Tag Archives: capitalism

The Proper Role of Government in the Market Place (Part 1/2)

Almost everyone agrees that the Govermment has far too much control in the Marketplace.  Whether it’s the federal reserve adjusting interest rates to give people incentive to buy homes at astronomically high prices (housing bubble), whether it’s a politician making a back room deal and accepting lobbyist dollars in promise to vote for a corrupt bill in return (oil industry, auto industry, communication industry), whether its using tax payer dollars to bail out big business (banking industry, mortage industry, auto industry), or even your local mayor approving a corporate construction zone near your neighborhood to make a few extra bucks – Government corruption and market intervention are rampant – we can all agree there are some problems.

What is the right amount of Government?

Government has two basic roles when it comes to business.  Enforcing Contract Law and protecting personal property rights.  Enforcing contract law basically involves upholding any contract made between two concenting adults.  This is necessary because if there is a disagreement the two parties may have a judgement made based on the predetermined agreement.  So if I agree to sell you my house for $200k, but never move out after you’ve paid me – then legally the Government should help you enforce the agreement.   Contracts are important to business as they are the foundation of confidence between two parties.  If two parties feel they cannot in good confidence make agreements they will not do business or the more powerful of the two parties will almost always abuse the weaker when it is advantageous to do so. 

The second role of Government in the marketplace is the protection of personal property rights.  That is the guarantee that one businesses actions do not interfere with the personal liberty of other individuals.  For example, a business can’t start a nuclear testing facility next to your neighborhood.  Though they certainly have the right to have their business the consequences faced by the individuals (radiation) is a violation of property rights.  (You can do anything you want as long as you don’t violate the liberty of others.)

Those two roles of Government applied fairly throughout the market place virtually guarantee a productive and fair place to do business.  So a drastic, not absolute, reduction of Government is necessary. 

Local vs. National Government

The constitution does an excellent job of providing what role the national and local governments would play.  Local governments have the ability to cater to local needs and perferences.  Local governments give people choice move to an area that better suits their needs.  Hypothetically 99% of issues would be decided by local and state governments.

National government is reserved for issues that involve the international community or cross state lines (per the constitution).  For example, a conflict by two companies in different states would involve the national government.  A nuclear facility’s radiation spreading across multiple states would be a federal issue – and so on. 

Today, due to juducial activism (the interpretation of interstate commerce, mostly) and enforcement by the executive branch the federal government has grossly overstepped its bounds.  This has made corruption among politicians and corporate bodies far easier – especially since the best interest of the people in the local communities mean almost nothing. 

To solve this we should revert back to a stronger local government.

Why Abolishing Government is a Bad Idea

I am a strong advocate of allowing the market to sort things out.  99.9% of the time that is the best thing to do.  However, the market can only work effectively if their is a fair playing field.  It’s important to remember that Government is not the only body of power that has the ability to artificially influence the free market.  So ideally, a just Government would stay out of the business of Market manipulation – and make sure others stay out of it too.  The Government must be non-biased, elected, and have no coflicts of interest to do this effectively (of course that’s not happening today).

Right now its very difficult to imagine a Government that would work.  The Government is so closely linked to business that we have a virtual oligarchy.  Big business sees fit that the right politicans are elected and corporate media ensures that the people agree to it.  Meanwhile, politicians are getting fat off our tax dollars AND corporate kickbacks.  It’s broken.

A system in place with the ability to enforce property rights is necessary though.  Without it we will have the same problems we have now.  Resources people need to survive and have a civilized standard of living (i.e., Medication, Metals, Food, Oil) all have the potential to be utilized for the greed of a few at the expense of many.  Without the enforcement of property rights the strong and wealthy will always be able to take advantage of the weak and poor.  It is the flawed nature of men – an empathy gap between those who are well fed and those who are not. 

We can see prime examples in the diamond fields of Africa where the corrupt rich rule the dying poor or the oil Shieks in the middle east.  An agency of justice is necessary – to lovel the playing field, ensure a truly free market exists, and allow everyone to compete.  Government should be a referee, not a participant.

The Folly of Impossibility

Free Markets or full government control – no matter your poison of choice – there is one major problem.  Men are flawed.  Some men will always exploit and desire to rule over others.  It doesn’t matter if they are in the form of a President or an Oil Tycoon unfair play is inevitable. 

Free markets with a dash of Government refereeing, I believe, give the people the best chance of success.  A free market gives people the opportunity to vote with their wallets and pocket books – to stop businesses who do bad and reward those who do good.  I think we’ve all had enough of these back door deals and lies by our “leaders”.

(Check out Part 2 where I will examine a few examples and discuss the data.)

PERSONAL RESPONSIBILITY: not just a conservative buzz word

Personal responsibility has become quite the buzz word.  I think it almost annoys some people.  A lot of conservative republicans have kind of hijacked the phrase and “responsibility” has almost become synonymous with neo-conservatism.  It’s a shame too.  Because really personal responsibility is what America is all about.

What is personal responsibility and what it’s not?

Personal responsibility is helping your neighbor when they need to paint their house.  It’s giving generously to a charity that feeds the hungry.  It’s giving your friend a few groceries to get by when times are tight. It’s busting your ass doing something you love week in and week out so you can get meet your own goals. 

Personal responsibility isn’t looking down on the poor or believing that everyone can be rich.  Those are lies the conservatives on TV seem to believe and liberals spread. 

It’s almost like everyone wants something for nothing.  They expect the invisible pocketbook of the system to pay for it all.  I think that’s where a lot of my distaste for government programs stems from.  Sure – it’s great that there is safety net in place to help out those who can’t help themselves, but it seems so much more moral if the people would do it themselves.  That is – instead of the government helping – we would help our own neighbor. It’s almost like people have become lazy.  Big Brother government will take care of us.

I’m not saying we should disband all government welfare programs.  Hell, keep them all!  I’m just saying lets change the culture and attitude of everyone.  Lets make “help thy neighbor” popular again.  Tax me less so I can give more to my Mother.  Spend less on fighting with Iranians and spend more on hungry Americans (hungry anybody!).  Maybe I’m being overly optimistic about the nature of our fellow humans, maybe no one would give shit unless they were forced to, but surely a system that provides people with the opportunities to take on responsibility for themselves is better than one that is our babysitter.

An example

A perfect example is in my own neighborhood.  We have an optional home owners association fee of $25 a year.  That’s it!  $25 to keep our neighborhood beautiful and home prices high.  We have a volunteer crew that does “handyman” work around the public spaces.  It’s the perfect example of a free market system – helping yourself helps everyone and visa versa.  However, of 185 households only about 35 households have paid the voluntary dues this year.  I suspect eventually around 50 will pay.  Why such a low participation rate for a service that so obviously benefits you directly?

The desire to pass the buck is an obvious tendency.  What if it were a mandatory $25 fee?  The neighborhood would be much nicer and happier – but a little less free.  Which is better?  I have to admit that I think that enforcing the rule may benefit me more (this time), but what about later when I disagree a rule?  What about when that fee is increased to $100, $500, etc.?  

Any Government or system of power has the incentive to keep taxing you more and more because it benefits the decison maker – where as a voluntary fee has the incentive to stay low – so people will actually pay it.  Which system is better?  Both have their benefits, but I choose freedom.  Especially when those enforcing the rules aren’t living in your neighborhood.

The Third Option

A third option exists.  One where everyone freely does the right thing –  everyone would do their part and take responsibility.  All 185 household would pay the $25, the neighborhood would be beautiful.  We could be both rich and free – not just one or the other.

Unfortunately there are always those who will buck the system.  Not do their part.  Some that can’t do their part.  That’s the problem.  How do we solve it?  I don’t know, but I do know that it starts with each and every one of us taking responsibility for ourselves and doing as much as we can for the rest of mankind – Maximizing Liberty and Happiness.

The Truth about Healthcare, Culture, and Taxation in the US

I discuss the myth that higher taxes will result in a better healthcare system and compare the United States to Japan and Switzerland (both countries with Universal Healthcare Options) .

I also touch on the myth that higher healthcare costs and lower life expectancy in the United States versus other developed nations is a result of not having a Universal Healthcare Option. *You can see the charts and statistics better if you expand the video to full screen.

You can check out the all the stats used in this video here.  Also thanks to Phil Ebersole’s Blog for the inspiration on this topic.

Success is about being a great BULLSHITTER

If there is one thing I’ve learned (and mastered) during my last few years of professional experience it’s that being a master bullshitter can take you a long way in the workplace.  Don’t get me wrong, being a great bullshitter doesn’t mean you have to be a liar or lack integrity, it just means sometimes you have to know what to say, how to say it, and when to say it.  Even if that means making a round piece fit in a square space.

For example, today a senior on my project was questioned by a partner regarding the status. He was in the process of gathering data and didn’t have a good answer, but of course the boss wanted answers when she asked for it.  My poor co-worker was left in a position where he could flourish or flounder, he chose the latter.  He admitted he hadn’t gathered the data on time and took a scolding.  In reality he knew from experience and managing the project that it was 80% complete, he didn’t know that exactly 82.23/100 project steps had been completed, but he had a good understanding of the situation; however, his pathetic answer made it sound like he was off track and incapable of managing the project.  Had he bullshitted, just slightly, and provided her with what he DID KNOW it would have saved him a lot of grief.

I’ve had other situations come up in the consulting environment that were the same way.  A client would ask me a very specific hypothetical question and instead of looking at him/her like an idiot I told the client what I DID KNOW.  Maybe I’m not sure how the latest programming language can solve X problem, but I do know a few of the best practices for IT security and programming – maybe even a few resources they could check out for the information.  So instead of looking like a dumbass, I came through with a value add.  Sometimes that’s how you earn your paycheck.

That’s just life though.  Knowing when to “fake it until you make it” and when to back off and admit you don’t know.  If you don’t know the difference and when to use each – then you’ll likely fail or spend your life in a dark grey cubical working for a bunch of bullshitters.  That’s a free piece of advice from yours truly.

Greg Mankiw’s Blog

I do my best to say an intelligent thing or two about economic issues with varying degrees of success, but I ran across Harvard Economics professor Greg Mankiw’s Blog and think where my little blog falls short – his picks up the slack.  I wanted to share it here – especially since it affirms a lot of my own beliefs. 🙂

a final plea: Truths you should know & why you SHOULD vote for RON PAUL

I have always tried to be as level headed as possible when it comes to making political decisions.  I am careful not to label myself as a republican or democrat, but rather vote for the person, their principals, and ideas rather than for a political party that I happen to associate myself with.  My core values may align, more often than not, with a certain political party than another, but in general I am open to hearing all thoughts and ideas.

That being said, there is only one candidate I fully endorse this presidential cycle.  That individual is Dr. Ron Paul.  The media, I believe, has done a good job of either ignoring Ron Paul completely or implying that he is some sort of lunatic radical, but nothing could be further from the truth.  Ron Paul is the only candidate, republican or democrat, not representing corporate interests, big government, and promoting freedom and wealth for the people.  He has been doing this for decades, but no one seems to realize it or give him credit for it. 

In fact, I have never been as passionate about any other candidate as I am about Ron Paul. 

Ron Paul predicted, pleaded, and begged congress to listen to him about the coming housing crisis:
For almost a decade before the housing crisis and economic collapse in 2008 congressman Ron Paul pleaded with congress to recognize and reverse the policies in place leading up to and causing the housing bubble and collapse that occurred in 2008.  He is the ONLY person running for president that can say that, but no one talks about it. 

Ron Paul has consistently criticized the artificially low interest rates and unlimited line of credit the federal reserve offers banks allowing them to make risky and unethical loans to home owners in which they cannot afford.  This unlimited line of credit led to a housing bubble, skyrocketing housing prices, people with loans they couldn’t afford, and in 2008 – the crash.  Every other candidate either supported the status quo, made money off it, or both.

Ron Paul is the only candidate for a strong, but peaceful, foreign policy:
Ron Paul has more military contributions than every other presidential candidate COMBINED!  Ever wonder why?  Why does conservative media label his foreign policy extreme and so many men in uniform support Ron Paul?  

I wrote an article a while back about the concept of blowback as related to foreign policy. To understand the logic of Ron Paul’s foreign policy I believe it is paramount to understand what that means.  In short, blowback simply refers to the unintended consequences of the United States’ influence in other countries.  For example, we help put Fidel Castro in power, Suddam Hussein in power, as well as Osama Bin Laden – today those are a few of the biggest perceived threats to all Americans.  It is that type of intervention that seemed to be the right thing at the time that further perpetuates war and security issues.

In any case, Ron Paul advocated a strong national defense without intervening in the business of other countries via force or occupation. That is not isolation, that is just peace.  Dr. Paul supports the strongest possible trade relations with all countries, open discussion, leadership by example, without sending our troops to become the police men of the world.  With military budget about half of the federal government’s spending, $15 trillion in national debt, Ron Paul seems to know something that is all to obvious, but the other candidates find less than profitable to support. 

Ron Paul is also a Navy veteran who proudly served his country in the 1960s. 

Ron Paul is the only candidate who advocates a sound monetary policy:
Does it bother anyone else that the federal reserve prints money at will, that effectively reduces the value of every dollar in our pocket?  They do this without authority, without accountability, and use that money to bail out big businesses – not the people.  Every dollar printed by the federal reserve is a hidden tax on the people.  Those dollars printed go into the pocket of banks and make the dollars in our wallets less valuable.  Those are facts. 

Our currency is a fiat currency.  That means it has no value except for the confidence of consumers.  You can’t take your dollar to the bank and exchange it for any precious medal.  Ron Paul is for a return to the gold standard in an effort to preserve the real value of the dollar, stop the hidden tax on the people, and to promote stability of the US dollar.  In a time when our currency is rapidly in decline world wide – the middle class’ wealth shrinking – why isn’t anyone else concerned with monetary policy?  The other candidates offer more of the same.

Ron Paul is the only candidate that doesn’t represent the Status-Quo:
Americans want change.  That’s a fact.  President Obama ran on it in 2008.  So why aren’t we getting any of what we want – what was promised to us?  Is it a surprise to anyone else that president Obama has a $1 BILLION campaign budget?  That Mitt Romney is supported by the corporations?  Why would the richest people in the world support a candidate that is truly for the people?  Why do they support Obama and Romney?

The answer is simple and it’s not a conspiracy theory.  The corporate interest in this country like the current system, why wouldn’t they, it’s making them rich.  The establishment candidates represent more of the same, the same isn’t working. 

Ron Paul on the other hand does not accept money from lobbyist and is fully supported by generous donations from the people – from pure grassroots campaigning.  Ron Paul is the only presidential candidate I have ever donated to.  The media ignores him, the corporations and lobbyist can’t buy him, to me that says it all.

Ron Paul is honest, consistent, and doesn’t come with all the baggage:
Ron Paul’s voting record, message, and personal life are as consistent and honorable as they come.  It’s almost amazingly so.  He has argued the same message and values for decades – and been right!  Ron Paul has been married to his wife for 54 years, doesn’t flip flop on the issues, and gives straight direct answers to the American people – even if they aren’t popular at the time.  It is this kind of leadership we need to represent the United States and promote and image of integrity.  Ron Paul can do that.

Ron Paul is the only candidate that doesn’t support BIG Government and promotes Liberty:
Almost everyone agrees that we are all better off with certain things – such as education and healthcare; however, almost no one agrees about who should be in charge of providing those services.  I want everyone to have access to healthcare, but I do not want government to be my provider.  The government does not generate revenue – they only tax the people and decide who get’s the benefits.  It is laughable that a government $15 trillion in debt (and rapidly growing), with the biggest and most aggressive military in the world, and that already taxes the people around 40-50% (income tax, sales tax, property tax, etc.), is trusted to provide the people with a service as important as healthcare!  Why do you believe this?

I hear each of the other GOP candidates talk about how they do not support big government – but what do they want to change?  Romney, as Governor of Massachusetts, just a couple of years ago implemented a government run healthcare program that REQUIRED people BY LAW to buy healthcare insurance.  Obama proposes the same type of program nationally.  Sure that seems admirable, but how can you force anyone to purchase a product – not to mention insurance and healthcare costs skyrocketed!  Meanwhile quality suffered.  Newt Gingrich has been a government employee for decades and has NEVER done a thing to minimize the size of government, why would he start now?

Ron Paul is the only candidate that supports personal liberty and small government.  His voting record is perfect, he has never supported a program that expands the size of government.  He promotes plans and systems that will HELP THE POOREST in this country and still promote wealth for every individual.  I beg you to research this issue in a non-biased manner.  Come to your own conclusions!

In summary:
Look, I’ll be honest, going against the status quo is tough.  It means researching a variety of complex topics, it means often times coming to your own conclusions, it means not always accepting the conventional wisdom.  I beg you to look at the facts – do your homework – overcome your political apathy and distaste for the idea that it’s all just more of the same.  We really are amongst a revolution, but it has to come from the people – we are the people.

an intellectually honest discussion: HIGHER TAXES DOESN’T ADDRESS WEALTH INEQUALITY

No – this isn’t going to be another conservative defense of “trickle down” economics.  My opposition to additional taxes has nothing to do with my desire to further sheild the rich from taxes in hopes that they may use that extra money in a way that will somehow benefit the rest of us.  Rather my oposition to taxes is a logical oposition to government and my lack of confidence in its ability or desire to use taxes to benefit the people.

We are a country with $15 trillion of national debt and growing.  We could increase the tax rate to 100% and still not pay that amount off in the next century.  The income the government does recieve is spent on an already bloated military to further expand our empire.  The military industiral complex, the corporations, and the politicians are the beneficiaries – NOT the people and especially not the poor.  Who are we kidding?

Perhaps an argument for higher taxes is based on good intentions, but it’s an illogical argument at best.  Those who argue for higher taxes are either in denial or totally ignorant of the government they trust.  People were disgusted with Mitt Romney’s astronomical income and seemingly low tax rat of 15% (still higher than 80% of America’s tax rate).  They ignore that Romney also gave about $7 million dollars to charity (about 15% of his income).  Who among us can say that?  I’m not defending Mitt Romney, but the point that I am trying to make is that charitable donations are far more efficient and effective in addressing the income inequality than giving more money to a government that has already shown they can’t be trusted to manage wealth.

Conservatives get a lot of grief for their distaste for taxes and government social programs.  Often getting the label of greedy and not understanding or empathizing with the poor, but I think there is a fundamental misunderstanding of why fiscal conservatives think this way.  It is not our desire to keep the money from the poor and needy, but rather our desire to keep the money AWAY from the government.  A belief that additional taxes would be used to help anyone is a fallacy.  Additional taxes only serve to further chip away at the liberty of every American, expand our empire, wage wars, and pad the pockets of corporate politicians and lobbyist. 

If anything, higher taxes only kill the poor by aiding the government to wage and fund wars – where the poorest of our sons go to their slaughter to settle the agenda of the elite in this country.  Don’t be fooled – this is the cold sad truth – the faster we recognize it the faster we can change our way of thinking.  We can stop expecting the government to take care of us and our poor, we can stop passing the buck to our government, and take responsibility for this situation ourselves.  Lower taxes empower the people, not the super-rich. 

Warren Buffet once wrote a very popular article saying he wouldn’t mind being taxed more – I say keep the taxes – if you want to give more of your money – give it to a charity where it can be much better utilized.  His article was a brillian PR stunt, but a fantacy.  When has any rich man ever had a problem finding a way to give more of his money away?  If the government does’t want to take it – there are an infinite number of organizations who will.  If anything, his article was a perfect example of our over reliance on the government.

Look folks, the government already takes about 50% of our income (income tax, property tax, sales tax, etc.).  If they can’t make ends meet with half of the country’s wealth then they aren’t doing something right.  The answer is far more simple and MORAL than raising taxes.  Stop waging war, stop expanding the empire, and spend that money on the people who need it.  The country would be that much more peaceful and well fed.

who will save us? the rich or the government? NEITHER!

Last night I had dinner with a few of the “most important” people in the region for our company.  Basically, I was sitting next to a few of my company’s leadership and making small talk for two hours while eating over priced, but delicious, Italian food.  Just based on the conversation at certain points I realized that despite where the individuals may have “come from” they have completely forgotten what it’s like to have an average income – or especially poor. 

It wasn’t that many years ago I was living at home with my parents, receiving free lunch at school, taking my mom to the doctor on her Medicaid insurance, and working doubles on the weekends so I could afford insurance and gas.  I’m not complaining – I didn’t even realize that wasn’t normal at the time.  I mean, had you asked anyone of my friends it I was completely normal.  Working builds character and hardship teaches lessons – even if you don’t even realize you are learning a single thing at the time. 

Anyways, back to the rich guys at dinner.  They were dropping topics like “lake house”, “sending my child to private school”, etc.  Their problems didn’t seem to be issues that regular people deal with – although I am sure to them they were.  Poor people worry about keeping the heat on in the winter, worry about their friends judging them because they get free lunch at school – the rich worry about their “insurance going up on the jet ski at their lake house” (real conversation). 

All this made me think about one thing – the empathy gap.  As you may or may not know I am highly against government interventionism and taxation, but I have to wonder how the poor – the real poor – would get by without government social programs.  Could we depend on the rich to be charitable to a group of people they blatantly do not understand – can’t begin to empathize with?  I doubt it.

Of course the current system is flawed, I hate it in fact.  People abuse the system, the government programs give people incentive to become welfare babies and grow dependent on those resources.  However, what is the solution?  How do we take care of the poor and needy in this country and still minimize abuse of the system, maximize personal liberty, and minimize government taxation and involvement in the rest of our lives? 

I have to believe that due to the amount of bureaucracy, politics, abuse, and general lack of efficiency that any government is not the best way to redistribute wealth – but what is the solution?  I certainly do not claim to have the answer. 

Republicans may say let the rich keep their money and the wealth will “trickle down”.  Democrats might laugh at that idea and push for higher taxes and more social programs to “redistribute the wealth.”  I’m not sure that either of those all so common solutions will solve anything for a hard working mother that can’t make ends meet. 

I know two things: 1. We can’t rely on the rich to be generous or understanding enough to take care of the poor, and 2. This country can’t afford more failing social programs and higher taxes.

So, it seems, we need answers.  We need change.  We need ideas.  We need leadership not tied to the corporate or political agendas.  In the mean time, if you can, be charitable.  We can’t rely on anyone else – not the rich and not the government – to do the right thing.

the best way to beat him is to ignore him – THE MEDIA vs. RON PAUL

Even with the whole of he media completely ignoring and downplaying Ron Paul he still managed to run a close race in Iowa – coming in 3rd. Is it that the people really do not agree with his politics or that they simply do not know who the man is? Every time I talk to a family member or friend that doesn’t support Ron Paul it is almost always because “well, I don’t really know anything about him.” Give me 10 minutes and almost everyone can’t believe they hadn’t heard of Ron Paul! It seems like the media is doing a great job of ignoring Ron Paul – ignoring him to defeat.

2012 Iowa Caucus Results

The race was close in Iowa though, so I figured people would mention it. Someone would say, “Hey this Ron Paul guy is doing pretty good for a guy with no Media attention or corporate donors.” My search in the news was in vein. Almost everyone else was mentioned – even the losers, but somehow the guy in 3rd place by a narrow margin was forgotten, completely.

Top Stories on CNN

Nothing, not even in the articles. No mention of the guy who is still in this race, but why? Why is the media ignoring the one man who has been preaching about blowback, the housing bubble, the fed, the economic crisis, FOR YEARS and BEEN RIGHT – not getting any attention? Instead, its talk about Rick Santorum, Romney, and even still Gingrich – the 4th place loser.

If conservative and liberal media have one thing in common – its ignoring Ron Paul.

Fox News Top Stories

I wish I could say I was kidding, exaggerating, or just making this stuff up – but I’m not. Is it a conspiracy or am I just too close to this? There seems to be too much evidence to believe that! What do you think?

How the Government Screws up Capitalism

On the surface I think it is a no brainer that it is a good idea for the rich to give to the poor.  For their to be greater social equality.  That everyone deserves healthcare.  That the world is a better place when even the poor have access to education, food, shelter, etc.  However, the real question is: Are those goals met best via free markets (capitalism) or via government intervention?  I say, in almost every situation that we are best suited by letting the market decide, maximizing liberty, and minimizing government intervention.

Housing is a prime example of government intervention for an apparently just cause going terribly wrong.  When the government has the power and the desire to effect markets we’re in big trouble.  When you take into account that every loan a bank gives out is a business decision, a risk, that the borrower will not pay them back – it makes since that not everyone can or should be trusted with a loan – especially one large enough to buy a house.  It is just human nature, I’m sure you have a few friends or family members that you wouldn’t trust a $200,000 loan to!  The government took all risks away from the banks though and gave them free reign to give loans to virtually anyone – and the promise on profit even for bad investments.  The banks via the government intervention basically loaned out your money.  When the housing bubble burst – we all wondered why it happened.

According to Judge Andrew Napolitano,

“It was the givernment that created the Department of Housing and Urban Development (HUD), which guaranteed billions of dollars in loans.  And, of course, if a loan is guaranteed by the government, there is no reason for a bank to look at the borrower’s ability to return the money.  Slowly, too, HUD lowered its standards, and the government’s approval for granting mortgage insurance became almost automatic.  Such guarantees brought about new banks, like Countrywide Financial, which were opened around the nation, centered on serving that portion of the population that could not get “prime” loans because of poor credit history, and providing them with “sub-prime” mortgages, sometimes with no money down, to by houses they could ill afford…

[After the housing collapse] Many of those who had invested were investment banks, which then had losses of billions, and they collapsed as well.  The market went into free fall, largely because the government induced and forced banks to loan to people with poor credit, because it felt that everyone deserved affordable housing and so it had to provide it, through any means necessary. But what the government tends to forget is that there is no such thing as a free lunch.  So now, we will soon be paying in higher taxes and inflation for the so called “affordable housing” that the government was desperate to provide.”

Basically, what we saw was government intervention that lead to business failure – it ultimately hurt the very people we were hoping to help. When the market crashed did the government bail out those folks who were losing their homes? No. The businesses were the only ones who profited from those type of lending practices, profited from the failures, and continue to profit today. All to extend the dumb idea that it is a right to own a home! As the Wall Street Journal put it “their profit is privatized, but their risk is socialized.”

The market does not need the government to ensure prosperity – the market has the people and profits to stabilize it. The only role of the government is to ensure fair play (prevent predatory practices, bribery, etc.). Those companies with the best products and business practices will succeed and prices will naturally be driven down, product quality be driven naturally up, and all without the government interfering with tax dollars.

For example, The United States Post Office has a monopoly. If a competitor was allowed to enter the market prices would be driven down due to competition and quality driven up. The only role the government has is to ensure fair play, that is, that one company didn’t illegally threaten the other (like with violence) and that they are not harming the people (like with nuclear radiation or something). Instead we have prices set artificially by the government, no competition, and quality suffers! There is no risk in providing bad quality because there is no competition, no innovation because there is no incentive to innovate.

The fact is, it is the Governments job to protect the people and promote fair play – NOT to artificially affect the markets. That type of intervention always fails! Require power companies to be safe to the environment and the people, require Pharmaceutical companies to test and produce reasonably safe drugs (or at least be honest with the people), require banks to disclose with honesty their financials and prevent fraud, but dear Government STAY OUT OF THE MARKETS.

The government, in the long run, hurts the poor – not help them. Tax dollars are inevitably used on War – which recruit the poor and uneducated to do the worst of the fighting. Tax dollars inevitably bail out the rich bankers – and leave the poor as house-less as they started. Government programs ultimately become a drug that the poor are dependent on like drug users – and they never get off. Free food and money is an incentive to never better yourself, to never gain skills, and to stay down – right where the rich government wants you!

Having said that – all government programs are not evil. Such as public education (while flawed). I know I wouldn’t be the man I am today had I not had a public education – my parents just didn’t value education like I do today. Other programs, like welfare, undoubtedly provided incentive for my parents not to work. I guess, in the end, all one can do is give those who will a chance to succeed.

I’m open to your thoughts about the role of government.