“As soon as A observes something which seems to him to be wrong from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X…. What I want to do is look up C…. I call him the Forgotten Man…He is the man who is never thought of. He works, he votes—generally he prays—but he always pays.”
William Graham Sumner, The Forgotten Man
“There is no limit to the amount of work to be done as long as any human need or wish that work could fill remains unsatisfied.”
Henry Hazlitt
Please, please read this. This is an important statement demonstrating the illegality of what the current administration is doing, and the bullying tactics they are using to avoid being called on it.
Unafraid In Greenwich Connecticut Clifford S. Asness
Managing and Founding Principal
AQR Capital Management, LLC
The President has just harshly castigated hedge fund managers for being unwilling to take his administration’s bid for their Chrysler bonds. He called them “speculators” who were “refusing to sacrifice like everyone else” and who wanted “to hold out for the prospect of an unjustified taxpayer-funded bailout.”
The responses of hedge fund managers have been, appropriately, outrage, but generally have been anonymous for fear of going on the record against a powerful President (an exception, though still in the form of a “group letter,” was the superb note from “The Committee of Chrysler Non-TARP Lenders,” some of the points of which I echo here, and a relatively few firms, like Oppenheimer, that have publicly defended themselves). Furthermore, one by one the managers and banks are said to be caving to the President’s wishes out of justifiable fear.
I run an approximately twenty billion dollar money management firm that offers hedge funds as well as public mutual funds and unhedged traditional investments. My company is not involved in the Chrysler situation, but I am still aghast at the President’s comments (of course, these are my own views, not those of my company). Furthermore, for some reason I was not born with the common sense to keep it to myself, though my title should more accurately be called “Not Afraid Enough” as I am indeed fearful writing this… It’s really a bad idea to speak out. Continue Reading…
“The Smoot-Hawley tariff of 1930 ignited reciprocal protectionism that suffocated global trade and deepened the Depression. The cap-and-trade legislation passed recently by a House committee is Smoot-Hawley in drag: It contains provisions for tariffs on imports designated ‘carbon-intensive’ — goods manufactured under less carbon-restrictive rules than those of the proposed U.S. cap-and-trade regime. Eco-protectionism is a recipe for reciprocity.”
George Will, “Growth’s Rapidly Diminishing Prospects“
“Putting ever more economic decisions in the hands of those with political power is just one of those mistakes with a track record of painful repercussions in many countries around the world. These repercussions have included not only serious economic losses but, even more important, a loss of personal freedom and self-respect, as ever wider segments of the population become supplicants and sycophants of those with the power to dispense largess or to make one’s life miserable with legalistic or bureaucratic harassment. We in America have taken large steps in that direction in recent years, and are accelerating our moves in that direction this year.”
Thomas Sowell, “The Character of Nations“
“Promise-keeping, including honoring contracts, is the default position of a lawful society. But suddenly, many citizens’ legal claims are merely starting points for negotiations with an overbearing government.”
George Will, “Shock and Awe Statism“
“The interlocking directorate is anathema to trustbusters and corporate watchdogs. It occurs when a board member or top executive of one company sits on the board of another company, accumulating undue power over a given industry. When it reduces competition, the arrangement is forbidden by the Clayton Antitrust Act of 1914…Obama Inc. has effectively won a seat on the board of companies at the heart of the nation’s industrial production and its financial system… Over time, this public-private arrangement will be subject to all the traditional pitfalls of interlocking directorates, from collusion to conflicts of interest to strategic myopia. The directorates have at times been used to create cartels, commonly defined as ‘a form of collusion between firms in the same industry aimed at restricting output and increasing prices.’ The new CAFE deal fits the definition almost exactly. It restricts the production of large automobiles, will increase the price of cars, and ignores the interests of the consumers. This is beggar-thy-neighbor industrial policy, wherein government uses its power to inflict harm or bestow advantage in order to divide and conquer corporate America. As a short-term political strategy, it’s unassailable. As a way to run an economy, it will prove corrupting and stultifying. The cause of free-market capitalism awaits its Clayton to unravel the sprawling Obama directorate.”
Rich Lowry, “Obama, Incorporated“
“If increased government spending with borrowed or newly created money is a ’stimulus,’ then the Weimar Republic should have been stimulated to unprecedented prosperity, instead of runaway inflation and widespread economic desperation that ultimately brought Adolf Hitler to power.”
Thomas Sowell, “Random Thoughts“
Government is the problem, not the solution
“The word repeated endlessly in these political charades is “deregulation.” The idea is that it was a lack of government supervision which allowed “greed” in the private sector to lead the nation into crises that only our Beltway saviors can solve. What utter rubbish this all is can be found by checking the record of how government regulators were precisely the ones who imposed lower mortgage lending standards…”
Thomas Sowell, “The Blame Game,”
…is the part of the housing crisis that the current administration isn’t telling us.
“Because banks are regulated by various agencies of the federal government, it was easy to pressure them to lend to people that they would not otherwise lend to– namely, people with lower incomes, poorer credit ratings and little or no money for a conventional down payment of 20 percent of the price of a house. Such people were referred to politically as “the underserved population”– as if politicians know who should and who shouldn’t get mortgages better than people who have spent their careers making mortgage-lending decisions. …But, in politics, power trumps knowledge…Who could be against “the American dream” of home ownership or so mean-spirited as to ask how much it would cost the taxpayers or what risks it would create for the whole financial system? Certainly not most Democrats or Republicans in Congress or the White House. The media were also part of this crusade for more home ownership, more widely available. If some segments of the population did not own homes as much as others, that just showed that there was something wrong with the mortgage lending process, as far as editorial office philosophers were concerned. …Riskier mortgage lending practices, imposed by government, were what set the stage for many mortgage payments to stop and thus for the financial disasters that followed. Political rhetoric, echoed in the media, seeks to obscure that painfully plain fact.”
Thomas Sowell, “The Housing Boom and Bust”
