Friday, December 23, 2011

Letter to the Editor of the Wall Street Journal

• Friday, December 23, 2011 As of 8:16 AM


Will We Ever Again See the Great Days of Capitalism?

While his Dec. 19 op-ed "Capitalism and the Right to Rise" is well written about things that need to be said, Jeb Bush mischaracterizes two key points.

First he writes, "We see human tragedy and we demand a regulation to prevent it." "We" don't demand anything; the politicians seeking to keep their cushy jobs pass laws just after a "human tragedy" to capitalize on the media coverage. It is the politicians, not the people, who legislate.

Second, Mr. Bush writes that "Mayors, county chairs, governors and presidents never think their laws will harm the free market." Again I beg to differ. I submit that many politicians couldn't care less about free markets, some being in absolute opposition to them. But they pass laws to keep their power and think little about the consequences, unintended or not. They seem to believe that they'll be out of office before then. This is about power, raw power over others, not any fine point of policy. The rubber, so to speak, is meeting the road now, when the promises made are becoming laws and crippling the free markets.

Theodore M. Wight


My Letter is based on the following Opinion piece:


• DECEMBER 19, 2011

Capitalism and the Right to Rise

In freedom lies the risk of failure. But in statism lies the certainty of stagnation.

• Article


Congressman Paul Ryan recently coined a smart phrase to describe the core concept of economic freedom: "The right to rise."

Think about it. We talk about the right to free speech, the right to bear arms, the right to assembly. The right to rise doesn't seem like something we should have to protect.

But we do. We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.

That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or nothing. People understand this. Freedom of speech, for example, means that we put up with a lot of verbal and visual garbage in order to make sure that individuals have the right to say what needs to be said, even when it is inconvenient or unpopular. We forgive the sacrifices of free speech because we value its blessings.

But when it comes to economic freedom, we are less forgiving of the cycles of growth and loss, of trial and error, and of failure and success that are part of the realities of the marketplace and life itself.

Increasingly, we have let our elected officials abridge our own economic freedoms through the annual passage of thousands of laws and their associated regulations. We see human tragedy and we demand a regulation to prevent it. We see a criminal fraud and we demand more laws. We see an industry dying and we demand it be saved. Each time, we demand "Do something . . . anything."

As Florida's governor for eight years, I was asked to "do something" almost every day. Many times I resisted through vetoes but many times I succumbed. And I wasn't alone. Mayors, county chairs, governors and presidents never think their laws will harm the free market. But cumulatively, they do, and we have now imperiled the right to rise.

Woe to the elected leader who fails to deliver a multipoint plan for economic success, driven by specific government action. "Trust in the dynamism of the market" is not a phrase in today's political lexicon.

Have we lost faith in the free-market system of entrepreneurial capitalism? Are we no longer willing to place our trust in the creative chaos unleashed by millions of people pursuing their own best economic interests?

The right to rise does not require a libertarian utopia to exist. Rather, it requires fewer, simpler and more outcome-oriented rules. Rules for which an honest cost-benefit analysis is done before their imposition. Rules that sunset so they can be eliminated or adjusted as conditions change. Rules that have disputes resolved faster and less expensively through arbitration than litigation.

In Washington, D.C., rules are going in the opposite direction. They are exploding in reach and complexity. They are created under a cloud of uncertainty, and years after their passage nobody really knows how they will work.

We either can go down the road we are on, a road where the individual is allowed to succeed only so much before being punished with ruinous taxation, where commerce ignores government action at its own peril, and where the state decides how a massive share of the economy's resources should be spent.

Or we can return to the road we once knew and which has served us well: a road where individuals acting freely and with little restraint are able to pursue fortune and prosperity as they see fit, a road where the government's role is not to shape the marketplace but to help prepare its citizens to prosper from it.

In short, we must choose between the straight line promised by the statists and the jagged line of economic freedom. The straight line of gradual and controlled growth is what the statists promise but can never deliver. The jagged line offers no guarantees but has a powerful record of delivering the most prosperity and the most opportunity to the most people. We cannot possibly know in advance what freedom promises for 312 million individuals. But unless we are willing to explore the jagged line of freedom, we will be stuck with the straight line. And the straight line, it turns out, is a flat line.

Mr. Bush, a Republican, was governor of Florida from 1999 to 2007.

Sunday, November 6, 2011

Our Government at Work.

In today's Seattle Times are four important articles.

1.  Front page of the Real Estate section E, page E 1.  "Some Big Goofs in Tax-Credit Program" discusses the fiasco of President Obama's tax-credit for first time home buyers.  Initially it was $7,500 then later $8,000.  The result?  Nearly 4 million applied and won $30 billion of taxpayers' cash for simply buying a home (which in all likelihood is worth less now).  But wait!  "A series of audits by the Treasury's inspector general has documented foul-ups by the IRS" including prison inmates, dead people, and teenagers getting the cash and plenty of fraud because the IRS initially didn't require any documentation.  The entire endeavor was a typical hugely expensive government bureaucratic mess costing upwards of a wasted $500 MILLION.  WASTED tax money from U. S. taxpayers.

2.  "4M  borrowers eligible for foreclosure review".   4,000,000 bundles of paperwork are to be reviewed by the U. S. Office of the Comptroller of the Currency, Federal Reserve and "independent" consultants forced on mortgage servicers for problems.  Who's to pay for all this?  You, one way or another, through use of your taxes or higher fees charged to get  a mortgage.

3.  Front Page D section, "Business", page D 1: "'Red Flag' seen before investment firm fell".
Seems Seattle investment advisor Mark Spangler's company The Spangler Group was inspected by an independent accounting firm which discovered that there was no independent qualified custodian of its customers' money and securities.  This material noncompliance was duly reported to the U. S. Securites and Exchange Commission which...did nothing.  Seems Spangler put $68 million of his clients' money into propping up failing (and subsequently failed) companies in which he had a personal investment.  The SEC was probably too busy writing rules or lobbying Congress to get more turf and regulations.  These are the regulators President Obama is counting on to stop another "meld-down"?  This agency was also investigated for illegally destroying its own records.  Oh yes, after the Spangler group filed for receivership did the SEC take a look.

4.  Finally in today's (November 6) Parade Magazine is an article which tells why this country is suffering from the rule of the over-zealous, anti-business Democratic Party.  Page 12: "If you purchased Reebok toning may...[get cash] through a proposed class action SETTLEMENT", where Reebok denied all wrongdoing but decided to settle.  If you bought certain Reebok items you can receive UP TO $25, $40 or $50.  YAHOO!  Score.  But WAIT! There's more:  Trial lawyers will get $3,500,000 plus expenses.  Of which according to practive $350,000 will be donated to elect Democrat Party candidates.  The Democrats who gain election throught the contributions of trial lawyers fight tooth and nail to continue the Class Action Lawsuit Industry from which they ream millions and sometimes billions of dollars of settlements.  There are no trials, no adjudication only suits filed, settlements agreed and dollars for lawyers.  And remember Reebok pays by increasing prices to pay the lawyers.

Thursday, November 3, 2011

Naive Republicans play the Democrats' game.

The Wall Street Journal

Letters to the Editor

November 1, 2011 page A 16


I beg to differ a little with Ms. Noonan. Her advice and that of most mainstream Republicans is to argue the Democrats' arguments.

Our country was founded on the concepts of life, liberty and the pursuit of happiness. That means government assures individual liberty, allowing everyone to pursue his own happiness. It doesn't mean that government defining happiness for people, or pursues it on their behalf.

Republicans want to enable Americans to pursue their own happiness, however they alone define it. How can Democrats fight that?

Republicans should forget about taxes; argue about personal freedom, win the election, then lower taxes. Arguing that big business is as bad as big government, or vice versa, should keep President Obama in place for another four years.

Theodore M. Wight




• OCTOBER 29, 2011

The Divider vs. the Thinker

While Obama readies an ugly campaign, Paul Ryan gives a serious account of what ails America.


People are increasingly fearing the divisions within, even the potential coming apart of, our country. Rich/poor, black/white, young/old, red/blue: The things that divide us are not new, yet there's a sense now that the glue that held us together for more than two centuries has thinned and cracked with age. That it was allowed to thin and crack, that the modern era wore it out.

What was the glue? A love of country based on a shared knowledge of how and why it began; a broad feeling among our citizens that there was something providential in our beginnings; a gratitude that left us with a sense that we should comport ourselves in a way unlike the other nations of the world, that more was expected of us, and not unjustly—

"To whom much is given much is expected"; a general understanding that we were something new in history, a nation founded on ideals and aspirations—liberty, equality—and not mere grunting tribal wants. We were from Europe but would not be European: No formal class structure here, no limits, from the time you touched ground all roads would lead forward. You would be treated not as your father was but as you deserved. That's from "The Killer Angels," a historical novel about the Civil War fought to right a wrong the Founders didn't right. We did in time, and at great cost. What a country.

Enlarge Image

Martin Kozlowski

But there is a broad fear out there that we are coming apart, or rather living through the moment we'll look back on as the beginning of the Great Coming Apart. Economic crisis, cultural stresses: "Half the country isn't speaking to the other half," a moderate Democrat said the other day. She was referring to liberals of her acquaintance who know little of the South and who don't wish to know of it, who write it off as apart from them, maybe beneath them.

To add to the unease, in New York at least, there's a lot of cognitive dissonance. If you are a New Yorker, chances are pretty high you hate what the great investment firms did the past 15 years or so to upend the economy. Yet you feel on some level like you have to be protective of them, because Wall Street pays the bills of the City of New York. Wall Street tax receipts and Wall Street business—restaurants, stores—keep the city afloat. So you want them up and operating and vital, you don't want them to leave—that would only make things worse for people in trouble, people just getting by, and young people starting out. You know you have to preserve them just when you'd most like to deck them.


Where is the president in all this? He doesn't seem to be as worried about his country's continuance as his own. He's out campaigning and talking of our problems, but he seems oddly oblivious to or detached from America's deeper fears. And so he feels free to exploit divisions. It's all the rich versus the rest, and there are a lot more of the latter.

Twenty twelve won't be "as sexy" as 2008, he said this week. It will be all brute force. Which will only add to the feeling of unease.

Occupy Wall Street makes an economic critique that echoes the president's, though more bluntly: the rich are bad, down with the elites. It's all ad hoc, more poetry slam than platform. Too bad it's not serious in its substance.

There's a lot to rebel against, to want to throw off. If they want to make a serious economic and political critique, they should make the one Gretchen Morgenson and Joshua Rosner make in "Reckless Endangerment": that real elites in Washington rigged the system for themselves and their friends, became rich and powerful, caused the great cratering, and then "slipped quietly from the scene."

It is a blow-by-blow recounting of how politicians—Democrats and Republicans—passed the laws that encouraged the banks to make the loans that would never be repaid, and that would result in your lost job. Specifically it is the story of Fannie Mae and Freddie Mac, the mortgage insurers, and how their politically connected CEOs, especially Fannie's Franklin Raines and James Johnson, took actions that tanked the American economy and walked away rich. It began in the early 1990s, in the Clinton administration, and continued under the Bush administration, with the help of an entrenched Congress that wanted only two things: to receive campaign contributions and to be re-elected.

The story is a scandal, and the book should be the bible of Occupy Wall Street. But they seem as incapable of seeing government as part of the problem as Republicans seem of seeing business as part of the problem.

Which gets us to Rep. Paul Ryan. Mr. Ryan receives much praise, but I don't think his role in the current moment has been fully recognized. He is doing something unique in national politics. He thinks. He studies. He reads. Then he comes forward to speak, calmly and at some length, about what he believes to be true. He defines a problem and offers solutions, often providing the intellectual and philosophical rationale behind them. Conservatives naturally like him—they agree with him—but liberals and journalists inclined to disagree with him take him seriously and treat him with respect.

This week he spoke on "The American Idea" at the Heritage Foundation in Washington. He scored the president as too small for the moment, as "petty" in his arguments and avoidant of the decisions entailed in leadership. At times like this, he said, "the temptation to exploit fear and envy returns." Politicians divide in order to "evade responsibility for their failures" and to advance their interests.

The president, he said, has made a shift in his appeal to the electorate. "Instead of appealing to the hope and optimism that were hallmarks of his first campaign, he has launched his second campaign by preying on the emotions of fear, envy and resentment."

But Republicans, in their desire to defend free economic activity, shouldn't be snookered by unthinking fealty to big business. They should never defend—they should actively oppose—the kind of economic activity that has contributed so heavily to the crisis. Here Mr. Ryan slammed "corporate welfare and crony capitalism."

"Why have we extended an endless supply of taxpayer credit to Fannie Mae and Freddie Mac, instead of demanding that their government guarantee be wound down and their taxpayer subsidies ended?" Why are tax dollars being wasted on bankrupt, politically connected solar energy firms like Solyndra? "Why is Washington wasting your money on entrenched agribusiness?"

Rather than raise taxes on individuals, we should "lower the amount of government spending the wealthy now receive." The "true sources of inequity in this country," he continued, are "corporate welfare that enriches the powerful, and empty promises that betray the powerless." The real class warfare that threatens us is "a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society."

If more Republicans thought—and spoke—like this, the party would flourish. People would be less fearful for the future. And Mr. Obama wouldn't be seeing his numbers go up.

Thursday, October 20, 2011

Something is up: DC is Richer than Silicon Valley

Washington, District of Columbia, is the richest city in America.  San Jose, California, the heart of "Silicon Valley" used to be.  Median -- half above half below -- household income was $84,523 for 2010 in DC versus $83,944 for the San Jose metropolitan area, center of innovation, entrepreneurship and wealth creation in America.  DC unemployment rate is 6% against a national figure of 9.1% and 10% in San Jose.

The average civilian federal worker gets $107,843 in total compensation.

According to the Wall Street Journal top capital lobbyists receive $1 million to $5 million plus bonuses.

And they're ocupying Wall Street!

Monday, May 16, 2011


My last post was October 29, 2010.  I am restarting after devoting the intervening time to vacations, a death in the family and my novel.

This is a practice.