Rand Paul

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Watching the news the last few days has been hilarious. It seems that everyone is shocked and surprised at the idea that Rand Paul is against the civil rights act from 1964. I don’t know why they are surprised, there were articles on this in a Kentucky newspaper earlier, besides, this is basic Libertarianism. They want the government out of everything.

Imagine if people could do whatever they wanted on their property, which is one of the main Libertarian principles. Anyone could keep any kind of person they wanted out of their shop which operates in the public domain. In one place that is owned by a Muslim there would be no Jews or Christians allowed, or if he wanted to charge black people twice as much he could do it. Nor would he need to follow even the most basic safety needs.

Libertarians say that the free market will work these things out for themselves, someone restricting certain people from their establishment would not be able to stay in business long, or if people started dying in there people would stop shopping there. The problem with that is - people have to die first! You would think that maybe we could do something that keeps people alive - well we have, it’s called regulation.

And businesses in the South stayed open during 100 years of Jim Crow laws, so the market doesn’t always correct itself and sometimes there is a huge price to pay when there is a correction. The Libertarian view is that freedom doesn’t come cheaply, besides, they think only stupid people would get hurt and who cares about them, anyway?

The free market is a fraud, it doesn’t exist. It would be like a football game with no rules, brutal and no fun to watch. On top of that without government interference it’s the rich who are in control. Over time all the small businesses get swallowed up by the big corporations and when there are only a few places someone can work the corporations effectively have slaves who have to accept whatever ridiculous wages and working conditions they want. So in a very real sense it’s like a football game where all the rules were written by one team and only for their benefit. Any doubts who would win?

So libertarianism and smaller government is not about freedom, at least not about the freedom of you or me. It’s all about the big corps being able to do whatever they want at any cost. This is what we have seen happening because of the 8 years rule of the Bushies. The idea is that business can “self-govern” - what a joke. The banksters were self-governing when they crashed the world’s economy. British Petroleum was self-governing with that oil rig, where the spill is in the process of destroying the Gulf. They couldn’t even be bothered to have an emergency plan in place just in case anything did go wrong.

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Econ 101

Obama gave a speech today. We all know he’s good at speeches but for this one he dropped the soaring and inspiring prose and settled into the role of an economics professor and explained in simple terms why he was doing the things he’s doing to get the economy going again. All very good and, unfortunately, very necessary for the stupid American public who are getting mad about things that they don’t even understand.

Obama is doing what any smart guy would do, looking at history and learning it’s lessons. The best example we have of our situation is The Great Depression.

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Very easy to look at the things Hoover did, all of which caused a deeper and worse depression. And look at what FDR did that started us back on the road to being able to live.

The first thing Hoover did, and which he is most known for is - nothing. He just stood there and said there was nothing he COULD do, the economy would correct itself. As we can see, Republicans have followed ideology over reality for over 75 years. FDR showed (and this is actually Keynesian economics, FDR didn’t invent it) that spending at a time when only the government has the muscle for any kind of big spending, is the necessary thing for a completely stagnant economy. Another thing Hoover got raked over the coals for was raising taxes, which was like throwing gasoline on a fire. This is why Obama hasn’t raised taxes for the rich yet like he said he was going to. He’ll just wait for the Bush tax cuts to expire next year and hope the recovery is far enough along that it won’t hurt.

This I have some doubts on, that raising the top tax rate from 36% to 39% is going to cause much of a problem. It might even be stimulative as the rich might want to make business investments to lower their taxes. Keep in mind that we have a marginal tax, which means the percentage increases with quantity - the 39% kicks in at amounts over $400,000. And that rate is ONLY paid on income over that limit, not below it. Still, I can understand being cautious and won’t fault Obama for not wanting to risk raising taxes right now.

But where I do find fault is what Obama said about not nationalizing the banks the way Paul Krugman has been saying he should. I kind of felt like Obama couldn’t justify that either and gave the least amount of explanation on that part. I think he is just staying away from what most of the country sees as socialism. But Krugman actually IS an economics professor at Princeton, unlike Obama who only plays one in speeches, and he recently won the Noble Prize in Economics, no small feat.

First we need an explanation of what Krugman means by nationalizing the banks, he doesn’t mean for the government to start running banks, they aren’t in the banking biz and shouldn’t be. It means the government steps in and seizes a failing bank and pretty much guts it, getting rid of it’s toxic assets, shareholders and officers. Then they sell it and let new management come in and start fresh. The best part of this is that it throws the assholes out on the street who brought the entire world’s economy to it’s knees. The bailout is giving these very same assholes billions of dollars to do what they want with, like give themselves million dollar bonuses and buying company jets. I think this is the single worst thing Obama is doing, letting the same guys remain in their positions to wreck more havoc. The big disadvantage to nationalizing is that all the shareholders suffer 100% loss, no chance of ever getting it back. With all the IRA’s out there right now that could mean a big hit to a lot of middle class people, not just rich guys.

That kind of hit could be worse than raising taxes in today’s economic climate. That’s probably what Obama is worried about, although I’m sure he’s more worried about looking like a socialist.

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