The Coming Rental Housing Crisis

In a 6/26/10 editorial, Stop dreaming: Home ownership is not for everyone, the Wall Street-bashing NJ Star-Ledger acknowledged that government policies brought about the financial crisis. They wrote:

"Owning your own home has been part of the American Dream for decades. But what if home ownership isn’t for everyone?

"Sheila Bair, president of the FDIC, had the guts to raise exactly that question recently before a group of nonprofit housing developers. Gutsy, and long overdue. As we’ve witnessed over the past few years, helping people buy homes they could not afford did them no favor and helped bring on our financial crisis."

I left the following comments:

zemack June 26, 2010 at 11:42AM
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So, the Star-Ledger wants us to “stop dreaming”. OK, then. Are American liberals ready to let go of their utopian dream of central economic planning?

The federal government’s affordable housing crusade began under FDR with the creation of agencies such as Fannie Mae, which killed off the originate-and-hold bank mortgage lending model in favor of originate-and-sell. Over the decades, through regulations, tax policies, government guarantees, political pressure, Federal Reserve monetary policies, and so on, layers upon layers of government interference was built up in the housing and mortgage markets. The purpose, as the Editors point out, was to expand homeownership.

The financial crisis we’re still not out of was the culmination of these government policies. I’m glad to see that acknowledged here. Never mind the irresponsible lenders and borrowers. They are culpable, but they are minor “moving parts” and are just convenient scapegoats. The private players represent merely the consequential face of this crisis. The fundamental cause was yet another failure of central economic planning. Without the government's housing and monetary policies, this crisis simply could not have happened.

I never cease to be astounded by how often the Star-ledger correctly identifies a problem, and then misses the obvious conclusion. The lessons of 150 years of central planning’s failures continues to multiply. So, do we get a call for an end to the government market interventions that the Editors finally admit was the cause of our problems? No, we get vastly expanded government control under the cover of “financial regulatory reform”. And do we get a call for an end to the homeownership crusade? No, trhe market distortions remain, and we get a call to make the same policy mistakes in the rental housing market!

To fix the problems the government itself caused, we reward the government with more power. The entire financial system right down to the consumer ATM transaction will be forced into a bureaucratic straightjacket under a powerful new central planning maze. The financial industry will be private in name only, as is typical under fascism. Then our brand new affordable rental housing crusade will establish the groundwork for yet another crisis that will not be allowed to go to waste. Then we will see de facto nationalization turn into outright nationalization, the final step and ultimate goal of the socialists.

The Editors dream on, and the nightmare approaches.

Lessons of 1929

The New Jersey Star-Ledger has posted an editorial on 10/29/09, entitled Stock market crash anniversary: Lessons unlearned. They wrote:

"In the years that followed [1929], economists, politicians and Wall Street’s overpaid optimists assured one and all they’d learned from the orgy of greed and excess. It wouldn’t happen again. The Feds had saved the system and put new regulations in place to prevent a repeat. Trust us, they said. And in our ignorance, we did.

"Over time, the lessons of 1929 were made to seem irrelevant and outdated, especially in the go-go economic climate of the 1980s. Layer by layer, 1930s regulations were stripped away. Under pressure from Wall Street, free-market fundamentalists and their acolytes in the press, deregulation was promoted and accepted — by Democrats as well as Republicans — as vital in the emerging global economy.

"The 1929-2009 parallels don’t end there. Post-1929 Wall Street’s leaders fought regulation fiercely; likewise their current-day descendants. Whether it’s regulation of derivatives (the value of which few buyers or sellers understood), higher bank capital requirements, or protection for consumers, Wall Street’s current captains of capitalism are against it.

"Will they win Congress to their side? When have they not? There’s much talk of the need to tighten the reins on Wall Street, especially the trading of billlions [sic] in securities backed by such uncertain assets as mortgages and credit card debt. But legislation remains stalled.

"In this country, Paul Volker has sounded the "too-big" warning. And he’s called for reinstating Glass-Steagall. Volker’s the guy who broke the 1980-81 inflationary recession and set the stage for a generation-long economic expansion.

"Maybe we should listen. Beats laying another egg."

Here is my commentary:

Posted by zemack
October 29, 2009, 8:09PM

Substitute the words “Wall Street” with the name of any ethnic group, and the injustice and bigotry implied in the use of that scapegoat become obvious. Throw in the undefinablely vague bogeymen “greed and excess”, and you’ve got the classic one-two punch beloved of all statists. That’s all they need to whitewash the real causes of the litany of economic catastrophes listed by the Editors.

The Fed’s excess money and credit expansion and then contraction fueled the stock market bubble and crash of the late 1920s. The crash, however, did not cause the depression. The market began to recover almost immediately, just like after the much larger 1987 crash. But unlike 1987, the rally ensued until mid-1930 when the Smoot-Hawley tariff act, the first of a series of disastrous government attempts to “save” the economy, was enacted. As the farm economy subsequently contracted, bank after bank collapsed under the weight of anti-branching, anti-diversification rules and other incompetent banking regulations. The Fed-engineered 30% shrinking of the money supply, massive “public works” projects that further drained capital from the economy, massive tax hikes, etc., etc., etc, crushed the economy. The Hoover-Roosevelt Depression was on. The power-hungry, mad economic scientists of the FDR administration, building on the policy foundation of the statist Herbert Hoover, then embarked upon a crippling array of actions that stretched the depression right through the end of WW II. If ever there could be proof of the failure of government economic intervention, this period of American history is the poster child.

But as the Editors say, we haven’t learned much. The S&L fiasco was brought on by the grossly misnamed Federal Deposit “Insurance” Corporation, a socialist-like scheme that promotes risky bank lending while draining responsible banks, their depositors, and taxpayers who bail them out (the so-called privatization of profits and the socialization of losses).

The current crisis is unequivocally “made in Washington”. Deregulation? Who controls money, the raw material of the banking industry? Who sets reserve requirements, interest rates, accounting standards, and every other conceivable aspect of finance? Exactly what regulatory authority did the government rescind during the alleged “deregulation” wave of the past quarter century? Repeal of Glass-Steagall is the only thing the Editors can point to, and it was not even culpable in the meltdown. Regulation actually increased on the banks (remember Sarbanes-Oxley?).

“Captains of capitalism”? Where does anyone see capitalism? The financial sector is the most heavily regulated American industry, operating under the thumb of a central bank money monopoly. The fed, in fact, is once again the prime culprit. Led by a central planning statist masquerading as a “free market fundamentalist”, the Fed pursued extraordinarily easy money policies without which the basic cause of the recession, the housing bubble, couldn’t have happened. As always, excessive risk-taking is merely a consequence of incompetent Federal Reserve policy. Fannie & Freddie, the FDIC, the CRA, the government’s very own “Too big to fail” policies, and the Clinton/Bush affordable housing crusades, among other things, did the rest.

As to Paul Volcker, I disagree on reinstatement of Glass-Steagall. The diversification enabled by its repeal fosters stronger institutions. What should be repealed is the government’s bailout addiction, which encourages to big to fail “mastodons of the market [like] JP Morgan Chase and Goldman Sachs…” As to Volcker being “the guy who broke the 1980-81 inflationary recession and set the stage for a generation-long economic expansion”, the Editors conveniently forget that he caved in to election year pressure from the Carter administration in the spring of 1980, abruptly reversing course and setting the stage for an even worse “second dip” in the recession. As BanditGuy points out, it was President Reagan who gave Volcker political cover to return to some semblance of sound monetary policy, at great political cost to himself.

Some vague notions of “Wall Street” and “greed” are all the Star-Ledger editors have to hang their hats on. Everywhere one looks, one sees the hand of government intervention making a mockery of free markets. The real lessons of the past century are a history of catastrophic government policies creating economic havoc, with freedom and capitalism getting the blame, leading to more government controls, and so on. The current Washington assault on individual rights, the constitution, the rule of law, and the remnants of free markets is a continuation of the same disastrous trend, “on steroids”.

"A nation / One Body" - the Enemy's Decaying Intellectual Corpse

Subsequent to my comments, another correspondent left this in the Star-Ledger Reader Forum. This discussion was the subject of my post of 8/4/09.

HSR0601 wrote, in part:

"U.S. health care consumers are usually one step removed from the cost because they are covered by employer-provided insurance, which might operate as a formula for a slow pace of transfer, along with the code of mandate.

"All free states as a nation / one body, and a fundamental human right, cover all their people. The debate about a human right, or public policy
in America is puzzling them now."

My commentary:

Posted by Zemack on 08/08/09 at 7:23PM

The fundamental conflict of the health care debate comes down to the age-old battle of collectivism vs. individualism. HSR0601 argues for the collectivist side:

"All free states as a nation / one body, and a fundamental human right, cover all their people."

"Slavery", in other words, "is freedom". The idea that there is a "fundamental human right" to any man-made product such as healthcare depends on the view of human beings as interchangeable cells in some super-organism, or ants in a hill colony, or "a nation / one body". The collectivist notion of "one body" is a floating abstraction with no basis in reality. Any group such as a nation, or society, or the public consists of independent, autonomous, individual human beings...each with his own stomach, heart, goals, values, character, and mind.

Collectivism serves a sinister purpose, though. Consider what the alleged "right" to health care actually means in practice.

If someone requires medical care, then the doctors, nurses, pharmaceutical and device makers, etc., must be legally obligated (i.e., compelled) to provide their services to that person. Likewise, that person's neighbor, or the guy 3000 miles away, must be legally obligated to pay for his treatment. In other words, the providers whose skills make medical care possible, as well as those whose taxes pay for it, are serfs. There is no other way. That is why the alleged "right" to health care requires a government takeover of the medical field...to give the state the power to loot and enslave the people. We would all become both slaves and moochers.

HSR0601s "a nation / one body" argument is a cover to justify...on the altruist grounds that "we are our brothers', and our sisters', keepers", as the president likes to say...the grab for unearned goods and control over other people's lives. Collectivism is the doctrine by, for, and of the parasites and the power-lusters. It's incredible that, after Soviet Russia, Nazi Germany, Red China, and all of the lesser variants of collectivism, this idea can still be taken seriously.

We don't need the third-party-payer system, which empowers insurers; or the mandates and interstate trade barriers, which cripple the insurance industry; or Medicare, Medicaid, SCHIP, EMTALA, etc, which empower government bureaucrats and enslave all to all. We need to abolish the current semi-socialized, semi-fascist, government regulated system, in favor of the only moral alternative - freedom (the real kind), individual rights, a rights-protecting government, and free markets in medicine.

Thomas Jefferson On Independence Day

The Letters of Thomas Jefferson: 1743-1826
LAST LETTER: APOTHEOSIS OF LIBERTY

To Roger C. Weightman, Monticello, June 24, 1826

RESPECTED SIR, --

The kind invitation I receive from you, on the part of the citizens of the city of Washington, to be present with them at their celebration on the fiftieth anniversary of American Independence, as one of the surviving signers of an instrument pregnant with our own, and the fate of the world, is most flattering to myself, and heightened by the honorable accompaniment proposed for the comfort of such a journey. It adds sensibly to the sufferings of sickness, to be deprived by it of a personal participation in the rejoicings of that day. But acquiescence is a duty, under circumstances not placed among those we are permitted to control. I should, indeed, with peculiar delight, have met and exchanged there congratulations personally with the small band, the remnant of that host of worthies, who joined with us on that day, in the bold and doubtful election we were to make for our country, between submission or the sword; and to have enjoyed with them the consolatory fact, that our fellow citizens, after half a century of experience and prosperity, continue to approve the choice we made. May it be to the world, what I believe it will be, (to some parts sooner, to others later, but finally to all,) the signal of arousing men to burst the chains under which monkish ignorance and superstition had persuaded them to bind themselves, and to assume the blessings and security of self-government. That form which we have substituted, restores the free right to the unbounded exercise of reason and freedom of opinion. All eyes are opened, or opening, to the rights of man. The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God. These are grounds of hope for others. For ourselves, let the annual return of this day forever refresh our recollections of these rights, and an undiminished devotion to them.

I will ask permission here to express the pleasure with which I should have met my ancient neighbors of the city of Washington and its vicinities, with whom I passed so many years of a pleasing social intercourse; an intercourse which so much relieved the anxieties of the public cares, and left impressions so deeply engraved in my affections, as never to be forgotten. With my regret that ill health forbids me the gratification of an acceptance, be pleased to receive for yourself, and those for whom you write, the assurance of my highest respect and friendly attachments.

Happy Independence Day,

Dionne on Sotomayor Nomination

Obama's Anti-Roberts, by E.J. Dionne in the Washington Post, May 28, 2009.

Excerpts:

"Republicans would be foolish to fight the nomination of Judge Sonia Sotomayor to the U.S. Supreme Court because she is the most conservative choice that President Obama could have made.

"And even though they should support her confirmation, liberals would be foolish to embrace Sotomayor as one of their own because her record is clearly that of a moderate.

"In this battle, it's important to separate Obama's reasons for choosing Sotomayor from her actual record. He was drawn to her not simply because the politics of naming the first Latina justice were irresistible, but also because he saw her as the precise opposite of Chief Justice John Roberts.

"In his September 2005 speech explaining his vote against Roberts, Obama argued that 95 percent of court cases are easily settled on the basis of the law and precedent. But in 'those 5 percent of hard cases,' Obama said, the 'legal process alone will not lead you to a rule of decision' and 'the critical ingredient is supplied by what is in the judge's heart.' "

My Commentary, posted on 5/29/2009 at 9:08:42 PM

Zemack wrote:
The crucial issue here is not whether Ms. Sotomayor is a liberal, conservative, or Hispanic or a woman. The real issue is President Obama’s judicial philosophy, which is an assault on a key founding principle of the United States and the foundation of justice. On May 1, 2009, the president said:

“... [J]ustice isn't about some abstract legal theory or footnote in a case book.

“I view that quality of empathy, of understanding and identifying with people's hopes and struggles as an essential ingredient for arriving at just decisions and outcomes.”

His nominee, Sonia Sotomayor, said the following in a 2001 California Berkeley School of Law
speech:

“…“[T]he aspiration to impartiality is just that–it’s an aspiration…

“There is no objective stance but only a series of perspectives,”

What this means is that a judge may, on any subjective whim, side-step the objective reliance on law and facts and substitute his own emotions in rendering a decision. What America since its founding has been guided by [is] the principle of “a government of laws and not of men”. President Obama’s historic precedent is to say, “not anymore”.

Never mind that “only” the most complex 5% of the cases will be affected. Once the arbitrary supplants the objective, the whole judicial system becomes an emotional crapshoot. How do the antagonists in a court case decide when to settle out of court when the only valid frame of reference, the law and the facts, can be rendered meaningless at any time by some judge’s “perspectives”? How does one prepare to enter a court of law governed by judges who can act at any time – not as an impartial arbiter of objective facts and law – but on what happens to just “feel right”? How can one ever know whether he will be a part of some imaginary 95%, or the other 5%? How can one ever know if he as an objective shot at justice? What’s the point of having courts at all, if impartiality is “just an aspiration” rather than a solemn pledge?

If Obama believes that the “disadvantaged” deserving of “empathy” would somehow benefit from the breakdown of objective law and equal, blind justice, he should think again. “A government of men” is tyranny, and the greatest victims of tyranny throughout history have always been the average citizen. America, the “government of laws”, has always been a place of achievement for the “little guy”, precisely because of the equal protection under the law that he can count on.

If Obama’s judicial philosophy takes hold, it can no more be contained to just 5% of the judiciary than cancer cells can be contained in the body. The road to tyranny begins with small first steps. President Obama has taken a scary first step down that ancient road of the rule of men rather than laws.

This issue transcends the liberal-conservative, democrat-republican divide. A judge has a legal, professional, and, especially, a moral duty to make the utmost effort to prevent personal feelings from impinging upon the rigorous adherence to facts and law…no matter how complex the case. Judge Sotomayor’s rejection of objectivity and impartiality renders her unfit for the Supreme Court. And President Obama must be sent a strong message by congress: The dignity of the judicial process must be preserved. The future of America depends on it.

When justice is transformed from an objective absolute into a ball of putty, there is no justice at all. Sonia Sotomayor should not be confirmed.

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.

"Empathy" and Obama's Judicial Philosophy--Star-Ledger Reader Forum

The following letter was published in the New Jersey Star-Ledger on 5/15/09. My comments follow, and you can read my blog post at Principled Perspectives for more.

Empathy is needed

I was nauseated reading Kevin O'Brien's recent op-ed article ("You won't find 'empathy' in the Constitution," May 8).

O'Brien objects to President Obama's stated desire to replace retiring Supreme Court Associate Justice David Souter with an individual who feels empathy with suffering Americans. O'Brien feels empathy has no place in government, and that " equal protection under the law, which is a bedrock of American jurisprudence," precludes officials from entertaining feelings of empathy. O'Brien opines that "empathy assumes partiality." Was the Bush administration showing partiality toward Halliburton when it awarded the contractor -- which was formerly headed by former vice president Dick Cheney -- so many lucrative no-bid contracts? Did Valerie Plame enjoy equal protection under the law when Scooter Libby was pardoned by President George W. Bush after publicly exposing the undercover CIA agent? Did the wealthier elements of American society enjoy empathetic treatment by the Republicans when their taxes were slashed, and America rolled up a humongous deficit as Bush attempted to conquer the world?

Every administration is characterized by empathetic feelings toward one segment of society or another.

It just so happens that after eight years of Republican empathy for the elite, America now has a president who feels empathy toward the larger mass of humanity that doesn't enjoy the wealth the richest one percent of society possesses.

Bill Gottdenker, Mountainside

My Commentary:

Posted by Zemack on 05/16/09 at 8:04PM

Bill Gottdenker needs to refresh his understanding of history. One of history's greatest achievement's is the founding of a nation...the United States of America...on the principle of "a government of laws, and not of men". That principle is, sadly, being steadily eroded as government increases its power and control.

The erosion of that American principle has, indeed, resulted in a mixed economy in which "Every administration is characterized by empathetic feelings toward one segment of society or another." We have become a nation of warring special interest pressure groups fighting (non-violently, so far) for the levers of government power, in order to gain through force some economic advantage that it cannot get voluntarily in the private market...each at the expense of others. This non-violent "civil war" is what happens when the objective rule of law breaks down, and the arbitrary whims of government officials and politicians...a "government of men"...takes over.

Now President Obama wants to undermine and corrupt our courts by inserting the arbitrary emotional whims...the "empathy"...of judges as a substitute for facts, logic, and objective law. This is a highly dangerous development and a major threat to justice. Mr. Gottdenker seems to believe that "the larger mass of humanity" would somehow benefit from the breakdown of objective law and equal, blind justice. But "a government of men" is tyranny, and the greatest victims of tyranny throughout history have always been the average citizen. America, the "government of laws", has always been a place of achievement for the "little guy", precisely because of the equal protection under the law that he can count on.

No, it hasn't been perfect or always consistently practiced. Nevertheless, a government of laws and not of men is an indespensable protector of "the larger mass of humanity". Inverting that principle leads to the rule of brutality, and Obama has taken us a major step down that dark road.

Tea Parties Past and Present

From the Star-Ledger Reader Forum, April 22, 2009

Letter #1

Defends tea partyers
I object vehemently to the charges by reader Lawrence Uniglicht in his letter to the Readers Forum, ("No tea for me, thank you," April 18) that all those protesting increases in taxes and an overspending government are malcontents and clowns. I suggest people look at Govs. Jim McGreevey and Jon Corzine, and Sens. Frank Lautenberg and Robert Menendez if they want to see clowns.

The protesters did not throw tea into Boston Harbor to start a war with England, but peacefully assembled to protest a fearful trend by a Democratic Congress and administration to take away our constitutional right to life, liberty, and the pursuit of happiness that our founders fought so hard to win. Protesters were from all walks of life. They did not break store windows, overturn and set fires to cars, or fight with the police. They personified what Americans are -- hard-working, law-abiding, and moral citizens.

As for constructive ideas from the Republicans, tea party opponents should know there were many proposals that were denied by the Democrats in Congress, mainly because they would be successful in restoring the economy to the way it was before 2006. That was the year the left-wing voted in a Democratic Congress, and we have been sinking toward socialism ever since.
-- Richard A. Ketay, Newark

Letter #2

History doesn't repeat
Once again, the American people are responding like sheep. A case in point is the recent "tea parties" across the country.

Had protesters been paying attention, they would realize the tax rate on the wealthy will only increase from 36-39 percent, far below the 90 percent rate under President Dwight Eisenhower.

The nationwide tea party, which was created to oppose taxation, borrowed its name from the Boston Tea Party. As a history teacher, let me take the opportunity to remind the American public that the Boston Tea Party was not about taxes. It was staged to protest the monopoly being granted to the East India Tea Company by Prime Minster Lord North, who was a primary investor in the company.
-- James O'Brien, Bayonne

My Commentary:

Posted by Zemack on 04/22/09 at 7:23PM
James O'Brien, the history teacher, doesn't understand the significance of today's Tea Parties, or of the philosophical common denominator linking them to the original Boston Tea Party. Richard A. Ketay does. The fundamental principle linking both across a span of centuries is a profoundly moral one...the uniquely American concept that the individual's life is his and does not belong to any "higher power" such as a king, warlord, democratic majority, state, priest, president, or ayatollah. That principle is embodied in the doctrine of unalienable individual rights to life, liberty, property, and the pursuit of happiness.

The concrete issues are different, but the principle is the same. Any government-imposed monopoly such as the East India Tea Company is a violation of individual rights because it forcibly bans individuals from exercising their liberty to promote their lives through the freedom of production and trade in a particular market. Today's protestors are not concerned with some narrow issue such as 3% in the income tax code. Rather, the massive confiscation of wealth through deficit spending and the forced transfer of wealth to politically connected failed corporations and irresponsible mortgage borrowers are what concern the protestors. This will be paid for either through direct, massive tax increases or through the inflationary back door...the confiscation of the purchasing power of our money through the government printing press.

Worse still is the use of the financial crisis as a cover for a breathtaking dictatorial economic power grab by government through its regulatory apparatus. This, despite the fact that it was the massive buildup over the years of government interference in the housing and mortgage markets, as well as the central bank money monopoly called the federal reserve system, that caused the crisis to begin with. The statist policies of Bush and Obama are a direct assault on America's founding principles of individual rights and a government limited to protecting those rights.

I find it fascinating that Mr. O,Brien chooses to call today's protestors "sheep" for rising to defend individual rights, which means the right and responsibility of each of us to take charge of our own lives. In contrast, President Obama constantly demands that we suspend our own judgement and our selfish concern for our rights (the "old, stale" arguments, as he puts it) in order to "come together" to solve our nations problems. This language is a euphemism for relinquishing control of our lives to central planning ideologues who seek to consolidate federal control over private contracts and corporate governance, energy, healthcare, education, food production, finance and investments, etc.

Who are the real sheep? It is certainly not the Tea Party protestors, many if not most of whom are attempting to build an individual rights coalition to push back against the rising tide of statism sweeping Washington, D.C.

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.

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.

Dionne on "Extreme Individualism"

Old, True and Radical

By E. J. Dionne Jr.
Thursday, January 22, 2009; Page A17

President Obama intends to use conservative values for progressive ends. He will cast extreme individualism as an infantile approach to politics that must be supplanted by a more adult sense of personal and collective responsibility. He will honor government's role in our democracy and not degrade it. He wants America to lead the world, but as much by example as by force.

And in trying to do all these things, he will confuse a lot of people.

One of the wondrous aspects of Obama's inaugural address is the extent to which those on the left and those on the right both claimed our new president as their own.

Many conservatives were eager to argue that Obama is destined to disappoint his friends on the left because the president who now wields power will be far more careful than the candidate who deployed rhetoric so ecstatically.

Their evidence included Obama's stout defense of old-fashioned values -- "honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism."

"These things are old," Obama declared. "These things are true." It was one of the most powerfully conservative sentiments ever to pass any president's lips.

But note the nature of that list: "Tolerance and curiosity," in particular, are values notoriously associated with the adventurous, with those who seek out the new and the novel. "Hard work" and "fair play" have long been invoked by egalitarians on behalf of the salt of the earth.

And Obama told us, straight out, the ends toward which he was conscripting the old virtues: "They have been the quiet force of progress throughout our history."

That emphasis on progress pervaded what was in many ways a radical speech. Obama clearly broke with the conservative past, more recently associated with George W. Bush and more distantly with Ronald Reagan.

As he has done so often, Obama pronounced debates about the size of government irrelevant. What matters is "whether it works." Quietly but purposefully, he was overturning the Reagan revolution.

He announced the repeal of the Bush-Cheney approach to domestic security with these words: "We reject as false the choice between our safety and our ideals." And while celebrating America's power, he broke with the past again by saying "that our power alone cannot protect us, nor does it entitle us to do as we please."

Finally, American presidents rarely ask explicitly whether "the market is a force for good or ill." Obama acknowledged its "power to generate wealth and expand freedom" but warned that without regulation, the market could "spin out of control." He also counseled against rampant inequality, insisting that "the nation cannot prosper long when it favors only the prosperous."

What makes Obama a radical, albeit of the careful and deliberate variety, is his effort to reverse the two kinds of extreme individualism that have permeated the American political soul for perhaps four decades.

He sets his face against the expressive individualism of the 1960s that defined "do your own thing" as the highest form of freedom. On the contrary, Obama speaks of responsibilities, of doing things for others, even of that classic bourgeois obligation, "a parent's willingness to nurture a child."

But he also rejects the economic individualism that took root in the 1980s. He specifically listed "the greed and irresponsibility on the part of some" as a cause for our economic distress. He discounted "the pleasures of riches and fame." He spoke of Americans not as consumers but as citizens. His references to freedom were glowing, but he emphasized our "duties" to preserve it far more than the rights it conveys.

This communitarian vision fits poorly with "the stale political arguments" between liberals and conservatives that Obama condemned, because they are really arguments between these two varieties of individualism. Their quarrel has been fierce not only because of how the two sides differ but also because they share so many assumptions. Family feuds and civil wars can be especially brutal.

For now, each side in the old debate can enlist aspects of Obama's rhetoric in their polemics against the other. But in associating our recent past with "childish things," in insisting that greatness is "never a given" and always "must be earned," Obama is challenging the very basis of their conflict.

It is a worthy fight. It will also be a hard fight to win because rights are so much easier to talk about than duties, and freedom's gifts are always more prized than its obligations.

My Commentary:

Zemack wrote:
President Obama's goals are much more ambitious than Mr. Dionne gives him credit for. It is not merely the Reagan Revolution that he wants to overturn, but the American Revolution.

The fundamental concept upon which America was founded is the principle of unalienable individual rights to life, liberty, property, and the pursuit of each's own welfare and happiness. The term unalienable means that man's rights are inseparable from the individual person and is the standard upon which any free society must be based. It means that his rights do not have to be purchased on the installment plan of service, sacrifice, and duty imposed upon him by "ourselves" (some disembodied collective), the nation, the world, or any leader seeking the prestige of "greatness". Extreme individualism, the unfettered right to live one's life as one sees fit, is the natural consequence of the principle of unalienable rights.

The Founders sought to establish a nation in which extreme individualism can flourish. That is to say, a nation in which each individual is free to think and act on his own judgement (for better or worse), to set his own goals, to reap the rewards of his own productive work, to trade and contract freely and voluntarily with others, and to decide for himself when, whom, and in what capacity to help others.

Never mind Mr. Dionne's reference to the 1960s culture's "individualists" or "the greed and irresponsibility on the part of some". These are straw men. True individualists do not live their lives through others by, say, seeking to be different for the sake of being different. Nor does an individualist use others, through dishonesty, to advance his own interests. An individualist is someone who simply thinks for himself. The Founders recognized the individuality of each and every person, and founded a nation (despite certain flaws) to protect his right to exist.

In attacking "economic individualism", Mr. Dionne strikes directly at the heart of individual rights, particularly the right to life. If one cannot make his own decisions on personal economic matters, which concern his crucial property rights, then he is not free to work to advance his life...to pursue his happiness. The government's proper role in economic matters, as in all matters, is to protect everyone's unalienable individual rights. This means, for example, to protect against and prosecute fraud and deception, and to mediate disputes through the law courts. Otherwise, laissez-faire..."leave us alone"...is the only moral course for government to follow. Short of violating other's rights, which are rights to freedom of action, not to unearned material benefits produced or provided by others, each of us must be left free from governmental regulation (i.e., coercion).

America's founding principles, severely eroded already by decades of growing government power, will be under tremendous assault in the years to come. Barack Obama's (and his supporter’s) determination to silence the opposition by intimidation through such accusations as infantilism, dogmatism, extremism, and cynicism should not be allowed to shut down any debate.

The fundamental choice America faces is collectivism or individualism. Defenders of "extreme individualism"...or unalienable individual rights...have never been more desperately needed in America than they are right now.