Monday, March 23, 2009 Star Parker We've legalized theft in America by Star Parker It says something about the dismal state of affairs in our country today by what outrages folks. Sure, if we want to portray business as the root of our economic ills, outrage about executives getting bonuses at a company that received taxpayer bailout funds has political sex appeal. Or perhaps that some company that got bailed out sent their managers to a fancy retreat somewhere. Or that maybe a bailed-out company sponsored a golf tournament. But where's the outrage about the circumstances that allow this all to happen to begin with? Where is the outrage about the ease with which politicians can expropriate hundreds of billions of taxpayers' funds to do these bailouts? I have been looking through a new study, released by an organization called the Property Rights Alliance, called the International Property Rights Index. The study examines 115 nations worldwide and examines the correspondence between prosperity in a country and how secure private property is there. It shows a practically perfect correlation. The more secure private property is in a given country, the more prosperous it is. Countries rated in the top 25 percent in secure and safe private property have on average nine times more income per person than those in the bottom 25 percent. It's one of those things that makes so much sense that you wonder why you have to do a study to show it. The easier it is to steal in any given country the less likely the economy will function well there. You really don't even need a fancy business degree to predict this. One of the Ten Commandments, transmitted so many thousands of years ago, instructs us not to steal. Yet, basic truths such as this are becoming increasingly lost in our country and this is what should be driving our outrage. That we now live in a country where our private property is no longer safe and the very government that supposedly exists to protect it has become the thief we have to worry about. President Obama went on Jay Leno's popular Tonight Show and talked about the current crisis. Listening to him, there seems little doubt that everything started on Wall Street. "The problem is ... people were able to take huge, excessive risks with other people's money." But, Mr. President, half the mortgages in this country are owned or guaranteed by Fannie Mae and Freddie Mac -- which were and are backed up with the money of us taxpayers. An easy flowing mortgage credit market built by politicians, by setting us taxpayers up to guarantee it all, which is what we wound up doing, is what started this whole thing. The president and Leno bantered about electric cars and, talk about taking risks with other people's money, the president apparently sees no problem tapping into us taxpayers to finance research into these cars. "So, we're going to be investing billions of dollars in research and development around these technologies -- that's what's going to create the auto industry of the future," Obama said. We've already used taxpayer funds to bail out auto companies. Now we're going to use them to take over their research and development functions. Given what the International Property Rights Index shows, we might consider that because private property has become as insecure as it has in our country -- that we have really legalized theft -- that this might be what's at the root of our economic chaos. So, we can have government-issue edicts on what executives are paid at companies that politicians bail out with taxpayer funds. Or maybe we should check if families whose mortgages we bail out are going on vacation or out to dinner. Or we can re-direct our attention from symptoms to causes. We can recall that the founders of our country intended the role of government to protect our lives and property, not violate them. And that in times when we have respected that proper use of government, our country has prospered.
"The problem is ... people were able to take huge, excessive risks with other people's money." ----------------------------------------------------- The height of hypocrisy for Obama to say this. I guess he feels his trillion dollar plans with opm are a sure thing.
He did have a point about taking excessive risks with OPM, or borrowed money. He missed the bigger lesson however, which is that the system has a self-correcting mechanism, if allowed to function. The people who took those risks are fired and in some cases prosecuted. The institutions that took such risks go bankrupt, and their valuable assets are sold at a discount to people who are more prudent. Instead of letting the system discipline those who abused it, Obama (and Bush) decided to freeze things as they were in 2006, and use taxpayers money to insulate those responsible from any real consequences. They refused even to prosecute obvious fraud at the GSE's FNM/FRE, and made sure top managers there who presided over a spectular failure retained huge bonuses. The fact that they were all well-connected political hacks obviously played a role. Exces at AIG who contributed heavily to Sen. Dodd and Oama were mysteriously allowed to receive huge bonuses. AIG itself became a conduit for disguised payments to banks and hedge funds who wanted to be relieved of the counterparty risk they took on. No one can say with any certainty if the cost of letting the system work out these issues would have been higher than the continuing bailouts. Those who most viforously assert that the cost would be unacceptable all seem to have enormous conflicts of interest or were major participants in creating the crisis. We can state with certainty however that these bailouts have created an enormous moral hazard problem and a deep cynicism among voters.
Now that the US gov't can legally steal bonus' that were rightfully earned let's put together a list to submit to the administration of different groups to target for the next round of taxation. 1. Homosexuals 2. Jews 3. Jewish homosexuals 4. minorities 5. Every man women and child who voted for Nancy Pelosi.
AIG didn't have money for bonuses. That would have been taxpayers money. Like giving your brother in law money to pay his mortgage for a month and he spends on the Knicks plus 7.