Either captial gains tax OR the free market

The economy is in a downturn, the worst since the beginning of the 80’s, and it has the potential to surpass that recession. Let’s examine what help we can hope for from the new administration:

There are two points regarding our president-elect’s plans for taxes to mention here: 1) increased capital gains tax—that is, the tax for positive returns on investments, 2) higher taxes for the rich. First, a brief economics lesson about the money supply:

The nation’s money supply consists of more than just what cash is floating around. When I lend you five dollars, expecting you to pay me a usury of 20%, I think I have six dollars, and you think you have five, and our money supply together is eleven dollars. Then we both continue to engage in trade with the “money” that we have: I buy a television on my credit card, and you buy lumber to build a lemonade stand. (A close enough parallel to what I mean by the nation’s money supply.)

What if because of the economic slump, you decide not to invest in a lemonade stand? You won’t borrow the money from me, and you won’t contribute to the market with your new lemonade business. And I’ll only have five dollars instead of six, so I won’t buy the television. When investment drops, the national money supply diminishes, and so does trade.

In light of our brief economics lesson, we see a solution for our economic downturn: to have the citizens with the most money (the rich) put it into the market by buying goods and services (investing). However, by means of the increase in capital gains taxes and taxing the rich harder, we are punishing the very people who have the means to correct the problem (the rich) for doing the very thing that we want them to do (pump money into the economy by making wise investments). “Punishing”? Yes, punishing, because if the investors do not invest or if they make poor investments, they will not be hit with the capital gains tax.

The capitalist’s hero, Adam Smith, explained that the invisible hand of a free market pushes the economy to its optimum. Artificial attempts to govern the economy prevent it from reaching that ideal. Need evidence? Look at the wealth that capitalism (free market) has produced compared with communism and socialism (government control). Our philosophy in the US for many years has not been one of a free market but rather of the idea that the economy should not be allowed to make decisions for itself because some people and industries will be marginalized.

Every year, we’re looking for “change,” the magic word to make all the problems go away. But the economic change we implement is only to shift in what way we artificially influence the market. This looks like change, but it is not a change of principle, a change in what we allow to govern the market. In fact, our “change” is often nothing more than intensifying previous efforts to effect change, which only exacerbates the problem.

Let’s lay the rosary of change to rest, stop calling on its name in prayer, and stop interfering with the capitalist free market via higher taxes, bailouts, stimulus packages, and heightened tariffs (there’s another thing that the new administration is considering).

Addendum:
What benefit comes from unshackling the market? The buyers patronize the suppliers who are offering what they want, with the marriage of quality and thrift which they want at the time. So the useful producers and are promoted, and their effective behavior is promoted in the market at large.

Obama 2008 - What racial barriers do you mean?

Racial barriers

"Obama shatters racial barriers," reads the behemoth headline in this morning’s Sacramento Bee. Are there racial barriers to presidency? If so, they are not legislative; they can only exist in the racist hearts of the voters.

…But we, the country, chose Barack Obama for president. California, a decidedly blue state (not noted for being mired in antiquated traditions of prejudice), chose Barack Obama for president. How are we, the voters, a racial barrier and at the same time the proponents of the candidate in question? Will we wear this slanderous label? Fortunately for the nation, the headline suggests, Barack Obama triumphed over the voters. Is that how election works? Is that how this election worked?

I am confident that the Bee would not say so.

Poor press

This is only a single example of poor press, and we have only considered the most attention-grabbing portion of the paper, but this sort of codswallop is not anomalous in my local paper, neither in some other papers across the country. We have an interest in our news providers; we choose to pay them for keeping us informed of the doings around us.

If you’ve watched “All the President’s Men,” the film about the journalists Woodward and Bernstein, who brought the Watergate presidential scandal to light, consider what fell within their demesne as journalists. If you haven’t watched it, I recommend it to you.

I have long been unsatisfied with my local paper and so do not patronize it. It is my perception that it reads like it was edited by a remedial high school elective class. The matters that receive focus tend toward the sensational, rather than the useful. Many matters I find represented with obvious bias. Will we continue to pay out for whatever drivel spills from the press onto the page?

Reading has been long considered an exercise for the mind, but it is not so if the reader passively accepts whatever drivel has spilled from the press onto the page—and how much worse when the reader pays to keep the provider employed. Let us inform our news providers what we will sanction and what we will not.

I will write to my local paper.

Amendment:

I have perhaps erroneously declared that the voters are not racist when I really meant to say that they are not racist in the way that the press would have us believe. In truth, I believe that the votes of many were influenced by race in this election, that for some, there was little examination of policy compared with the examination of pigment.