Monday, June 21, 2010

Obama's brilliant re-election strategy

To get re-elected in 2012, Obama has to take drastic action. If he allows the congress to continue to be Democrat controlled, and Nancy Pelosi to continue as Speaker, they will drive the US economy so far into the crapper that Obama would not even get the Democrat nomination in 2012.

No, he needs a Republican sweep of congress in the Fall. Then he can say to his union masters, "Look, my hands are tied. I can no longer give you the payback you earned." If he can count on a Republican congress forcing gridlock, and Washington doing no further damage to the economy, perhaps real unemployment will fall low enough by 2012 that Obama can engineer a Bill-Clinton style re-election.

In furtherance of this strategy, Obama has to appear as weak and incompetent as possible. Great job so far.

Thursday, May 27, 2010

Liberalism demolished in one blow

Never mind the bad effects liberalism has on incentives and wealth creation. Here's the worst of it. Liberalism depends on the wisdom and benevolence of politicians and bureaucrats to decide who gets what, and how much. When you are through laughing, we can go on.

There are two kinds of government employees--those whose services would be useful in a laissez-faire society, such as police, firefighters, garbage collectors, teachers, clerks, librarians, park rangers, judges, and levee engineers; and those who do nothing but keep the machinery of government running, whose services would be totally worthless in a laissez-faire society, such as congresspersons, presidents and vice-presidents, rule makers, tax collectors, and the people who decide how much of the public purse to devote to "housing for the poor," for whose services no one would pay voluntarily.

Monday, May 24, 2010

Those ingenious Chinese

By 1976, the Chinese government had seen the handwriting on the wall. They saw that China could not become a world power as long as its economy lay mired in communist poverty. Although the Soviet Union was a world power at the time, China saw that a failed economy could not long support military might.

And so China liberalized its economy, allowing free-market principles to generate wealth, not for the benefit of the people, but for the benefit of the ruling elite. It was just a necessary corollary that ordinary people prospered also.

China's bond portfolio is now between a rock and a hard place. The Chinese may be reluctant to buy any more US bonds, but if they refrain from buying, and drive up US interest rates as a result, the value of their current bond holdings will tank. They may try a bluff: threaten not to buy any more US bonds unless Obama introduces some free-market reforms. Communists teaching Obama about the benefits of the free market!

Paid not to work

The congress is considering extending unemployment-insurance benefits, because there are "so many" people out of work. Serious studies confirm the widely held belief that most people receiving benefits refrain from looking for work until their benefits are about to run out. Usually, serious analysis contradicts common sense, but in this case it confirms it.

If you pay people not to work, they will refrain from working. If you subsidize something, you get more of it.

One jokester suggested that Republicans should support this effort to extend benefits in order to keep the unemployment figures high. Then they would have one more issue to run on in November.

Saturday, October 17, 2009

Libertarian issue makes lasting impression

During our walk with Develop Don't Destroy Brooklyn on Saturday, October 17, 2009, a woman saw our sign ("Brooklyn Libertarian Party") and told me that a while back she had heard a libertarian speak at some church nearby and was very impressed with his ideas. I asked if it was I, and whether the event was the four-way debate held during my run for Brooklyn Borough President in 2005. She didn't remember. It was "a while" back.

In the walk also was a sign, "We need more parks." I said, "It's easy to get a park. Form a consortium with other like-minded people, buy some land, and build a park. There are many ways to support a park. The Central Park Conservancy does it. The Prospect Park Alliance does it. You don't have to talk about it for 25 years and beg the government [a reference to Brooklyn Bridge Park]."

The woman said, "It was you!" for I had made the very same point in the debate four years ago, when Brooklyn Bridge Park had been talked about for only 21 years.

Monday, October 12, 2009

The Columbus Day Parade 2009

The response we got at the Columbus Day Parade was excellent. Marching with Libertarian Party candidate for Mayor Joseph Dobrian were Derek Sacerdote, Libertarian Party candidate for City Council, 46th district in Brooklyn; Cameron Weber, Vice-Chair of the Brooklyn Libertarian Party; me; and David Casavis, libertarian-leaning Republican candidate for Manhattan Borough President. People applauded as though they knew the name "Libertarian" and they probably did. Some people yelled cheers for Libertarians. For every person at the parade cheering Libertarians there were probably thousands elsewhere in the city who know us and what we stand for. This is a good year for Libertarians.

Friday, September 18, 2009

Regulation-what's it good for?

The government's rules in the banking and insurance industries purport to limit the risk that firms in those industries are permitted to take. In a free market, each individual and each firm would make its own risk/reward assessment and act accordingly. Young people and young firms might eagerly seek more risk and more reward than old people and old firms.

Government rules in banking and insurance are necessarily for the purpose of limiting risk, else why have them? One-risk-fits-all rules prohibit some people and some firms from seeking the risk and reward that they would seek voluntarily in a free market. Why have such rules? What does "society" get in return for limits on freedom to choose? Over the last two years we have seen that the regulators missed the dangers in mortgages, banking, and insurance. Of course they did. If the people at Lehman Brothers didn't know they were risking their very firm, how could the regulators know, with their inferior knowledge? Regulators always have inferior knowledge compared to the people on the front lines who are risking their own money, or that of their employers and/or clients. The only conclusion is that regulation is good for nothing except raising costs and lowering rewards.