Do Superpowers Inevitably Degrade Into Socialism?

The economic miracle that has been the United States was not produced by socialized enterprises, by government-union-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline. –  Milton Friedman

As our government continues to bail out big corporations, a pattern is emerging. The current bailout targets the big auto manufacturers, and just like with the banks, the government is saying that the companies are failing due to poor decisions. This presents the government with a dilemma. If it does nothing, the economy could continue a steep decline. If it bails out the failing companies, it risks the loss of the additional money, and encourages other large corporations to play dead for a handout. In order to avoid the appearance of rewarding and subsidizing failure, the government is attempting to get a share in the companies and regulate their decisions. This presents a host of difficulties.

• With no fear of failure, the company doesn’t feel the hunger to optimize and make a better, more competitive product, they just throw their newfound weight around. 
• Domestic competitors who were not failing now have the problem of a rival who has an artificial advantage. This actually serves to increase monopolistic tendencies. This is illustrated with our bailed out banks taking the opportunity to buy out competitors rather than loan money. 
• As the company attempts to find loopholes to wriggle free of its new bonds, the government counters with additional regulations, thus digging us deeper.

If we follow this to a logical end we see American car companies being given a global competitive advantage by having their cost of doing business artificially reduced. This has the same effect upon foreign competitors as the kind of corporate bullying you see when a Wal-Mart arrives in a small town and drives all of the local businesses under. Foreign governments will then have a choice. They can either let their auto manufacturers die because America played dirty, or they can subsidize their own auto manufacturers. What this could lead to is a new cold war in which we have a race towards socialism in order to conquer the global market.

Unnecessary Censorship, 2008 Election Edition

 

This still cracks me up. I get so sick of excessive censorship. It is nice to see someone so competently illustrating the idiocy of it all. It reminds me of reverse graffiti.

A New Era

Things may not have turned out as we had hoped, but we would like to extend our congratulations to president elect Obama on a hard earned victory. It was obvious four years ago after his speech at the DNC for John Kerry that he had the potential for greatness. Those who claim he has no executive experience haven’t been watching for the past two years. He executed the best campaign I can remember, and he took down titans and fellow visionaries. Hillary Clinton began her campaign seeming to believe it was merely a formality to her nomination. She underestimated him. His unyielding hope for the future likely convinced many potential Ron Paul supporters that the system wasn’t broken beyond repair. John McCain, as brave a man as there is in Washington, fell to his own desperation after seeing the inexorable gains of this Teflon newcomer. Obama ran an honorable campaign. He avoided dirty politics, rejected special interest money, rejected government money, and sparked the largest voter turnout in history.

And what has he won? He has won the right to stand at the helm of the Titanic after it hit the iceberg. His followers have led themselves to believe that he will part the waters and walk them to safety. All we can do now is hope that they were right. After eight years of disastrous leadership backed by rampant corruption, we have seen what has become of the Republican party. I feel a great relief that the Bush administration is on its way out. I’ll give this former constitutional law professor the benefit of the doubt because he has earned it, and standing in the way will only prolong the problem, but it our responsibility to call him on his mistakes, and we will do so. Right now our biggest issues are bloat and corruption. I think Obama will find that his biggest challenge is getting his own party to do the right thing. If he can’t turn things around, it won’t be a two party election next time. The race for 2012 starts today. It is time to take one eye off of the government and prepare to pick up the torch, should he fail.