Economic Advice for the Obama Administration

During the last 8 years we've heard a lot about security. Security means different things to different people. For some, security means big weapons and lots of people actively wielding them. Our hope is that this is not what Mr. Obama thinks this word means. For most people, security means the ability to reliably provide for themselves and their families housing, food, medical care and the more abstract notions of happiness and love. Some of these are inscribed in our constitution. We formed this union to provide for the common defense, promote the general welfare and ensure the blessings of liberty to ourselves and our posterity. We should continue to do this - continue to promote the general welfare, continue to ensure the blessings of liberty to ourselves and our posterity. These were wise words written by wise people.

Let's make no mistake about this though, those blessings for us and our posterity are at risk today. Each day our liberty is curtailed by ongoing activist legislation not wrong because of its intent, but because of its methodology - every time we make it illegal for one Joe to do what he wants, it puts at risk the liberty of Jane to do what she wants next. If we continue to curtail our liberties based on reactionary felt needs of any given time, in time all our of liberties will be gone. In many ways, with them so go our general welfare. As our government continues to encroach on our daily lives, the quality of those lives decrease. We've seen this happen many times - with public education's "Learn to Work" program which has significantly eroded the quality of public education today. With our current economic interventionist strategy, we are threatening to do the same with our banks. Our local governments curtail how and where we can make money with their land-use policy. Various government agencies control how and from whom we can obtain energy and food.

Curtailing our liberties is not a way to ensure the blessings of liberty. Rather, it is to destroy those opportunities. Many people will say that the need for protecting ourselves against wrongdoers outweighs the need for liberty. But here we have to make a strong distinction between someone doing harm to another person by actively engaging them, and someone perceiving a harm done where there is none. For instance, we all can agree that inhaling second-hand smoke is harmful, but need we all agree that it is the smoker's fault that the non-smoking party is deciding to be in close proximity with them? At the very least this question is debatable. Surely someone not wishing to inhale second-hand smoke can leave or choose not to be near people that smoke. Society has built-in protections for such problems, and our mistake is to try to legislate our way out of them.

Another way our government tends to curtail our freedoms is by actively controlling the way we citizens conduct business. By subsidizing various activities and penalizing others, the federal government significantly decides the course of the american economy. For instance, our choice to subsidize road-building rather than rail, light rail and bullet-rail has put our transportation system decades behind other modernized countries. We've subsidized that system again today by providing low-cost loans for the dying automobile industry. Similarly, our banking industry is failing, and we've subsidized that failing industry again by injecting money directly into obsolete institutions. Lastly, we've subsidized our weapons and military-consulting industries with dire consequences for us and our worldwide friends, with the result that when our war has ended (and it must end) we will have a completely valueless industry here subsidized, again, by the federal government, sucking resources daily from the public funds whose purpose is to benefit We the People. If we are to remain free and ensure freedom in trade while simultaneously promoting growth, we can't subsidize dying industries. We must look to the future.

President Elect Obama's administration will have tough choices to make about how to steer the country, with unprecedented power in both houses of Congress, the Democratic party will have legislative and administrative freedom unparalleled in current history. This policy-making freedom must be used to ensure the blessings of liberty and to promote the general welfare for ourselves and our posterity. How can we do that without creating another government-funded fiasco like our banking system, military system, energy system and transportation system? I think the answer must be this - we have to get our federal-hands out of the business of deciding economic policy either directly or indirectly.

People, left to their freedoms and with their pocketbooks in tact will do what is good for themselves - we will innovate, expand, survive and prosper by the work of our own hands. In fact, the very idea of a government handout is morally appalling to anyone without a physical or mental disability and should be regarded as the very lowest of low activities for those able to contribute their own innovation and/or labor to the betterment of mankind. We must start this process at the top, for we began it at the top.

The first industries to lose their direct and indirect subsidies must be those industries most directly benefitting them, the guilty parties are enumerated above - we must dismantle our failing banking system and build and economic system on fairness and freedom rather than centralized control and cronyism. We must replace our failing transportation system of endless road-building and endless-car-building with systems that our country can live with for generations to come - and take our money out of the eternal waste of the automobile business. We must end our de facto subsidy of the oil industry by military means worldwide and invest in renewable energy sources here at home. We must end our dependency on foreign countries for all manner of essential materials as a matter of national security - a nation that depends on other countries for food, energy or medical supplies is constantly at risk of losing those supplies and at the mercy of their providers. How can we do this without intervening in the economic system? The answer is actually extremely simple. We must simply put an end to government subsidies for those activities. We must stop spending money on unnecessary foreign wars. We must stop giving money wholesale to bankers. We must stop giving money to automotive industry executives. It's that simple, we must put an end to the subsidizing of the largest industries in our country and we must do it immediately.

The results some people say would be catastrophic. But catastrophic for whom? Surely they would be catastrophic for the stockholders in those industries in terms of their lost savings, but the real question is why we're rewarding them for failing! For regular people, it would mean the following. Instead of our country depending on foreign sources for shoes and food and televisions and computers, we would more efficiently produce them locally to offset the increased cost of importing them without the de facto oil subsidy. By forcing America to rely on internal resources for energy, our tremendous think-tank of innovation would surge its activity to creating sustainable, renewable local sources of energy which would ensure that prosperity we enjoy now for generations to come. By removing the automobile subsidy, Americans would innovate in alternative forms of transportation, maybe even have the flying car we saw in the Jetsons when we were young. By removing the heavy burden of foreign wars, we would have additional human and capital resources to fulfill our needs for our people right here at home. In short, by simply NOT engaging in these practices of subsidizing directly and indirectly the banking, oil, automotive and military industries, we would create the secure and blessed nation we know we should have.

At the same time, the risk of NOT pursuing this course of freedom is dire.

There are really two things we might do to fail here, both of which we've done before. The first is to pursue legislative and administrative actions to directly intervene in the "fixing" of the american economy by continuing the subsidies of these industries. This would be catastrophic, creating in the United States a country permanently dependent on its ability to extend military might to acquire oil and raw goods necessary for the sustenance of human life here at home. This ongoing activity in which we are already engaged creates our enemies by giving them good reason to oppose us. Our extension of our economic influence abroad creates effective slavery worldwide, requires us to support oppressive regimes, and attracts the most radical elements of society to want to war with us and gives them the moral rational required to recruit what would normally be peaceful people to their cause which should be our shared cause - Freedom. If we stay this course, we destroy our own freedom for ourselves and diminish the likelihood of providing security for ourselves and our posterity.

If on the other hand, we attempt to subsidize OTHER forms of economic recovery - by handing out money to other businesses - we run the risk of simply missing the mark. For instance, if President Obama's administration were to subsidize the building of electric cars and those cars were not a suitable replacement for our current industry, in 10 years or less we would be in the same position we are in today - obsolete technology chasing an advancing world. If we create a comprehensive plan to create electricity cleanly today, and use that electricity efficiently for many years to come, we might still miss the mark and at the cost of, again, our freedom, as our legislation effectively legislates more and more how we can do business.

Let's imagine this scenario. Let's imagine that there were some combination of renewable clean electricity sources that could be developed with a finite cost today. And let's imagine that those electricity sources could be deployed to solve our general transportation problems in the form of trains, electric cars and publicly available air and sea-freight. Let's imagine further that we can produce all of the necessary materials and technologies here in the USA. Let's imagine that the United States becomes again the worldwide leader in energy-technology and transportation technology and because we've given up using military means to get what we need, we've gained allies and friends worldwide. And finally, let's imagine that the Federal Government subsidized this entire effort, creating millions of jobs and new companies in the next 8 years.

This sounds pretty good, right? Certainly in comparison to our current world, it sounds great. Idyllic even. As long as we're imagining it, we may as well all buy tickets for the maiden voyage of the Starship Enterprise.

In reality, our government is horrible at subsidizing innovation, terrible at creating jobs, and even worse at making us world-leaders. Look again at the military we've created, which while excellent, is based on military ideas from the previous century, incapable of winning a modern war (Korea, Vietnam, Iraq, Afghanistan) because the notion of winning is no longer ad-equated by the method of combat. We think rolling tanks over a capital city wins a war. It doesn't. We have to get used to that idea. What would work? I don't know. But I do know that what we've failed to do by pouring billions of dollars into government subsidized research is produce an army capable of defeating any modern opponent. Similarly, look at our federally subsidized education system, which continues to be the embarrassment of our people that every other first-world country manages to educate our children better than we do. Medicaire, is failing, we can't take care of our medical needs. Social Security is failing, we can't take care of our old people. In fact, we can't name a single successful government program with the possible exception of the Internet (and I say possible because, as we see now, private concerns are attempting to restrict internet access from the people who subsidized its creation - google "NET NEUTRALITY").

In short, increasing government subsidizing of any of these programs is simply bound to failure because it's based on the mistaken idea that governments are good at solving society's problems from the top-down.

Instead, we must allow our economy to fix itself from the bottom up, by simply refraining from subsidizing the failed business models and allowing Americans to fix our economy ourselves, and having faith that we're up to the task.

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