Painting the Leaves

Our leaders truly are incredibly intelligent. When they see brown leaves, they simply paint them green.

Our doctors are often able to correctly diagnose thousands of different illness types. Plus, they know all the medications and procedures that are commonly prescribed to treat those maladies. They are incredibly bright. Point taken, it is marginally sad that most of them have no clue what actually really caused those diseases. Why else would they structurally medicate the hell out of their patients? But forgive them, they cannot all be a Herbert Shelton.

Our political leaders are keenly able to name the illnesses of modern society: economic depression, violence, illiteracy, poverty, disease. There is no end to their inventiveness when it comes to vomiting out new laws, rules, regulations, and public entities in a relentless effort for the government to control all the evils of the world. That, in itself, is a fantastic accomplishment. Sure, it is a smidgeon sad that they have no clue why their policies are not working. Why else would they be spending the taxpayers’ money on bailing out the banks? But go easy on them, they cannot all be a Ron Paul.

Our business leaders have taken MBA’s and know a thousand details about production planning, logistics, marketing, and human resource motivation programs. OK, it is somewhat sad that most of them only focus on short-term results and have no idea how to really build steadfast organizations that structurally build quality products and provide meaningful service. Why else would they keep discounting and brand extending their products to death? Yet keep in mind, they cannot all be a Steve Jobs or a Jack Trout.

Our economists are brilliant at naming, measuring and analyzing a plethora of economic variables such as GDPs, inflation rates, stock indices, earning reports, consumer leverage ratios, bond yields, and so on. Yes, obviously it is a tad sad that they keep thinking their centrally planned tinkering is stronger than the market. If not, why else do they continuously meddle with interest rates, money supplies, taxation, currency band widths, public spending, and all the other tools of the Keynesian bag of tricks? But relax a little please, they cannot all be a Ludwig von Mises.

Many trees have thousands of leaves. Sometimes, these leaves turn brown. Sometimes they fall. Nature can be cruel that way. Fortunately, in their infinite wisdom, our leaders do not accept that. They know better than going with nature. Fortunately also, they have studied leaf science and therefore know how to tape leaves to their twigs and paint them in - almost - natural looking hues. It does not exactly always work perfectly, but why wait for next spring if you may have green leaves year-round? Why nurture the roots with fertile soils, if a paint job is that much faster and cheaper? Our leaders are truly quite brilliant. To solve our issues, all we need is more painters.

Only the Market can fix the Market

In 2007, Western economies got hit by the American financial crisis and ensuing economic depression. Left wing politicians rushed in to point the finger at the greed of the bankers and the lack of regulation. Right wing politicians more or less agreed. They were all wrong.

There will always be greed. The trick is to get greed to work for you, not against you. In a free market, greed - like ego, pride and passion - is good. It works as the antioxidant of the economic body. It aids to guide the efficient distribution of resources and eats up the inefficiencies. The market uses the greed. No greedy businessman would ever tolerate wasting resources. And free market bankers would never get away with over-rewarding themselves with bonuses. They would lose their jobs, for either their employer would go bankrupt or their shareholders would force them out. That is what almost happened some years ago. It did not, for our governments bailed out the bankers and therewith awarded the overly greedy businessmen. That’s how you create bad greed. A truly free market would never tolerate inefficient behavior. In any other kind of market, greed becomes another growth killing variable. A free radical that feeds on risky behavior that will always go unpunished.

We really do not need more regulation. Simply study the rules and regulations, as well as the number of overseeing entities, financial corporations had to deal with just before 2007. A sheer avalanche it was, already back then. But it did not work. It did not weed out the greed and it did not stop banks from making some critically wrong decisions. So now more regulation is going to work the magic, right? Wrong. Greed and mistakes will always be there. It’s human. To think you can regulate that away is a fallacy of the highest order. They tried this, in vain, in communist, fascist, and socialist regimes. Sadly, it is a concept that is still entertained by the elitists who think that a select group of wise people should decide for everybody else. This, while history has proven that no amount of regulation is going to fix the market. Only the market can fix the market.  

What really caused the financial crisis is sustained government intervention. The powers-that-were spent like mad, kept increasing bureaucracy and taxes, subsidized some industries, forced low interest mortgage programs on the market, and - worst of all - regulated the markets through inept central banking systems that pushed interest rates to artificially low levels and printed money out of thin air. But they have not learnt one thing. Now, in order to ward off a double dip, the powers-that-be have been prescribing the same medicine, but with upped dosages. That’s like smoking more cigarettes in order to cure your lung cancer. Maybe it’s time to just quit smoking.

Subsidies are Immoral

No matter how you cut it, government subsidies are immoral. 

In politically correct terms, subsidies aid those in need in order to enhance the greater good.  Objectively speaking, any subsidy takes money from most citizens and gives it to a select few, based on subjective criteria. This practice is both unfair and economically retarded.

The practice of doling out subsidies is simply unjust. The process of deciding on who gets a government grant, and who does not, is always a subjective one. Take subsidies for artists. There are thousands and thousands of aspiring painters, dancers, singers, writers, and every other artistic endeavor. Who should get subsidized? All of them? There is not enough money for that. Only the dancers? Uh, that would not be fair! Only the most talented ones? But who are they? There isn’t a snowball’s chance in hell that even a commission of the wisest men and women in the world could answer that with any degree of objectivity. Some highly debatable choices will have to be made. Moreover, the vast majority of artists will get nothing. Yet, to add insult to injury, they will have to compete with those artists who do get subsidized. The same goes for trade subsidies, area development subsidies, entrepreneurial subsidies, and any other kind of subsidy. Handing out money is nothing less than playing favorites. The only just and simultaneously efficient way of deciding on who gets what, is pure democracy. In other words, leave it to the market. 

On top of that, government subsidies are a monstrous economic tool. Subsidies lead to unfair competition and a massive squandering of resources. Providing subsidies, by nature, quickly spirals into more taxation, more government spending, and more bureaucracy. To illustrate, just to determine who will get subsidized, Western societies maintain thousands of committees and ‘non-profit’ foundations, all of which need income themselves to stay afloat (which often means carrying huge management salaries and luxury cars with chauffeurs). Their income mostly comes from, yes, more subsidies as, well as huge fees paid by other foundations for ‘services rendered’. Consequently, ‘non-profit’ grows like cancer. There are also loads of foundations that have to keep the other foundations in check. Which, commonly, they don’t or can’t. But who cares? They get government funding anyway. This ever-growing underbelly of crony capitalism and covert socialism drains our economy. It can only be fed by increasing taxes, again and again. Until it all blows up in our faces.

Yet, Big Government politicians love subsidies, for they provide an excellent platform to meddle where they want, foster their networks, forward their pet projects, hide funds, create sweet jobs for cronies they need to pay off, and just play favorites in general. The only way to get rid of subsidies, is to get rid of Big Government. It is a happy few politicians who keep funding a selected group of citizens at the expense of everybody else. It is immoral.

Why Occupy should fight Big Government

The Occupy protesters appear to be clueless, baseless and directionless. But they do have a point. One.

No, it is not that they blame capitalism. Many of the protesters claim that capitalism is the culprit behind the economic crisis. Although this is a popular notion nowadays, it could not be further from the truth. For capitalism to be the cause, we would need to have capitalism first. We do not. Proper capitalism can only exist under laissez-faire government that would not tax the hell out of everybody, would not try to regulate every move we make, would not systemically centralize power, would not force anybody to get insurance for anything, and most of all, would not use the taxpayer’s money to rescue any company from bankruptcy. Anybody who claims that capitalism is to blame, does not know what capitalism is.

It’s also not Occupy’s call for more legislation. What we need is less legislation. Both in the U.S.A. and Europe the markets are already structurally hindered by an overload of - all too often conflicting - laws, rules, and regulations. More regulations, more government appointed ‘authorities’, and more committees overseeing these authorities will not solve anything. Has it ever in the past? No. Not ever. All it will do is create more bureaucracy.

And it is certainly not that they blame the economy. Believe it or not, but some of the Occupy interviewees stated that they were protesting ‘against the economy’. Do not laugh, for there are many among us who consistently confuse cause and effect. Like those who believe our political leaders when they claim to bail out the bankers, or the Greeks, or whoever is next, in order to ‘save the economy’. What they really are trying to save is the status quo, their relations, and their power.

But Occupy is right on the money about one thing. Corporatism. The political power of Big Pharma, Big Finance, Big Defense, and Big Telecom is gigantic. The markets are rigged in favor of the big corporations. Small players stand no chance, as they are lobbied out and regulated to death. Consequently, we have government induced oligopolies in industries such as health care, energy, and defense. True competition is thwarted. Consumer choice is suppressed. This is hugely hurting the economy.

Yet, what Occupy does not say, and probably does not know, is that corporatism is sponsored by Big Government. Who is responsible for the overflow of nitty gritty laws and regulations? Big Government. Who bailed out the banks? Their comrades in Big Government. Who bailed out GM? You guessed it, Big Government. Corporatism festers in the fertile bureaucratic wastelands of overbearing and over-regulating governments.

Fortunately, there is an effective antidote. Small government. So here is what Occupy should demand: Do not regulate the markets. Do not bail out corporations. Restore a truly free market economy. Shift the power balance back to the individual.

Greek Drama

Yeah right.  As if sending even more billions of Euro’s or Dollars to the Greeks is going to keep their economy afloat.  News flash for the ignorant: Greece is bankrupt already.  Has been for a long time and no amount of spending will change that. The only rational and humane thing to do, is to let them go bankrupt in peace.  Would be best for Greece.  Would be best for all of us.  

It certainly would be best for Greece, as multiple kinds of cancer - bureaucracy, socialism, laziness, and being forced into oversized E.U. pants - have been eating away at this beautiful country’s intestines for way too long. Its life can be prolonged by artificial life support, but it cannot be preserved. Please let the old Greece die. A new Greece will arise from its ashes. Lean and mean. Slowly, but surely. With strong and healthy economic fundamentals. It will be hard in the short-term, but those individuals that really want to, will find opportunity and wealth. Why? For one, because they will have to. Having no fall back plan is a great motivator to stop complaining and start working. But also, there are, of course, plenty of clever and hardworking Grecians. It is this group of people who will light the path for a glorious Hellenic future.

It would be best for the rest of us too. Our governments, in all their various guises, are spending our income on playing pretend. Due to Soviet style planned interventions and investment programs all E.U. countries are in the red to the max. Printing more money, throwing more loans at the weakest E.U. countries, guaranteeing unlimited credit to the banks. It will not work. Now that the terminal cancer patient is starting to visibly decay, our leadership fools are acting that wrapping the dying body in bandages will make the problem go away. It will cover the wounds for some time, but it will not hide the stench. And already the blood is seeping through. It will merely prolong the death struggle and cost the E.U. tax payer an arm and a leg. More than anything else, it will hurt the world wide economy in a huge way.

Let this Greek drama end now. Stop using the individuals’ hard earned money in trying to keep the show going. Give the Greeks some time to fix their issues but let them start today. With their own currency and their own inventiveness. Let the leftover E.U. countries stop spending money. Also today. The market will recover faster without the governmental medicine man act. Governments throughout the Western world are increasing taxes and spending it on ‘saving the economy’. Does anybody with a sane mind think that decreasing our taxpayer’s spending power will actually be beneficial to the economy? That would be like believing that you can beat somebody into loving you. Let nature take its course. Let the markets do their job. Stop meddling.