Showing posts from December, 2010

Open Letter to The Tea Party

"Millions of dollars have flowed in from corporations and rich donors, all of whom have their own ideas about what the tea party should be. This struggle for the soul of the movement has left many of its original activists facing agonizing decisions: Do they, should they, still belong?" Washington Post 12/31/10 The Tea Party claims to be pro business and anti big bureaucracy, including big government. It believes that government stifles entrepreneurship and destroys creativity of its citizens. There is too much power centralized in government and thus diminishes the power and freedom of our citizens.

Are We Pulling Out of The Recession?

"Jan Hatzius, the chief United States economist at Goldman Sachs, said the economy was likely to grow at an annualized rate of around 3 percent this quarter. Goldman projected last week that the growth rate would be 4 percent for most of 2011. Morgan Stanley, which raised its growth forecast for 2011 to 4 percent, is even more optimistic, forecasting a rate of 4.5 percent this quarter" New York Times 12/24/10 Is there really a Santa? Did he really deliver a sleigh full of merriment and optimism? Or were the reporters at the New York Times and several economists across the country taking part in too much spiked eggnog?

Obama's First Two Years - Success or failure?

"The ratification of the New Start treaty is the capstone to a remarkably successful legislative agenda for President Obama's first two years" New York Times It truly was a success, if the measuring standard is the volume of legislation that was passed. It is not so great if one looks at what was passed.

Oligopolies -When will we learn

Another example of an Oligopoly raising havoc with the economy and an industry. When will we learn?

Role of Government.

The quote below is from the book Capitalism and Freedom written by Milton and Rose Friedman. Dr. Friedman is the economist who is quoted most often when conservatives are praising free markets and capitalism. But we cannot rely on custom or conscious alone to interpret and enforce the rules; we need an umpire. These then are the basic roles of government in a free society; to provide a means where we can modify rules, to mediate differences among us on the meaning of rules, and to enforce compliance with the rules on the part of those few who otherwise would not play the game. For whatever reason, this part of Dr. Friedman's philosophy is never mentioned when it comes to making "free markets" work.

Health Care & Oligopolies

""Consumer advocates fear that the health care law could worsen some of the very problems it was meant to solve — by reducing competition, driving up costs and creating incentives for doctors and hospitals to stint on care, in order to retain their cost-saving bonuses. The new law is already encouraging a wave of mergers, joint ventures and alliances in the health care industry,” said Prof. Thomas L. Greaney, an expert on health and antitrust law at St. Louis University. “The risk that dominant providers and dominant insurers may exercise their market power, individually or jointly, has never been greater.”" Consumer Risks Feared as Health Law Spurs Mergers , New York Times, November 21, 2010 We lost track of a key ingredient that Adam Smith identified as necessary in order for “rational self interest” to work. There must be many producers. In too many industries, the number of producers has shrunk and the ones remaining have gotten “too big to fail”. This is true i

Oligopolies -Who is at fault?

Who is at fault that the economy is in a stranglehold by the very large oligopolies that are preventing free enterprise from flourishing in so many of our industries? It is not the corporations. Industries like banking, including wall street, insurance, health care, automotive and others are controlled by a small handful of firms that are doing what Adam Smith, the author of Wealth of Nations, published in 1776, advocated. They are pursuing their rational self-interest. The problem is how they are allowed to pursue it..

South Korea & Free Trade

We can thank North Korea for the Free Trade Agreement. By shelling South Korea, North Korea woke up the regime in South Korea as to just how dependent they are on the United States for their self defense. Read More

The Mount Vernon Statement & Oligopolies

In February 2010 a group of modern day conservatives headed by Edwin Meese, former U.S. Attorney General under President Reagan published the Mount Vernon Statement . The phrase Constitutional conservatism is based on the following principles. It applies the principle of limited government based on the rule of law to every proposal. It honors the central place of individual liberty in American politics and life. It encourages free enterprise, the individual entrepreneur, and economic reforms grounded in market solutions. It supports America’s national interest in advancing freedom and opposing tyranny in the world and prudently considers what we can and should do to that end. It informs conservatism’s firm defense of family, neighborhood, community, and faith.

Too Big To Succeed

The article below appeared in the New York Times on December 2, 2010. THE MESSAGE IS RIGHT ON! It was written by Thomas M. Hoenig, President of the Federal Reserve Bank of Kansas City "THE world has experienced a severe financial crisis and economic recession. The Treasury and the Federal Reserve took actions that saved businesses and jobs and may very well have saved the economy itself from ruin. Still, the public seems ungrateful, expressing anger at these institutions that saved the day. Why? Americans are angry in part because they sense that the government was as much a cause of the crisis as its cure. They realize that more must be done to address a threat that remains increasingly a part of our economy: financial institutions that are “too big to fail."