Mitt v. Barack, Marginal Tax Rates, and … Morality!

The first presidential debate of 2012 is over, and it is fair to say Mitt Romney had a very good night, was on the offensive, did not make any meaningful gaffs, and by all reasonable accounts won this debate. Good for Mr. Romney, as far as that goes.

In the debate (focused exclusively on domestic policy), we heard a great deal about taxes. Mitt Romney attempted to make the case for, essentially, reduced marginal tax rates to spur growth. Romney’s plan calls for maintaining the “Bush tax cuts,” which were across the board rate cuts of roughly 20% from prior levels. In addition, Romney’s plan calls for eliminating the Alternative Minimum Tax, eliminating the estate tax and other tax reductions. Romney also mentioned this plan is coupled with eliminations of various deductions, credits, and loopholes. His plan, to the extent we have details, can be (seen here). Obama argued that this was a “$5 trillion dollar tax cut.” Romney then countered: “I’m not looking for a $5 trillion tax cut. What I’ve said is I won’t put in place a tax cut that adds to the deficit. That’s part one. So there’s no economist that can say Mitt Romney’s tax plan adds $5 trillion if I say I will not add to the deficit with my tax plan.” Read the rest of this entry »

Advertisements
Posted in US Presidential Election. Comments Off on Mitt v. Barack, Marginal Tax Rates, and … Morality!

Jon Steward On Despicable Newt

This is insanely funny, in an insane way!

Jon Steward on The Daily Show (1/23/2012)

“… as close to despicable as you can imagine!?!?! . . . you imagined your wife while she was dealing with having MS would be open to you having sex with another lady you’d already been having sex with for six fucking years! . . . I think you have a pretty good imagination, despicability-wise!”

Or, put differently, look up ‘despicable’ in Websters and there you’ll find a picture of the “Gingrich who stole South Carolina.”

Dude’s girth is exceeded only by his incessant bloviations.

Posted in Humor, US Presidential Election. Comments Off on Jon Steward On Despicable Newt

The New Counter Culture

With the Obamanation in full stride, some of my personal predictions coming true almost daily, and a host of new self-sacrificial edicts being foisted upon one and all from all corners I thought it entertaining to take a peek in the mirror.

But first, a reflection of a different sort.. I wrote on the heels of the election (11/8/2008) the following comment:

But be prepared for the big surprise, the godless collectivists who will be taking power in January will start out by telling all of us that Christian faith is fully consonant with their goals. They will appear more religious than the gang of true believers who just vacated the White House. Their thesis will be that their collectivist programme is not just consonant with but required by those of the Christian faith; what you pretend to believe on Sunday must be instituted practically by law on Monday. And you know what, in many ways they are correct – social mysticism and religious mysticism share the same intellectually bankrupt premise, the incredible inversion whereby the individual must be subordinated to a higher authority; the church or government at all levels. And since the collectivists believe fundamentally that the church is incapable in a general way to achieve their socialist goals, government will be the higher authority.

Link

Obama has gone about as fast as I surmised, and his speeches at ASU and Notre Dame were in large part further spewing this sickening creed of self-sacrifice. It is everywhere now. Want another prediction? It will absolutely kill this country and the mystics, not Atlas, will be ones shrugging. They will shrug and say, how can we argue with the self-sacrifice preached by Obama. If we are true to our faith, we will see the truth in his call to duty… in his call to tax the achievers…. in his call to sacrifice for national healthcare… in his call to sacrifice for the workers in failed auto companies…. in his call for sacrifice to the altar of the Greens…. and on and on and on. Sacrifice for the percieved needs of others knows NO END.

Gents and ladies, those of you who frequent this site in general agreement (or amazement), you are part of the new counter culture now… Indeed, if you sense this trap tightening around your neck you must understand its root cause. When you do, you will see that you too are part of this rag tag fleet of star ships moving into the galaxy in search of a new planet where liberty, freedom, free markets, and free minds can dwell. A place where the trader is revered and the looting class non-existent. Where one’s only moral obligation to another is to act rationally… Where individual rights, not collective whim, rule and no man may infringe on the inalienable rights of another. And make no mistake about it, there is no place on this earth one can run to now.

Well, in the spirit of this mess we casually call Western civilization in the 21st century it is fascinating to read what our last semi-conscience President had to say.

Better than most…

We’ve had enough of sideline kibitzers telling us the system they themselves have disrupted with their social tinkering can be improved or saved if we’ll only have more of that tinkering or even government planning and management. They play fast and loose with a system that for 200 years made us the light of the world. The refuge for people all over the world who just yearn to breathe free. It’s time we recognized that the system, no matter what our problems are, has never failed us once. Every time we have failed the system, usually by lacking faith in it, usually by saying we have to change and do something else. A Supreme Court Justice has said the time has come, is indeed long overdue, for the wisdom, ingenuity, and resources of American business to be marshalled against those who would destroy it.

What specifically should be done? The first essential for the businessman is to confront the problem as a primary responsibility of corporate management. It has been said that history is the patter of silken slippers descending the stairs and the thunder of hobnail boots coming up. Back through the years we have seen people fleeing the thunder of those boots to seek refuge in this land. Now too many of them have seen the signs, signs that were ignored in their homeland before the end came, appearing here. They wonder if they’ll have to flee again, but they know there is no place to run to. Will we, before it is too late, use the vitality and the magic of the marketplace to save this way of life, or will we one day face our children, and our children’s children when they ask us where we were and what we were doing on the day that freedom was lost?

January 1978 Whatever Happened to Free Enterprise? by Ronald Reagan

Well, now we can answer that question for Mr. Reagan. Freedom was lost one drip at a time, and the final nail in the coffin was the irrational support for two intellectual misfits: McCain and Palin. A war hero and an evangelical journalist turned Alaskan Governor. Neither knowing anything about free markets, nor really caring to know. Both spewing right wing collectivism as if it were the righteous cause, all the while the snake in the grass had all of us by the short hair.

The Obamanation is no idiot, this was the perfect setup because in order to oppose him one has to oppose self-sacrifice which is the core of the creed of the collectivists and of the religious faithful. And that, ladies and gentlemen, is what the new counter culture must be premised upon. If we do not embrace individual rights, rational thought, and free markets purely and immediately while simultaneously rejecting the creed of self-sacrifice then the answer was, at least for me, abstention.

On that day as rhetorically posed by Reagan, I abstained. I could not, would not, sanction collectivism in ANY form, or from any political gang.

Welcome, perhaps, to the new counter culture.

Posted in Capitalism Advocacy, Liberty, Religion, US Presidential Election. Comments Off on The New Counter Culture

CONVICTIONS OF AN AMERICAN

Having the courage of one’s own conviction is a trait typically found in those who have moral clarity. In fact, I would argue that it is moral clarity that gives one the intestinal fortitude and intellectual drive to have such courage. To those who have such clarity, the world is viewed in far fewer shades of gray than the other side, whom I like to call the “grayscale relativists.” When I originally thought this through I included as grayscalers not just social liberals, but also collectivists of virtually every stripe. It was my view that the aforementioned list pretty well described all of “Old Europe”, the American Left and many within the US educational establishment (especially on university campuses and the ilk making up the various teachers unions across the nation). My thesis was (and still is) that all of these groups simply cannot bring themselves to admit what I believe to be an undeniable conclusion – the moral superiority of us, the USA.

Now that I have the hair on the back of your neck likely standing at attention, my point here is actually more subtle than one might think. By reference to ‘us, the USA” being morally superior I am referring to the enlightenment vision of the intellectuals among our Founding Fathers – the unique American idea, if you will. And, you ask, what is that idea? Well, it is rather simple but exceedingly profound. Moreover, it is in a state of utter disregard in the minds of the politicians (not to mention the masses) who are right now massing their political troops, sound bites, white papers, etc., at the borders of each and every “swing state.”

The idea to which I allude comes from the foundational ideas of Aristotle who, although having views on many issues different from the Enlightenment, provided broad basics such as the primacy of this world, the lawfulness of nature and the fact that we have the ability to understand it, the reality of the individual, the singular power of ones own mind (reason), and the value of intellectual development as a means (if not the means) to self-fulfillment. These profound ideas (and some other plainly Aristotelian notions) were never put to practical political use in Aristotle’s time but they nevertheless percolated in the minds of men who stood on Aristotle’s shoulders. One man, in particular, who took these profound Aristotelian ideals and put them to practical use was John Locke. Locke bequeathed them to the intellectuals amongst our Founding Fathers who indeed made good use of them, resulting in the American Revolution. Without the philosophy of the Enlightenment and the minds to create the abstraction from the Aristotelian concretes no revolution would have, or could have, succeeded.

Specifically, the unique American idea as originally conceived, and to which I argue is morally superior to anything ever implemented socially in the world to date, is the fundamental challenge to the primitive idea that the state be regarded, either explicitly or implied, as the ruler over the individual, a sovereign authority (God granted or not). The Founders unique American idea was the opposite: the primacy and sovereignty of the individual. It is implicit in our founding documents, particularly The Declaration of Independence, which states that the individual precedes any group or institution of government and that each man possesses certain individual rights: “that among these are Life, Liberty and the Pursuit of Happiness.” This, then, is the unique American idea. It is profound, previously unknown in any political/social context, and is precisely what led to the advancement and material well-being of the citizens of this country through the one and only economic system capable of supporting such a notion of individual rights and liberty – capitalism. And the more free market oriented our economy, the better the standard of living for all the participants, and the greater are the odds that this unique idea will survive.

So, the question then becomes if you do not believe in the moral superiority of what our founding fathers created, and that to which The Constitution refers as a “more perfect union” then, by default, you must believe that either something else is morally superior, or you are amoral. Which is it Mr. Obama? Mr. McCain? Please, enlighten all of us to the better philosophy, the one not tried to date in this world; the politic which makes individual freedom and liberty subservient to the state, or to God, or to you. Moreover, if this is your world view your system of making judgments and decisions sees capitalism as questionable (evil), private property rights as inconvenient (unfair or unnecessary) to the aims of the state, liberty and freedom as quaint notions of a by-gone era, the United States Declaration of Independence as a document written by misguided racist slave drivers, incremental “progressive” confiscation of wealth from the producers to the non-producers of society as somehow “fair” and moral, thus making true benevolence impossible by design.

We grew as a great country because of the only social/economic system-capitalism-that answers ‘yes’ to the question of whether or not man is truly free. The divide between it and its antithesis is as profound as the staggering growth and success we have achieved in a short 232 years and is further reflected in the people who have died trying to come to our shores to find freedom. Incredibly, we now have here in America two presidential candidates who either overtly mock it (Obama), or acquiesce (in the case of Mr. McCain) as political expediency to its antithesis (collectivism). I have a great degree of respect for what Mr. McCain endured as a prisoner of war, and as a human with a unique American experience that we all can look up to. He is without question far superior in this regard to this fool named Obama. Nevertheless, Mr. McCain’s votes in the Senate and his words upon the stump lead me to no other conclusion than that he is not espousing as candidate McCain the vision of our country that he says he held close to his heart as prisoner McCain. Either that, or he simply does not understand the non-negotiable essence of the American idea. That disconnect is now palpable in the growing antagonism towards the Arizona Senator.

America is an idea and it is the moral superiority of its foundational idea which implicitly includes concepts such as laissez-faire capitalism, the inalienable individual rights of life, liberty, and property. Such a presumption of individual freedoms irritate the Obamists as well as the Islamists, in fact fundamentalists of every stripe. Moral clarity about America will give you the courage to stand up for the conviction which that idea implies. Convictions about a very unique idea that subsumes the state to be subservient to the individual. This is unique to America and Americans – it is by definition non-negotiable. People wonder why there is contempt, even hatred, for America in parts of the world? The above explains much, it is the oldest of emotions. Resentment of success (jealousy) and our freedoms go a long way to understanding the current state of moral uncertainty and moral relativism in the world, and the conflictions and irrationality of presidential candidates whose stated goals and programs have no other ultimate end than to raise the state over the individual.

The American Left and our enemies abroad are really against this moral clarity and our virtues, coupled with the fact we are willing to face the facts; willing to make clear moral judgments and act independently with, as Ayn Rand stated, a “radiant certainty and absolute rectitude of knowing that ours is the Morality of Life, of Liberty, of Happiness and that we need not apologize to anyone for it.” We should not apologize for our freedom, our profits or our unmatched successes as it is America, the last and best hope for freedom and liberty in this world, who deserves not disdain but rather a huge “thank you” from the rest of the civilized world. The founding fathers of this country understood that our future, and the future of the world, was dependent upon leaving the “Old Countries” and old dogmas behind.

I believe it is time to follow that truth, that rational realization. This, more than anything, is why I cannot support John McCain. Sadly, of our two presidential candidates one is merely a dime store collectivist while the other is a sad and confused amalgam of collectivism with a pretense of “conservatism.” As if being a collectivist-minded politician wearing a Conservative badge inoculates the ill-effects of collectivism. Therefore, my best hope for this coming presidential election is that there will be enough Americans with conviction who will say NO to both of these characters and that the mandate, the majority, will have summarily rejected both.

I remain proud to have the conviction of an American!

Posted in Capitalism Advocacy, Founders Vision, US Presidential Election. Comments Off on CONVICTIONS OF AN AMERICAN

Is Race The Real Issue Here?

obama.jpgAcross every news outlet and out of the mouths of virtually every talk show host comes the premise of Barak Obama’s current political problem. The race issue, it is argued, is the principal matter to which Obama now alludes in his attempt to distance himself from an outspoken religious mystic whom he allowed his family to be influence by for years. Twenty, approximately… What is clearly missed in all corners of this discussion is the real issue, religion itself.

In my view (and that of others) it is utterly obvious Obama joined the church run by Pastor White for political convenience. Its 8000 members at the time was the perfect place for him to get a foothold in Chicagoland, and thus a staging area for his political aspirations. Clearly, this guy did not move to Chicago to engage in capitalism, he moved to Chicago to commence a political career on the left. He did what he had to do to accomplish the task necessary, to create the image needed to succeed politically on the left. For a half-breed like Obama, who attended an Ivy League school and was raised in Hawaii, moving to Chicago and pursuing a left-handed political career meant having to work the depraved side of the equation. He had to set up the image that he believed in the theory that the greater the love, the greater the depravity it affords to the loved… Just listen to what passes for his “soaring rhetoric.” It is full of this self-sacrificial, government is the solution to all problems, pabulum. This concept is the embedded premise of all mystics – both social and religious. But when the religious mystic and the social mystic mix into one person you end up with a confliction between the enlightenment induced conception of individual liberty and the good of the collective. It is an irreconcilable difference.

If you truly subscribe to such a theory then you are obligated to believe that love, friendship, respect, and admiration are merely the appreciation of another person not based on your rational measure of their objective value, but rather as an act of selflessness, that as far as one’s own selfish interest and pleasure are concerned, it makes no difference whether one deals with a genius or a fool, whether one meets a hero, a thug, a drug dealer or a child rapist. All are equal in the eyes of the mystics. It would not matter to you whether you married a person consonant with your values and pleasing to your sight, or a mere slut. Such is the dilemma of those who try to commit to both religious mysticism AND social mysticism. Either one, on their own, is problematic but both in tandem results in tyranny over the mind of man. Put into the political realm it can only result in collectivism – socialism, democratic nationalism, communism, etc. Such precludes free will and free minds, such is truly the antithesis of the unique American idea. A concept to which Barak Obama simply has no idea, or perhaps is too cute by half in his (and his ilk’s) unbridled attempt to demolish it completely.

It is clear to me (and always has been the case with me) that it matters not what color (or combination of colors) a person may be – that is merely a fact that carries with it other objective issues; there is no inherent value in ones racial configuration. To assume there is, is the height and essence of racism. To preach this venom from the pulpit is the stock and trade of immoral clowns such as “Reverend” White and, profoundly, the likes of Louis Eugene Walcott aka, Louis Farrakhan. For Obama to stand up in front of all of America and raise this issue of him being half black, half white, as if this gives him some intrinsic value that you and I do not have and a perspective into both “worlds” that you and I are incapable of perceiving is evil hardly to be matched. Yet such is fully consistent with the moral bankruptcy and tenets of his and Reverend White’s other-world view. Obama has no other experience or background to rest upon, ergo it is by obvious analysis that this is the case. To go so far as to regularly patronized a church based upon “black values” is utterly and patently racist – if any sitting white skinned member of the United States Congress regularly attended a church where only “white values” were put forth, he or she would be run out of Washington on a rail – tar and feathers would be too good. Yet, this is the sum total of Barak Obama and his so-called “experience,” and is the overt tutelage afforded in White’s “church.” Clearly, Reverend White has either had an immense impact on Obama or Obama held very similar views prior to joining White’s church.

The problem here folks is not race; it cannot possibly be race. We do not, fundamentally, have a race “problem” here in America. We certainly have a self perpetuating perception of a race problem, and it is shoved down our throats by holier than thou libs as well as those who claim the moral authority to be the leaders of the “black community.” Moreover, we have interventionist government at virtually all levels that erect barriers and obstacles to people of all races striving for self-sufficiency and wealth creation and accumulation. The reality is that economics as a science is profoundly blind to any and all distinctions between human beings other than its fundamental requirement of using ones mind. But when the mindless or the mystics claim your wealth by tears, and cry that their lack of accomplishment is due to something other than their own lack of initiative they are simply applying their mysticism to an otherwise real world of profit and matter – it should be no surprise they do not succeed. They have allowed their only tool of perception to be disregarded out of hand – rationality. The race card makes pretty good cover then for a guy like Obama when things get tough – he just whips it out in a not so nuanced way to deflect any criticism of his utter lack of substance or real experience (note he has never run a business, never made a payroll, never served in the military, never been an overt supporter of free market capitalism, espouses social and religious mysticism, etc., etc., etc.).

But all of this, I would submit, is masking the real issue. What Obama’s campaign illustrates is that we do have a national problem-religion-coupled with a profound misunderstanding of the ideas and ideals of our founding fathers. We lack a full acceptance of Capitalism (specifically laissez faire) as the most moral system to which living, civilized, humans can ascribe. In fact, it is man-made religion itself which is at the bottom of virtually all of our conflicts and arguments; until and unless we free ourselves from the shackles of this tyranny over man’s mind we will forever be at the mercy of men, such as Pastor White, who claim insight into the mystic realm and attempt, like Obama, to implement it in the political realm.

Race is not the issue, race is merely the scapegoat.

Posted in Capitalism Advocacy, Founders Vision, Liberty, Religion, US Presidential Election. Comments Off on Is Race The Real Issue Here?

Spitzer-speak

What an idiot this guy, Spitzer, is. Governor Spitzer was interviewed on CNBC this morning. The Liberal NY drivel that oozes out of this guy’s mouth is amazing.

He took about 5 minutes to essentially say that the muni bond market issue is due to a failure of follow-through by regulators leading up to the residential housing mortgage disaster. A “virus” has now spread from it into the realm of municipal bonding. So, he blames, get this, Ayn Rand (whom he can’t seem to bring himself to actually pronounce her name correctly, using “Ann” Rand) and her revulsion of regulation in general, Alan Greenspan, and a broad brushed blame game against the Bush Administration (clearly a transparent piece of the upcoming democrat presidential and congressional campaign season)….

Now, you’ll get little support for the Bushy’s from me, as I actually think they did have a hand in furthering the tone of a “home-ownership society.” But that society they envisioned, and essentially have gotten, wasn’t premised on the free market. Rather, it was based and premised upon a highly interventionist federal government – particularly in the realm of currency and interest rate manipulation. True, the Fed called those shots but the Fed has no audits or oversight and is essentially working on behalf of both itself and the government. It is government itself who is to blame here, so for Spitzer to argue that the problems New York faces in regards to muni bonding are due to a lack of oversight by regulators, who themselves represent the very system that brought us to this lending mess, is utterly inane – his thesis is severely and profoundly flawed. Regulators, not regulation or government intervention, are to blame according to Spitzer. So, his conclusion is that more of what is at the core of out problems is needed. More regulations, whips on the backs of regulators to implement and enforce those regulations, are the cure. Folks, if you thought we already had a nanny state just hold on to your caps – Obama or Hillary, coupled with total donkey control of Congress, aided and abetted by the likes of this bone headed Governor – because you ain’t seen nothin yet…

What Governor Spitzer would never admit, but is clearly a fact in this matter, is that much of this current reflection of interventionism and regulation actually started in the Clinton Administration with Henry Cisneros who sat on the board of Country Wide when the wheels of change in lending practices started rolling. But that fact simply misses the larger and salient point that it is Ayn (pronounced, Mr. Spitzer, “eye-N”) Rand’s ideas which are precisely correct, and had we had an asset backed currency and far less regulation none of this would have occurred in the first place! Greenspan supported a gold standard back in the day, but he can hardly now be blamed, in utter hind-sight, for not unilaterally taking us back to one. This, again, is simply convolution hardly to be matched by Mr. Spitzer. Typical of his ilk, Spitzer now says he and others had warned of an impending lending mess due to the policies set forth by the evil capitalists. Well, what’s new with that? Spitzer and his ilk are on record opposing EVERYTHING about free market capitalism and so when our interventionist based system fails, as it will due to those of his mindset who demand controls and regulations, he and his intellectual misfits cry that it is capitalism and its defenders who are to blame. That not enough controls are in place to control the controllers…. just consider that one for a minute because that is precisely the point little Elliot made today.

You cannot argue that a lack of oversight by regulators is to blame for a meltdown in banking due to regulations designed to oversee a banking system premised upon the periodic creation of money out of thin air. Worse yet, to argue that an economic philosopher who’s intellectual abilities make Spitzer look like a junk yard dog, are wrong-headed when applied to an economy based on the exact antithesis of her economics is simply a fraud – which, by the end of the interview of Spitzer, was exactly apparent.

Some call him Governor, I would call him an absolute idiot with zero understanding of free market capitalism.

Posted in Capitalism Advocacy, US Presidential Election. Comments Off on Spitzer-speak

Oil, Intervention, and Ron Paul

Over the past six months there have been untold numbers of articles written regarding the rise in the price of oil, inflation concerns, U.S. military intervention, credit market issues, bank failures, and now presidential candidates. What follows are some thoughts regarding the price of oil, interventionism, and what possible relationship there may be.

The reality is that per barrel oil prices have risen by 400% in roughly 7 years (an average of 57% per year), during which time we have been intensely intervening in the affairs of the Middle East. The obvious correlation issue is this: what is the relationship, if any, between U.S. military intervention and the rise in the price of oil?

If one remembers, part of the argument for stopping Sadaam’s assault on Kuwait was the idea that, ostensibly, only we (the U.S.) were capable of intervening in a way that would prove effective and that our intervention would be a stabilizing factor in world energy prices. The argument went that if Hussein was in control of the Kuwait oil fields he would/could control world oil prices (ostensibly, the risk being far higher prices), and command a far richer enterprise affording him the ability to acquire, perhaps, more costly and ghastly weapons thereby destablizing the region. Similar arguments, albeit dwarfed by the weapons of mass destruction and ‘war on terror’ pretext, were put out five years hence in the context of terrorism with the more recent overthrow of the very same Iraqi dictator. We did indeed intervene as we turned back Sadaam from Kuwait, then intervened in Bosnia, then attacking segments of Afghanistan, and most recently the Iraq war. All the while we have maintained a presence on the Arabian Penninsula, all the while the net result has been that the price of oil has skyrocketed. Please note that this is the exact opposite effect of the stabilization argument. One simply cannot ignore this fact, and I would argue the two are bound and tied together by a chain of paper currency printed virtually at will with no asset backing.

So, here is the formula: FUNNY MONEY INFLATION —-> FUNDING OF INTERVENTIONISM —-> INFLATION

Some argue that there is no relationship, that the rise in the price of oil is merely a function of supply and demand citing the rapidly expanding Chinese and Indian economies, and our own insatiable appetite for oil as the prime price mover. But a growing economy, in and of itself, has absolutely nothing to do with inflation. Economic growth without devices for increasing the money supply actually results in deflation, as it did from the end of the Civil War until 1896. Yet there are others who ignore this demand issue and focus entirely on worldwide credit policies of central banks. If one looks at oil prices prior to Dessert Storm, the price of oil was under $20. After repelling Sadaam, and after the tensions eased, the price quickly returned to the sub $20 range. During the early 90’s it actually hit a low in December of 1993 of $12.56. From that point, we have seen (with a few notable variations) the price rise almost ten-fold in just 14 years. The common thread to this has been an unprecendented increase in the combined measure of central bank money and credit manipulations – some of which even the central banks cannot fully measure (such as M3). Frankly, I believe the nexus is being missed, or ignored, principally because it flies in the face of support for the troops and the president AND is a principle source of cash for those who do business with the government.

The answer to this issue is that we have been paying for interventionism by printing currency, extending credit, and in many seen and unseen ways easing fiduciary media limits – all supposedly “balanced” by issuing debt instruments picked up by China, Japan, et al. We have been financing domestic spending, real estate puchasing, and general consumer consumption with massive debt via a highly loosened credit expansion which has resulted in the very issues to which Ron Paul has alluded on more than one occasion. Elucidations, I might add, which tend to fly right over the pinheads both on the stage, in the gallary, and, notably, in the role of “debate promotion.” My argument then, is that it is precisely this inflation which has resulted in the velocity and magnitude of the rise in oil price, and a general rise in the price of virtually all goods and services. The banking system enabled by our Federal Reserve has allowed an incredible amount of “funny money” to enter the system. Moreover, I would argue that the rise in oil prices would have occurred whether we intervened in the middle east or not. The complete thought is this: The rise in oil prices would have occurred whether we intervened or not, given the same amount of money creation (inflation) by central banks – particularly The Federal Reserve. This, I believe, is the nexus which is being missed in most of the discussions to date.

So it would be true whether you buy guns and build nations with it, or buy health care for children with it – the initial inflation (an unbacked increase in money of all forms) causes a rise in prices either way – but not all items in the economy rise in price to the same degree or at the same time. Also, where you use this inflation makes a difference as well. That is where demand comes in… and the resulting revealing of particular price rises. It should be rather obvious that some products have a more or less elastic level of demand. But in this analysis however, one cannot ignore the nature of the Fed’s need over the last seven years to massively inject liquidity into the economy, which clearly they have by printing money, easing credit, and liberalizing fiduciary media requirements. The reason was (and is) due to the massive cost of our inteventionism, along with domestic policy spending programs such as the farm bill, the “ownership society” mantra, medicare drug benefits, etc. As an aside I have no beef with an ownership society, provided it is based on capitalism- I believe laissez faire to be the one and only solution to all of this. But an ownership society created by government intervention and unbacked currency inflation is hardly free market, laissez faire, and has shown to have been foolhearty. The “ownership society” is turning out to be an unfunded mandate ridden, adjustable rate mortgage trapped, double earning, caffeine dependent rat race.

Clearly, our interventionism in the ME has accomplished nothing with regard to the stability of world-wide global energy prices – in fact it has made it worse. Oil rose precisely concurrent with our increased interventionism. Now, correlation does not prove causation but we do know that inflation causes all goods prices to rise, but not all at the same time. Moreover, basic economics defines inflation as is the act by a central bank of increasing the supply of currency. A general rise in prices is a logical, longer term, consequence of that inflation.

Ron Paul’s position is that the inflation would not have been necessary had we not had to deficit fund our military operations overseas. I think his precision here is right, and that this is rather self-evident now; U.S. military interventionism could only be sustained by the Fed injecting massive liquidity into the system – it is, therefore, monetary inflation in a variety of guises which has been a decidedly magnifying cause of the degree to which oil prices have risen precisely because we are paying for a commodity, oil, which is itself in high demand. We have done so with rapidly inflating currency, and the cause and effect is highly probably.

It is not a case of one or the other, demand or credit, rather it is both inflation of the money supply (all forms) AND the demand for oil which are at the heart of the oil price rise. Our interventionism is merely a side show which justified additional inflation of the money supply to pay for it. Had we used the massive inflation for nationalized health care and “free homes” for everyone the price of oil would have risen just the same. The reason for the inflation was, in this particular historical case, our interventionism – all three are inextricably linked. Interventionist foreign policy required an inflationary monetary policy, an inflationary monetary policy coupled with the inherent demand for oil causes a price rise much higher than merely the demand in a non-inflationary environment (or less inflationary).

Now, Ron Paul argues against an interventionist foreign policy not merely based on the inflation issue but also on a constitutional, Founding Fathers vision argument (non-entanglements). Ron Paul is exactly correct on this matter on both fronts – the fact that the neo-conivers prefer guns and nation-building over health care and homes is irrelevant. The bottom line is that neither are provided in the constitution and the avoidance of both, coupled with a sound currency, would return this country to be in step with the Constitution, the Founder’s vision, and an economic system far less susceptible to boom-bust cycles. Unfortunately, it will probably take utter collapse before people will believe it – at which point they’ll probably blame capitalism and cry for more government intervention.

Posted in Capitalism Advocacy, Founders Vision, US Presidential Election. Comments Off on Oil, Intervention, and Ron Paul