring to their fellow man. The jobs we fill, the skills we learn, the tools we work with, and the array of products and services we purchase with our earnings...values we do not and could not ourselves provide...come courtesy of the most productive and creative few. In all cases, production can be traced back to the minds of individuals.
Mr. Kochman is right to tie capitalism to morality. Capitalism is the moral social system which rewards integrity and honesty (clarity) because it is based upon the recognition of individual rights, and a government charged with the task of protecting those rights from foreign enemies and domestic criminals...both violent and non-violent (ex. fraud). So long as an individual (or his business) does not violate the rights of others, he is free, under capitalism, to act on his own judgement and in his own self-interest. Madoff is a criminal money chaser, not a producer. His prosecution is government's proper function. It is grossly unjust to equate him with producers on any level of competence.
But government regulation is destructive of capitalism and free markets. The mostly capitalistic system established at our Founding has been replaced over the past century or so with a special-interest-driven mixed economy drifting steadily toward total government control. Regulations that replace the private judgements of individuals regarding their own affairs with those imposed by government bureaucrats are a violation of an individual's rights to life, liberty, and property and are thus immoral...i.e., anti-capitalist.
The current financial crisis is proof of the failure of government regulation and market interference. The shenanigans of some of the bankers and financiers as well as many home-buying borrowers, while representing the face of this crisis, occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly. On top of that is a whole network of market distorting government housing policies accumulated over a period of decades spawned by the intention to "encourage" homeownership. We are witnessing the climax of the failure of those policies and regulations today.
We should turn away from the destructive and immoral policies of targeting the productive and rewarding government with more power, and instead discover and turn toward capitalism.
Producers Fell Short
I'm confused by your reader who's concerned that President Obama wants to replace the high standard of living through capitalism with socialism by punishing the producers and rewarding the slackers ("Obama policies destructive," March 7). Who are these producers? Perhaps he is referring to the Ponzi scheme specialists Bernie Madoff and R. Allen Stanford.
I also have in mind notable producers from 2008, before Obama was elected. Richard Fuld earned $70 million as CEO in the year that Lehman Brothers collapsed. Let's not forget some of the best producers of our lifetime: AIG, Washington Mutual, Merrill Lynch, Wachovia, Bear Stearns and Countrywide.
A famous comedian had a skit in which he handed out business cards announcing he was a producer. What did he produce? Business cards. Our producers created derivatives and other indefinable investment vehicles, raking billions of dollars off the top, leaving no value for the original investor.
I'm a capitalist like the reader. But my form of capitalism yearns for morality, integrity, clarity, and yes, regulation to assure that destructive greed can be minimized.
-- Richard Kochman, West Caldwell
My Commentary:
Posted by Zemack on 03/14/09 at 9:54PM
Richard Kochman's confusion stems from his equating of money-chasing at any cost with money-making. Money-makers are the producers who give value to money. It's true that the ranks of the money-chasers are growing...and the money-makers shrinking...in our politically corrupted economy. But, think of all of the goods and services available to you which you do not yourself produce, and you'll have proof of the existence of the actual producers. A producer is anyone who puts in an honest day's work producing something of value for others willing to purchase that value through voluntary, uncoerced trade to mutual advantage. Highly productive people are those who produce vast amounts of wealth for trade, thus enriching the lives of thousands and millions. The highest in this regard are the creators and inventors who turn innovative ideas and theoretical science into commercially valuable wealth. The fortunes they earn pale in comparison to the benefits they bring to their fellow man. The jobs we fill, the skills we learn, the tools we work with, and the array of products and services we purchase with our earnings...values we do not and could not ourselves provide...come courtesy of the most productive and creative few. In all cases, production can be traced back to the minds of individuals.
Mr. Kochman is right to tie capitalism to morality. Capitalism is the moral social system which rewards integrity and honesty (clarity) because it is based upon the recognition of individual rights, and a government charged with the task of protecting those rights from foreign enemies and domestic criminals...both violent and non-violent (ex. fraud). So long as an individual (or his business) does not violate the rights of others, he is free, under capitalism, to act on his own judgement and in his own self-interest. Madoff is a criminal money chaser, not a producer. His prosecution is government's proper function. It is grossly unjust to equate him with producers on any level of competence.
But government regulation is destructive of capitalism and free markets. The mostly capitalistic system established at our Founding has been replaced over the past century or so with a special-interest-driven mixed economy drifting steadily toward total government control. Regulations that replace the private judgements of individuals regarding their own affairs with those imposed by government bureaucrats are a violation of an individual's rights to life, liberty, and property and are thus immoral...i.e., anti-capitalist.
The current financial crisis is proof of the failure of government regulation and market interference. The shenanigans of some of the bankers and financiers as well as many home-buying borrowers, while representing the face of this crisis, occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly. On top of that is a whole network of market distorting government housing policies accumulated over a period of decades spawned by the intention to "encourage" homeownership. We are witnessing the climax of the failure of those policies and regulations today.
We should turn away from the destructive and immoral policies of targeting the productive and rewarding government with more power, and instead discover and turn toward capitalism.
Businessweek Debate Room-CEO Pay Caps
The Debate Room
Let CEOs Make Do with $500,000
President Obama’s proposed salary restrictions for banking executives are a good idea for all of Corporate America. Pro or con?
Pro: Welfare Checks for Execs
by Dean Baker, Center for Economic & Policy Research
President Obama has proposed restrictions on the pay of top executives at banks that are getting bailed out by taxpayers. It remains to be seen how effectively these restrictions, which would set a maximum salary of $500,000 a year for these corporate officers, will be applied, but lower pay for top executives in the financial sector is a good idea that can help set an example for the rest of the economy.
The tens of millions of dollars received by top executives in the financial industry set a standard that executives in other industries strive to match in the same way that a record contract signed by a sports superstar turns into the new benchmark for other top athletes. Perhaps a sharp decline in salaries in the financial sector will set in motion a trend toward lower pay—whether enacted by the government or by the corporations themselves—for CEOs and other top executives in other sectors.
Rewriting rules on corporate governance to provide shareholders with more control on pay would aid this trend. For example, if companies were required to win shareholder approval for executive pay packages in real elections (unreturned proxies don’t count), it would go far toward reining in the pay of top executives.
President Obama should take advantage of the extraordinary opportunities in the current political and economic environment to rebalance the relationship between corporate management and shareholders. This would be the best and most immediate way to limit executive compensation.
Con: An Unneeded Complication
by Yaron Brook, Ayn Rand Center for Individual Rights
Like Bush, Obama is using our tax money to bail out AIG (AIG), GM (GM), Bank of America (BAC), etc. In return many Americans expect, not unreasonably, that our government should now be able to dictate to these companies how to run their businesses, including what to pay their CEOs. But do we really want America’s largest corporations taking orders from members of Congress, government bureaucrats, and professional lobbyists? I think not.
Instead, we should end the bailouts, repeal the numerous government regulations that have distorted the free market, and let companies sink or swim on their own merits. That’s the American way.
But letting the government determine pay for all corporations? A CEO can mean the difference between a company’s success and collapse—just think where Apple (AAPL) would be without Steve Jobs. Shareholders have a moral right to pay whatever they judge necessary to attract, retain, and motivate talented leaders.
What about not-so-successful CEOs who walk away with millions while their companies tank? Shareholders are free to insist on clawback provisions and other contractual measures. But a government-enforced cap on CEO pay would punish the best CEOs by denying them the huge rewards they earn by creating vast amounts of wealth.
The only sure result of this injustice would be a flight of the best and brightest from public corporations.
Government mandates on CEO pay mean CEOs lose, shareholders lose, and all those who benefit from dealing with public companies—i.e., all of us—lose.
My Commentary
Mike Zemack
February 11, 2009 08:48 PM
On the face of it, the pay cap doesn't seem to make any kind of sense at all. At a time when top talent is needed to turn these companies around, which was the whole point of the government’s bailout "investments," these companies are denied the flexibility and freedom to attract that talent.
But viewed from the proper perspective, this does make sense. The pay cap is a government power grab. Eventually, the precedent established here will lead to greater government intrusions into all companies. As has been pointed out previously here, the pay cap is the latest in an escalating series of government intrusions into the private economy, each leading to the next. We are witnessing creeping fascism.
I agree with Mr. Brook. Repeal the cap and end the bailouts. Then abolish the myriad of market-distorting government regulations, programs, and policies that led to the crisis to begin with.
Other Commentary
random
February 11, 2009 11:49 PM
"... a government-enforced cap on CEO pay would punish the best CEOs by denying them the huge rewards they earn by creating vast amounts of wealth."
These CEOs ran their companies into the ground, begged the government to give them money and they should keep multi-million dollar salaries for failure?
To all those who bemoan that the banks are getting nationalized and reaching for the USSR/Cuba hyperbole, keep in mind that the banks ran to Congress, crying that they needed government help and the same regulation they described as injurious meddling. Obama didn't nationalize banks. Bush did. At their request.
If you're perfectly happy with these hypocritical "leaders" keeping $200 million pay packages and rewarding them for their failures, that's your business. I, on the other hand, wouldn't want my taxes to be paying for a generous retirement of someone who ran his bank into the ground and socialized it rather than face the music and take his lumps.
"Although not an example of LFC, the Industrial Revolution was a time during which there was very little government interference in business. The result was an overall improvement in the quality of life for all people. This country realized a surge in private wealth no other had ever known."
Really? According to whom? During the Industrial Revolution factory workers spent 10 hours a day, six days a week for almost nothing and kids as young as 6 were used for hazardous repair work. Grocery stores sold rotten food, butter mixed with mashed potatoes and tap water was better suited for biological warfare than for drinking, cooking or cleaning.
Monopolies crushed competition and the overwhelming majority of the new wealth was concentrated at the top 1%. There was no such thing as the middle class until the mid 1940s.
Unless of course you have data that contradicts every college textbook written in the last 50 years.
Finally, when using Marx or the Communist Manifesto in an insult, here's something to remember. Marx and Engels were sitting down to a cup of coffee and ranting about the mistreatment of factory workers. None of the things they outlined were supposed to come from government interference. Both of them just assumed that the changes will happen on their own.
My Commentary Response to Random
Mike Zemack
February 12, 2009 07:58 PM
Random, and apparently the college textbooks he cites, fails to consider historical context. The conditions that existed at the dawn of capitalism and the Industrial Revolution were horrendous. Unimaginable poverty, including hordes of homeless children, was the norm. Life expectancy was abysmally low, and the mortality rate for children under five years old was 70% plus.
This must be kept in mind when criticizing the allegedly terrible conditions of "factory workers [who] spent 10 hours a day, six days a week for almost nothing and kids as young as 6 were used for hazardous repair work." People filled those conditions, those jobs, voluntarily because it vastly improved their lives, compared to previous conditions.
In particular, most of those child laborers Random laments would most likely have been dead children before...part of the hordes of children abandoned by parents too poor and hungry themselves to feed all of their children. All of those people, adults and children alike, flocked to the newly opening factories by choice, because it improved their lives. I know of no historical record of businessmen forcing people to take those jobs. The rising prosperity of the 19th century capitalist economies pulled families out of pre-industrial poverty, gradually alleviating the need for children to work. Today's child labor laws that rightly protect children from exploitation were not made necessary by capitalism, but made possible because of capitalism. Had those laws existed during the early days of the Industrial Revolution, they would have condemned countless children to death by starvation.
It should also be noted that life expectancies almost doubled, from about 30 to the mid fifties, between the late 18th and early 20th centuries in the industrializing capitalist nations, an unprecedented and incredible achievement in so short a period of time. This occurred in large part because of improved living conditions for children, resulting in a sharp fall in their mortality rates. It also occurred during a period of time unlike any before or since--an almost laissez-faire economy.
As for monopolies, both practice and theory demonstrate that the kind of monopolies that "crush the competition" are a logical impossibility in a free, capitalist economy. As long as political force isn't brought into the economic equation, there is no way any company...even one that is the sole producer of a particular product at a particular time...can prevent new competitive entrants.
Take the just-announced merger between Ticketmaster and Live Nation. Despite the fact that it will initially create a market monopoly, new entrants are free to enter into the ticket business at any time, including Springsteen, LiveStub CEO Hershfield, or any of the artists and others in the ticketing industry who are squawking against the merger. If this deal is approved, as it morally should be, the combined company would still have to satisfy its customers or lose them to a new competitor. As long as individual rights are protected, as they are only under capitalism and as long as political connections aren't employed by the big established players to thwart competitors, as typically happens in the kind of mixed economy we have now competition (which includes potential competition) can not be "crushed" or coercively eliminated by anyone.
Capitalism has never had a fair hearing because it has never been fully understood, even by most of its supporters. A good place to start would be to examine the total context of the current crisis, as Mr. Brook has attempted to point us in the direction of. Even Random might be tempted to set aside "every college textbook written in the last 50 years", and think again.
One final comment. Not all of "the banks ran to Congress, crying that they needed government help..." Some, such as Wells Fargo, among many others, were forced to take bailout money by the Bush administration. Many, though, did run to the government. But keep in mind that one must not confuse capitalism with capitalists. Laissez-faire means, essentially, the separation of state and economics. Under capitalism, no bailout would have occurred, and the incompetent banks would have folded. Of course, under capitalism, we wouldn't be having this discussion, because the housing bubble would never have occurred to begin with.
random response
February 13, 2009 02:39 PM
Mike,
Really, you shouldn't make things up. To say that kids doing factory work in hazardous conditions circa 1905 wouldn't been dead instead is to use a heavy amount of artistic license about tough times in the big city and make your own version of history, more agreeable with what you like to hear. Historical context doesn't mean you get to make up something to disagree with facts you'd rather ignore.
The same goes for your bizarre concept that monopolies give room for new entrants into a market. They don't. If they did, they wouldn't be called monopolies. A monopoly owns 98% of the market or more which means that it controls 98% of the customers and close to 99% of all revenues that can be generated in the market. They can and do crush any new entrants to the field which is exactly what happened with US Steel, Standard Oil, AT&T and the other famous monopolies of the day. Your example of the TicketMaster and LiveNation merger uses customers who are forced into partnerships with the companies because they've shut out everyone else and calls them "new entrants." So if my Internet is provided by Time Warner which has a monopoly in my area and I have no choice but to go with them for Internet access, I'm their competition? Wow. Just wow.
Finally, I find it hard to believe that Paulson was shoving money down Wells Fargo's throat. Why? Because that never happened. No bank is forced to take bailout money. They ask for it in order to be eligible to receive it. It may help to actually read the news before pontificating on morality of running a monopoly. Big words and long posts by themselves do not a valid argument make.
My Response
Mike Zemack
February 13, 2009 11:03 PM
Random:
I specifically said "As long as political force isn't brought into the economic equation, there is no way any company...even one that is the sole producer of a particular product at a particular time...can prevent new competitive entrants."
There is a crucial difference between a market monopoly and a government-enforced monopoly. The cable companies are typically awarded a franchise to operate in a given geographical area--by government. This means, competitors are forbidden by law from entering into that particular market segment. Absent government interference in the market, a monopoly can be maintained only by the voluntary actions of customers willing to buy the products of that company. A market monopoly cannot forcibly prevent new entrants. Citing AT@T and Standard Oil in the same context is comparing apples to oranges. AT&T's market share was guaranteed by law (until 1984), while Standard Oil's share dropped precipitously after the Texas oil discoveries and exploding demand for petroleum products with the advent of the auto industry.
Wells Fargo was one of nine healthy banks called to Washington to meet with Paulson, at which time he "offered" a contract in which the banks must take the money as a "one-time" offer. This was understood by the banks as a threat from the entity--the government--that controls their industry. Wells Fargo immediately resisted, but ultimately signed the agreement. None of the nine banks actually asked for the money. This was reported by the New York Times and other news outlets last fall. It must be remembered that we have a centrally controlled and regulated banking industry. When the people who have regulatory control over your business demand something, you are hardly in a position to refuse. Perhaps Wells Fargo and the others could have taken the risk of refusing the money, but none of the nine banks asked for the money.
As to child labor and the other facts I cited, the source for the information I presented is, among others, the book The Capitalist Manifesto by Andrew Bernstein. And I was specifically referring to the early years of the Industrial Revolution regarding child labor, not 1905. If you can't refute some one's arguments, it doesn't mean you should accuse him of lying.
Let CEOs Make Do with $500,000
President Obama’s proposed salary restrictions for banking executives are a good idea for all of Corporate America. Pro or con?
Pro: Welfare Checks for Execs
by Dean Baker, Center for Economic & Policy Research
President Obama has proposed restrictions on the pay of top executives at banks that are getting bailed out by taxpayers. It remains to be seen how effectively these restrictions, which would set a maximum salary of $500,000 a year for these corporate officers, will be applied, but lower pay for top executives in the financial sector is a good idea that can help set an example for the rest of the economy.
The tens of millions of dollars received by top executives in the financial industry set a standard that executives in other industries strive to match in the same way that a record contract signed by a sports superstar turns into the new benchmark for other top athletes. Perhaps a sharp decline in salaries in the financial sector will set in motion a trend toward lower pay—whether enacted by the government or by the corporations themselves—for CEOs and other top executives in other sectors.
Rewriting rules on corporate governance to provide shareholders with more control on pay would aid this trend. For example, if companies were required to win shareholder approval for executive pay packages in real elections (unreturned proxies don’t count), it would go far toward reining in the pay of top executives.
President Obama should take advantage of the extraordinary opportunities in the current political and economic environment to rebalance the relationship between corporate management and shareholders. This would be the best and most immediate way to limit executive compensation.
Con: An Unneeded Complication
by Yaron Brook, Ayn Rand Center for Individual Rights
Like Bush, Obama is using our tax money to bail out AIG (AIG), GM (GM), Bank of America (BAC), etc. In return many Americans expect, not unreasonably, that our government should now be able to dictate to these companies how to run their businesses, including what to pay their CEOs. But do we really want America’s largest corporations taking orders from members of Congress, government bureaucrats, and professional lobbyists? I think not.
Instead, we should end the bailouts, repeal the numerous government regulations that have distorted the free market, and let companies sink or swim on their own merits. That’s the American way.
But letting the government determine pay for all corporations? A CEO can mean the difference between a company’s success and collapse—just think where Apple (AAPL) would be without Steve Jobs. Shareholders have a moral right to pay whatever they judge necessary to attract, retain, and motivate talented leaders.
What about not-so-successful CEOs who walk away with millions while their companies tank? Shareholders are free to insist on clawback provisions and other contractual measures. But a government-enforced cap on CEO pay would punish the best CEOs by denying them the huge rewards they earn by creating vast amounts of wealth.
The only sure result of this injustice would be a flight of the best and brightest from public corporations.
Government mandates on CEO pay mean CEOs lose, shareholders lose, and all those who benefit from dealing with public companies—i.e., all of us—lose.
My Commentary
Mike Zemack
February 11, 2009 08:48 PM
On the face of it, the pay cap doesn't seem to make any kind of sense at all. At a time when top talent is needed to turn these companies around, which was the whole point of the government’s bailout "investments," these companies are denied the flexibility and freedom to attract that talent.
But viewed from the proper perspective, this does make sense. The pay cap is a government power grab. Eventually, the precedent established here will lead to greater government intrusions into all companies. As has been pointed out previously here, the pay cap is the latest in an escalating series of government intrusions into the private economy, each leading to the next. We are witnessing creeping fascism.
I agree with Mr. Brook. Repeal the cap and end the bailouts. Then abolish the myriad of market-distorting government regulations, programs, and policies that led to the crisis to begin with.
Other Commentary
random
February 11, 2009 11:49 PM
"... a government-enforced cap on CEO pay would punish the best CEOs by denying them the huge rewards they earn by creating vast amounts of wealth."
These CEOs ran their companies into the ground, begged the government to give them money and they should keep multi-million dollar salaries for failure?
To all those who bemoan that the banks are getting nationalized and reaching for the USSR/Cuba hyperbole, keep in mind that the banks ran to Congress, crying that they needed government help and the same regulation they described as injurious meddling. Obama didn't nationalize banks. Bush did. At their request.
If you're perfectly happy with these hypocritical "leaders" keeping $200 million pay packages and rewarding them for their failures, that's your business. I, on the other hand, wouldn't want my taxes to be paying for a generous retirement of someone who ran his bank into the ground and socialized it rather than face the music and take his lumps.
"Although not an example of LFC, the Industrial Revolution was a time during which there was very little government interference in business. The result was an overall improvement in the quality of life for all people. This country realized a surge in private wealth no other had ever known."
Really? According to whom? During the Industrial Revolution factory workers spent 10 hours a day, six days a week for almost nothing and kids as young as 6 were used for hazardous repair work. Grocery stores sold rotten food, butter mixed with mashed potatoes and tap water was better suited for biological warfare than for drinking, cooking or cleaning.
Monopolies crushed competition and the overwhelming majority of the new wealth was concentrated at the top 1%. There was no such thing as the middle class until the mid 1940s.
Unless of course you have data that contradicts every college textbook written in the last 50 years.
Finally, when using Marx or the Communist Manifesto in an insult, here's something to remember. Marx and Engels were sitting down to a cup of coffee and ranting about the mistreatment of factory workers. None of the things they outlined were supposed to come from government interference. Both of them just assumed that the changes will happen on their own.
My Commentary Response to Random
Mike Zemack
February 12, 2009 07:58 PM
Random, and apparently the college textbooks he cites, fails to consider historical context. The conditions that existed at the dawn of capitalism and the Industrial Revolution were horrendous. Unimaginable poverty, including hordes of homeless children, was the norm. Life expectancy was abysmally low, and the mortality rate for children under five years old was 70% plus.
This must be kept in mind when criticizing the allegedly terrible conditions of "factory workers [who] spent 10 hours a day, six days a week for almost nothing and kids as young as 6 were used for hazardous repair work." People filled those conditions, those jobs, voluntarily because it vastly improved their lives, compared to previous conditions.
In particular, most of those child laborers Random laments would most likely have been dead children before...part of the hordes of children abandoned by parents too poor and hungry themselves to feed all of their children. All of those people, adults and children alike, flocked to the newly opening factories by choice, because it improved their lives. I know of no historical record of businessmen forcing people to take those jobs. The rising prosperity of the 19th century capitalist economies pulled families out of pre-industrial poverty, gradually alleviating the need for children to work. Today's child labor laws that rightly protect children from exploitation were not made necessary by capitalism, but made possible because of capitalism. Had those laws existed during the early days of the Industrial Revolution, they would have condemned countless children to death by starvation.
It should also be noted that life expectancies almost doubled, from about 30 to the mid fifties, between the late 18th and early 20th centuries in the industrializing capitalist nations, an unprecedented and incredible achievement in so short a period of time. This occurred in large part because of improved living conditions for children, resulting in a sharp fall in their mortality rates. It also occurred during a period of time unlike any before or since--an almost laissez-faire economy.
As for monopolies, both practice and theory demonstrate that the kind of monopolies that "crush the competition" are a logical impossibility in a free, capitalist economy. As long as political force isn't brought into the economic equation, there is no way any company...even one that is the sole producer of a particular product at a particular time...can prevent new competitive entrants.
Take the just-announced merger between Ticketmaster and Live Nation. Despite the fact that it will initially create a market monopoly, new entrants are free to enter into the ticket business at any time, including Springsteen, LiveStub CEO Hershfield, or any of the artists and others in the ticketing industry who are squawking against the merger. If this deal is approved, as it morally should be, the combined company would still have to satisfy its customers or lose them to a new competitor. As long as individual rights are protected, as they are only under capitalism and as long as political connections aren't employed by the big established players to thwart competitors, as typically happens in the kind of mixed economy we have now competition (which includes potential competition) can not be "crushed" or coercively eliminated by anyone.
Capitalism has never had a fair hearing because it has never been fully understood, even by most of its supporters. A good place to start would be to examine the total context of the current crisis, as Mr. Brook has attempted to point us in the direction of. Even Random might be tempted to set aside "every college textbook written in the last 50 years", and think again.
One final comment. Not all of "the banks ran to Congress, crying that they needed government help..." Some, such as Wells Fargo, among many others, were forced to take bailout money by the Bush administration. Many, though, did run to the government. But keep in mind that one must not confuse capitalism with capitalists. Laissez-faire means, essentially, the separation of state and economics. Under capitalism, no bailout would have occurred, and the incompetent banks would have folded. Of course, under capitalism, we wouldn't be having this discussion, because the housing bubble would never have occurred to begin with.
random response
February 13, 2009 02:39 PM
Mike,
Really, you shouldn't make things up. To say that kids doing factory work in hazardous conditions circa 1905 wouldn't been dead instead is to use a heavy amount of artistic license about tough times in the big city and make your own version of history, more agreeable with what you like to hear. Historical context doesn't mean you get to make up something to disagree with facts you'd rather ignore.
The same goes for your bizarre concept that monopolies give room for new entrants into a market. They don't. If they did, they wouldn't be called monopolies. A monopoly owns 98% of the market or more which means that it controls 98% of the customers and close to 99% of all revenues that can be generated in the market. They can and do crush any new entrants to the field which is exactly what happened with US Steel, Standard Oil, AT&T and the other famous monopolies of the day. Your example of the TicketMaster and LiveNation merger uses customers who are forced into partnerships with the companies because they've shut out everyone else and calls them "new entrants." So if my Internet is provided by Time Warner which has a monopoly in my area and I have no choice but to go with them for Internet access, I'm their competition? Wow. Just wow.
Finally, I find it hard to believe that Paulson was shoving money down Wells Fargo's throat. Why? Because that never happened. No bank is forced to take bailout money. They ask for it in order to be eligible to receive it. It may help to actually read the news before pontificating on morality of running a monopoly. Big words and long posts by themselves do not a valid argument make.
My Response
Mike Zemack
February 13, 2009 11:03 PM
Random:
I specifically said "As long as political force isn't brought into the economic equation, there is no way any company...even one that is the sole producer of a particular product at a particular time...can prevent new competitive entrants."
There is a crucial difference between a market monopoly and a government-enforced monopoly. The cable companies are typically awarded a franchise to operate in a given geographical area--by government. This means, competitors are forbidden by law from entering into that particular market segment. Absent government interference in the market, a monopoly can be maintained only by the voluntary actions of customers willing to buy the products of that company. A market monopoly cannot forcibly prevent new entrants. Citing AT@T and Standard Oil in the same context is comparing apples to oranges. AT&T's market share was guaranteed by law (until 1984), while Standard Oil's share dropped precipitously after the Texas oil discoveries and exploding demand for petroleum products with the advent of the auto industry.
Wells Fargo was one of nine healthy banks called to Washington to meet with Paulson, at which time he "offered" a contract in which the banks must take the money as a "one-time" offer. This was understood by the banks as a threat from the entity--the government--that controls their industry. Wells Fargo immediately resisted, but ultimately signed the agreement. None of the nine banks actually asked for the money. This was reported by the New York Times and other news outlets last fall. It must be remembered that we have a centrally controlled and regulated banking industry. When the people who have regulatory control over your business demand something, you are hardly in a position to refuse. Perhaps Wells Fargo and the others could have taken the risk of refusing the money, but none of the nine banks asked for the money.
As to child labor and the other facts I cited, the source for the information I presented is, among others, the book The Capitalist Manifesto by Andrew Bernstein. And I was specifically referring to the early years of the Industrial Revolution regarding child labor, not 1905. If you can't refute some one's arguments, it doesn't mean you should accuse him of lying.
Thursday, March 19, 2009
Sanchez on Class and Other Subjects
Commentary: It's time for America to think straight about class
By Mary Sanchez | The Kansas City Star
So now, with people's 401(k) retirement accounts vanishing along with their puffed-up middle class pride, perhaps there is space for a little truth telling.
The average American never leaves the class level he or she is born into. Yes, it's true, despite all those Horatio Alger kitchen table talks about "you can be anything you want dear, this is America!" I don't want to let greedy financiers off the hook for current market turmoil, nor do I wish to deflate the ambitions of next great entrepreneur, Google founder or Warren Buffet in the making. But Americans just don't understand class and how it works within the version of capitalism that is the U.S. of A.
Just consider the heedless and lemming-like way most Americans stumbled into this recession.
For decades, people truly believed they were far better off financially than they actually were, even though the average American worker saw a 16 percent drop in his earnings (adjusted for inflation) between the 1970s and 2004, according to economist Benjamin Friedman of Harvard. Meanwhile, the top 1 percent of the income scale skyrocketed ahead? Yet somehow, every American proudly proclaims membership in "the middle class." Amazing what E-Z credit and the ability to buy a latte every morning can do to a worker bee's perspective.
It is time for the voting masses – and I'd include myself here – to understand economic facts better and begin pushing for real change. We need to shed our mythical beliefs about class and build a stable economic foundation that all Americans can depend on. I suspect more people will be open to this line of learning now that unemployment has hit 8 percent. For decades, people missed the fact that a white collar job, a college degree and a cubicle did not necessarily offer them a level of job or financial security above the blue-collar, manual labor workers they thought they'd moved ahead of.
Consider the findings of the 2009 MetLife Study of the American Dream, released in March: Half of all respondents admitted they were one or two paychecks from ruin. If they lost their jobs, within a month, 50 percent of the people polled admitted they would not be able to pay their bills.
Another 28 percent said losing their job would find them unable to pay their bills within two weeks. More than a quarter of people earning $100,000 said they'd be insolvent after a month of unemployment. That's not middle class stability as most people would define it. No doubt this situation owes much to the recent crash in home prices and the cratering of the stock markets. But that's another way of saying that many Americans were simply never as upwardly mobile as they had assumed, or deluded themselves into thinking they were.
You may own a sprawling home with the three-car garage, take an annual trip to Cancun, and be able to discuss basic investment strategies, but somehow at least a quarter of you are living one month away from financial oblivion. The trappings of middle class life are not the same as security.
Another sign of our cluelessness is that half of us are railing (a few decades late) at the excesses of the executive class, while the other half of us are railing at deadbeat subprime borrowers. What we should be doing is pouncing upon our elected officials, demanding that Congress lay a foundation for true prosperity and security, as previous generations did in the 1930s and 1950s. In this session, Congress will likely decide on major legislation that would make it easier for unions to organize workplaces; that would reform the American health care system; and possibly that would overhaul the way we regulate banks and other financial institutions. In each of these areas we need bold change from recent policy.
I hear the cry of "socialism" coming from the back of the room.
This isn't about class conflict; this is about building a stable foundation for the future, so hard work really will get people ahead.
My Commentary:
America does not have a “version of capitalism”, but a mixed economy of steadily eroding capitalistic freedom and ever expanding government control. There is nothing new or bold about Obama’s policies, which continue America on the century-long path toward total statism.
Ms. Sanchez points to the 1930s and 1950s as models we should follow to “lay a foundation for true prosperity and security”. Far from any such thing, the foundation for the current crisis in finance and healthcare were laid in the early to mid 20th century in a quest for the free lunch of government-guaranteed “security”. Instead of turning toward a free market, she calls boldly for government to be rewarded for its failures with still more power.
The two areas of concern mentioned by Ms. Sanchez, the financial crisis and the mess that is our healthcare system, are perfect examples of a mixed economy, not capitalism. The third-party-payer system, the thousands of insurance mandates, barriers to interstate competition for health insurance, and rights-violating programs such as Medicare, Medicaid, SCHIP, and EMTALA have virtually destroyed all but a few remnants of capitalism and free markets in healthcare. The current financial crisis is proof of the failure of government regulation and market interference, not capitalism. This crisis occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly. On top of that is a whole network of market distorting government housing policies accumulated over a period of decades spawned by the intention to "encourage" homeownership. We are witnessing the climax of the failure of those policies and regulations today.
Ms. Sanchez doesn’t like hearing the term “socialism”. But words have meanings, and ignoring the nature of where America is heading will not wish it away. The fact is that socialism is coming to America via the back door of welfare state fascism, a system whereby most property remains in private hands, but is totally controlled by the state. It is just this mixed economy trending toward total fascism that tends to freeze people into economic “classes”. The graduated income tax, massive government business regulation, dependency-fostering welfare-state programs, and tax and monetary policy are among the reasons upward mobility is shackled in America. Capitalism, the system of individual rights, eliminates all of those barriers under a system not of classes or tribes or special interest groups but of individuals associating with each other through voluntary trade and contract to mutual advantage.
“Hard work” is not the primary ingredient to “get ahead”. People worked a lot harder in pre-capitalist times just to stay ahead of the next famine. Slaves can be made to “work hard”. The irreplaceable virtue that lies at the foundation of economic prosperity and progress is the individual human mind. But reason and thinking require both political and economic freedom…i.e., to be free from interference by force from one’s neighbors and the government. Only one social system establishes the proper social conditions man’s rational faculty (and thus wealth production) requires…capitalism.
The fundamental battle today is between capitalism and socialism, or individual rights and the total collectivist state. Mostly what we hear today in varying degrees from both major parties is more of the second. The truly bold change would be to discover and embrace individual rights and capitalism as the foundation for a truly free and prosperous laissez-faire society.
Other's Commentary:
borisjimski wrote on March 17, 0:29 AM:
"Local projects should be paid out of local funds, not by federal moneys taken from people who are nowhere near . . . in a quest for the free lunch of government-guaranteed “security.”" Right you are! So all those southern states that live off the largess the Yankee states give them each year as the excess over what they pay into the federal system, time to cough it up. As to healthcare being a market-based business, do you really believe people price out how much it will cost them at each hospital with each doctor when they have a heart attack or discover a lump? "This crisis occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly," notwithstanding the fact all those regulations were ignored the last eight years. Geez Mike, sounds like you're getting your talking points directly from the AEI. Capitalism isn't a social system, it's an economic system. And socialism isnt the total collectivist state.
MikeZemack wrote on March 17, 9:06 PM:
Capitalism in the philosophical sense is a social system based upon the recognition of individual rights to life, liberty and property, and a government limited to protecting those rights. A free market is an economic system, which is integral to capitalism. But capitalism encompasses both political and economic freedom, Political freedom is only possible under economic freedom. Freedom of speech, religion, association, etc. are not practicable when government controls one’s property and livelihood. Only capitalism provides both freedoms.
Government economic regulation is the means by which politics corrupts the private economy. Political pressure on the banks applied through the conduit of the regulators and the GSEs, compounded by the Fed’s easy money, low interest rate policies, led to this crisis. The quick-buck artists on Wall Street, while not to be excused, were merely riders on a political train. At no time did the government relinquish any of its regulatory powers.
Other's Commentary:
mongrel wrote on March 17, 3:10 PM:
Mike Zemack said it all:
"The fact is that socialism is coming to America via the back door of welfare state fascism, a system whereby most property remains in private hands, but is totally controlled by the state."
This is not new, it has happened elsewhere in the past. "Limousine liberals" and misguided leftist do-gooders were instrumental in making "welfare state fascism" become reality.
What "our" limousine liberals forget that all those previous limousine liberals also thought they will be allowed to keep their limousines while the misguided "masses" will be ruled by the socialist government. Instead of limousines, they were labelled "enemies of all classes" & ended up in prison, in concentration camps, and execution chambers. The "masses" lost freedom of speech, freedom of assembly, freedom of religion, the right to private property, and became poorer, hungrier, completely oppressed by government.
MikeZemack wrote on March 17, 9:22 PM:
Mongrel, you are scarily right.
The growing dependency on government, the breakdown of society into a civil war of special interest pressure groups at the expense of the individual and his rights, government controls breeding more government controls, calls for more and more sacrifice to the state (or the nation or the race or society), exploding government debt, a flood of printing press money…it’s all happened before.
The closest historical parallel to the America of recent decades is pre-Hitler Germany…from Bismarck’s 1880s welfare state to the 1930s.
By Mary Sanchez | The Kansas City Star
So now, with people's 401(k) retirement accounts vanishing along with their puffed-up middle class pride, perhaps there is space for a little truth telling.
The average American never leaves the class level he or she is born into. Yes, it's true, despite all those Horatio Alger kitchen table talks about "you can be anything you want dear, this is America!" I don't want to let greedy financiers off the hook for current market turmoil, nor do I wish to deflate the ambitions of next great entrepreneur, Google founder or Warren Buffet in the making. But Americans just don't understand class and how it works within the version of capitalism that is the U.S. of A.
Just consider the heedless and lemming-like way most Americans stumbled into this recession.
For decades, people truly believed they were far better off financially than they actually were, even though the average American worker saw a 16 percent drop in his earnings (adjusted for inflation) between the 1970s and 2004, according to economist Benjamin Friedman of Harvard. Meanwhile, the top 1 percent of the income scale skyrocketed ahead? Yet somehow, every American proudly proclaims membership in "the middle class." Amazing what E-Z credit and the ability to buy a latte every morning can do to a worker bee's perspective.
It is time for the voting masses – and I'd include myself here – to understand economic facts better and begin pushing for real change. We need to shed our mythical beliefs about class and build a stable economic foundation that all Americans can depend on. I suspect more people will be open to this line of learning now that unemployment has hit 8 percent. For decades, people missed the fact that a white collar job, a college degree and a cubicle did not necessarily offer them a level of job or financial security above the blue-collar, manual labor workers they thought they'd moved ahead of.
Consider the findings of the 2009 MetLife Study of the American Dream, released in March: Half of all respondents admitted they were one or two paychecks from ruin. If they lost their jobs, within a month, 50 percent of the people polled admitted they would not be able to pay their bills.
Another 28 percent said losing their job would find them unable to pay their bills within two weeks. More than a quarter of people earning $100,000 said they'd be insolvent after a month of unemployment. That's not middle class stability as most people would define it. No doubt this situation owes much to the recent crash in home prices and the cratering of the stock markets. But that's another way of saying that many Americans were simply never as upwardly mobile as they had assumed, or deluded themselves into thinking they were.
You may own a sprawling home with the three-car garage, take an annual trip to Cancun, and be able to discuss basic investment strategies, but somehow at least a quarter of you are living one month away from financial oblivion. The trappings of middle class life are not the same as security.
Another sign of our cluelessness is that half of us are railing (a few decades late) at the excesses of the executive class, while the other half of us are railing at deadbeat subprime borrowers. What we should be doing is pouncing upon our elected officials, demanding that Congress lay a foundation for true prosperity and security, as previous generations did in the 1930s and 1950s. In this session, Congress will likely decide on major legislation that would make it easier for unions to organize workplaces; that would reform the American health care system; and possibly that would overhaul the way we regulate banks and other financial institutions. In each of these areas we need bold change from recent policy.
I hear the cry of "socialism" coming from the back of the room.
This isn't about class conflict; this is about building a stable foundation for the future, so hard work really will get people ahead.
My Commentary:
America does not have a “version of capitalism”, but a mixed economy of steadily eroding capitalistic freedom and ever expanding government control. There is nothing new or bold about Obama’s policies, which continue America on the century-long path toward total statism.
Ms. Sanchez points to the 1930s and 1950s as models we should follow to “lay a foundation for true prosperity and security”. Far from any such thing, the foundation for the current crisis in finance and healthcare were laid in the early to mid 20th century in a quest for the free lunch of government-guaranteed “security”. Instead of turning toward a free market, she calls boldly for government to be rewarded for its failures with still more power.
The two areas of concern mentioned by Ms. Sanchez, the financial crisis and the mess that is our healthcare system, are perfect examples of a mixed economy, not capitalism. The third-party-payer system, the thousands of insurance mandates, barriers to interstate competition for health insurance, and rights-violating programs such as Medicare, Medicaid, SCHIP, and EMTALA have virtually destroyed all but a few remnants of capitalism and free markets in healthcare. The current financial crisis is proof of the failure of government regulation and market interference, not capitalism. This crisis occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly. On top of that is a whole network of market distorting government housing policies accumulated over a period of decades spawned by the intention to "encourage" homeownership. We are witnessing the climax of the failure of those policies and regulations today.
Ms. Sanchez doesn’t like hearing the term “socialism”. But words have meanings, and ignoring the nature of where America is heading will not wish it away. The fact is that socialism is coming to America via the back door of welfare state fascism, a system whereby most property remains in private hands, but is totally controlled by the state. It is just this mixed economy trending toward total fascism that tends to freeze people into economic “classes”. The graduated income tax, massive government business regulation, dependency-fostering welfare-state programs, and tax and monetary policy are among the reasons upward mobility is shackled in America. Capitalism, the system of individual rights, eliminates all of those barriers under a system not of classes or tribes or special interest groups but of individuals associating with each other through voluntary trade and contract to mutual advantage.
“Hard work” is not the primary ingredient to “get ahead”. People worked a lot harder in pre-capitalist times just to stay ahead of the next famine. Slaves can be made to “work hard”. The irreplaceable virtue that lies at the foundation of economic prosperity and progress is the individual human mind. But reason and thinking require both political and economic freedom…i.e., to be free from interference by force from one’s neighbors and the government. Only one social system establishes the proper social conditions man’s rational faculty (and thus wealth production) requires…capitalism.
The fundamental battle today is between capitalism and socialism, or individual rights and the total collectivist state. Mostly what we hear today in varying degrees from both major parties is more of the second. The truly bold change would be to discover and embrace individual rights and capitalism as the foundation for a truly free and prosperous laissez-faire society.
Other's Commentary:
borisjimski wrote on March 17, 0:29 AM:
"Local projects should be paid out of local funds, not by federal moneys taken from people who are nowhere near . . . in a quest for the free lunch of government-guaranteed “security.”" Right you are! So all those southern states that live off the largess the Yankee states give them each year as the excess over what they pay into the federal system, time to cough it up. As to healthcare being a market-based business, do you really believe people price out how much it will cost them at each hospital with each doctor when they have a heart attack or discover a lump? "This crisis occurred within the context of a heavily regulated banking system under the control of a coercive government central bank money monopoly," notwithstanding the fact all those regulations were ignored the last eight years. Geez Mike, sounds like you're getting your talking points directly from the AEI. Capitalism isn't a social system, it's an economic system. And socialism isnt the total collectivist state.
MikeZemack wrote on March 17, 9:06 PM:
Capitalism in the philosophical sense is a social system based upon the recognition of individual rights to life, liberty and property, and a government limited to protecting those rights. A free market is an economic system, which is integral to capitalism. But capitalism encompasses both political and economic freedom, Political freedom is only possible under economic freedom. Freedom of speech, religion, association, etc. are not practicable when government controls one’s property and livelihood. Only capitalism provides both freedoms.
Government economic regulation is the means by which politics corrupts the private economy. Political pressure on the banks applied through the conduit of the regulators and the GSEs, compounded by the Fed’s easy money, low interest rate policies, led to this crisis. The quick-buck artists on Wall Street, while not to be excused, were merely riders on a political train. At no time did the government relinquish any of its regulatory powers.
Other's Commentary:
mongrel wrote on March 17, 3:10 PM:
Mike Zemack said it all:
"The fact is that socialism is coming to America via the back door of welfare state fascism, a system whereby most property remains in private hands, but is totally controlled by the state."
This is not new, it has happened elsewhere in the past. "Limousine liberals" and misguided leftist do-gooders were instrumental in making "welfare state fascism" become reality.
What "our" limousine liberals forget that all those previous limousine liberals also thought they will be allowed to keep their limousines while the misguided "masses" will be ruled by the socialist government. Instead of limousines, they were labelled "enemies of all classes" & ended up in prison, in concentration camps, and execution chambers. The "masses" lost freedom of speech, freedom of assembly, freedom of religion, the right to private property, and became poorer, hungrier, completely oppressed by government.
MikeZemack wrote on March 17, 9:22 PM:
Mongrel, you are scarily right.
The growing dependency on government, the breakdown of society into a civil war of special interest pressure groups at the expense of the individual and his rights, government controls breeding more government controls, calls for more and more sacrifice to the state (or the nation or the race or society), exploding government debt, a flood of printing press money…it’s all happened before.
The closest historical parallel to the America of recent decades is pre-Hitler Germany…from Bismarck’s 1880s welfare state to the 1930s.
Saturday, October 18, 2008
Commentary 46- Mulshine on McCain
How the McCains really stick it to Joe Sixpack
Posted by Paul Mulshine October 17, 2008 12:59PM
Radley Balko of Reason Magazine has an interesting piece up on the politics of beer distributorships and how this has made John McCain a rich man.
"To be blunt, the entire industry is a farce. It's an artificial, anachronistic, government-created entity that's anti-competitive and full of lobbyists and special interests. It raises the cost of each bottle of beer you drink, though 'Joe Six Pack,' as McCain's running mate might put it, receives no value for the added cost."
Balko adds,
"What does the candidate lecturing Wall Street about greed think about the alcohol wholesaling industry? Is it fair? Should government be subsidizing (if not outright creating) an industry by forcing consumers to pay more for alcohol--for which they get little to no added value in return? And who's greedier, the family who exploits that system to amass a small fortune, or the brokers and traders McCain derides for pursuing profits in a free market?"
To which I can only add: Let us all hoist a beer in honor of Ron Paul, the only true adherent of the free market who ran for president this year and an opponent of rent-seeking behavior.
No wonder McCain hated him so much.
Other's Commentary:
Posted by hglindquist on 10/18/08 at 8:28AM
Ah so, a clear example of negative government intervention in the market ... in terms of market dynamics.
But control of the sale of alcohol is seen to be necessary for the collective good for a variety of reasons ... (there are other goods and services that are deemed to need to similar controls) ...
So the issue is the monopolistic nature of distributorships/wholesalers in those states that have the 3-tier system (explained in the articles you reference) ...
And there appears to have been some history as to why the 3-tier system was seen as a solution.
Which gets us to root of the economic problem: How do we control/pay for the costs that are directly tied to the consumption of alcohol -- for example, the devastating effect on families of alcoholism -- when they are not paid for out of the profits from the sale of alcohol for consumption? These costs are externalities like the dumping of mountaintops into fishing streams when mining. Cancer from second-hand smoke and earlier working with asbestos are other examples of externalities,
Quoting dear ol' Milton Friedman (my favorite quote of his): "'Free markets' is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. But that isn't the fact. The fact is that, most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. There are some good economists like Gary Becker and Bob Lucas who are working on these issues. This reality ensures that the end of history will never come."
Aside, what it also assures is that there is no such thing as a "free market".
My personal view is that the more directly costs can be paid out of the profits that generated the costs, the more efficient (and effective) the market will be. But I am not an economist. On the other hand while Physicists can give a reasonable layperson explanation to the way atoms work, Economists have not been able to explain how free markets work ... in relation to reality ... and not even to themselves -- in my opinion.
In any case, you -- Mr. Mulshine -- are right in labeling Senator a McCain a hypocrite ... and pwc is right in questioning the Senator's character in regards to his treatment of his first wife.
My Commentary:
Mr. Mulshine's understanding of McCain as an enemy of free markets is right on. He is dangerous because he is a statist running under the free market banner...just as President Bush waved the free market banner while destroying it the last 8 years. I had decided that rather than vote for one of the two statist candidates, that I would abstain from voting for president this year...for the first time in my 4 decades as a registered voter. But maybe I'll write in Ron Paul, who Mr. Mulshine describes as "the only true adherent of the free market".
A free market is a crucial ingredient of capitalism, and of freedom. It is based on the recognition of individual rights, in which each individual is free to think and act on his own judgement, to associate and trade with others voluntarily to mutual advantage, in pursuit of his own goals, welfare, and happiness. Rights are a guide to freedom of action, not to the productive efforts of others (ex.-a home, food, health care, a job, etc.). Philosopher Ayn Rand described individual rights as "the means of subordinating society to moral law."
The concept of individual rights...including the all-important property rights, without which no other rights are possible...contains the answer to the problem of so-called "externalities". If the actions of one violates the rights of another...causes physical harm to another's person or property as objectively determined in a court of law...then the government may properly step in to require restitution to the injured party. Such would be the case of an individual or group of individuals (i.e., a corporation) polluting the property of another. In the case of second-hand smoke, as long as a non-smoker is free to leave an area occupied by smokers, his rights are not violated. It is solely the right of the property owner...ex., a restaurateur...to decide whether his establishment will allow smoking, and whether to segregate smokers from non-smokers.
The free market is not incompatible with government action to protect individual rights. Indeed, the protection of individual rights is the only proper function of government, and is vital to the functioning of a free market. The "free" in free market means to live one's life free from coercive interference (physical harm) by others, including by government officials and politicians, as well as criminals and the economic activities of others. The protection of rights, in a free society, is accomplished through objective laws against explicit types of behavior, or through the civil courts where grievances and disputes are resolved in an objective forum...and not through the arbitrary, dictatorial powers of government regulators.
Free market capitalism, properly understood, is the only practical and moral social system because it is the only system based on individual rights and a government limited to the job of protecting those rights. People can deal with each other in one of only two ways...by voluntary persuasion and logic, or by physical force. Under capitalism, rent-seeking pressure groups would not and can not exist because the government's power of economic interference on behalf of one private entity at the expense of others would not exist. The individual is protected against the predation of those seeking to trample his rights in the name of that mystic god of every power-luster...the "collective", or "common good".
It's either a free market, tyranny, or what we have today..a mixture of freedom and tyranny, in which tyranny steadily gains and freedom slowly recedes.
I choose free market capitalism.
Other's Commentary:
Posted by boobosie on 10/19/08 at 8:51AM
Free markets are responsible for the financial melt down on wall street. Tax payer protection is needed against the likes of fraudulent CEOS, bogus math gurus who eliminate risk, and unregulated credit default swaps.
Tariffs are needed to make the free market trade a level playing field.
Consumer protection is needed against the likes of "Joe the Plumber".
Free markets are great, for criminals.
Didn't your mommy ever tell you there is no 'free' lunch?
My Commentary:
Posted by Zemack on 10/19/08 at 9:46PM
On boobosie:
Free markets are responsible for the financial melt down on wall street.
Where do you see a free market in finances? You're committing the fallacy of equating the failures of private individuals and firms with a free market.
Who controls the money supply, the raw material of banking? The Fed
Who ended the gold standard? FDR, on the domestic front, by confiscating private gold currency and replacing it with fiat (i.e., counterfeit) paper. And Nixon, who closed the international gold window.
Who controls short-term interest rates? The Fed. (The Fed's inflationary policies and sudden tightening, based on control of money and interest rates, were largely responsible for the rampant 1920s stock market speculation and crash, as well as the recent housing boom and bust.)
The current crisis is rooted in the government's massive intervention in the housing and mortgage markets, beginning with FDR's "second bill of rights", which declared every family's "right" to own a home (which was reaffirmed in JFK's 1960 party platform.) Subsequent government policies were implemented to ensure that alleged "right." The home mortgage deduction; mortgage "insurers" (at taxpayer expense) FHA and FHLBB; the government-created quasi-private Fannie and Freddie that artificially created the mortgage resale "market."
Then when it was found that many low-income folks couldn't qualify for home loans, Carter created the CRA, to "encourage" lenders to extend loans to those folks. The government's extensive regulatory control over the banks was the club with which it enforced its "encouragement." Then when that wasn't enough, Clinton imposed "flexible" lending standards through the CRA, which led to no-doc and no-down-payment, or sub-prime, loans. But when banks that dove into these loans found that by restricting these gov.-mandated standards to just low-income folks they could run afoul of anti-discrimination laws, they had to extend these standards to all customers who wanted them. (Do not take this as a condemnation of low-income folks in general. It should be stressed that many low-income folks did purchase homes the old fashioned way...by saving for a down payment and then securing conventional loans. Many low-income, sub-prime borrowers continue to make their payments on time. And many of the defaulters are high earners.)
When it was found that Fannie and Freddie, the government-created giants with the implicit (now explicit) backing of Uncle Sam, wouldn't buy those sub-primes, Clinton, and later Bush, (and with the complicity of Congress) intervened to force them to. The flood gates were open for a virtual government-created conveyor belt of bad lending. CEOs like Mozilo of Countrywide latched on to the game with a vengeance.
It was Fannie and Freddie who pioneered the practice of bundling good and sub-prime loans together into Mortgage-Backed Securities (later emulated by many Wall Street firms) for sale to the public. The implicit taxpayer-guarantee created a false sense of safety for these securities. The "bubble mentality" of ever-rising home prices, fueled by the Fed's inflationary policies, took over from there.
The government's Federal Deposit "Insurance" and the "Too Big To Fail" bailout policy...as well as the Fed's lender of last resort status...has led to an atmosphere of reward without risk, or profit without loss. In a free market, the threat of having to face up to one's own failings is a built-in protector against the kind of system-wide catastrophe we are now seeing. The free market rewards long-term prudence and penalizes irrational, short-term lenders, investors, and borrowers (I don't let the irresponsible borrowers, which included outright speculators, off the hook. Without them, there would not have been a crisis.) When profits are privatized (as they should be), but losses are socialized (as they should not be), what kind of behavior does one expect to take hold?
The fact is that the heavily controlled and regulated financial industry was responding to the policies of its own government. The sound and prudent institutions that resisted the sub-prime mania were, for a time, placed at a competitive disadvantage, leading to a loss of business. (They are now in a very good position, once the economy turns around.) According to an article by Bloomberg's Michael Lewis (NY Post, 9/17/08), "if any of these men had behaved well and resisted the pressures and temptations of the moment, his firm would have, for several years, dramatically underperformed the competition. He probably would have lost his job." He was speaking of the Bear Stearns, Merrill Lynch, and Lehman Brothers CEOs. What created a situation where prudence is penalized and imprudence is rewarded? The quick-buck charlatans who gained a position to bring down decades-old financial powerhouses were unleashed by market distortions created by government intervention.
I could go on and add to this already too-long post. The private lenders, borrowers, and investors that participated in this fiasco are part villain, part victim. But they are only the face of this crisis. Without government's massive interventions, the imprudent would have been weeded out by bankruptcy, foreclosure, and investment losses long before they could infect the whole system. One does not have to excuse the failures of private participants in order to understand that the government-created culture of homeownership entitlement and the policies they spawned are the real culprit here. It's a simple matter of cause and effect.
In a Money magazine interview (with Janice Revell, Sept. issue, I believe), Rep. Barney Frank made this startling statement: "But we have made a mistake in this society. The assumption that everybody can be a homeowner is wrong. We pushed and encouraged people into home ownership - people who, in some cases, weren't ready for it. You can't act on wishes that are unrealistic without having negative consequences."
That is about as close to an admission of the real cause as you will find in Washington. The free market is getting tried and convicted, where no free market exists. And along with it, our freedom.
I apologize for this long-winded post. But it was necessary. I could not let boobosie's unsubstantiated statement go unchallenged.
Other's Commentary
Posted by hglindquist on 10/19/08 at 9:53PM
OK, zemack, I am safely ensconced in my hotel room in New Haven ... the traffic backup getting onto I-95 South to NYC at I-91 was too long, so I "went to Yale" and phoned home that I was staying north for the night.
It was a gorgeous day out in Connecticut's fall foliage.
Now in rebuttal: It is common knowledge that profits have been used to avoid the payment of known externalities and to hide externalities from becoming known. The market has been able to use profit to protect itself from paying costs the profit-seeking generated. And I agree with you, it is a proper role for we the people through our government to investigate the potential for harm caused by any product and to impose laws and regulations that protect we the people from such harm.
You seem to forget that in your example of the right of a non-smoking employee to leave smoking area has only been recently established ... and that I have absolutely no protection from the concentrations of tobacco smoke that sometimes accost me as I exit a building ... and that the children of smokers are still at risk in far too many cases. It is because of the market's failure to address the issue adequately that government has had to intervene with laws and regulations, and still has a ways to go to adequately protect the non-smoker. So I am pleased that you agree that we the people through our government should continue to move in that direction ... but then you go back to the free market concept.
And we continually have examples of companies hiding the harmful side effects of their products so the cost of the harm does not have to paid out of the profits, or costs are delayed or minimized.
History has shown that here in this country we are more at risk from the active pursuit of cost suppression for profit maximization than we are from "the arbitrary, dictatorial powers of government regulators."
And "the collective or common good" is not some "mystic, undefinable god of every power-seeker" -- in my opinion. We can simply start by identifying those "things" the individual has a right to expect from his/her community, and in turn recognizes that his/her community has a right to expect participation from him/her. Or to put it another way, what do we expect to share in common as Americans?
Security may be a place to start. Do we not believe it is the roll of the collective community to defend the community -- which is its members -- from its enemies? Don't we all share in our common defense against our enemies, generally speaking?
So if I expect to be defended then I expect to participate in the defense. And if I expect to participate in the defense, then I expect to be defended. That makes sense, doesn't it?
But in any case ... I really do think this latest socialization of the losses by the market fundamentalists will put the concept of a "free market" on ice for another -- what? -- 70 years. Maybe longer if we don't turn this sucker (the meltdown) around pretty quick ... which -- I'm afraid -- is looking less and less likely every day.
In any case, Senator McCain is a hypocrite for taking his second wife's largess, and he is what we used to call a low-life for the way he treated his first wife -- in my opinion after reviewing the facts.
And yes, I believe in redemption. But apparently McCain hasn't repented.
My Commentary:
Posted by Zemack on 10/20/08 at 7:50PM
Hglindquist, 10/19/08
I hope you're enjoying you're trip to New England. My wife and I plan on some day making a trip up there.
I'll address one more point...the key point...to hopefully clarify my philosophical position.
And "the collective or common good" is not some "mystic, undefinable god of every power-seeker" -- in my opinion. We can simply start by identifying those "things" the individual has a right to expect from his/her community, and in turn recognizes that his/her community has a right to expect participation from him/her. Or to put it another way, what do we expect to share in common as Americans?
I reject the collectivist premise in the entire statement. I consider the notion of "The collective or common good" to be invalid for two reasons. First; human beings...every one of us...are autonomous individuals each possessing his own independent mind, or rational faculty, which is the means by which he guides his life. This is a metaphysical fact of nature. The fundamental choice that each of us faces is...to think or not. That is exclusively a choice of the individual, and only the individual. No one can do another's thinking, nor force another to think.
Second; the collectivist, or tribal, premise is un-American. A recognition of the validity of the first reason formed the basis for the Founders' creation of a nation that, for the first time in history, was based on the premise that the individual, not the group, is the supreme value upon which a society would be organized. And they recognized that certain fundamental requirements are required for such a society...the individual's unalienable rights to life, liberty, property, and the pursuit of one's own welfare and happiness...protected by a government which, for the first time, was explicitly deemed to be the peoples' servant rather than ruler.
Thus, there is no such thing as the "collective", or "common" good that is separate from the good of the individual...every independent individual. And since every individual possesses the same unalienable rights, equally, and at all times, and protected equally and at all times by the government, any private or public (i.e., governmental) action that violates the rights of even a single individual is not and can not be in the "common" good.
There is no such entity as a "community". The community is a number of individuals, as described above. The "community" has no right to expect anything out of any individual, and the individual has no right to expect anything out of the "community"...save one. That one "thing" that each of us owes the other individuals that make up a "community" is to respect, and to reframe from violating, their aforementioned individual rights...i.e., to avoid compelling another person to act against his own judgement and will. In a free society based on individual rights, anyone who initiates physical force against another is a criminal, and is subject to prosecution by the government. This same principle applies to government. The government is the protector of the individual's unalienable rights. Therefor, no one in the "community" may use the legalized force of government to violate the rights of other members of that community, no matter how big his majority or how small the minority. The same principles apply to a group of ten, a thousand, a million or 320 million. This is what is meant by the principle that "Individual rights are the means of subordinating society to moral law."
The use of the term "the common or collective good" implies that the group or society or the community is the supreme value and can do whatever it wants to its individual members. It is always the justification for any rights-violating governmental action...and of all tyrannies. There is no "collective" good in a free society. There is only the necessity to ensure, via limited government, that each member is free to pursue his own good...which means to be free from human predators.
What do we... share in common as Americans? We share the right to think for ourselves, to act on our own judgement in the pursuit of our own individual well-being, to engage in voluntary and uncoerced association with one another, to engage in voluntary trade to mutual advantage, to engage in voluntary and uncoerced charity, and the obligation to respect the rights of all of our fellow community members. We share, in other words, the principles of free market capitalism. Or at least, as Americans, we should.
Posted by Paul Mulshine October 17, 2008 12:59PM
Radley Balko of Reason Magazine has an interesting piece up on the politics of beer distributorships and how this has made John McCain a rich man.
"To be blunt, the entire industry is a farce. It's an artificial, anachronistic, government-created entity that's anti-competitive and full of lobbyists and special interests. It raises the cost of each bottle of beer you drink, though 'Joe Six Pack,' as McCain's running mate might put it, receives no value for the added cost."
Balko adds,
"What does the candidate lecturing Wall Street about greed think about the alcohol wholesaling industry? Is it fair? Should government be subsidizing (if not outright creating) an industry by forcing consumers to pay more for alcohol--for which they get little to no added value in return? And who's greedier, the family who exploits that system to amass a small fortune, or the brokers and traders McCain derides for pursuing profits in a free market?"
To which I can only add: Let us all hoist a beer in honor of Ron Paul, the only true adherent of the free market who ran for president this year and an opponent of rent-seeking behavior.
No wonder McCain hated him so much.
Other's Commentary:
Posted by hglindquist on 10/18/08 at 8:28AM
Ah so, a clear example of negative government intervention in the market ... in terms of market dynamics.
But control of the sale of alcohol is seen to be necessary for the collective good for a variety of reasons ... (there are other goods and services that are deemed to need to similar controls) ...
So the issue is the monopolistic nature of distributorships/wholesalers in those states that have the 3-tier system (explained in the articles you reference) ...
And there appears to have been some history as to why the 3-tier system was seen as a solution.
Which gets us to root of the economic problem: How do we control/pay for the costs that are directly tied to the consumption of alcohol -- for example, the devastating effect on families of alcoholism -- when they are not paid for out of the profits from the sale of alcohol for consumption? These costs are externalities like the dumping of mountaintops into fishing streams when mining. Cancer from second-hand smoke and earlier working with asbestos are other examples of externalities,
Quoting dear ol' Milton Friedman (my favorite quote of his): "'Free markets' is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. But that isn't the fact. The fact is that, most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. There are some good economists like Gary Becker and Bob Lucas who are working on these issues. This reality ensures that the end of history will never come."
Aside, what it also assures is that there is no such thing as a "free market".
My personal view is that the more directly costs can be paid out of the profits that generated the costs, the more efficient (and effective) the market will be. But I am not an economist. On the other hand while Physicists can give a reasonable layperson explanation to the way atoms work, Economists have not been able to explain how free markets work ... in relation to reality ... and not even to themselves -- in my opinion.
In any case, you -- Mr. Mulshine -- are right in labeling Senator a McCain a hypocrite ... and pwc is right in questioning the Senator's character in regards to his treatment of his first wife.
My Commentary:
Mr. Mulshine's understanding of McCain as an enemy of free markets is right on. He is dangerous because he is a statist running under the free market banner...just as President Bush waved the free market banner while destroying it the last 8 years. I had decided that rather than vote for one of the two statist candidates, that I would abstain from voting for president this year...for the first time in my 4 decades as a registered voter. But maybe I'll write in Ron Paul, who Mr. Mulshine describes as "the only true adherent of the free market".
A free market is a crucial ingredient of capitalism, and of freedom. It is based on the recognition of individual rights, in which each individual is free to think and act on his own judgement, to associate and trade with others voluntarily to mutual advantage, in pursuit of his own goals, welfare, and happiness. Rights are a guide to freedom of action, not to the productive efforts of others (ex.-a home, food, health care, a job, etc.). Philosopher Ayn Rand described individual rights as "the means of subordinating society to moral law."
The concept of individual rights...including the all-important property rights, without which no other rights are possible...contains the answer to the problem of so-called "externalities". If the actions of one violates the rights of another...causes physical harm to another's person or property as objectively determined in a court of law...then the government may properly step in to require restitution to the injured party. Such would be the case of an individual or group of individuals (i.e., a corporation) polluting the property of another. In the case of second-hand smoke, as long as a non-smoker is free to leave an area occupied by smokers, his rights are not violated. It is solely the right of the property owner...ex., a restaurateur...to decide whether his establishment will allow smoking, and whether to segregate smokers from non-smokers.
The free market is not incompatible with government action to protect individual rights. Indeed, the protection of individual rights is the only proper function of government, and is vital to the functioning of a free market. The "free" in free market means to live one's life free from coercive interference (physical harm) by others, including by government officials and politicians, as well as criminals and the economic activities of others. The protection of rights, in a free society, is accomplished through objective laws against explicit types of behavior, or through the civil courts where grievances and disputes are resolved in an objective forum...and not through the arbitrary, dictatorial powers of government regulators.
Free market capitalism, properly understood, is the only practical and moral social system because it is the only system based on individual rights and a government limited to the job of protecting those rights. People can deal with each other in one of only two ways...by voluntary persuasion and logic, or by physical force. Under capitalism, rent-seeking pressure groups would not and can not exist because the government's power of economic interference on behalf of one private entity at the expense of others would not exist. The individual is protected against the predation of those seeking to trample his rights in the name of that mystic god of every power-luster...the "collective", or "common good".
It's either a free market, tyranny, or what we have today..a mixture of freedom and tyranny, in which tyranny steadily gains and freedom slowly recedes.
I choose free market capitalism.
Other's Commentary:
Posted by boobosie on 10/19/08 at 8:51AM
Free markets are responsible for the financial melt down on wall street. Tax payer protection is needed against the likes of fraudulent CEOS, bogus math gurus who eliminate risk, and unregulated credit default swaps.
Tariffs are needed to make the free market trade a level playing field.
Consumer protection is needed against the likes of "Joe the Plumber".
Free markets are great, for criminals.
Didn't your mommy ever tell you there is no 'free' lunch?
My Commentary:
Posted by Zemack on 10/19/08 at 9:46PM
On boobosie:
Free markets are responsible for the financial melt down on wall street.
Where do you see a free market in finances? You're committing the fallacy of equating the failures of private individuals and firms with a free market.
Who controls the money supply, the raw material of banking? The Fed
Who ended the gold standard? FDR, on the domestic front, by confiscating private gold currency and replacing it with fiat (i.e., counterfeit) paper. And Nixon, who closed the international gold window.
Who controls short-term interest rates? The Fed. (The Fed's inflationary policies and sudden tightening, based on control of money and interest rates, were largely responsible for the rampant 1920s stock market speculation and crash, as well as the recent housing boom and bust.)
The current crisis is rooted in the government's massive intervention in the housing and mortgage markets, beginning with FDR's "second bill of rights", which declared every family's "right" to own a home (which was reaffirmed in JFK's 1960 party platform.) Subsequent government policies were implemented to ensure that alleged "right." The home mortgage deduction; mortgage "insurers" (at taxpayer expense) FHA and FHLBB; the government-created quasi-private Fannie and Freddie that artificially created the mortgage resale "market."
Then when it was found that many low-income folks couldn't qualify for home loans, Carter created the CRA, to "encourage" lenders to extend loans to those folks. The government's extensive regulatory control over the banks was the club with which it enforced its "encouragement." Then when that wasn't enough, Clinton imposed "flexible" lending standards through the CRA, which led to no-doc and no-down-payment, or sub-prime, loans. But when banks that dove into these loans found that by restricting these gov.-mandated standards to just low-income folks they could run afoul of anti-discrimination laws, they had to extend these standards to all customers who wanted them. (Do not take this as a condemnation of low-income folks in general. It should be stressed that many low-income folks did purchase homes the old fashioned way...by saving for a down payment and then securing conventional loans. Many low-income, sub-prime borrowers continue to make their payments on time. And many of the defaulters are high earners.)
When it was found that Fannie and Freddie, the government-created giants with the implicit (now explicit) backing of Uncle Sam, wouldn't buy those sub-primes, Clinton, and later Bush, (and with the complicity of Congress) intervened to force them to. The flood gates were open for a virtual government-created conveyor belt of bad lending. CEOs like Mozilo of Countrywide latched on to the game with a vengeance.
It was Fannie and Freddie who pioneered the practice of bundling good and sub-prime loans together into Mortgage-Backed Securities (later emulated by many Wall Street firms) for sale to the public. The implicit taxpayer-guarantee created a false sense of safety for these securities. The "bubble mentality" of ever-rising home prices, fueled by the Fed's inflationary policies, took over from there.
The government's Federal Deposit "Insurance" and the "Too Big To Fail" bailout policy...as well as the Fed's lender of last resort status...has led to an atmosphere of reward without risk, or profit without loss. In a free market, the threat of having to face up to one's own failings is a built-in protector against the kind of system-wide catastrophe we are now seeing. The free market rewards long-term prudence and penalizes irrational, short-term lenders, investors, and borrowers (I don't let the irresponsible borrowers, which included outright speculators, off the hook. Without them, there would not have been a crisis.) When profits are privatized (as they should be), but losses are socialized (as they should not be), what kind of behavior does one expect to take hold?
The fact is that the heavily controlled and regulated financial industry was responding to the policies of its own government. The sound and prudent institutions that resisted the sub-prime mania were, for a time, placed at a competitive disadvantage, leading to a loss of business. (They are now in a very good position, once the economy turns around.) According to an article by Bloomberg's Michael Lewis (NY Post, 9/17/08), "if any of these men had behaved well and resisted the pressures and temptations of the moment, his firm would have, for several years, dramatically underperformed the competition. He probably would have lost his job." He was speaking of the Bear Stearns, Merrill Lynch, and Lehman Brothers CEOs. What created a situation where prudence is penalized and imprudence is rewarded? The quick-buck charlatans who gained a position to bring down decades-old financial powerhouses were unleashed by market distortions created by government intervention.
I could go on and add to this already too-long post. The private lenders, borrowers, and investors that participated in this fiasco are part villain, part victim. But they are only the face of this crisis. Without government's massive interventions, the imprudent would have been weeded out by bankruptcy, foreclosure, and investment losses long before they could infect the whole system. One does not have to excuse the failures of private participants in order to understand that the government-created culture of homeownership entitlement and the policies they spawned are the real culprit here. It's a simple matter of cause and effect.
In a Money magazine interview (with Janice Revell, Sept. issue, I believe), Rep. Barney Frank made this startling statement: "But we have made a mistake in this society. The assumption that everybody can be a homeowner is wrong. We pushed and encouraged people into home ownership - people who, in some cases, weren't ready for it. You can't act on wishes that are unrealistic without having negative consequences."
That is about as close to an admission of the real cause as you will find in Washington. The free market is getting tried and convicted, where no free market exists. And along with it, our freedom.
I apologize for this long-winded post. But it was necessary. I could not let boobosie's unsubstantiated statement go unchallenged.
Other's Commentary
Posted by hglindquist on 10/19/08 at 9:53PM
OK, zemack, I am safely ensconced in my hotel room in New Haven ... the traffic backup getting onto I-95 South to NYC at I-91 was too long, so I "went to Yale" and phoned home that I was staying north for the night.
It was a gorgeous day out in Connecticut's fall foliage.
Now in rebuttal: It is common knowledge that profits have been used to avoid the payment of known externalities and to hide externalities from becoming known. The market has been able to use profit to protect itself from paying costs the profit-seeking generated. And I agree with you, it is a proper role for we the people through our government to investigate the potential for harm caused by any product and to impose laws and regulations that protect we the people from such harm.
You seem to forget that in your example of the right of a non-smoking employee to leave smoking area has only been recently established ... and that I have absolutely no protection from the concentrations of tobacco smoke that sometimes accost me as I exit a building ... and that the children of smokers are still at risk in far too many cases. It is because of the market's failure to address the issue adequately that government has had to intervene with laws and regulations, and still has a ways to go to adequately protect the non-smoker. So I am pleased that you agree that we the people through our government should continue to move in that direction ... but then you go back to the free market concept.
And we continually have examples of companies hiding the harmful side effects of their products so the cost of the harm does not have to paid out of the profits, or costs are delayed or minimized.
History has shown that here in this country we are more at risk from the active pursuit of cost suppression for profit maximization than we are from "the arbitrary, dictatorial powers of government regulators."
And "the collective or common good" is not some "mystic, undefinable god of every power-seeker" -- in my opinion. We can simply start by identifying those "things" the individual has a right to expect from his/her community, and in turn recognizes that his/her community has a right to expect participation from him/her. Or to put it another way, what do we expect to share in common as Americans?
Security may be a place to start. Do we not believe it is the roll of the collective community to defend the community -- which is its members -- from its enemies? Don't we all share in our common defense against our enemies, generally speaking?
So if I expect to be defended then I expect to participate in the defense. And if I expect to participate in the defense, then I expect to be defended. That makes sense, doesn't it?
But in any case ... I really do think this latest socialization of the losses by the market fundamentalists will put the concept of a "free market" on ice for another -- what? -- 70 years. Maybe longer if we don't turn this sucker (the meltdown) around pretty quick ... which -- I'm afraid -- is looking less and less likely every day.
In any case, Senator McCain is a hypocrite for taking his second wife's largess, and he is what we used to call a low-life for the way he treated his first wife -- in my opinion after reviewing the facts.
And yes, I believe in redemption. But apparently McCain hasn't repented.
My Commentary:
Posted by Zemack on 10/20/08 at 7:50PM
Hglindquist, 10/19/08
I hope you're enjoying you're trip to New England. My wife and I plan on some day making a trip up there.
I'll address one more point...the key point...to hopefully clarify my philosophical position.
And "the collective or common good" is not some "mystic, undefinable god of every power-seeker" -- in my opinion. We can simply start by identifying those "things" the individual has a right to expect from his/her community, and in turn recognizes that his/her community has a right to expect participation from him/her. Or to put it another way, what do we expect to share in common as Americans?
I reject the collectivist premise in the entire statement. I consider the notion of "The collective or common good" to be invalid for two reasons. First; human beings...every one of us...are autonomous individuals each possessing his own independent mind, or rational faculty, which is the means by which he guides his life. This is a metaphysical fact of nature. The fundamental choice that each of us faces is...to think or not. That is exclusively a choice of the individual, and only the individual. No one can do another's thinking, nor force another to think.
Second; the collectivist, or tribal, premise is un-American. A recognition of the validity of the first reason formed the basis for the Founders' creation of a nation that, for the first time in history, was based on the premise that the individual, not the group, is the supreme value upon which a society would be organized. And they recognized that certain fundamental requirements are required for such a society...the individual's unalienable rights to life, liberty, property, and the pursuit of one's own welfare and happiness...protected by a government which, for the first time, was explicitly deemed to be the peoples' servant rather than ruler.
Thus, there is no such thing as the "collective", or "common" good that is separate from the good of the individual...every independent individual. And since every individual possesses the same unalienable rights, equally, and at all times, and protected equally and at all times by the government, any private or public (i.e., governmental) action that violates the rights of even a single individual is not and can not be in the "common" good.
There is no such entity as a "community". The community is a number of individuals, as described above. The "community" has no right to expect anything out of any individual, and the individual has no right to expect anything out of the "community"...save one. That one "thing" that each of us owes the other individuals that make up a "community" is to respect, and to reframe from violating, their aforementioned individual rights...i.e., to avoid compelling another person to act against his own judgement and will. In a free society based on individual rights, anyone who initiates physical force against another is a criminal, and is subject to prosecution by the government. This same principle applies to government. The government is the protector of the individual's unalienable rights. Therefor, no one in the "community" may use the legalized force of government to violate the rights of other members of that community, no matter how big his majority or how small the minority. The same principles apply to a group of ten, a thousand, a million or 320 million. This is what is meant by the principle that "Individual rights are the means of subordinating society to moral law."
The use of the term "the common or collective good" implies that the group or society or the community is the supreme value and can do whatever it wants to its individual members. It is always the justification for any rights-violating governmental action...and of all tyrannies. There is no "collective" good in a free society. There is only the necessity to ensure, via limited government, that each member is free to pursue his own good...which means to be free from human predators.
What do we... share in common as Americans? We share the right to think for ourselves, to act on our own judgement in the pursuit of our own individual well-being, to engage in voluntary and uncoerced association with one another, to engage in voluntary trade to mutual advantage, to engage in voluntary and uncoerced charity, and the obligation to respect the rights of all of our fellow community members. We share, in other words, the principles of free market capitalism. Or at least, as Americans, we should.
Friday, May 16, 2008
Commentary 30- On Government Zoning Powers
From the New Jersey Star Ledger, 5/14/08
Are Democrats making peace with the 'burbs?
Posted by Paul Mulshine May 14, 2008 8:00PM
The Democrats need to end the war.
The war against the suburbs, I mean. It's getting out of hand.
"We're discouraging jobs in this economy," says state Sen. Ray Lesniak. "It's dumb. Stupid, stupid, stupid."
Lesniak, who is a Democrat, was talking about the latest affordable-housing scheme. The Corzine administration recently signed off on new Council on Affordable Housing regulations that call for more than 100,000 new housing units to be shoehorned into the suburbs. Worse, the plan lists parks, schoolyards and even the Garden State Parkway right-of-way as available for development. And even worse than that, the Democrats plan to send the bill for much of this construction to anyone who wants to build a new business in the state.
That's what set Lesniak off. Though he himself is a city-dwelling Democrat - he lives in Elizabeth - Lesniak realizes that the COAH plan amounts to nothing less than a declaration of war on new business. His "stupid, stupid, stupid" comment was directed at the part of the plan that would make any new business moving into the state responsible for paying to build housing proportional to the number of new employees.
Even without the new regs, it's hard enough to get new businesses to locate in the state, says Michael McGuinness, who heads the state chapter of the National Association of Industrial and Office Properties.
"The proposed rules are real deal killers," said McGuinness. "We're not aware of similar affordable housing fees in other states, so it makes us less competitive."
That's only one reason the 1985 Fair Housing Act, which set up COAH, needs "a total overhaul," Lesniak said.
"Right now it's a very poor planning tool," he said. "It contributes to sprawl, increases infrastructure needs and increases the unaffordability of the state of New Jersey."
Indeed it does. But the Legislature may be powerless to do anything about it. The war on the suburbs originated in the state Supreme Court, not in the Legislature. Way back in the disco era, the seven justices of the court decided to straighten out suburbia by taking over both zoning and school funding. Since then, every effort by the Legislature to take back control has been rejected by the justices.
I predicted to the senator that the court would reject his reforms as well. Then what?
He's ready to take the nuclear option, that's what.
"If we adopt a plan that provides affordable housing where the jobs are and where the mass transit is and the court says that's unconstitutional, I would support a constitutional amendment," he said.
Such an amendment has long been pushed by state Sen. Gerry Cardinale, a conservative Republican from Bergen County. If the Democrats decided to put such an amendment on the ballot, said Lesniak, it "would pass overwhelmingly."
At that point, the suburbs would be free of the effects of the court's 1975 Mount Laurel ruling, the disastrous decision that started all of this. In the fuzzy memories of most liberals, the court was forced to reject Mount Laurel's zoning code because the town fathers had engaged in exclusionary zoning to keep minorities and poor people out.
In fact, that "exclusionary" zoning code permitted a housing density of more than four units per acre. That's a density roughly equal to the neighborhoods in Lesniak's own Elizabeth.
And here's a memorable line from that decision: "No forests or small towns need be paved over and covered with high-rise apartments as a result of today's decision."
Countless forests have been felled since then for the condos and townhouses required by the court. And countless more will be bulldozed in the future. Once the current COAH quotas are met, the next round will call for even more housing.
All of this is being done because long ago the justices of the New Jersey Supreme Court decided that the people who pay their salaries are a bunch of narrow-minded bigots and unrepentant racists. The same is true of the court's decision in the Abbott vs. Burke school funding cases. Thanks to those decisions, the court took over school funding decisions. As a result, more than half of state aid goes to 31 heavily Democratic and heavily urban "Abbott" school districts, while the remaining 580 school districts get to split up the rest.
Lesniak won't be leading the revolt against that decision though. Most of the Abbott districts just happen to be located in his backyard. In fact, his backyard is literally in one such school district. The Elizabeth school district gets more state aid than all of the school districts in Morris County combined.
So don't hold your breath waiting for the Democrats to end that aspect of the war on suburbia. They've already declared victory.
Original Referenced Link
My Commentary:
Posted by Zemack on 05/16/08 at 9:09PM
There is no question in my mind that the Mount Laurel decision that led to the COAH was prompted by widespread exclusionary municipal zoning practices that froze out large segments of homebuyers. Rather than another COAH mandate, though, what should be questioned is the very government zoning and land-use power that is at the root of the problem. Rolling back the so-called "home rule" powers of local governments, not the shifting of those powers to the state, is the answer.
Had local government's not interfered with the economic activities relating to the housing market, there would have been much greater availability of housing at much lower prices than we currently have. (There are a number of causes for the affordable housing crisis in NJ, but restrictive zoning and planning board practices is a major one.) By imposing these restrictions on land use, property owners are effectively barred from selling their land at market prices, builders from constructing housing to meet market demand, and potential buyers are frozen out of the market by artificially inflated prices and lack of supply in many locations.
This is not to say that government doesn't have a role, but that role is rooted in the American principle that government's proper function is to protect the rights of its citizens. When local groups use municipal zoning powers to impose land-use restrictions...whether for reasons of race, income level, preserving the "quality of life" of existing residents, esthetics, or to impose their own utopian vision of what the "character" of "their" town should look like, etc...they are violating the individual rights, including property rights, of property owners, builders, and homebuyers. (Never mind the "rights" of the local groups. Rights belong to individuals, and only individuals. There is no such thing as group rights.)
This does not mean that builders and property owners can do as they please regardless of the consequences to others. The builder cannot, for example, design his project so as to allow stormwater runoff to flood adjacent properties...or install insufficient sanitary waste removal facilities that can contaminate the property of others. In these or similar instances, the government can properly step in to require corrections and the payment of restitution to the affected property owners, as determined in a court of law. But as long as the builder causes no physical harm to the property or lives of others, he has violated no one's rights and thus should be free to build according to his best market judgement.
There is a strong demand here in New Jersey for affordable housing. The answer to the housing affordability problem is to eliminate the source of the problem...government impediments. The property and housing markets should be liberated from the tyranny of local "planners" using the illegitimate and un-American zoning powers of municipal governments to create "ideal" communities at the expense of individual rights, and to the exclusion of large segments of the population. So long as no one else's rights are violated, the location, price range, and quantity of residential development should be determined by the voluntary, uncoerced judgements of landowners, homebuilders and homebuyers...i.e., by the free market...and nothing else.
Other Commentary:
Posted by hglindquist on 05/17/08 at 6:44AM
Zemack writes: Never mind the "rights" of the local groups. Rights belong to individuals, and only individuals. There is no such thing as group rights.
Apparently Zemack is unfamiliar with a whole body of law regarding "groups" like corporations.
from http://www.capitalism.org/faq/corporation.htm
Isn't the right to form a corporation, really a "privilege" that can be revoked at whim by the state?
The basis of treating a group of individuals who form a corporation as a single entity are the rights of the individuals who make up the corporation, i.e. the rights of the shareholders, the rights of the corporate officers, the rights of the employees (management, etc.), and the rights of all individuals who choose to trade with that corporation under the terms of the corporate agreement. The right to form a corporation is not a "privilege" as socialists allege, but is an inalienable right.
The definition of a corporation as "An artificial person or legal entity created by or under the authority of the laws of a state" (Blacks Law Dictionary) is only valid when one understands that the laws of any proper state are based on the principle of rights. The point is that the state has no authority to violate rights.
I like that: The right to form a corporation is not a "privilege" as socialists allege, but is an inalienable right.
My Commentary:
Posted by Zemack on 05/17/08 at 5:44PM
Precisely, hglindquest.
Notice that the definitions you reference validate my contention that the group...the corporation, in this instance...possesses no rights, separate and apart from the individuals that comprise it. An individual neither forfeits his rights, nor acquires new rights, by joining a corporation. Each individual maintains his rights, which are inalienable. The corporation, as such, has no rights. It merely acts according to the authority delegated to it by the individual members, who themselves act together by mutual consent to mutual advantage. The concept of inalienable rights...rights possessed by all individuals, equally, and at all times...remains inviolate.
This is not so, in regards to municipal corporations under current law, though. And that's the problem. This relates to the crucial difference between private and governmental entities. Municipalities are governmental entities, and as such possess what no private corporation or group possesses...the power of legalized force and compulsion. Municipal zoning and land use authority conveys on certain individuals the extraordinary power to violate the rights of other residents, thus rendering the concept of inalienable individual rights inoperative. This state of affairs is more consistent with medieval feudalism than American principles.
My argument is not to say that municipalities do not possess these powers, but that they should not possess them. As is quoted in your reference, "The point is that the state has no authority to violate rights."
But that is precisely what local governments do! The NJ Supreme Court was right to address this issue, but their solution was worse than the disease. Rather than grant to the state the power to impose housing mandates on local communities, they should instead have rolled back the "home rule" authority of towns to arbitrarily block the construction of the low and moderate income housing that the market demands.
Are Democrats making peace with the 'burbs?
Posted by Paul Mulshine May 14, 2008 8:00PM
The Democrats need to end the war.
The war against the suburbs, I mean. It's getting out of hand.
"We're discouraging jobs in this economy," says state Sen. Ray Lesniak. "It's dumb. Stupid, stupid, stupid."
Lesniak, who is a Democrat, was talking about the latest affordable-housing scheme. The Corzine administration recently signed off on new Council on Affordable Housing regulations that call for more than 100,000 new housing units to be shoehorned into the suburbs. Worse, the plan lists parks, schoolyards and even the Garden State Parkway right-of-way as available for development. And even worse than that, the Democrats plan to send the bill for much of this construction to anyone who wants to build a new business in the state.
That's what set Lesniak off. Though he himself is a city-dwelling Democrat - he lives in Elizabeth - Lesniak realizes that the COAH plan amounts to nothing less than a declaration of war on new business. His "stupid, stupid, stupid" comment was directed at the part of the plan that would make any new business moving into the state responsible for paying to build housing proportional to the number of new employees.
Even without the new regs, it's hard enough to get new businesses to locate in the state, says Michael McGuinness, who heads the state chapter of the National Association of Industrial and Office Properties.
"The proposed rules are real deal killers," said McGuinness. "We're not aware of similar affordable housing fees in other states, so it makes us less competitive."
That's only one reason the 1985 Fair Housing Act, which set up COAH, needs "a total overhaul," Lesniak said.
"Right now it's a very poor planning tool," he said. "It contributes to sprawl, increases infrastructure needs and increases the unaffordability of the state of New Jersey."
Indeed it does. But the Legislature may be powerless to do anything about it. The war on the suburbs originated in the state Supreme Court, not in the Legislature. Way back in the disco era, the seven justices of the court decided to straighten out suburbia by taking over both zoning and school funding. Since then, every effort by the Legislature to take back control has been rejected by the justices.
I predicted to the senator that the court would reject his reforms as well. Then what?
He's ready to take the nuclear option, that's what.
"If we adopt a plan that provides affordable housing where the jobs are and where the mass transit is and the court says that's unconstitutional, I would support a constitutional amendment," he said.
Such an amendment has long been pushed by state Sen. Gerry Cardinale, a conservative Republican from Bergen County. If the Democrats decided to put such an amendment on the ballot, said Lesniak, it "would pass overwhelmingly."
At that point, the suburbs would be free of the effects of the court's 1975 Mount Laurel ruling, the disastrous decision that started all of this. In the fuzzy memories of most liberals, the court was forced to reject Mount Laurel's zoning code because the town fathers had engaged in exclusionary zoning to keep minorities and poor people out.
In fact, that "exclusionary" zoning code permitted a housing density of more than four units per acre. That's a density roughly equal to the neighborhoods in Lesniak's own Elizabeth.
And here's a memorable line from that decision: "No forests or small towns need be paved over and covered with high-rise apartments as a result of today's decision."
Countless forests have been felled since then for the condos and townhouses required by the court. And countless more will be bulldozed in the future. Once the current COAH quotas are met, the next round will call for even more housing.
All of this is being done because long ago the justices of the New Jersey Supreme Court decided that the people who pay their salaries are a bunch of narrow-minded bigots and unrepentant racists. The same is true of the court's decision in the Abbott vs. Burke school funding cases. Thanks to those decisions, the court took over school funding decisions. As a result, more than half of state aid goes to 31 heavily Democratic and heavily urban "Abbott" school districts, while the remaining 580 school districts get to split up the rest.
Lesniak won't be leading the revolt against that decision though. Most of the Abbott districts just happen to be located in his backyard. In fact, his backyard is literally in one such school district. The Elizabeth school district gets more state aid than all of the school districts in Morris County combined.
So don't hold your breath waiting for the Democrats to end that aspect of the war on suburbia. They've already declared victory.
Original Referenced Link
My Commentary:
Posted by Zemack on 05/16/08 at 9:09PM
There is no question in my mind that the Mount Laurel decision that led to the COAH was prompted by widespread exclusionary municipal zoning practices that froze out large segments of homebuyers. Rather than another COAH mandate, though, what should be questioned is the very government zoning and land-use power that is at the root of the problem. Rolling back the so-called "home rule" powers of local governments, not the shifting of those powers to the state, is the answer.
Had local government's not interfered with the economic activities relating to the housing market, there would have been much greater availability of housing at much lower prices than we currently have. (There are a number of causes for the affordable housing crisis in NJ, but restrictive zoning and planning board practices is a major one.) By imposing these restrictions on land use, property owners are effectively barred from selling their land at market prices, builders from constructing housing to meet market demand, and potential buyers are frozen out of the market by artificially inflated prices and lack of supply in many locations.
This is not to say that government doesn't have a role, but that role is rooted in the American principle that government's proper function is to protect the rights of its citizens. When local groups use municipal zoning powers to impose land-use restrictions...whether for reasons of race, income level, preserving the "quality of life" of existing residents, esthetics, or to impose their own utopian vision of what the "character" of "their" town should look like, etc...they are violating the individual rights, including property rights, of property owners, builders, and homebuyers. (Never mind the "rights" of the local groups. Rights belong to individuals, and only individuals. There is no such thing as group rights.)
This does not mean that builders and property owners can do as they please regardless of the consequences to others. The builder cannot, for example, design his project so as to allow stormwater runoff to flood adjacent properties...or install insufficient sanitary waste removal facilities that can contaminate the property of others. In these or similar instances, the government can properly step in to require corrections and the payment of restitution to the affected property owners, as determined in a court of law. But as long as the builder causes no physical harm to the property or lives of others, he has violated no one's rights and thus should be free to build according to his best market judgement.
There is a strong demand here in New Jersey for affordable housing. The answer to the housing affordability problem is to eliminate the source of the problem...government impediments. The property and housing markets should be liberated from the tyranny of local "planners" using the illegitimate and un-American zoning powers of municipal governments to create "ideal" communities at the expense of individual rights, and to the exclusion of large segments of the population. So long as no one else's rights are violated, the location, price range, and quantity of residential development should be determined by the voluntary, uncoerced judgements of landowners, homebuilders and homebuyers...i.e., by the free market...and nothing else.
Other Commentary:
Posted by hglindquist on 05/17/08 at 6:44AM
Zemack writes: Never mind the "rights" of the local groups. Rights belong to individuals, and only individuals. There is no such thing as group rights.
Apparently Zemack is unfamiliar with a whole body of law regarding "groups" like corporations.
from http://www.capitalism.org/faq/corporation.htm
Isn't the right to form a corporation, really a "privilege" that can be revoked at whim by the state?
The basis of treating a group of individuals who form a corporation as a single entity are the rights of the individuals who make up the corporation, i.e. the rights of the shareholders, the rights of the corporate officers, the rights of the employees (management, etc.), and the rights of all individuals who choose to trade with that corporation under the terms of the corporate agreement. The right to form a corporation is not a "privilege" as socialists allege, but is an inalienable right.
The definition of a corporation as "An artificial person or legal entity created by or under the authority of the laws of a state" (Blacks Law Dictionary) is only valid when one understands that the laws of any proper state are based on the principle of rights. The point is that the state has no authority to violate rights.
I like that: The right to form a corporation is not a "privilege" as socialists allege, but is an inalienable right.
My Commentary:
Posted by Zemack on 05/17/08 at 5:44PM
Precisely, hglindquest.
Notice that the definitions you reference validate my contention that the group...the corporation, in this instance...possesses no rights, separate and apart from the individuals that comprise it. An individual neither forfeits his rights, nor acquires new rights, by joining a corporation. Each individual maintains his rights, which are inalienable. The corporation, as such, has no rights. It merely acts according to the authority delegated to it by the individual members, who themselves act together by mutual consent to mutual advantage. The concept of inalienable rights...rights possessed by all individuals, equally, and at all times...remains inviolate.
This is not so, in regards to municipal corporations under current law, though. And that's the problem. This relates to the crucial difference between private and governmental entities. Municipalities are governmental entities, and as such possess what no private corporation or group possesses...the power of legalized force and compulsion. Municipal zoning and land use authority conveys on certain individuals the extraordinary power to violate the rights of other residents, thus rendering the concept of inalienable individual rights inoperative. This state of affairs is more consistent with medieval feudalism than American principles.
My argument is not to say that municipalities do not possess these powers, but that they should not possess them. As is quoted in your reference, "The point is that the state has no authority to violate rights."
But that is precisely what local governments do! The NJ Supreme Court was right to address this issue, but their solution was worse than the disease. Rather than grant to the state the power to impose housing mandates on local communities, they should instead have rolled back the "home rule" authority of towns to arbitrarily block the construction of the low and moderate income housing that the market demands.
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