Government Action Creates Fair Markets

Actually, it wasn't the government that collectively set labor and health standards. Or for that matter, determined a scope of week weeks, child labor, retirement pensions, profit sharing, or even basic human resource benefits. It was rather the chief efforts of the labor union movements that grew out of the 1870's industrialist cartels and the advent of yellow journalism that brought the excesses of the industrialist cartels to the attention of the emerging middle class.

This point has been argued often and conclusively on Ornery to the point that even people who have strong misgivings or even oppose the current unions today have to admit that the work environment enjoyed by everyone is primarily the result of union activities from the 1900-1950 time range. It was only after unions became a strong political force that the government codified what had already been won by unions for everyone. OSHA would not exist had there not first been unions operating in the private sector demanding employers pay attention to worker safety rights.

As to government reductions in poverty, the CBO has oft notified Congress that the impacts of the social programs that originated with the Great Society have at best plausibly stemmed some poverty. But the unvarnished truth is that the social programs started by and maintained by the government have had no impact on poverty. The periods when people tended to do best more recently include the Reagan, Bush, and Clinton tenures where the growth of the economy combined with reduced social spending actually raised the living standards of the poor in the country and even managed to get people to move beyond Federal poverty standards.

The issue isn't whether the government can mitigate the needs of people on a temporary basis. Because the government can. Look at Katrina and Rita as examples. In unusual circumstances where a free market cannot function, only government action can restore a market and maintain a population until the market recovers. But then again, look at the Katrina and Rita policies that have allowed people to live rent free ever since the hurricanes until now. The unintended consequence of government emergency aid is that the people receiving it often delay or do not even attempt to remove the need for such aid. If you haven't recovered from Katrina or Rita by now, it isn't because the free market has not recovered. It is because you have learned that by your own inaction, the government will secure your needs for you.

What this spending plan amounts to is a mechanism by which disputed or redundant public policy spending items have been bundled together into the ultimate wish list. Cheifly, the items contained in it are those spending items that have Democrat advocates supporting the agendas that are the basis of such spending items. Whether it is a local pork plan to widen a road, build seafaring canoes in Hawaii, or give block grants to ACORN- the majority represents plans and spending agendas that predated President Clinton's declaration that the Era of Big Government was over.

If even Clinton thought these types of spending plans were bad, how then can we now see this jump-start of all things government to be good? If the Patriot Act was a direct attack on our personal freedoms, then surely the stimulus packages of the last 8 months has to represent a direct attack on our market economy and the level of government control that will accrue during the planned disbursement of funds from these plans.

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Making Choices

One of the biggest concerns when making a decision that represents a major change in life is obviously how it effects both yourself and your family. The biggest decision we ever make in our lives is the one we make upon the realization that we alone are responsible for our own choices. Before you ever make any decision of import, you have to first recognize it inherently lies within your own make up the ability to make such a choice.

Many people never reach that point in their lives. While many people wake up one morning with the idea that they can indeed decide for themselves what to do in their lives, many more people probably never make it to that point. It is still not uncommon to come across people who have never left their birthplace or childhood home. They are born, raised, live, and eventually die in the same place. Often these people never make a conscious choice to do so. Rather, the inability to make a choice of life altering consequence is abrogated in exchange for a continuity and ease. It is often easier to make no choice and simply accept what comes to a person without effort.

I am not trying to say that people who never leave their place of origin are all universally incapable of making a life changing decision. The fact is often those people have come to the individual choice that their life altering decision is to indeed remain close to their origin. But the examples offered by many people who never make a major life altering choice are cases such as not wanting to risk making the wrong choice.

It is a big deal to choose to leave home for college for example. The choice to get married. The choice to move from one state or region to another. The choice of leaving a family business for a far flung dream. In these examples, you have a case where the alternatives are often easier and often require no effort on the part of the person making them.

By way of example I offer my sister in law. She and my wife are close in age. They grew up in Warner Robbins, Georgia. Very small military town with little else in the way of culture or uniqueness apart from service industry jobs and the occasional high school football game. Do not think that I consider living in a small town to be silly or provincial. Rather, understand that what I am trying to impart here is her adoption of a small vista by default. There isn’t much to the town except a single street with strip mall after strip mall filled with services that focus on the military community. There are indeed great people who live there by choice. But my sister in law lives there not by choice, but instead she lives there by default.

Yes, her parents live there. Yes, she still lives with some of her friends she grew up with. But when she had the opportunity to make a choice to expand her vista she neither chose to implicitly attempt to expand them or limit them. In a sense life just happened to her. She chose to go to a small college and live at home with her family because she didn’t even consider applying anywhere until it became obvious that her sister who did choose to leave home was becoming a successful college student far from home. She even chose her profession by default.

Many of her choices were not choices at all but rather emulation of her sister on a small scale. She bought a house when my wife did. She bought a car when my wife did. She became a nurse because my wife did. She even planted roses and put up a fence because my wife did. What is really creepy is when she found out that my wife and I were announcing our engagement at Christmas, she went from being the world’s best spinster to not only having a boyfriend, but also being knocked up in the space of two weeks. What is even creepier is she found a man with the same last name as mine.

But I digress. My point in bringing her up is that she is a prime example of a person who has never actually thought about, planned or in any way managed her own choices. The emulation of my wife’s choices by her sister is pathetic ultimately because my sister in law wasn’t making these choices out of personal striving but rather to maintain parity on some level with her sister.

Now compare that to how my wife did things. She chose to leave home because she realized that the world view of her family and by extension her little town was insular at best. She took the huge risk to leave home and rely on herself. She chose to be a nurse in a very difficult arena, namely intensive trauma care. It is very different from being a simple floor nurse. It is also something that you must intentionally try to get the credentials for. My wife chose to buy a house because she wanted to have something to show for her efforts while she decided what she should do next in her career.

Of course she didn’t plan on me or Alex coming into her life. But ever since I have known her, the degree of thought and the depth of planning she takes towards all things in our lives is profound. When we discuss her family and her sister, it is often with regret. The regret is that they assume incorrectly that we plan for nothing and they resultantly say and do things that make our choices seem inferior.

Fact is at this point we let the results of our choices speak for themselves.

Obviously, and especially, in the last few months we have had to make many choices of great weight since the fire. And in those choices almost every one of them were ultimately decided by how it will effect our son. For us, the consideration of either my wife’s parents or my own are simply not an issue. It would take too long to adequately explain why they are of minimal importance. The fact remains however, that when we make a decision our own parents aren’t a concern.

Without giving you a list of things we decided to do and not do, I will instead offer you the guidelines we used. The first was whether our choice would enable our son to have more options than we had with our own lives. The second was would the choice give him stability to be able to independently choose his own path in life. The last was would the choice make our family stronger both now and in the future.

It really was that simple.

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Printing Currency

If liquidity is the problem, then why not take the 787,000,000,000.00 and print the money for each citizen?

That would be roughly 320,000,000 give or take considering some people cannot be found, some are invested in grey market activities, and some are in prison as convicted felons.

So that would leave roughly $2,400 for all those people.

If cash flow is the problem, and a lack of printed paper money available to meet the created wealth via production, then giving all citizens $2,400 should solve the problem.

For some it would be 2 52" Vizo LCD flat panel tvs. For others it would be the tax/tag/title on a new GM car. For others it would be nearly two months mortgage for a median house. For even others it would be new computers, clothes, food, etc.

If the real problem is liquidity of paper currency and availiblility of paper currency, then a government "stimulus" of pork pet projects isn't really needed.

Somehow I doubt that it would work. We gave taxpayers what? $1000 in rebated taxes? And it did almost nothing. As a matter of fact it did make matters worse. Because upon being given a rebate by the government, many people assumed correctly that if the government was giving back tax money, it was because the economy was in trouble.

Most people simply used the money to buy down debt.

This is just stupid.

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If the economy is really bad?

I always wondered why the difference for the past couple of years the answer to the polling questions as to your own personal economic reality, and your perception of your neighbor's economic reality. It gets brought up cyclically in the media. I have no idea what college or group funds the poll, or even how to find the latest one. But they have been asking it for decades.

That said, the last time I heard about it was during the election. In short when asked how their own personal economy was going 90% said they were fine. When asked how they thought their neighbors were doing, the same respondents declared that 90% of their neighbors are having problems.

Think about it. 90% of people think that they are doing fine- but- 90% of their neighbors are doing badly. Which leads to an interesting conclusion. The current economic crisis may indeed be a media driven perception of events. In my own circle of people, those who watch MSNBC or CNN have been bemoaning the state of the economy for almost five years. Declaring how bad it is for every person, without ever taking into account that they themselves and everyone they know is neither better off or worse off in any substantial measure. I personally think that this perception has indeed become reality. And I have seen it first hand and watched the results.

Now mind you, in my particular circumstance it has been of some benefit because were builders and subcontractors not running scared, I would have been unable to rebuild my house as quickly as I did, or even at the cost I eventually had to spend through the process. People are simply holding off buying or purchasing anything or entering into any risk venture. I think it is mostly due to media.

Compared with the Carter years, the events of today don't even come close. You aren't seeing unionized industries collapsing wholesale. Partly because the union collapse of Carter's watch were ultimately permanent. Shipping, transport, automobiles, shipbuilding, steel, and unionized skilled trades all got swamped by better and generally more efficient free labor models. So today, we aren't seeing whole industries collapse both in terms of job loss and the permanent disappearance of jobs. Those loses happened 20 years ago. We are not seeing credit markets for even people with good credit collapse as they did back then either. If you have a credit card with a 20% interest rate attached to it currently, it isn't because that is the lowest rate as it was during Carter. Rather, if you have a 20% interest rate today, it is because you are incompetent with money.

People with even average scores can get, and are getting interest rates on 30 year fixed conforming loans of under 6% right now. Back during Carter, people with 760-840 credit scores were getting 13% interest rate loans only after paying 20% down and 3 to 5 points for 30 year conforming mortgages. If you think gas and food are expensive now, you might want to reconsider. Using adjusted Dollars to compare today to then, your loaf of bread cost you $6 then compared to $3 tops now. Your gas cost you $4 then compared to $2.50 now.

The thing is it is perception that statistics like "largest job number loss in 18 years" sounds scary. But it is scary only if you don't understand that in the past 25 years the size of the employment job market has skyrocketed. In percentage points of actual loss it doesn't even compare. Compare today's 6% unemployment rate to the double digit rates of the Carter years. Then take it a step further and consider that most economists historically viewed a rate of 5% as being essentially the closest our economy could come to "FULL EMPLOYMENT". Think about that. We are historically just one percentage point away from full employment nirvana, yet you have elected officials stating that we are just a step away from a Depression?

You mean the Depression where we had 15% and over average unemployment? We are not even in the same ballpark right now. Do many people remember how happy we were with interest rates at 10% and 8% unemployment under Reagan?

It was recalled as a boom time for the entire economy. Remember the 1980's? The time when all levels of the economy miraculously improved? Well, it wasn't miraculous all we did was cut taxes. Yet, that level attained by that improvement doesn't even begin to approach today's numbers of Prime 3.25% and unemployment of 6.1%. Under Carter we had a prime of 21.5% and 11.3% unemployment.

Did we need a bailout? No we didn't. Did we loan some industries money? Yes- and made a profit for the taxpayer when they were paid off. Did we spend billions in infrastructure and pork programs? No- we solved the crisis by dropping the marginal tax rates to a more sane level. How did companies respond? They cut their staffs, retooled production, began investing in technology, and spun off dozens of inhouse entities to become independent corporations. Small business also got lean and mean, dumped staff and improved their products and services- not to mention improving productivity.

So really, if you believe their is an economic crisis, you have probably fallen into a media perception trap. You probably are a person who has made some bad economic choices that influence how you see the overall economy. You probably can't get a home or auto loan due to past credit issues. Your employment skill set is probably antiquated or specialized to contracting industries. You probably don't remember the Carter Administration, Ford's WIN program, or the Oil Embargoes on a personal level, resultantly leaving you without reference to evaluate current claims that we are one step away from a Depression. In short, your personal reality is that you represent the 10% of Americans who, for whatever reason, are simply not successful compared to everyone else.

Therefore you see reporting on how bad everything is- and identify with it personally because it is what you are experiencing. The reality is that real estate in isolated markets, California, Washington, New York, etc. were over valued and had minor corrections of 10% average which left less capable people upside down in short term mortgages. You had a federal policy of risky loans dropped into the mix, as well as a war, and a retraction in technology services all combining to create a situation where reasonable people became cautious. And by being cautious, people and companies pay less, look at budgets more closely, and keep liquid assets consolidated and available.

What this means to those who live beyond their means, and companies who operate with lose fiscal control is the economy that enables such activity has ceased. People living within their means are not effected right now and are even benefitting from lower costs towards purchases and credit.

Unfortunately we are all getting a nice $1,000,000,000,000.00 debt increase intended to insulate those among us who tend not to live with a personal budget & those companies who operated with lose fiscal controls.

If we are on the verge of a Depression, then what we experienced under Carter was a full blown Depression. And that would make the Depression of the 1930's totally unimaginable by anyone in terms of actual economic impacts.

McCain was right. The economy is sound and is operating normally. And the expectation that unless something was done before Obama took office, the Depression was going to hit by January has proven ultimately false. There isn't a crisis. There never was one. However, we have now sown the seed that will bare fruit during our children's lives. For ever dollar spent by the government, the economy gets back a 60 cent return. For every dollar the government borrows it costs the tax payer and addition 50 cents. So the real costs associated with the $700 billion of Bush and $800 billion of Obama are ultimately going to clock in at around $3 Trillion in true costs.

Our children should expect a real Depression in the next 30 years.

I'd pay off your credit cards and pay off your mortgage if I were you.

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