But How Would They Get Their Mail

Posted by Jason | Posted in Economics, Government | Posted on 24-10-2010


The other week I was debating a guy on Facebook, who was telling me how government has to provide certain services. I’m pretty sure it began because of the Tennessee fire fighters watching a house burn down. Of course as most of these arguments go, the Postal Service was brought up.

The argument he was making was that the private sector would not deliver mail because it is not profitable for them. I mentioned that I used to work at UPS whenever they first went public (this was my first IT job). I specifically remembered that UPS wanted to get into mail delivery, but of course I was told I was just flat wrong. Apparently, my own memory, the reality I was living in, is just propaganda.

I was told I was wrong because UPS and Fedex could not profitably deliver mail to certain neighborhoods. Yeah, it would work out for most New Yorkers, but how about the little people in Alaska (his term not mine)? While, I’m sure he felt good that he was looking out for the “little people”, is he really? I asked why a person in Iowa should have to subsidize mail for someone who chooses to live in Alaska. Of course that fell on deaf ears. He then proceed to tell me those who live east of Pittsburgh (where I’m from) would be lucky to get mail twice a week if left to the free market. As you can tell, now it is not whether the free market would deliver mail. It’s whether it would deliver it as frequently as some anti-free market thinker believes it should be. This puts to bed the idea that the free market couldn’t deliver mail profitably. It obviously could. It’s just a matter of how it would do it.

For the sake of argument, let’s say that some areas would only get mail once a week. Oh the horror. Bills and bulk mail only once a week. I’m in! We could even say once every two weeks. The point is this is completely arbitrary and whatever is profitable is what makes sense for everyone. If it’s unprofitable in the free market to deliver mail 6 days a week, then it’s even more unprofitable when ran by the government, which has no competition. As I’ve pointed out in my blog about profits, profit is what directs resources to the most efficient use. If UPS or Fedex could not deliver mail everyday to certain areas, it’s because those residents don’t need the mail six days a week at the cost it would take to get it there. There is nothing evil about this. These are choices that people make. They chose where they live. They choose what they can afford and want given their scarce resources.

Of course with the government in control of mail delivery, they just force those who make better choices, as far as mail delivery goes, to subsidize those who do not. Instead of a person who can be delivered to profitably being able to get the most out of their hard earned resources, say paying half of what they do for mail and using the other half to buy something else, they are forced to hand it over for someone else’s choice to live in areas where it costs more to deliver. That other 50% of their resources would have given them more for their hard work, and it would have created new production in the economy.

If someone wants to have mail delivered to some outskirt six days a week, they should pay for it. Why is this considered evil? As with most government arguments, anti-free market thinkers see everything as static. If mail isn’t delivered six days a week to every mailbox in the US, the world would collapse. This just isn’t so. If mail wasn’t delivered six days a week to some places, those people would adapt. If they really needed something, they’d pay more to have it delivered. If they didn’t need something right away, they’d let it come at regular intervals, which would be when enough mail has accumulated to justify the resources.

Also, this is the age of the internet. Why should most mail be delivered six days a week. Talk about locking yourself into an old idea and wasting resources. If the free market were allowed to deliver mail, it would have already innovated well beyond our current system. There is a good chance much of it would be paid for by advertisers since they are the ones filling most mailboxes. As far as personal mail goes, most people  use email, Facebook, text and that new innovation called the telephone to communicate. If something needs delivered urgently or someone purchases a product, they already typically use UPS and Fedex. Why? There’s a reason Dell computers don’t come through the post office. Ever see the first Ace Ventura?

There is nothing sacrosanct about mail delivery or the postal service. It is an old idea, whose time has passed. It is not economical, and actually hinders our progress. Private companies can provide everything people want as far as delivery services go. There is no service that is unprofitable that is at the same time a necessity. Profits only reflect the demand of consumers, and if there is no demand, there is no need. Unprofitable just means unwanted. I guess the best argument again the Postal Service, since it is unprofitable the way it is currently delivered, is no one wants it. Why should they be forced to have it?

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Another Example Of The FDA Driving Up Drug Prices

Posted by Jason | Posted in Economics, Health Care | Posted on 23-10-2010


While everyone complains about the rising cost of health care, most Americans look to the government for the solution. It’s sort of like asking your dealer to help you kick your drug habit. All one needs to do is look at the daily examples where the government steps in and distorts the free market. This intervention is what drives up prices, and here is one of the millions of examples of how the government does this.

ViroPharma Inc. said U.S. drug regulators declined to approve an expansion of the company’s manufacturing of the drug Cinryze, which treats a hereditary disease, as the agency asked for more information.

Cinryze was approved by the Food and Drug Administration in 2008 to treat hereditary angioedema, or HAE, a rare genetic disease involving potentially deadly swelling of various parts of the body.

ViroPharma, of Exton, Pa., has sought to more than double the supply of Cinryze. Earlier this year, the company applied for FDA clearance to commercialize Cinryze manufactured using a certain industrial-scale process that’s different from the current process.

ViroPharma had expected to receive FDA approval of the industrial-scale product by the end of this year, helping sales beginning in 2011.

But the company disclosed Friday that the FDA sent a so-called complete response letter, requesting additional details about the technical process and ViroPharma responses to “quality observations” from an FDA inspection.

“The questions raised in this complete response letter are answerable in a timely manner,” ViroPharma Chief Executive Vincent Milano said on a conference call with analysts. ViroPharma plans to schedule a meeting with FDA officials as soon as possible, but Mr. Milano said it was too soon to provide a more specific timeline for next steps.

Mr. Milano said ViroPharma would proceed with plans to begin manufacturing industrial-scale lots “at risk” in the first quarter of 2011, with the hope inventory will be ready for shipment soon after FDA approval.

ViroPharma’s currently approved manufacturing process alone yields up to 60,000 doses of Cinryze annually. The industrial-scale process would add another 100,000 doses.

Cinryze generated sales of about $75 million for the first half of 2010, or about 38% of total company revenue.

via FDA Rejects Expansion Of ViroPharma Drug – WSJ.com.

I would sure hate to be inflicted with this disease, because you just got screwed by the government. The company, in pursuit of more profits, wanted to more than double the supply. In case there are any bureaucrats on here, let’s revisit our trusty Supply and Demand curves again. What happens when supply is increased without the demand curve changing? Prices go down. So with this government action alone, prices will not be driven down, which is what would have been the result of the company’s actions.

No, instead our benevolent dictators decided those inflicted do not need the extra doses at a lower cost. I’m sure they think they have their reasons. After all, this red tape is there to protect us (or strangle us). So, now not only does this extra supply not make it to the market, but ViroPharma has had to have the extra cost of paying off the mafia in hopes of doing business. Sorry, I meant the government, not the mafia. Do you think they are going to just eat that extra cost? Of course not. It’s going to be passed on to the consumer.

This example doesn’t even take into account the original FDA process that drug manufacturers have to go through to bring their drugs to market. If we had no FDA, that supply curve would shift dramatically, lowering prices.

On top of that, who knows how many people are going to die now that the extra supply won’t make it to the market. Oh well. The government has to get its cut. If someone’s got to die, then someone’s got to die.

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Fannie and Freddie Tab Could Hit $363 Billion

Posted by Jason | Posted in Economics, Government | Posted on 21-10-2010


According to the Wall Street Journal, the tax payer may be looking at another $363 billion bailout, but this time just for Fannie and Freddie.

Fannie Mae and Freddie Mac’s regulator said Thursday that the companies could end up costing the government $363 billion as they absorb losses from bad mortgages.

Fannie Mae and Freddie Mac’s regulator said Thursday that the companies could end up costing the government $363 billion.

The Federal Housing Finance Agency ran stress tests under varying scenarios. The best case, with improving housing prices, saw the government-sponsored mortgage operators drawing a cumulative $221 billion in taxpayer money. If house prices drop, the bill would hit $363 billion.

“These are not predictions; the results reflect the potential effects of a limited set of hypothetical changes in house prices, a key variable driving credit losses for the enterprises,” said FHFA Acting Director Edward DeMarco.

To date, Fannie and Freddie have drawn $148 billion from the Treasury Department under the Preferred Stock Purchase Agreements program. The government took over the two enterprises in September 2008 as they faced a financial crunch.

via Fannie, Freddie Tab Could Hit $363 Billion – WSJ.com.

Why are tax payers on the hook? If these GSEs wanted to act like businesses with their profits and their million dollar pay packages for the executives, then they should be handled like the rest of the private sector, where you go bankrupt if you run your business into the ground. Of course, that won’t happen. The reason that won’t happen is the other banks, you know the ones that surround Obama, use Fannie and Freddie to sell off their crappy mortgages. They want their profits now, and they want the tax payer to take the long term risk. Add to that, the amount of money being made by those who are in government one day and running these GSEs the next, making millions of dollars a  year in the process, and it’s no wonder they won’t let these criminal institutions go under.

Does the media explain it to you that way? Of course not. They make it seem like something has to be done to save these GSEs, and they just pass the government propaganda along to the public. Jefferson was right. If I had to choose a government with no press or press with no government, I’d choose the latter. We currently have the former, so can we give the latter a shot now?

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We’ve moved… ah competition. I love it.

Posted by Jason | Posted in Technology | Posted on 21-10-2010


As many of you probably noticed, our website has been extremely slow. We decided Godaddy just wasn’t cutting it, so yesterday I went looking for a new hosting company. I found a new one that cost less and appears to be much faster. In the process of migrating, I ran into a snag, and quickly the support staff quickly pointed me in the right direction. Isn’t the free market great? You cannot hold consumers hostage to sub-par service. If you don’t deliver, someone else will.

Here’s to faster page delivery in the future! Cheers!

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California Would Make Drug Laws “Greatly Complicated”, Let’s Hope

Posted by Jason | Posted in Government | Posted on 17-10-2010


California has a initiative on the upcoming ballot to legalize marijuana, and it looks like it has the feds worried.

Attorney General Eric Holder said the Obama administration “strongly opposes” a California ballot measure to legalize marijuana, warning that federal drug-enforcement efforts would be “greatly complicated” if the measure passes.

I was under the impression the government was supposed to serve the people, and it would appear the people don’t want the federal government kidnapping their friends and neighbors because they have the wrong herb on them and then throwing them into rape rooms to be transformed into life long violent thugs. Of course, Obama, who bragged about his youthful indiscretions, doesn’t care if the average Joe’s kid is thrown in prison for doing the very thing the President has done.

Attorney General Eric Holder has said the administration would continue to enforce federal laws against marijuana if California passes a ballot initiative legalizing pot in next month’s election.

Basically, “We don’t care what the people say. It’s our decision what freedoms citizens have, and we decided they aren’t having this one.”

The Yes on 19 campaign backing the California measure said passage “would kick-start a national conversation about changing our country’s obviously failed marijuana prohibition policies.”

Joseph McNamara, a retired San Jose police chief and supporter of Proposition 19, said in response to Mr. Holder’s letter that efforts to block marijuana use “waste billions of dollars” and are the wrong priority “in the midst of a sagging economic recovery.”

A great point, but one obviously the Feds don’t give two turds about. Look at their budget.

The U.S. government will “vigorously enforce” federal laws against marijuana even if voters next month make California the first state to legalize pot, Attorney General Eric Holder says.

via Holder Says U.S. Will Enforce Marijuana Laws – WSJ.com.

We see what vigorously means. They have militarized the police to storm into suburban homes with women and children living there, killing dogs, shooting at will, terrorizing American citizens.

There is a reason the feds don’t want to give up the drug war. It’s all that is needed for tyranny. They can storm into your house at a moments notice, steal your property, take your children, lock you up, kill you, create gestapo like networks to gather info on you, and lastly enrich themselves. They can do all this whether you do drugs or not. It does not matter. They can claim probable cause, and who the hell is going to stick their necks out to vow for you. If they do, they’ll get the same treatment.

The drug war has nothing to do with the people and everything to do with tyranny, so let’s hope that California makes this tyranny “Greatly Complicated”.

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Another REASON Bill Maher Is An Idiot, Profits

Posted by Jason | Posted in Economics | Posted on 13-10-2010


Always wanting to hear the viewpoints of those who disagree with me, I always watch Bill Maher’s show when I get a chance. Typically, I end up asking myself the same question every time, “Why the hell am I even watching this?”  The reason I get so frustrated is Bill Maher states his opinions as if they have only reasoning behind them. You know, Bill Maher, the guy who says people that believe in God are idiots and don’t believe in reason. As most free market advocates would point out, Bill Maher too has a religion. That religion is statism, and it is based on faith, not reason.

Here is an example from this weeks round table discussion, which had a NY Times columnist, Andrew Ross Sorkin, conservative, S.E. Cup, and libertarian, P.J. O’Rourke (Am I using too many commas?) when discussing the Tennessee firemen standing watching a guy’s house burn down.

It’s crazy that we have for-profit healthcare. As crazy as it would be if we had for-profit fire departments or for-profit police departments. I didn’t expect people to take that and go the other way and make the fire departments for-profit. I’m saying none of them should be for-profit. – Bill Maher

I thought this was a t-ball for O’Rourke. Surely an intellectual libertarian like O’Rourke would hit this one out of the park. He’d explain how profits benefit society, they aren’t a bad word, and every government service should work “for-profit”. Not even close. O’Rourke seemed more like he had tourettes, shouting out stupid statements in an attempt to be funny. Unfortunately for him and his fellow libertarians, he wasn’t even funny, as the weird looks by the other panelists pointed out.

So what is it that Bill Maher doesn’t seem to get about profits? I mean, he’s obviously such a logical guy since he’s an atheist. He just goes where logic, proof and reasoning take him. Well, let’s lay out the proof and reasoning. Obviously, Bill Maher won’t be reading my little ole’ blog, so we’ll just do it for grins and giggles.

As I’ve stated in a previous post, the Tennessee fiasco had nothing to do with the free market. It was still government run, and the government could care less about profits. They don’t need no stinkin profits. They got the guns.

Next let’s analyze the common criticism of all lefties, profits. Aaaahhhh, profits! What is it about profits that are so evil, and why do liberals not get that profits are what drive our civilization forward?

Profits are nothing more than what results from trading one item for another freely, where both parties agree that the item they are getting is more profitable to them. For example, if I produce a bag full of apples in my back yard, but I can only eat a quarter of the bag, it would be profitable for me to trade them. Another person may have made flour, but can only eat so much bread. They would find it profitable to trade some flour for my apples. We both then can make apple pies. It was profitable to both of us.

As every economics book will tell you, this is how trade begins, but it gets very difficult to trade when you have to track down people all the time that want apples or flour. Instead, you trade them for money. Money is no different than the other commodity in the previous example, except it is accepted by everyone.  The reason I traded some apples for the flour is I more highly valued the flour than I did the apples. The other side valued the items the opposite way. This does not change when money is introduced. Say I sell my apples for a dollar each. I obviously value that dollar more than my apples. The person buying the apples values the apple more than his dollar. We both profited.

Now that we’ve laid out what profits are, what role do they play in an economy? Profits are what tell entrepreneurs what society wants and needs. They basically tell entrepreneurs, “Hey, we need more resources on this demand, and we are willing to reward you for it.” Let’s say I’m producing my apples and I decide to trade them. It cost’s me 25 cents to produce each apple. When I take it to the market, I find the going price is $1.  Obviously, that is a pretty good margin. Society is telling me that they demand more apples, and they are willing to reward me quite handsomely for it. Now, because I have unlimited wants, what am I going to do with a return like that? I am going to direct my resources at producing more apples. Other competitors will see those profits and start making apples in order to get in on the action. After all, society obviously wants more apples.

What happens next? Eventually more supply is brought on the market, which decreases what society is willing to pay for the apples. Unless something increases demand at the same rate as supply, prices will drop. If the cost to produce the apple remains the same, then the profits will decline as well. What is this decrease in profits telling the producers? It’s telling them that they are approaching the point where they are making enough of what society is demanding in regards to apples at the given price. Eventually, if they don’t change something and prices continue to fall, profits will work their way to zero and then turn into losses. What is the loss telling the producers? It’s telling the producers that the given product is being produced too much at the given price. Society would rather he direct his resources elsewhere to provide them with what they value more than apples.

The entrepreneur then does one of two things. They will either try to lower their costs, which will increase their profits and give them more market share, or they will move into another product or service, where the profits are larger, which tells them people want resources directed there.

If they find a way to lower their costs, say by inventing a machine or improving their production techniques, they will lower the cost of production. This will drive out competitors who aren’t as productive, because they won’t be able to lower prices as low as our innovative entrepreneur without taking losses. They will then leave and go into a more profitable business given their resources. The profits or the lack their of, told this business that society doesn’t want what it’s offering at this price and instead would prefer them to use their resources where they can be more efficient than they were at producing apples. Society is basically saying, “Look if you want us to reward you, you have to produce something else.” Now think about this, and you’ll see how this creates prosperity. One entrepreneur innovates, which allows him to lower price and maintain profits. The other cannot, so slowly the innovators takes more market share. Society still gets the apples they want at the given price, but as the less efficient apple producer moves into producing something else, they are now getting apples plus the new product or service. If price was driven down to 25 cents, which forces one producer to lower production cost and another out of the production of apples, society now is then getting one apple plus 75 cents of another product for the same dollar they originally spent on apples.

Now, if they can’t lower cost, they will not be able to continue producing the same level of apples. This is a good thing. Society is telling them, “We don’t need more apples given the cost to produce them.”  They will instead direct resources to where society wants as our less competitive producer above had to do. They may continue to produce apples but only to the point of it being profitable. Their excess resources will be diverted to a more profitable venture. Society is telling this entrepreneur, “Look, we want apples, but we don’t want all these apples given the cost. Please give us other products.”

I’m getting a little long here, and hopefully not being too confusing, but now ask yourself how does this take place without profits, which means the government takes it over.  The government has no competition to drive down price or encourage innovation. It has nothing to tell it that it is using it’s resources efficiently, or to tell it what society really wants at a given price. This is what leads to the proverbial $600 toilet seat and Big Dig boondoggles.

Now, as one pro-government advocate told me, resources are never really wasted. Really? What does this $600 toilet seat really mean? Remember our example of apples and flour. $600 would constitute $600 worth of production, in our example apples. That $600 of production, what many people are given for their entire week of production (their paycheck), is exchanged for a toilet seat instead of being exchange for $10 worth of production, which is more along the lines of what it should cost. Is this wasteful? Of course. It would be like me trading 600 apples (if apples are $1/each) for a toilet seat that should only cost 10 apples. Instead of being able to buy other products totaling $590 in production, meaning another $590 in production took place, I only got $10 in production.  Does this sound like resources are being put to their best use to increase the amount of production in an economy? It is production that makes prosperity, and it is PROFITS that direct producers to produce what society wants, what society deems best for society, not our corrupt overlords.

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John Lennon debunks Malthus’s centuries-old myth in seconds

Posted by Jason | Posted in Economics, Technology | Posted on 10-10-2010


Thanks to some great friends on Facebook, I came across this video of John Lennon addressing overpopulation, which was posted as a tribute to Lennon on his 70th birthday on the LewRockwell.com Blog.

What I love is Lennon’s simplicity of explaining this. I don’t know whether he is familiar with the originator of this idea, Thomas Malthus, or not, but he pretty much explained why Malthus and modern day environmental disciples were wrong about over population.

In the late 1700s, Thomas Malthus published Essays on the Principles of Population, in which he argued that population would grow exponentially resulting in food supplies not being able to sustain it. What Malthus and modern day environuts miss is the human minds ability innovate.

When free markets are not hindered by government dictates, the economics of scarcity spurs the entrepreneur to address these concerns with solutions such as better farming techniques in Malthus’s day or living on the moon as Lennon so nonchalantly puts it. With that little quip, Lennon highlights the entire problem with Malthus’s thesis. Technological advances push back the day of Malthus’s catastrophe.

Because current generations cannot anticipate what future innovations will come, it would be completely immoral for them to decide they must do something now in the current generation to prevent population growth of the future.

The whole premise of this catastrophe prescribes government action as the solution, which would be the exact opposite of what you would want. What you would want to avoid this catastrophe is a free market, where capitalistic profits could direct resources to the most pressing needs.

Let’s say we are approaching the the supposed malthusian catastrophe. As this approaches, what would happen? The demand for food or whatever resource we are talking about would steadily out pace supply. What happens when demand rises while supplies decrease or stay the same? Prices climb. Now, there are two things that would cause the price to rise. 1) The amount of production taking place isn’t sufficient. The total cost of production is unchanged, but the amount of production isn’t keeping up with the growing demand. In this case, profits would rise. As profits rise, competitors would enter the food production business, bringing more food to market. The other scenario 2) is that production is taking place at the highest level with the given resources and profits have shrank to the point of leaving only the most efficient producers. Now, this sounds horrible, but what way could an intelligent entrepreneur increase his profits? He could innovate. He could develop a new way of producing food that would lower his cost of production. Keep in mind that some outsider could produce this innovation as well in hopes of reaping profits when he sells his idea to food producers.

So what happens when this new cost lowering innovation is put into place? Profits rise! What happens when profits rise? More product is produced either by the current producer or competitors looking to get in on the action. All result in more food for the masses, pushing Malthus’s catastrophe further out into the future when another free market entrepreneur can save mankind.

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Go Figure. Texting Ban Having Opposite Effect.

Posted by Jason | Posted in Government | Posted on 09-10-2010


A recent study came out saying that bans on texting while driving have actually increased the number of accidents in 3 out of 4 of the states that put the bans in place. Is this shocking to anyone who realizes the government cannot regulate human behavior with one size fits all solutions? It shouldn’t be. Some people can handle texting while driving and some can’t. As humans we are all different, and the government has no business regulating our behavior. As with all human behavior, the free market can handle the incentives much better than government can. If people want to text, they can, but if they cause an accident while texting, they will be liable for the accident. This is nothing new. If you are negligent, you are liable for the property you destroy, including the destroying another life.

Of course liberals and conservatives, who want to regulate every aspect of human behavior to the point of making us all robots, have plenty of reasoning behind their belief that a ban on texting will save lives. They have the logic of a 5th grader. The problem is we don’t live in a static world. People don’t just stop texting because of  the dictates of some nanny wannabe politician. Instead, as I believe is the case here, they still text, but they are engaging in more risky behavior now, because they are trying to hide it. They are trying to keep their phones out of site from the prying eyes of the po po. This of course causes them to look down instead of up and out the front window, which obviously can lead to more accidents.

Why do people ignore the ban? Because there is nothing inherently evil with texting while driving. It’s not like we are banning slavery, which is obviously evil and a violation of an individual’s liberty and property. Texting can be a very good an productive activity in a car. If you are running late, you can text something that you are running late. Just think about the absurdity. Is there an exclusion if you are sitting in traffic at a stand still? I am guessing there isn’t, although honestly I’m not going to spend my time looking. What if there is another person in the car who is looking out the window with you and can alert you that the guy in front of you is breaking (My wife does this when I’m not texting. It’s annoying).

One size fits all laws never take in consideration the many factors that are involved in every human activity. Instead, government, in it’s attempt to turn us into robots, drives perfectly fine human behavior underground. They turn us all into outlaws.

Well, at least a study has come out and showed us the error of our ways. I’m sure this ban will be repealed. Right?

LaHood Weighs Urging Ban on All Driver Phone Use in Cars

Eh boy. Go figure. The problem isn’t the ban. The problem is it needs to be federal law. It needs to be one size fits all across 300 million people.

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Geithner Wants Americans To Pay More At The Store

Posted by Jason | Posted in Economics, Foreign Policy | Posted on 07-10-2010


Timothy is apparently asking China to make it even harder on Americans. He’s calling on China to increase the value of the Yaun, which would make Chinese products more expensive for Americans. Doesn’t he realize this is what has helped Americans live the standard of living they currently do. With the Fed destroying the value of the dollar, if China increases the value of their currency, working class and poor Americans will be in for a shock when they hit the local Walmart.

WASHINGTON—The U.S. and China stepped up their confrontation over the valuation of Beijing’s currency, prompted by fears that competing foreign-exchange policies could hamper the global economic recovery.

First, let’s quit worrying about the so called global recovery and instead worry about what’s right for the American public. If China wants to devalue their currency, it only helps Americans. Who is Geithner really worrying about?

In a surprisingly blunt speech, U.S. Treasury Secretary Timothy Geithner took China to task for maintaining what the U.S. considers a deliberately undervalued exchange rate aimed at helping China’s export industries.

By undervaluing their exchange, Americans can get products for less than they would otherwise. With the savings, Americans can acquire even more products that they would have otherwise been unable to afford had China not undervalued their exchange rate. If anyone should be complaining about this, it should be the Chinese workers as their buying power is being eaten away.

“When large economies with undervalued exchange rates act to keep the currency from appreciating, that encourages other countries to do the same,” said Mr. Geithner, using language that referred directly to China, in an address at the Brookings Institution, a Washington think tank. “This sets off a dangerous dynamic” as nations compete to keep their currencies undervalued.

It encourages other countries to do the same because their leaders are as intelligent as a bunch of monkeys. It sounds more like the old monkey see monkey do than it sounds like intelligent economic policy. Geithner is basically saying “Look China is taxing their citizens wealth away with inflation. We better do the same thing.” Of course, the Fed does plenty of this already.

In Brussels, before Mr. Geithner spoke, Chinese Premier Wen Jiabao asked European Union business and political leaders to tone down their attacks on Beijing. “If the yuan is not stable, it will bring disaster to China and the world,” he said. “If we increase the yuan by 20% or 40%, as some people are calling for, many of our factories will shut down and society will be in turmoil.”

What this basically means is if China did as the other idiotic leaders called on them to do, prices of Chinese goods would go up by 20% to 40%. How’s that inflation sound to you? Because Americans would buy less of their goods, Chinese workers would also be harmed with layoffs.

The broadsides came as leaders prepare to gather in Washington for meetings at the International Monetary Fund, followed by two sessions of the Group of 20 industrialized and developing nations. The increasingly exasperated rhetoric suggests participants are losing patience with a multilateral approach to currency issues.

Indeed, Mr. Geithner warned China that the U.S. support for a bigger role for Beijing in the IMF depends on Beijing showing “more progress” in pursuing “market-oriented exchange-rate policies.” Fred Bergsten, director of the Peterson Institute for International Economics said that U.S. was saying to Beijing, “We’ll only support your game if you play by the rules.”

Geithner playing the ugly American. Go figure. Unfortunately, China holds all the cards and they know it. Wait it gets better.

To the U.S., China is pursuing a mercantilist strategy that favors its industries at the expense of competitors in the U.S., Europe and Asia. China sees itself as pursuing its national interest and a strategy that has turned the country from an impoverished also-ran into a powerhouse.

You got that. China is mercantilist, but the US is what? We put tariffs on steel why? We put tariffs on sugar why? We subsidize our farmers why? You get the point.

Mr. Geithner hasn’t named a target for Chinese currency appreciation that the U.S. would find satisfactory. But he has often spoken favorably of the 20% rise in the yuan from 2006 to 2008.

Now could you imagine having a 20% rise in the dollar? Aren’t we always told deflation is so horrible. A little inflation is good, but you never want deflation. Well what the hell do they think a 20% rise in the yaun valuation will bring for the Chinese?

No worries though. Geithner has a solution. Cartels.

In his speech, Mr. Geithner suggested countries with undervalued currencies could cooperate on kind of joint currency appreciation. In that way, China need not worry that Asian competitors such as Malaysia and Vietnam will gain an edge if the yuan rises in value.

U.S., China Deepen Spat Over Yuan – WSJ.com.

I thought Cartels were bad. Oh, I forgot. Many things that are bad for individuals and private business are righteous when the government does them.

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Does The Tennessee Fire Really Prove Libertarians and Free Markets Are Wrong?

Posted by Jason | Posted in Government | Posted on 06-10-2010


Having seen a complete smearing of the free market and libertarianism because of this Tennessee fire fiasco, I figured I should chime in with my four cents (two cents just aren’t what they once were thanks to the Fed). The argument goes that because the government charged a $75/year fee for fire protection and then stood idly by while someone’s house burnt to the ground, that this somehow was a complete destruction of all libertarian and free market thought. Well, let’s break down what happened and see if the free market is to blame or the government.

First let’s look at the actual act. The house caught on fire, and then the fire fighters drive to the fire and disgustingly just stand by watching as it burns to the ground. Is this the fault of the free market? These guys after all are government employees. It does not matter if they are volunteers or not, they are still government employees. If I intern for a company for free, I’m still considered an employee of that company during my intern.

So if the people who stood idly by while the house needlessly burnt to the ground were all government employees, how could this be misconstrued as an example of the free market or libertarian though? Well, it’s because the home owner was supposed to pay a $75 fee to the neighboring government for fire services and did not. Does that act of paying a fee to the government immediately make the government a free market player? Are competitors allowed to freely enter the market? What about inside the borders where fire services are included in the property tax? Can people choose to withhold their taxes and pick their own fire service? Of course not. Every aspect of this was government from the borders created, the laws that dictated the fire fighters could not put the fire out, and the fire fighters who twiddled their thumbs while a man’s home burned.

Was there any aspect of the free market involved? Well, there was the insurance company. You know, those evil bastards who look for any excuse to not pay your claim. I bet they used this whole not paying $75 to refuse this poor family’s claim.

The family has coverage with Farm Bureau Insurance through local agent, Josh Simmons, who raced to the scene of the fire as soon as he learned about it. Simmons says the insurance company would not refuse or reduce payouts on the fire loss just because the fee has not been paid.

Simmons said he knows of one other time this has happened. He said the insurance policy has a provision for a reduction in payouts if a fire protection service has not been subscribed but that the insurer has not enforced that in these situations.

Tennessee Tragedy: Family Had No Fire Service But Had Some Insurance.

Hmmm, so the one free market actor in this situation actually was the one that stepped up in the family’s time of need. Now I’m sure Josh Simmons, the agent, really wanted to help, being a neighbor and all, but why would the insurance company do this? I thought they only cared about profits, and they’d look for any reason to screw the home owner in pursuit of those profits. Well, the former is much more true than the latter.

Companies do only care about profits. Profits after all are societies reward to companies for delivering what society wants. Now, the question is what is more profitable to the insurance company? Would it be more profitable for them to screw the home owner? Maybe if they existed in a vacuum, but they don’t. In the real world, it’s more profitable for them to do the right thing. How would it look to the world if the news said, “In addition to the government standing by laughing at the home owner while his house burned, the insurance company piled on by refusing his claim. According to the insurance company, there is a clause in his contract that if he doesn’t pay his $75 for fire service, they are not liable for the claim.” Of course it would look bad, and many other customers of the insurance company would  go to a competitor. A competitor would say, “Look what Farm Bureau Insurance did to that poor home owner in Tennessee. You want to do business with us, not them. We care.”

Instead the insurance company did the right thing and will pay the full claim. Now they have a raving customer who will tell everyone that in this whole horrendous situation, the insurance company was the only one to do the right thing. As I like to say, “They stepped up in a real big way.” Other current customers of Farm Bureau Insurance will feel reassured they made the right decision in picking Farm Bureau Insurance, and competitors’ customers might even switch knowing that Farm Bureau was there for their client. All of this will increase profits or as I said earlier, will be rewarded by society.

Now on the other hand, will government be punished? They may get a lawsuit brought against them, but I doubt that will go far. They will still be there. They will still be the only game in town.

So while the media froths at the mouth denouncing libertarians and free markets, just remember, in this whole government created nightmare, the free market shined through. The private insurance company stepped up in the pursuit of profits (that is a good thing), and the libertarian and free market thinkers were still right.

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