Friday, October 24, 2008

Is Capitalism and Deregulation to Blame for the Financial Crisis?

This past week, the Economist, one of my favorite news sources, raised a question that I have been meaning to write about for weeks: the future of capitalism. As many of us have seen, the U.S. economic system (the world’s best economic system) is under fire as a result of the current financial crisis. Subsequently, many of the pro-growth, free-market policies adopted during the past 25 years are in danger of being replaced by the outdated, statist policies that failed during the 1970s. This populist knee-jerk reaction is not the correct way to respond.

This growing desire to wrongly blame for the status quo is well addressed by the article. Specifically mentioned are the criticisms that have been raised against capitalism—namely, that American-style capitalism is a failing policy, and, more specifically, that deregulation of finance is a losing approach. In rebuking these false arguments, the article looks to the record of capitalism in the developing world, and notes that millions of people have been moved out of poverty as a result of the success of capitalism. In fact, it is highlighted that this decade could be the highest growth decade in history. With these indisputable realities, one cannot help but wonder, “where are these critics getting their information?”

There is some consensus that regulation of the financial markets does require a second hard look by regulations. Most reasonable minds and the author of the article seemingly agree with this. As also mentioned in the article great places to start are requiring banks to keep capital reserves during good times, as well as having the Federal Government consider asset prices in their decision making process. But the current crisis cannot be blamed on deregulation alone. Millions of Americans know this and the same sentiment is reflected in the article.

Over-regulation shares as much if not more of the culpability for the current problems. The article notes that the U.S. mortgage industry is heavily regulated, as evidenced by the role of quasi-governmental entities Fannie Mae and Freddie Mac. Regulators and Congress thought they had the proverbial thumb on these areas, while in hindsight, we know otherwise. Pairing this excessive entanglement with industry with ill-advised Federal efforts to increase home ownership brought us total disaster as a nation.

An additional point made by the article also provides proof from beyond our borders that over regulation equates disaster. Looking to the more recent economic crises in Japan and South Korea (also heavily regulated economies), it is not hard to see a greater picture forming that spells out what brings disaster.

Ultimately, as rightly stated by conservative thinkers for years, and most recently this article, we need better government, not more. There could not be a more accurate statement. Complicating an already broken system not only fails to address what brought the first problems into existence but then sweeps them under a rug where they remain hidden for years. What happens then is a re-emergence of a then bigger, more severe issue.

Less is more, both in life and in regulation.

W. Sherman

Wednesday, October 22, 2008

The test is now.

This Friday the modern day energy mafia otherwise known as OPEC will hold an emergency meeting to discuss the sudden “problem” with the price of oil. This re-convergence of many of the world’s most tyrannical, and anti-American governments to discuss what should be done to raise the price of oil should serve as another grave warning shot to all Americans that we live in a time that continues to be one of great peril, and not just at home.

Commentators today have rightly identified why some of the more infamous OPEC member countries are so agitated with the recent plummet in oil prices. To sum up those reasons is easy: they planned on using record prices to fund militarization, defy international law, and oppress freedom loving people around the globe. (Apparently with prices for oil dropping at record rates it is becoming difficult again to be a flush murderously oppressive government.)

Not only is this Friday meeting troubling news in that it indicates an increased potential for conflict around the globe, but such conduct will directly affect, (and likely harm) the American public as well. Based on what has been said recently there is in fact little question that one of the primary motivating factors of these rouge nations is to cause as much harm to the American public as possible.

Ironically a recent headline has also been that it is predicted that an Obama presidency would likely see a near immediate challenge by one of these rouge nations. Not only has coverage of this point been overdone, it is not even news worthy. A coke addicted in-bred with the IQ of Forrest Gump could have told you that countries like Russia, Iran, and Venezuela are out to get the United States any way they can. (For those out there excited about the break-through quality of the American news outlets, this ought to let a little wind out of your sails.)

The bottom line is this;
1.Oil is a weakness for the United States and most westernized countries.
2.This problem is complex and no amount of promised change or hope is going to solve it or any other economic problem quickly.
3.Throwing money at this issue or any other like matter is a short term solution that will screw you in the end because it breeds complacency.
4.The much hyped but still mythical Obama presidency is not going to be tested in 6 months, America is being tested now though and it takes a steady hand to respond to this still every present security and economic threat.

The end result is that we must elect a leader here in a few short weeks that has the best chance at handling a test already being administered to the United States. That leader is NOT Barack Obama. John McCain does offer the best chance we have at quashing the tyrannical governments seeking to do us harm like Iran, Russia, and Venezuela. These rouge nations are not going to let up on their assault on America. If we the electorate neglect this reality and choose the wrong leader we will be tested in ways no American would wish on anyone.


U.S. Grant

Tuesday, October 14, 2008

Parting Thoughts on a Wild Two Weeks.

The last two weeks have been an intensely emotional roller coaster ride when one thinks about the U.S. economy. Between the drama in passing the questionable $700 Billion Bail Our Plan and the rise and fall of the stock market, it has been hard to catch a breath in regards to our economy.

People are still talking about, and in many cases criticizing, the passage of the bail out. I cannot blame them; it is truly an affront to all small government-minded, freedom-loving people everywhere. Even worse (yet unsurprisingly), a large portion of the free world soon followed in our reactionary, populist footsteps, and imposed similar responses.

Compound this reality with the fact that the last Presidential debate, arguably one of the dullest exchanges in recent history between two men vying for the position of leader of the free world, did little to help the situation. Both candidates seem to be in a race to the bottom regarding who can buy out more personal debt faster, or who can crack down harder on those “greedy” men on Wall Street. This discussion is not only pointless but also redundant.

I realize that today, after the world relief package went through, the market also saw a historic rise. This is a great thing, but who is to say it would not have happened without governments world wide destroying economic freedoms, crushing free market ideals, and misapplying billions of dollars of taxpayer money. This seems like a certified deal with the devil, and as many of us know, the devil is in the details.

I am pleased to know that today, world markets are breathing more easily. Furthermore, even though John McCain’s discussion of buying out mortgages disappoints me, I will still vote for him without question. The thought of an Obama Presidency makes my skin crawl. I do invite both Senator McCain and the electorate to wisen up to the devil in the details here. The crisis is not over, and failure to recognize this could lay the seeds for another one in the future.


U.S. Grant

Note On Follow Up: Click HERE TO See The Washington Post October 14, 2008 For More On This From Those In The Industry!

Friday, October 3, 2008

Want Good Judges? Vote McCain

Very few law students—especially in the Midwest—have an opportunity to hear a lecture from the Chief Justice of the United States. Even fewer law students have an opportunity to pose a question to him during a Q & A session. And even fewer law students have an opportunity to shake his hand and have their picture taken with him. Yesterday, I became one of the fortunate few to have all three of these opportunities, thanks to Chief Justice John Roberts’ visit to Drake University Law School for the 2008 Dwight D. Opperman Lecture in Constitutional Law.

Quite honestly, there is little that I learned about Chief Justice Roberts that I didn’t already know. Having watched a large portion of his confirmation hearings in 2005, I knew he had an exceptional legal mind and was very likable. These expectations were confirmed today. Having taken Constitutional Law, and read some of his judicial opinions, I also knew that he is a judge who seeks to interpret the true meaning of our Constitution, and doesn’t arbitrarily assign meanings to parts of the Constitution that aren’t there. Again, this initial intuition was confirmed today. Finally, as one who has been paying attention to current events and one who is aware that election day is one month and one day away, I know that in order for our nation to continue to have good judges like Chief Justice Roberts on the bench, John McCain must be elected President.

A little history lesson to begin with: the last four Presidents each appointed more than one Supreme Court Justice. Presidents Bush, Bush and Clinton each appointed two (all of whom sit on the current Court) and President Reagan appointed three (two of whom sit on the current court). With Justice John Paul Stevens approaching age 90, there is a great likelihood that the next President will appoint at least one Supreme Court Justice.

On the Supreme Court, the vote of one Justice carries a lot of weight. One vote is the difference between allowing partial-birth abortions and upholding a law banning this gruesome procedure. It is the difference between forcing school children to be bussed an extraordinary distance for the sole purpose of “diversity” and allowing parents to have their children go to the best schools for them, regardless of their race. Finally, one vote is the difference between allowing cities to ban handguns from law-abiding citizens and upholding the second amendment right to keep and bear arms. On a more general level, one Justice may mean the difference between a Court whose decisions are based on the original meaning of the Constitution and a Court whose decisions are based on what the Constitution “should” mean. One vote may mean the difference between a Court whose decisions are based upon the Constitution and its original meaning, and a Court whose decisions are based upon foreign precedent and “contemporary human rights documents.” In short, one vote means a lot.

Another history lesson: John McCain has a track record of supporting good, originalist judges. He voted to confirm Justice Thomas, Chief Justice Roberts, and Justice Alito. Barack Obama voted against the Chief Justice and Justice Alito. Joe Biden voted against all three of the judges. For those of us who want good judges who will base their decisions on what the Constitution says, and not legislate from the bench, John McCain is your man.

By W. Sherman