Congress: Doing More Harm Than Good

Does having Congress in session, doing "the peoples work", actually make things better?

According to a new economic analysis of stock market returns, not if you are an investor!

Congress Consistently Hurts Your Investments
Eric Singer has done an interesting analysis of stock market returns going back to 1963. The analysis looks at the returns of the overall market as represented by the S&P 500. His analysis compares market returns when Congress is IN SESSION versus when they are OUT OF SESSION. To some of you, the results will be shocking. To those of us in the free market camp, the result are intuitive and expected.

S&P 500 Average Returns 

(Past 44 years - Annualized)

 

When Congress is 

OUT of session   17.6%

 

When Congress is 

IN session                                                 1.6%


Are You Surprised?
You may be saying... how could this be? Isn't Congress always doing things to help the US economy. Aren't they trying to help us? The sad part is that they are trying to help. But, they are incapable of helping!

3 Ways Congress Destroys Investment Returns

• Regulation: Regulation constantly grows. It grows slower under Republicans than Democrats, but it grows. Why do we have regulation? Because Congress believes that they are "protecting" people. They are bombarded by lobbyists, the liberal media, constituents and even businesses wanting to be advantaged in some way versus someone else.
  
• Just look at Rep. Barney Frank's comment in an interview on CNBC last week.
• Q. Are you wanting to usher in a new "golden age" of regulation?
• A. Yes!
  
• Note: I spilled my coffee when he so directly said "yes" to a "golden age of regulation."
• The more the regulation, the more the POWER. Power for Congress. Power for government agencies ... Power for bureaucrats...Power for lobbyists.
• WHY DOES REGULATION HURT STOCK MARKET RETURNS?
  
• Regulation, by definition, increases costs.
  
• Regulation artificially advantages one group over another.  It causes inefficiency.  Businesses are not pure and innocent in this. They use lobbyists to influence Congress and Agencies to protect them from competition. Just think of the battles between the phone companies and cable TV companies.
  

• Uncertainty: When Congress is in session and doing "work", it creates uncertainty. Investors (aka The Market) hate uncertainty! As Eric Singer says, "Talk is NOT cheap."

• Taxes: Over the long term, Congress raises taxes. These taxes are not just used to raise revenue. They are used as instruments of social policy (redistribution of wealth, etc) and stealth regulation. All of these increase business costs and uncertainty.

For more on why Congress believes they are helping and why they are wrong, see my July 17 post on Nobel Prize winner in Economics... F. A. Hayek's... concept of the "Fatal Conciet."

Barney Frank's "Golden Age of Regulation"

Congress - Doing What It Does Best

Congress - Doing More Harm Than Good

Note 1: I am NOT a broker or financial planner. Eric Singer has started a mutual fund to turn this analysis into a stock market strategy. You can contact him directly if you are interested.

Note 2:  It seems clear that there is a correlation present in Singer's analysis.  I have not done any study to confirm causation.  

The Bumper Sticker Strategy- McCain's Only Chance

McCain's Problem - A Tennessee Story
I returned home to the great state of Tennessee about 7 years ago. (At the time, I planned on running for Congress in 6-8 years... which would be about now. That is another story for another time.) Upon my return, I began attending local Republican Party meetings.

Local Parties / True Believers
Local party meetings, for any party, are interesting. If you are not in the heat of an election, the meetings are small and made up of true believers. These people are well informed. They care deeply about issues and ideas. They are a little geeky in that they watch C-SPAN, read books on policy, know history and search the Internet for off season tid-bits. To my wife's dismay, I include myself in the "a little geeky" group. They are like the football fans that watch old games on NFL TV or ESPN Classic 365 days a year. The fight over ideas is in their blood! Most of these people are not planning to run for office. They are not carefully parsing and positioning for their own future gain. They are fighters... they believe.

Take Back the Governor's Mansion!
My first local party meeting was in Murfreesboro, TN. There was a discussion about "taking back" the Governor's mansion. I sat quietly...puzzled...thinking... "isn't the Gov. Don Sundquist a Republican?" Then I realized ... he is a Republican... but he really is a RINO. In fact, he was barely even a RINO. He supported creating a state income tax! For Tennessee Republicans, talking about creating a state income tax is like a discussion of who controls Jerusalem while sitting in an Orthodox Synagog in Israel. Sundquist supported all sorts of "moderate" tax, regulatory and spending policies. He had completely lost his true believers. They had disowned him. They were passionate about "taking back" their party.

A Tennessee Lesson
While true believers can easily distinguish real conservatives from RINOs, the general public, establishment / paid Republican party staff and the press do NOT make the same distinction. Republicans were all painted with the same brush. So, when election time came in Tennessee, we got a moderate Democrat as Governor. The fact that a true Conservative Republican was running against the former Democrat mayor of Nashville, didn't resonate with voters. Too many heard Republican and simply equated him with the RINO... Don Sunquist.

Taking Back The White House
This is where McCain has such a BIG problem with the true believers in the base. Bush has strayed so far from the heart of the true believers (except for appointing judges) that McCain's many non-conservative, press loving, maverick positions make them feel like a win will be more of the same... or worse. He has to tap into something else to sway the base... to entice the true believers.

My Favorite Bumper Sticker - McCain's ONLY Viable Strategy
If you drive through the South and Midwest, you see them all the time.... football bumper stickers. My favorite one is all about "the rivalry." And that is what McCain has to tap into. It just isn't about running against Obama. Every pundit says that for McCain to win, the election has to be a about Obama. I am saying something different. The appeal has to be more emotional. It has to be like ... College Football!

Favorite bumper sticker theme...

• My favorite team is Ohio State - My second favorite is whoever is playing Michigan

• My favorite team is Alabama - My second favorite is whoever is playing Auburn

• My favorite team... you get the idea....
  

Somehow, McCain has to convince the base to hate Obama as much as Ohio State fans hate Michigan or Alabama hate Auburn. In any given season, you may hate your own coach or hate your quarterback... but you hate your arch rival even more! McCain has to tap into the passion behind my favorite bumper sticker.

McCain's Political Version Has To Be...

My favorite candidate is a true conservative...

my second favorite is whoever is running against Obama!

? ? ? ? ? ? ? ? ? ? ? ?

He has to pray that is enough...

because that is all he has!

NOTE: Getting a clear and consistent conservative message out there, especially on taxes, would be a huge step forward. I just don't believe that is possible with McCain and his team.

Fear And Loathing On The Campaign Trail

"Politics is largely the process of taking credit and putting the blame on others-regardless of what the facts may be."
                                                                             Thomas Sowell
                                                                                                        Economist / Author

What The Democrats Are Teaching Americans
Ronald Reagan taught Americans to believe in the American Dream.  We were already, and in Reagan's world view could be an even brighter, "City on a hill."  After one term of decreasing regulation and slashing marginal tax rates,  America was back on track!  Do you remember  Reagan's re-election theme ...

 

"It's Morning In America Again"

And it was!  Entrepreneurial spirit and a pro-growth agenda were at the center of the Reagan vision and his success.  Jack Kemp, Arthur Laffer and the gang re-launched America off of the USS Jimmy Carter... a sinking ship poorly lead by its captain.

Instead of the optimism of Reagan, Barrack Obama teaches pessimism and class warfare. His tone and style may be glossy, his suits stylish and his youthful smile bright, but his ultimate message is bleak and depressing.  Even the leading, politically moderate, European business magazine sees this clearly:

"The rich appear in Barrack Obama's speeches not as entrepreneurial role models but as modern versions of the 'malefactors of great wealth' denounced by Teddy Roosevelt a century ago..."
                                                                            The Economist Magazine
                                                                            "Unhappy America"
                                                                                                      July 26, 2008

Unfortunately, Many Americans Are Believing It?
Today I was picking up medical records to send to an insurance company.  Because I had a little heart problem a few years ago, I ended up filling out paperwork at the offices of a large heart specialist group here in Nashville. While I was sitting in the waiting room, the following exchange occurred between what appeared to be a 60 year old lower/middle class man and another couple that worked together in a small business (they own and drive their own 18 wheeler).

The man said:
"There are only a few people getting rich in this country."
"And they want to keep the rest of us poor."

The couple replied:
"Yep"

Fear And Loathing On the Campaign Trail
Herein lies the terrifying part. The story line manufactured by the Democrats doesn't just teach that talent and opportunities favor the rich, it teaches that the rich conspire to "keep the rest of us poor."  While this may be good short term politics for Democrats, it is horrible for American and terribly damaging to individual American families.  Americas prosperity is not a zero-sum game!  There is not one pie to cut and share.  As Reagan taught, we can and will grow the pie.  Then, everyone can get a bigger piece.

And... It Is Not A Zero Sum World?
The softness in the US economy and the strength of emerging countries (BRIC - Brazil, Russia, India, and China) has a lot of workers scared.   In fact, many believe that China's economy is already bigger, by a lot, than the US economy. In reality, at its current growth rate, which will likely slow in the coming years, it will take 25+ years for China's GDP to equal that of the USA (assuming the USA maintains the current growth rate).

Sadly, since we don't have a Ronald Reagan on the political stage, The Economist Magazine has to point out the true Reagan way of thinking.  This same one pie mentality has many Americans, taught by liberals and labor unions, believing that we must retreat from free trade.  This fits the Obama narrative perfectly.  The Economist points out that even if  "Asia's rise continues unabated, it is wrong...

 

... and profoundly unAmerican... 

... to regard this as a problem!  Economic growth, like trade, is not a zero-sum game. The faster China and India grow, the more American goods they buy. And they are booming largely because they have adopted America's ideas."

International economics is no more of a zero sum game than than the economics between American families and between the rich and the poor.  Free trade and free markets will grow the pie for all.   Ronald Reagan was right!   

Sadly, Milton Friedman was also right when commenting on the past, present, and future of free market thought.  He said...

"Adam Smith was a radical and a revolutionary in his time - just as those of us who preach laissez faire are in our time."

Finally,  add to this a reminder from Ludwig von Mises ...

"There cannot be too much of a correct theory."

Note:  Please read the first comment to this post and my response for some outstanding data on Reagan's economic legacy.

Who Really Killed The Reagan Revolution?

-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-

The Reagan Revolution ...

RIP?

-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-

With the passage of the massive "Housing Bailout", many in the press are trumpeting the largest increase in government spending, regulation and expansion of power since FDR.   (Even though the Congress has estimated the cost of the bailout at $400-700 billion, CNBC reports that the real obligation to taxpayers will likely be north of $1.4 trillion.)  Sadly, the press has it right.  Even sadder, the collapse of the Reagan Revolution started long before the sub-prime credit mess.  It started in the White House and with Republicans in Congress.

 Oh How Far We Have Fallen!

1.  We should all remember what Ludwig von Mises said in his book Bureaucracy:

"He who is unfit to serve his fellow citizen wants to rule him."

2.  Marry this to what I saw Rep. Barney Frank (D), Chairman of the Financial Services Committee, say in an interview on CNBC last Friday.

     Q. "Do you want us to usher in a new golden age of regulation?"

     A.  "Yes !"

Headline On The Front Page of the WSJ ...  

Friday, July 25

"Unraveling Reagan - 

Sour Economy Spurs Government To Grab Bigger Oversight Role"

Summary from WSJ:

"... a major challenge to the movement toward deregulation..."

"... some proponents of a bigger oversight role for government are Republican..."

"... SEC Chairman Christopher Cox said the SEC should be given more power to regulate investment banks..."

"... state utility commissions are re-establishing control over power companies..."

"Both major party candidates are endorsing proposals to create new Fed-style commissions to limit greenhouse-gas... and to decide how to spend billions of dollars on energy-efficient technology."

"The movement started by President Reagan has taken several hits.  2001 terrorist attacks ➭ DHS ...  corporate accounting scandals ➭ Sarbanes-Oxley. "

"The Treasury Department is seeking approval to buy equity stakes in Fannie Mae and Freddie Mac and to offer them unlimited lines of credit..."

☆☆☆☆☆☆☆☆☆☆

"Government isn't the answer to our problems, government is the problem."

                                                                                           President Ronald Reagan

☆☆☆☆☆☆☆☆☆☆

"W" and the "Republican" Congress

I put Republican in quotes because the Republicans of the past 7 years have not been elephants, they have been RINOs (Republicans In Name Only).  But for appointing good judges, the President has not been any better.  In the first 3 years of President Reagan's administration, he decreased non-discretionary spending by 14%.  In contrast, "W" increased non-discretionary spending by 21% over the same time frame.  

After 7 years of spending like drunken Democrats,  "W" wakes up...

"Fiscal conservatism is one of my defining issues for the remaining months."

                                                                 President Bush in a Neil Cavuto interview 

                                                                                                                      May - 2008

The President finally wakes up... but...

If the wake-up call comes too late, you miss your meeting...  

even if your meeting is with destiny.

3rd Parties Can Matter - A No Regrets Move

As we approach the November Presidential election, many voters are planning to "hold their nose" and pull the lever in the voting booth. While much has been made of this point among true conservatives and Ron Paul supporters because of having McCain on the Republican side, it is equally true for Hilliary supporters and Blue Dog Democrats as they think about Obama. Obama's lack of anything approaching experience and his ultra-liberal record scares them to death.

What to do?

Use The Electoral College As Your Megaphone
Because we live in a country with an electoral college, overall popular vote does not count. (Ask Al Gore) If it is clear that either major party candidate is going to win your state, you are free and clear to vote for a third party candidate without risk. Further, you get to send a signal.

Obama Supporters should consider Independent candidate Ralph Nader, Libertarian candidate Bob Barr or Green Party candidate Cynthia McKinney.

Republicans should consider Libertarian Party candidate Bob Barr or Constitution Party Candidate Chuck Baldwin.

The Party Duopoly
Unfortunately, the parties and the media have conspired to keep 3rd parties from gaining any traction. State legislatures have passed laws making it extremely difficult for 3rd parties to even get on the ballot in some states. Further, the media excludes them from coverage. The Commission on Presidential Debates excludes them from all the Presidential debates. By using this election to send a signal, we can begin to break this duopoly. If the Democrats are really pro-choice, let them prove it by allowing voters a full choice on the election ballot.

This Strategy Can Work In 30+ States !
In most states, elections are not and will not be close. While Obama says that more states are in play and that he will campaign and spend money in traditionally Republican states, that is only true in a handful of states. Over 30 states will easily and clearly go for one candidate. Neither candidate or party will spend significant $$ or even campaign in these 30+ states. For example, if you live in Massachusetts, you can vote for any third party candidate you want. Obama will win the state by 20 points, no matter what.

This is not a good strategy for Ohio, Michigan, Pennsylvania, Florida, New Mexico, Colorado, Nevada, etc. If you are worried about an Obama presidency, you can just tell yourself that you are voting against Barack (not necessarily for McCain) and pull the McCain lever.

Note: PLEASE read my blog post from July 17... 

"The Conservative Gambit: McCain or Not"

The 5% Solution
We NEED the Libertarian and the Green parties to each receive about 5% of the vote in these safe states. I focus on these two parties because they can receive enough votes to have a meaningful impact on breaking the duopoly. (Unfortunately, the Green Party nominated a crazy candidate that only Rev. Jeremiah Wright could love. Imagine if the Green Party had nominated Al Gore!) Hilliary voters and true conservatives can easily switch to a 3rd party with "no regrets"... their vote will not impact their state's outcome and therefore will not impact the general election.

Locked Out
Ballot access is a big issue in a lot of states. Democrats and Republicans have written legislation to make it hard for fledgling parties to gain any traction by making it difficult to even get on the ballot. Libertarians, Green Party, Ralph Nader and Constitution supporters need to pool resources to get all the candidates on the ballot every election. Citizens need to help by finding out about petition drives and by signing any party's petition to gain ballot access.

The Media... Lap Dog of the Major Parties (mainly the Democrat Party)
Finally, the media needs to get off the laps of the major parties and support ballot reform. If the media and Presidential Primary debate organizers had limited primary coverage and debates to just the big name, big money, high polling candidates... Hillary would be the Democrat nominee, McCain would have been knocked out early and the surprising excitement generated by Ron Paul would have been killed before it ever started.

--- You can use THIS ELECTION to send a signal ---
Hillary voters... are you listening?

Ron Paul Supporters... are you out there?

True Conservatives... Are you in a "safe state?"

A 3rd Party Vote - No Regrets in 30+ States

Minimum Wage - Maximum Ignorance

The federal minimum wage increased...

70¢ to $6.55.

Next year, it will increase another...

70¢ to $7.25.

I'd like to discuss a few of the economic facts in hopes that you can easily fend off the emotional arguments put forth by well meaning but ignorant people. Yesterday my post pointed out that the minimum wage debate is steeped in emotional and misleading language. Today we'll focus on economic facts, personal responsibility and the protection of freedom.

"America's workers are the most productive in the world..."
(quote from Jerry Lee, President of the AFL-CIO of Tennessee)

This is a prime example of the hypocrisy or ignorance behind arguments from most liberal advocacy groups.

What is productivity? Productivity is the volume of output for a given worker.
This output is a function of the worker and the leveraging of capital assets/ technology.
This deployment of capital / technology makes a given worker vastly more productive.
If product demand is constant, a company needs fewer workers to provide the necessary supply of goods.

First, none of these minimum wage workers drive the incredibly high productivity of the average worker in the USA. By definition, minimum wage workers are low skilled. To bring productivity increases into this debate is disingenuous. While Americans work hard, I have no reason to believe that they work harder than workers in India, Vietnam or China. What I do know is that US business has deployed technology better and faster than most countries.

Second, let's remember that the AFL-CIO has fought every advance in automation and technology since the industrial revolution. For Big Labor to use per worker productivity improvements as an argument for wage increases is laughable and hypocritical.

A "Living Wage"

Now we get to the emotional trump card. How can anyone be against a "living wage?" Let's think about this.

• Do you believe that the government should dictate the prices of goods and services in America? What if Congress decided to mandate what restaurants had to pay for eggs... or vegetables... or Pepsi? Labor is an input to a product, no different than eggs for a restaurant or paper for a printing company. --- Living Wage = Price of Labor for Businesses --- Government is not qualified to micro-manage prices of any input, be it eggs or labor costs. Income for the employee is a cost for the employer. Central management of prices has failed in every socialist and communist country in the history of the world.
  

• While the press portrays business generically as Big Business, the fact is that about 90% of businesses in America have fewer than 20 employees. The bulk of minimum wage workers work in small businesses. These small businesses have a hard enough time absorbing the massive cost of government regulations. They can't easily absorb an increase of 40%+ over a couple of years for the price of their lowest skilled / lowest productivity employees. They will hire fewer employees, margins will shrink, or they will go out of business.

• I really don't mean for this last point to be harsh. But... workers have to take personal responsibility for acquiring job skills! If not, you can wake up at 25, 35 or 45 and realize that you have no skills and can't find a good job. That includes staying in school, finding a career you want, and working at it. That may include finding and taking an entry level job, a job requiring no skill and paying a very low wage in order to get access to skills. But if the cost of these low skill jobs is forced higher by the government, the supply of these jobs will decrease... and so will the on-ramp to acquiring skills.

• Who decides what constitutes a living wage? Several newspaper articles today said that inflation has eaten up all the increase workers were given by the increase. The implication is that the current $7.25 target is not high enough. So, what is the right number... $9, $10, $12.50? Instead of impacting 2.3% of employees as this increase does, will the "living wage" that liberals want impact 4%, 5%, 10%... of workers and businesses? How many businesses will have to raise prices, use technology as a substitute for workers or go out of business? And how much will prices have to increase to absorb this new "living wage" ... and how much will the new wages increase future inflation?

- The Minimum Wage -
Good Politics, Bad Economics
A Horrible Violation of Freedom

Note: Please review yesterday's post (Politicians and Language) on the fairness of "Income Distribution" in America.

Breaking News from Europe !

According to a Gallup Poll taken this week, the French strongly support Obama.

Poll of French Citizens Over 18

                                                   Who do you prefer be elected...

                                                   President of the United States?

• Obama                                              65%

• McCain                                                   4%

Whew, I feel better now.

Politicians and Language

"It depends on what the meaning of is, is."

                                          President Bill Clinton

                                                Testifying in the Monica Lewinski Scandal

----------------------

One of the hardest things about understanding politicians is that they use language designed to manipulate the electorate. Confusion and misdirection are their weapons of choice. 

"Income Distribution":  A Liberal Favorite

Tomorrow we see an increase in the federally mandated Minimum Wage.  You will see a lot of talk about the unfair income "distribution" in America.  Use of the word distribution implies that the society and the government make top-down choices on how to "distribute" income to the people.  Let's be completely accurate in the language here... Income is not distributed...

Income is EARNED!  The lack of emphasis on earning and the focus on distribution removes all responsibility from the individual.

Obama's Vocabulary

For Senator Obama, his grand speeches are rich in second and third order definitions and connotations.  For example, the Senator loves to talk about his plan to "INVEST" in our country.  How can anyone be against "investment?  Hold on... his "investment" is spending close to a trillion dollars on new programs.  This is simply a redeployment of capital from the private sector (your family) to the Federal Government.    

There is no new investment.  Most Americans would consider investment something the private sector does.  Government simply "spends" taxpayer money, "redistributes" taxpayer money or both.  To consistently use "invest" is to confuse what is really happening.... but it sounds nice.

Democrats: the partial pro-choice party

I want to take this point in a different direction than normal.  Rather than pointing out the obvious importance for Democrats of keeping the words "baby" and "kill" out of any sentence they utter, I want you to consider the fact that the Democrats are only pro-choice in the narrowest possible sense.

• Democrats are not pro-choice when it comes to letting women decide where they can send their children to school. (No school choice)
• Democrats are not pro-choice when it comes to allowing women to opt out of Social Security and choose their own investments for retirement. (No retirement choice)
• Democrats are not pro-choice when it comes to whether women, who usually live longer than their husbands,  can leave all of their estate to their children.  They want the government to be able to decide where half goes... to them. 
• Democrats are not even pro-choice if women want to cut, color and style hair for a living.  They want to license/regulate both the stylists and the business. ---- Whew, good thing the government has ramped up to protect us from bad haircuts. ----
• ... and the list goes on and on...
  

Let's be completely clear and objective... no matter what their language is...the Democrats are only the party of pro-abortion choice... nothing else.  In everything else, they want to be your nanny.

President Bush's Strange Republican Lexicon

No, I am not going to make fun of the President for butchering words and sentences.  My point is regarding the President's contorted use of the word "conservative."  While we can argue about whether the President's foreign policy and view of Presidential power is truly conservative, there can be little argument about this fact:  

- In Reagan's first 3 years in office.... non-defense discretionary spending decreased 14%.

- In Bush's first 3 years in office.........non-defense discretionary spending increased 21%.

By no definition, is spending like a drunken Democrat... conservative. 

In this  and every political season, you have to...

 listen carefully 

and 

think critically.

Byron Smith Blog 

Health Care - The Next "School Busing"

The headline on the front page of the newspaper said it all:

Want to keep your doctor?

Pony up $1,500

Scary... isn't it.  The first 3 illustrations in the article are about patients who love their doctors, but sadly can't afford to pay the $1500 annual fee the doctors want to charge.  But wait... is that the whole story...  not if you wade further into the article.  There isn't just a patient side to the story.   There is a doctor POV that is critical to understand.  And then there is the patient side that is never thought through...  look out !! ... 

Health care is the next "school busing."  

But first, you need some background.

The New Math For Doctors

Before you get upset with doctors, realize that there is new math for doctors.  With the rise in clout of insurance companies,  the Medicare system and malpractice attorneys, doctor profit and job satisfaction are at an all time low.

Doctor Job Satisfaction = (Profit per patient ×  Patients seen per hour × Hours Worked)  ÷  (Private life expectations × Law suits × Rate of cost increases )

How many doctors do you know?  I know several.  Almost all, except for high end specialists and plastic surgeons, are not having fun.  They are killing themselves working a ton of hours to make less money year after year.  And they do not see light at the end of the tunnel.  And here is the real tip that something is wrong... not one that I know would recommend their children go into medicine.... not one.  Doctors want to retire earlier... they are simply burning out.

How the "Fee" Works

So, what does the $1,500 you have to "pony up" get you?  If a doctor considers this new approach,  he is actually selling a different / better product to his patients.  Instead of having about 2,400 patients, the doctor cuts his load to 600.  By having 1/4 the number of patients, they can spend lots more time with each patient and have more time to spend with their own families.  The doctor can really know the patient and can be proactive.  Further, there is less doctor burnout.  These are often called "Concierge Practices."

An even higher touch approach reduces patient load to 50 families and charges $15,000 - $25,000.  These are dubbed "VIP or High-Touch Practices."

These options enable doctors to work more years, thereby increasing the supply of doctors.  They make general medicine more attractive.  These new ways of practicing medicine make the entire field more attractive!  The supply of good doctors increases.

Here Comes "School Busing"

Of course the articles about these practices decry this new trend. There is the warning of the "widening gap of care" creating a "new class system" in medicine.  Doesn't that make you feel horrible.  It may.. but it shouldn't.  Let's consider the alternatives to having free market options for doctors and patients.

1. We can mandate what doctor you get to "attend".
2. We can mandate each doctor's "schedule."
3. We can force patients to change doctors in order to adjust for doctor ability.  If one doctor is doing a much better job than another doctor, we can "bus" some of the good doctor's patients to the "bad" doctor.
4. We can mandate "quotas" for income, age, gender and racial makeup of patients for each doctor or group practice.
5. We can make medicine "unionized" with 3 pay tiers .... regardless of ability... regardless of results.... doctors can be locked into a pay tier.

In other words, we would have the equivalent of...

COURT ORDERED SCHOOL BUSING

 

... for patients and doctors. Will we attract the best and the brightest into medicine... NO!    Will we have fewer great doctors... YES!  Should the government control any one's free practice of their job... NO!  If we fall for the class warfare arguments, this means that:

 The primary goal of health care becomes 

a low standard deviation of care, 

even if the average level of care falls!   

Don't get sucked into the emotional arguments.

Let the free market work...

For Doctors 

For Patients

Byron Smith Blog

                                          

A Weekend Treat

"Today's bear market in financial assets is nothing compared to the preceding crash in human judgement."

                                                                        James Grant

                                                                        Wall Street Journal

WSJ: Weekend Journal

I have come to enjoy the the Saturday addition of the Wall Street Journal more that the weekday addition.  There are always terrific articles and editorials.  For example, Peggy Noonan's editorial is always a great read. 

This weekend, James Grant has an interesting article about the current financial crisis on Wall Street.  Grant is a first rate economist and financial historian.  I think you'll agree, it is...

The best article of the weekend.

☝

Click on the link above and enjoy his article titled:  "Why No Outrage."

NOTE:

Please read the Saturday post below.  I received lots of e-mails about it.

Byron Smith Blog

Framework for Freedom

Before analyzing any proposal, argument or idea, you need a framework to filter the idea through.  In religion, they call it doctrine and theology.  Theologians know that demagogues can move people to believe anything given the right speaker, the right sermon and the right personal circumstances.  This is why the Church Fathers worked for years distilling Christian doctrines into catechisms and confessions.  They placed an emphasis on studying and memorizing these frameworks to protect their flocks from heresy.

In this Presidential election, 

the risk of demagoguery is greater than ever! 

Unlike religious denominations and churches, most people are not prepared with a mental framework through which to filter speeches, party platforms and glossy political advertising.  Further, the emotional appeals of today's election rhetoric are amplified by $4.50 gas, Middle East conflicts, BRIC (Brazil, Russia, India and China) rising as economic powers, food inflation, and on and on.  These circumstances make it easy to fall prey to someone giving a great speech and offering to "help" you with bigger government "solutions"...  a nanny-state.  

Always remember the BIG LIE... 

"I'm from the government and I'm here to help you."

A Framework To Organize Your Thinking

In 1962, Milton Friedman wrote his classic and groundbreaking work, Capitalism and Freedom, on the linkage between economics and freedom... hence the title.  

Milton Friedman

• Nobel Laureate in Economics - 1976
  
• University of Chicago - Professor
• Hoover Institution - Sr. Research Fellow

I want to share a few important sections from this book in hopes that it will help you evaluate the policies and promises made by our presidential candidates.

 Capitalism and Freedom

"It is widely believed that politics and economics are separate and largely unconnected; that individual freedom is a political problem and material welfare an economic problem; and that any kind of political arrangements can be combined with any kind of economic arrangements.  The chief contemporary manifestation of this idea is the advocacy of "democratic socialism" by any who condemn out of hand the restrictions on individual freedom imposed by "totalitarian socialism... such a view is a delusion... only certain combinations of political and economic arrangements are possible." 

"The kind of economic organization that provides economic freedom directly, namely, competitive capitalism, also promotes political freedom directly because it separates economic power from political power and in this way enables the one to offset the other."

"Fundamentally, there are only two ways of co-ordinating the economic activities of millions.  One is central direction involving the use of coercion... The other is voluntary co-operation of individuals - the technique of the market place." 

"Exchange can therefore bring about co-ordination without coercion."

"Political freedom means the absence of coercion of a man by his fellow man.  The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, or a momentary majority."

"... the market eliminates this source of coercive power.  It enables economic strength to be a check to political power rather than a reinforcement."

Don't Get Confused

The growth in the power and reach of government will always result in a reduction in all kinds of freedom, economic and otherwise. A true free market is the best system to improve prosperity for ourselves and future generations.  It is also the best option for protecting all individual freedoms.  What Obama offers, what Hillary was offering, and to a lesser degree what McCain is offering is a Faustian bargain... nothing more, nothing less.  

Just remember the BIG LIE... "I'm from the government and I'm here to help you."

Pick up a copy of Capitalism and Freedom.

Filter the rhetoric through a logical screen.

Notes:

There are a few great places to go to learn more about the freedom producing effects of free market economics.

-  The Cato Institute

-  The Club for Growth

-  The Ludwig von Mises Instiute

I have links to all three to the left of this post.  Byron Smith Blog

No Honor Among Thieves

If there is one thing you should be calling your Senator about, it is the fact that Senate Majority Leader Harry Reid is going back on his PROMISE that he would confirm as many federal judges for President Bush as Republicans did for Clinton.  The Republican controlled Senate confirmed 15 federal judges for President Clinton during the closing months of his Presidency.  Reid, and his Democrat colleagues, have confirmed only 2/3 of the judges he committed to get confirmed and is signaling that they are through confirming Republican nominees to the  federal bench.

Recall, this was a promise made as part of a compromise.  The long history of the Senate, as opposed to the more continence history of the House of Representatives, is built on honor and trust between Senators on both sides of the aisle.  The Republicans fulfilled their half of the bargain.  Senator Harry Reid has reneged on his part of the deal.  

We all know judges are important.  But many incorrectly believe that it is only a social policy issue.  This assumption is horribly wrong.  The courts effect everything... business economics, separation of powers, health care... everything.

 

Call your Senator today!

Call Harry Reid today!

And call again tomorrow!

Even If McCain Wins...

Senator McCain has said all the right things on judges... RECENTLY.  But his long term record shows no passion for or commitment to "original intent" jurists.  I admit that he is saying the right things today to get the conservative vote.  I am not convinced he will do the right thing if elected.  An election year promise is worth 25% of the historic evidence and a non-election promise.  (And we now know that a Harry Reid promise is worth NOTHING.)  Even if elected, McCain will face a Democrat controlled Senate.  They will likely try to block ANY true conservative.  

Now is the time to light up the switchboard in the Senate. 

You have to hold the Senate's feet to the fire.... 

Republicans and Democrats. 

Byron Smith Blog

Your Highest Political ROI

A couple of weeks ago, I walked into the kitchen to hear my wife yelling (in tone, not volume) at a fundraiser for the Republican Party.  She was telling them the same story that they have heard a million times by now...

We won't give any more to the national party until:

• The Republicans in Congress behave like true conservatives
• The party nominates true conservatives to run for office
• The President starts acting like a conservative (oops, too late)

Who Can You Trust?

There are only a few places that you can count on to find great conservative candidates.  One of those places, and my favorite, is The Club for Growth.  

There are 5 reasons The Club for Growth is a great place to invest your political contributions:

1. They vet candidates well... they are true economic conservatives
2. They only enter the fray in races that are winnable
3. They only enter races where $$$ matters.
4. They are willing to try to unseat moderate Republicans in primaries in favor of true, electable conservatives. 
5. Their track record is second to none!

These 5 things make your ROI (Return On Investment) terrific.  If there is a great candidate that is going to win easily,  the Club doesn't get involved.  You can be sure that your money will work hard and have a chance of changing the outcome of a race.

Call... The Club for Growth ... Today

202-955-5500

I'd suggest you start by giving them a little money in 3 different areas:

• Give to a specific endorsed candidate  (through them, not directly)
• Give to the Club directly to support the work
• Give to the PAC ($5000 maximum) so that they can get directly involved in campaigns

I have done all 3 and have never regretted it.  

I wish I could say the same for the RNC.

Definitions for Politicians

DEFINITIONS TO KNOW

Con-ceit: (kuh n-seet) - noun

1. an excessively favorable opinion of one's own ability
2. vanity or egoism

Fa-tal: (feyt-l) - adjective

1. causing destruction, misfortune, ruin or failure
2. a politician's plans to "help", "fix" or otherwise manage economic concerns
   

"The Fatal Conceit" ...   A phrase /concept created by F. A. Hayek

• Nobel Laureate economist - 1974
• " for his penetrating analysis of the interdependence of economic, social and institutional phenomena"... Nobel Committee
• University of Chicago Professor

THE FATAL CONCEIT

The egotistical and destructive idea that even very smart people can plan and centrally manage an economy better than the free market itself

Examples:

- Communist Party ... Old Soviet Union

- Communist Party ... Pre-capitalist China

- Communist Dictator ... North Korea

... AND...

- Liberal Democrats ... United States

- RINO Republicans ... United States

- Those with ... Hollywood Money 

... SEE ALSO ...

Common political words signaling "The Fatal Conceit":

• bailout
• fair share
• protect
• regulate
• manage
• encourage
• change

When you hear the grand rhetoric of politicians, especially in campaign season...

... REMEMBER ...

Their conceit can be fatal for America!

Byron Smith Blog

Obama is Not a Muslim ... BUT....

Much has been made of the recent caricature of Barack Hussein Obama and his wife on the cover of this month's New Yorker Magazine.  It is intended to poke fun at the 8-12% of people who answered when polled that they believe Obama is a Muslim, not a Christian.  I am not concerned that he is Muslim.  

 I am worried about his unique brand of Christianity ... 

... and how it influences his thought process.

What Kind of Christian?

For 20 years, Obama and his wife sat under a teaching pastor who subscribes to a form of Christian theology called "Black Prophetic Theology (BPT)."  According to his teaching pastor, Dr. Jeremiah Wright, this theology "uses a different hermeneutic" from traditional western Christianity.  (Hermeneutics is the theory and study of Biblical interpretation.)  From everything I have heard and studied, Wright is absolutely correct!  But it isn't just a different method of understanding the Bible.  It is a radically different theology and method of interpretation.  BPT says that the theological method originated prior to the"problem of western ideology."  It is critical to understand that western civilization as we understand it and as it influenced all of American thought is, for Obama's theology, "a problem." 

Exactly What Is Black Prophetic Theology (BPT)?

At first glance, it looks a lot like the "Liberation Theology Movement" found in the liberal vein of the Catholic Church in Latin America during the 1960s and early 1970s.  And while BPT's activity in community, social outreach and care is commendable, its perversion of historic Christian theology is so far out of the mainstream of Christian thought that all its good works are tainted.  

BPT views all Biblical texts and interpretation through the lens of the situation / emotions of "the oppressed." 

And here it the important thing to understand.  BPT adherents say that their interpretation is "bottom up" while historic western / American hermeneutics is "top down".  To them,  top down means "white."  Unfortunately, this paradigm is drastically misinformed.  I agree that their view is "bottom up".  They have an optical vantage point that distorts all of Scripture as they read it.  But the historic Western hermeneutic (specifically driven by the Protestant Reformation) is not top down, it is from the inside of the Bible out to other parts of the Bible.  It simply says: let Scripture interpret scripture.  It says to use clear texts to help understand unclear texts. It says to view the Bible as a whole, interconnected story.  There is to be no emotional, external lens or vantage point skewing our view.

What Do We Get From This Distorted Theology?

Obama's BPT believes that the Christianity of America is "the Christianity of the slave holder."  This theology calls for "radical change...a changed social order... changed laws."  Hmmm, I wonder where Barack gets his passion for "change."  His teaching pastor and denomination for 20 years believes that this is at "the heart of Trinity United Church of Christ."  It carries with it a distorted view of America, the Middle East, economic policy, American History,  and World history.  As all sincere faith does, it permeates all of one's thought and all of one's life.

People steeped in the BPT tradition are comfortable using a special lens, an emotional lens, a lens different than most Americans, to order their logic and their thinking.  (See the FYI below for a good example of how it distorts one's thinking.)

I know Obama isn't a Muslim.

But I also know this: 

His form of Christianity distorts and misinforms how he thinks.

What kind of... change... does he really want?

----------------------------------------------------------------------------

Notes:

A Book to Consider Reading

The Decline of African American Theology by Thabiti Anyabwile

This book traces the journey of the black church from "historic Biblical faith to cultural captivity."  It is published by IVP.  The forward is written by Mark Noll.  Noll is the author of The Civil War as a Theological Crisis.... also a good book.

FYI:  Most quotes from Pastor Wright are from his speech before the Washington Press Club.  You can easily view it on You Tube.  And watch the Q&A too.  In the Q&A,  he stands by his belief that the US government may have created HIV/AIDS specifically to kill blacks.

Election Season Musings

"Power tends to corrupt, and absolute power corrupts absolutely."

                                                                                        Lord Acton

  

"Render unto Caesar the things that are Caesar's and unto God the things that are God's."

         

                                                                                        Jesus speaking to the Pharisees

The Point

"Separation of powers" isn't just a safeguard to keep a single branch of government from overpowering the other two branches.  All power is not vested in government.  Individuals, families and churches also have independent jurisdictions. 

Learning From GE ... Rediscovering Goldwater

General Electric is a huge and complicated company spanning many unrelated businesses with global reach. GE is unique in that it is still a successful conglomerate (very recent results not withstanding).

Leadership
GE is also unique in that when it promotes someone to CEO, the person is always relatively young (under 50) and is expected to be CEO for 20 years. The CEO has to live with decisions and the results for a long time. The person is then asked to take a look at the company and make tough leadership decisions:

• What are the most important things we should focus on and do well?
  
• Are we uniquely qualified to meet the challenges this business unit faces?
• Should we be in this business at all?

GE's leadership regularly admits mistakes, recognize changes in the marketplace, and exits businesses that would be better served by another company. They don't throw good money after bad! They get out completely. They get out quickly.

Federal Government
Remember, there are lots of things that the Federal Government is not mandated to do by the Constitution. Even if the mandate was there, it does not mean that the Federal Government / Agencies are the place it should happen. The Constitution mandates either decentralization to the states or divesting to the people.

Any Real Republicans Left?

"...the federal government should withdraw promptly and totally from every jurisdiction which the Constitution reserves to the states."

Barry Goldwater
The Conscience of a Conservative

Note the two important words in this quote: promptly and totally. By the way, I would add an important phrase to the end of the Goldwater quote... or to the people. There are things that the states shouldn't even be doing.

A Sad Case Study
Remember when Republicans wanted to abolish the Department of Education! This is a perfect case study. Nowhere in the Constitution is the word education, because the function of education is solely reserved for the states. In the early 1990s the House Republicans introduced legislation to abolish the Department of Education. Reagan had suggested it in the '80s. The Republican base LOVED the idea, but hold on ... did they REALLY want to do what Goldwater suggested... withdraw promptly and totally? NO!

At the time, the Department of Education had a budget of about $35 billion, but the legislation projected a savings of about 10% of the total budget. The Republican bill simply moved 90% of the functions to other departments. The public relations spin was there, but the Bill, proposed by Republicans, simply re-arranged the deck chairs on the Titanic. Grade for Republicans versus the Goldwater Test: D-.

How Far Have We Fallen?
As bad as that was, now we have a Republican President that created "No Child Left Behind". The President is now the Superintendent of Schools for the nation... the Congress and the Department of Education is the School Board.

I ask again...

Are there ANY real Republicans left?

Do Secular Liberals REALLY Care?

I started my career in marketing and advertising. One of the ways we judged an ad was to look at the pictures without the words. Then we'd listen to the words without the pictures. Then, the test, do the words and the pictures go together?

Words and Pictures

Secular liberals love to portray themselves as the ones who care. They care about the poor, the sick, the arts, the trendy charity, etc. They portray conservatives, especially Christian conservatives as uncaring and greedy. Does the data back that up? Do the words and the pictures go together? NO !

Who Cares Most? ... Who Gives Most?

Of course Christians out give secular liberals when we look at church / religious giving. But what about when we look at overall giving and non-religious giving? According to the data, committed Christians out give secular liberals on every front... in every way!

                                                                                  Conservative           Secular ...

                                                                                  Christian                  Not Religious

% giving to charity 91% 66%

% volunteering each year 67%                                44%

# of times volunteering                                       12                                      6

% giving to secular charities                            71%                                 61%

% volunteering w/ secular orgs.                     60%                                39%

$ of annual secular gifts                                  $532                               $467

Source: SCCBS N=29,233 (Column label are paraphrased by me)

An Old Saying

There is an old saying...

What you do speaks so loudly that I can't hear what you are saying.

When Big Government/Secular Liberals "preach" to us about caring for the needy, imagine a bubble above their heads saying...

Do as I say, not as I do!

Don't Be Proud... The Bar IS LOW

Liberal hypocrisy doesn't let us off the hook!

If we advocate: free markets... actually following the Constitution... drastically reducing the size of government, especially federal government.... we have to continue to give time and money to charities. The fact that we give more time and money to both religious and secular charities does not mean that we are where we need to be. It just means that they are the ones that are greedy hypocrites.

If Christians funded their ministries with a Biblical level of tithing, we would put many functions of government out of business.

Don't wait for smaller government... give more... take back from government what they shouldn't be doing in the first place!

Strict Construction: It's not just for judges

I was riding in my car listening to the radio and ran across The Rush Limbaugh Show.  Just as I got to the station, the host said "President Bush says we are at war and we should act like it."  There are a thousand variations of this statement and theme on talk radio every day.  But here is the problem... our nation is not at war.  According to the Constitution, only Congress can declare war.  

Strict Constructionist

I am a strict constructionist.  I want judges to follow the Constitution and its original intent.  Most true conservatives are strict constructionists.  I don't want judges to legislate from the bench.  I don't want them to make it up because it is the "right" thing to do in their minds.  And...  

I don't want the Executive Branch to do it either.  The President should have only the powers that the Constitution authorizes... no less... no more!

If we feel the need to invade Iraq, make the case and force Congress to vote to declare war ... or not.  The Constitution is clear about this.  They cannot delegate it to the President.  For some reason, neo-cons are happy to read things into the Constitution for the Executive Branch... but they have a different standard for the Judicial Branch.

Strict construction is the correct hermeneutic (framework for interpretation).  Let's be consistent ... let's be logical ... let's be honest.  Strict Construction for Judges, the President and Congress.

The Constitution... follow it or amend it.

(NOTE:  See the next post for more specific information on the Presidency... I have re-published this post as it goes well with yesterday's thought.)

What Exactly Are We Electing - President or King?

The Founding Fathers had a clear view of what the office of President was to be.

It begins with the title. They didn't select a title that sounded like royalty (Your Highness, Exalted One, etc). In fact, while today we ascribe something akin to religious reverence and awe at the phrase...

"The President of the United States"

... it wasn't that way in 1787 when the Constitution was being debated. President... literally came from the root ... "to preside". In fact, the book The American Presidency says that the presiding function was deemed to be so strong, it was "almost to the exclusion of any executive powers."

The Job of the President

The Founders saw a clear but limited role for The President:

• Veto Legislation when Congress overstepped its bounds
  
• Defend the country if we were attacked by a foreign country (NOT declare war... Congress alone does that)
  
• Enforce the laws that Congress enacts

"We Have Declared War On .... fill in the blank."

"... our liberties would be prey to the means of defending ourselves..."

The Federalist #8 by Alexander Hamilton

In the Federalist Papers, Hamilton argued that the one way the President can quickly gain power at the expense of the Congress is in a time of war. Presidents have understood this as they use the Bully Pulpit to sell the "war du jour"...

- The Korean War

- The Vietnam War

- The Iraq War

- The War on Drugs

- The War on Terror

- The War on Poverty

- Declare war on AIDS, cancer ... acne...

As you can see, this "war du jour" strategy isn't confined to any political party or ideology. It crosses all boundaries.

Anytime you hear the President evoke the phrase "the war on ...", beware! Liberties are at risk. The Constitution may be under attack. Your taxes are about to be raised. You are being asked to use your emotions, not your brain!

Sadly... This Isn't Confined To War

We now expect a whole list of responsibilities to be vested in the President. We don't just want a Commander-in Chief... we want a Nanny-in-Chief. And to get elected, that is how they run... promising to:

- Fix the economy

- Reduce the price of world oil

- Take care of you in retirement

- Forgive your home debt

- Tie your shoes

- Change your diaper

- Rock you to sleep...

I don't mind all the campaign promises (lies). But I am scared to death that they will actually try to do what they promise! The Road to Serfdom should be required reading for all candidates.

Who is Responsible?

We all are responsible for this unconstitutional mission creep of the roll of The President. Congress has abdicated its responsibility. The Supreme Court has been asleep as it happened. Liberals and Conservatives (especially NeoCons!) have allowed, or wanted, the "Imperial Presidency" to be created.

Do you really want King Obama? or His Highness McCain?

It is time to read the Constitution.

It is time to return The Presidency to its rightful role.

It is time to rediscover the wisdom of our Founding Fathers!

Too close for comfort... Bush/Clinton

"I feel your pain."  

                                   President Bill Clinton

"We have a responsibility that when somebody hurts, government has got to move."

                                   President George W. Bush

OR.... Try A Better Way

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

                                   The Founding Fathers

                                   The 10th Amendment to the Constitution

So ... Who should help?

Help should come to those that are hurting.  Where should the help come from?  According to the founders:

• The States
• The People

Who should NOT help:

• The Federal Government

It is not that people should not get help... 

but help should NOT come from the ever growing:

Nanny State !

Funny and Right

"Giving  money and power to government is like giving whiskey and car keys to teenage boys."

 --- and ---

"A little government and a little luck are necessary in life, but only a fool trusts either of them."

                                                                                                      P. J. O'Rourke

                                                                                                      Parliament of Whores

The Conservative Gambit: McCain or Not

Gambit is a term that originates in the game of chess.

The gambit can take dozens of forms and has been developed into an art over decades of play. It is a strategy that can be implemented in many ways, but it always involves the same basic choice... the same basic decision...

Gambit: to give up material in exchange for a long term positional advantage.

To offer a gambit or not... this is the decision that true conservatives are facing.

It is not an easy decision!

I have many friends who believe that it is "a no brainer"... you have to vote against Obama. And, since the only possible person to defeat Obama is McCain... then we must cast our vote for McCain. Then they immediately follow with their trump card ...

"Do you know how many Supreme Court Justices will retire over the course of a Barack Obama presidency?"

To be clear, this really is a powerful and scary argument. One that should not be taken lightly.

The Pro-Gambit POV

The pro-gambit side of the argument goes like this:

John McCain has NEVER been a true conservative ... of any flavor:

• He is not a free-market economic conservative
• He is certainly not a Christian conservative
• He isn't a Libertarian conservative
• He has not historically been a leader for judicial conservatism
• He has no foundational guiding strategy, only tactics driven by his gut

"Strategy without tactics is the slowest route to victory.

Tactics without strategy is the noise before defeat."

Sun Tzu

At the end of the argument for the "can't vote for McCain" conservatives... they believe that McCain's.... tactics without strategy.... means that even if he wins the election, a "McCain GOP" win is just the noise before defeat for conservatives and for the GOP as they know it. Conservative principles defined and fought for during the Reagan years... refined and held dear by the likes of:

• The Cato Institute
• The Heritage Foundation
• The Family Research Council
• The Club for Growth
• etc...

... will be tarnished, dismantled and lost... for a generation or more!

They honor Sen. McCain's military service and sacrifice, but they DO NOT TRUST HIM!

The Conservative Gambit ... the stakes are high.

Obama's Flip-flop: Let's take it and run !

Sen. Obama's flip-flop ... deciding to forgo public financing and self-fund his campaign.... is a huge long term victory for economic conservatives, free speech advocates and defenders of individual liberty.  Historically, the Democrats have been the strong proponents of rigid campaign finance laws.  Now, with Obama's flip-flop, they are in a Catch-22.

Stop Beating Obama ... Support His Choice !

No matter the spin, lies and contortions Barack uses to justify his choice, his actions speak more loudly than his words.  Republicans and Libertarians should run through this opening and force the Democrats to embrace free markets and free speech in election financing.

Professor Mark Byrnes Is Exactly Right

Mark Byrnes (Associate Dean of the College of Liberal Arts at Middle Tennessee State University, Vanderbilt PhD,  Presidential Historian and Professor of Political Science) says it perfectly in an editorial in today's Tennessean.

"Our history indicates that money finds a way into campaigns whatever regulations are in place.  It might be that beefing up our disclosure requirements , so voters can know in a timely fashion who is giving what to whom, is the most promising course.  That would allow voters, in the famous phrase from All the President's Men, to 'follow the money'." 

                       

                                                                                              Dr. Mark Byrnes

                                                                                              Political Science Professor

                                                                                              Presidential Historian

Transparency and Technology -- "Follow the Money"

We are at a unique place in history.  With today's technology:  databases, the internet, blogs and hundreds of TV channels, there can be virtually instant transparency of "who is giving to whom".   Public financing of campaigns and campaign restrictions are both obsolete and harmful.

Thanks Barack!  

You have done what Conservatives could never do.

                                             

Great Quote from Ludwig von Mises

"The main political problem is how to prevent the rulers from becoming despots and enslaving the citizenry."

                                                                                                        The Theory of Money and Credit

                                                                                                        Page 454

Ludwig von Mises was one of the most, if no the most,  important and prolific writers and thinkers in the "Austrian School" of economics.  He was a strong, intellectual proponent of free markets and individual liberties.  

In the world we live in today:

• Post 9/11
• $4.00 gasoline
• Stagflation
• Negative savings rate
• Credit / mortgage / housing bubble
• etc...

... it is easy to hear grand speeches asking us ever so nicely to turn over our freedoms and liberties to those who say government (and their presidency) is the answer. 

Just remember the 3 BIG LIES:

-  The check is in mail

-  The money is in bank

    ... and the biggest of the three...

-  I'm from the government and I'm here to help you!

Helping the Poor ... Learning from Africa

"After half a century of failure, foreign aid can no longer be the preferred tool for lifting the masses of Africa and Latin America out of their economic prostration."

                                                                                Alvaro Vargus Llosa ... author of ...

                                                                                Lessons from the Poor:

                                                                                Triumph of the Entrepreneurial Spirit

Simple observation and common sense demonstrates what free market economists have argued for years.  Llosa's book gives well documented examples of entrepreneurship doing what trillions of dollars in foreign aid could never and will never do... begin to solve the problem of poverty.

Free markets and entrepreneurship are the best cure for poverty.  

It is the cure in Africa.

It is the cure in Latin America.

It is the cure in these United States.

Trivia Question

Last night at our Independence Day (4th of July) party overlooking downtown Nashville, I asked a trivia question to a few of my friends.  None of them got the answer correct. When I told them the answer, their jaws dropped.  

The Question:  What is the most popular boy's name in Amsterdam, in Belgium, and in the large cities in Sweden ?

The Answer:  Mohammed

The Decline and Fall of European Culture

Broadly  speaking,  Europeans have bought into 4 big lies / culture shifts that are killing their culture... literally!

The 4 lies / culture shifts are...

• Overpopulation is a big problem
• Children are an economic liability, not a blessing
• Women should wait to get married (if married at all), couples should wait to have children
• Abortion is a costless, amoral choice

The Result

The replacement birth rate is 2.1.  So, for any given population to stay constant... not shrink and not grow... women need to have 2.1 children on average.  Because of buying into the lies above, Europe is dying country-by-country.

Sample European Birth Rates:

-  Spain        1.1

-  Italy         1.2

-  Germany  1.3

"If a society chooses to outsource its breeding, who your suppliers are is not unimportant. ... Islam is now the principle supplier of new Europeans, and currently the second biggest supplier of new Canadians."   

(Note: Canada's birth rate has fallen to 1.5.)

                                                                                          Mark Steyn, Author

                                                                                         America Alone

Born in the USA

The birth rate in America is 2.11.... almost exactly the replacement rate.  Without the growth of the hispanic/Catholic population, the rate would be between 1.8 and 1.9.

What I'm NOT Saying and What I Am Saying

Most importantly, I am NOT saying that all Muslims are terrorists.  In fact, this is NOT a post about terrorism at all.  This IS a point about the fact that historic, western,  Christian based culture is radically different than Islamic culture, moderate of fundamentalist!  

Western culture was built on the backs of Calvin and Luther, the Catholic Church, Burke and Adam Smith, Jonathan Edwards and John Owen, Churchill and C. S. Lewis and Chesterton .... and the list goes on.  

Does anyone believe we would live in a culture of:

• Democracy
  
• Free Market Economics
• The Rule of Law ... based on The Ten Commandments
• and... Individual Rights and Liberty...

... if we live in a culture based on Islam?  

Celebrate 1776 - But for a different reason !!

As we head into the July 4th weekend, everyone will be thinking about 1776 and the birth of our nation.  But there is another reason to think about and celebrate 1776.  

The Wealth of Nations

In 1776,  Adam Smith wrote The Wealth of Nations and the world has never been the same.  Now before I go on and on about how important and how great the book is... you should know that I almost never recommend that people read it.  I only recommend it to serious lovers of economics, history and political economies.  Adam Smith wrote a LONG book with lots of side arguments and bunny trails.  A tight and concise writer he was not.  I feel about it a bit like I feel about Moby Dick.  You need a basic understanding of it.  If you run with a literate  crowd, they will allude to it ... even if they haven't read it.... so you need to know what it is about and why it is important.

Pour A Dram of  Single Malt Scotch, Have a Seat, and...

Let's Discuss Adam Smith and the Book

Adam Smith was a Scot.  Before he wrote The Wealth of Nations, he wrote The Theory of Morale Sentiments.    It was Theory made him famous in Scotland and Europe ... and Smith always thought it was a better book.  Certainly, it laid the groundwork for Wealth.  Smith was a great speaker and was in great demand.

Before 1776 and The Wealth of Nations, there was significantly less focus on the individual.  Further,  there was almost no interest shown in individuals outside of the elite.  While there is much to take away from the book,  Adam Smith introduced 3 basic but iportant concepts you need to know:

1. Pursuing your own self interest in decisions is good for you and has the residual value of being good for the collective good.
2. The division of labor is imperative for individuals to maximize their economic potential (Even more so for the non-elite.)
3. Freedom to trade without government interference is good for all. If the two parties didn't think that the trade was good for both, a trade would never happen!  By definition, both parties must consider the transaction a win-win.

Another obvious by-product of #2 is that you must have #3.  In a world where division of labor exists, free trade is an imperative because you no longer make all the goods you consume.  Others in the division of labor chain make things you need... you must trade.

All these things seem obvious today.  But remember, every great idea had an origin and an originator. 

If You Want A Little More

If you have an interest in free markets and Adam Smith's roll, I'd point you to two fun resources.

1. How The Scots Invented The Modern World by Herman is a fun book and has a great section on Smith and his friends.
2. The Libertarian Reader published by The Cato Institute has a terrific 7-8 pages that will give you the essence of Wealth of Nations

1776 ... It was a great year !

Is John McCain.... "New Coke"?

Brands are important. Brands don't just communicate attributes; brands communicate at an emotional, deep, DNA level. Brands include and brands exclude. Products under a brand umbrella have to fit what the brand stands for...otherwise the consumers.... especially the brand loyalists... will reject it. But more than that, they will not just reject the product, they will begin to reject the whole brand.

There are well know BRAND DISASTERS. The best known is "New Coke". For the GOP, I am pretty confident that John McCain is New Coke.

New Coke

To the marketing team in Atlanta, New Coke's goals sounded reasonable. They wanted to:

• Expand the brand base
• Attract a new type of consumer
• Specifically, attract people who like Pepsi

The problem was that to attract new users, they left their hardcore, loyalist base behind. They had done the math. If they lost 9 but attracted 10, the net 1 positive would be great. In a close battle like Coke/Pepsi... any small gain would be huge. WRONG.

Losing a hardcore brand loyalist is not a 1-to-1 transaction. Brand loyalist are not consumers of the brand...they are actually a part of the brand! (As an aside, Starbucks is learning this today with their "Pike Place - All Day" strategy of having mainly milder coffee and less choices. They are quickly reversing course... but the damage is already done.)

John McCain and the GOP Brand
What are we told about the strengths of the John McCain brand?

• He will attract independents... expanding the base.
  
• He will be more liked by the press.
  
• He is a new type of Republican which is what we need since "W" is so loathed.

But the Republican coalition, and the vast majority of the hard core loyalists, are true believer Conservatives. Many of them (me included) think that "W" and the Republican Congress is already a "New Republican" - "A New Coke". The GOP brand has been changing for the past 8 years and is being changed again, but not back to the Reagan - Heritage Foundation - Cato Institute - Family Research Council brand that won in the 1980s.  

Long Term Damage
After 8 years of big spending / government expanding Republicanism, the further brand drift of McCain Republicanism can only damage the brand more. The loyalist, the hardcore users that are a part of the brand will react predictably:

• They will reduce spending on the product: donations, attending events and even voting
• They will lose passion and energy: remember, the brand was a part of them... they loved it... they believed in it at a deep, emotional level... and the brand has left them!
  
• At some point, some will look for a brand alternative: one with the attributes they have at their core... in their DNA (If other parties could win, migration would be much bigger and faster.)
  
• Libertarian Party
• Constitution Party

Keepers of the Brand
So who are the keepers of the brand? Who has the clout and organization to help the GOP find its way? I mentioned them earlier:

1. The Heritage Foundation
2. The Cato Institute
3. The Club for Growth
4. The Family Research Council
5. Campaign for Liberty

While these 5 are all a slightly different part of the Republican Coalition, all 4 are clearly under the brand umbrella.

If you are not donating to the GOP and McCain, don't stop giving.

Give to the keepers of the brand listed above.... and get involved !

Sweden and the Future that Disappeared

A new book on Sweden, poster child of the liberal left, titled Fishing in Utopia:  Sweden and the Future that Disappeared by Andrew Brown is reviewed in the latest issue of The Economist.  

Let's start with the scariest quote:

" A secular priesthood of social workers snatch children from their elitist parents..."

The Sweden I Know

I have been interested in Sweden since my brother-in-law almost married a Swede, my wife visited Sweden and friends from Sweden stayed with us. The family my wife stayed with, almost our relatives by marriage, were both doctors.  In fact, they were not just doctors, he was a renowned orthopedic surgeon and she was an opthamologist.  Even so, they lived very modestly.  The government taxes were SO high, that their take home wages were not far above average.  In return, their children went to school for free... forever... if they did well.  Their children got something like an allowance from the state.  Health care was "free" for everyone.  Retirement was modest but guaranteed.  In short, the Nanny State didn't just nanny the children, it nannied the entire population... the entire ecomomy.

How They View America

They look down on us for who we are yet want what we have.  Sort of like liberals in the USA look down on America but stay here and take "the spoils" of our system...at least until they can destroy it.  Swedes love our goods, entertainment culture and want to spend lots of time here in the States.

Sweden Post 1930

But remember, Sweden was not the socialist/liberal state is is today before 1930.  In fact, The Economist book review says that Brown points out with great insight that...

(Warning:  Liberal media bias embedded in a good point)

"As the harsh echos of the impoverished, heirarchical system of the 1930s fade, so too does the moral tone of the society.  It is only the memory of poverty that creates the social discipline necessary for prosperity, he suggests ; once that is forgotten, the seeds of decay begin to sprout."  

Moving past the biased words and phrases  like "harsh echos",  "impoverished" and "poverty" which could have been written in the positive rather than the negative, the point is a good one...

"... once that is forgotten, the seeds of decay begin to sprout."

How Would We Say This?

Once the free market incentives are removed, once the profit motive is killed, once the government assumes massive taxes are rightfully its to redestribute... decay sets in.  And the decay is pervasive.  

• Government becomes the Nanny State:  family responsibility, church obligation and private philanthropy decay
• Profit motive is killed:  individual motivation dies
• Average becomes the ideal 
• "... the seeds of decay begin to sprout."
• Fundamentally because ..."a secular priesthood of social workers snatch children from their elitist parents"

Hurry Barack, Hurry Nancy, Hurry Harry... 

Before It Falls Completely Apart!

This is the path that the ultra-liberal left so desparately wants us on.  The path to the Nanny State.  This is the world of Barack Obama's economic and social plan.  This is Nancy Pelosi's utopia.  

They love to point to supposed successes of countries like Sweden without mentioning  all the facts.  And now that are faced with a decaying trend...  all their plans could unravel.  

Better hurry.  Or better yet, read The Road to Serfdom by F. A. Hayek.