French Workers Shut Down Eiffel Tower: A Preview Of Socialism by Rachel Marsden

The article of the day comes from Townhall.com:

A Rasmussen poll here in America has just found that only 53% Americans prefer capitalism to socialism. Care to see what the alternative looks like?

“Strike closes Eiffel Tower; worker’s demands not known,” read the headline of a Canadian Press story this week. Apparently 500 people who work in the city’s largest tourist attraction all just walked off the job. No one even needs an excuse not to work in France anymore. Coming up with things like “demands” takes work and effort. And why bother going through the rigmarole of requesting time off, jockeying for prime vacation days with your colleagues, or even notifying your boss of your absence when they could have it so much worse and really should be so lucky that you just decided not to show up.

For those French bosses who audaciously impose things like “schedules” and “work days” on their underlings, the French will be willing to foist work upon themselves as prison guards, holding their boss hostage in the workplace. That’s what happened recently to the executives at France’s 3M, Caterpillar and Sony plants. With 45% of French approving of this tactic, according to a poll this week, things aren’t likely to be changing anytime soon.

Having spent some considerable time recently in Paris, France, I just happened to be there during one of the country’s national strikes. From where I was that day in the upper-scale 16th arrondissement, it wasn’t too noticeable. The subway operated normally, and students whose teachers were on strike appeared to have some studying to do. Mainly because they’re told that unless they qualify for certain universities and programs, they can pretty much kiss their entire lives goodbye. Attending the right schools in France determines whether you will, in the future, be locking up a superior in a private industry job…or, alternatively, being wrapped up in duct tape by an underling.

But just south of where I was, at the Place de la Nation, the police spent the national strike day fighting off rioters, who apparently had nothing better to do after a long day of being paid not to work. (more…)

Advertisements
Published in: on April 13, 2009 at 6:28 pm  Comments (2)  
Tags: , , , , , ,

Deliberately Misplaced Blame by Sean Malone

The article of the day comes from Mises.org:

Let’s play a game. I have a not-so-famous quotation to share with you, and then you guess who said it:

We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic.

I’ll give you a hint; it was spoken by a sitting US president. Not quite enough? How about multiple-choice? Was the speaker

  1. Current president Barack Obama
  2. Overseer of the first-round, $700 billion bailout George W. Bush
  3. New Deal designer Franklin Delano Roosevelt
  4. “Hands-off” free-market supporter Herbert Hoover

Ponder that for a minute or two, and we’ll come back to the answer later on.

Geesh! Free-market, laissez-faire capitalism sure has been taking a beating in the press lately. The official story seems to be that everyone knows the financial crisis represents a failure of the capitalist system, and now only a “gigantic program of economic defense” will save us.

I suppose that would make plenty of sense, if only the details we’re being told day in and day out were actually true.

It’s rather amazing the lengths to which many of the people chronicling the economic crisis are willing to stretch the truth in order to ascribe blame to those they wish to be responsible, all the while ignoring those who actually are. One depressingly common tactic, seemingly en vogue at the moment, is to falsely claim that a person said or believed certain wrong-headed things in order to denigrate the person about whom one is making the claim. Examples abound, but the case du jour is Thom Hartmann’s traducement of laissez-faire’s “intellectual roots” in the Huffington Post:

The intellectual forefathers and mothers of the insane conservative economic policies that have brought us to where we are include Ludwig Von Mises, Friedrich Von Hayeck [sic], Milton Friedman, Alan Greenspan, Tom Freidman [sic], Robert Rubin, Larry Summers, and Ayn Rand.

Hartmann will likely get away with this slap-dash conflation of names, simply because the people he impugns are mostly dead and relatively unknown to the average reader. Hartmann isn’t alone either; it seems almost daily we read another set of distortions, myths, and outright lies trotted out by similarly minded writers.

The reality, quite unfortunately for Mr. Hartmann and friends, is that his claim is built on a wobbly foundation of misinformation. Why? (more…)

Is Barack Obama The “Moral Alternative” To Capitalism? by Austin Hill

The Article of the Day comes from Townhall.com:

Who ever imagined that in the year 2009, the President of the United States and the protesters who sought to disrupt the G-20 Summit would actually agree on something?

“Capitalism is immoral” was one of the phrases scrawled on several of the banners carried outside the summit meetings this past week. And although he has never said this in so many words, indeed President Obama would seem to be in lock-step with that assertion, or at least with the sentiment that the assertion entails.

But whether you’re a protester or the President, to assert (or even to simply “imply,” as Mr. Obama does) that “capitalism is immoral” is to invite a slew of crucial questions. And the first and most obvious question that this raises is, “what does this assertion mean?”

Presumably, protesters – – and those who think and believe like them – – intend to convey with their “capitalism is immoral” statement that the mechanisms of the free market have failed to produce “moral” economic outcomes. Executives earn too much money, non-executives earn too little. Business owners exploit their employees, and as a result the employees can never “get ahead” and gain new ground with their personal finances.

And it’s not just protesters outside the G20 Summit who believe these things. I suspect that a great many Americans think and believe that the free market has produced “immoral” outcomes, as well. But it is not sufficient to simply say “the free market is immoral.” If one really believes this, then one must ask themselves “what system would make for a better alternative?” Yet without formally asking this question about “alternatives,” most people who believe that the free market is immoral presume, almost instinctively, that an economic system with more government controls and mandates can produce a more “moral” outcome.

So let’s assume for a moment that this is true, that more government controls and mandates on business can produce a more “moral” outcome for the economy, and for the broader society. If this is so, then one must also answer this question: who is the individual person that is so wise, so all-knowing, so just and so good, that they can make all the decisions necessary to produce this “more moral” economy?

Don’t kid yourself – – this is high-stakes stuff. If the mechanisms of the free market – – that is, private persons and organizations who, driven by their own natural interests, seek to acquire the best possible goods and services at the lowest possible prices, and who seek to sell their goods and services for the highest price they can get for them – – if the decisions and behaviors of individual private citizens don’t produce a desirable outcome, then which individual can make all the “right” decisions, and mandate all the “right” behaviors, so we can all enjoy a desirable outcome?

People of the “protester mentality” don’t often consider these more detailed, more delicate, and more difficult questions. Yet, world history is replete with kings, queens, dictators, and – – yes – – even Prime Ministers and Presidents – – who are certain in their own minds that “as long as I’m making all the decisions, then things will turn out good.”

This is precisely the certainty that President Obama displays. In the past three weeks, alone, our President used his influence to oust the C.E.O. of the General Motors Corporation, and now appears to be more-less hand-picking a new board of directors for G.M. As was noted in a Washington Times article two weeks ago, Mr. Obama’s Treasury Department appears to be creating a new position in our government – – the office of the “U.S. Executive Compensation Specialist” – – a government appointee who will determine how much money business managers and executives will be “permitted” to earn, and who will also seek to take away earnings from Americans who are believed to have been paid “too much.” It also appears that, via the Treasury Department, Mr. Obama intends to have other CEO’s removed and replaced as well.

So is this the pathway to a “more moral” U.S. economy? Nobody questions that there have been serious failures among many American corporations. But does this one man, Barack Obama, know the banking, and insurance, and automotive, and healthcare, and energy businesses so well that he, alone, can determine what are “fair” wages, and prices, and practices in all situations.

Such an assumption of the U.S. President defies the limitations of the executive office as set forth in the U.S. Constitution. But constitutional limits don’t seem to matter to our current President.

So now it is left to the American citizenry and the U.S. Congress to determine if this one man, Barack Obama , is so wise, so all-knowing, so just and so good, that he can make all the decisions necessary to produce this “more moral” economy. How will the American people respond to this all-important question?

The Obama Arbitrary CEO Pay

Let me first give an introduction to this piece I am going to talk about. This was written for Slate Magazine by Eliot Spitzer. Yes, the former Governor of New York that was involved in the prostitution scandal. He writes a column once and a while for Slate and they are usually pretty good. This article is on the Obama CEO salary-cap of $500,000. This has been something I wanted to discuss. First, let’s start out with a quote:

“What should really be done about executive pay? First, let us acknowledge that the $500,000 bar is arbitrary. It will be way too low in some circumstances and way too high in others; it affects too few executives; it can be easily avoided through alternative pay techniques; and it injects the government into a sphere where it is uniquely inept—setting private-sector wages.”

This is an important point the reader should take away. That is this is a arbitrary number that has been imposed upon people with absolutely no calculation. This is a key problem to socialism. As in because we can only ballpark the wage, which was solely decided upon by looking at other markets, we have no clue if $499,999 is the right amount or $500,000. The main reason for a CEO’s wage is to attract the best and brightest, while not putting all your eggs in one basket. When the government takes over a business the incentive for them to take off and run away with the money is huge. This is not a small detail to be missed. This is a huge problem when creating policy, when you talk about social justice it is all arbitrary. For example the progressive income tax, the rich should be taxed 33%, 45%, 56%? Pick one and tell me why. Now this is where Governor Spitzer goes wrong:

“If we are to stop outrageous pay, the objective should not be to match the foolishness of the Bush ideological embrace of wild-eyed libertarianism masquerading as capitalism with an equally foolish “government knows best” approach that ignores the market. We must create a genuine market for CEO services, generating meaningful competition and socially acceptable results.”

He then goes on to describe how he would set up a corporation with checks on CEO’s pay. First, Bush was no where near libertarianism and he definately did not ignore the market. He has made some of the larges moves towards socialism by messing with the markets we have ever seen since FDR. Then there is the major fallacy, he makes. He decides to come up with is own corporate system and acting like it is a policy prescription.

If you do this then you are making the best possible case for central planned socialism. So sure, maybe he does have some points and you can read those in the link below, but he needs to pitch these to corporations not to the American people. If they adopted his plan and it was superior then all investment would flood this business and CEO would be begging for a job.

The rest is here.

~PCCapitalist

Published in: on February 25, 2009 at 1:15 pm  Leave a Comment  
Tags: , , , ,

The Layman’s Fiscal Stimulus Economics Lesson

picture-3Since the stimulus package passed last night, there needs to be some time for everyone to understand the particular economics behind this. As NetRightNation has pointed out this has been pointed out rightly that it is full of pork. This is logical from the politicians because they are trying to win votes. If their constituents feel as if they are not being taken care of during this time of crisis they will surely be voted out. Most non-Economist do not completely understand every aspect of this plan but they feel it is wrong. So what is the “fiscal stimulus” and what are the theories and counter theories in Economics about it?

This of course starts with our good friend John Maynard Keynes. Keynes worked on a way for us to get out of recessions with government in mind. He worked on a concept called “the marginal propensity to consume.” It was hard to find a chart but above is the consumption and income for 1935-36. As you can see consumption is very close to income. The marginal propensity to consume is how much a person will spend if you give them a dollar. If it is .9 then they will spend 90 cents on the dollar. So for simplistic terms this means that it is a multiplier and important to note for injecting money into an economy. The basic idea is that the increase of government spending on the economy will multiply rising people’s incomes throughout the economy, which will make the initial demand boost. The Keynesian economist (KE) says that it is the loss in demand that has caused the recession. The KE would also believe that businesses would have a coordination problem and they need government to ensure demand will always be there so they can invest. So what is the solution? The government.

Basically, Milton Friedman and other monetarist came along and believed that this was wrong and that in fact you must use monetary policy to shift the aggregate demand, which is everyone’s demand added together. This includes interest rates and the monetary base. So now we have two schools of thought basically arguing over how to increase demand.

So what are the problems with these? First, the problem is even if we assume this can work, there is a huge lag. As in the economy is already in recovery by the time the fiscal stimulus effects everyone, government will not get data that we are out of the recession until a couple of months after the fact. This is why monetary policy is preferred until recently. It is much quicker and requires no legislation. Second, if people expect the tax cuts to only be temporary they will not respond in the way that they would if the tax cut was permanent. The expiration of the Bush tax cuts could be a culprit to the current crisis. The third problem, is called crowding out. This is when we increase fiscal debt which leads to higher interest rates. That will then lower the demand in the private sector and then these would counteract each other. This is why adjusting the interest rate has been the governments favor plan. Of course, if you will notice then interest rate is the lowest it has ever been and loans aren’t coming out. This is because the central bank cannot control the real rate of interest.

What is the real solution then? First, we must eliminate the capital gains tax for good. This is important to make permanent as I mention the lag problem before. We also must deregulate banks and allow them to invest in more than just small business loans and mortgages. Whenever someone invests into the stock market, one of the first tips you will hear is diversify. We do it but we do not allow banks to do it. The Federal Reserve must work on targeting inflation and not creating it. There will be a downward pressure on prices but this will be due to a readjustment period and not because people are burning their money. We should adopt a balance budget. This will not happen over night but it will ensure prosperity for the future of America. We reduce spending and extend the Bush tax cuts. These all will allow for more investment. We do not need to be obsessed with Americans spending money. If they take their extra earnings from these tax cuts and elimination of the capital gain tax then we will encourage investments. This will allow for these bad assets to be bought up.

~PCCapitalist

Published in: on January 29, 2009 at 4:23 pm  Comments (3)  
Tags: , ,

Marxism Versus Capitalism

This title of this post is my new project with a Marxist debating Capitalism, Socialism, Labor theory of value, and many others. I invite you all to join and contribute. The Austrians did it years ago and now it is time to do it again. This is because people have not learned.

The link is here.

~PCCapitalist

Published in: on January 24, 2009 at 3:04 pm  Leave a Comment  
Tags:

Insane Murderer or Fighting Revolutionary?

This is an interesting story I read in an older Economist Magazine:

“A Chinese man who killed six unarmed police officers in Shanghai can hardly be surprised to find himself of death row. But he might be taken aback by the popular sympathy for his plight. So might the authorities: the case has become an embarrassment.

Mr. Yang’s standing was bolstered by internet rumors-denied by the police- that he was beaten up by officers when he was detained last year for riding an unlicensed bicycle. Many also criticized the secrecy in which the first trial was held and an apparent conflict of interest: Mr. Yang’s lawyer was giving advice to the local government responsible for the murdered policemen.”

Sure, murder is bad but what I found interesting about this article is that this man would have been labeled by the government just as a crazy man. Maybe even a crazy man against Communism and this may well be true and the rumor about the bike could be untrue. What is important here is that if this is true then the man is getting his story heard. The massive explosion of the Internet in China is giving the Chinese a place to speak freely. Sure, it isn’t 100% free, but it is more free than before.

Most people would be very upset to be beat up for stupid government regulation by the police. They would most likely sue and attack the government. Since in China there is no real system to do this Mr. Yang took it in his own hands. Right or wrong he was standing up for his rights to defend himself. In a Capitalist society, that is through the judicial system. In a Communist society, you have but no choice but to result to violence.

If Mr. Yang really got beat by the authorities for riding an unregulated bike, then all he was doing was standing up his right to exert punishment on the unpunishable. So this begs the question, in a society that is full of totalitarian police force dictators how can you defeat them without resorting to their own tactics?

~PCCapitalist

Published in: on January 22, 2009 at 1:27 pm  Leave a Comment  
Tags: , , , ,

Book Review: Liberalism by Ludwig von Mises

Even though my semester hasn’t officially started and has been delayed by President-elect Obama’s events, I have completed the first book for a class called Constitutional Economics. This book is by the dean of the Austrian School of economic thought. It is a very short read of about 200 pages including the introduction, talking about the new dirty word in politics, “Liberalism.” It is not the type of liberalism that you think of when thinking of John Kerry. In fact, most of it is the complete opposite. Like most sensible people, unlike politics, Mises used the word in relation to its definition from the latin word “liber” meaning free.

Since there are many big ideas in this book that I will probably write future posts about, I will only give this a brief book review. The overarching main theme is that the Liberalist’s policies are those of a society build upon freedom and Capitalism. Capitalism has been the key to success bringing wealth to everyone, along with freedom. I think this is an important point that people overlook. Capitalism back in his time and still today is portrayed as only helping the rich. This makes no sense at all because none of the polices pursued by supporters of Capitalism support a certain class.

This leads to another great point Mises makes which is that when people talk and think of a monarchy, they always think of themselves as the king. In a oligarchy, they are always apart of the ruling class. In a socialist system, they are always the central planner. In Capitalism, they are always what? When someone talks about Capitalism, they never put themselves in any ruling class over someone else. This alone should make people skeptical of what these other people are coming up with as organization.

Capitalism is not complicated even though today people try to complicate it. It is simply, as Mises puts it,  private property as the means of production. This is completely opposite of communal property as the means of production or Socialism. This argument could go on and I am sure in his other literature, he continues these arguments. But it is without a doubt that this should be a required reading for all politicians and policymakers. Since very few of us are those, then this should be a good starting book into the literature of Capitalism. And I will end this with a great ending quote from the book:

” It [Liberalism] has no party flower and no party color, no party song and no party idols, no symbols and no slogans. It has the substance and the arguments. These must lead it to victory.”

Rating 10/10

~PCCapitalist

Cuba’s Revolutionary Task

Today marked the 50th anniversary of Fidel Castro taking power and turning Cuba upside down. Since then the United States has had an embargo on Cuban goods. Some, like yours truely, argue that it has done nothing to bring down Castro. With the new administration, we can hope that there will be a change in policy towards the Cuban nation. This is so that we can put tourists and investment in this country, lifting people out of poverty and showing them what Capitalism is all about. Of course, many Cubans already know as many flee here all the time. This from the International Herald Tribune, which is a good story to sum up the last 50 years.

“Four months after they appeared in the waters between Havana and Miami, the four dead men remain nameless. At a morgue in the Florida Keys, they lie on stretchers stacked like bunk beds, their bodies chewed by sharks, their faces too putrified to be recognized.

The police suspect they were Cuban rafters. Nilda García thinks one of them might be her son – and the thought makes her weep. Fourteen years after she left Cuba on her own makeshift boat, she finds herself wondering once again: When will it end?

“How many mothers are going through this?” García said in an interview at her daughter’s apartment here as she awaited DNA results on the bodies. “How many more are crying for their losses? How many young people have drowned in this sea? How many?”

Fifty years ago on Thursday, many Cubans cheered when Fidel Castro seized power in Havana, and even now, the revolution attracts many fans – as evidenced by a Canadian tour agency advertising trips “to celebrate five decades of resilience.”

But the bodies speak to a different legacy. Here in South Florida, where roughly 850,000 Cubans have settled over the years, repeated waves of painful exile and family separation define the Castro era.”

We as Americans get too used to our living standard and government. These people fight and risk their lives for freedom, while we continue to elect those who move us closer and closer to socialism.

~Marxsevelt

Published in: on January 1, 2009 at 11:38 pm  Leave a Comment  
Tags: , , , ,

Good Recession News: Privatizing Parks and Roads

As most people know all across America there are many nature areas that are owned by the state and federal government. This along with almost all roads are owned by the government. As I have mentioned before during a recession people usually turn their back on Capitalism. There are some benefits of recessions and in this case it is that the governments of many states are losing revenue. This is because as productivity goes up so does governmen revenue. Since states cannot issue their own currency and inflation/steal from people, they must find another way to raise revenue. This from The USA Today:

“Like families pawning the silver to get through a tight spot, states such as Minnesota, New York, Massachusetts and Illinois are thinking of selling or leasing toll roads, parks, lotteries and other assets to raise desperately needed cash.

Minnesota Gov. Tim Pawlenty has hinted that his January budget proposal will include proposals to privatize some of what the state owns or does. The Republican is looking for cash to help close a $5.27 billion deficit without raising taxes.

GOP lawmakers are pushing to privatize the Minneapolis-St. Paul International Airport and the state lottery. Both steps require a higher authority — federal legislation in the case of the airport, a voter-approved constitutional amendment for the lottery. But one lawmaker estimated an airport deal could bring in at least $2.5 billion, and the lottery $500 million.

Massachusetts lawmakers are considering putting the Massachusetts Turnpike in private hands. That could bring in upfront money to help with a $1.4 billion deficit, while also saving on highway operating costs.

In New York, Democratic Gov. David Paterson appointed a commission to look into leasing state assets, including the Tappan Zee Bridge north of New York City, the lottery, golf courses, toll roads, parks and beaches. Recommendations are expected next month.”

This is great. It would be nice if banks and private individuals were able to own some of these assets. First, this wold allow banks to not weigh so heavily on the mortgage industry. Second, these airports and roads will be run more efficiently. This is a benefit to everyone and most people would agree that many of these things shouldn’t be run by the government. The federal government should take a look at what the states are doing. They are too busy trying to “Save Capitalism.” Anyone who says that is a Socialist. The point of Capitalism is the invisible hand not the bureaucratic hand.

It is definitely an interesting shift with the federal government socializing banks and car companies while states are auctioning assets. It could be must worse and at least us Capitalist are getting something out of this.

The rest is here.

~PCCapitalist

Published in: on December 28, 2008 at 1:11 am  Comments (1)  
Tags: , , , , , , ,