Tomatoes on sale…well until the government drives prices up

Posted by Jason | Posted in Economics | Posted on 17-06-2010

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Apparently, grocery shoppers may actually see some prices going down. Wow, that would be a change.

Jeff Dolan’s tomatoes in San Joaquin Valley are ripening and ready to pick this week. But that puts him in a pickle.

In California, harvest time is arriving just as tomato growers in other parts of the U.S. are reeling from a sudden supply glut that is pushing the price for fresh tomatoes sharply lower. Florida farmers who fetched more than $30 a few months ago for a 25-pound box of round, fresh field-grown tomatoes, also known as slicer tomatoes, are now getting $5 or less.

The abundant crop is rooted in last winter’s cold weather in Florida, which delayed the development of tomato plants. The overdue harvest hit the market in May just as DiMare Co., where Mr. Dolan oversees California field operations, was picking tomatoes near Palm Springs

Well, you win some and you lose some. The farmers had a bad growing season, and now all the tomatoes have come on the market at once. That’s how business goes. Well, unless the government steps in.

The U.S. Agriculture Department estimates that wholesale tomato prices fell to 25 cents a pound in June, down 78% since March. The current price is “the lowest number that I can remember seeing,” says Gary Lucier, an agricultural economist and tomato expert at the USDA.

Worried about the impact of the plunge on farmers, the USDA is buying $6 million of tomatoes and distributing them to food banks. Agriculture Secretary Tom Vilsack said the purchase is designed to give Florida farmers “some relief.”

Would someone tell Tom Vilsack that consumers need some relief after the Fed has inflated prices sky high over the past decade. Here we go with the market prices reflecting what is really going on, and what does the government do? It steps in and starts handing out cash. Instead of letting consumer demand rise with the lower prices, the government steps in as a huge consumer and drives the prices up. While I’m sure it buys them big agriculture’s vote  and donations, it does not help “The People”.

January’s freeze in Florida destroyed about two-thirds of the tomato crop in one major growing region, according to the USDA, citing industry estimates. As supplies withered, prices spiked, and some of the increase was passed on to consumers. In the first quarter, U.S. average retail tomato prices rose 24% to $2 a pound.

via the WSJ Tomatoes Go From Shortage to Glut – WSJ.com.

So where was the government when the prices spiked? Did they step in to help the consumer? Of course not, nor should they have. This idea that farmers need “relief” is silly economics. If the price of tomatoes drop, more tomatoes will be bought. Yes, farmers will make less per tomato, but they can make up the difference with volume. It’s no different than the local store running a sale on some product that has been sitting on their shelves. The local store realizes that the price is too high, and at the current price the demand isn’t there. So, what do they do? They run a sale. While they don’t make the same amount per item, they make it up on volume and getting the products off the shelf where they are making no money.

The farmers know this is coming, and they should plan for it. And I don’t mean by lobbying local politicians for “relief”. No on gives relief to the local Kmart when they stock too much of an item nobody seems to want. Farmers can run sales as well. They will survive. Some may go out of business, just like every other industry. Then guess what happens? There is less tomatoes produced next time and prices go up. Then when the price go up, farmers will be incentivized to move back into growing more tomatoes.  The free market works, and it doesn’t require the government plundering everyone every time some crop doesn’t come in the way farmers would like at the price they’d like.

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Fannie and Freddie may cost tax payers $1 trillion

Posted by Jason | Posted in Miscellaneous | Posted on 16-06-2010

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I saw this article this morning on the Tribune Review. Just think about the amount of money that is going to go into these two government entities, and what the people actually get out of it.

WASHINGTON — The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.

Fannie and Freddie, now 80 percent owned by taxpayers, have drawn $145 billion from an unlimited line of government credit granted to ensure that home buyers can get loans while the private housing-finance industry is moribund. That surpasses the amount spent on rescues of American International Group Inc., General Motors Co. or Citigroup Inc., which have begun repaying their debts.

“It is the mother of all bailouts,” said Edward Pinto, a former chief credit officer at Fannie Mae, who is now a consultant to the mortgage-finance industry.

Fannie, based in Washington, and Freddie in McLean, Va., own or guarantee 53 percent of the nation’s $10.7 trillion in residential mortgages, according to a Federal Reserve report. Millions of bad loans issued during the housing bubble remain on their books, and delinquencies continue to rise. How deep in the hole Fannie and Freddie go depends on unemployment, interest rates and other drivers of home prices, according to the companies and economists who study them.

Fannie and Freddie account for 53% of the $10.7 trillion dollar residential mortgage market, which comes out to $5.35 trillion. If it costs $1 trillion to bail them out, that is 20% of the mortgages that they hold. Shouldn’t 1 and 10 home owners nation wide or 1 in 5 home owners that have a loan held by these two entities have a home free and clear? How about every home owner have their mortgages reduced by 10%? While I don’t really think that is a good idea, because the money will be either borrowed or printed, I don’t think it make sense for the American people to have to eat $1 trillion dollars in mortgages to keep these entities propped up. Let them go bankrupt. Other banks will pick up the pieces.

The Congressional Budget Office calculated in August 2009 that the companies would need $389 billion in federal subsidies through 2019, based on assumptions about delinquency rates of loans in their securities pools. The White House’s Office of Management and Budget estimated in February that aid could total as little as $160 billion if the economy strengthens.

If housing prices drop further, the companies may need more. Barclays Capital Inc. analysts put the price tag as high as $500 billion in a December report on mortgage-backed securities, assuming home prices decline another 20 percent and default rates triple.

Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pa., said that a 20 percent loss on the companies’ loans and guarantees, along the lines of other large market players such as Countrywide Financial Corp., now owned by Bank of America Corp., could cause even more damage.

“One trillion dollars is a reasonable worst-case scenario for the companies,” said Egan, whose firm warned customers away from municipal bond insurers in 2002 and downgraded Enron Corp. a month before its 2001 collapse.

Fannie and Freddie are deeply wired into the American and global financial systems. Figuring out how to stanch the losses and turn them into sustainable businesses is the biggest piece of unfinished business as Congress negotiates a Wall Street overhaul that could reach President Obama’s desk by July.

Deeply wired means there are very wealthy and powerful people who stand to lose a lot of money if they go under. They want the American people to subsidize their losses, and our government is all too willing to give them what they want.

Neither political party wants to risk damaging the mortgage market, said Douglas Holtz-Eakin, a former director of the Congressional Budget Office and White House economic adviser under President George W. Bush.

“Republicans and Democrats love putting Americans in houses, and there’s no getting around that,” Holtz-Eakin said.

With no solution in sight, the companies may need billions of dollars from the Treasury Department each quarter. The alternative — cutting the federal lifeline and letting the companies default on their debts — would produce global economic tremors akin to the federal decision to go off the gold standard in the 1930s, said Robert J. Shiller, a professor of economics at Yale University in New Haven, Conn., who helped create the S&P/Case-Shiller indexes of property values.

“People all over the world think, ‘Where is the safest place I could possibly put my money?’ and that’s the U.S.,” Shiller said. “We can’t let Fannie and Freddie go. We have to stand up for them.”

The companies’ liabilities stem in large part from loans and mortgage-backed securities issued between 2005 and 2007. Directed by Congress to encourage lending to minorities and low- income borrowers at the same time private companies were gaining market share by pushing into subprime loans, Fannie and Freddie lowered their standards to take on high-risk mortgages.

Treasury Secretary Timothy F. Geithner has vowed to keep Fannie and Freddie operating.

“It’s very hard to judge what the scale of losses is,” Geithner told Congress in March.

One idea being weighed by the Obama administration involves reconstituting Fannie and Freddie into a “good bank” with performing loans and a “bad bank” to absorb the rest. That could cost taxpayers as much as $290 billion because of all the bad loans, according to a May estimate by Credit Suisse analysts.

Keeping Fannie, Freddie afloat might cost up to $1 trillion – Pittsburgh Tribune-Review.

Great idea Obama. One bank where his cronies can maintain their profits without risk and another bank where the tax payer can eat the losses. Awesome!

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Say Bye Bye To Your Secret Swiss Bank Account

Posted by Jason | Posted in Economics, Government | Posted on 15-06-2010

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Switzerland has been the home of off shore banking for a very long time. People who want to keep their money off shore, are doing it to protect their money from the modern day mafia, the US gov’t. Well, not for long. The Obama administration has vowed to go after those who believe their money is theirs, whether it is at home or over seas.

The Swiss were not giving in until just yesterday when their parliament approved a treaty with the US that would hand over files on their clients.

ZURICH—The Swiss Parliament Tuesday approved a treaty with the U.S. that will hand thousands of files on suspected tax cheats to U.S. authorities.

A majority of 81 to 61 lawmakers in Switzerland’s lower house have voted in favor of the government-backed deal. Fifty-three lawmakers abstained on the issue that has been portrayed as a nail in the coffin for Swiss banking secrecy.

Tuesday’s vote passed after the powerful Swiss People’s Party dropped its opposition. A first attempt last week to have parliament approve the treaty was blocked when the nationalist party and the left-wing Social Democrats voted “no.”

Technical details remain to be ironed out and the proposal may still be put to the Swiss public in a referendum before it finally becomes law.

Subjecting the bill to a referendum would likely mean that Switzerland would fail to meet the August deadline set in the pact with the U.S. because of the months it takes to hold a signature drive to launch a referendum in Switzerland.

The August 2009 settlement reached between Swiss and U.S. officials aims to resolve a conflict between Switzerland and the U.S. over data on wealthy Americans suspected of using hidden offshore accounts at UBS to avoid paying taxes.

OK, now two things are going on here. Number one is that the American government is so tyrannical that they will go after your money anywhere on the face of the earth. There is no such thing as personal property. There is no such thing as doing what is best for your money. They will chase you down literally to the edge of the earth. If that isn’t tyranny, I don’t know what is.

Second, the Swiss Parliament is completely screwing their people. If they turn over the files of wealthy Americans, what reason do wealthy Americans have in the future to put their savings into Swiss banks. They don’t. What will happen is savings will dry up in Switzerland. This means less capital for Swiss lending.

When savings are built up in banks, banks, in order to make profits, lend out that money. They lend it out to businesses, who then will look to grow the economy. In this short sighted attempt to appease the US regime, the Swiss will be giving up those savings, and they will be giving up the economic growth that that savings would have stimulated. In short, they are screwing their citizens, because the US regime wants to screw it’s citizens.

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Is Obama’s Demand For A BP Fund Just A Way To Limit Liability?

Posted by Jason | Posted in Government, Miscellaneous | Posted on 14-06-2010

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There is no doubt BP has bungled the handling of this oil spill. What is even more bungled is the government’s back and forth trying to act like they are or even can do something about this that will actually help. Most recently, Obama is now calling for a fund to be setup to pay claims.

From the Wall Street Journal:

The Obama administration, facing growing public anger over the Gulf of Mexico oil spill, plans to ask BP PLC to establish an independently administered fund for reimbursing victims—in effect, taking some of the compensation decisions out of the company’s hands.

White House officials on Sunday said they wanted BP to put “substantial” funds into an escrow account to cover claims by Gulf Coast businesses and residents affected by the spill.

President Barack Obama plans to bring up the idea at a White House meeting Wednesday with top BP executives, including Chairman Carl-Henric Svanberg.

The call was echoed by congressional leaders and state officials. In a June 10 letter to BP released on Sunday, Senate Majority Leader Harry Reid (D., Nev.) and other Democrats asked BP to establish a $20 billion account, administered by an independent trustee, that would be used to pay the damages and clean-up costs associated with the spill. Florida Governor Charlie Crist and other officials in the Gulf Coast region joined the chorus.

It remained unclear how any such funds would be supervised, in particular who would oversee the compensation decisions. Administration officials on Sunday didn’t comment on the size of the escrow account they will seek, or on where money might come from. Nor did officials detail the legal status of the proposal.

Such a fund would provide a measure of security, proponents argue, for people concerned BP might file for bankruptcy protection or otherwise stop paying claims at some point in the future. It also has the potential to give the government or its designees control of distributing a significant pool of relief money.

OK, so the fund does not sound like a bad idea other than the “It remained unclear how any such funds would be supervised…”. That sure sounds like a nice slush fund for someone.

While not opposed to the idea of the fund, BP objects to the implication that if it isn’t required to set money aside, it might try to avoid paying it in full, according to a person familiar with the company’s position. BP insists it has the financial muscle to settle the final bill for the clean-up, as well as pay its dividend.

From BP’s side, maybe they do have the means to pay the bill. If there is no fund setup all at once, BP will be able to handle claims as they come, which will help cash flow. If the government tells them to setup a fund, and it’s required to be funded all at once, that could really harm BP’s chances of recovering from this. Cash is king, and if cash flow runs out, BP may be too tarred and feathered to raise capital.

Legal experts struggled to come up with a precedent for such a move. Examples of government-run funds exist, but they differ from the proposal facing BP.

Are we trying to act like our government cares about the law now?

In the early 1980s the government passed Superfund legislation that would create a fund to pay for the cleanup of hazardous-waste dump sites.

Through the law, the Environmental Protection Agency can compel the polluter to clean up the site or pay for it through the Superfund and sue for reimbursement.

Around the same time, the first of about 40 trust funds were set up with court approval by Johns Manville Corp. and later other companies with asbestos liability to alleviate some of the problems of lengthy asbestos-related litigation. But their creation stemmed from bankruptcy proceedings for Johns Manville. The trusts now oversee about $20 billion in assets, a sum that has nearly tripled since 2005, consultants say.

What they don’t say is this huge fund created an industry of lawyers looking to make millions off these claims. Instead of settling suites for those effected by asbestos, it was really a pay off to the trial lawyers.

Typically, corporations fund such victims accounts to settle class action lawsuits, although there have been a few examples of legislatively mandated funds such as the 9/11 victims fund, according to Howard Erichson, a law professor at Fordham University. “If the idea is to get BP to do this voluntarily, the question is what’s in it for them? Is there some liability protection in it for them?” Mr. Erichson said.

See, here’s the pay off to BP. While the government is trying to make it seem like it’s coming down hard, they will really setup an escape route for BP. They will put in liability protection for BP.

What I would like to know is why are we pushing to have a fund setup now? Did we not know there are risks involved in what they were doing, and shouldn’t we have planned accordingly? Of course, they didn’t because instead of focusing on liability they focused on buying off the government regulators. In a free market with private property protection, companies would buy insurance for liability protection. Insurance is the fund that would pay claims. Why is there not drilling rig insurance that pays out when something like this happens? My guess is there is no need for an insurance company to provide insurance like this, because government is used as the insurance.

Let’s just think about how this should work. If I’m BP, and I’m proposing to drill one mile below the ocean. One of the first things I should be thinking about is how will I pay claims if this goes bad? I better get insurance. Then the project should be submitted to an insurance company. The insurance company would have the expertise to evaluate the riskiness of the project. Then based on that, they would say, “BP, we are willing to issue a policy on this project for X number of dollars. Here are the things that we would require to issue this policy. 1.) You must use this latest technology. 2.) You must have this expertise on site at all times. 3.) We will inspect the rig weekly…..”. You get the picture.

Now, the insurance company is basically saying we are taking the risk off BP, and to do this BP will pay them so much money and meet certain criteria. The insurance company now must limit it’s chances of having to pay out claims. That is how they make money, and YES, this is a good thing. Insurance provide a valuable service to society, so quit letting the government smear insurance companies.

Anyway, so the insurance company will take actions to limit their chances of being liable. How will they do that? They will first take actions, such as inspections, to make sure that the rig is up to the highest standards. Also, they will develop clean up plans ahead of time, so they can quickly take action and limit their losses before the problem gets out of control. If they don’t, they run the risk of losing money on this policy.

So as you can see, this is how a true market works, when there is real private property protections in place. Instead, we have a government regulated market, where there were laws on the books capping the oil companies’ liability at $75 million. Why buy insurance or why provide insurance, when the government already said what your cap is? Oh sure, Obama is grandstanding and trying to make it seem like he’s coming down hard on BP. The truth is they will setup a way for BP to limit it’s liability. They will protect big oil. Even if BP doesn’t make it through this, the billionaires at the top have already put into place a way to limit their losses. Entities, government created of course, will be moved around, gobbled up, etc, but make no mistake about it. The government is and will protect their rich masters, instead of doing the one simple thing a just government is supposed to do, protect property rights.

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Newspapers, iPads and Horse Carriages

Posted by Jason | Posted in Economics, Government | Posted on 04-06-2010

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In a free market, when people do not want a product, businesses have to adapt their products to deliver something that is wanted. If they do not, they will go out of business. This is a good thing, because it keeps what is produced aligned with what is demanded. For example, when automobiles came out, eventually no one wanted horse carriages anymore. Companies that didn’t adapt went out of business. You wouldn’t keep producing horse carriages when no one had horses and were driving around in cars.

Well, in modern day America this isn’t how it works. In the modern day United States of America, you just lobby the government to force citizens at gun point to pay for your product even when they don’t want it and you don’t even provide it.  Take for example the newspapers. Here is a business model that has been collapsing for years. The internet has changed the way people get their news. People can get articles from many different sources instead of just their local paper. This isn’t something that just started happening. The writing has been on the wall for a long time. So instead of adapting to deliver what people are demanding, what are the news papers doing?

The U.S. government has some creative ideas to “save journalism” or more aptly to save newspapers. Among their feel-good suggestions to help preserve the free press (paper) is to institute a 5 percent tax on all consumer electronics.

The U.S. Federal Trade Commission has submitted a multi-faceted proposal to President Obama and Congress. The FTC insists the proposal is “solely for the purposes of discussion”, though it expects aspects of it could work their way in to legislation.

The most controversial part of the proposal is to tax all digital electronics, including, but not limited to — iPads, iPods, iPhones, laptops, desktop PCs, Macs, netbooks, Zunes, Sansas, Creative MP3 players, digital cameras, video cameras, Android smart phones, Nintendo DS's, PSP Go's, Xbox 360s, Wiis, and the PS3.

The 5 percent federal tax, along with applicable state taxes, would bump total tax on these items to 10 percent or more in many states.

The proposal would suck in $25 per $500 spent on electronics goodness. The government would “redistribute” the $4B USD it hopes to haul in from the proposal to struggling print news businesses, who have seen their ad revenue drop 40 percent in the last decade as advertising has made the leap to the internet.

The full recommendation is available here [PDF]. Feel free to contact your Senators and Representatives and give them your thoughts.

Even if the government can’t find a way to enact a consumer electronics tax, state governments should help pick up the slack. Nationwide there's a wealth of measures looking to tax digital downloads such as iTunes tracks, video game downloads from Valve, and more. Critics say the laws will drive people to piracy, but advocates say they will allow the government to harvest much needed funds to pay for roads, schools, and police forces.

via DailyTech – FTC Discusses 5 Percent Federal Tax on Computers, Phones, and Consoles.

There you have it. Stick a gun to everyone’s head and  make them pay for newspapers, when they neither want nor get a damn newspaper. Instead of the person, who will have to pay this tax, being able to spend that money on something they want and that will generate new business, they are having it stolen from them to give to another business, which will not provide a product in return. Think about that.

Say you have $525 to spend. You decide you want to buy an iPad for $500. Under this tax, you’d have to pay $25 for newspapers. Do you get a newspaper. No you do not. The newspaper gets your money without providing a product. Does this stimulate business in any way? They are basically selling their products at inflated prices, but the difference between what their real customers pays and what the real price is is what the rest of society has to pay.  Nothing more is produced. There is no economic gain here. The consumer lost out on the enjoyment of whatever labor it took him to earn that $25, and the business is being reward for producing what people do not want.

Now if this consumer had the same $525 to spend as he pleases, he would buy his iPad for $500. Then he would have his $25 to encourage businesses to produce what he demands. He would actually get the enjoyment that he earned through his labor. That $25 may go to online media, which has adapted to the new business models. Who knows. When the money is spent, a product would actually be delivered and be produced. The economy would benefit. The consumer would get the benefit of his labor. The producer that was intelligent enough to produce something people want would be rewarded, and quality of life is improved. Price signals would do their job. The newspaper would then have to charge more money to stay in business. Consumers obviously wouldn’t want what they are producing, since they don’t want it at the current lower prices. The newspaper businesses would consolidate, change and adapt to survive. This is how the free market works, and the government should let it work. If we did this years ago, we’d all have horse carriages sitting in our driveways next to our automobiles.

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Buffett Defends Moody’s

Posted by Jason | Posted in Miscellaneous | Posted on 03-06-2010

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Warren Buffett was defending Moody’s by saying it was caught up in the biggest bubble he’s seen in his lifetime. Can you imagine any other watch dog group saying they were caught up in something that the group they were supposed to watch was involved in? Imagine if the FDA was promoting crack (I know. This wouldn’t be a stretch.), and then was like “We just got all caught up in the crack epidemic. It’s the biggest drug craze we’ve seen in our lifetime.”

Anyways, then Buffett says something I agree with.

But the Berkshire Hathaway Inc. chief executive expressed doubts that even radical changes to the credit-ratings industry, such as creating a government-appointed board to select rating firms, would improve the quality and accuracy of ratings.

via Buffett Defends Moody’s Management – WSJ.com.

Of course, this is always the solution from government. Give them more power. Is this just corruption in the making or what? Instead of rating agencies being chosen based on the quality of their past ratings, they will be chosen by whoever spends the most money lobbying. Look at BP and the MMS fiasco.

Only the free market can fix the rating agency system. Let the market decide which agencies are best. Large investors will not want to use corrupt rating agencies, and Moody’s will lose it’s clients. The government is not a solution here. The government will be used to keep out real competition and prevent trust worthy ratings.

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Thomas Frank Isn’t Being Fair With Laissez-Faire

Posted by Jason | Posted in Government | Posted on 02-06-2010

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This morning I was reading a piece by Thomas Frank, the token idiotic liberal over at the Wall Street Journal. His piece is an argument against people calling for laissez-faire capitalism, and he uses the oil spill as his proof that we need government.

Just last week, for example, the Washington Post featured a 2,500-word essay by Arthur C. Brooks, head of the American Enterprise Institute, calling for a “New Culture War” for laissez-faire capitalism—a grand moral debate over the right relationship of business and government that Mr. Brooks felt his side was sure to win.

Well, the Gulf spill has given Mr. Brooks and his movement the perfect opportunity to stage that debate. On one side, we’ve got the liberty-minded oil companies, the gentle giants that, just two months ago, the right was so keen to liberate from federal interference and to unleash on the nation’s coastline.

And on the side of government, we’ve got the Obama administration, which has backtracked on its new offshore-drilling policy and even announced plans to beef up drilling regulations. True, for most Americans that’s not a lot of statism to deplore, but the tea party movement is accustomed to regard even the most insignificant regulatory initiative as a front in the eternal war between freedom and socialism.

“Liberty-minded oil companies”? Is he serious? What oil company isn’t buying politicians? What oil company is begging for less federal involvement? Oh sure, they may not want the government involved in their operations, but they sure love government to be involved in steering leases their way, sending troops off to secure oil over seas, etc. Oil companies are in bed with government.

Also, laissez-faire doesn’t mean unaccountable. Those harmed by the spill would have recourse through the courts. BP and the other companies involved would have to compensate property owners for the damage they caused.

Most importantly, who will find an inventive way to blame government for the disaster? Not blame it for reacting too slowly after the spill—that is merely a statist reflex in disguise—but for somehow causing the spill with its meddlesome concerns for safety and the environment?

The answer, as far as I have been able to determine, is almost nobody. True, newspaper columnist Charles Krauthammer attempted last week to divert a little blame toward “environmental chic,” arguing that one reason the oil companies were even drilling in the Gulf is that environmentalism has blocked their access to other spots, such as the Arctic National Wildlife Refuge.

But for the most part, what we hear from the right these days is essentially the same as what we hear from the liberals: complaints about corporate misbehavior, the need for more federal action, and demands for a shakeup of the regulatory agencies involved so that they might regulate better in the future.

Has Mr. Frank ever heard of moral hazard? I’d blame the government for making the oil companies focus on bribing them instead of focusing doing what’s necessary to protect themselves from liability. Maybe if BP wasn’t wining and dining MMS bureaucrats in order to get awards and win approval for their projects, they would instead hire the best minds to focus on safety instead of hiring the best lobbyists to mingle with politicians and bureaucrats.

In fact, one of the people leading the criticism of the Minerals Management Service—the regulator in question—has been conservative paladin Darrell Issa (R. Calif.), who correctly accuses MMS of having “too cozy of a relationship” with industry. Former GOP vice presidential candidate Sarah Palin, for her part, has actually used the spill to outflank Mr. Obama on the left, suggesting that someone should find out whether his administration’s vacillating response can be attributed to the sizable campaign contributions he has received from BP employees over the years.

These are refreshing arguments to hear from the right. After hurricane Katrina wrecked New Orleans, you will recall, conservative pundit Amity Shlaes famously described the Bush administration’s vacillating response as the traditional observance of the “Federalist Pause.”

And Galt only knows how many times “coziness” of the MMS variety has been celebrated as part of the struggle for free markets and free people. For a reminder, just pull out that famous 2003 photograph of James Gilleran, then director of the Office of Thrift Supervision, a bank regulator, “cutting red tape” along with a smiling group of bank-industry lobbyists.

So Frank does see that the regulators are useless, but he call is for more regulation. Are we to believe every time there is a failure that that just means there wasn’t enough regulation, when it turns out the regulators were all corrupt?

But things are different today. The catastrophe is too great to brush it off with the usual laissez-faire scholasticism. So the great debate must wait. We are all liberals for the duration.

via Thomas Frank: Laissez-Faire Meets the Oil Spill – WSJ.com.

I’m still not a liberal Mr. Frank, well in the modern day context anyway. Laissez-fair is the correct approach. It is the only way for companies like BP to pay the piper instead of the governors. Mr. Frank comes to these debates with too many assumptions. He assume laissez-fair would mean no accountability, which is wrong. It would be increased accountability. Remember the corporate veil is a state created entity to protect the big wigs from liability. Remove that veil, and see how many idiotic risks are taken by our economic titans.

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The United States Cause of Death, Plundered to Death

Posted by Jason | Posted in Miscellaneous | Posted on 01-06-2010

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Now that the government has already plundered trillions of dollars from the people to bailout wall street bankers and General Motors, they are now getting set to plunder hundreds of billions more to bail out the unions.

Feeling tapped out after stimulus, ObamaCare and everything else? Senator Bob Casey has one more deal for you. If the Pennsylvania Democrat gets his way, U.S. taxpayers will also pick up the astonishing tab for poorly managed union pension plans.

Mr. Casey is gathering support for his curiously named “Create Jobs and Save Benefits Act,” a bailout for union-run retirement plans. Similar to House legislation from North Dakota Democrat Earl Pomeroy and Ohio Republican Patrick Tiberi, the bill would transfer tens of billions of dollars worth of retiree liabilities to the Pension Benefit Guaranty Corporation, i.e., to taxpayers.

via Review & Outlook: The Union Pension Bailout – WSJ.com.

So let’s put this in layman’s terms. Unions have lied to themselves all these years about the real value of their labor, crushing the businesses they work for. Then they fell for their union leaders’ lies and “pension plans”. Because of their choices, everyone else in society is supposed to suffer. They should have no responsibility for their choices. Their leaders should walk away scott free thinking they did a great job, and the rest of American workers should be enslaved to pay for their mistakes.

In Frederic Bastiat’s book, The Law, he laid out the choices societies make in regards to their laws.

“The few plunder the many. Everybody plunders everybody. Nobody plunders anybody.”

Which one do you think we fall under? It seems to be we are under “The few plunder the many” heading towards “Everybody plunder everybody”. There is a good chance this country will be bankrupt though before we get there. It seems there is not a concern in the world that politicians have where they don’t look at the American workers as human sacrifices to be offered up to they cause. The only problem is they will eventually run out of sacrifices. They will have killed the Country.

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