the whitestick papers

looking at politics from a different perspective

Posts Tagged ‘economics

The lesser of two evils…

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It is perhaps the most frustrating of choices; to look on the ballot and try to pick the candidate you dislike the least.  Is there no one you can soundly support or are you forced to vote for one person because you’re determined to vote against their opponent?

The fact is, no matter who you vote for, you’re always voting for the lesser of two evils.

There are a couple of reasons for this, both of which trace back to basic human nature.  The first reality is that everyone is flawed.  Some more than others, of course, but the fact is no one is perfect.  This is true for everyone and seems to be particularly true for those who seek political office.

The second factor flows from this; power corrupts.  Those who seek political office often seek that power and, with it, the inevitable corruption.  Some resist more than others, but it taints everyone.

Taking into account that you will always vote for the person who, to you, is the lesser of two evils, let’s apply that to the current Presidential race.  Either Mitt Romney or Barack Obama will be elected in November.   Sure; there are those who hope others might but, unless you’re completely deluded, even the most loyal follower of one of the “also ran” candidates has to admit that.

Your choice comes down to someone who might be less than what you’d prefer but, in general, agrees with you on many, if not most, points.  Mitt Romney embodies the value of a free market, the necessity of a reduced government and the economic ruin caused by a runaway deficit.  He shows he understands that the country’s greatness has been built by people, not the government.

Or you can vote for a person who has demonstrated a total commitment to Keynesian economics, anti-colonial loathing of America and a willingness to reward some and punish others both domestically and as a foreign policy.  Barack Obama told the Russian President he would do even more in a second term and, since he wouldn’t have to deal with another re-election, he easily could.  Is that what you want?

To vote for someone else or to not vote is to let Obama win by default.  For a person of principle, who wants a restoration of American liberty and rule of law, the only logical choice is to go with the one who could turn things around.  Even though flawed, Romney is more likely to stop the current devolution than to continue, much less accelerate it.

Sure, Romney’s not perfect.

Who is?


Written by Jeffrey S. Smith

13 September 2012 at 8:21 am

First, stop digging

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We are now in the second year of one of the worst recessions in American history.  There’s been a lot of talk about what can and should be done to deal with it but, as has been noted, those who don’t learn from history are doomed to repeat it, and there is much that has been done already that speaks to what needs to be done in the future.  Among the most ominous aspects of this continuing downturn is that what the government’s doing is almost identical to what turned the relatively minor recession of 1929 into the Great Depression of the 1930’s.

First, let’s go back to early 2008.  Although the economy was starting to slow, what triggered the sharp decline was poor risk assessment, particularly in the housing industry.  During the Clinton Administration, laws forced lenders to make loans to people who didn’t deserve them.   After twelve years and with a weakening economy, those bad loans started cascading into failure and, as the 2001 stumbling showed, once that starts, it affects other parts of the economy as well.

It was bad enough but, because only a relatively small percentage of those with the loans were actually affect, we could have weathered it.  But then,the media deepened it by hyping it; after the surge worked, the press no longer could beat President Bush over the head with daily bad news from Iraq and had to find a new hammer. The normal ebb and flow of economic cycles augmented by the inevitable result of “liar loans” with images of foreclosed houses, made the downward turn sharper and deeper as people lost confidence.

The cure is going to take time and more than a little pain. The devolution of American liberty into nascent tyranny has happened in fits and starts, but it has taken nearly all of our history to get us where we are today. Clearly, the Keynesian policies and practices that is the typical government response do not and cannot work; it’s a wide and well-paved road that’s easier to travel but eventually leads to disaster. Eventually we, as a nation, have to be willing to give up the “gifts” and “support” given us by government – unemployment insurance, Social Security, Medicare, tax “deductions” and “credits” as well as the more obvious “welfare” and other assistance programs – before we can truly be a free people again.

In the meantime, I’ll settle for it not getting worse; stop automatic increases and extensions, and create no new programs. Then, one by one, we can evaluate every existing program in light of Constitutional authority. To be honest, I don’t think the nation would stomach that – we’ve gotten too comfortable with our bread and circuses – but it’s where we’ll have to go to completely correct the situation.

There’s an adage that says, “When you realize you’re in a hole, the first step to getting out is to stop digging.” I don’t expect to see complete economic recovery in my lifetime. But I’ll vote for anyone who’ll stop digging the hole – and vote against anyone who digs it deeper, no matter what “good” it’s supposed to do.

Written by Jeffrey S. Smith

11 March 2010 at 11:36 am

Posted in Basics

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Bunning: patriot or pariah?

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There’s been quite a bit of chatter lately about Senator Jim Bunning (R-KY) and his insistence that the source of the $10 million needed  to extend unemployment benefits before the Senate approves that extension.   Bearing in mind he couldn’t do this on his own as it requires 40 other Senators to allow a filibuster, the fact remains that he’s the most outspoken of the group and definitely the target of the media and those who think the extension should be granted immediately.

Before we go any further and in the interests of full disclosure, I need to let you know I have a dog in this fight.  I’m a casualty of the economic slowdown, a little more than a week away from my one year anniversary as an unemployment statistic.  I’m close to having this issue affect me and my family, already struggling to make ends meet.  But there’s a bigger picture here, and I think we all need to look at the issue from the perspective of principle rather than personal want.  As I see it, there are two parts to this, one philosophical and the other economic.

The philosophical question involves the role of government.  Bunning has staked his concern on where will the money come from.  While that’s a very good question when we’re looking at skyrocketing deficits and government spending that simply can’t keep growing at the rate it’s been growing, there’s the question of what responsibility does government have to its unemployed.   Is it the role of government, at any level, to act as an insurance provider, forcing the payment of “premiums” while someone is working so that person has something to fall back on if they’re unemployed.  Looking at the US Constitution, my conclusion is there’s nothing supporting this.  So, in that sense, Bunning has it right.

Add to the Constitutional issue the question of whether the Senate should obey the rules it sets for itself.  Recently, they made it so any spending must be paid for as it goes.  In reality, all Sen. Bunning g(and those supporting his filibuster) are doing is requiring the Senate live by the rules.  When you strip out the emotional element, that seems fair.

On the economic side, I wonder why this extension is even necessary.  Unemployment is reportedly at about 10%.  That should mean for every person receiving unemployment benefits there are nine people paying into the system, plus the matching amount paid in by their employer.  Okay, so there’s a lot of people out there who aren’t working but also not collecting unemployment, but even the worst estimates put that at 20% total unemployment.  That still means an eight-to-one ratio of money going in to money going out.  But a number of states have run out of funds to pay benefits and need this bailout to stay afloat.  And what about the “trust fund” us job-seekers were paying into for years?   What happened to all that money?

Actually, this is a rhetorical question.  Like Social Security, unemployment insurance is a Ponzi scheme, where those who came in early get paid by the money put in by those who came later, there never was any trust fund or lock box protecting their “contributions”.  As long as there are more people paying in than are taking it out, it works.  But as soon as more money goes out than is coming in, the pyramid collapses.  And that’s exactly what has happened.

Most states have treated unemployment insurance as an extra tax; there’s always been a lot more coming in than has been going out, so it was a great cash cow.  There never was  any investment of the “premiums”, as would have been the case with a private insurance company; they spent the money on various programs and the bureaucracies needed to make them work.  Because the well was, for the most part, dry when the number of unemployed got to a certain point, they’ve gotten into the habit of getting bailed out by the federal government.  And, until now, the federal government went along with the illusion.

Yes, my family and I will probably suffer unless I beat the odds and get a new job before my benefits run out.  But weaning America off the various easy solutions that have gradually enslaved us is going to hurt people – probably, in one way or another, most if not all of us.  During the American Revolution, Thomas Paine didn’t have a lot of patience for what he called the “sunshine soldier” – someone willing to fight for liberty until the way got hard for him.  I won’t be one of those.

Written by Jeffrey S. Smith

4 March 2010 at 11:02 am

Posted in Events

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Wrapped in golden chains

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If you’re old enough, the title of this article strikes a chord wherever it is that memories of the early 1970’s still live and triggers the sounds of Creedence Clearwater Revival (or, as we came to know them, CCR).  In his tribute to the generation’s coming out party, Woodstock, John Fogerty ‘s Who’ll Stop the Rain included a cryptic couplet that clearly refers to government, a popular target of the day.  The complete set of lyrics goes:

Five year plans and new deals, Wrapped in golden chains.
And I wonder, Still I wonder Who’ll stop the rain.

The references are pretty clear; “five year plans” were the hallmark of the Soviet Union under the domination of communism, and the New Deal was the chief feature of progressive US President Franklin Delano Roosevelt’s effort to combat the Great Depression.  But how are these tied together, much less “wrapped in golden chains”?

I don’t know whether or not Fogerty had it in mind, but there is a clear connection and significance, not only to the 1970’s but to today.

Beck in the 1920 and 1930’s, those Americans who championed the benefits of communist politics and socialist economics discovered they were a tough sell to the good citizens of the United States.  So, instead of using those terms, they hit upon the term “progressive” to describe their views; after all, in an era marked by two depressions separated by one of the greatest periods of growth in American history, who could possibly be against progress?

Later, in the 1950’s and 1960’s, that term wouldn’t have quite the positive spin it used to, so they started using the term “liberal” to describe how they wanted people to live.  Lately, that term has also started getting a bad taste to it, so they’ve gone back to “progressive”, but, no matter how it’s labeled, at its core the point of view is still socialist.

The bottom line of progressive thought is that the government – particularly with them in charge – knows what’s best for the people.  That’s the point of five-year plans; you can’t trust the people to know what’s best to produce or what crops to grow.  It needs the wisdom and oversight of the experts to make sure it gets done right.  The food shortages, long lines waiting to buy necessities and invariably poor quality machinery and other goods demonstrate just how well that worked out.

The New Deal was supposed to improve everyone’s lives, giving people jobs and hope again.   Truth be told, it did help the national infrastructure, but the Keynesian economic model it was based on assumed that work paid for by the US taxpayer was just as valuable as that provided by industry or agriculture.  As a result, men would dig holes in the morning that other men would fill in that afternoon.  Nothing was produced except a couple of paychecks, and that from the profitable efforts of other people.

The problem with government control, like five-year plans, or provision of jobs, like the New Deal, is that it comes at a cost.  Government, by its very nature, can’t produce anything.  It has to rely on its people to produce something so it can take part of it to do its job.  So, whenever it decides what its people can and can’t produce; when it spends more than it takes in; when it takes more and more in taxes, it takes liberty away from its citizens.  Sure, what they get may look good, and some people might even prefer the luxury of living in substandard conditions so they don’t have the responsibility to produce all that much, but even golden chains are still chains.

The problem is that progressive thinking has gotten into the water, so to speak, of government at all levels and with government officials of all types and political affiliation.  Any time an elected official tells you this program or that assistance for the poor, needy, hungry or whatever is a really good thing, they’re showing progressive colors.  That’s exactly the sort of often well-meaning but in the end self-serving destructive fad John Adams, Ben Franklin, Thomas Paine and the like recognized as tyranny.

Is it any wonder Barack Hussein Obama and his cohorts in the US House and Senate believe they need to pass a healthcare package the majority of Americans believe is wrong?  They, after all, know better than we do what we need, and no one is going to stand in their way of giving it to us.

“See how the gold glitters so nicely?  Wouldn’t you like to wear these chains?”

Written by Jeffrey S. Smith

26 February 2010 at 5:07 pm

Posted in Basics

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Reflections on a setback

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It’s difficult to describe my emotions this morning.  Sure, I’m disappointed the people of Oregon decided to accept the job-killing taxes so many of us worked for the last six months to get on the ballot and let the Legislature know it was a bad idea in a recession.  When we did this sort of thing  five years ago, the result was so overwhelming the politicians didn’t attempt another new tax again until this session, and we naturally figured the hard work was over when we got the referendum petitions in and approved.  We assumed, with good reason, the people of Oregon wouldn’t pass a tax increase during record unemployment and a down economy.

But we didn’t count on the lessons the left had learned in the meantime.

We should have realized they were planning shenanigans when they tried to confuse voters by changing the vote on referendum, making a :”yes” vote mean “no, we don’t want the new tax” and vice versa.  We considered it a minor victory when that died due to the public outrage, but should have been on notice this was going to be a different sort of battle.

Then there was the stall tactic by the Governor who, although he knew we wanted to refer these taxes to the ballot, sat on them for weeks, deliberately reducing the time we had to gather the necessary signatures.  That didn’t work out so well; he eventually caved to the public pressure and we delivered 2-and-a-half times the required number of signatures, even with the shrunken window of opportunity.

The most outrageous con came next, when we found out the Legislature had changed the rules on how the ballot title was written.  Instead of a panel of those for and against working together to put out a reasonably neutral statement, they instead arranged for a Legislative committee, lopsided to favor the taxes, to write them.  As you might expect, instead of a balanced presentation the citizens got a bit of propaganda slanted to encourage a vote to accept the taxes.

The campaign was, for the most part, pretty typical.  We focused on the logical impact of raising taxes on small businesses and corporations.  They have a limited number of options when that happens; raise prices, reduce costs (usually by laying off workers), shutting down or moving out of state.  None of these are a great idea in a recession, and we said so.

Outspending us three to one, the public employee unions and their allies focused on two elements so the citizens were led to believe the new taxes wouldn’t touch them.  If all you talk about is the direct impact, that’s largely true, but it ignores the indirect consequences of losing jobs and businesses and, for that matter, the taxes they pay.

There was, of course, also the threat of having schools and safety services hit hard if the taxes didn’t go through.  That was largely a sham, as there was nothing in the Measures that required them to be reduced; that’s the Legislature’s job.  As it is, there’s a surplus in the state’s bank account more than four times the size of what these taxes raise and nothing to keep them from tapping into it.  In fact, I’d be willing to predict that, when the revenues drop because businesses fail and leave town (as our only Fortune 500 company, Nike, has said it will, along with its 7,000 jobs) over the next year or so they’ll have to use some of it to make up the difference.

The bottom line; I’m disappointed, but pleased and proud of the work we did.  We were outspent and outmaneuvered, but we also learned from this.   One of the conversations last night hit upon an idea that will turn the socialists’ claims and dire predictions against them, and there’s a new unity among groups that have, in the past, tended to look at each other a little suspiciously.

The Second American Revolution was dealt a blow yesterday, but no war has ever had a victory with every battle.  We’re down but not out, and we’re determined to win next time.

Written by Jeffrey S. Smith

27 January 2010 at 9:35 am

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Men in tights

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I’m sure you’re familiar with the legend of Robin Hood – a band of merry men and dashing derring-do in Sherwood Forest and all that.  You know about Little John, Will Scarlet, Friar Tuck, Maid Marian and the rest who mischievously “…steal from the rich and give to the poor…”, frustrating the evil King John and his dastardly minion, the Sherriff of Nottingham  There have been countless movies, TV shows, plays and books produced over the years so it’s an image nearly everyone can easily call to mind.

But did you realize the background it’s set against is still with us?  In fact, it’s a setting that’s been around throughout all of human history.   The names and details change, but the broad strokes would be recognized in nearly every country in nearly every age.  And the funny thing is, those who want and believe government should and can solve people’s problems see the same picture differently than those who argue for small government.  Allow me to illustrate.

Those who want the government to solve the problems they see around them, if they thought about it, would see themselves in the role of Robin and his band of merry men.  After all, they care for the poor, the downtrodden, the unfortunates of the world, and want those poor folks to have the same opportunities and advantages the rich do.  Government is the only power bigger than those wicked corporations, businesses and people who have gotten fat on the sweat of the common man and, by golly, it makes sense to take away some of the ill-gotten gains of the rich and give it to the poor through taxes and fees – share the wealth, as it were.

You can almost see them nodding in agreement, can’t you?  There’s a problem with that image, however, and it takes only a slightly closer look at the scene, and maybe a little understanding of medieval society, to realize they’ve really got it wrong.

First off, who were King John and the Sherriff of Nottingham?  Were they wealthy businessmen who took advantage of the poor citizens living in and around Sherwood Forest?  Not at all; they were corrupt government officials who unfairly taxed the people, taking a portion of what the people earned to serve their needs and wants rather than, as intended, the needs of the people.  The people being taxed were, by and large, the shopkeepers, bakers, smiths and the like who performed services or built and provided goods for others.  Or they were laborers, those with no training or skill who traded their own physical strength for food and various forms of payment.

We could go into detail about the feudal economic system, with its lords, dukes and kings, but the bottom line is those who were producing the wealth were being forced to support a self-centered and self-serving aristocracy, who had all the authority, wealth and military power behind them.  You can look at the corrupt rule of the Roman emperors, countless kings and queens both ancient and not so long ago, modern dictatorships in Europe, Africa and the Americas to see a similar pattern, but the real question is, can you see it where you live now?

In this day and age, in this nation, we don’t have a Robin Hood or a band of outlaws who help us as they roguishly cut the purses of tyrants who dump every-increasing taxes and newly-created fees on our backs.  But we have something the good people of Nottingham never did – an opportunity to vote to throw out those who oppress us and put in place people who will prevent the abuse of power in the future.

In a sense, each of us is our own King Richard, and our own Robin of Locksley.  Ultimately, the responsibility for our own liberty is in our hands.

Written by Jeffrey S. Smith

26 January 2010 at 6:02 pm

Posted in Basics

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