From Freedom to Following Rules

For most of the USA’s history, transactions occurred based on pragmatic experience.  Society was shaped by countless voluntary transactions based on the accumulated knowledge gained through experience, largely free from government interference. Frederick Hayek stated “all the famous early law-givers did not intend to create new law but merely to state what law was and had always been.”  For example, for decades, experience had shown that to remain strong, banks needed a certain capital base, and to lend money to buy a house, banks required that the recipient of the loan have a 10 percent down payment (so they would have a vested interest in the property, and to show they had the self-discipline to manage a budget to save up the down payment) and that payments not to exceed 30 percent of income.  This kept foreclosures at a minimum.   “New” law was written requiring banks to change their policies, not based on what worked, but to make the housing market more “fair” and to increase home ownership, and this new law did not take into account what experience had shown to be successful, but instead was based on how bureaucrats envisioned how things “should” be.  The result was the real estate bubble that ended with the financial meltdown of 2007. The “Affordable Health Care Act” is the latest huge law written by our ruling elite which will replace largely voluntary transactions between doctors and patients with detailed laws that all caregivers and patients must follow…forget voluntary transactions based on years of experience.  More and more, voluntary transactions, based on knowledge gained through experience, are being replaced by very detailed, specific laws, written and implemented by an elite few who think that their limited knowledge can construct a society of rules that is superior to a free society.  We are quickly turning away from what has made the USA prosperous, and so far, the results are not favorable.

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Berating Corporations… biting the hand that feeds you

I saw a post today from the “Seniors for a Democratic Society” Facebook page, where Sen. Bernie Sanders said “if you want to start going after someone for closing the deficit, start with these greedy corporations!”  I would comment on their Facebook page, but they blocked my comments after one post I made on their page that was counter to their philosophy, which seems to be that the rest of the world exists to provide them with the good life.  Had I been able to comment on this post, here is what I would have said.  What are corporations?  Legal entities set up by one or more people who want to invest their money to produce a good or service to offer for sale to others.  Their objective is to receive a reasonable return on their investment, and they only do that if what they offer is voluntarily purchased by someone who values it, and if their cost to produce it (plus the added costs of the government’s take) is less than the cost to provide it.  That is how we have pacemakers, cars, food, stints, entertainment, houses, televisions, gasoline, phones, and everything else we consume.  Somehow, those who post on Seniors for a Democratic Society seem to think that corporations, who only provide what consumers voluntarily purchase, are evil, yet, they want all the goods and services the corporations produce.  This seems to me to be the epitome of “biting the hand that feeds you.”

What makes politicians successful?

Politicians who represent special interests are successful.  Politicians who uphold the Constitution and represent the average citizen are not successful.  Why?  Those who want something from the government band together to elect politicians who will deliver what they want.  Those of us who just want to be left alone and who want political power dispersed as defined in our Constitution, don’t take the time to organize into a “special interest” group, so our voices go unrepresented.

Benjamin Franklin on Welfare

"To relieve the misfortunes of our fellow creatures is concurring with the Deity; it is godlike, but, if we provide encouragement for laziness, and supports for folly, may we not be found fighting against the order of God and Nature, which perhaps has appointed want and misery as proper punishmets for, and cautions against, as well as necessary consequences of, idleness and extravagance? Whenever we attempt to amend the scheme of Providence and to interfere with government of the world, we had need be very circumspect, lest we do more harm than good. " Benjamin Franklin (In Smyth, writings of Benjamin Franklin, 3:135)

Franklin D Roosevelt on Government Regulation and Legislation

“The doctrine of regulation and legislation by ‘master minds,’ in whose judgment and will all the people may gladly and quietly acquiesce, has been too glaringly apparent at Washington…Were it possible to find ‘master minds’ so unselfish, so willing to decide unhesitatingly against their own personal interests or private prejudices, men almost godlike in their ability to hold the scales of justice with an even hand, such a government might be to the interests of the country; but there are none such on our political horizon, and we cannot expect a complete reversal of all the teachings of history.” Franklin Delano Roosevelt, in 1930, when he was still governor of New York.

Ways to Spend Money

Milton and Rose Friedman, in their book Free to Choose, showed that there are only four ways in which money can be spent.  First, your money can be spent on yourself. When you spend your money on yourself, you try your best to get what you want at the least cost. Second, you can spend your money on other people. Again, you try to get the best price you can although you may not be as concerned about getting exactly what you want.  Third, you can spend other people’s money on yourself. Here, you don’t care how much is spent and you try to get all you can (this is how special interests use government to get other people’s money). Fourth, you spend other people’s money on other people. You didn’t have to earn the money and you get credit for all the “good” you do with the money (along with the power to decide who gets the money).  Number four is the way all government programs work.

An Entitlement Equals an Obligation

Every entitlement given to any individual by the government is matched by a corresponding obligation which the government must impose on another individual to provide the entitlement.  This holds not only for entitlements to individuals, but also to support which the government gives to companies, schools, and groups of any kind.  For example the government’s investment of over 500 million dollars in the solar panel company Solyndra, required the government to collect $1,000. from over 500,000 households.  Think about that every time you hear about another government program, no matter how laudable you think the intentions.