I like Peter Schiff

Peter Schiff has a nice little piece in the San Diego Union Tribune from October 10. It's so cynical that it must be true. He gives some great advice to the would be foreclosed individual:

If your mortgage does become the property of Uncle Sam, the growingly popular impulse to “just walk away” should be replaced by “just stay and stop paying.” No one will throw you out. After a few months, or years, of living payment free, you will get a call from a motivated government agent eager to adjust your loan into something affordable.

To bolster your bargaining position it will help to be able to claim poverty. As a result, if you have any savings, spend it soon, before they call. Buy a bigger TV, a new wardrobe, or better yet, take a vacation. After the hardship of spending all of your refi cash, you probably deserve it. If you have any guilt just remember, Washington argues that consumer spending is the best way to stimulate the economy. Living beyond your means is a patriotic duty.

New Family Blog

FYI, I've started a new blog to chronicle our family's adventures and travels. It's Prairie Dog Rustlers. I've put a post in regarding our trip to the Bisti Badlands, so check it out if you are interested. I'm going to try to get Alice and the kids to update it also.

AIG Bailout and what it costs me...

So the government in its wisdom has decided we need to bail out AIG to the tune of $85 billion. If you average that in over the approximately 300 million people in the country, it works out to a bill of ~$280 per person. So for a family of 6 like I have, I'm on the hook for $1680.

Of course if it was rolled out like this, there would be an uproar. Instead, we'll just let the Fed print more money. Now, instead of me paying directly, I'll do two things. I'll get fewer goods for my hard earned paycheck and I'll pass on more debt to my children.

Sigh.

A Look Backwards

I came across a reference to this speech by John F. Kennedy given to the New York Economic Club in 1962. While JFK is idolized by many on the center and left of today's electorate, his positions are anathema to what they do today. One could same the same of Reagan and the right of course...

I particularly enjoyed JFK's observations on the economy:

If we do not take action, those who have the most reason to be dissatisfied with our present rate of growth will be tempted to seek shortsighted and narrow solutions — to resist automation, to reduce the work week to 35 hours or even lower, to shut out imports, or to raise prices in a vain effort to obtain full capacity profits on under-capacity operations. But these are all self-defeating expedients which can only restrict the economy, not expand it.

Interesting that this saint of the left rails against the same type of "solution" that his descendants always propose.

He continues:

But the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand — to cut the fetters which hold back private spending. In the past, this could be done in part by the increased use of credit and monetary tools, but our balance of payments situation today places limits on our use of those tools for expansion. It could also be done by increasing federal expenditures more rapidly than necessary, but such a course would soon demoralize both the government and our economy. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency. And I shall say more on this in a moment. The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system — and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.

I'm not talking about a "quickie" or a temporary tax cut, which would be more appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a
drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incenitives [sic] for personal effort, investment, and risk-taking. In short, to increase demand and lift the economy, the federal government's most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures.

His prescription?

But you can understand that, under these circumstances, in general, that any new tax legislation enacted next year should meet the following three tests:
First, it should reduce the net taxes by a sufficiently early date and a sufficiently large amount to do the job required. Early action could give us extra leverage, added results, and important insurance against recession. Too large a tax cut, of course, could result in inflation and insufficient future revenues — but the greater danger is a tax cut too little, or too late, to be effective. Second, the new tax bill must increase private consumption, as well as investment. Consumers are still spending between 92 and 94 percent on their after-tax income, as they have every year since 1950. But that after-tax income could and should be greater, providing stronger markets for the products of American industry. When consumers purchase more goods, plants use more of their capacity, men are hired instead of laid-off, investment increases, and profits are high.

Corporate tax rates must also be cut to increase incentives and the availability of investment capital. The government has already taken major steps this year to reduce business tax liability and to stimulate the modernization, replacement, and expansion of our productive plant and equipment. We have done this through the 1962 investment tax credit and through the liberalization of depreciation allowances — two essential parts of our first step in tax revision — which amounted to a ten percent reduction in corporate income taxes worth 2.5 billion dollars. Now we need to increase consumer demand to make these measures fully effective — demand which will make more use of existing capacity and thus increase both profits and the incentive to invest. In fact, profits after taxes would be at least 15 percent higher today if we were operating at full employment.

Interesting that JFK was calling for larger profits and in effect condemning low profits. Compare this to the calls for higher taxes on "windfall profits". Now that very few companies actually make a profit, we need to punish those that do. Sigh.

Albuquerque's Finest

I'll comment on this later, but let me put the link up now. Watch the whole video for a disturbing look at how things are run in the Duke City.

New Candidate for Albuquerque Police Department Public Relations Officer

Man that cop knows how to steal a scene.

June Primary Preparation

So I finally did it. I've had the form sitting on my dresser for 5 months and haven't submitted it, but today I went down the the Sandoval County Bureau of Elections and registered as a Republican. My original party registration at 18 was Republican, but I changed to Libertarian shortly thereafter in disgust with the big-government policies of George H. W. Bush. I've generally voted libertarian since then, but see a real opportunity to do more than just thumb my nose at the system this June when I check the box for Ron Paul.

Yes, I know that he is not going to win. It's a shame that one of the key criteria people have in voting is whether or not they vote for a winner. You don't get a prize if you mark the right box. I'm actually excited to vote for the first time in a long time. It's refreshing to vote for someone who you actually want to be elected. It's also refreshing to see the grassroots activism that is shaking up the Republican Party.

Witness the fireworks in Nevada where party apparatchiks abruptly recessed the convention when it became apparent that RP supporters would be able to secure a majority of the national delegates. Throughout the primary process local groups supporting Paul have become active in their local parties. This lays the groundwork for shifting the base of the party in a direction more supportive of individual liberty, fiscal sanity and a moral foreign policy and away from the corrupt militarism of Bush and Cheney. It's nice to see a promise for productive change in the future.

The Compassion of Profits

The National Post has an interesting summary of a study of the responses to Hurricane Katrina. The gist of the study was that Wal Mart and other big box retailers provided the best immediate respose to the disaster. I don't necessarily enjoy shopping at Wal Mart, but I certainly am not one of these folks that condemns them at every opportunity. This has got to sting for Wal Mart's critics who contend that Wal Mart is an evil exploiter of the poor in America and worldwide.

Of particular interest to me was this comparison of government to enterprise:

Companies must, to survive, create economic value one way or another; government employees can increase their budgets and their personal power by destroying or wasting wealth, and most may do little else. Companies have price signals to guide their productive efforts; governments obfuscate those signal.

This point has always been ignored in my opinion. The idea that bureaucracies and governments act in some benevolent interest has always baffled me. Just because someone has a government title doesn't mean they will stop acting in their self interest. It only means that their actions have less accountability to the public. WalMart's success and FEMA's failure only serves to underscore this.