Pulling the Wool

At the Democratic National Convention this week in Charlotte, NC, we got the chance to see two amazing things.

1. Why we’re not a Democracy

2. How the Democratic leaders mislead their followers into thinking their voice actually counts.

The Founders of the United States understood that a pure democracy is a dangerous thing.  As Neal Boortz, a talk show host in Atlanta often says “Democracy is two wolves and a sheep voting on what’s for dinner”.  So last week the Democratic party somehow makes the decision that they want to remove “God” and a reference to Israel out of their official Democratic platform.  OK – stupid political move but whatever – it’s their platform.  But here’s where it gets rich and where the curtain is pulled back.

Having received a whirlwind of blowback from across the nation, one of their delegates stands up and says he wants to suspend the rules and make a motion to reinsert these two things back into the official platform.  Clearly someone up on high made the decision that they had to do this.  It’s all scripted.

Los Angeles Mayor Antonio Villaraigosa is presiding over the moment and leading from the stage.  He clears the motion and takes a “voice vote” from the convention hall delegates.  All in favor say “ay” all opposed say “no”.

The audience is split about 50/50 on the first voice vote.  The mayor is perplexed.  Apparently it’s not going as scripted.  The delegates didn’t get the message that they needed to get this passed and out of the way.

He takes the vote again.  Again the audience voice votes but this time the “no’s” are even in stronger opposition – sounds like 60/40.  The mayor on live TV is visibly a little nervous because it’s not going as planned (ordered).

As if to prove what an example of Democracy in action we have here, he takes the voice vote a third time.  This time the “no’s” are overwhelmingly more than the “ay’s”.

He asked for the vote, he got the vote, BUT the vote wasn’t what the party wanted or needed to hear.

Without wasting another second, the Mayor simply decided (ruled) that in the “Opinion of the Chair, two-thirds having voted in the affirmative.. the measure is passed”.  The audience boos.  Clearly he was simply concluding the vote the way they wanted to have it concluded.

What did we see and learn here.

1. This is why we’re not a Democracy on purpose.  Democracy is nothing but mob rule.

2. The Democratic party only pretends that they want to hear the true opinions of their delegates by staging this show that the vote actually counts.  Their position clearly goes like this:  We’re going to take a vote and if we hear what we want we’ll pass the vote – and you all will think your voice actually matters.  But if we don’t hear what we need to hear, we’ll just keep voting until we get the result we want”.

The Democratic party lies and misleads the very people it portends to care about.  They say they’re for mob-rule but but it’s worse than that – what they’re really for is nothing short of dictatorial power.  It’s all just for show.  How do we know this?

The vote what pre-decided Politburo style.  The Mayor was simply reading the pre-determined and scripted words from the teleprompter.  The leaders don’t give a damn about what their delegates (voters) actually want – just get in line and be good little soldiers.

Here’s a link to the story with the video of the moment and here’s the photo of the teleprompter the Mayor was reading from.  Draw your own conclusions.

Photo Credit: Carlos Amezcua, Fox 11 News

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Misdirected Arrows

Having just seen last year all of the occupy demonstrations, my wish for the new year is that more people worldwide, and especially in the USA, will realize that the economic problems we are seeing in the world stem not from Capitalism but from Government and government intervention in what should be free markets.

While I get the beef the occupiers have, I have it too (anger at crony business for example), but so many people have their anger focused on the wrong place.  It is ignorance in the most caring sense of the word.

The occupy crowd (and the population in general) should not be upset at Capitalism or at the too easily contrived “fat cats”, they should go to the source of the problem which is Government.

Markets naturally self-regulate.  Why?  Because Buyers and Suppliers of anything have to both agree before any product or service can be bought or sold.  If one or the other cheats, lies, or otherwise doesn’t offer value they will naturally be eliminated or otherwise ignored.   The good and the bad word gets out.

The minute an outside party to the transaction gets involved and alters the relationship (screws with the free market) it is no longer a free market but a manipulated market.  Look around – do you not see Government intervention and manipulation in markets almost everywhere?  Housing, Health Care, Food, Labor, Stocks, Banking and on and on.

Look at the United States – we have a Constitution, a founding document of the nation that sets forth not what the Federal Government can do but rather what it cannot do.  This is somewhat unique to the USA and what has up until now set the USA apart from the rest of the world by levels of degrees when it comes to economic productivity.  The first job of the government is to protect your liberty, life, and property rights, and the first job of the President is to defend the Constitution.  We have a Congress that passes laws that regularly interfere  with your liberty and property rights and a current President that routinely tramples on the Constitution.

The problems we’re seeing in the USA and in many parts of the world are not stemming from Capitalism – on the contrary – its the lack of Capitalism that is pushing everything down.  When Capitalism flows freely the markets would take care of themselves.  If Government would get out of the way of interfering in markets so many of the nations economic issues would naturally resolve themselves.  Resolving economic issues leads to resolving many social issues.

Do you really need a far-away Federal bureaucrat deciding for you what you should buy, when, and for how much?  If you support this sort of a world, maybe there are a few countries for you where you could relocate, but the Constitution in the United States lays out the terms and conditions of the country.  It is clear that many people also confuse the role of the Federal government with the role of the States (ex. Dept of Education).  So many people lose their minds when you say we should get rid of the Federal Dept of Education – but think about it, what business does the government have being in the business of educating children?  That is not a role of the Federal government.  (As a side note, if you think about it again, you’ll realize why the Federal government like to have a hand in education.)

So while nobody like crony capitalism (hardly a free marketplace either), the occupy Wall Street Crowd and most Liberal Democrat voters have their arrows and frustrations pointed in the wrong place.  They should really take a clearer look at from where these problems stem and if they want to occupy something they ought to direct their energy at voting out people in the Federal government that are creating the policies.   The Federal government is the entity creating the problems then coming forth with “solutions” for the problems they create.  Enough – just vote out the wrong people and do your best to vote in the right people.  When you elect people like Barney Frank, Chris Dodd, Chuck Schumer, Harry Reid, Dick Durbin, Barack Obama, and the like, you get what we have now.  I’ll even throw in George W. Bush because he too abandoned free market principle as she said “to save the free market“.

So in this theme, spend 15 minutes checking out the above insightful video from Peter Schiff who went down to one of the occupy protests to see if he could have a dialogue with the people there.  You can see in the video that the crowd wants to just spout out quick slogans or blame zillionaires for making too much money, but Schiff sympathizes with them, calmly shoots straight with them, and shows them that their anger really needs to be put squarely on Washington DC and the politicians who create policies that do not let markets self regulate.  He is fair in his analysis and I hope here in 2012, in what is easily the most critical election year of your lifetime, more people everywhere understand that free Capitalism is the solution, not more Government.

Remember that at least in the USA the government governs at the consent of the governed.  How many Americans no longer consent to the current state of the Federal government and will vote out the wrong people this year?

Video from Reason.tv

Grateful for Entrepreneurs

Going into 2012 and looking back on the past few years, I have to say that I am grateful that we still have entrepreneurs in the USA, and more of us (especially the occupy crowd) should also reconsider just how lucky this country is that so many people start businesses.  The funny thing about starting a business (I too have done this and it is NOT easy), is that when you’re starting up you have to struggle and fight for every inch, every client, every deal but when you make it somehow “everyone” thinks it was overnight and that life is then so easy.  The whiners don’t see the years of toil, sweat, worry, sleeplessness, risk, and tuna sandwiches – they only see the “today” and think somehow it’s not fair.

Entrepreneurship is hard and it’s not for everyone, but at least be thankful for those who trail blaze instead of vilifying them.  The occupy crowd whines about how things aren’t fair while they drink lattes and make cell phone calls.  They don’t have a clue about fairness.  You know a place where everything’s fair?  North Korea.

The President (and many other leaders) so often preach about the honor of public service, even to the point where they propose special school loans that an be forgiven if you choose to go into public service.   Why not flip this around and offer loan forgiveness for those that start businesses and employ others?  That’s public service.  People that start companies are pillars of public service – not the guy at the DMV.

In the next round of Congressional and Presidential elections I hope we get back to electing into office representatives that understand  that this country can be stronger and more stable through entrepreneurship, and we put in place a general attitude that thanks those that start companies and employee others rather than punish them with over the top regulation and taxes.   Imagine a country with no entrepreneurs.  What would you have?  How would you grow – hell how would you eat!   

I am grateful for those among us that took the chance to start companies that ultimately went on to employ so many.  That is what we should be encouraging in this country.  So this holiday season and into the New Year, let’s hold entrepreneurs up with reverence and put gratitude where it belongs – in the hands of those that make lifestyle possible for so many others.  If you ever start a company you’d want the same treatment.

The Social Contract

There is this myth out there that Conservatives are only for “the rich” and Liberal Democrats are always fighting for the “working class”.   Even though Liberals claim to be for the poor, or as they say the “less priviledged” and the “less fortunate”, it seems to me that Liberal Democrats don’t give a damn about the poor.  If they did, they wouldn’t continue to push policies that keep people down.

The policies that Liberals have put in place – and continue to push for do nothing but keep the poor poor.  When it comes to economics, Liberal policies and ideas do absolutely nothing to help the poor because all these policies do is maintain the poor.  Liberals are extraordinarily hypocritical – If anyone is for the “rich”  and priviledge it’s Liberals – just as long as they’re one of them.  Barack Obama is a perfect example – he’ll deride fat cats all day long then go meet them for dinner to collect cash.

But something Liberals tend to bring up over and over is this concept of the “Social Contract”.  Liberals want to engage in a system where people that have earned something are somehow obliged under some nebulous “social contract” to give up a portion of their wealth to others that don’t have wealth.

Look at Elizabeth Warren talking about this.  She’s just outraged that people that have produced something of value for their fellow men have not given a hunk of their wealth to the people.

She claims that “you built a factory out there?  good for you!

But then she says she “wants to be clear” talking to the presumed factory owner:

“You moved your good to market on the roads that the “rest of us” built.”

“You hired workers the “rest of us” paid to educate.”

“You were safe in your factory because of police forces and fire forces that the “rest of us” paid for.”

Then she goes on to say..

“Now look, you built a factory and it turned into something terrific or a great idea, God bless…keep a big hunk of it, but part of the underlying “social contract” is you take a hunk of that an pay forward for the next kid that comes along.”

Are you kidding me?  First of all who is Elizabeth Warren to decide on behalf of anyone what “hunk” of their business they can keep?

Second of all, just what “social contract” is in place anyway?  A contract implies two or more parties coming together and AGREEING to terms of which all parties CHOOSE to participate.  Forcing one party to hand over some “hunk” of their efforts, brains, ingenuity, or otherwise when they have not agreed to do so is confiscation and there is no “social contract”.

Third of all she keeps saying “that the rest of us paid for“.  Really?  Has she seen who is paying Federal taxes in the USA?

Liberals love to tell you all about the rich and how much money they make, that it’s “disproportionate” and not “fairly distributed“. The somehow always forget to include the part of how much in Federal income tax is paid by the people that produce the wealth.

According to the IRS a few years ago the Top 50% of income earners pay 96.54% of all income taxes.  Last reviewed in 2010 it went up to 97.41%.  Here is the data (click the matrix for full view):

So if we are going to discuss income earned then we also need to discussed taxes paid.

With that in mind, let’s come back to this concept of a “social contract”.  Liberals always want to come at this this from only one direction.

  • What about the social contract where people who can’t afford health insurance rearrange their priorities to not purchase cool toys before taking care of the basics?  Sure it’s expensive but these are choices in life.  Part of the social contract is not obliging your fellow citizen to cover your butt because you chose not to.
    • What about people getting off this idea that someone else is going to pay for their mortgage and gasoline:
  • What about the idea of all American citizens paying something in taxes even if only a little.  When 50% of the country’s population pay absolutely nothing in Federal income taxes, they , as Ms. Elizabeth Warren likes to say so much are living in a society that the “rest of us paid for“.

The “Social Contract” is a two way street. If people of means would agree to “hand over” a hunk of their earned wealth, would it be too much to ask that those on the receiving end not abuse it and do everything possible to stand on their own two feet as best as possible?

The person that started his or her factory and did well did so because he or she delivered something of value to their fellow man who chose to purchase it in the free market – and yes Ms. Warren, the roads those product were delivered on were paid for in a much larger part by the same people that had the ideas, built the factories, and even employed others.

In short, the productive people of this world not only provide value to their fellow citizens, not only provide jobs to their local communities (and sometimes long distance communities), not only indirectly create whole new economies in the towns where they place their factories and offices, but they also paid almost all of the costs of putting the roads there, educating the workforce, and paying the taxes that provide local police and fire protection.

I have watch Elizabeth Warren’s announcement video and in all sincerity it’s pretty good, and she’s welcome to do what she thinks is right fighting for “working families” and fighting big lobby interests, but to attack productive people saying their goods were delivered on roads paid for “by the rest of us” is just factually incorrect.  The people setting up factories and other business are just as much a part of the working class as anyone – maybe even more so as there is no 9 to 5 in the world of the entrepreneur.

For Elizabeth Warren to come at this any other way is only to stir up false rage in some attempt keep class warfare alive.  Good luck up there in Massachusetts.

A Rebuttal to “How Rich is Too Rich” by Sam Harris

Sam Harris wrote a piece on August 17 on his blog entitled “How Rich is Too Rich?“.  It was a genuinely thoughtful piece with some great points but he lost my hope when he used the line “how much wealth can one person be allowed to keep“.  Allowed?  By whom?

And what about the other side of the “How Rich is Too Rich” coin such as “How Much Stealing is the Right Amount?” or maybe “How Much Waste is There in Government” or even “How Lazy Can You Be?

When it comes to private individuals generating wealth (even one dime) by performing a legal service or selling a legal product, the profit generated after belongs not to society but to the individuals and stakeholders that took the initiative to make it happen.

If we want to start throwing around the “allowed” word the very first place we should put that word is with the federal government.  We should not be asking how much Steve Jobs should be allowed too keep, but rather how much should the government be allowed to have from the taxpayers generating the wealth.

The US Government holds its position at the consent of the governed, and people are mad because government is using billions of dollars in taxpayer money to go way beyond the core purposes of government.  By and large Americans don’t have a problem with the concept of paying taxes, they have a problem with paying taxes when the tax revenue gets squandered.

Taxpayers who have trouble making ends meet are not thinking about Steve Jobs, Bill Gates, or anyone else like that, they’re thinking about their mortgage, their gas bill, groceries, medical bills, and other items that they could purchase if they only were “allowed” to keep more of their income.

They get mad because of the sheer waste all around them, such as this $600,000 gurgling toad sculpture.  How many tax paying households had to chip in to pay for this?  Don’t you think whatever monies were taxed and redistributed to purchase this commissioned work could have been put to better use by the people that earned that money?  There is an almost limitless supply of examples of government waste we could discuss – here’s 50.  It’s government that is “allowed” to keep too much money not individuals.

Sam posits a question and gives his answer.

“How many Republicans who have vowed not to raise taxes on billionaires would want to live in a country with a trillionaire and 30 percent unemployment? If the answer is “none”—and it really must be—then everyone is in favor of “wealth redistribution.” They just haven’t been forced to admit it.”

What about framing the argument this way?

How many Democrats who have vowed to raise taxes on anyone making over $250,000 would want to live in a country where employment goes to 30% because business owners limited to $250,000 in income have no incentive to grow past that – because anything over that amount would simply be confiscated?

Which do you think is a more likely scenario?  Clearly the second because nobody is close to an individual wealth of a triilion bucks, but we have all kinds of Democrats wanting to raise taxes on people who generate over $250,000 in income.

In Mr. Harris’ blog post, he brings up the news about Warren Buffett’s op-ed wherein he mentions he’s taxed at a lower rate than his secretary (and that many Conservatives pretend not to find this embarrassing).

This is comparing apples and oranges.  One is capital gains taxation and the other is ordinary income taxation. Mr. Buffett could always choose to pay himself ordinary income.  Why doesn’t he?  Mr. Buffett instead of pledging his billions to the Gates Foundation could choose to disperse with his wealth in some other way that’s not maybe as tax efficient.

Moreover, as this article points out, even if you flat out took all the money the super wealthy had you wouldn’t even put a dent in the problem. The root issue is not how much private people earn, it is the amount government spends.  This tired argument of taxing the hell out of rich people simply because they have it does not solve the problem.  Government must shrink.

And anyway, does anyone need a trillion dollars?  Of course not, but that’s not the point.  The point is does a need on my part create an automatic obligation on everyone elses?  If the answer is “yes”, then those people answering that way are in favor of stealing, they just haven’t been forced to admit it.

The problem we’re facing in the USA (and indeed the world) is that for many people the answer is “to hell with property rights, I want my stuff”.  They call this “social justice”.  But what is “just” about taking from your neighbor simply because you deem him to be more than satiated?

We’re all looking down the barrel of ugly arguments and scenarios these days not because of productive, job-giving, wealth creating entrepreneurs, but because of government fools who get in the way of free markets efficiently delivering solutions to people.  The very people government claims to help and champion are the very people that get wiped out by government.

Are free markets perfectly efficient?  No but they are far more efficient and “fair” than centrally planned economies where a few people pick winners and losers and there are only but a few winners. Remember fairness is a two lane highway.

In the USA we do have “crisis of inequality” and on a global level it’s even worse, but government interference, corruption, and waste only exacerbates the problem.  Americans (and likely most people in rich countries) do not want to live in a society with huge “inequalities” in wealth but the difference between Conservatives and Liberals is how we achieve that.  One could also easily point out that we have a crises of inequality in effort put forth by many people.

Offering 99 weeks unemployment checks or incremental welfare subsidies for every baby you have while on welfare only keeps people down when they might otherwise get up on their own.

The brutal truth is some politicians would have it no other way.  Until we elect people that limit government to what it is supposed to do instead of all of these superflous programs it won’t change too much.

If there is one place we should be pointing the “how rich is rich” question it is not at private individuals, it is at government.

Photo by Stuck in Customs

Obama and The Waiting Game

We are all just waiting.  Waiting for the clock to run out.  Waiting for people to have a reason to grow their business.  Waiting for employers to have a reason to hire.  Waiting for the time when we can have a President that is not hell bent on destroying the country.  We (mankind) have at least a hundred years of recent history of failed socialistic experiments all over the world that always end up in ruins yet there is a constituency out there that insists that we just haven’t given it enough time.

Two years into Obama’s presidency the President has only two ways to explain the situation the country is in:

1. He inherited a mess from Bush

2. He didn’t realize that the mess he inherited from Bush was as big as it was.

Let’s take the first one.  Obama certainly walked into office at a tough time.  The country was in a real mess for sure.  But there are two key points to make here.  First, regardless of how we were in that situation, why would you double down (and actually quadruple down) on the problem.  Obama didn’t reverse course from where he picked up the ball – on the contrary his policies directly made a real mess into a real big mess.  If you wanted to get America going in a healthy direction, you wouldn’t do ANY of the things President Obama has put in motion.

As for the second one, the reason the USA was in the fiscal mess it was in can be directly tied to the real estate market and directly to the specific people that created the conditions such that we would end up in the situation were in.  Specifically Barney Frank, Chris Dodd, and then Senator Obama with the implicit help of a Democratically controlled Congress.  It’s just too easy to say everything is Bush’s fault when in this specific issue in fact the Bush administration explicitly went to Congress to ask them to reign in Freddie Mac and Fannie Mae lending openness.

Watch this video

As far as the people who voted heavily for Obama in 2008, African Americans, Low Income People, and Young Professionals/College Students) their life under Obama not only has not improved, it has become even harder (how could it not with a President who insists are crushing the private sector and discouraging employment).  Check out this article.

According to the website endoftheamericandream.com  from June 6, 2011, here are 20 ways the US Economy has gotten worse since Obama became President (with supporting links to the details).

#1 In January 2009, the official U.S. unemployment rate was 7.6 percent.  Today it is 9.1 percent.

#2 When Barack Obama took office, the number of “long-term unemployed” in the United States was approximately 2.6 million.  Today, that number is up to 6.2 million.

#3 When Barack Obama first became president, the average price of a gallon of gasoline in the United States was $1.83.  Today it is $3.79.  This also affects the price of almost everything else that we buy.

#4 In April 2009, the average U.S. household spent approximately $201 on gasoline.  In April 2011, the average U.S. household spent approximately $369 on gasoline.

#5 According to an article in the Daily Mail, the cost of a Memorial Day cookout was 29 percent higher this year than it was last year.

#6 When Barack Obama was sworn in, there were nearly 32 million Americans on food stamps.  Today, there are more than 44 million on food stamps.

#7 According to the U.S. Census, the number of children living in poverty has gone up by about 2 million in just the past 2 years.

#8 When Barack Obama took office, the U.S. national debt was 10.6 trillion dollars.  Today it is 14.3 trillion dollars.

#9 The federal government has borrowed 29,660 more dollars per household since Barack Obama signed the economic stimulus law two years ago.

#10 During Barack Obama’s first two years in office, the U.S. government added more to the U.S. national debt than the first 100 U.S. Congresses combined.

#11 The combined debt of the major GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to 6.4 trillion in 2011.  Thanks to George W. Bush, Barack Obama and the U.S. Congress, U.S. taxpayers are standing behind that debt.

#12 Under Obama, the U.S. trade deficit continues to grow.  The trade deficit was about 33 percent larger in 2010 than it was in 2009, and the 2011 trade deficit is expected to be even bigger.

#13 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

#14 Just since August, 2 million more Americans have left the labor force.

#15 In 2010, more than a million U.S. families lost their homes to foreclosure for the first time ever, and that number is expected to go even higher in 2011.

#16 The U.S. real estate crisis just continues to get worse.  During the first three months of this year, less new homes were sold in the U.S. than in any three month period ever recorded.

#17 The U.S. dollar has fallen by 17 percent compared to other major national currencies since 2009.

#18 Faith in the U.S. dollar and in U.S. Treasuries is rapidly declining.  The mainstream news is not reporting on it much, but right now the Chinese are rapidly dumping U.S. government debt.  That is not a good sign.

#19 When Barack Obama first took office, an ounce of gold was going for about $850.  Today an ounce of gold costs about $1500.

#20 Americans seem to be more pessimistic about the economy than ever.  According to a brand new poll, 61 percent of Americans believe that they will not return to their “pre-recession” lifestyles until at least 2014.

But don’t you worry because the number of limousines is up 73% in the Obama administration.  You would think that those in the Obama administration would want to move around in a Prius or a Volt – after all, they want you to.

And the above 20 ways didn’t even get into Obama’s Foreign Policy brilliance.

What about Healthcare?  Obama doesn’t even talk about is signature piece of Legislation – Health Care Reform (Deform).  You would think that if this was your absolute signature piece of leadership you’d be all over it.  Why doesn’t he do this?  Maybe because everyone knows it stinks and is unconstitutional to boot.  If it were so good why would 26 states be suing over this legislation and why would there be (so far) 1400 waivers from having to participate in such a system?

 

 

Closing:

The net result is there is a lot of money in the USA in the private sector and it’s not coming out for productive use until and unless Barack Obama is voted out of office in 2012.  The choice before the country is extraordinarily clear – keep this ridiculous and destructive charade of PeeWee’s Big Adventure going or vote this menace out of office – yes menace.

Certainly whomever the Republican nominee will be needs to be sharp because if Obama thinks he inheirited a mess in 2008, it’s going to be nothing compared the mess the Republican nominee is going to walk into in 2013.

At this point I am 100% sure for at least 48,000,000 voting Americans it simply does not matter who the Republican nominee is as long as he or she can be put in the “other” check box – and that 48MM is by now more likely closer to 60MM.

Obama did this to himself (and to the country) and “ironically speaking” thank God Obama won in 2008 otherwise America may have never woken up.

>> I’ll leave you with article from today.  1.9 Million Fewer Americans Have Jobs Today Than When Obama Signed Stimulus.

“Other” is the only choice forward if we are interested in any sort of future for our kids.  I think it’s that serious.