My own sense is that capitalism works but, like with guns, in the hands of insane progressives and liberals anything can happen. Capitalism is not to blame but human excess. Moderation is key.(See 1 below)
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According to Sowell, Bernanke had his plans that were supposed to work. Like the Gershwin song from P and B, "Ain't necessarily so." (See 2 below.)
As a consequence of the economy not responding to Bernanke's approach, Roubini sees low rates for a long period. (See 2a below.)
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When my friend, Bret Stephens, wants to do a job on someone he is the best. In this op ed he hammers away at the mediocrity of Hegel and just unloads and justifiably so.
On any level Hagel should recuse himself but he will be confirmed because Democrats will be loyal to Party not the nation and Republicans just do not know how to twist after they have punctured. (See 3 below.)
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Jeb has to announce before Rubio or, in my opinion, we get into another nasty food fight. (See 4 below.)
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Dick
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1)3 crucial lessons Ayn Rand can teach us today
Feb 2nd is the birthday of Ayn Rand, author of the 1957 classic "Atlas Shrugged," and one of history’s most celebrated champions of capitalism. Here are three of the crucial lessons Rand offers those of us who want to fight for a freer, more prosperous America.
1. Celebrate Business
Today business is the scapegoat for virtually every evil. Whatever the problem or crisis, “greedy” businessmen take the blame, and the solution is always held to be more controls, more regulations, more taxes. When the financial crisis hit in 2008, for instance, Republican leaders raced to blame “greedy” bankers, not government policy. President Obama has intensified this outlook.
According to Rand, this is one of history’s worst injustices. Businessmen are the ones who create the medicines, food preservatives, sanitation systems, irrigation systems, and millions of other innovations and labor-saving devices that have nearly tripled our lifespans and provided us with a standard of living unimaginable by our forefathers. As she explained in 1961, the businessman is the great liberator who, in the short span of a century and a half, has released men from bondage to their physical needs, has released them from the terrible drudgery of an eighteen-hour workday of manual labor for their barest subsistence, has released them from famines, from pestilences, from the stagnant hopelessness and terror in which most of mankind had lived in all the pre-capitalist centuries.
Capitalism is good, said Rand, because it protects each man’s ability to make the most of his own life—and government intervention, which strips such men of their wealth and their freedom, is morally wrong.
If we want to limit government, Rand warned, this is something we need to celebrate. To slam business is to attack a core part of what makes America great.
2. Don’t Apologize for the Profit Motive
Underneath the attack on business is an attack on the motive that drives businessmen: the desire for profits. The profit motive, we’re constantly told, leads businessmen to lie, cheat, and steal their way to a buck—or at minimum taints them morally.
Just recall the criticisms of Mitt Romney. Even his Republican challengers criticized him, not for passing RomneyCare, but for having been a profit-seeking businessman. But if the profit motive is dangerous and immoral, how can we tolerate the profit system?
Rand sets the record straight. A profit, she notes, is the insignia of production: you make a profit when you produce something of value, something that others want to buy because it makes human life better, longer, easier, more enjoyable.
Capitalism is fueled, not by the Al Capones or the Bernie Madoffs of this world who seek to get money by hook or by crook. It is fueled by individuals who make money by creating wealth. This is the actual nature of the profit motive: it is the desire to earn rewards through productive achievement.
That, says Rand, is the kind of attitude toward one’s work, toward one’s wealth, and toward other people that pervades a free market. Free markets drive out of business the short-sighted, unproductive moochers who don’t create value—and a capitalist government locks up predators such as Madoff when they try to defraud others.
Capitalism is good, said Rand, because it protects each man’s ability to make the most of his own life—and government intervention, which strips such men of their wealth and their freedom, is morally wrong.
3. Run from Anyone Trumpeting “The Public Good”
Today government grows at the expense of individuals: at the expense of their rights, their freedom, their wealth. The supporters of Big Government have always justified this by appealing to “the public good.” How have defenders of capitalism responded? Not by challenging the notion of “the public good.” Instead, we have accepted that notion and tried to persuade people that only capitalism can achieve it.
But the justification for capitalism, Rand stresses, is not that it serves “the public good” or “the public interest” or “the common welfare.” All of those slogans are dangerously vague: they can mean anything, and so they can be used to “justify” everything. The justification for capitalism is that it is the only system based on the individual’s inalienable right to pursue his own life, liberty, and happiness.
Society, Rand observes, is not an entity but a collection of sovereign individuals, and the essential political value they have in common is freedom.
Freedom, Rand stresses, means that individuals can exercise their rights free from coercion and compulsion. They can work to make a successful life for themselves, acting on their own independent judgment, keeping the fruits of their labor, and dealing with others through voluntary exchange to mutual advantage. The government’s role is to protect their freedom by barring the initiation of physical force. The economic system that emerges when government is limited and individual rights are secured is capitalism.
If you want to stop the growth of the state, you have to get rid of any ounce of the idea that individuals exist to serve some social purpose or goal. Capitalism is the system rooted in the conviction that each individual is an end in himself and has a right to exist for his own sake.
Ayn Rand’s Winning Formula: Capture the Moral High Ground
If you wanted to boil down what makes Rand so successful and what she can teach us today, it would be that she teaches the free market side to take the moral high ground.
We “must fight for capitalism,” Rand says, “not as a ‘practical’ issue, not as an economic issue, but, with the most righteous pride, as a moral issue. That is what capitalism deserves, and nothing less will save it.”
But how can a system driven by self-interest and the pursuit of personal profit be moral? That is the question Rand answers in her works, and it is the question we address in our book, the national bestseller "Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government
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We can limit today’s unlimited government. But to do so we will need to mount an unapologetic moral defense of freedom. The first step is to arm ourselves with Ayn Rand’s unsurpassed stockpile of intellectual ammunition, and then to speak out for freedom.
Don Watkins and Yaron Brook are the authors of the national bestseller Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government and a fellow and executive director, respectively, of the Ayn Rand Institute.
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2) Prophets and Losses
)Now that the federal government is playing an ever larger role in the economy, a look at Washington's track record seems to be long overdue.
The recent release of the Federal Reserve Board's transcripts of its deliberations back in 2007 shows that their economic prophecies were way off. How much faith should we put in their prophecies today -- or the policies based on those prophecies?
Even after the housing market began its collapse in 2006, Federal Reserve Chairman Ben Bernanke said in 2007, "The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained."
It turned out that financial disasters in the housing market were not "contained," but spread out to affect the whole American economy and economies overseas. Then Chairman Bernanke said: "It is an interesting question why what looks like $100 billion or so of credit losses in the subprime market has been reflected in multiple trillions of dollars of losses in paper wealth."
What is an even more interesting question is why we should put such faith and such power in the hands of a man and an institution that have been so wrong before.
This is not just a question of a bad guess by Ben Bernanke. The previous chairman of the Federal Reserve System, Alan Greenspan, likewise misjudged the consequences of the housing boom and bust. Nor was the Federal Reserve's staff any more accurate in its prophecies. According to the New York Times, "The Fed's own staff still forecast that the economy would avoid a recession."
Today, the economy has not yet fully recovered from the recession that the Federal Reserve System's staff and chairmen thought we would avoid.
We all make mistakes. But we don't all have the enormous and growing power of the Federal Reserve System -- or the seemingly boundless confidence that Fed Chairman Ben Bernanke still shows as he intervenes in the economy on a massive scale.
Not only does the Federal Reserve System control the money supply and regulate banks, the Fed's willingness to keep buying hundreds of billions of dollars' worth of government bonds makes it easier for the Obama administration to keep engaging in massive deficit spending that runs up a record-breaking national debt.
The reason that the Federal Reserve can afford to continue buying huge amounts of government bonds is that the Fed is authorized to create its own money out of thin air. They use the fancy term "quantitative easing," instead of saying in plain English that they are essentially just printing more money.
Being wrong is nothing new for the Federal Reserve System. Since this year is the one hundredth anniversary of the Fed's founding, it may be worth looking back at its history.
President Woodrow Wilson explained the reasons for creating the Federal Reserve System. He said that the Federal Reserve "provides a currency which expands as it is needed and contracts when it is not needed" and that "the power to direct this system of credits is put into the hands of a public board of disinterested officers of the Government itself" to avoid control by private bankers or other special interests.
The Federal Reserve was supposed to prevent shocks to the economy that can come from drastic inflation or deflation, and reduce the dangers that can come from widespread bank failures. These are all good goals. But what is the Fed's track record?
In the hundred years before there was a Federal Reserve System, inflation was less than half of what it became in the hundred years after the Fed was founded. The biggest deflation in the history of the country came after the Fed was founded, and that deflation contributed to the Great Depression of the 1930s. As for bank failures, they reached levels unheard of before there was a Federal Reserve System.
Like so many "progressives," then and now, Woodrow Wilson seemed to think that, if those who made government decisions had no financial interest in those decisions, then they could be trusted to wield their powers in the public interest.
But the enormous power wielded by the unelected leaders of the Fed over the economy, unchecked by the constraints of the market, has repeatedly turned out to be more than human beings can handle.
2a)Roubini: Low Rates for 'As Far as Eye Can See’
By Dan Weil
The Federal Reserve will keep interest rates near record lows for “as far as the eye can see,” says Nouriel Roubini, chairman of Roubini Global Economics and a business school professor at New York University.
He also says that while private sector deleveraging has worked, public sector deleveraging will be a drag on the economy and keep gross domestic product growth at about 1.5 percent. And that will force the Fed to refrain from raising rates.
The U.S. economy contracted 0.1 percent in the fourth quarter, and economists’ consensus is that growth will total about 2 percent in 2013.
“Once the deleveraging of the public sector occurs, consumption growth is going to be slower,” Roubini tells CNBC. “So the economy for the time being is only growing 1.5 percent. Some positives would pick up the growth toward 2.3 percent, 3 percent.”
Raising taxes and reducing government benefits will crimp income growth and force faster deleveraging, he notes. “Job creation is picking up, creating income. The tax increases, including the payroll tax elimination reduces it. So you have forces going in different directions.”
That tension is going to drag down economic growth, Roubini explains. “Part of the growth over the last two years was due to the fact that we postponed the deleveraging of the public sector, and the consumer spent more income than otherwise.”
Now that we no longer have this boost, “there will be a cost of deleveraging the public sector,” he notes, thereby slowing economic growth.
As a result, “I don't think [a reversal of the Fed’s easing] is going to happen any time soon.”
The Fed is buying $85 billion of Treasurys and mortgage-backed securities a month and plans to keep short-term interest rates near zero until unemployment drops to 6.5 percent. The unemployment rate was 7.9 percent in January.
Last week, the Fed said it will stick with its massive easing program for the near future, despite the criticism of many economic experts.
Stanford University economist John Taylor writes in The Wall Street Journal that the central bank’s policy “creates incentives for otherwise risk-averse investors to take on questionable investments as they search for higher yields.”
Even some Fed officials have called for easing to be scaled back.
Richard Fisher, president of the Dallas Fed, favors reducing the pace of asset purchases as the U.S. economy gains momentum this year, Bloomberg reports.
“As you approach your goals and things get better, you reduce purchases,” Fisher says. “I wouldn’t go from Wild Turkey to cold turkey” in monetary policy.
“I wouldn’t have favored spiking the punch bowl to the degree we have,” but it would be too abrupt to stop purchases all at once.
Fisher, who doesn’t vote on monetary policy this year, opposes the Federal Open Market Committee decision last week to continue purchasing securities at the rate of $85 billion a month.
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3)Hagel's Hruska Defense
Will America's next defense secretary vindicate the cause of the mediocre man?
Once upon a time, a Republican senator from Nebraska spoke up for the right of mediocrities to occupy eminent positions of public trust.
"Even if he were mediocre, there are a lot of mediocre judges and people and lawyers," said Sen. Roman Hruska in 1970 as a defense of G. Harrold Carswell, Richard Nixon's ill-fated nominee to the Supreme Court. "They are entitled to a little representation, aren't they, and a little chance? We can't have all Brandeises, Frankfurters and Cardozos."
Right. And at the Pentagon, we can't have all Stimsons, Forrestals and Marshalls. Which is why America needs another senator from Nebraska to vindicate the cause of the mediocre man.
That man is Chuck Hagel.
Until his confirmation hearing last week, Mr. Hagel was touted as a courageous tribune of the hard but necessary truth. His nomination, according to one sycophant, "may prove to be the most consequential foreign-policy appointment of [Barack Obama's] presidency." He was hailed as a latter-day Dwight Eisenhower, a military hero mindful of the appropriate limits of U.S. power, a real American bold enough to tell the chicken-hawk neocon pretenders where they could stick it.
As for his claim about the Jewish lobby intimidating people, it was no more than a gaffe in the sense of accidentally telling the naked truth. "I am certain," said another prominent Hagel defender, "that the vast majority of U.S. senators and policy makers quietly believe exactly what Hagel believes on Israel." To take offense at the suggestion that a nefarious assortment of Jews plays the Congress like a marionette was to risk accusations of McCarthyism.
After the hearings, what's left of that defense?
Courageous Chuck is done for. He simply folded in the face of questions about his previous positions on Israel, Iran, nuclear Global Zero, Pentagon overspending and so on. If his repentance is sincere, then the ideological iconoclasm that was supposed to be his great recommendation as secretary of defense is no more. If he's insincere, then he's little more than a dissembler trying to advance his career.
Deep-thinking Chuck is no more, either. His befuddlement on Obama administration policy toward Iran—the flubbed remark about containment, the passed note, the re-flub, the coaching from committee Chairman Carl Levin—was almost the least of it. He didn't even seem to grasp the details of the 2011 Budget Control Act that contains the infamous sequester and will be the very thing he'll need to wrestle with immediately if confirmed.
Chuck-in-Charge is also not in the cards. "I won't be in a policy-making position," he said, astonishingly, to a question from West Virginia Democrat Joe Manchin. To be the secretary of defense, you see, is a bit like being the grand marshal at an Independence Day parade: You wear a sash, you hold a baton, you say a few words, you smile, wave and walk the route.
It says something about the political state of play that Mr. Hagel's defenders are now whispering that he just won't matter all that much. Serious defense policy will be run by the grown-ups in the White House, people like Ben Rhodes, Valerie Jarrett, Denis McDonough and, of course, the president. That's reassuring.
It also says something about the political moment that Republicans seem prepared to let Mr. Hagel through now that they have drawn a bit of blood. Nebraska's Mike Johanns and Mississippi's Thad Cochran have declared their support for Mr. Hagel. John McCain opposes a filibuster on the grounds that the president deserves an up-or-down vote on his nominee. In theory that's right and, in a sense, honorable. But a political party that can't press a political advantage when it has one is a loser. And who wants an opposition that thinks its honor lies in losing honorably?
In the meantime, it will come as a comfort to America's enemies to know what they'll be getting in a second Obama term.
One is a cabinet without a single hawk or even semi-hawk, whereas only a year ago there were three: Leon Panetta, David Petraeus and even Hillary Clinton. Another is a secretary of defense with an unsteady grasp of a department that may, within a month, be facing a historic and blunt reduction in its budgets. A third is a vice president who has just agreed to yet another round of negotiations with Tehran. And finally there's a president whose second inaugural address was entirely devoted to calling America home for the collective tasks he believes lie ahead.
Ask yourself how Vladimir Putin, Ali Khamenei and Bashar Assad are likely to feel about all of that. Shouldn't America have at least one officer of cabinet rank who scares the daylights out of these people?
If Mr. Hagel had a sense of the seriousness of the office he is now likely to enter, he would withdraw his name from consideration. But the essential characteristic of mediocre people is that they are the last to recognize mediocrity, either in themselves or in others. That our legislators in their wisdom may soon make this man secretary of defense says as much about them as it does about him. Truly, it's a Roman Senate.
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4)Jeb Bush Moving Closer to 2016 RunBy Cyrus Afzali
Former Florida Gov. Jeb Bush will speak for the first time at the annual Conservative Political Action Conference, a clear sign that he is mulling a run for the Republican presidential nomination in 2016.
The American Conservative Union, which sponsors the conference, announced Tuesday that Bush will address the group, set for March 14-16 in National Harbor, Md., just outside Washington. Bush has been invited by the group to speak at CPAC several times, but this will be his first appearance.
“We are pleased to announce that my friend Gov. Jeb Bush will be a featured speaker at CPAC 2013,” ACU Chairman Al Cardenas said in a statement.
“We look forward to welcoming him to the CPAC stage for the first time in March.”
Bush served as Florida governor for two terms and since leaving office in 2006 has been vocal about the Republican Party’s need to reach out to minorities. He’s also been critical of the Republican Party’s failure to embrace comprehensive immigration reform and made education policy a key priority during his time leading Florida.
News that Bush will take the stage at the conference comes as The National Review reports that Bush this week is meeting in Washington with a number of cabinet members of his brother, former President George W. Bush. When asked to comment directly on the rumors the meeting was tied to a forthcoming run, Bush would only say the meeting was about education policy.
Bush was one of the nation’s first governors to push through comprehensive education reform. Florida’s plan has since been modeled by 36 states.
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4)Jeb Bush Moving Closer to 2016 RunBy Cyrus Afzali
Former Florida Gov. Jeb Bush will speak for the first time at the annual Conservative Political Action Conference, a clear sign that he is mulling a run for the Republican presidential nomination in 2016.
The American Conservative Union, which sponsors the conference, announced Tuesday that Bush will address the group, set for March 14-16 in National Harbor, Md., just outside Washington. Bush has been invited by the group to speak at CPAC several times, but this will be his first appearance.
“We are pleased to announce that my friend Gov. Jeb Bush will be a featured speaker at CPAC 2013,” ACU Chairman Al Cardenas said in a statement.
“We look forward to welcoming him to the CPAC stage for the first time in March.”
Bush served as Florida governor for two terms and since leaving office in 2006 has been vocal about the Republican Party’s need to reach out to minorities. He’s also been critical of the Republican Party’s failure to embrace comprehensive immigration reform and made education policy a key priority during his time leading Florida.
News that Bush will take the stage at the conference comes as The National Review reports that Bush this week is meeting in Washington with a number of cabinet members of his brother, former President George W. Bush. When asked to comment directly on the rumors the meeting was tied to a forthcoming run, Bush would only say the meeting was about education policy.
Bush was one of the nation’s first governors to push through comprehensive education reform. Florida’s plan has since been modeled by 36 states.
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