Britain Should Start "Easing" Government Stranglehold on the Economy

By Alex Epstein (Sunday Telegraph, March 8, 2009)

Responding to a crisis caused by the inflationary policies of central banks, the Bank of England has decided to generate still more inflation, just in a different form: “quantitative easing.” And so Britain, along with the rest of the world, continues to fight fire with petrol.

If Britain really wants to solve its financial crisis, why doesn’t it start “easing” the government stranglehold on the economy that caused this mess? What about stripping away housing restrictions that prevented supply from keeping up with demand? What about slashing the massive government spending that crowds out private ventures? What about ending the policy of propping up insolvent financial institutions, a policy that only freezes taxpayers’ capital?

And what about calling for an international free banking system and gold standard that would make a credit crisis like today’s impossible?

“Earth Hour” Symbolizes the Renunciation of Industrial Civilization

Washington, DC, March 26, 2009–On Saturday, March 28, cities around the world will turn off their lights to observe “Earth Hour.” Iconic landmarks from the Sydney Opera House to Manhattan’s skyscrapers will be darkened to encourage reduced energy use and signal a commitment to fighting climate change.

But according to a recently released op-ed by Dr. Keith Lockitch, resident fellow of the Ayn Rand Center for Individual Rights, “The symbolic message that Earth Hour sends is deceptive and destructive.”

“Cutting off our carbon emissions would be a global catastrophe. Carbon-based energy is a life-and-death necessity in today’s world. A truly massive reduction in carbon emissions means a massive reduction in our energy use and would cause significant harm.

“The lights of our cities and monuments are a symbol of human achievement, of what mankind has accomplished in rising from the cave to the skyscraper. Earth Hour presents the disturbing spectacle of people celebrating those lights being extinguished. Its call for people to renounce energy and to rejoice at darkened skyscrapers makes its real meaning unmistakably clear: Earth Hour symbolizes the renunciation of industrial civilization.”

Atlas Shrugged Tops Amazon’s Bestseller List

Washington, D.C., March 18, 2009 – Earlier this year Ayn Rand’s prophetic novel Atlas Shrugged was selling at triple the rate it sold at in the beginning of 2008. Now the novel is soaring to even greater heights, and its trade paperback edition is currently in first place in the Classics category on Amazon.com’s best-seller list for sales in the United States. The 50th anniversary mass-market paperback edition of Atlas Shrugged ranks as #2 and the trade paperback Centennial edition ranks as #3. For several weeks Atlas Shrugged has been holding steady in the top 10 best-sellers in the broader United States Literature and Fiction category, and as of the writing of this release, different editions of the novel stand at #3, #5 and #6 in Amazon’s ranking.

In a recent Wall Street Journal op-ed, Yaron Brook, executive director of the Ayn Rand Institute, explained the parallels between Atlas Shrugged and today’s events.

“In Atlas Shrugged, Rand tells the story of the U.S. economy crumbling under the weight of crushing government interventions and regulations. Meanwhile, blaming greed and the free market, Washington responds with more controls that only deepen the crisis. Sound familiar?”

Brook also stressed the importance today of the book’s often overlooked message that capitalism cannot be properly defended without morally defending profit and self-interest: “. . . only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism–and that as long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention–and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.”

Those interested in understanding the morality of capitalism can learn more in Ayn Rand’s The Virtue of Selfishness–which, at #12 in the Classics category, is setting records of its own.

—————-

Yaron Brook is executive director of the Ayn Rand Institute. He is a contributing editor of The Objective Standard and his articles have been featured in major publications such as The Wall Street Journal, Forbes.com, USA Today, the Houston Chronicle, Chicago Sun-Times, Providence Journal and the Orange County Register. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared on the new Fox Business Network, FOX News Channel, CNN, CNBC and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business, and foreign policy at college campuses, community groups and corporations across America and throughout the world.

To interview Dr. Brook or book him for your show, please contact media@aynrandcenter.org.

The Green Energy Fantasy

By Keith Lockitch

Will a green energy industry be an engine of economic growth? Many want us to think so, including our new President. Apparently a booming green economy with millions of new jobs is just around the corner. All we need is the right mix of government “incentives.”

These include a huge (de facto) tax on carbon emissions imposed through a cap-and-trade regulatory scheme, as well as huge government subsidies for “renewable,” carbon-free sources. The hope is that these government sticks and carrots will turn today’s pitiful “green energy” industry, which produces an insignificant fraction of American energy, into a source of abundant, affordable energy that can replace today’s fossil-fuel-dominated industry.

This view is a fantasy–one that could devastate America’s economy. The reality is that “green energy” is at best a sophisticated make-work program.

There is a reason why less than 2 percent of the world’s energy currently comes from “renewable” sources such as wind and solar–the very sources that are supposedly going to power the new green economy: despite billions of dollars in government subsidies, funding decades of research, they have not proven themselves to be practical sources of energy. Indeed, without government mandates forcing their adoption in most Western countries, their high cost would make them even less prevalent.

Consider that it takes about 1,000 wind turbines, occupying tens of thousands of acres, to produce as much electricity as just one medium-sized, coal-fired power plant. And that’s if the wind is blowing: the intermittency of wind wreaks havoc on electricity grids, which need a stable flow of power, thus requiring expensive, redundant backup capacity or an unbuilt, unproven “smart grid.”

Or consider the “promise” of solar. Two projects in development will cover 12.5 square miles of central California with solar cells in the hope of generating about 800 megawatts of power (as much as one large coal-fired plant). But that power output will only be achieved when the sun is shining brightly–around noon on sunny days; the actual output will be less than a third that amount. And the electricity will cost more than market price, even with the life-support of federal subsidies that keeps the solar industry going. The major factor driving the project is not the promise of abundant power but California’s state quota requiring 20 percent “renewable” electricity by 2010.

More than 81 percent of world energy comes from fossil fuels, and half of America’s electricity is generated by burning coal. Carbon sources are literally keeping us alive. There is no evidence that they have–or will soon have–a viable replacement in transportation fuel, and there is only one in electricity generation, nuclear, which “green energy” advocates also oppose.

We all saw the ripple effects last summer when gas prices shot above $4 per gallon, and higher transportation costs drove up prices of everything from plane fares to vegetables. If green policies cause a permanent, and likely far greater, hike in the cost of all forms of energy, what shockwaves would that send through our already badly damaged economy?

We don’t want to find out.

Regardless of one’s views on global warming–and there is ample scientific evidence to reject the claim that manmade carbon emissions are causing catastrophe–the fact is that kneecapping the fossil fuel industry while diverting tax dollars into expensive, impractical forms of energy will not be an economic boon, but an economic disaster.

We in developed countries take industrial-scale energy for granted and often fail to appreciate its crucial value to our lives–including its indispensable role in enabling us to deal with drought, storms, temperature extremes, and other climate challenges we are told to fear by global-warming alarmists.

If we want to restore economic growth and reduce our vulnerability to the elements, what we need is not “green energy” forced upon us by government coercion but real energy delivered on a free market.

Ayn Rand Center Launches New Blog: "Voices for Reason"

Washington, D.C., February 9, 2009—Today, the Ayn Rand Center for Individual Rights has launched its blog Voices for Reason, where its experts will provide daily commentary on breaking news from the perspective of Ayn Rand’s philosophy, Objectivism.

According to Debi Ghate, vice president of Academic programs, “Every weekday, we will post new commentary on current events on topics such as the financial crisis, environmentalism, foreign policy, free speech, and property rights. We will also explore the principled solutions Ayn Rand’s philosophy offers for tackling today’s political, economic and cultural problems.

“It is our goal to make Voices for Reason the go-to source for our unique perspective on the most important news of the day and the state of our culture. Our writers will share their insights, evaluating current events using Ayn Rand’s philosophy of reason, individualism, and laissez-faire capitalism as their guide.”

Voices for Reason will also carry announcements and updates from the Ayn Rand Center and the Ayn Rand Institute.

Pain of Recession Foretells Agony of Green Economy

Washington, D.C.–For the first time in 25 years, global demand for oil is expected to decline two years in a row. The decline is an effect of the global economic recession, which has dramatically reduced production and trade worldwide.
 
“This recession, with all its grim news of job loss and economic hardship, should be seen as a cautionary tale against coercive energy and climate policies,” said Keith Lockitch, fellow of the Ayn Rand Center for Individual Rights.
 
“Energy is the motive power that fuels production and trade. When economic activity slows, so does energy demand. But it goes the other way too. Imposing restrictions on the use of energy–as would occur under a system of carbon regulation–would choke off the economy’s fuel and shut down productive activity. The economic pain we’re all feeling in this recession is nothing compared to the pain we would feel if we adopt green policies that cut off fossil fuel consumption.
 
“For one thing, a recession is a temporary downturn; we can expect that once the economy picks up again, producers will increase their demand for energy toward renewed growth and prosperity. Also, nobody sets out to cause a recession. But if we voluntarily adopt green policies that force cutbacks in energy, the result would be a self-inflicted depression that would cause economic pain for as long as the policies are in place.
 
“Those who claim that we could avoid economic hardship by running a green economy on windmills and solar cells are seriously out of touch with reality. None of the so-called alternative energies that are supposedly going to power the ‘green energy revolution’ have proven themselves to be practical sources of energy. And this despite decades of research and billions of dollars in subsidies.

“Whatever you think about global warming–and there is ample evidence to reject the hysterical claim that we are facing any sort of planetary emergency–the reality is that a drastic reduction in carbon emissions means a reduction in the use of energy far greater than anything we are seeing right now, and the corresponding economic decline would make this recession seem like a party.”

The Right’s Pathetic Opposition to the Auto Bailout

Washington, D.C. – Republican opponents of the auto bailout are being accused of putting ideology ahead of the economy’s well-being. They are accused of having an ideological animus against bailouts.

“That criticism pays Republicans a compliment they don’t deserve,” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. “The Republican opposition to the auto bailout was not a matter of principle, but of pragmatic nit-picking.

“A principled opposition to the auto bailout would have denounced as immoral any attempt to use taxpayer money to prop up failing companies. It would have insisted that such attempts at central planning are destructive and un-American. It would have said that the government’s proper function is not to engineer the economy, but to protect individual rights and otherwise leave the economy free. That is not what the Republicans claimed.

“In his floor statement opposing the bill, leading Republican senator Mitch McConnell’s ‘stinging’ criticism consisted of finding that the bill ‘does not’ lay out ‘an effective strategy for securing the long-term viability of these companies,’ that it did not give the proposed ‘Car Czar’ enough power, and–the ultimate deal-killer for Republicans–the bill would have adjusted auto worker wage rates at ‘too slow’ a pace.

“The tragic fact is that Republicans do not regard central planning as objectionable–they merely disagree with the Democrats’ central plan.”

Since When Does America Allow Czars?

Washington, D.C. – “Our Founding Fathers must be turning over in their graves hearing Americans, of all people, discussing the need for a ‘car czar’ and an ‘energy czar,’” said Alex Epstein, an analyst at the Ayn Rand Center for Individual Rights.

“The whole purpose of the Declaration of Independence and the Constitution was to liberate individuals from czars, kings, and other dictators who violate individual rights and kill progress by shackling everyone to their ‘vision’ of how others should act.

“The new advocates of czarism claim that freedom has failed, and so we need some economic strongman to order everyone into line. But in fact, the energy and auto industries are suffering because they have been the victims of central planning and regulatory strangulation for decades. The solution to our problems is not to centralize government intervention from many czars to a few, but to remove it altogether. We must de-socialize the electric grids, liberate nuclear power, end bankrupting fuel economy mandates, and remove the many other government interventions that destroy freedom and progress.

“What we need is not a new set of czars, but freedom.”

Save the Big Three, Kill the U.S. Auto Market

Washington, D.C.– Advocates of a bailout for the Big Three claim that if we allow these giants to fail, it will destroy the U.S. auto industry. “In fact,” said Alex Epstein, an analyst at the Ayn Rand Institute, “it is the bailout, a veritable marriage between Detroit and Washington, that will destroy the U.S. auto industry.

“The Big Three have no right to demand that taxpayers risk money on them when private investors won’t. They do, however, have a right to demand the repeal of the policies that have helped destroy the auto industry. These include the labor laws that have forced them to acquiesce to economically catastrophic UAW demands, and fuel economy laws that have forced them to produce small cars that they can’t profit from given their labor costs. Indeed, the Big Three should have done this long ago–so that they would have been free to produce desirable cars at a profit in America, just as they do in scores of countries around the world.

“But instead of demanding their freedom and making a case to the market, the automakers are surrendering even more of their freedom to the government in exchange for taxpayer money. They have met Congress’s demand to commit to producing more small cars–even though it is small cars that have bankrupted the companies in the first place.

“By seeking handouts, not freedom, the auto industry is helping to destroy any remnant of a genuine auto market. In a real market, free companies would make money by producing the cars that free individuals judge best. In the new pseudo market, companies will make money by collecting taxpayer dollars in exchange for making whatever cars Washington tells them to. If this is what it means to save the U.S. auto industry, then the industry should die, and then real, freedom-seeking, profit-making companies might emerge.”

Don’t Bailout U.S. Automakers – Untie Them

Washington, D.C. –Politicians across the spectrum are calling for an auto bailout, arguing that we cannot allow such large companies to fail.

“If U.S. automakers cannot find a market fix for their problems, they must fail,” said Alex Epstein, an analyst at the Ayn Rand Center for Individual Rights. “They should go through bankruptcy proceedings so that creditors and owners can redeploy their assets as efficiently as possible.

“Every day these companies remain in existence in their current form, they are destroying shareholder wealth and wasting worker effort. To preserve these companies with a bailout would be obscenely unfair. Every dollar of a bailout would come at the expense of those who did nothing to cause the auto mess.

“There is one thing the government does owe the auto companies, however: freedom. For example, however the industry shakes out, automakers must be liberated from CAFE fuel economy laws that arbitrarily dictate what kind of cars they must sell, forcing them to sell millions of small cars that have no chance of profitability given consumer preferences. The auto industry must also be liberated from the Wagner Act, which gives unions the coercive negotiating power that railroaded the Big Three into their lavish, unprofitable wage and health plans. If a liberated Big Three can rejuvenate themselves, great; otherwise, a liberated next generation will be able to succeed where they failed.

“Economic freedom is what created the American automotive industry and made it the envy of the world. Economic freedom is the only thing that can bring it back.”

Mr. Epstein is an analyst at the Ayn Rand Center for Individual Rights, focusing on business issues. Mr. Epstein’s op-eds and letters to the editor have appeared in such publications as the Wall Street Journal, San Francisco Chronicle, Philadelphia Inquirer, Canada’s National Post, and the Washington Times. He is also a contributing writer for The Objective Standard, a quarterly journal of culture and politics. Mr. Epstein has been a guest on numerous nationally syndicated radio programs.

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