Archive for November, 2010

It’s the corruption, stupid

Wednesday, November 17th, 2010

The deficit, the spending, earmarks, taxes, entitlements, Obamacare, the TSA. These are all important issues, but underlying everything is the corruption. Our government is for sale to the highest bidder. The government is a gate that must sooner or later be passed through, if you really want to get ahead. Even Bill Gates finally realized he was going to have to start spending a bunch of dough in DC if he wanted all those anti-trust vexations to go away.

If you are the Disney Corporation, you need to allocate millions of dollars to political campaigns to make sure that the copyright on Mickey Mouse is extended indefinitely. When the deadline approaches, money is applied, legislation is passed, and copyright is extended.

If you are the UAW, you need to allocate millions of dollars to political campaigns to make sure that the government takes over General Motors in a pseudo bankruptcy that abrogates bond holders’ legal rights in order to protect and enrich the union.

Bush’s Homeland Security secretary Michael Chertoff now has a security consulting agency, The Chertoff Group. One of their clients manufactures the scanner machines that are now being deployed at airports across the country. These machines are expensive. Not to mention the maintenance contracts.

If you cheat on your taxes and are appointed to a high government position, and are thus exposed, you just have to pay what you stole and all is forgiven. If you are an ordinary citizen, you go to jail, or at least have to pay large penalties. Charlie Rangel, after committing fraud and tax evasion, will receive a letter of reprimand. No doubt Maxine Waters will receive a similar punishment for using her position to maintain the value of her husband’s bank holdings.

The very existence of farm subsidies, the CPB, the NEA (education), the NEA (arts) is corruption in action.

This is just scratching the surface. Government is corrupt, at all levels. Of course this is not new. It has always been so, and, I reckon, always will be. It is in the nature of government to be corrupt. There is no competiion to eliminate government programs that are inefficient and counter-productive. There is no competition, no creative destruction in government. There are only constituencies that never die, consituencies that are created and maintained by the government agencies and programs that serve them.

There is no solution to government corruption. It can only be minimized by minimizing the size of government. The smaller the government, the less corruption. The less revenue going to the government, the less they can steal. The less power of the government, the less need to placate it.

Unattended, the inevitable trajectory of government is to grow larger and more powerful. That is what it will do, that is what it has done, until (maybe) now. The near future of our republic will tell whether or not it is possible to shrink government.

But you must remember, my fellow-citizens, that eternal vigilance by the people is the price of liberty, and that you must pay the price if you wish to secure the blessing. It behooves you, therefore, to be watchful in your States as well as in the Federal Government.

— Andrew Jackson, Farewell Address, March 4, 1837

Democracy Finals

Thursday, November 11th, 2010

It’s simple. In fact it’s so simple, you don’t even need an advanced degree from Harvard (or Yale or Princeton), like George W. Bush and Paul Krugman have. It’s something that every sane householder on Earth knows. Even John Maynard Keynes understood it. Over the long run, even the medium run, expenditures have to, on average, at most, equal revenues. It’s even better if you can save a little. In good times, save. In bad times, dip into the savings if you have to. That is real Keynesianism.

The current Keynesians in the government have forgotten the part about saving for a rainy day. They think that Keynesianism means borrowing like crazy when times are good, and borrowing lots more when times are bad. You would think that even a Nobel prize winner in economics could see the flaw in this particular line of economic “reasoning”.

We haven’t listened to common sense. We’ve listened to the uncommon sense of credentialed intellectuals who assured us that piling up debt and never paying it off, was OK as long as it was the government that was doing it. We, the people, may be stupid. That is what Barack Obama, Mitch McConnell, and the Washington establishment apparently believe. But eventually, even as stupid as we are, we just can’t help but notice, it is no longer possible to hide the fact, that WE are broke.

We are a rich nation, a rich world, wealthy beyond the most extravagant dreams of our past selves. Paying off this debt will (would) not be that difficult. Raise the retirement age a little. Do a little means testing, not much, for entitlements like social security and medicare. Get a handle on wasteful defense spending. Get rid of totally unnecessary government departments and programs like the NEA, PBS, DEA, farm subsidies, corporate welfare, etc. It’s not that hard. If it were a household or a small business in trouble trying to figure out what was necessary and what wasn’t, it would be obvious.

This is really a test of the very idea of democracy. If a people are lucky enough to have a democracy, the politicians will try to get elected by promising to give free stuff to the electorate. Voters will then presumably vote for whoever promises the most stuff. The free stuff is then provided by using the collective credit of the demos to borrow money until, as Margaret Thatcher put it, we run out of other people’s money.

That’s where we are now. Democracy is in the dock. Either we succeed in voting to pay off our debts, or we go bankrupt. If we fail to vote for fiscal sanity, or if it turns out that our votes do not matter, then democracy will have been proven to be a false god.