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?

Is Rand Relevant?

By Yaron Brook (The Wall Street Journal, March 14, 2009)

Ayn Rand died more than a quarter of a century ago, yet her name appears regularly in discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books, and her magnum opus, “Atlas Shrugged,” is selling at a faster rate today than at any time during its 51-year history.

There’s a reason. In “Atlas,” 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?

The novel’s eerily prophetic nature is no coincidence. “If you understand the dominant philosophy of a society,” Rand wrote elsewhere in “Capitalism: The Unknown Ideal,” “you can predict its course.” Economic crises and runaway government power grabs don’t just happen by themselves; they are the product of the philosophical ideas prevalent in a society–particularly its dominant moral ideas.

Why do we accept the budget-busting costs of a welfare state? Because it implements the moral ideal of self-sacrifice to the needy. Why do so few protest the endless regulatory burdens placed on businessmen? Because businessmen are pursuing their self-interest, which we have been taught is dangerous and immoral. Why did the government go on a crusade to promote “affordable housing,” which meant forcing banks to make loans to unqualified home buyers? Because we believe people need to be homeowners, whether or not they can afford to pay for houses.

The message is always the same: “Selfishness is evil; sacrifice for the needs of others is good.” But Rand said this message is wrong–selfishness, rather than being evil, is a virtue. By this she did not mean exploiting others à la Bernie Madoff. Selfishness–that is, concern with one’s genuine, long-range interest–she wrote, required a man to think, to produce, and to prosper by trading with others voluntarily to mutual benefit.

Rand also noted that only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism–and that so 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.

Rand offered us a way out–to fight for a morality of rational self-interest, and for capitalism, the system which is its expression. And that is the source of her relevance today.

Dr. Brook is president and executive director of the Ayn Rand Institute.

——

Here is the link to the Op-Ed in The Wall Street Journal:
http://online.wsj.com/article/SB123698976776126461.html
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Obama Whitewashes Iran

Obama Whitewashes Iran

By Elan Journo
 
In his address to the joint session of Congress, President Obama said that “We cannot shun the negotiating table” in conducting our foreign policy. He’s previously elaborated that “if countries like Iran are willing to unclench their fist, they will find an extended hand from us.” And Iran’s president Ahmedinijad tentatively welcomes “talks based on mutual respect and in a fair atmosphere.”
 
The shared idea, evidently, is that our conflict with Iran stems largely from a past failure to use so-called diplomacy to settle disputes. Alluding to George W. Bush’s supposedly tough policy, Obama has said he wants to restore “the same respect and partnership that America had with the Muslim world as recently as 20 or 30 years” ago.
 
Really? Thirty years ago this November, followers of Ayatollah Khomeini, who spearheaded Iran’s Islamic revolution, stormed the U.S. embassy in Teheran and took the personnel hostage. President Carter gently admonished Iran, but ruled out military retaliation. Instead his advisors spent months dreaming up schemes to bribe Iran into releasing the hostages–while bending over backward to enable the regime to save face. In the end Khomeini’s Islamist theocracy collected a handsome payoff for its aggression, and concluded, rightly, that if attacked, America would crumple to its knees.
 
Was Obama thinking of the 1980s? In April 1983 Iran’s jihadist proxies in Lebanon rammed a truck bomb into the U.S. Embassy in Beirut; the Reagan administration responded by doing nothing. Months later, encouraged by Washington’s inaction, Teheran issued a kill order–via its ambassador in Syria–to its allied groups in Beirut. Early one morning, an Islamist suicide bomber set off a massive explosion at the barracks where U.S. marines were sleeping and killed 241 of them.
 
Reagan spouted hot air about not backing down–and soon after ordered the U.S. troops to bug out. The jihadists wanted America out, they slaughtered our troops, and we caved in and gave them what they wanted.
 
Osama bin Laden, like jihadists in Iran and elsewhere, viewed our response to the Beirut bombings as further proof that their ideologically driven war was a viable cause. And so, inspired by Iranian aggression, the anti-American jihad kept ramping up.
 
Maybe Obama meant the fabled halcyon days of the 1990s, when President Clinton tried to mend fences with Iran?
 
In 1996 a team of jihadists–financed and trained by Teheran–blew up the Khobar Towers building in Saudi Arabia, killing 19 American servicemen. Clinton’s administration learned that Iran was behind the attacks. But Washington brushed aside any notion of retaliating against Iran, in order to facilitate a “reconciliation” with that murderous regime. In an eerie parallel with today, Iran expressed its openness to U.S. groveling–an opportunity Clinton seized.
 
So, Clinton attended a speech by Iran’s leader at the U.N.; the administration also permitted the sale of much-needed aircraft parts to Iran, among other sweeteners. Granted the cover of respectability, Iran was emboldened to continue fomenting Islamist aggression and avidly pursue its then-embryonic nuclear program.
 
Obama’s appeasing diplomacy re-enacts the disastrous policy of the past. Our policymakers evaded Iran’s character as an enemy, and by rewarding its aggression with bribes and conciliation, they encouraged a spiral of further attacks. 
 
No. Bush was no exception to this trend. After 9/11 his administration invited Iran–the leading sponsor of Islamist terrorism–to join an anti-terrorism coalition(!). Talk of an axis of evil was quickly abandoned, and Washington backed the European scheme to bribe Iran to halt its nuclear program. By late last year, there was talk of opening a U.S. Special Interests Section (a step down from an embassy) in Iran. Meanwhile Bush’s welfare mission in Iraq negated U.S. security and left Iran untouched to grow more powerful and resolute.
 
A genuinely new, rational policy toward Iran would turn away from the last 30 years and begin by facing up to Teheran’s ongoing proxy war against us.

 

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Sales of "Atlas Shrugged" Soar in the Face of Economic Crisis

Sales of “Atlas Shrugged” Soar in the Face of Economic Crisis

Washington, D.C., February 23, 2009–Sales of Ayn Rand’s “Atlas Shrugged” have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold.

“Americans are flocking to buy and read ‘Atlas Shrugged’ because there are uncanny similarities between the plot-line of the book and the events of our day” said Yaron Brook, Executive Director at the Ayn Rand Center for Individual Rights. “Americans are rightfully concerned about the economic crisis and government’s increasing intervention and attempts to control the economy. Ayn Rand understood and identified the deeper causes of the crisis we’re facing, and she offered, in ‘Atlas Shrugged,’ a principled and practical solution consistent with American values.”

—————-
 
Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. 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.

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Let Bankruptcy Courts Take the Wheel

General Motors, having sucked up $9.4 billion of taxpayer cash since Christmas, now desperately craves the remaining $4 billion authorized by President Bush for disbursement in February.

And come March, once that new money has disappeared down the Detroit drain hole, renewed pleas for aid will undoubtedly land on President Obama’s desk. Will the new chief executive emulate Bush, bowing to the anti-bankruptcy sentiment fomented by Rep. Barney Frank, chairman of the House Financial Services Committee, and others who advocate bailing out the Detroit automakers? Or will he let the bankruptcy courts take charge?

“There’s only one thing you can do in bankruptcy that you can’t do outside of bankruptcy–break your word, break your deals,” said Frank in a “60 Minutes” interview. “It allows you to say to the small businesses who have been catering lunches for you, ‘sorry, we’re not paying you.’ It allows you to go to the workers and say, ‘sorry, we’re not paying you.’”

Really? So bankruptcy is a get-out-of-jail-free card that allows treacherous companies to escape payment obligations they would otherwise have to honor? Sorry, Mr. Frank, but that’s a fantasy.

Plodding behemoths like General Motors are not even eligible for bankruptcy until they’ve become insolvent, which means they already can’t pay their bills and have no prospects for recovery. What bankruptcy does is treat the victims of those broken deals fairly–by preventing the bankrupt company from playing favorites among unpaid creditors, and by giving those creditors a big say in the distressed company’s future.

If an automaker can return to profitability by streamlining products, cutting staff, or closing plants, a bankruptcy judge can allow a reorganization. But a company that’s hopelessly floundering may have to be liquidated through an orderly sale of assets, with income paid to creditors according to their existing contract rights.

Yes, Mr. Frank, some creditors walk away from a bankruptcy empty-handed, or collect only pennies on each dollar of debt. Caterers, assembly-line workers, material suppliers, landlords–everyone who does business with a company in a market economy assumes a risk of nonpayment. But that needn’t spell disaster if creditors take steps in advance to confine the pain of bankruptcy within reasonable limits. Wise businessmen check on credit histories, set limits on outstanding balances, and register liens on hard assets. Even unions can protect their members, such as by having pension funds placed in trusts sheltered from bankruptcy proceedings.

Under bankruptcy, the risk of financial loss stays right where it belongs, on those who assumed the risk of non-payment by voluntarily dealing with a badly managed company. But in Barney Frank’s bailout universe, Congress can simply paper over the reality of business failure by shifting those losses to taxpayers, competitors, and consumers–in short, everyone who doesn’t deserve to pay.

This means that if GM’s caterers don’t get paid for the hors d’oeuvres served to CEO Rick Wagoner and his team of corporate bailout beggars, you and I must foot the bill. And if UAW members fear losing the staggeringly high wages and benefits they’ve extorted over decades using pro-union legal privileges, society must ride to their rescue.

But shifting the financial pain of business failure onto society at large is unjust. Most obviously, taxpayers shouldn’t be forced to prop up failing companies’ balance sheets. But other victims abound. Think of the profitable competitors with hard-earned credit standings, watching with justified resentment as badly managed rivals line up at the public trough.

Consumers, too, pay a price for bailouts. Bailed-out firms flood the market with inferior products–GM cars, anyone?–by continuing to own assets that would have gone to making more desirable products if market forces had ruled. Just picture today’s city streets if the horse and buggy industry had been bailed out a century ago.

Is General Motors to become a brain-dead patient in a Federal bailout ward, languishing on tax-funded life support beyond all hope of recovery? Not if Congress steps aside and lets the bankruptcy courts do justice through adjudication.

Big Government, not Big Media, Threatens Free Speech

Self-appointed consumer watchdogs–including Obama’s recent pick for FCC chair, Julius Genachowski–have long complained about media consolidation. So it was no surprise that when the FCC recently loosened restrictions barring companies from owning a newspaper and TV station in the same city, these critics went apoplectic and are now urging the House to follow the Senate in blocking the measure.

Media consolidation supposedly threatens free speech. A few conglomerates, critics warn, have seized control of our media outlets, enabling these companies to shove a single “corporate-friendly” perspective down our throats. As Senator Byron Dorgan put it, “The free flow of information in this country is not accommodated by having fewer and fewer voices determine what is out there. . . . You have five or six corporate interests that determine what Americans can see, hear, and read.”
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How to Stop the Next Madoff

Washington, D.C.–“Want to stop the next Madoff? Gut the SEC,” says Yaron Brook, executive director of the Ayn Rand Center for Individual Rights.

“Part of the reason Madoff’s misdeeds went undetected is that the Securities and Exchange Commission spends most of its time doing things the government has no business doing. The only legitimate job of a securities law enforcement division is to protect investors against the specific crimes of theft, fraud, and breach of contract.

“But the SEC plays a much different role. Its mandate is to attempt to make investing ‘safe’ by controlling every aspect of financial markets, from dictating the composition of mutual fund boards to mandating public release of executive compensation numbers that shareholders want kept private to determining when executives are allowed to sell stock–‘insider trade’–instead of leaving that to the discretion of a company’s owners.

“In pretending to guarantee to investors that their investments are sound, which is impossible, the SEC encourages the kind of blind group-think that characterized the Madoff investors. And with the SEC devoting itself to a sprawling array of elaborate witch-hunts, such as the ‘insider trading’ case against Mark Cuban, what time or attention does it have for real fraud?

“The answer–as is clear from the fact that a 29-point, 17-page report on Madoff, submitted in 1999, 2001, and 2005, entitled The World’s Largest Hedge Fund is a Fraud slipped through its cracks–is none.”

 

Obama’s Backward Economics

Washington, D.C.–“Barack Obama claims that Americans can only stave off economic disaster by trillions in government spending–which means trillions of dollars taxed or borrowed to finance government make-work programs,” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights.
 
“Obama-nomics couldn’t be more wrong.
 
“Prosperity requires that the government drastically cut government spending. That way, as much real capital as possible will remain in private hands, and be put to productive use by entrepreneurs to create valuable goods and services to sell at home and abroad. By taxing and inflating our wealth away, Obama will simply be creating more of the crushing debt that brought about the current crisis.”
 
“You don’t put out a fire with more gasoline. And you don’t end a recession by destroying capital.”

U.S. Should Help Crush Hamas

Washington, D.C. – In response to the Hamas bombardment of Israel, Washington must encourage and help Israel to annihilate that Islamist group, once and for all.

The failure to wipe out Hamas on previous occasions has encouraged Palestinian terror groups. It teaches Islamists that their terrorist war will be rewarded, that their quest to destroy Israel–and ultimately America–is achievable.

To put an end to Hamas’s brazen aggression, the jihadist group must be defeated. It is proper and necessary for America to aid and bolster Israel, its one true ally in the Middle East, in the face of a common enemy.

The nature of compromise…

“When men reduce their virtues to the approximate, then evil acquires the force of an absolute, when loyalty to an unyielding purpose is dropped by the virtuous, it’s picked up by scoundrels—and you get the indecent spectacle of a cringing, bargaining, traitorous good and a self-righteously uncompromising evil.”
-Ayn Rand

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