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Thursday, September 29, 2011

President Obama Comes Out of the Socialist Closet

The latest proposal by President Obama may well be the most telling thing he has ever said. Certainly everyone feels for those who are unemployed, especially those laid off for no other reason than a lack of seniority or the closing of a business. However, the idea that a person can prosecute or sue a company for hiring someone currently employed versus the unemployed is ludicrous. It is also pure and unadulterated socialism.

In a capitalist system, employers and employees are free to contract between each other the exact terms of their relationship. Certainly it is acceptable for groups of employees to discuss and agree on what acceptable terms would look like, as happens in a labor union. However, the employer retains the liberty to reject that proposal and, if necessary, fire the whole lot and hire new workers. Moreover, an employer is free to chose the candidate it decides is most qualified for the job. In the case of employed versus unemployed, it is likely that the employed individual has retained more skills and is more current in the field. He most likely has a more impressive resume, and has been deemed valuable enough to retain his position despite the weak economy. There are many reasons to choose the already employed over and above sheer thoughtless discrimination.

What this move would accomplish is to create work for trial lawyers and bleed more money out of the manufacturing and service base of the economy. However, President Obama is now in full campaign mode, concentrating less on economic realities than pandering to his base (special interests like the aforementioned lawyers) and to the masses of unemployed people who have been left to rot, ironically, by the president's own policies. The net result of such a law would be to further hinder economic growth and thus extend the problem of unemployment rather than alleviating it. President Obama knows this, but he does not care. November 2012 looms much larger in his view than the long-term results of his decisions. As Thomas Sowell writes in Common Sense Economics, it is often a viable move politically to kill the goose who lays the golden eggs.

Thursday, September 15, 2011

President Obama's Phantom Jobs Bill

The president has a new jobs bill. Okay, really he has a few suggestions for a bill that hasn't yet materialized, but for the sake of argument let's pretend he actually took the time to write one. What I find interesting is the place from whence President Obama believes jobs should come. He suggests "investing in infrastructure," a code-phrase for make-work programs that would have been paid for by local governments if they were truly necessary. He will likely suggest extending unemployment yet again, lengthening the vacation that the unemployed may take before really having to begin the search for a job. Research has shown time and time again that increasing the timeline of unemployment benefits increases the number of unemployed. The president also wants tax breaks "for the wealthiest Americans," a bonus of $2,500 for each new hire. However, he also wants to increase their total tax burden. My step-dad once made me such an offer. When I asked for an allowance, he said, "Okay. I'll pay you 50 cents a week, but you'll have to pay me five dollars a week for rent."

What this as-of-yet-theoretical bill proves is that President Obama believes in a government-controlled, centralized economy. Jobs, to him, should be provided not by private enterprise but by government. Thus, instead of making conditions better for business, he proposes "closing tax loopholes," a fancy way of saying "raising taxes on business." Such foolishness betrays his lack of prior government experience. Every mayor and governor has granted tax breaks and other benefits to companies as an enticement to locate in their area. They know that by so doing, they will not only benefit by more jobs, but by the revenue that taxes on this income will produce. Anyone who has played SimCity knows that after a certain threshold, higher taxes means lower revenue. It's common sense to everyone but those in Washington D.C. To corporations, governments are service providers. If, in a cost-benefits analysis, the cost of services (taxes, wage rates, expensive regulations) outweigh the benefits provided by that government (protection from criminality, ease of transportation, special benefits and allowances), the corporation will choose another service provider. It's not unlike switching from Comcast to DishTV depending on which has a better selection and/or price. America needs to have the best possible combination of good service and low costs to attract companies to our shores rather than driving them away. We don't want to become the Verizon FIOS of international business environments.

While I'm waiting to hear the specifics of the president's plan, I am not hopeful. The man is a socialist; he has already signed legislation establishing government control over one-fifth of the economy (health care). He has simply taken the property of investors in corporate debt, deeming by royal proclamation that stakeholders would simply go unpaid, including teachers associations that had invested millions of their pension funds in corporate bonds. Having a socialist run a capitalist economy is like having an Amish man repair your computer. Not only is he unfamiliar with the technology--he doesn't even believe in it. I am waiting hopefully for President Obama to leave office and a businessman to enter it. Only someone who has succeeded in the private economy has the know-how to fix it.

Monday, September 12, 2011

Examining the Terrorists' Logic

Sometimes I have to wonder just how much we've learned since the attacks ten years ago. First, I thank God that Al Gore wasn't president--his first instinct was to ponder what we did to anger Osama. I can sum up why terrorists hate us in three short words: We're not Muslims.

Just for the sake of accuracy, let's entertain the arguments made by the Muslim Brotherhood and its offshoots. Their excuse is that we had no right to split up the Ottoman Empire after World War I. They see that empire as the last great caliphate, and resent that America and Europe had the audacity to disband it into several weaker entities. This resentment, however, stands in direct conflict with the facts. The dissolution of the Ottoman Empire began with the Arab Revolts, a series of rebellions by dissidents within the empire seeking to liberate the Arab peninsula. They were initiated by Sherif Hussein bin Ali in 1916 and greatly weakened the Ottomans, contributing to their downfall. By the end of World War I, not much was left of the Ottoman Empire for the Europeans to dissolve.

However, even admitting that some political interference was made after the war, it must be conceded that it was the Ottomans' own doing. By entering into a secret treaty with an imperialistic Germany and seeking to secure disputed lands using the conflict as an excuse, the Ottoman Empire set the scene for its own downfall. It was inevitable, really; by the 1900s, the Ottoman Empire was know as "The Sick Man of Europe." It had been in decline for years, and was showing no signs of recovery. At least it can claim that it went out with a bang rather than a whimper.

The second thing terrorists use to justify their idiocy is the existence of Israel. However, this too is a farce. Israel has always had a substantial Jewish presence. Even when ruled by Egypt or Arab powers, Palestine has been the homeland of the Jews. The creation of Israel as a Jewish state simply formalized what had been a matter of fact since Biblical times. It is true that some Arab Palestinians were forced to leave their homes in Jerusalem and the surrounding area, but what is never mentioned is that they were offered a substantial recompense for doing so. They were not being expelled from the country. What it boils down to is the issue of eminent domain. In some ways, I sympathize. However, if you refuse the money and end up being forced out, that's your choice. Either way, this happened the better part of a century ago. It's time to get over it and join the modern world.

The attitude of the terrorists is not entirely unlike the attitude of any people who were once wronged. Resentment generations later simply impedes progress. There is no point to rehearsing a list of past misdeeds, especially when this is done by murdering those who were not even alive when they happened. Sorry, terrorists, but you make no sense. America doesn't bargain with idiots. (Okay, we do domestically, but we're not talking about welfare policy right now.)

Terrorism is keeping the Muslim world from reaching its cultural and economic potential. There will never be another Golden Age until Islam has left the Crimson Age.