Let Them Fail

An Ayn Rand Center op-ed:

Let Them Fail
By Amit Ghate

Everywhere today politicians are blaring that they must save America’s financial institutions, alleging catastrophic risk to the economy were any to fail. Paulson and the entire Bush administration, in a discernible panic, are now pouring $700 billion into the big banks, having already bailed out AIG, Fannie Mae, Freddie Mac, and Bear Stearns to the tune of $300 billion.

Capitalism doesn’t work, they declare, but fortunately the government is here to rescue us.

Sadly, they have it all backwards. The credit crisis is just more evidence that whenever the government supplants the free market and attempts to “manage,” i.e., control, the economy--disaster ensues.

Overlooked here is that in a free market business failures are not just normal, they’re crucial for the best products and ideas to emerge. Most restaurants fail in their first three years because customers have other preferences. Many mom-and-pop grocers go out of business because Walmart offers better selection and lower prices. Even whole industries--think typewriters, 8-tracks and horses and buggies--vanish because new inventions and competitors arise.

None of these failures are a problem, nor do they threaten the system. On the contrary, they are an inherent part of the progress which only capitalism makes possible.

So why would failures in the financial industry be any different?

Typically, the answer given is also the one used to rationalize the creation of the Federal Reserve, the FDIC, the FSLIC and any number of other government agencies and regulations intended to “manage” the banking system: financial firms carry systemic risks for the nation’s economy and therefore can’t be allowed to fail. As evidence, bank failures from 1870 to 1913 (pre-Fed) are cited, followed by the assertion that their number was simply “unacceptable.”

But every business forms part of the economic system and thus has “systemic” impact. If Microsoft were to fail, thousands of suppliers, customers, and workers would be affected, as would their customers, suppliers, workers, etc. Yet this would be no reason to bail them out. We know that new businesses would arise to fill the void, better for having learned from Microsoft’s mistakes.

And as a historical fact, the U.S. economy during the period 1870 to 1913 grew significantly faster than it did after the Fed was established. True, there were many bank failures in this period, but there were also many business failures in general: banks were actually less likely to fail than were other businesses. The number of bank failures speaks to the dynamism of the period, not to anything fragile in the financial system. Precisely because market mechanisms were permitted to work, depositors, creditors and counterparties all kept a close eye on banks, monitoring leverage and withdrawing funds at the first sign of problems.

When the free market functions--and failure is allowed--people become viscerally aware of risk, with the result that they voluntarily assume less of it.

Conversely, when the government tries to “manage” the economy--when the consequences of risky behavior are shifted from self-interested actors to taxpayers, as was done by the creation of the Fed and its various insurance programs, or when weak financial firms are propped up rather than being allowed to fail--people take on risks they would not otherwise. Banks are less careful, depositors no longer evaluate their institutions, and risks are concealed and amplified until they become catastrophic.

So pre-Fed we had runs on banks, some undoubtedly severe--but with the Fed we’ve had the Great Depression, the S&L meltdown and now perhaps the greatest worldwide credit crisis ever.

An analogy may be helpful here. Historically certain types of forests naturally experienced frequent, but small, wildfires. Because their frequency kept deadwood at a minimum, the fires never grew into large conflagrations. However, when government forestry services instituted fire suppression policies, they eliminated most small fires, but caused deadwood and other fuel to accumulate. When at last a fire came that could not be suppressed, it grew into a devastating inferno.

Learning from their errors, forestry services have abandoned fire suppression policies.

It’s time for our government to do likewise. First, by immediately abandoning its bailout binge, and then by phasing out all of the economic controls by which it attempts to “manage” the financial system--from the FDIC to the Federal Reserve itself. Nothing less can reestablish the freedom essential for a sound and vibrant economy.


Amit Ghate is a guest writer for the Ayn Rand Center for Individual Rights. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes the philosophy of Ayn Rand, author of “Atlas Shrugged” and “The Fountainhead.”

Church and State: A Marriage Not Made in Heaven

An Ayn Rand Center press release:

Church and State: A Marriage Not Made in Heaven
October 31, 2008

Washington, D.C.-- Californians will soon have the chance to vote on Proposition 8, which would define marriage in the state constitution as being only between a man and a woman, denying marriage to same-sex couples. The proposition is heavily supported by the religious community. Said one religious leader who supports the measure, “We believe it is a religious issue as well as a political issue. That’s where we feel the Church must have a word.”

According to Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “Regardless of how one thinks ‘marriage’ should be defined, there’s a much graver issue at stake: this is a flagrant attempt to inject religion into politics.

“As our Founders understood, religion is properly a private matter--not a legitimate basis for government action. The government’s only role is to protect our rights to life, liberty, property, and the pursuit of happiness. Under our secular political system, individuals are free to hold any religious views they wish, but they cannot impose their views on the rest of us. That is the meaning of freedom of religion.

“Once we accept the view that the ‘Church must have a word’ in the political sphere, we are accepting a principle completely opposed to freedom. If gay marriage can be barred because, as one supporter of Prop. 8 put it, ‘I don’t think God has ordained it,’ then why, for instance, can’t speech that similarly offends religionists also be banned? Indeed, this is the very principle that motivates the religious right’s crusade against broadcast ‘indecency’--and the brutal principle that recently led the Afghani government to sentence a journalism student to 20 years in prison for blasphemy.

“The separation of church and state is a cornerstone of liberty. It protects our right to live by our own judgment, free from the dictates of ministers and mullahs. To protect that right, we should oppose any attempt to bring religion into politics.”

Been there, done that.

Some people are just so behind the curve:

A Computer Program That is Pure Evil

A group of scientists is building the world’s most evil computer program. This isn't a B-movie setup: A team at Rensselaer Institute’s AI & Reasoning Lab is bringing personified evil to virtual life in the hope that they'll unlock the secrets of human morality.

Well, obviously none of these people have read Ayn Rand.

Um, hello? You want the secrets of human morality? Have you tried reading Atlas Shrugged? The Virtue of Selfishness?

Connecting the Disconnect

An exception to the disconnect between the American people on the one hand - who are vehemently opposed to the bailout, and the government and the media on the other - who are trying to pretend that the American people and their opposition don't exist, and even if they do, if people would just do as they're told and let the government fix everything it will all be just fine - no, really! - is this excellent piece in Friday's Wall Street Journal:

Another Bubble Bursts

EXCERPTS:

Testifying before Congress yesterday, Mr. Greenspan pinned the crisis on mortgage securitizers, risk modelers and lending institutions, thus contributing to the Washington narrative that government had little to do with it. The Fed's monetary policy apparently gets a pass. The media and Members of Congress will use Mr. Greenspan's testimony to impugn the very free market principles that the former Ayn Rand protégé has spent his life promoting. It was a painful spectacle to watch.

As for the second bubble, this one began in August 2007 with the onset of the credit panic. This is Ben Bernanke's creation. The Fed chose to confront the credit crunch as if it were mainly a problem of too little liquidity, not fear of insolvency. To that end it flooded the economy with money, while taking short-term interest rates down to 2% from 5.25% in seven months. The panic only got worse, and this September's stampede finally led the Treasury and Fed to address the solvency problem by supplying public capital and numerous guarantees to the financial system.

. . .

The tragedy of the second bubble is that it has left the economy in a weaker position to ride out the housing slump and credit panic. The American consumer has been whipsawed with $4 dollar gas and food inflation, while entire industries have been put on the edge of bankruptcy. Detroit's auto makers have spent the last year taking down their truck and SUV assembly lines while gearing up to make hybrids and electric cars, even as their cash flow has been ravaged. Their new investments are based on the expectation that oil will stay high permanently, but will the market for hybrids exist if oil is $50 a barrel?

As Congress plumbs the causes of our current mess, the main one is hiding in plain sight: Reckless monetary policy that did so much to create the credit mania and then compounded the felony with a commodity bubble and run on the dollar whose damage is now becoming apparent. The American people intuitively understand what's been done to them, which is why they are so angry. If the next President ignores the monetary roots of our troubles, he is courting the same fate as George W. Bush.

(Emphases mine.)

More on Greenspan

Skimming through the comments to a blog post about Greenspan at the NY Times - mostly the usual rabidly anti-Capitalist emotionalism from people who are completely clueless about economics - I came across the following:

Missing from the analysis is that the government with ideologues of every stripe, whether libertarian Greenspan or the most oversight-averse (for Fannie Mae and Freddie Mac) Democrats, would be far worse arbiters and managers of risk.

After creating a $53 trillion unfunded liability and a $10 trillion deficit that will bankrupt this nation, launching an immoral and irrational bailout (opposed by over 100 economists from Ivy League schools), starting the Iraq War, severely undermining individual and civil liberties by voting in domestic surveillance and trying to foist on us the Real ID, and not to mention, injecting toxic loans into the financial system backed and promoted by government sponsored enterprises, lets not jump to the conclusion that government regulations subject to the whims of vote-pandering or special-interest owned or even well-intentioned (and hell-bound) politicians would be better. We cannot trust that free people will not indulge in irrational exuberance. But we do have a right to hope that the government won’t be the prime initiator and major cause of the problem.

Nothing that the private sector has ever done to the people of this country (even leaving aside the fact that it has created 100% of our wealth) can compare to the horrors of centralized power and decision-making.

— Filby

Alan Greenspan

Last night, after reading - with growing incredulity - some of the news stories about Greenspan's testimony before Congress yesterday, I wrote a draft of a blog post about it which I ultimately became dissatisfied with. Today I am relieved to see that there is no end of Objectivists blogging about this, and so, rather than posting something of mine which I regard as inadequate, I will simply refer you to Gus Van Horn, whose effort on the subject may be even more strongly worded than what I came up with last night. It is entitled, simply,

Alan Greenspan, Coward and Traitor

Hat tip to NoodleFood, where Diana Hsieh put it quite nicely when she wrote

Gun Van Horn gives Alan Greenspan a much-needed ass-kicking for his repudiation of free markets.

Yes, indeedy, many Objectivists, myself included, are extremely unhappy - to put it mildly - about Mr. Greenspan, who is still publicly associated with Capitalism and Ayn Rand, even though his actions tend to reflect and foster the opposite.

Thus, when Alan Greenspan falters, Capitalism and Rand get the blame. As Hsieh put it:

By continuing to associate himself with the free market ideas of his former mentor, even while thoroughly contradicting them in word and deed as Fed Chairman, and then publicly repudiating them based on a government-created financial crisis, the man has done more damage to Objectivism than Barbara and Nathaniel Branden.

Here's the Ayn Rand Center press release:

Greenspan Has No Free Market Philosophy
October 24, 2008

Washington, D.C. --Opponents of the free market are giddy at Alan Greenspan's declaration that the financial crisis has exposed a "flaw" in his "free market ideology." Greenspan says he is "in a state of shocked disbelief" because he "looked to the self-interest of lending institutions to protect shareholder's equity"--and it didn't.

But according to Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, "any belief Greenspan ever had in truly free markets was abandoned long ago. While Greenspan long ago wrote in favor of a truly free market in banking, including the gold standard that such markets always adopt, he then proceeded to work for two decades as leader and chief advocate of the Federal Reserve, which continually inflates the money supply and manipulates interest rates. Advocates of free banking understand that when the government inflates the currency, it artificially increases prices and causes booms in certain sectors of the economy, followed by inevitable busts. But not only did Greenspan lead the inflation behind the .com bubble and the real estate boom, he blamed the market for their treacherous collapses. Greenspan should have recognized that what he wrote in 1966 of the boom preceding the 1929 crash applied here: 'The excess credit which the Fed pumped into the economy spilled over into the stock market--triggering a fantastic speculative boom.' Instead, he superficially blamed 'infectious greed.'

"Should it be any shock that Greenspan now blames the free market for today's meltdown--rather than the Fed's policies, which fueled an inflationary housing boom, which rewarded reckless lenders and borrowers from Wall Street to Main Street? Greenspan didn't mention the word 'inflation' once in his testimony.

"Whatever Greenspan's economic philosophy is, it is not anything resembling a free market."

Objectivist Round Up

The latest Objectivist Round Up is now online at Nick Provenzo's "Rule of Reason"!

It includes my post: "My latest LTE"!

Dysfunctional?

Comment by Robert Walker, Chairman, Wexler and Walker Public Policy Associates, at a panel at the International Symposium for Personal and Commercial Spaceflight 2008 (from notes taken by Clark Lindsey for HobbySpace):

Congress has gotten so dysfunctional, can't even get budgets done on time. This is a big problem for companies with govt. contracts and are trying to arrange their own budgets and spending schedule.

50-to-1

Tom Coburn was in Oklahoma City today for a "town hall meeting".

Here's the story from the AP in The Oklahoman:

U.S. Sen. Tom Coburn defends bailout vote
By The Associated Press
Published: October 20, 2008

U.S. Sen. Tom Coburn rigorously defended his vote in favor of the economic rescue plan Monday as he faced hard questions at a town hall meeting in Oklahoma City.

Coburn, R-Okla., told a crowd at the Oklahoma City campus of Langston University that he would vote to same way "time and time again," remembering the failure of the country's leaders to act soon enough to head off the Great Depression.

Coburn said, like it or not, the country already "is in the midst of a recession" that would "probably last for several quarters." He said the bailout was needed to put money into the financial system so funds could be made available for lending to everyday citizens and to hopefully reduce job losses.

Some members of the audience at Langston expressed their displeasure with the bailout.

"We should have let it go. We should have let it fail," shouted one man.

"Your option is way too painful," Coburn said.

He said there was danger that a without the bailout, the nation's economy could have dipped to its level in 1960.

"How many of you think you'd still have a job?" he asked.

"We got the best deal we could and it stunk," he said of the bailout. He said his mail, e-mails and telephone calls from constituents are running more than 50-to-1 against his vote.

Coburn, who is known for his conservative approach to funding issues, defended holding up bills to expand small business programs and other projects.

He said he would oppose such measures until Congress includes criteria to determine if the programs work.

Coburn said most federal programs are funded and reauthorized without adequate oversight by Congress.

"That's 80 percent of the federal government. They don't know what they are doing," he said.

On another subject, Coburn said he is "a good friend" of Democratic presidential candidate Barack Obama, though he is a vigorous supporter of John McCain, the Republican nominee.

He called Obama "a good man" who "just has a different philosophy than I do."

Here's the comment I left at The Oklahoman's website:

Coburn was wrong to vote for the bailout and he is wrong to support Paulson, who should be fired. Paulson's armtwisting of healthy banks who don't need the government's help will make matters worse not better.

Fannie Mae and Freddie Mac can't be reformed and should be closed: so long as they are around they will be in the sights of politicians who want to further their careers by promoting the fantasy of home ownership without responsibility.

And how can Coburn rail about pork - which makes up less than one percent of the federal budget - and say nothing about the out-of-control growth of Social Security and Medicare, which account for one-third of the federal budget?

All this scare-mongering about credit is nothing but an excuse for a power grab on an unprecedented scale, and Coburn is a willing accomplice. He knows nothing about free markets or principles and is no defender of Capitalism.

AND I posted the URL for Repeal the Bailout!

If you scroll down to the beginning of the comments section for the story in The Oklahoman, you can read a letter Coburn is sending to his constituents containing his excuses for his vote on the "economic stabilization legislation", a.k.a. the bailout.

Those with stock seed having no trouble getting more stock seed

This story in the Journal Record would seem to indicate - when considered along with reports that smaller banks are relatively healthy - that the banking industry is not quite as threatened with imminent collapse as the government would have us believe:

Oklahoma ag producers having no issues securing operational capital

Building Flawed American Dreams

The NY Times examines the role of Henry Cisneros in the creation of the housing bubble and credit collapse which led to the current crisis.

The Objectivist Round Up

Speaking of which, the latest Round Up is being hosted by Rational Jenn!

Objectivist Round Up #66

My latest LTE

I noticed the following letter in Wednesday's Oklahoman:

The root cause

The political mantra during Bill Clinton’s 1992 campaign is the same today: It’s the economy! Everyone’s focus is on the economy and returning stability and confidence to our financial markets and institutions. The economy is the issue that will determine the November election and the candidates are feeling its power and prominence.

The truth, however, is that our economic crisis is the result of moral decline and compromised values. Greed on Wall Street and in corporate offices, unscrupulous lenders, self-serving politicians and a lack of personal self-control have brought about our financial implosion. The government bailout that was full of political payouts that had nothing to do with the crisis, and new legislative regulations won’t solve our problems because it’s a matter of the heart. Until the moral issues
within our country and institutions are addressed, the stability of our nation will always be in peril.

The chant shouldn’t be "It’s the economy” but rather "It’s the morality.”

Mark Hiehle, Norman

Upon reading this letter, I thought his identification of morality as the base of economics was an opportunity to say something about which morality is more accurate that I just couldn't pass up - especially since I had passed the 42 day mark since my last LTE!

So here's what I sent:

Mark Hiehle, in his letter of October 16th, is correct when he says that morality is the underlying cause of our current economic crisis, but he is incorrect as to which morality is to blame. Western civilization was founded on reason, which, consistently applied, leads to freedom, individualism and a morality of rational self-interest.

Was it selfishness which led lenders to give mortgages to people who didn't qualify for them under any rational standard? If you say that the only reason they did it was because the government twisted their arms, what motivated the government to do that?

It was selflessness - as represented by the Community Reinvestment Act - which led the government to force banks to loan money to people who couldn't afford it, to buy homes they can't pay for. If a government motivated by selflessness caused this mess in the first place, how can we trust it to control the economy?

It is selflessness which motivated our political leaders and the media to ignore the public's response to the bail-out, which ranged from "No!" to "Hell No!"

Closing Fannie Mae and Freddie Mac - no, they can't be "reformed" - repealing the Community Reinvestment Act and firing Henry Paulson would be a good start on resolving the current crisis, but it would only be a start, and so long as selflessness is accepted, we will always end up right back in the same place: notice that on Monday when Paulson ordered the leaders of the 9 largest banks in the country to allow themselves to be taken over by the government, not one of them had the "selfishness" to stand up and say "NO". Their acquiescence gave the sanction of the victim to Paulson's takeover of the banking industry.

The time is long past to recognize that selflessness is an empty fantasy based on no factual evidence whatsoever. Giving in to selflessness will lead not just to the destruction of our economy but of our civilization.

Selflessness is a sacred cow which deserves to be exposed as such. It is the actual requirements of human life which lead to a morality of rational self-interest. Even those who can't afford to buy their own homes can benefit from this.

To those who wish to know more, I strongly encourage you to read "Atlas Shrugged" by Ayn Rand.

Rob Abiera

I sent it Thursday. Today I got an email from J. E. McReynolds, chief editorial writer at The Oklahoman - it consisted of my letter and this message:

Returned unread. Does not follow guidelines. Second notice. Do not resend.

I assume that "Returned unread" refers to The Oklahoman's policy of not considering letters which do not fit its guidelines, one of which is a limit of 225 words. I had hoped that, if my letter was too long, they would simply edit it down to fit. Guess I was wrong and they won't even consider letters that aren't already under 225 words.

Or do they? After all, the guidelines do say:

Why we edit letters
Editing is done for the benefit of our readers. We make every attempt to preserve the writer's essential meaning. Editing for length allows us to accept a greater number of letters. Letters most likely to be edited are those that are twice as long as needed to make a point and those that try to make too many points.

which certainly seems to imply that they will accept letters that are longer than the 225 word limit and edit them down.

Then again, there could always be another reason.

And I don't get the part about a "second notice", either, because I never got a first one.

Oh well. It will still make a good blog post. And I will send it to the usual email lists.

And I might even submit it for the next Objectivist Round Up!

Oh, and if anyone else wants to repost it, feel free!

Gift Certificates 4: Revolt of the Small Banks

Well, well, isn't this interesting. Looks like some people still have a spine after all.

Smaller Banks Resist Federal Cash Infusions

Excerpts:

Community banking executives around the country responded with anger yesterday to the Bush administration's strategy of investing $250 billion in financial firms, saying they don't need the money, resent the intrusion and feel it's unfair to rescue companies from their own mistakes.

But regulators said some banks will be pressed to take the taxpayer dollars anyway.

. . .

President Bush, in introducing the plan, described the interventions as "limited and temporary."

"These measures are not intended to take over the free market but to preserve it," Bush said

Did he steal that last line from Tom Coburn?

. . . in offices around the country, bankers simmered.

Peter Fitzgerald, chairman of Chain Bridge Bank in McLean, said he was "much chagrined that we will be punished for behaving prudently by now having to face reckless competitors who all of a sudden are subsidized by the federal government."

At Evergreen Federal Bank in Grants Pass, Ore., chief executive Brady Adams said he has more than 2,000 loans outstanding and only three borrowers behind on payments. "We don't need a bailout, and if other banks had run their banks like we ran our bank, they wouldn't have needed a bailout, either," Adams said.

Good for them!

The opposition suggested that the government may have to continue to press banks to participate in the plan.

Uh-oh. Not so good.

Federal regulators said they did expect some banks to volunteer, though none stepped forward yesterday. But they added that they would not rely on volunteers. Treasury will set standards for deciding which banks can be helped, and the regulatory agencies will triage the banks they oversee: The institutions faring best and worst will not receive investments. The institutions in the middle, whose fortunes could be improved by putting a little more money in the bank, will be pushed to accept the money from the government.

"We will encourage institutions to apply," said John C. Dugan, the comptroller of the currency, who oversees most of the nation's largest banks.

In return for its investments, Treasury will receive preferred shares of bank stock that pay 5 percent interest for up to five years. After that, if the companies haven't repaid the government's initial investment, the interest rate goes up to 9 percent.

And here's the payoff:

(FDIC chair Sheila C.) Bair acknowledged that the new guarantees shelter banks from the immediate consequences of misbehavior because depositors and investors have no incentive to remove their money from an institution if they know that the government stands behind it.

But Bair said the government's first priority was to stabilize the industry.

"The risks of moral hazard were simply outweighed by the need to act and act dramatically and act quickly," Bair said.

(Emphases mine)

And how is demoralizing the industry supposed to stabilize it? By keeping the small fry in line, perhaps?

Will some banks be more "sheltered" than others? Could this be a tool for playing favorites and punishing those who get out of line? Hmm . . .

We'll see how that works out.

(Hat tip: Cox and Forkum via Repeal the Bailout)

Repeal the Bailout

www.repealthebailout.net

Ayn Rand Avenged

Ed Cline has posted his own take on the takeover of the banking industry at The Rule of Reason.

Gift Certificates 3: The Road to Fascism

From the Ayn Rand Center:

The Road to Fascism
October 16, 2008

Washington, D.C.--The government has announced that it plans to use $250 billion to buy ownership stakes in various U.S. financial institutions. According to the New York Times, nine major U.S. banks have already been forced into the program. “The chief executives of the nine largest banks in the United States . . . were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left. . . . ‘It was a take it or take it offer,’ said one person who was briefed on the meeting, speaking on condition of anonymity because the discussions were private. ‘Everyone knew there was only one answer’”--even though at least one institution, the relatively healthy Wells Fargo, wanted to say no.

According to Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “In herding banking executives into a room and making them an offer they couldn’t refuse, the Paulson regime took its latest and most disturbing step yet on the path to state control of the economy.

“If fascism means coercive state control over nominally private property, then there is no more chilling sign of creeping fascism in America than government’s encroachment on the lifeblood of the U.S. economy--its financial institutions. While the government assures us it will be a ‘passive investor,’ merely funneling cash into the banking system rather than dictating how banks function, this is a lie. Not only does the money come with strings attached--such as restrictions on executive compensation, dividend payments, and the types of investments banks can make--but politicians are already promising a web of further controls. As John McCain recently noted, ‘We will not merely inject billions of dollars into companies and walk away hoping for the best. We will require that those companies be reformed and restructured until they are sound assets again, and can be sold at no loss--or perhaps even a profit--to the taxpayers of America.’

“The Paulson shakedown is the latest in a rapid-fire series of government bailouts and interventions over the last several months. Our leaders claim that this virtual takeover of markets is economically necessary. But it was government control of financial markets that spawned the financial meltdown in the first place: an inflationary boom brought on by the Fed’s easy-money policies, a campaign to promote home ownership that encouraged risky loans, regulations that pushed banks to become dangerously over-leveraged, etc., etc. The response to the crisis should be to restore freedom and to disentangle government from the economy. Instead, the same mentality and the same central planners that created the financial crisis are being given far wider reign to manipulate and distort markets. We must tell our government to reverse this fascist course--now.

More than one of the executives for the banks in Monday's meeting felt that their institution was financially sound and on a solid footing. So how can John McCain's statement

We will require that those companies be reformed and restructured until they are sound assets again . . .

be anything but a vicious insult to them, if not outright slander?

If John McCain knew anything about the actual condition of those banks when he made that statement, then his statement is a lie, as well.

Gift Certificates 2

One thing which comes to mind, when considering just how bad things have gotten in this country and how we got there - and what that says about the future - is that the people in power didn't get there all by themselves. What happened Monday is a case in point: as bad as it is for Paulson to be assuming the role of economic tyrant, not one of the 9 leaders of the country's largest banks called him on it. No one stood up and said,"NO".

Here, truly, is a classic example of the sanction of the victim.

What would have happened on Monday if one of those men had stood up and said "NO"?

Gift Certificates

Remember the passage in Atlas Shrugged where Floyd Ferris "asks" Hank Rearden to "give" Rearden Metal to the government - excuse me - "the country"?

The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.

But by 6:30, all nine chief executives had signed . . .

Are we all Venezuelans now?

And what would John Allison have done under these circumstances?

Read the gory details here.

LTE's

From today's The Oklahoman:

Typical politicians

I’m disappointed in Sen. Tom Coburn and Rep. Mary Fallin for voting for the second bailout bill. I voted for Coburn and Fallin to stop pork-barrel projects and to uphold the Constitution, things they both swore to do when they got to Washington. I wanted someone who’d take a stand against corruption and wasteful spending in Washington, but Coburn and Fallin have become typical politicians.

Do they think the common people who contacted them in protest of the bailout didn’t know that this might hurt us for a while? It might have hurt us, but it was better than going down the road to socialism!

Michael Markum, Edmond

Here's one from Sunday:

Either way...

Regardless of how the economic vampires in the banks, their corporate and government minions and their buddies in the Fed are portrayed sympathetically by the media, they’re still thieves. Their apologists sanitize their past and present actions, attempting to justify bleeding our economy dry to pay for their fraud, waste and abuse. Government officials and journalists who aid and abet these thieves are accessories to the crime.

Officials in the government, corporate executives and the bankers who subsidize them insist that all hell will break loose if we common citizens aren’t made economic sacrificial animals. What they don’t tell us is that all hell will break loose if we give them what’s left of our economic lifeblood. Either way, we’re caught. The truth of our economy teetering on fake currency and widespread criminality is coming to light in spite of the whitewash.

Will we meekly consent to being bled by these vampires, fearful that if we rock the boat, we’ll lose what little we have left? Or will we educate ourselves as to what real money is, how a truly free enterprise system works, and stand up for our unalienable rights? Do we consider our lives worthy of economic and political freedom? Time will tell.

Ruth McReynolds, Oklahoma City

Are We All Socialists Now?

From the Ayn Rand Center:

Are We All Socialists Now?
October 10, 2008

Washington, D.C. --The Treasury Department, as part of its ongoing assumption of control over the financial industry, is preparing to inject cash into U.S. banks in exchange for preferred shares of bank stock.

“Are we all socialists now?” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. “Have we learned nothing from the devastation that socialist policies wrought worldwide in the twentieth century? Government intervention distorts markets and causes economic dislocations, no matter whether Uncle Sam controls private companies by regulation or assumes public ownership outright.

“A crisis doesn’t transform poison into medicine. Over decades, government manipulation of money, credit, and mortgages poisoned this economy and left it dangerously weak. Now Hank Paulson and his comrades are hooking up IV tubes filled with more of the same poison--bailouts, loan guarantees, cheap money, and more burdensome regulations--and hoping we will lie still and trust in their cure.

“But the real cure is capitalism, not more doses of socialism. We should act quickly to put government in its place, by rolling back the interventionist measures that caused the present emergency. Government’s proper role is to punish fraud and enforce contracts, not to own and manage the economy. We cannot achieve financial health unless we are willing to free the markets.”

### ### ###

Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. He is a regular contributor to Forbes.com and a contributing editor of The Objective Standard. His articles have been featured in major newspapers such as USA Today, the Houston Chronicle, the Chicago Sun-Times, the 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 in 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 Larry Benson:
949-222-6550, ext. 213
media@aynrandcenter.org

For more information on Objectivism’s unique point of view, go to ARC’s Web site. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes the philosophy of Ayn Rand, author of “Atlas Shrugged” and “The Fountainhead.”

Copyright © 2008 Ayn Rand® Center for Individual Rights. All rights reserved.

Lawsuit filed against ultrasound rule

From today's The Oklahoman:

Group opposes abortion rule on ultrasounds
Opponents say law will shut down Tulsa clinic

FROM STAFF REPORTS
Published: October 11, 2008

A Tulsa clinic is challenging a state law that takes effect this fall requiring women to view an ultrasound of their unborn babies before getting an abortion.

The lawsuit, filed late Thursday in Oklahoma County District Court by the Center for Reproductive Rights, contends the law is overly vague and violates women’s right to terminate a pregnancy.

Sen. Todd Lamb, who helped write the law, said the lawsuit is misguided.

"This lawsuit was filed by a pro-abortion fringe group that opposes Oklahoma’s sensible regulations on abortions,” said Lamb, R-Edmond. "Their lawsuit seeks to undo important reforms that provide women with information that helps them give informed consent prior to receiving an abortion.”

Senate Bill 1878, which spurred the lawsuit, was passed into law in April, when legislators overrode Gov. Brad Henry’s veto.

The law goes into effect Nov. 1 and includes a specific regimen for administering the medical abortion pill and legal protection for health care workers who balk at being involved in abortions.

Henry refused to comment on the lawsuit, but his spokesman noted he raised concerns about the legislation with his veto.

Opponents said enforcement of the law would force Tulsa-based Reproductive Services — one of only three clinics in the state that offer abortions — to shut down. The clinic serves more than 200 women each month, according to a news release.

"Anti-choice activists will stop at nothing to prevent a woman from getting an abortion, but trying to manipulate a woman’s decisions about her own life and health goes beyond the pale,” said Stephanie Toti, the lead attorney in the case.

"Governments should stop playing doctor and leave medical determinations to physicians and health decisions to individuals."

Here's an excerpt from the press release by the Center for Reproductive Rights, who calls Oklahoma's new law the "Most Extreme Ultrasound Law in (the) Country":

WHY THE CASE IS IMPORTANT:
In Oklahoma, if this law is enforced, Reproductive Services will be forced to close down. The clinic provides more than 200 women abortion services a month. If it shuts down, that means more than 2000 women a year throughout Oklahoma and surrounding states will have no access to abortion.

Nationally, this case has implications because the law at issue is among the first signs that anti-choice legislatures are beginning to take cues from last year's U.S. Supreme Court ruling upholding the "Partial-Birth Abortion Ban Act of 2003." Should this law be upheld, it could encourage copycat legislation around the country. In Gonzales v. Carhart, a case argued by the Center, the majority reasoned, "[w]hile we find no reliable data to measure the phenomenon, it seems unexceptional to conclude some women come to regret their choice to abort the infant life they once created and sustained. Severe depression and loss of esteem can follow." The argument opened the door to measures based on the assertion that a woman lacks the judgment and independence necessary to make a responsible decision about her own pregnancy; and that abortion causes a woman to suffer mental and physical side effects—a claim recently refuted by an American Psychological Association study. No other state in the country requires a woman to hear the description of an ultrasound image; and Ohio is the only other state that has prohibited use of the ACOG-recommended regimen for medical abortion. Ohio's law is currently being challenged in federal court.

Notice that no mention is made of why "Governments should stop playing doctor and leave medical determinations to physicians and health decisions to individuals" except that it "goes beyond the pale" - in other words, "it simply goes too far".

This does not give me confidence that the Center will prevail in this case.

The moral of this story? It is not just their legal strategy, but their morality which supporters of abortion rights need to question.

Update - Oct 13: The Tulsa World's story about this has received over 100 comments so far.

OU Daily vs Boren

Last Friday, Oct 3rd, the staff of the University of Oklahoma's student newspaper, OUDaily, proved themselves to be better human beings than OU president David Boren by printing an editorial advocating against the bail-out. Boren was one of a number of Oklahoma "business leaders" who signed a statement begging Congress to vote for the bail-out.

Here is the students' editorial:

OUR VIEW: Dear representatives: Vote no on bailout
The Oklahoma Daily Editorial Board
Friday, October 3, 2008

Dear Reps. Fallin, Lucas and Sullivan:

You’ve taken a lot of heat over the past five days for voting against the bailout bill on Monday.

The president of our university e-mailed you and asked you to change your vote, and a group of Oklahoma business leaders released a statement Wednesday that called you out.

Now that it’s time for a statement of our own, we want to say: Vote no. Again.

The bailout represents a staggering violation of free-market principles.

In a true free-market economy, firms that engage in risky behavior suffer the consequences of their actions when investments go bad.

In this case, firms bought high-risk mortgage-backed securities tied to mortgages offered to individuals who probably shouldn’t have been buying those homes in the first place.

Now that people are defaulting on their loans, the institutions are watching the value of their assets shrink and some could be facing bankruptcy.

It’s never pretty to watch huge firms fail. But if the government bails out firms that are struggling now, it will undermine the idea that financial institutions must maintain responsible practices and take reasonable risks.

A bailout will not provide companies with any incentive to reform their policies and make better decisions in the future.

We understand that the failure of the bailout bill could send the economy into a recession.

But we think the dangers of recession have been overstated by our president and every other public figure who has invoked the memory of 1929 when talking about this crisis.

The Great Depression is famous because it was such a striking anomaly in the history of American recessions. According to economics experts, most recessions last a few quarters at most.

While a year or so of recession might make life difficult for those in certain industries, it won’t usher in a second era of soup kitchens and bread lines.

Oklahoma, with its firm grip on the oil and gas industry, might not even feel a national recession. And it almost certainly wouldn’t find its education, health and safety programs threatened, as the Oklahoma CEOs who released a statement earlier this week would have you believe.

A recession might be just the thing the country needs anyway. It won’t be pretty, but some economic pain might compel Americans to stop living beyond their means and force firms to stop making it so easy to do so.

We appreciate your stand against unjust federal intervention into the economy. We hope that when you have the opportunity to vote today, you cast another vote against the bailout and for fiscal responsibility on the part of this nation’s financial institutions.

Sincerely,

The editorial board of The Oklahoma Daily

You can read Boren's response to this editorial here.

GayOKC.com

FOR IMMEDIATE RELEASE
Thursday, October 9, 2008

GayOKC.com
http://www.gayokc.com
Contact: Rob Abiera
Email: rabiera@gayokc.com

LOCAL ONLINE RESOURCE MARKS 10TH ANNIVERSARY

Oklahoma City - Local website GayOKC.com marks its 10th year online this month, according to the site's founder and editor, Rob Abiera. GayOKC.com first went "live" in October, 1998. The site is located on the Internet at http://www.gayokc.com.

GayOKC.com was founded to be an online resource for Oklahoma City's Gay, Lesbian, Bisexual and Transgendered Persons. For many years, it was updated with the latest GLBT news headlines - including local stories - several times a week and often more than once a day.

The idea for GayOKC.com grew out of work Abiera was doing for the Oklahoma Gay and Lesbian Political Caucus at the time. One of Abiera's goals was to encourage the GLBT Community to use the Internet as a resource for overcoming obstacles to progress for Gays and Lesbians in Oklahoma City.

Some of the local stories covered by GayOKC.com over the years include the rejection by Mick Cornett of an endorsement by a local Gay rights group, the controversy over the city's banner policy which resulted in a lawsuit by the Cimarron Alliance Foundation after its Gay Pride banners were removed from light poles, the election of openly-Gay political candidates to office in Oklahoma, including Jim Roth and Al McAffrey, the formation of local chapters of the Stonewall Democrats and Log Cabin Republicans, the controversy over Gay-themed books such as King and King in the public libraries, and more.

Such stories required constant updates to the front page of GayOKC.com as new developements occured. To commemmorate GayOKC.com's 10th anniversary, copies of those updates of the front page have been placed back online in a new Page One Archive.

Another important story covered by GayOKC.com was the effort by NW Classen High School teacher Joe Quigley to add protection for sexual orientation to Oklahoma City's school policies. This resulted in an enormous amount of documentation, all of which remains online. A new page has been added to GayOKC.com to make access to those documents easier.

Also highlighted this month are the "State of Our Community" town hall meetings which GayOKC.com presented in 2003, 2004 and 2006.

All of this information can currently be accessed through links on the front - or home - page.

Abiera says he intends to keep GayOKC.com online to serve as a historical resource for Oklahoma City's GLBT Community. Appropriately enough, October is also GLBT History Month.

-30-

Abortion and Abolition

This is a terrific essay which nails virtually every important point about abortion rights:

Abortion and Abolition
by Diana Hsieh and Ari Armstrong

Colorado is ground zero in a national battle over the morality of abortion, and the defenders of abortion rights are ceding ground.

The opponents of abortion declare that every human life is endowed by God with an inalienable right to life. To terminate a pregnancy, whatever the circumstances, is murder.

Republican presidential candidate John McCain seeks to overturn Roe v. Wade, then "end abortion at the state level." His running mate Sarah Palin says she's as "pro-life as any candidate can be." She thinks "abortion [should] only be allowed if the life of the mother is endangered."

Colorado's Amendment 48 inaugurates a new strategy for ending abortion. Instead of restricting abortion via piecemeal government controls, the measure would usher in a near-total ban on abortion by defining a fertilized egg as a person with full legal rights in the state constitution.

The opponents of abortion claim the sanction of divine morality, based on the premise that "life begins at conception." Many anti-abortionists now openly seek to ban not only abortion and most fertility treatments, but also the birth control pill, morning after pill, and IUD because they may prevent a fertilized egg from implanting in the uterus. Amendment 48 would help them do that.

Given this all-out assault on reproductive rights, traditional defenders of abortion might be expected to launch a vigorous counter-attack. Instead, they've dodged tough questions and conceded basic principles, leaving reproductive rights with a flimsy defense.

When Democratic presidential candidate Barack Obama was asked when a baby gets "human rights," he famously declared the question to be "above [his] pay grade." Yet he will be called on to judge such matters if elected. His running mate Joe Biden accepts the teachings of his Catholic Church: the fertilized egg is a human person. Yet he regards abortion as "a personal and private issue" -- as if the state should allow every person to decide for himself whether or not to recognize the rights of others, so long as any killings happen behind closed doors. That's clearly wrong: if an embryo or fetus is a person, then abortion is murder. If not, then it's a woman's right.

In response to the threat posed by Amendment 48, the traditional defenders of abortion rights -- such as Planned Parenthood and NARAL -- organized a broad coalition to fight the measure. They persuasively argue that Amendment 48 would have disastrous legal consequences for abortion, birth control and in-vitro fertilization.

Yet their oft-repeated slogan of "it simply goes too far" is a whopping concession to their opponents. It implies that abortion, birth control and in-vitro fertilization could be and perhaps ought to be restricted -- just not as severely as Amendment 48 would do. Instead of upholding reproductive rights, the slogan implicitly welcomes further incremental controls on abortion.

Just imagine if the abolitionists of the 19th century had attempted to defend the inalienable rights of slaves based on the slogan, "slavery: it simply goes too far." Imagine Lincoln declaring the morality of slavery to be "above [his] pay grade." The monstrous evil of slavery would still exist today. The recognition and protection of the rights of slaves required an uncompromising defense of those rights based on the facts of human nature.

Similarly, the recognition and protection of abortion rights requires an uncompromising defense of those rights based on the all-important differences between a fetus and a baby.

Neither an embryo nor a fetus is a human person with a right to life. While still in the womb, it exists as part of the woman, wholly contained within and dependent on her. It goes where she goes, eats what she eats, and breathes what she breathes. It lives as she lives, as an extension of her body. A fetus is only a potential person without a right to life.

That situation changes radically at birth. A baby lives his own life, outside his mother. Although very needy, he maintains his own biological functions. He breathes his own air, digests his own food and moves on his own. He can leave his mother to be cared for by someone else. He has a life of his own that must be protected as a matter of right, just the same as every other person.

During a pregnancy, the only person with rights is the pregnant woman. She has a right to liberty, including a right to use her body as she pleases. So she has every right to terminate an unwanted pregnancy -- for any reason. If an abortion will further her own life and happiness, then she ought to pursue that option with a clear conscience.

The growing faith-based opposition to abortion cannot be countered by vague appeals to choice and privacy. Roe v. Wade will be overturned and Amendment 48 (or its like) will be passed without a clear, consistent and positive defense of abortion rights. We must be as principled in our defense of a woman's right to her own body as were the abolitionists in defending the rights of slaves. Liberty cannot be won by any other means.

Diana Hsieh is the founder of the Coalition for Secular Government. Ari Armstrong is the editor of FreeColorado.com. They co-authored "Amendment 48 Is Anti-Life," available through SecularGovernment.us.

SEC getting desperate?

Is the SEC guided by rationality or whims, principle or pragmatism? The agency has reversed itself on short-selling, which it banned only 3 weeks ago: SEC opens markets to short selling again

Two liars

According to a story on last night's debate,

Democrat Obama said the current crisis was the "final verdict on the failed economic policies of the last eight years” that President Bush pursued and were "supported by Senator McCain.”

He contended that Bush, McCain and others had favored deregulation of the financial industry, predicting that would "let markets run wild and prosperity would rain down on all of us. It didn’t happen.”

No, Mr Obama, this crisis was not caused by freedom but by oppression.

McCain’s pledge to have the government help individual homeowners avoid foreclosure went considerably beyond the $700 billion bailout that recently cleared Congress.

"I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes at the diminished value of those homes and let people be able to make those payments and stay in their homes,” he said.

"Is it expensive? Yes. But we all know, my friends, until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy, and we’ve got to get some trust and confidence back to America.”

Mr McCain, how is letting people who can't afford homes continue to buy them going to stabilize home values? How is sending Americans the message that if they can't - or won't - pay their bills, the government will bail them out going to solve anything?

Both are wrong: this crisis is the direct result of the government's attempts to use the economy to force its values on us. Neither of them has the guts or the inclination to challenge the government's promotion of altruism.

Blank-out

SpaceX has succeeded in launching a rocket into orbit - the first time a private company has done so with a liquid fueled rocket, which SpaceX developed, itself.

XCOR has now made more manned rocket flights in this century than NASA and the Russians put together.

Yet, the mainstream media continues to focus on the idea that the end of NASA's shuttle flights means that the US will be dependent on Russia for access to the Insternational Space Station - this despite the prospects for the private space industry to develop the capacity to make manned flights to orbit, including ISS, within the next few years.

I offer, as an example, a recent story in the NY Times.

What's wrong with this picture?

(Hat tip: HobbySpace)

Update - Oct 8: SpaceX has issued a report on its recent launch. Here's an excerpt:

A week spent reviewing data has confirmed that the flight went really well, including the coast and restart. The mood here at SpaceX is just ecstatic! This is the culmination of six years of hard work by a very talented team. It is also a great relief for me, who led the overall design of the rocket (not a role I expected to have when starting the company). I felt a little sheepish receiving the AIAA award for the most outstanding contribution to the field of space transportation two weeks before this flight.

Orbit was achieved with the first burn terminating at 330.5 km altitude and 8.99 degree inclination. The goal for initial insertion was a 330 km altitude and a 9.0 degree inclination, so this was right on target! Accuracy far exceeded our expectations, particularly given that this was the first time Falcon 1 reached orbit.

Update - Oct 13: Here's a nice little story by Alan Radecki from the Mojave Skies blog:

A Salute as XCOR Completes Flight Testing, Sets Records

The flight test program at XCOR Aerospace for their version of the Rocket Racer has drawn to a close with a flurry of flights that set several informal records at the Mojave Air and Space Port.

On October 1, the XCOR team flew the Rocket Racer seven times, setting the unofficial record for most flights of a rocket-powered aircraft in a single day. According to XCOR's research, the previous record was three flights in a day by a German ME-163 Komet rocket-powered fighter aircraft during World War II. (In an interesting rocket-world twist, Microsoft co-founder Paul Allen, who was the money behind Rutan's SpaceShipOne, purchased one of the surviving ME-163s back in May, 2005...I guess the guy really likes rockets!)

The seven Rocket Racer flights put Mojave on the map as the site of more manned rocket-powered flights this century than any other locale in the world; in fact, with 51.3%, it's more than all the other places combined. (And for the record, Kennedy Space Center is second with 19.5% and Baikonur Cosmodrome in Kazakhstan is third with 13.5%.) In her enthusiasm, one XCOR teammember summed it up nicely: "Seven rocket flights in one day: unofficial record. Mojave Spaceport rocks!"

The XCOR team has the turn-around process down to an art, and can refuel the Racer with kerosene, LOX and helium in under 8 1/2 minutes.

On the very last flight, pilot Rick Searfoss pushed the Racer higher and longer than on any previous flight, reaching 10,000 feet and lasting 20 minutes, with two mid-flight relights. At that distance, the plane itself disappeared from view, with only the tiny bright star-like rocket plume to marks its place in the sky.

For the XCOR team, completion of the Rocket Racer program means that they can now focus their attention on what XCOR CEO Jeff Greason calls their "third generation rocket-propelled vehicle", the Lynx, a two-seat sub-orbital rocket plane, with which they hope to break into the commercial space tourism market. And to talk to the team, they seem quite excited about moving on to this. Searfoss summed up the customer's experience in the Lynx nicely when he said, "...the best part of it all is that you’ll ride right up front, like a co-pilot, instead of in back, like cargo."

The future of the Rocket Racer is in the hands of the Rocket Racing League, which has carefully stage-managed all media access to their program. Original indications were that both the XCOR and the Armadillo engines would be available to the race teams. Oddly, when RRL announced that the Armadillo test aircraft had finally gotten airborne, the media release read (which you can read in full here) "The Rocket Racing League today announced the successful results of the first seven test flights of the Bridenstine DKNY Rocket Racer® conducted at the Oklahoma Spaceport (OKSP), a leading facility specializing in horizontal takeoff and landing of Reusable Launch Vehicles, in Burns Flat, Oklahoma."

The release made no mention whatsoever of the XCOR program, which has been flying for a lot longer than Armadillo's, and it sound like the Bridenstine DKNY Rocket Racer itself had been taken to Oklahoma and re-engined. The release went on to quote Bill Khourie, Executive Director of the Oklahoma Space Industry Development Authority (OSIDA) saying, “We are thrilled to have been selected as the facility of choice by the Rocket Racing League for its initial flight test program.” Initial? No, that's been under way right here in Mojave for months, folks. Quite clearly, Oklahoma is trying to posture itself as giving Mojave some competition, although with the records just set, Mojave doesn't have to look over its shoulder just yet....

Shame on you, Bill!

Irrationality at the Fed

The Fed is going to buy short term debts in an attempt to "unclog" credit. How is this supposed to work? If credit is "tight" right now, is that not due to the rationality of lenders passing judgement on the ability of borrowers to repay under current conditions, as well as projected future conditions based on their knowledge of current conditions? What's going to make those lenders listen to the Fed? Simply because the debts the Fed buys will then be "guaranteed" by the federal government? What rational lender is going to see that as a guarantee, considering the amount of debt the federal government is already carrying?

Oh wait, the government can always print more money, right?

Yeah, right.

The Republican Party

This NY Times article suggests to me that social conservatives - the Religious Right - still have an iron grip on the Republican Party: Tom Davis Gives Up.

Fannie Mae

The NY Times has a behind the scenes look at Fannie Mae's role in the horror story now unfolding: Pressured to Take More Risk, Fannie Hit a Tipping Point

The pattern

As if more confirmation was needed, here is an example from Europe which is almost "fiction-like" in the way it illustrates the fundamental facts of this situation: an attempt by German banks and the German government to bail-out another German bank - Hypo Real Estate - has failed. According to this report:

HRE was hobbled by debts incurred by a German-Irish subsidiary, Depfa, which it bought in October 2007, after the international financial crisis emerged with the collapse of the US market for high-risk, or subprime, mortgages.

Depfa specialises in the financing of public works projects. (emphasis mine)

It's the morality, stupid!

In Atlas Shrugged, the country's leaders sought to treat worsening conditions as a purely economic matter that could be kept completely separated from morality. Their motive was to protect their morality, or at least to protect themselves from having to admit the truth about their morality.

The current economic crisis parallels this. Washington's leaders are doing everything they can to evade the moral roots of their failed economic policies, desperately striving to evade the fact that once they have destroyed the economy in order to protect the status of the poor as an object of sacrifice - so that they can purchase homes they can't afford - there will be no more homes to purchase and we will ALL be poor.

As culpable as the Left is, the role played by the Right in creating this situation is worse: it is the Right which posed as the defenders of freedom - including property rights - while pursuing a policy of "compassionate conservatism" based on religious dogmatism. While the Left openly pursued socialism, it is the Right which sought to have its cake and eat it, too.

The time has come to strip away the "economic" facade and expose the truth that this crisis is a failure of altruism, and as such, there will certainly be more to come until this country's leaders learn to reject sacrifice and accept more rational policies based on a morality of self-interest.

Response from Fallin

Since the House is supposed to be voting on the Senate's version of the bail-out by Friday, I thought I'd send my Congressperson, Mary Fallin, a reminder that my preference is for her to vote "no".

As I was perusing this week's Objectivist Round Up at The Crucible and Column this morning, I noticed Kendall J's post on the bail-out, "Why Paulson's Money is No Good", which struck me as laying out the essentials of the situation in a fairly clear and straightforward manner, and thought I'd send it along to Ms. Fallin.

I included the following note:

Congresswoman Fallin,

I am writing to you once again to ask that you vote no on the bail-out.

I am including the following to help you understand my reasons. Please note especially point 5:

In the seizure of WaMu, Treasury seized the company and by fiat destroyed all contractual priorities set forth in the capital structure. This act alone has exacerbated the liquidity problem because now any potential lender to a distressed bank risks losing his entire investment regardless of pre-negotiated terms, to arbitrary exercise of force. Henry Paulson's money comes paired with the potential for wholesale rights violations.

The use of government to attempt this function necessitates rights violations, spends money indiscriminately, and preserves the structures which created the panic at taxpayers expense. The proposed bail-out illustrates perfectly the concept of chasing bad money with good. Voluntary action by the free market instead "cleans house". It cannot be otherwise, no matter how well-intentioned the government.

Consider also that Japan once tried something similar and suffered 15 years of stagnation as a result.

Rob Abiera
Oklahoma City

I don't know whether she was responding to the email I sent her on Tuesday, or to this one, but less than an hour later (!!!!!!!!) I received the following:

October 2, 2008

Mr. Rob Abiera
OK

Dear Mr. Abiera:

Thank you for contacting me about ongoing efforts to confront the crisis in our financial system. I share your deep concerns over this crisis. First, rest assured that Congress and the administration are continuing to work to develop legislation that will be both effective and prudent - and I am working with my colleagues in the House to that end. Our goal is to craft a bill that addresses both the immediate crisis and assures stability and responsibility in the out years. It is also absolutely vital that this legislation protects the taxpayers.

After much deliberation, I voted against the initial bill presented to the House on Monday, September 29. I felt - as did 227 other representatives from both parties - that the bill contained serious flaws and that it failed to shield taxpayers from being placed in a position of underwriting a massive bailout of organizations that had acted unwisely and irresponsibly. Our goal should not be a bailout; it needs to focus on a productive workout, plus reforms that will prevent such a crisis from happening again. As your representative, I cannot in good conscience sign a blank check without appropriate safeguards and assurances that those funds will return to the treasury once the crisis has passed.

In the end I agreed with the overwhelming majority of Fifth District residents who contacted me to express their views. They believe that government has a duty to act, but not at the expense of basic principles like common-sense financial discipline and individual responsibility. Our work is not yet done here in Washington, but I am confident we will be able to craft a bill that protects taxpayer interests and preserves the fiscal integrity and continued freedom of our financial markets.

Sincerely,
Mary Fallin
Member of Congress

Which strikes me as being code for "I know I voted 'no' before, but this time I'm going to vote 'yes'. Please re-elect me, anyway?"

Next president will reshape U.S. courts from top to bottom

That's the title of a report by Michael Doyle, published yesterday, on the potential impact of the next President on the US courts, including the Supreme Court.

Abortion, same-gender marriage, eminent domain and the separation of church and state are just some of the issues where the courts have been a major influence and the appointees of the next administration could make a huge impact.

Some excerpts:

The next president will tip the courts, one way or another.

Supreme Court openings are all but guaranteed, and that's just the start: 44 trial and appellate federal judicial vacancies already await filling. There will be more.

Consider this: President Bush has placed 316 judges on the bench during his two terms. One out of three federal judges now owes a lifetime-tenured job to the current president. Whoever replaces Bush will be likewise recasting courthouses, top to bottom.

. . .

On Monday, timed to the opening of the Supreme Court's new term, the conservative Judicial Confirmation Network will begin running on ads Fox News Channel attacking Democratic nominee Barack Obama.

. . .

Either candidate is bound to put his standards into practice. By next September, six of the nine Supreme Court justices will be at least 70 years old. Justice John Paul Stevens turns 89 in April.

"The Supreme Court is on the ballot this fall, and the stakes could not be higher for Americans," said People for the American Way President Kathryn Kolbert in a statement released Wednesday.

In some ways, the advocacy groups are out ahead of the public at large.

Something to think about when you're deciding whether or not to abstain from voting in the election.

Inhofe: I voted no.

Senator Inhofe deserves credit (no pun intended) not just for voting no, but for immediately sending an email to his constituents to let them know how he voted and explaining why and to top it off he invites us to send him our feedback!

Can you tell that he's running for re-election?

Inhofe does not deserve credit for voting no for the wrong reasons: he's not against a bail-out, but he wants to drag his feet about it. Basically I think he voted to pass the buck back to the House.

Well, he's asked for it: I hope a lot of people tell him exactly what they think of this.

The Senate just voted on the bailout, and I voted no.

After spending time in Oklahoma meeting with my constituents, local business leaders, and elected officials, I could not, in good conscience, vote to approve a massive taxpayer-funded rescue plan that was so hastily crafted.

Too little time was allowed for reading and comprehension of this bill. Insufficient time was allowed for proper discussion and debate on a bill with a $700 billion price tag. $700 billion dollars of your taxpayer money.

Certainly our nation faces a financial markets crisis that requires action. Unfortunately, it remains unclear if this bill is the right action. I believe it is much more important to get it right than to rush it through.

My vote tonight was against the Paulson plan, not against taking extraordinary action to provide necessary confidence to financial markets. The plan before us would have bureaucrats in Washington attempt to do what the experts on Wall Street can't do - value troubled assets.

From the very beginning, it was the Paulson plan or no plan. It is Congress's duty to examine its options, deliberate, come to a decision that has the support of America, and act. I regret we were not allowed to do that.

Sincerely,
Jim Inhofe

What is your opinion? Click here to read this message on the JimInhofe.com blog and leave a comment.

Disgusting

The Senate passed the bail-out today - among other things, it gives the FDIC a blank check:

The FDIC would be allowed to borrow unlimited money from the Treasury Department through the end of next year as a way to cover the increased insurance limit.

Senator DeMint, I salute you.

Not long later, Sen. Jim DeMint, R-S.C. said, "As the blood of our young men and women fall on foreign soil in the defense of freedom, our own government appears to be leading our country into the pit of socialism."

http://news.yahoo.com/s/ap/20081001/ap_on_go_co/meltdown_stakes_analysis

Regardless of how one feels about our military involvements in Iraq and Afghanistan I believe it is possible to agree with the sentiment.