Category: Responsibility

The Politics of Money

The world wide focus on banks and related government regulation is only relevant to the extent governments lie, borrow beyond their current income, and print money. This focus results from government fabricated value undermining confidence in value actually earned from work and free exchange.

Understand clearly that bank regulations and government money printing have nothing really to do with human interchange (the fundamental force driving economics) and everything to do with the politics of satisfying constituents dependent on various forms of welfare (from corporate cronyism to food stamps).

Here is a juxtaposition worth consideration.

If you put your life savings in a Cyprus bank in 2008 you would have earned a modest amount of interest, now had at least 40% of your “uninsured” deposits confiscated by a European Union regulator to repay the pain caused by your Cyprus bank “investing” your deposits in supposedly “safe” Greek bonds, whose value was earlier propped up by the fact that the Greek government outright lied about their finances while the European Union regulator now confiscating your money forgot to check. Read that again.

You would have been better off putting your money in LVMH Moet Hennessy Louis Vuitton (MC.PA), a company that sells arguably frivolous and overpriced merchandize to people who value status more than substance. One could argue that LVMH is the most risky of investments because the stuff it sells is not essential or even needed, yet, the common stock of the company has grown from $85 USD per share in April 2007 to over $133 USD per share in April 2013 (an 8% annual return) and currently pays a 2.2% annual dividend. LVMH is not regulated by anything other than its credibility with its customers.

Hmmmm…..

Now, if you live in the United States you can certainly put your savings in a bank, but keep in mind that Mr. Bernanke’s assurances that your money is “insured” is based solely on his ability to inflate the money supply while he pays you nothing for incurring the risk (or is it a certainty?) that he is devaluing your savings by doing so. So where do you put your money when the government prints $85 billion a month in new money (now over $3 trillion in money printing) used to purchase bonds in the open market for the known purpose of manipulating interest rates in an effort to force private savers to take risk? This is a circular game that compounds and delays the consequences of the uncertainty engendered by the policy.

Herein lies the social justification for a strong currency. A currency that has a proven reputation for holding its value exactly because the government issuing the currency does not lie, does not borrow beyond its means, and does not print money stabilizes the value of private savings and increases trust needed to justify private risk taking, thereby creating jobs and opportunity for those willing to work.

Regards, Pete Weldon
americanstance.org

Withering Morality and the Statist Reality

While Mr. Obama offers endless pontification in front of the cameras, claiming the moral superiority of his policies, the reality is that more and more citizens are the object of federal subsidies and policies that bribe their voting loyalties. What moral code is responsible for this reality? Mr. Obama is clearly and consciously in pursuit of the road to serfdom. Exactly who wishes to take that road and why?

A small but telling recent reality is that millions of people have fraudulently received cellphone subsidies. Federal spending on this subsidy suddenly increased from $846 million in 2008 to over $2.2 billion in 2012 with more than 6 million citizens receiving subsidized cellphone service. The federal agency overseeing this program is now back peddling and claiming to increase enforcement of eligibility requirements but the morality of those exploiting the subsidy is clear for all to see.

The reality is that millions of people now expend a substantial portion of their human potential looking for federal subsidies and exploiting them wherever and whenever possible. While intended to help those less well off, subsidies offer free entrance to moral failing, not the benevolent society Mr. Obama preaches. History is clear that ever increasing government benevolence, whether or not justified by moral rationalization, serves only to decrease individual responsibility and work.

The dramatic increase in food stamp recipients and dollars spent per recipient needs to be publicly discussed in this context. My analysis is based on government data.

The facts show that:

  • The number of food stamp recipients has increased from 26 million in 2007 to over 46 million in 2012.
  • Food stamp participation as a percentage of total population averaged 8.24% between 1975 and 2007 with temporary increases to 9% in the early 1980’s recession to slightly more than 10% in the early 1990’s recession, always returning to a level below 8%.
  • Food stamp participation as a percentage of total population increased dramatically after 2008, rising above 13% in 2010 and further increasing to 14.85% by 2012, an increase of 80% above the mean and 42% above highs in the early 1990’s.
  • The average monthly food stamp benefit per participant increased by over 22% in 2009.

Our citizens need to understand why our government continues to subsidize food stamps for 20 million more people in 2012 than in 2007, why the average benefit increased over 22% in 2009 when inflation actually turned to deflation, and why the current participation rate is materially greater than that in previous periods of economic difficulty and does not show any sign of receding to the historical norm.

Our citizens need to understand how people on food stamps will be moved out of the program so as to avoid creating a permanent 15% or more of our population living in food stamp dependency and expecting more of it.

America is fast becoming a nation of dependency and expected entitlement. More people are exploiting available subsidies.

Mr. Obama frequently uses the word “responsibility” in describing his policies. The press needs to hold up the results of his “responsible” policies to the light of day.

Regards, Pete Weldon
americanstance.org

Free Contraception for the Federal Register

Chiquita Brooks-LaSure, Deputy Director of Policy and Regulation at the Center for Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services (that title is 156 characters long) held a conference call on February 1, 2013 to announce revised proposed rules for socializing the cost of female contraceptives as those rules impact religious organizations. Per the Associated Press, the recording of this call is available through February 8, 2013 by calling 800-677-1613. (Go for it!)

If you don’t want to listen to the whole recording (ahem), here is a recording of Ms. Brooks-LaSure’s announcement and a recording of one of the questions from an NPR reporter and the response of Ms. Brooks-LaSure. Click here for the 80 page document detailing the actual proposed rules. Let’s see, we have a 156 character long title for a government employee announcing an 80 page proposed set of rules selectively addressing religiously based conscience objections to a government mandate that such organizations pay for free contraceptives for their employees. The only reason for any of this is that those praying at the alter of government believe it is their duty to impose their will and beliefs upon those who pray at a different alter.

The best part of the whole show is Ms. Brooks-LaSure’s response to the question in the above linked recording. The reporter asks whether it isn’t really the insurance companies who will be paying the cost of free contraceptives given to employees of religious organizations who request such coverage under the proposed rules, or won’t the Federal government really be paying the cost for those employees under self funded health insurance plans offered by religious organizations?

In response, Ms. Brooks-LaSure notes that since “studies have shown” overall health costs are reduced when contraceptives are provided free, insurance companies will realize an overall cost savings by paying for those costs. But wait a minute! If that were true the insurance companies would voluntarily include free contraceptives within coverages as doing so will save both the companies and the employees money while improving health care, and there would be no need for us to pay Ms. Brooks-LaSure’s salary let alone have to deal with a new 80 page proposed rule or any free contraceptive mandate at all.

Again, in response to the question as directed to self insured organizations, Ms. Brooks-LaSure notes that the user fees paid by health plan administrators would be credited for the cost of providing the contraceptive coverage. While Ms. Brooks-LaSure doesn’t think that means the Federal government is paying for that credit, the reality is that we would be paying, as user fees supporting the government’s over site of Obamacare are reduced through such credits, which dollars will necessarily be made up from another Federal bucket. It seems Ms. Brooks-LaSure’s belief system is highly selective.

If someone wants to start a charitable organization that collects donations to be used to subsidize the cost of contraceptives and other female reproductive health services that is fine with me as both those funding such an organization and those using such a service would be doing so voluntarily, freely exercising their rights and assuming personal responsibility for their behavior.

If there were real evidence free contraceptives save overall health insurance costs as claimed the insurance industry would be foolish not to offer such coverage in all health plans, and in fact, those women declining free contraceptives would then rationally be subject to a higher, rather than lower premium payment.

The emptiness of the government’s reasoning in proposing religious exceptions reveals that those same flaws exist in the reasoning underlying socialization of female reproductive health services in the first place.

The reality is that our government is full of Brooks-LaSures, people who believe in and whose income depends on the religion of government at the expense of our individual freedoms and responsibilities. We need to push back until the entire female preventative health services mandate is repealed, not simply seek a religious exception, in order to limit the scope of Federal power, to reel it to boundaries consistent with our traditions of moral and religious tolerance, and mutual respect. We need to do this to prove we live in America.

Regards, Pete Weldon
americanstance.org

The Education of James Taylor

Prior to performing a verse of America the Beautiful at Mr. Obama’s recent 2nd inaugural, singer/song writer James Taylor appeared on the Charlie Rose show and offered some interesting commentary on “corporate” America. Watch and listen here (his political commentary begins at about 28:35).

As a former singer /song writer I greatly admire James Taylor’s music and his career. What struck me as odd, however, was his complete misunderstanding of the realities of “corporate” America and the counter productive thinking and policy that comes from such misunderstanding. In the political world, James Taylor’s misinformed views are an example of “liberal think” that destroys opportunity in the name of “humanity.”

Here is a portion of James Taylor’s comments:

America is such a noble experiment. It’s really the light of the world. A lot of people are angry at us but mainly because of our, sort of, corporate colonialism that we practice. That’s not the American people. Those are individuals who are acting badly. That’s Standard Oil and Union Carbide in Bhopal, BP in the gulf. That’s a real problem for the future. Aside from carbon in the atmosphere, what we do with corporate organization and corporate power and how we make it serve human beings and the largest number of human beings at that, and not just enslave human beings and, you know, march backwards, that’s a big, hmmm, Gordian knot for human beings to deal with, this question…. because corporations don’t have the same human priorities… The Supreme Court and the Citizen’s United decision not withstanding, corporations are not human. They have a very selective and a very limited and not very humane priority (Charlie Rose interjects, and a very different mission)… and a very different mission. A robber Barron will at least put his name on a hospital, I know you will see a lot of football stadiums with “Enron” on them or whatever, … but the point is these things (corporations) use portions, little slices of people and there are three people waiting to take your job and do that little, you know, dedicate that little part of yourself to that number being as large as it can be, and that’s not… its just incomplete is what it is, its not whole and its not human. I think other countries have done a better job asking corporate power to serve human beings better than we have.

Mr. Taylor’s references are dated.

Standard Oil was broken up in 1911 and it can be credibly argued that its broad influence over petroleum production and distribution made possible the economic transition from group transportation (trains) to personal transportation (automobiles), adding significantly to individual freedom. No longer are individuals restricted to a small geographic area to find work and exercise a desire to travel, thanks to the personal automobile.

The “Bhopal” event occurred under Union Carbide’s ownership of a chemical plant in India in 1984. Union Carbide has been owned by Dow Chemical Company since 2001.

The “BP” Deepwater Horizon gulf oil leak occurred in the spring 0f 2010.

It can only be Mr. Taylor’s imagination that leads him to believe the “corporate” nature of these companies resulted in “bad behavior” that did not and does not serve human needs. Note that the consequences of these industrial accidents were paid for dearly by both the management and owners of the effected corporations, setting examples that promote responsible behavior. Also note that there is no evidence that government ownership or regulatory control of the means of production would avoid the occasional industrial tragedy (see Chernobyl, Three mile island, and Fukushima Daiichi). Finally, there is evidence that government regulation and favoritism interfere with the operation of markets in ways that negatively impact humanity through increasing prices and limiting choice (see as examples ethanol mandates, Obama Care, and the Dodd/Frank legislation).

Mr. Taylor then moves from stereotyping bad “corporate” behavior to stereotyping “corporate” priorities. Let’s accept that those priorities as seen by Mr. Taylor are limited to financial greed. Now it is time to understand what a “corporation” is and why it exits.

Like money, corporations, are man made structures designed to serve a purpose. In the case of money that purpose is to provide a trusted means of exchange between people that simplifies trading. In the case of corporations that purpose is to simplify the organization of resources so as to provide humanity with goods and services in an efficient manner. Note that the customers of corporations voluntarily enter into purchase transactions to meet their needs. Note that government imposes such things as an ethanol mandate through the force of law, not voluntary exchange. Which approach truly serves humanity? Which approach takes risks to invest in technology and production so that new products come into being to serve humanity? OK, the “Furby” may not serve humanity in any sense other than providing a curious entertainment but certainly laparoscopic surgery and wireless networks and smart phones do, as do supermarkets and materials and chemicals and fuels and restaurants and accountants and lawyers and doctors and hospitals, and …..

The next presumption that corporations “use portions, little slices of people and there are three people waiting to take your job” is false. Corporations offer job opportunities resulting from voluntary demand for goods and services they produce. Remember that no one is compelled to buy a Big Mac, or a designer dress, or a new home, or car, or smartphone, or six pack of beer. Yet, the corporations that meet these human needs take the risk that the customers will be there tomorrow and in doing do employ millions of people who have personal ambition and a desire to learn and apply their knowledge in meeting society’s needs (that is, they are willing to work). The last time I checked no one was being compelled to work for IBM, or Exxon, or Johnson and Johnson. However, the government is now compelling all citizens with health insurance to subsidize the cost of female (not male) reproductive health services, some in violation of their religious faith. Lastly, many US corporations live by credos that list the shareholder’s interest last in line exactly because they understand that their long term profitable survival is what, in the end, creates value for both humanity and for those who take the financial risk to make it all happen. Here is a corporate credo Mr. Taylor should read.

No one I know has ever proposed that a corporate interest represents the interests of all of humanity. This may well be why democratic governments over the years have sought to use tax revenues to supplement those human needs not directly served by a job. It is also why we have many other forms of organization including union, religious, social, charitable, and political organizations. In fact, in America the Beautiful you are free to start any organization you want and prove there is a market for your ideas by getting others to give you money to support your cause, whether it be corporate or otherwise. That is what Citizen’s United is all about; more speech, not less.

Regarding this last offering from Mr. Taylor, “I think other countries have done a better job asking corporate power to serve human beings better than we have.” It is not a given that “countries” (he means governments) have some moral authority to “ask” (he means impose) rules on corporations to “serve human beings better,” whatever that means. Morality is not the purview of government. Government actions only reflect the morality of the citizens. Mr. Taylor would do well to update his perspective for contemporary reality. It is the power of centralized government that imposes regulatory mandates founded in righteous misconception, that accrues $80,000,000,000,000 in unfunded entitlement liabilities with no plan to reduce those liabilities to manageable size, that is more than $16,000,000,000,000 in debt with no effort to reduce that burden, and that spends more than a $1,000,000,000,000 more per year than it takes in revenue. This runaway abuse of power by the government exceeds any negative impacts of corporate power by orders of magnitude. Who is going to pay for this? Corporations, at least, are accountable to the realities of the markets. Government is accountable to the voters, a majority of whom have accepted government bribes, accepted money and favors to satisfy their short term desires while they burden their children and grand children with unsupportable debt and lost opportunity. So much for the morality of government and its role in serving humanity.

James Taylor is a brilliant man and I encourage him to read and understand more about our national government and our modern welfare state, and where they are headed. When he is done understanding, he just might want to form a corporation whose mission is to fix it.

Regards, Pete Weldon
americanstance.org