Wounded unto death, great beasts throw themselves about in a last temper tantrum of violence and revenge.

Could it be that these are the last days of the government's control of our markets in stocks, banking, housing, insurance, and money?

Faster and faster as the end draws near the Congress passes new law and new regulation.  The blaming of free markets becomes more and more bitter and arrogant.  Each day a new lie is born out of fear that the regulators are losing control of the natural ecology of human trade.

The derivative securities are the desparate attempts of the market to fix the damage done by Congress.  Yes, subprimers are doomed to fail.  But the regulations and subsidies of the Democrats (and, sadly, too many Republicans) left free people no other choices.  Like yeast growing in bread dough, if you confine it, the living thing will explode its container.

It is an arrogant conceit to suppose something as artifical as law and regulation can control a natural, spontaneous system like the human market.  Maybe a market can be controlled if it can be centralized in institutions like the New York Stock Exchange or the Federal Reserve or Wall Street.  Maybe freedom can be restricted, for a time, when the major media and all branches of government and the universities conspire against it.  But today there are stock markets in every nation and I can purchase stocks and bonds on my computer directly from the company that issues them.  Markets, like any non constructed and natural system, cannot be designed or artifically controlled everywhere or for long.  These natural systems will grow their way around obstructions like socialism or destroy the societies and nations that attempt to block them.

Is that what we are witnessing now?  Are these the final straws that break the back of the oppressive control ordered by Congress?   What will come next?  New markets beyond their reach?  New currencies they cannot control the price of?  New freedom to create, to build, to trade?

If this current round of oppressive law passes, mark my words, the next panic will happen in less than a year.  After that "fix," the next crisis will follow in six months.  They (I mean Congress) will not stop until they have ruined us all.

Any nation so arrogant that they believe they can control and modify human nature or the natural and spontaneous order of markets and prices is doomed to destruction.  So went Shumer, so went Accadia, so went Egypt, so went Babylon, so went Assyria, so went Persia, so went Greece, so went Rome, so went China, so went Europe, so went Britain, so went the Soviet Union, and so will we also go unless we stop the Democrats and their chicken hearted allies in the Republican Party.

The Faith Heretic
Charles Johnsen
chj3@westernabzu.us

To get out of a hole, first stop digging.

The Democratic Party never fills in the holes it digs. It jumps into them and digs them deeper. Do not dare to throw them a rope. They are insulted by any solution that does not leave them in control.

After Enron, Congress passed Sarbanes-Oxley. Did that help? No. Part of our current problem is the answer to the question we should have asked, "Then what?"

In the Depression, to encourage home ownership, Congress started Fannie Mae. Did that help? No. In addition to the corruption, part of our current problem is the answer to "Then what?"

In 1970 Congress created Freddie Mac to artifically attract more capital to the mortgage market. Any time the market tells us that all is not well Congress reacts by making it worse. Did that help? No. In addition to the corruption, part of our current problem is the answer to "Then what?"

The Community Reinvestment Act was created to force banks to become charities. Did that help? No. Poor people did get houses. For a while. Now they have neither house nor good credit rating. Congress intended to help them. As always, Congressional help did great harm. No one in the federal government asked the question, "Then what?"

The Federal Reserve Bank caused the Depression. Instead of repealing Wilson's Folly, Congress blamed the stock market and created the SEC. Did that help? No. Part of our current problem is the answer to "Then what?"

And the grandaddy of them all, the Fed, has done the most damage. It was created by Congress to gain control of the currency so that the economy would follow election politics instead of market reality. Did that help? Yes, it helped Congress and the President. But the Fed has harmed us, all of the rest of us.

"Then what?" is the question I now ask about the current proposals to "fix" the current "crisis." Congress will use this as an excuse to increase government power, even though they create these problems and they profit from the problems they create.

What idiot proposes fixing a problem by making it worse? The problem is not markets or America or we citizens (except as voters and whiners). The problem is Congress and the silly laws they pass.

"Then what?" is the question no one asks when the federal government steals money from people on high ground and gives it to people who build on the flood plain. There will be a next disaster and a next and each new one will steal more money from the rest of us. "Then what?"

Corporate income taxes are nutty. They only hurt the customers of the corporations, you and I. Corporations do not pay taxes, we do when we buy stuff from them. The corporate income tax is a scam and needs repealing.

The capital gains tax is nonsense. Much of the gain is no gain at all but inflation cause by government. How dare they tax us for their mistakes? But they do. So, those who chose stocks poorly pay no tax and those who chose well pay tax. Punish the smart, successful, careful, and alert. Reward mistakes. That is Congress.

Repeal the capital gains tax, corporate income tax, progressive taxation (a shell game to take money out of our pockets while pretending not to) the Fed, the SEC, the Community Reinvestment Act, Sarbanes-Oxley, Freddie Mac, and Fannie Mae. That would fill in the hole Congress dug.

Then what? The markets, world wide, would take off and fly. 

Charles Johnsen
The Faithful Heretic
westernabzu.us
chj3@westernabzu.us

Fix by Repeal.

The Statists are already using this emergency, which they created, as an excuse to increase regulation, redistribution, and reelection.

Nonsense.  The best way to fix the current mess is to repeal the laws and regulations that got us here in the first place:  Sarbains-Oxley, the Community Reinvestment Act, FannyMae and FreddyMac, the SEC, and the Federal Reserve Bank.

In addition, the taxes on capital gains and corporations need repeal.

These actions would fix the markets over night and lead to a generation of economic growth and safety.

Government is not the solution.  Government is the problem.

The slogan of the statists is that banks should be "Too big to fail."

Dr. Alan Greenspan encouraged the consolidation of banks because that made them stronger and more efficient. He, a friend of Ayn Rand, should know better. Age and federal office kills brain cells, so they say. There is this: The little banks can not afford a room full of compliance officers and lawyers like a big bank can. Of course, without a Federal Reverse Bank or congressional regulation no lawyers would be needed. Just bankers.

Actually, this disease has been caught by many structures in our society that should know better. "Local and private" suited churches, schools, businesses (especially retail), unions, lodges (Nineteenth and early Twentieth Century insurance companies), political parties, hospitals, and almost everything else. Or, consider states and cities and counties which were once the fundamental units of governance in our nation.

Not any more. Maytag and Amana are one company now. I work for Home Depot instead of the mom and pop flower shop of my youth. We are rapidly coming to a national school system. Insurance companies are so big they control a significant percentage of our capital markets. Little banks are nearly gone. Medicine is run by the federal Medicare machine. Local churches, who believe in Christ, find themselves members of organizations like the National Council of Churches, which believes in Marx.

If a local business makes a mistake, even a very bad one, only one business will go up for sale. There will be a buyer because everything else is okay and there will be enough currency. So the owners and customers may be hurt but they will not suffer for long. But if a national business makes a mistake everybody, not just the owners and customers of that business, suffers. Capital evaporates. No one else can afford to buy it because it is so big. Some critical product or service goes away.

One person or one board of directors blew it in both cases. We are, after all, human. (Unless elected to Congress where no mistakes are made.) But the suffering is temporary and personal in one case but can be national or even global in the other.

There is the efficency argument, that one board and chairman can run a hundred little banks and afford the room full of lawyers. Yes, true. And sometimes markets will pull business in that direction and usually it works out. Or, if times change (technology, weather, politics), perhaps markets will pull large organizations apart. As long as millions of people, as they buy stocks, are making these decisions the swings and adjustments will be gentle and correctable. The danger is when the government gets involved and encourages the aggregations, because they always go too far, they never correct themselves, and they always go toward centralization.. That is, in part, what has happened to us. We are left with no where else to turn.

But the biggest problem with bigness is that it freezes innovation. A local gas station can change his prices every ten minutes if he wants or sell out in a couple of months or change his pumps one at a time. Not so a giant company. And no matter how smart people are, no matter how many studies they do, they cannot respond to local conditions or temporary situations fast enough. This goes double, quadruple, an order of magnitude for Congress. Once a regulation is promulgated it may be expanded but never deleted.

How is it that a congress person knows who should get mortgages at what rates? We would get a better guess from a priest or bus driver. Maybe bankers should write speeches for their representatives. Wait a minute, maybe they do.

The simple fact is that government cannot know enough detailed information to set the price for a pencil, much less for money. It is way past arrogance for a national government to try and control the value of their currency in a global market.

We have become too big to succeed.

Charles Johnsen
The Faithful Heretic at The Western Abzu
chj3@westernabzu.us

How Presidental Election Politics Overrides Party, Congress, and Nation.

Good folks will often say that the President manages the economy or runs the country. "Nonsense." is the usual libertarian response. The economy, through the natural mechanisms of freely set prices and private property, is not directed, guided, or managed. The ordinary acts of trade, work, and ownership make it go and sort out the occassional flaw through the free choices of free people. Manage an economy and it will fail. This is not really debateable after the events of the last century: the utter failure of planned economies, the disasters of government interference in Europe and Japan, and lately has become obvious even in the United States of America. The current economic "crisis" is, just like 1929, completely the fault of the federal government and its agencies and central banks. In other words, Congress screwed up. The complaints that the mess is due to deregulation is like saying the kid covered in mud is clean when only his hands have been washed. The claims that this is a failure of markets is like like claiming we were robbed by that guy chained in the dungeon.

What free market drove the political appointees (that is what they are) at freddy and fanny to give campaign contributions to elected officals? That was politics, not economics. What free market principles drove fanny and freddy to loan money to people who could not repay? Again, markets are not that insane. Politicians are and they are the ones that literally forced the lenders to lend (I mean give away) stock holder money (I mean tax payer money).

As for the President running the country, God help us, I beg that this never happens. It would be Fascism. Even though American Fascists look like classical liberals next the European and Asian varieties, there is no other word for it and it not an exaggeration. He (or she if the Republicans have their way) is not a king, an emperor, or a god. He or she is a human being with a FEW, LIMITED powers granted by the people through their Constitution and is not allowed to bully us about. Neither is Congress. Nor is the Supreme Court our master. But who will ever tell them? Having said that, please do not mention my name in this connection.

Like Fascists everwhen, the more centralized the better and the best of all is a single leader. The English word for that is monarch. And so, oddly, we find the little Fascists in Congress willing to sacrifice their popularity for the sake of the big Fascist in the Whitehouse. In every recent case, except Ronald Reagan, even the survival of their parties took second place to the survival of their President. What else would explain Democrats refusing to impeach or convict President Clinton for perjury? What else would explain the Republicans voting for President Bush's internal imperialism (to use Fr. Richard Neuhaus's phrase) over schools, charities, and presciption drug distribution?

When elected officals or media personalities say that the President manages the economy or runs the country I get angry because they should know better and have a heavy responsibility to teach and lead. Jefferson, Washington, Franklin, et al, would be appalled. When ordinary citizens talk like this it just makes me sad. I know they do not really mean it. These are only phrases we are allowed to hear and see on television.

Along with these is the phrase, "on your watch." The President gets the credit or the blame no matter what Congress does. For example, Bill Clinton--lying--claims to have given the country no deficits and great prosperity. Nonsense. Both were the doing of Newt Gingrich. Clinton fought Gingrich every step of the way. It is not too far wrong to say that Newt saved Bill's Presidency. This is not debateable, it is obvious, and is therefore invisible to the New York Times. The other side is George Bush, who's chief and only flaw is to trust the good will of his political and international opponents. He complained about freddy and fanny, he lobbied Congress to reign them in, and was arrogantly ignored. But he gets the blame when his warnings come true. Or, he has been after Congress for years to loosen up the brain dead regulations against energy, both nuclear and petroleum. But who does the press blame when this chicken comes home to roost?

And now, after shining a little angry light on how poorly American Fascism works, allow me to describe my main point.

The Reed-Pelosi Congress has sacrificed itself, its reputation and achievements, for the goal of electing a real Fascist to the presidency. They believe that the president is able to change America, to run America, to fix America. Of course they are wrong but the point is that they believe it. To the end of electing a Democrat to the post of god, they have blocked every effort to fix the problems we have. They are convinced that hatred of Bush can be turned into an election victory. They are also convinced, because it usually happens this way, that the members of Congress will escape notice in the blame game (Heaven forbid a reporter should blame a member on the front page) and that the President will get it all. Most important, they do not want things to go well or people might get the idea the Republicans are not so bad.

This is vile. Still, I believe it to be true. How else to explain a refusal to take up any bill that will help people? Minimum wage? What do you think gave us the recent uptick in unemployment? Put aside the issues of the policy, the intent was not a living wage for poor folk but to embarrass President Bush. He too was more political than wise and did not veto the bill. Too often he has cooperated with idiots because the newspapers love idiots. I do not get him at all.

There lies the big mistake of the Democrats. Bush's popularity is about one third of the nation. But does that mean we all think he is too right wing? Of course not. Ten percent of the seventy percent who dislike Bush think he is too right. About half of the seventy think he is just wrong and do think of it in right and left terms. That leaves about fourty percent of the seventy who think Bush is too far left.

I know this hard for leftists to believe, but many of us think Bush is not a conservative (except in a few areas). The more they paint him as a conservative the more we like him. The more he does stupid thinks like work with Teddy to pass a bill to harm public schools the more libertarians and conservatives mistrust him. Look at the angry dust up over the boarders. Were those lefties who shouted mean things at Bush?

Ironically, the Democrat stratigy to elect their version of god will made the electorate so mad at Bush that they elect McCain. All McCain needs to do to karate leftists is to appear a little to the right of Bush and help Obama along on his quest to get as far left of Bush as possible. Once again the left proves it has no clue about conversatives, libertarians, or religious people. Their foolishness may also lose them the Congress.

Oh, boy!

Charles Johnsen
chj3@westernabzu.us
westernabzu.us