One of my favorite quotes from Ben Franklin is, paraphrasing, “People willing to trade their freedom for temporary security deserve neither and will lose both”. Not only does it apply to us giving up our liberties for security from terrorism, foreign nations, or even the local drug dealer. It can also apply to economics. It could easily be…

“People willing to trade their economic freedom for temporary economic stability deserve neither and will have neither.”

Think about it. We have handed over our economic liberty to the Federal Reserve, who is supposed to prevent the business cycle and inflation. How’s that working out? We’ve lost 30% of our spending power just this past decade and had the biggest economic crisis since the great depression. Since the inception of the Fed, the dollar has lost 98.3% versus gold.

We’ve handed over 12.4% our income to the government for social “security” in hopes that we’ll have a decent retirement. As everyone knows, it is bankrupt, already been spent, and for those already on it, it sure does not provide any quality retirement.

Now the government is going to force us to buy health insurance and steal money from some of us to pay for health insurance for others, so that we don’t go bankrupt when we are sick. To provide the economic stability of knowing you have health insurance coverage, we’re giving up the economic freedom to make the best financial decision for ourselves. While it is not enacted yet, I’m sure the same principle will apply. If it works like the UK’s health system, everyone will still have to buy private insurance if they want to see a doctor in this life time. Doctors will be restricted in what they can offer, leading some to travel over seas for restricted procedures. We’ll still be locked into the closed drug market that prevents us from buying drugs outside our borders. All of this will lead to an economic disaster down the road and a massive economic collapse.

In the end, we never get what is promised in exchange for our freedom. We’ve given up our liberty, and as Ben Franklin said, we’ve got neither security nor economic stability.

I watched a documentary this weekend called The Listening Project, and it made me think about my post Public Education – A View From Outside The Matrix. The documentary has a group of people traveling around the world asking people what they think about these United States (notices these instead of the!).

The one thing that I noticed is most of the people knew a lot more about history than most Americans do. They were talking about Rome, Julius Ceasar, etc. While many Americans may have heard of both, they probably aren’t able to explain either and how they relate to modern times. To tell you the truth, I don’t even remember being taught about Rome in school. What I know of Rome has been self taught as an adult. I guess that wasn’t part of what the government mandates us to learn. Study hall was no doubt more important to society.

What the people recognized was we are no doubt the last empire of the world. Now conservatives will argue that we don’t want to conquer lands, so there for we aren’t an empire. We cannot have bases in well over 100 countries, claim we use our bases to look out for our national interests, and then say we aren’t an empire. We use our military and economic power to push countries in the direction we want. Anyways, this is all besides the point. The point is the rest of the world recognizes that we are an empire, and that we are no different than the Roman Empire. Countless people said we are the Rome of today, and that like Rome our empire will perish. They didn’t say this in a way that they want it to happen. They were stating the obvious. It’s too bad most Americans don’t recognize this, because all it would take to avoid it is getting back to what we were founded on.

The other thing that was noticeable in the documentary was that most of the people love the idea of America. They love the people and the spirit that is America. They love the idea that someone can pursue their dreams and make it. What they didn’t like was our government. This goes back to our foreign policy and how we try to force the world to be more like us. It was a bit shocking to see how many of them specifically stated there is a difference between the people and the government. Considering we elect these bums, that was pretty charitable. So here we are socializing everything under the sun, but it isn’t the social programs other nations love. It wasn’t our stimulus bills or our banking system. It’s our liberty. It’s what they believe we have. They don’t realize that we have lost so much liberty, but then again most Americans don’t recognize how much liberty we have lost.

Anyway, it was a pretty good documentary. It’s definitely worth watching. I’m guessing it was made to bash Bush, but I’m sure the people that were interviewed would probably still have the same opinions with Obama in the White House. He has only been a change for the worst. It’s just a shame that public education in this country is leading us down a path of ignorance compared to other parts of he world. When people in South Africa are explaining how Rome fell and how that relates to the US, yet most Americans wouldn’t know what they are talking about, you know it won’t be long before the new Rome is no more.

During the election, not only did Obama promise to air the health care negotiations on C-SPAN, but he also promised he would pass drug re-importation. As of right now, the health care reform bill explicitly prohibits drug importation as a bribe to the drug companies.

Do you really think the government cares about your health care and how much it costs? Of course they don’t. They only care about control. Drug importation is just another example. Why do you think the drug companies are running to the rescue of the Democrat in Massachusetts?

In a free market, goods and services are not restricted by where they can be purchased or sold, but with government force, drugs cannot be purchased from outside our borders. Why is that? Is it really because the government wants to protect us? Aren’t the Democrats always telling us we need to be more like Europe and Canada? Then they say we can’t trust importing drugs from those nations. The truth is they are closing the market off to us. They want us trapped in this government backed market. This is not the free market.

If we were allowed to import drugs, drug companies would not be able to pillage the American people. The only reason they are able to is because of the gun in the room. The gun is the government, and it is there to threaten you if you don’t buy the more expensive drugs. After all, they promised the drug companies if they do what they’re told, they would protect them. Don Corleone would be so proud.

Yet, we are told the free market can’t provide affordable medical care. This same thing takes place on the state level with health insurance. So, what would the free market really look like without government coercion again the people? Well, Americans would import the cheaper drugs. Drug companies would see the that game is up via lost profits in the US. They would then start stabilizing prices around the world, which would lower the US prices. Drugs are a good, and a good should cost no different in one part of the world as another except for distribution and currency exchange costs.

Can you imagine if Americans were told you can’t import your oil. You have to buy oil from within the US, and the oil company can charge a different price in the US than it charges elsewhere? How much do you think gas would cost?

Isn’t it time everyone starts waking up that we don’t live in a free market. We live under a fascist government. There is no part of our economy where the government isn’t using is monopoly on force to pick winners and losers, to force citizens into giving their money to corporations, or where inefficient companies have to compete to survive against the up and coming little guy.

Captain Capitalism has a great post today on the merits of GDP. GDP is just a formula of economic output, but it does not take into account actual prosperity. If a city is destroyed by a tornado and we rebuild the city, GDP will increase. The problem is you are no better off than you were before the tornado even though GDP tells you there has been economic growth. Actually, you are worse off because the resources that went into getting you back to square one would have been used otherwise to increase your standard of living.  If you’ve studied economics, this is known as the broken window fallacy. Stimulus and government programs are nothing but the broken window fallacy on steroids.

Here’s part of the Captains post. I highly recommend reading the entire article. Even the commentors have great comments. Read those too.

In the video I posted below about China essentially building a city that nobody is living in, the reporter kept emphasizing the importance of GDP. That the government wanted to boost “GDP.” However, given this “stimulus” plan of Ordos as well as the “stimulus plan” here in the US to boost GDP, I think it's high time we have a simple economics lesson in GDP.

Understand the goal of economics is NOT to increase GDP, but rather to increase standards of living. We simply USE GDP as a measure of all the goods and services produced within an economy, ASSUMING those goods and services when consumed help increase our standard of living. That by eating the grapes we produce and watching the movies we produce, we get utility from that, enjoyment from it, and therefore we enjoy our lives more, thus increased standards of living.

This is a logical assumption in that typically, TYPICALLY, we produce what we want to consume. We produce things that are only going to benefit us. Nobody produces ebola for consumption on account that why would we? Nobody produces styrafoam dogs. Nor do we make our roads out of cake. It not only would not benefit us, it just plain doesn't make sense.

However, this assumes an INCREDIBLY important assumption about how we go and produce things. We ASSUME that the free market is going to be in charge of what is produced. We assume that a free people, in control of their own money, is going to decide how many Big Macs we should make, how many I-Pods we should produce and how much sushi we should make. But what if this assumption is faulty?

The reason why it is faulty is the progressively less and less money is being spent by the people. A higher and higher percentage of our economy is being spent by the government. Going from essentially 3% of GDP in 1900 to 46% today.

Read the full article at  Captain Capitalism: There is No Merit to GDP Unto Itself.

Another one bites the dust…..

The Venezuelan government, already facing power and water problems and a shaky economy, is including scheduled power outages nationwide as part of its ongoing electricity rationing efforts, the state-run news agency reported.

Electricity Minister Angel Rodriguez said the latest energy-saving measures are meant to prevent a power collapse that could occur if water levels in the Guri dam system continue to drop, the Bolivarian News Agency reported. Oil-rich Venezuela relies heavily on hydroelectric power, which has been hurt by drought.

Officials with the state electric utilities in Caracas, the capital, and two other western states today announced plans for four-hour outages every other day, the Associated Press reported.

Venezuela started the year with new government restrictions on power consumption, including a limit on the hours commercial centers may use the electricity grid.

via Venezuela expanding electricity rationing to include scheduled power outages nationwide | La Plaza | Los Angeles Times.

Gotta love socialism! Seriously, why did we elected a socialist again? And why do these idiots think we can make socialism work? Oh, that’s right, “Because we are Americans”. Even though we are all humans, the adjective American apparently means we can defy all historical evidence, economic science, and who knows maybe gravity.

This is what happens every time government is the decider of any economic matter. It does not matter what it is. In the US we are only prosperous to the point of which government isn’t involved in the economy. Our prosperity would be so much more if the government wasn’t involved at all, and it’s going to be so much less now that they have involved themselves so much more.

While I don’t have to say this for my regular readers, for all the new folks, the free market always allocates resources to their highest and best use. That is why you do not have shortages in something that your country has in abundance like you do in oil rich Venezuela. Anytime, and I mean anytime without exception, the government changes the way the free market functions, you get resources being allocated in a less useful way. The bottom line is that means the standard of living is decreased. Venezuela is a perfect example of standards of living being decreased by the government’s misallocation of resources. Now something as simple as energy is going to be rationed. If food rationing has started yet, it will be as will many other things. Producing and distributing of goods requires energy, so what do you think is going to happen now that energy is being rationed?

Considering how stupid governments are, I would not be surprised to see Venezuela reallocate resources to energy, and then have an abundance of energy. The only problem is because it will be centrally planned by an idiotic government (and they are all idiotic), they will have over allocated energy resources and some other resource(s) will be under allocated. This is what happens when a few people, far away from the actual transaction decide what transactions should be taking place months if not years in advance. Think about how inefficient that is. The free market on the other hand adjusts resource allocations by the second based on the constant tweaking of millions of individual transactions.

There is no doubt that America will be facing the same issues soon. Our government is centrally planning the cost of money, the housing market, the auto manufacturers, the banking industry, schooling, energy, the food supply, travel, health care and the list goes on and on. Instead of resources being steered by the end consumer and producer, Washington thinks they know who need what and how much of it they need. While we have been the frog in the increasingly hot water for probably the past 100 years, it seems Obama increasing rate of socialization has caused us to realize the waters boiling. Hopefully, we can stop it before we become Venezuela. Hopefully, the people of Venezuela realize their folly and revolt against their dictorial government. It’s their only hope, and not to far it the future it may be our only hope as well.

Alan S. Blinder wrote another half witted op-ed about financial regulation and Wall Street’s return to “greed”. As all half witted intellectuals, he recognizes a symptom, but never questions the source. Here is a paragraph where he talks about Adam Smith.

When economists first heard Gekko’s now-famous dictum, “Greed is good,” they thought it a crude expression of Adam Smith’s “Invisible Hand”—which is one of history’s great ideas. But in Smith’s vision, greed is socially beneficial only when properly harnessed and channeled. The necessary conditions include, among other things: appropriate incentives (for risk taking, etc.), effective competition, safeguards against exploitation of what economists call “asymmetric information” (as when a deceitful seller unloads junk on an unsuspecting buyer), regulators to enforce the rules and keep participants honest, and—when relevant—protection of taxpayers against pilferage or malfeasance by others. When these conditions fail to hold, greed is not good.

via Alan S. Blinder: When Greed Is Not Good – WSJ.com.

Binder says “in Smith’s vision, greed is socially beneficial only when properly harnessed and channeled”, and I’m guessing he thinks the geniuses in Washington should be the ones to do the harnessing and channeling. Is Binder really this ignorant, or is he so trapped in his own reality that he can’t see past his old ideas? By giving Washington the power to “harness and channel” Wall Street, the economy or anything else, you create the source of corruption. Washington has become Wall Street. Look at who occupies the White House staff. This isn’t just Obama. This was Bush as well.

Greed is only harmful to society when the negative results of greed are forced on society instead of the source of the greed. In this case, Wall Street’s greed led to subprime mortgages, but instead of them being harmed by the negative results, they used government force to dish the negative results on the tax payers.

People aren’t typically greedy, despite all the negative comments by the like of Blinder. Something usually entices you into greed. Someone sees the chance of unearned profits, and they get…. well “greedy” for it. In this case, Wall Street got greedy because the Fed was printing “free” money. Who benefits from this money? Well, the banks are the ones who get the money first before it’s devalued. They get to loan it out and make their profit before the damage is done. In their ability to do this, because of the Fed, would they not be making unearned profits? It would be no different than a man giving you $1,000 and saying go ahead lend that out at whatever interest rate you can to make a profit. You pay the man back one percent interest and keep the rest. You really don’t have any risk there. Inflation is typically three to four percent. Hmm, just think how much you can make with no risk if you make even more of these loans. What if you loaned out $1 million? Now you can see where greed comes from.

If we didn’t have the Fed in bed with Wall Street bankers, we wouldn’t have had the easy money that created the last bubble in which Wall Street so enriched themselves. Then when the bubble burst did Wall Street have to take their punishment? Nope. Because of government force and collusion, they were able to force all of America to pay the bill.

What Blinder doesn’t understand is the problem isn’t an unregulated “invisible hand”. The problem is because of government the “invisible hand” now has a gun in it. When there is a gun, this is when “greed is not good”.

So, the Dems always act like they are fighting against the big insurance and drug companies for the people. Yeah right. Looks who’s coming to the democrats rescue to save health care reform.

We’ve been following the special election in Massachusetts, where the GOP hopes to pull a surprise upset in the race to fill Ted Kennedy’s seat.

If they do pull it off, healthcare reform is instantly in trouble, as the Democrats drop below 60.

But money is coming to the rescue of Democrat Martha Coakley — healthcare industry lobbyist money, specifically.

Tim Carney identifies several of her top fundraisers. Take a look at who they represent:

• Thomas Boggs, Patton Boggs: Bristol-Myers Squibb
• Chuck Brain, Capitol Hill Strategies: Amgen, BIO, Merck, PhRMA
• Susan Brophy, Glover Park Group: Blue Cross, Pfizer
• Steven Champlin, Duberstein Group: AHIP, Novartis, Sanofi-Aventis
• Licy Do Canto, Raben Group: Amgen
• Gerald Cassidy, Cassidy & Associates: U. Mass Memorial Health Care
• David Castagnetti, Mehlman, Vogel, Castagnetti: Abbot Labs, AHIP, Astra-Zenaca, General Electric, Humana, Merck, PhRMA.
• Steven Elmendorf, Elmendorf Strategies: Medicines Company, PhRMA, United Health
• Shannon Finley, Capitol Counsel: Amgen, Astra-Zeneca, Blue Cross, GE, PhRMA, Sanofi-Aventis.
• Heather Podesta, Heather Podesta & Partners: Cigna, Eli Lilly, HealthSouth
• Tony Podesta, Podesta Group: Amgen, GE, Merck, Novartis.
• Robert Raben, Raben Group: Amgen, GE.

Of course, this is how politics works. Lobbyists for various corporations and causes get involved wherever they can for candidates of both parties. But when you see all these big pharma (and insurance!) representatives coming with cash for a crucial vote, you know which side they’re on.

via Panicked Healthcare Lobbyists Descend On Massachusetts To Save The 60th Democratic Vote For Reform.

I’m sure no one that reads this blog is surprised. If the health care bill wasn’t in the best interest of the drug and health care companies, they would not be coming to the rescue for the democrats. Why do they want this bill? Well, government is forcing people at gun point to buy their products. How much easier can business be for them? They don’t have to convince you to buy their product anymore. You can’t decide that you only need a minimal plan, because their buddies in congress are going to make sure you have a “qualified plan”. Oh, but we’ll figure out what that is after the bill is past. Let’s not worry about the details right now.

What a joke our government has become. The mafia must be looking on with envy. The big drug companies have all signed up for protection, and they are all doing their part to protect the turf of the ruling class.

I came across this post on The Business Insider. Apparently, smarter folks than I are giving some of the same warnings I did in my post here.

MarketWatch has rounded up a few of the more pessimistic preditions about 2010.

A lot recommend buying farmland. Here are the gloomiest:

Former IMF chief economist Simon Johnson warns:

“We’re running out of time … to prevent a true depression.” He says unless we break Wall Street’s “stranglehold” we will be unable prevent the Great Depression 2.

Morgan Stanley research guru turned hedge fund manager Barton Biggs (pictured), who called the market rally, advises that you buy a farm a good distance away from a city and, he advises, make sure that your doomsday safe-haven:

* Be self-sufficient and capable of growing some kind of food

* Be well-stocked with seed, fertilizer, canned food, wine, medicine, clothes, etc

And get a gun, he says, because “a few rounds over the approaching brigands' heads would probably be a compelling persuader that there are easier farms to pillage.”

Mark “Gloom Boom Doom” Faber also recommends buying farmland. Our society has peaked and is on the decline, he says:

“Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.”

via Barton Biggs: Stock A Safe Haven With Food And Firearms To Protect Against Pillagers.

What’s wrong with C-SPAN? Do they think this is a government of the people, by the people, and for the people? Silly C-SPAN.

The head of C-SPAN has implored Congress to open up the last leg of health care reform negotiations to the public, as top Democrats lay plans to hash out the final product among themselves.

C-SPAN CEO Brian Lamb wrote to leaders in the House and Senate Dec. 30 urging them to open “all important negotiations, including any conference committee meetings,” to televised coverage on his network.

“The C-SPAN networks will commit the necessary resources to covering all of the sessions LIVE and in their entirety,” he wrote.

In a Tuesday afternoon press conference on health legislation negotiations, House Speaker Nancy Pelosi appeared to object to the premise behind the request.

“There has never been a more open process for any legislation in anyone who’s served here’s experience,” she said.

via FOXNews.com – C-SPAN Challenges Congress to Open Health Care Talks to TV Coverage.

I’d like to know where the outrage is on this one. There is nothing that the government should be doing that should be done in secret. These are supposed to be our representatives, so how can someone represent you without you knowing what they are saying on your behalf?

Of course, this post is all rhetorical. It’s obvious that our government, no matter which party is in charge, is not representing the people. They are conspiring in secret, because they are conspiring on how to stay in power. They want to setup a structure where you are at the mercy of them. Oh, and don’t worry about those who claim to be not running again, like Chris Dodd. You’ll see his ugly face around Washington until his last breath. He’ll be conspiring from the outside to fatten his wallet, and to keep his accomplices in power. Make no mistake about it.

What was that Jefferson said about the tree of liberty……

I was reading a blog on Shay’s rebellion and big government on a blog called Right Condition. You should check out the whole article, but here is a paragraph that highlights how the federal reserve is robbing the middle class.

Whether you look at the debasement of the Roman currency or the systematic destruction of the Byzantine gold coin the result is always the same. Debasement of a civilization’s currency leads to the civilization’s demise as the population is systematically robbed while the ruling class grows richer. This is precisely what is happening in America today! If you are not convinced, play around with the inflation calculator. You will find just as an example a 30% inflation rate since 1999. Similarly in 1999 the median income was 42k, while in 2009 the median income stands just north of 46k. So while prices on average went up 30%, median incomes barely went up 10%. This is a systematic plunder of American wealth.

Think about the average household basically being robbed of 20% of their purchasing power. I love how the government keeps coming out with these low inflation numbers, but every citizens knows inflation has been through the roof since 2000. Gas prices are up over 100%, which is down substantially from it’s high. A bag of potato chips that used to cost a dollar is now three or four dollars. Utility bills eat up a larger percentage of your income. Housing prices went through the roof, and even though they have come down, they are still way above their 2000 level. On top of that, the government and the Fed are trying to inflate their way out of the mortgage crisis. Still, the Democrats stand around complaining about the wealth gap. Well, here is your wealth gap. It is expanded by the Federal Reserve.

Is there a modern day Shay on the horizon?