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Capitalism, the Superior Societal System


“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
– Adam Smith (1723-1790) Scottish moral philosopher and a pioneering
political economist.

Self interest, what some may call “greed”; wrongly, is a good thing.

Put simply, capitalism, is as natural to humans as breathing. In the first moments of the dawn of mankind capitalism was present. Everyone who has ever lived, has participated in free market economics. This includes, the communist, marxist, socialist and every other follower of a political philosophy that has existed. The self-interest of an individual is the foundation of ‘economy’. This self-interest is a force on both sides of the market. Someone has a need for a good or service, and someone else has the good or service to provide. It really is as simple as that.

When someone performs labor, they have transferred a part of themselves into that which they have done. The task has become intertwined with their very soul. Same with someone who creates a product, that endeavour also is a part of them. This, I believe is the inherent reason that wherever and whenever socialism or communism is experimented with, it always fails. It is because the economic system of socialism punishes the producer and rewards the mooch. It steals the very soul of man. When a person lays their hand to the plow, they do it to better their socio-economic status, not for their health. They do it for their family. This is why the recent remarks made by President Obama about small business owner’s hit such a sour note. “If you have a business, you didn’t build that, someone else made that happen.” The election that we happen upon will be a decision solely won or lost on who we think will do a better job of pulling the American economy out of the ditch. Capitalism vs. socialism. The difference’s, couldn’t be further apart. Our politicians are attempting to mix the two, and have. However, I suggest they are not compatible with one another. One steals from one party, and distributes the stolen money to those without the morality to know that they should refuse to take the money. One, lets the party who earned the money to keep the fruits of their labor, and spend it accordingly to their will. They do not mix as philosophies.

Like all other things, capitalism doesn’t fare well when mixed with immorality. Here is the issue that befalls us currently. The enemies of capitalism use instances of Immorality to attack it. What they fail to do is separate free market capitalism and the immoral act. An excellent example of this is the issue a few years back when it was found that Bernie Madoff swindled many out of billions of dollars as an investor. Communists point out “look that man stole a ton of money from innocent people, capitalism is terrible!” You see, capitalism doesn’t breed theft, or a skewed view of greed, or what the Holy Bible calls covetousness, (the act of wanting after the things that others possess). The act of theft is a fallen, human condition, it develops in the heart before it is acted upon. Capitalism serves those in need of goods or services, it doesn’t steal from anyone. Another argument against capitalism is “look, the housing market collapsed, or the Dow Jones fell 300 points, capitalism sucks!” The flaw of that argument is this, free market capitalism has not been practiced in our nation for better than a hundred years. There are a set of structures built into an economy, a set of laws. Just like physics, an economy is bound by its laws. If a body is at rest, it will tend to stay at rest until something moves it. If a body is in motion, it will tend to stay in motion until something stops it. Equally, if a force outside the market attempts to control it or manipulate it in any way, it has an effect. The effect can be either positive or negative, however, there is an effect. An example of this would be the housing bubble. When congress decided to set new loan rules for housing by demanding banks lower their standards on lending, the market was affected. What ensued from that decision is now remembered as the housing crash of ’08. A lot of finger-pointing came from that market crash. Many blamed the banks, many blamed the people who couldn’t afford the home, however few blamed the real culprit, the set of loan rules that caused the bank to make bad loans in the first place. Pure, free market capitalism doesn’t recommend loaning monies to people who can’t repay. The housing crash has been used to attack capitalism. When the market fell, Americans should have marched on Washington D.C. and demanded that congress pass legislation to remedy loose loan rules pushed upon the banks by the government.

That brings us to GSE’s. The Government Sponsored Entities are those businesses like Fanny Mae, and Freddie Mac. Actually, there are a lot of these. Many would agree that the federal government should not be in  the business of owning businesses. Owning a business is not one of the seventeen enumerated powers of the government laid out in the U.S. Constitution. However, the government, through influence and regulation, own or run a plethora of companies. General Motors, Chrysler Corp., Floodinsurance.gov, banks, investment firms, insurance companies, now with Obamacare the government absorbed 1/6th of the U.S. economy, this is a short list, there are many more. A state regulated and controlled market is not free market capitalism, it is state capitalism like China operates. With the latest comments that Obama has made about expanding the auto bailouts to other industries, Americans should be extremely concerned about our direction as a nation. He is espousing marxist theory on the campaign trail, and the sad part is not many Americans know it when they hear it. On the other hand, if George W. Bush would have campaigned in ’04 and told the American people that he was shutting down and selling off GSE’s to private buyers, or “worse” yet, private equity firms, the press would have had a seizure! They would have said that the nation was being transformed for the worse. But, when our nation is being strangled by Venezuelan style business models, (nationalizing industry) the press is silent. That is criminal!

To me, the results of the Founders’ exceptional vision can be summed up in one sentence: Throughout human history, the American Idea has done more to help the poor than any other economic system ever designed. – Paul Ryan (R) Wis.

Capitalism has, as Paul Ryan puts it, “done more for the poor than any other system”. The man is right. In the history of the world, capitalism has brought the over all living standard higher than ever before, not just in our own country, but in all countries. It has brought new innovations to the market place like electricity transmission, light bulbs, the automobile, the train, the airplane, oil production, the space shuttle and the personal computer. If you see it, there is a great chance that capitalism brought it to life either through direct or indirect funding.

As long as people exist, free market capitalism will exist. As long as people exist, the threat of someone trying to squash capitalism will exist.  Although, It is our inheritance from our founders, economic freedom.

Some just want to live their lives, and some just want to run the lives of others.

It is the battle cry of small government patriots, we need a free market, right away!

Robert E. Stage Jr.

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What Do These Four Pictures Have in Common?


Roger Clemens

The federal government has prosecuted Roger Clemens for four years, only to lose their case (twice) against him for lying to congress. How many taxpayer dollars do you think that cost us? Well the Barry Bonds trial cost taxpayers 55 million dollars, and John Stossel  (see paragraph 7) of Fox News said that the Roger Clemens trial would cost at least that much if not more. Can you think of a more productive way to spend that amount of money? Besides, isn’t performance enhancing drugs and there use a MLB problem? Why should we the benevolent taxpayer be on the hook for these kind of expenditures? Now it may cost the taxpayer more, what if Clemens sues the federal government for defamation and frivolous prosecution? After all, the man did have his name drug through the press on and off for four years, that has to be worth some monetary reimbursement.

Fast and Furious Eric Holder

On to the Honorable Eric Holder Jr. of [Don’t prosecute the Black Panthers for voter intimidation] fame, and of course Fast & Furious fame. These hearings were not free. Nine months of asking this man for documents related to Operation Fast & Furious. And nine months of him leading committee members on wild goose chases, promising to produce the documents, and then reneging on those promises. Stonewalling. Every person on the committee makes a base salary of $174,000 annually. Plus bonus cash for serving on a committee. Can you imagine what this has cost the taxpayer? Just the initial illegal gun walking program cost 1.25 million dollars in guns alone. Not only that, but first and foremost this cost countless lives, including the life of Border Patrol Agent Brian A.Terry. An then Obama swoops in to invoke executive privilege? Something, by the way, he could have done at the first hearing, or even before the hearing was scheduled. An absolute waste of taxpayer dollars. An obvious political calculation on Obama’s part.

Wind Turbines

I know what you’re thinking, what could a wind turbine possibly have to do with the first two pictures. From 2009-2011 the Obama administration has doled out 9 billion in stimulus dollars to wind and green energy technology pet projects. In doing so, the government has created 910 jobs. Doesn’t that seem low? 910 jobs? Our spendthriftgovernment has spent 9.8 million dollars per “direct” green energy job. Now wait before you judge, there’s more. There were some “indirect” jobs created also, 4,600 of them. So if you add the 910 “direct” jobs to the 4,600 “indirect” jobs you get an average cost per job of—$1.63 million each to produce. That has to be a bargain. In what sane section of the universe do you spend $1.63 million per job?

Federal Reserve

Today the Federal Reserve announced that they were going to extend their controversial “Operation Twist” program, it was to expire at the end of this month. Yes, more stimulus, START the MONEY PUMPS! More propping up of the fake economy. The Fed will continue switching out short-term bonds for long-term bonds dated between 6 years and 30 years. This is designed to drive down interest rates. It’s a high stakes shell game worth 267 billion dollars. All this was done because unemployment numbers went back up .1% to 8.2% (which is a fake number) it’s closer to 10.2%, and the projected GDP numbers have been revised down .5% to between 1.9%-2.4%. Meaning the economy is essentially stalled and stagnant. Could you imagine if you or I tried to manipulate and shift the money markets with our money or assets? The government would throw us in prison, and throw away the key. Each one of these stories spell out certain disaster for the taxpayer, the producer of the country.

It’s time “We the People” start demanding some answers and some changes in our government and its many bureaucracies! Chain their hands and their feet.

Robert E. Stage Jr.

 
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Posted by on 06/23/2012 in economics, Uncategorized

 

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Big Government, Unions, and Minimum Wage. Why all Three are Bad for America


Many people know that Big Government, Unions and the Minimum Wage are a drag on our economy, but don’t know how to argue that position effectively. Lets run through the cons of each of these and see exactly how they affect the American economy, in fact, the world’s economy.

We are told how we need more and more government programs to sustain our nation. More food stamp programs, more assistance and job training programs. Now, Jesse Jackson Jr. (D) Illinois, has proposed that the U.S. Congress raises minimum wage to $10.00 per hour, but we will cover that in a bit. What no one will stand up and say is, as a nation we cannot afford nothing more, in fact, we have really been out of money for some time, and we need to cut right away. Government costs money to operate. So, naturally, Big Government costs more. Government is a wealth destroyer, not a wealth producer. So, any time the government grows, it has to destroy more wealth. When wealth is transferred from the private sector into the government treasury whether it be through taxes, fees, regulation, fines and penalties, the only logicical conclusion has to be, the economy slows. Whats even worse, in our country if we run low on money the Federal Reserve just puts out the command to print and digitize more money, and then we monotize that printing by buying our own t-bills and they artificially keep interest rates low. Because they can’t raise them, if they do, the economy stalls. And what if inflation goes up, thats another way for the government to reap more money out of the economy.  You see, they’ve painted us and them into a corner. Summarily, any time you read a story that says “the Government is spending more money” you can replace the word “Government” with your name and mine, because ultimately, the consumer and taxpayer pick up the tab for all! Always remember that, you pay for it! Bad for America.

Public  and private sector unions are also a huge drag on the economy. Not only a drag, their incestuous relationship with the Democrat party is criminal. Their main scheme is money laundering and political campaign donations. Period. Here’s how it works. The Democrat party comes out in favor of pro-union stances and laws, like the Hobbs Act. They try to get as many people hired in union jobs as possible, public and private sector. Union members pay dues, and the union leadership uses the dues to gain even more political power by donating to the Democrat Party. It is truly devious and ingenious. It is a viscious cycle. The liberals that run the unions also like to run a fraternity of those who are always wanting more money per hour.  Since when is it good to have two classes of workers, private and union? It promotes crony capitalism. Not only this, but, anytime a union is involved, prices automatically go up on labor and goods. Start with this premise, if you hired an attorney to represent you at a job you worked at, would that not add cost to doing business? Yes. You would have to pay or the employer would have to compensate the attorney. This causes prices to go up, when the cost of doing business is increased, naturally, the price of consumer goods must go up also. The union stands between the employer and the employee, reaping their dues, and in a lot of cases representing their membership poorly. While doing this, they make the price of labor and consumer goods to rise. When the price of consumer goods and labor costs rise, the economy slows. You pay the added price. Bad for America.

Minimum wage is in the news again. This time, Jesse Jackson Jr. is backing a proposal in Congress that would raise minimum wage to $10.00 per  hour, up from $7.25. Let me ask the question no one is asking, why? Why, does the Congress want to control the bottom level of income in America? Its a great political football, it gives them yet another control or chain on the economy. In order to understand the reason for minimum wage you have to find out who instituted it. The Democrats, in 1938 led by FDR, worked the law through Congress and the president signed off on it. Now, put the current minimum wage into the context of our unemployment problem in America. Most minimum wage jobs are for entry level workers, part time, or high school kids. How many people want to hire an unskilled, untrained green horn at $7.25 an hour? Not too many. The market is perfectly capable of working out how much a job is worth, per hour. So, there is really not a need for the Fair Labor Standards Act. How many more people would be employed if the rate per hour of labor was left to businesses and individuals to mitigate out? There are quite a few jobs in the job market not worth paying someone $7.25 per hour for, sweeping floors, light janitorial work, library worker, fast food labor, etc. As we discussed before, anytime labor costs rise, it ultimately causes the economy to slow, because business owners can only pay so much per hour until it puts them in the red. If the rate goes up to $10.00 it transfers in the first week of its implementation, $4.9 million from businesses to workers using the figures on the governments own department of labor website from 2010. Its the most recent data available, the site shows 4.4 million people worked at the minimum wage level in 2010. Thats an expendature of 1.28 billion dollars just for a weeks of service. If minimum wage went up by $2.75, in just the first week business expenditure would go up to 1.77 billion, for every week. So, in the first year, businesses would spend 254.8 millon dollars. Taking from the private sector and driving up wages, and the economy slows. You pay for the added price. Bad for America.

Always remember, the consumer / taxpayer pays for everything.

Robert E. Stage Jr.

 

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