"Quote of the Day"

"Honor, justice, and humanity, forbid us tamely to surrender that freedom which we received from our gallant ancestors, and which our innocent posterity have a right to receive from us. We cannot endure the infamy and guilt of resigning succeeding generations to that wretchedness which inevitably awaits them if we basely entail hereditary bondage on them." --Thomas Jefferson

Monday, September 21, 2009

The Problem With Big Government

I argued with several conservatives regarding the Cash-4-Clunkers program. They thought this was an example of providing incentive at the consumer level.

I am willing to acknowledge that this program at least has a foundation in Capitalism. Unfortunately, it is not a natural driven occurrence.

My problem is that you need to give money back to consumers and allow them to spend it however they choose. Don't force them into the automobile market. All Cash-4-Clunkers accomplished was: #1 to persuade people to buy something that they were already strongly considering, or #2 persuade people to purchase something they can't really afford. Neither of these events is what should be happening in a FREE-MARKET CAPITALIST ECONOMY.

You will here me repeat this theme over-and-over. Let the free-market work and it will generally sort things out. Other than unlawful practices, Government involvement typically makes matters worse.

We got into this recession because of government meddling in the housing market.

So below is the news now telling us that automobile showrooms are now quiet. DUH! When the government forces an unnatural rally, it will not be good.

I'll give this a couple more months to play out, but what I see developing is this. The government artificially drove sales up, retailers responded by purchasing more vehicles to be sold, manufacturers responded by ramping up production (possibly even hiring back a few people) - this all sounds good, right? But now the sales are gone...retailers were tricked into over-responding...manufacturers made vehicles that weren't needed...soon there will be oversurplus and people will be laid off...and the downward spiral starts again.

Everybody agreed that the recession was near the bottom. Just allow it to run its cycle and it will improve. Now we have to suffer the emotional turmoil of another downward slope to our economy (i.e. consumer confidence goes down).

Nobody is evil in their intentions, in fact, they were probably noble. Its just the reality of economics. People buy and sale as individuals when they become convinced that their economic standing supports a move. Unnatural spurring in a certain direction, particularly when it is only short-term, only confuses the issue. It disrupts the natural course of the decision making process and causes people buy on impulse...and bad things happen.


This brings us to the big newspapers that are crumbling. They are producing something that is no longer needed, and in many cases, no longer wanted.

Many of these are so slanted towards one party or the other that they are irrelevent.

Now, there is news emerging that Obama is willing to consider bills that provide newspapers a "tax break" if they restructure as "non-profit" organizations. (Gee, that has worked really well with ACORN).

I find it hard to believe that companies structured for profit can suddenly become non-profit. These companies have failed to keep up with the modern day technology, and they should be allowed to fail.

The natural cycle will take care of getting rid of poor performing companies, and it will reward those that produce the goods and services that consumers want. It just takes the courage to let it happen and stop trying to force an economically unnatural event.


Ronald Reagan once explained, "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And, if it stops moving, subsidize it."

The reality is as Reagan also said, "government is not the solution to our problem; government is the problem".

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