Thursday, January 31, 2013

Sitting idle


So here we are at post #2! My goal is an entry a week and so far I am only 3 days behind schedule. I have been hemming and hawing regarding the direction I wanted to take with this entry. On one hand I was considering finding the common ground that most sane individuals could agree with. However, that is not my intended goal with my blog and I would rather point out some sacred cows.

There has been a lot of discussion about a parasitic populace in America.  Depending on the statistics that you use and where you acquire them from,  anywhere between 47 – 53% of households do not pay any federal income tax. In addition to this lack of tax revenue we have the liabilities of Social Security, Medicare,  Affordable Health Care, government employee pensions, and that list could go on and on. Typically when there is a discussion about a group of people that have become dependent on these particular government programs there is also a push to characterize those individuals. I don’t necessarily believe participating in these programs makes a person “good” or “bad”. Sure there are the people that take advantage of the system and they receive most of the attention, these so called “welfare queens”. I do believe the majority see this as needed help or in the case of retirees with social security, an entitlement for payroll deduction.  As a Libertarian, I do not want to see anyone pay a federal income tax but that is another rabbit hole to travel down. The main issue we have here is rather than adding wealth to the economy, we are consuming it. We are now way past the tipping point and have roughly half of our society consuming wealth and is relying on the half that produces wealth to fund all the entitlements. If this trend is not reversed we will continue riding the road to the downside.

However, while the citizen number is growing and raising concern what is more alarming is the creation of the Corporate Parasite. Both major parties feed their respective corporate parasite. The Democrats feed the so called “green energy” companies which could not exist without subsidies, loan guarantees, and tax breaks. The Republicans have their military industrial complex and energy in the form of Lockheed Martin, KBR, Halliburton, the five largest oil companies, and an alphabet of corporations. There is always a justification, with Democrats we have the vision of a bright future of rolling back the tides by switching to mercury filled light bulbs and the Republican fear mongering of terrorists, USA jobs, and protecting foreign ally Israel.  While the big two differ in some areas they both seem to come to agreement that government needs to step into varying sectors of the economy and subsidize with public money. They just can’t seem to agree with which sectors to jump into, that is until it comes to Wall Street and financial institutions.

George W. Bush, Barack Obama, Nancy Pelosi, Harry Reid, and John Boehner would like you to believe that they acted heroically in stepping in to save our economy from depression, or that the “other” guys were destroying the economy, it all depends on election cycles. Regardless of intent, which I do not believe was ever noble, what really happened was public money was taken and given to large institutions to protect them from taking a well deserved financial loss. In various forms over $2 Trillion dollars were taken from the public and lined into the pockets of the financial industry. Regardless to popular belief, money is amoral and it doesn’t care if you are a nice or bad person, if you act foolishly you lose money, it isn’t personal, it’s just how reality functions.

Malinvestment is when a firm badly allocates investments that can’t be returned. There is a lot of malinvestment going on and whats worse is it being encouraged with a low cost of credit and an increase in the money supply. When an institution can only remain profitable with government assistance it means that the institution is using raw resources such as labor, energy, and materials to create a finished product that is worth less than the inputs used in production. In return, the more that governments choose to support parasitic companies with public money, the poorer the nation will become. It is an unsustainable business model and can only be sustained with additional printing from the Federal Reserve at low interest rates, an increased tax burden on the public, or a continued deficit. I am reminded of what libertarian economist Milton Friedman said “If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand”.

The government should not be in the business of picking winners and losers in the marketplace. Markets when left alone will do a much better job of innovating and correcting mistakes. I also trust a company that is willing to place their money on the line, there is a lot to lose in a situation like that. The risk factor is much lower when it isn’t your money to lose and it is easier to come by when it is given by the fool or thief. When subsidies happen that is the government stating that they are better at investing your money than you are. Whats worse is they are investing in companies that break the first rule of thermodynamics and actually destroy energy and wealth in the process. The first law of thermondyanmics needs an asterik, 
"Energy can not created or destroyed" *unless a governmental body is allocating resources and then a flaming rat hole will ensue. In the case of a flaming rat hole, throw more money at it to suffocate the fire. If that creates a bigger flaming rat hole blame it on the other guy.
Ya, I feel the first law of thermodynamics is now complete.
Government believes it can create prosperity by destroying resources and wealth in the process, but then again that is the fiction of the state.

Monday, January 21, 2013

State Fiction


I have been flirting with the idea of starting a blog for a few years now. Well, not really flirting but it's more like standing in the corner of a middle school gymnasium at the Spring Dance staring and wondering about starting a blog. Well, I have now walked across the gymnasium and awkwardly asked this blog to dance….or something like that. So, please excuse me for when I step on your toes.

I guess the year was 2006 in which my Wikipedia reading would spider web into 20 or so browser tabs of "related" subjects and topics into a cacophony of random reading. It was through this galaxy of randomness that I stumbled upon a 19th century French political economist and classical liberal theorist named Frederic Bastiat. His work seemed intriguing, and I decided to purchase a used dog eared copy of his most famous piece of work, The Law. This short pamphlet clocked in at 48 pages in large print, yet every single sentence is quotable enough to become its own internet circulated meme. After The Law, I purchased copies of Economic Sophisms, Economic Harmonies and Selected Essays on Political Economy. It was through Bastiat that I found my catalyst into Libertarianism. I could write quite a bit about Bastiat, but that isn't why I am here.

My objective here is simply to further my understanding of libertarianism. These will not be beautiful essays nor will I write the libertarian rebuttal to end each and every debate with statists and collectivists. What I hope to accomplish beside my own enlightenment is to further the discussion and, who knows, maybe even influence a person or two to see an issue from a different light.

Today, the majority of citizenry in the United States seems to be deeply segregated across two political party lines. There is a lot of screaming, cheering, flag waving, t-shirts, bumper stickers and hatred for the other guys that you would sometimes think that you were at a football game. Ultimately, it appears the parties of elephants and donkeys are playing the same sport but with west coast offense and wildcat offense. Although there are some minor differences in ideology, and they really are minor, both parties have decided that there isn’t a problem that can't be resolved with more government involvement.

I have come to terms with knowing that most Americans don’t want to be free, and they definitely don’t want anyone else to be free. I believe this is because most people have confused the difference between freedom and equality. Everyone can be equal in an unjust society but not free. It seems that more and more individuals have become defenders of the initiation of force. People interact either through voluntary means or coercion. Through voluntary action, two parties would have to both agree on a favorable exchange of value. At no point is anyone forced into an exchange but rather must negotiate. Coercive action is best seen as government. Citizens are expected to comply with rules and regulations. When compliance is not achieved, force is initiated in the way of fines, prison and sometimes even worse. At this point it appears the majority of Americans do not see a problem with the coercive force of government. I really believe that all of this just proves that people want to be in control of others and dictate their lives.

I don’t believe there is a thing called the “American Dream”. James Adams defined the American Dream as, "life should be better and richer and fuller for everyone, with opportunity for each." I don’t believe that sentiment is unique to Americans alone but rather the human race. The American Dream is a Humanity Dream. What sets the distinction in America is the philosophical approach of individual liberty with the ability to pursue your happiness without the interference of others as long as you didn't interfere on the rights of others. We have since got away from this philosophy and went down the road of greater government emphasis and a one size fits all package. On one side you have a party that wants to increase the size of the warfare state and on the other side you have a party that wants to increase the size of the welfare state. In the end, as the revolving door of political power changes hands, we have seen the expansion of both the warfare and welfare state.

Today, Barack Obama was inaugurated for a second term, and the Internet is a score of comments and opinions. There are a lot of people that believe a single person can guide and rule single-handily over an entire nation. Most comments and opinions are stating whether or not Obama is fit to govern over us. I guess this is one of the things I find so appealing about libertarianism. There is this notion that libertarians are secretly plotting to take over the world so they can leave you alone. I can't say for sure what will happen in the next 4 years, but I am pretty sure we will not see a more libertarian society. I believe we will see a continued and more aggressive drone war, we will have more meddling in nations where we shouldn’t be, there will be a continued war on drugs and gay marriage, spending will not go down, deficits will increase, more liberties will be eroded and the once shining reputation that America had will continue to fade. Yet that is what makes our two party system so amusing. At every wrong turn they will be there pointing the blame at the other explaining that things would have been different under their watch. Then again, isn’t that the great fiction of the state to begin with?

-Michael Coyne