Monday, August 6, 2012

Porkulus increases (roughly) equal GDP decreases

From The Wall Street Journal, on the general lack of effectiveness of Porkulus Packages.  If you say that stimuly spending saved us from a meltdown, you're looking at is as a theologian.  It's a matter of faith for you, nothing more.  Logic and evidence don't interfere with your worldview. 

Here's Art Laffer:

Policy makers in Washington and other capitals around the world are debating whether to implement another round of stimulus spending to combat high unemployment and sputtering growth rates. But before they leap, they should take a good hard look at how that worked the first time around.


It worked miserably, as indicated by the table nearby, which shows increases in government spending from 2007 to 2009 and subsequent changes in GDP growth rates. Of the 34 Organization for Economic Cooperation and Development nations, those with the largest spending spurts from 2007 to 2009 saw the least growth in GDP rates before and after the stimulus.

The four nations—Estonia, Ireland, the Slovak Republic and Finland—with the biggest stimulus programs had the steepest declines in growth. The United States was no different, with greater spending (up 7.3%) followed by far lower growth rates (down 8.4%).


Close..Still, the debate rages between those who espouse stimulus spending as a remedy for our weak economy and those who argue it is the cause of our current malaise. The numbers at stake aren't small. Federal government spending as a share of GDP rose to a high of 27.3% in 2009 from 21.4% in late 2007. This increase is virtually all stimulus spending, including add-ons to the agricultural and housing bills in 2007, the $600 per capita tax rebate in 2008, the TARP and Fannie Mae and Freddie Mac bailouts, "cash for clunkers," additional mortgage relief subsidies and, of course, President Obama's $860 billion stimulus plan that promised to deliver unemployment rates below 6% by now. Stimulus spending over the past five years totaled more than $4 trillion.

Hit the link at the top to read the whole thing before it disappears behind a pay wall. 
Hit a Statist upside the head with this chart next time he or she says the stimulus wasn't big enough. 

What would it take to change your mind?

Patrick Crozier over at Samizdata asks the great philosophical question "What would it take to change your mind?" 
In the link, Mr. Crozier uses the example of Global Warming.  He believes that Anthropogenic Global Warming isn't falsifiable, as there is no weather condition that isn't occasionally used as proof of AGW.  Therefore, it is a religious belief, rather than a rational one.  He begins his post as follows....   
In the Telegraph, Tom Chivers asks: what would it take to change your mind? It's a good question; I'm forever using it in imagined arguments with socialists. It's good because it helps distinguish beliefs that are rational from those that are religious. If you can answer it without being facetious or coming up with an impossible and improbable test then your beliefs are rational. If not, they're religious. It's a question I ask myself from time to time, as in: what would convince me that freedom is wrong?

So what would it take for me to change my mind about freedom and libertarianism?

Here's what would be required for me to change my mind.  See if this works, if it is falsifiable, if it is non-facetious, and if it is rational.

The Heritage Foundation has long published The Index Of Economic Freedom.  They rank every nation by a standard of Limitied Government (low government spending and high fiscal freedom), Rule Of Law (property rights and freedom from corruption), Regulatory Efficiency (business freedom, labor freedom, and monetary freedom), and Open Markets (trade freedom, investment freedom, and financial freedom). 

No nation is perfect.  But the citizens of Hong Kong enjoy much more freedom than those of North Korea. 
 
Not every nation is starting from the same baseline.  The U.S. has enjoyed about four centuries of basic respect for British Common Law.  That helps.  Other places have a government and a citizenry who thumb their noses at any contracts or agreements, and the entire nation is run on bribery. 

China's airport have concession stands where helpful Sherpas will set up your new business in three days.  Try that in France.  You'll die waiting. 

Here's a link to see the ranking of all nations by their relative levels of freedom.  Write down the places that interest you.   

Now, check this out....

The Legatum Institute puts out a World Prosperity Index.  In addition to their overall prosperity rank, the nations are judged by their education systems, safety and security, health, and social capital. 

The nations of the world don't have an exact correlation between freedom (liberty) and prosperity.  But it's close.  Of the top 10 nations in the Freedom Index, there are 5 who make the top 10 in the Prosperity Index.  Find me a correlation like that on every pro football Sunday afternoon, and I'll be a rich man by December. 

Hong Kong, Singapore and Chile are all in the Top 10 of the Freedom Index, but not the Prosperity Index.  But these were all third world hellholes within my lifetime.  Then the great Milton Friedman visited them.  They're coming off a lower baseline than, say Norway, Denmark and Finland, but does anyone doubt that they're going to be more prosperous places than the Scandinavia within 20 years? 

I believe that the relationship I see between prosperity and freedom is rational, falsifiable, and non-religious (regardless of how many people accuse me of swapping extreme Baptist fanaticism with extreme libertarian fanaticism). 

I'll change my mind about libertarianism when the Heritage Freedom Index and the Legatum Prosperity Index no longer have a positive correlation. 

So....what would it take for you to change your mind about the benefits of Obama's Stimulus Package? 

Sunday, August 5, 2012

Howard Roark's Trial Speech, Barack Obama's "You Didn't Build That", and Elizabeth Warren's "Roads" speech

I finished Ayn Rand's The Fountainhead this morning.  Good book. It's the story of an architect named Howard Roark who struggles to turn his vision into reality while being opposed by parasites, second-handers, and public opinion.  He agrees to design a housing project called The Cortland Homes as a favor for a friend, and for the joy of seeing the thing built.  He has one stipulation.  No one can change his design.  
Government parasites change his design, just for the hell of it, and to prove that they did something that day.  

Roark dynamites the housing project.  

Throughout the book, I couldn't help but think of the vast armies of regulators, busybodies, nannies, Family Values Republicans, Patronage Democrats, compassion democrats and their ilk who would be lined up for miles to keep Howard Roark from getting his buildings off the ground. 

Here's the speech from Roark's trial.  I've inserted quotes from a few contemporary politicians just to draw some contrasts.  See the italics. 

“Thousands of years ago, the first man discovered how to make fire. He was probably burned at the stake he had taught his brothers to light. He was considered an evildoer who had dealt with a demon mankind dreaded. But thereafter men had fire to keep them warm, to cook their food, to light their caves. He had left them a gift they had not conceived and he had lifted dardness off the earth. Centuries later, the first man invented the wheel. He was probably torn on the rack he had taught his brothers to build. He was considered a transgressor who ventured into forbidden terrritory. But thereafter, men could travel past any horizon. He had left them a gift they had not conceived and he had opened the roads of the world.


“That man, the unsubmissive and first, stands in the opening chapter of every legend mankind has recorded about its beginning. Prometheus was chained to a rock and torn by vultures—because he had stolen the fire of the gods. Adam was condemned to suffer—because he had eaten the fruit of the tree of knowledge. Whatever the legend, somewhere in the shadows of its memory mankind knew that its glory began with one and that that one paid for his courage.

“Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision. Their goals differed, but they all had this in common: that the step was first, the road new, the vision unborrowed, and the response they received—hatred. The great creators—the thinkers, the artists, the scientists, the inventors—stood alone against the men of their time. Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won.

“No creator was prompted by a desire to serve his brothers, for his brothers rejected the gift he offered and that gift destroyed the slothful routine of their lives. His truth was his only motive. His own truth, and his own work to achieve it in his own way. A symphony, a book, an engine, a philosophy, an airplane or a building—that was his goal and his life. Not those who heard, read, operated, believed, flew or inhabited the thing he had created. The creation, not its users. The creation, not the benefits others derived from it. The creation which gave form to his truth. He held his truth above all things and against all men.

There are a lot of wealthy succesful Americans who agree with me -- because they want to give something back. They know they didn’t -- look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something -- there are a whole bunch of hardworking people out there. - Barack Obama
“His vision, his strength, his courage came from his own spirit. A man's spirit, however, is his self. That entity which is his consciousness. To think, to feel, to judge, to act are functions of the ego.

“The creators were not selfless. It is the whole secret of their power—that it was self-sufficient, self-motivated, self-generated. A first cause, a fount of energy, a life force, a Prime Mover. The creator served nothing and no one. He lived for himself.

“And only by living for himself was he able to achieve the things which are the glory of mankind. Such is the nature of achievement.

“Man cannot survive except through his mind. He comes on earth unarmed. His brain is his only weapon. Animals obtain food by force. Man has no claws, no fangs, no horns, no great strength of muscle. He must plant his food or hunt it. To plant, he needs a process of thought. To hunt, he needs weapons, and to make weapons—a process of thought. From this simplest necessity to the highest religious abstraction, from the wheel to the skyscraper, everything we are and everything we have comes from a single attribute of man—the function of his reasoning mind.

“But the mind is an attribute of the individual. There is no such thing as a collective brain. There is no such thing as a collective thought. An agreement reached by a group of men is only a compromise or an average drawn upon many individual thoughts. It is a secondary consequence. The primary act—the process of reason—must be performed by each man alone. We can divide a meal among many men. We cannot digest it in a collective stomach. No man can use his lungs to breathe for another man. No man can use his brain to think for another. All the functions of body and spirit are private. They cannot be shared or transferred.

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. - Barack Obama
“We inherit the products of the thought of other men. We inherit the wheel. We make a cart. The cart becomes an automobile. The automobile becomes an airplane. But all through the process what we receive from others is only the end product of their thinking. The moving force is the creative faculty which takes this product as material, uses it and originates the next step. This creative faculty cannot be given or received, shared or borrowed. It belongs to single, individual men. That which it creates is the property of the creator. Men learn from one another. But all learning is only the exchange of material. No man can give another the capacity to think. Yet that capacity is our only means of survival.


“Nothing is given to man on earth. Everything he needs has to be produced. And here man faces his basic alternative: he can survive in only one of two ways—by the independent work of his own mind or as a parasite fed by the minds of others. The creator originates. The parasite borrows. The creator faces nature alone. The parasite faces nature through an intermediary.

“The creator’s concern is the conquest of nature. The parasite’s concern is the conquest of men.

“The creator lives for his work. He needs no other men. His primary goal is within himself. The parasite lives second-hand. He needs others. Others become his prime motive.

“The basic need of the creator is independence. The reasoning mind cannot work under any form of compulsion. It cannot be curbed, sacrificed or subordinated to any consideration whatsoever. It demands total independence in function and in motive. To a creator, all relations with men are secondary.

“The basic need of the second-hander is to secure his ties with men in order to be fed. He places relations first. He declares that man exists in order to serve others. He preaches altruism.

“Altruism is the doctrine which demands that man live for others and place others above self.
"You built a factory out there? Good for you, But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did." - Elizabeth Warren
“No man can live for another. He cannot share his spirit just as he cannot share his body. But the second-hander has used altruism as a weapon of expoloitation and reversed the base of mankind’s moral principles. Men have been taught every precept that destroys the creator. Men have been taught dependence as a virtue.


“The man who attemps to live for others is a dependent. He is a parasite in motive and makes parasites of those he serves. The relationship produces nothing but mutual corruption. It is impossible in concept. The nearest approach to it in reality—the man who lives to serve others—is the slave. If physical slavery is repulsive, how much more repulsive is the concept of servility of the spirit? The conquered slave has a vestige of honor. He has the merit of having resisted and of considering his condition evil. But the man who enslaves himself voluntarily in the name of love is the basest of creatures. He degrades the dignity of man and he degrades the conception of love. But this is the essence of altruism.

“Men have been taught that the highest virtue is not to achieve, but to give. Yet one cannot give that which has not been created. Creation comes before distribution—or there will be nothing to distribute. The need of the creator comes before the need of any possible beneficiary. Yet we are taught to admire the second-hander who dispenses gifts he has not produced above the man who made the gifts possible. We praise an act of charity. We shrug at an act of achievement.

“Men have been taught that their first concern is to relieve the sufferings of others. But suffering is a disease. Should one come upon it, one tries to give relief and assistance. To make that the highest test of virtue is to make suffering the most important part of life. Then man must wish to see others suffer—in order that he may be virtuous. Such is the nature of altruism. The creator is not concerned with disease, but with life. Yet the work of the creators has eliminated one form of disease after another, in man’s body and spirit, and brought more relief from suffering than any altruist could ever conceive.


"Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along." - Elizabeth Warren
“Men have been taught that it is a virtue to agree with others. But the creator is the man who disagrees. Men have been taught that it is a virtue to swim with the current. But the creator is the man who goes against the current. Men have been taught that it is a virtue to stand together. But the creator is the man who stands alone.


“Men have been taught that the ego is the synonym of evil, and selflessness the ideal of virtue. But the creator is the egotist in the absolute sense, and the selfless man is the one who does not think, feel, judge or act. These are functions of the self.

“Here the basic reversal is most deadly. The issue has been perverted and man has been left no alternative—and no freedom. As poles of good and evil, he was offered two conceptions: egotism and altruism. Egotism was held to mean the sacrifice of others to self. Altruism—the sacrifice of self to others. This tied man irrevocably to other men and left him nothing but a choice of pain: his own pain borne for the sake of others or pain inflicted upon others for the sake of self. When it was added that man must find joy in self-immolation, the trap was closed. Man was forced to accept masochism as his ideal—under the threat that sadism was his only alternative. This was the greatest fraud ever perpetrated on mankind.

“This was the device by which dependence and suffering were perpetuated as fundamentals of life.

“The choice is not self-sacrifice or domination. The choice is independence or dependence. The code of the creator or the code of the second-hander. This is the basic issue. It rests upon the alternative of life or death. The code of the creator is built on the needs of the reasoning mind which allows man to survive. The code of the second-hander is built on the needs of a mind incapable of survival. All that which proceeds from man’s independent ego is good. All that which proceeds from man’s dependence upon men is evil.

“The egotist is the absolute sense is not the man who sacrifices others. He is the man who stands above the need of using others in any manner. He does not function through them. He is not concerned with them in any primary matter. Not in his aim, not in his motive, not in his thinking, not in his desires, not in the source of his energy. He does not exist for any other man—and he asks no other man to exist for him. This is the only form of brotherhood and mutual respect possible between men.

“Degrees of ability vary, but the basic principle remains the same: the degree of a man’s independence, initiative and personal love for his work determines his talent as a worker and his worth as a man. Independence is the only gauge of human virtue and value. What a man is and makes of himself; not what he has or hasn’t done for others. There is no substitute for personal dignity. There is no standard of personal dignity except independence.

“In all proper relationships there is no sacrifice of anyone to anyone. An architect needs clients, but he does not subordinate his work to their wishes. They need him, but they do not order a house just to give him a commission. Men exchange their work by free, mutual consent to mutual advantage when their personal interests agree and they both desire the exchange. If they do not desire it, they are not forced to deal with each other. They seek further. This is the only possible form of relationship between equals. Anything else is a relation of slave to master, or victim to executioner.

“No work is ever done collectively, by a majority decision. Every creative job is achieved under the guidance of a single individual thought. An architect requires a great many men to erect his building. But he does not ask them to vote on his design. They work together by free agreement and each is free in his proper function. An architect uses steel, glass, concrete, produced by others. But the materials remain just so much steel, glass and concrete until he touches them. What he does with them is his individual product and his individual property. This is the only pattern for proper co-operation among men.

“The first right on earth is the right of the ego. Man’s first duty is to himself. His moral law is never to place his prime goal within the persons of others. His moral obligation is to do what he wishes, provided his wish does not depend primarily upon other men. This includes the whole sphere of his creative faculty, his thinking, his work. But it does not include the sphere of the gangster, the altruist and the dictator.

“A man thinks and works alone. A man cannot rob, exploit or rule—alone. Robbery, exploitation and ruling presuppose victims. They imply dependence. They are the province of the second-hander.

“Rulers of men are not egotists. They create nothing. They exist entirely through the persons of others. Their goal is in their subjects, in the activity of enslaving. They are as dependent as the beggar, the social worker and the bandit. The form of dependence does not matter.

“But men were taught to regard second-handers—tyrants, emperors, dictators—as exponents of egotism. By this fraud they were made to destroy the ego, themselves and others. The purpose of the fraud was to destroy the creators. Or to harness them. Which is a synonym.

“From the beginning of history, the two antagonists have stood face to face: the creator and the second-hander. When the first creator invented the wheel, the first second-hander responded. He invented altruism.

“The creator—denied, opposed, persecuted, exploited—went on, moved forward and carried all humanity along on his energy. The second-hander contributed nothing to the process except the impediments. The contest has another name: the individual against the collective.

“The ‘common good’ of a collective—a race, a class, a state—was the claim and justification of every tyranny ever established over men. Every major horror of history was committed in the name of an altruistic motive. Has any act of selfishness ever equaled the carnage perpetrated by disciples of altruism? Does the fault lie in men’s hypocrisy or in the nature of the principle? The most dreadful butchers were the most sincere. They believed in the perfect society reached through the guillotine and the firing squad. Nobody questioned their right to murder since they were murdering for an altruistic purpose. It was accepted that man must be sacrificed for other men. Actors change, but the course of the tragedy remains the same. A humanitarian who starts with declarations of love for mankind and ends with a sea of blood. It goes on and will go on so long as men believe that an action is good if it is unselfish. That permits the altruist to act and forces his victims to bear it. The leaders of collectivist movements ask nothing for themselves. But observe the results.

“The only good which men can do to one another and the only statement of their proper relationship is—Hands off!

“Now observe the results of a society built on the principle of individualism. This, our country. The noblest country in the history of men. The country of greatest achievement, greatest prosperity, greatest freedom. This country was not based on selfless service, sacrifice, renunciation or any precept of altruism. It was based on a man’s right to the pursuit of happiness. His own happiness. Not anyone else’s. A private, personal, selfish motive. Look at the results. Look into your own conscience.

“It is an ancient conflict. Men have come close to the truth, but it was destroyed each time and one civilization fell after another. Civilization is the progress toward a society of privacy. The savage’s whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.

“Now, in our age, collectivism, the rule of the second-hander and second-rater, the ancient monster, has broken loose and is running amuck. It has brought men to a level of intellectual indecency never equaled on earth. It has reached a scale of horror without precedent. It has poisoned every mind. It has swallowed most of Europe. It is engulfing our country.

“I am an architect. I know what is to come by the principle on which it is built. We are approaching a world in which I cannot permit myself to live.

“Now you know why I dynamited Cortlandt.

“I designed Cortlandt. I gave it to you. I destroyed it.

“I destroyed it because I did not choose to let it exist. It was a double monster. In form and in implication. I had to blast both. The form was mutilated by two second-handers who assumed the right to improve upon that which they had not made and could not equal. They were permitted to do it by the general implication that the altruistic purpose of the building superseded all rights and that I had no claim to stand against it.

“I agreed to design Cortlandt for the purpose of seeing it erected as I dedigned it and for no other reason. That was the price I set for my work. I was not paid.

“I do not blame Peter Keating. He was helpless. He had a contract with his employers. It was ignored. He had a promise that the structure he offered would be built as designed. The promise was broken. The love of a man for the integrity of his work and his right to preserve it are now considered a vague intangible and an inessential. You have heard the prosecutor say that. Why was the building disfigured? For no reason. Such acts never have any reason, unless it’s the vanity of some second-handers who feel they have a right to anyone’s property, spiritual or material. Who permitted them to do it? No particular man among the dozens in authority. No one cared to permit it or to stop it. No one was responsible. No one can be held to account. Such is the nature of all collective action.

“I did not receive the payment I asked. But the owners of Cortlandt got what they needed from me. They wanted a scheme devised to build a structure as cheaply as possible. They found no one else who could do it to their satisfaction. I could and did. They took the benefit of my work and made me contribute it as a gift. But I am not an altruist. I do not contribute gifts of this nature.

“It is said that I have destroyed the home of the destitute. It is forgotten that but for me the destitute could not have had this particular home. Those who were concerned with the poor had to come to me, who have never been concerned, in order to help the poor. It is believed that the poverty of the future tenants gave them the right to my work. That their need constituted a claim on my life. That it was my duty to contribute anything demanded of me. This is the second-hander’s credo now swallowing the world.

“I came here to say that I do not recognize anyone’s right to one minute of my life. Nor to any part of my energy. Nor to any achievement of mine. No matter who makes the claim, how large their number or how great their need.

“I wished to come here and say that I am a man who does not exist for others.

“It had to be said. The world is perishing from an orgy of self-sacrificing.

“I wished to come here and say that the integrity of a man’s creative work is of greater importance than any charitable endeavor. Those of you who do not understand this are the men who’re destroying the world.

“I wished to come here and state my terms. I do not care to exist on any others.

“I recognize no obligations toward men except one: to respect their freedom and to take no part in a slave society. To my country, I wish to give the ten years which I will spend in jail if my country exists no longer. I will spend them in memory and in gratitude for what my country has been. It will be my act of loyalty, my refusal to live or work in what has taken its place.

“My act of loyalty to every creator who ever lived and was made to suffer by the force responsible for the Cortlandt I dynamited. To every tortured hour of loneliness, denial, frustration, abuse he was made to spend—and to the battles he won. To every creator whose name is known—and to every creator who lived, struggled and perished unrecognized before he could achieve. To every creator who was destroyed in body or in spirit. To Henry Cameron. To Steven Mallory. To a man who doesn’t want to be named, but who is sitting in this courtroom and knows that I am speaking of him.”

"You didn't build that" - Barack Obama 

John Jay Myers on government regulation

My buddy John Jay Myers posted this gem on Facebook yesterday.  He's running for Senate, and here's where you can go to send him some money. . 
Here's a beautiful John Jay rant on the general uselessness of government regulation:
 
When the SEC wanted someone to give lectures, who did they hire?
Bernie Madoff. The biggest crook they could find.
Nasdaq made him its chairman; the SEC appointed him to industry panels; Congress invited him to testify.

Unfortunately the more power to regulate you give to government, the more they regulate in favor of their cronies, crippling the real competition, this is why the only real answer is to limit what government can do.
 
I'm trying, and failing, to think of any scams that the SEC prevented before they became full-blown disasters.  There's plenty of anecdotal evidence that regulators knew that Madoff was running a house of cards, but no one had the cajones to say anything. 
Is it possible that the best regulation for Wall Street would be 1) requirements that everyone will do what they say they'll do, and 2) hanging a sign at each end of the thoroughfare that says "Let The Buyer Beware"?  In the present system, players generally believe that the government has their back.  They don't. 

For those against "the big banks" the easiest way to bring them down would be to deregulate them. Why? Because who would invest in a bank 2000 miles away if you didn't think the government had your back?

You would look for a safer place to put your money, like a local bank where you knew the people running it. A bank where you could verify that they had private insurance to cover their loans. Private insurers would do a much better job of regulating banks than the government because they have a strong financial incentive to do so.

Knowing the government is not giving these companies a pass you might consider investing your money in your local economy as opposed to investing it in the stock market. Isn't that what most people would really like to see? Money going right back into their community?

If the government was out of banking then you would get a fair interest rate for your money because they would finally need your money. Right now they can borrow from the Fed at 0%, why do they need your money?

Lastly regulation means that somehow we, the American people taking responsibility for the banking industry, that Americans are ALL on the hook. I don't want to be on the hook for what a private business does.

It means they make the profits and we take the losses.
 
Willingness to say things like that is why John Jay would make a great senator. 
 
 

Saturday, August 4, 2012

Real Men Of Genius: Calvin Coolidge

The 1920's "roared" partly because Calvin Coolidge was president. 
Calvin didn't get involved with much.  Stayed home a lot. 
Didn't preach for anything but less government involvement. 
Told the lobbyists for the first Farm Bill to shove it. 
Supported Civil Rights for blacks and immigrants. 
He cut taxes and spending to the point that by 1927, only the top two % of earners paid any income tax.  He slashed the national debt by 1/4.  

That's really all he did to create one of the most prosperous times in U.S. history. 

It was called "The Roaring Twenties".

If he'd been president at the beginning of the the stock market crash of '29, I suspect we wouldn't have seen a Great Depression. Calvin would've ignored it.

Whited's Law: A depression is a recession that the government tried to kill. 

Where's Calvin now that we really need him? 

Friday, August 3, 2012

On Price Controls At The Olympics

To charge fair market value for something like the Olympics would be unfair. 
Therefore, price controls were put in place. 


Here's the great Tom Woods, star speaker at the Texas Libertarian Party's recent State Convention, on why you've got empty seats:
The British Olympic organizers restricted ticket purchases, rewarded corporate purchases but not corporate use, imposed price controls on tickets available to the public and state violence against the resulting scalpers (touts) — and are distraught and surprised over the empty seats that characterize so many of the Olympic events so far. To reduce the embarrassment and sense of scandal, organizers have carted in British troops–dressed in their camo!–to fill seats at gymnastics events, while other easily manipulated, low-time-cost groups on the government’s payroll are also being bussed in to other sparsely-attended venues.

Meanwhile, many thousands willing to pay market prices to attend Olympic events are told to bugger off.

And they always act "surprised", don't they? 

Glenn Reynolds of Instapundit has been having fun for the last 5 years or so, working the word "unexpectedly" into the reports of markets and prices reacting to incentives in ways that surprise the Statists but not many other people.  Go here for a sampling....

A Day In The Life Of A Statist. Or A Departmentist.

Someone (with the aid of schoolteachers, The Department Of Education, and the roadbuilders of the Information Superhighway) has written a clever little socialist parable that is making the rounds on Facebook:

This morning I was awoken by my alarm clock powered by electricity generated by the public power monopoly regulated by the US Department of Energy. I then took a shower in the clean water provided by the municipal water utility. After that, I turned on the TV to one of the FCC regulated channels to see what the National Weather Service of the National Oceanographic and Atmospheric Administration determined the weather was going to be like using satellites designed, built and launched by the National Aeronautics and Space Administration. I watched this while eating my breakfast of US Department of Agriculture inspected food and taking the drugs which have been determined as safe by the Food and Drug Administration.

At the appropriate time, as regulated by the US congress and kept accurate by the National Institute of Standards and Technology and the US Naval Observatory, I get into my National Highway Traffic Safety Administration approved automobile and set out to work on the roads built by the local, state and federal departments of transportation, possibly stopping to purchase additional fuel of a quality level determined by the Environmental Protection Agency, using legal tender issued by the Federal Reserve Bank. On the way out the door, I deposit any mail I have to be sent out via the US Postal Service and drop the kids off at the public school.

After work, I drive my NHTSA car back home on the DOT roads to my house, which has not burned down in my absence because of the state and local building codes and fire marshall’s inspection, and which has not been plundered of all its valuables thanks to the local police department.

I then log on to the internet, which was developed by the Defense Advanced Research Projects Administration and post on freerepublic.com and fox news forums about how socialism in medicine is bad because the government can’t do anything right. 

-Anonymous Wingnut

It begs for a response, doesn't it?  If the phrase "electricity generated by the public power monopoly regulated by the US Department of Energy" doesn't make you break out in fits of giggles, hell, it can't be done.  And then there's the long lists of unnecessary government departments, all staffed with tens of thousands of useless seat warmers, helping this guy get through his day. 

Because if the government didn't provide those services, the private sector could never ever do so.  Is that really what this dude believes?   

Someone called Ipster76 on Reddit wrote a response that goes as follows:

This morning I was awoken by my alarm clock powered by electricity generated by the local public power monopoly. After that, I turned on the TV to one of the FCC regulated channels to see what the latest misleading liberal dominated mass media reports are. I watched this while eating my unhealthy, subsidized corn-byproduct dominated breakfast thanks to the US Department of Agriculture.

Had I written this, I would've put in something about "the US Department of Agriculture - a wholly owned subsidiary of Monsanto."  But I tend to over-write. 

I then get into my National Highway Traffic Safety Administration used automobile, whose renewed title I was forced to pay an exorbitant amount for when I bought it. I then set out to my job on the roads built by the local, state and federal departments of transportation, passing by groups of 8 or more Union laborers, of which only about 2 are actually doing work at any given moment due to their collective bargaining agreement. I am also forced to slow down or risk being caught and fined by speed cameras implemented by the local government, despite the fact that I am a fully competent driver with no violations on his record, and the highway repairs have yet to be finished after 5 years. I also do not stop to purchase exorbitantly priced fuel from Big Oil subsidized by the Federal Government using legal tender that has lost value thanks to inflationary policies of the Federal Reserve Bank. At some point in the future when I am married with children, I will drop off my kids off at a private school 20 minutes away, because despite my future residence in a decent neighborhood, I am zone for an unsafe public school fraught with gang activity, and staffed by underpaid teachers.

This guy must live on Fort Worth's East Side. 

After work, I drive by the same unproductive union workers in the alleged construction zones, and am again forced to slow down because of the speed cameras. I do not stop by the liquor store, because although I am legally an adult who can vote and serve in the military, I cannot legally purchase alcohol, thus violating my rights under the Equal Protection Clause of Section I, Amendment IIV of the Constitution; however, because I am over the age of 18, it will also remain on my permanent record if I am caught in possession of it. I continue driving my car back to my apartment, which I discover has been plundered of all its valuables. I contact the local Police Department, who make a cursory investigation and fail to find any evidence, because they are too busy fighting the prohibitionist war on drugs under which gang activity has flourished for the past 30 years. I consider smoking some marijuana on my own private property to relax after a long, hard day at work, but I can’t because it has been made illegal by politicians that receive campaign funds from big pharma and the liquor lobby.

I then get on to the internet, which the Federal Government is trying to stifle through regulation and censorship, and proceed to post on r/politics about how libertarians are selfish and that the government needs to be more involved with healthcare.

Well done, sir.  Well done. 

Thursday, August 2, 2012

Why shouldn't Olympic earnings be taxed?

Florida's Marco Rubio is trying to ensure that Olympians aren't taxed for bringing home gold, silver, or bronze medals. 

The Florida Republican introduced a bill today to exempt U.S. Olympic medal winners from paying taxes on their medals. In addition to gold, silver or bronze, medal winners receive cash payments to go with their hardware.

Rubio said the American medal winners get honorariums from the U.S. Olympic Committee of $25,000 (for winning gold), $15,000 (for silver) and $10,000 for bronze, with the Internal Revenue Service ever ready to collect.

"Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness," said Rubio, a Tea Party favorite. "Athletes representing our nation overseas in the Olympics shouldn't have to worry about an extra tax bill waiting for them back home."

Similar measures have also been introduced in the House, by Reps. Aaron Schock, R-Ill., Mary Bono Mack, R-Calif., and G.K. Butterfield, D-N.C.

Under the legislation, the gross income of U.S. Olympians "shall not include the value of any prize or award won by the taxpayer in athletic competition in the Olympic Games." If the bill becomes law, it would apply to prizes received after Dec. 31, 2011.
Ok, so Michael Phelps works his butt off to win $25K, and wouldn't have to pay taxes on it.
 
Some other guy who isn't on television works his butt off to write a book, sell a painting, or even puts a lot of money at risk to win $25K at the blackjack tables in Vegas.  He still has to pay taxes on that, because he isn't representing our nation overseas?? 

Can someone please clarify the distinction that Rubio is trying to make? 

In case you're new to this site, I believe that 80% of all tax dollars are mis-spent.  The worst thing that can happen to an Olympian's hard-earned dollar is for Tim Geithner to get his grubby little paws on it.  But I don't think it makes sense to exempt Group A from taxes but not Group B.  Especially when Group B supplies the donations that make Group A's useless but entertaining activity possible. 

Wednesday, August 1, 2012

You Didn't Lift That

Finally. 

A nation whose citizens express proper gratitude to their leaders.
London, July 30(ANI): North Korean Olympian Om Yun Chol joined an elite list of weightlifters to have lifted three times their weight during the men's 56-kg, group B, clean and jerk weightlifting competition at the London Olympics, and he has credited his world-record feat to late North Korean leader Kim Jong Il.


Om won the gold medal in the process, and according to him, it was all thanks due to their late 'great leader'.

The 20-year-old Om, who stands just a shade under 5 feet, also set an Olympic record when he cleared 168 kilograms (about 370 pounds) in the clean and jerk in the men's 56-kilogram (about 123 pounds) category.

"How can any man possibly lift 168kg? I believe the great Kim Jong Il looked over me," CBS quoted Om, as saying.


Let us all take a brief timeout from our daily tasks, go to a quiet place, and offer up prayers of gratitude to the Kims, Pol Pots, Bushes, Clintons, Reagans, Obamneys, Pelosis, Reids and Boehners who take our money away from us and then pay other people to do things for us with it.  For without them, we would have more choice in the matter. 

Go here for the entire story about Om. 
Go here for the theologian who first noted Om's proper attitude of reverence to The One who helped him lift 168 kilos.  His blog is called The Dignified Rant.  Via a link from Instapundit. 
If you've been moved by Om's story, you can go here for information on how pay for even more government's spending.  (Bush/Obama spending, not North Korean spending).

Send your checks to this address:

Attn: Dept G

Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

Tuesday, July 31, 2012

Happy Birthday, Milton Friedman !!!

From The Wall Street Journal:

It's a tragedy that Milton Friedman—born 100 years ago on July 31—did not live long enough to combat the big-government ideas that have formed the core of Obamanomics. It's perhaps more tragic that our current president, who attended the University of Chicago where Friedman taught for decades, never fell under the influence of the world's greatest champion of the free market. Imagine how much better things would have turned out, for Mr. Obama and the country.


Friedman was a constant presence on these pages until his death in 2006 at age 94. If he could, he would surely be skewering today's $5 trillion expansion of spending and debt to create growth—and exposing the confederacy of economic dunces urging more of it.

In the 1960s, Friedman famously explained that "there's no such thing as a free lunch." If the government spends a dollar, that dollar has to come from producers and workers in the private economy. There is no magical "multiplier effect" by taking from productive Peter and giving to unproductive Paul. As obvious as that insight seems, it keeps being put to the test. Obamanomics may be the most expensive failed experiment in free-lunch economics in American history.


Equally illogical is the superstition that government can create prosperity by having Federal Reserve Chairman Ben Bernanke print more dollars. In the very short term, Friedman proved, excess money fools people with an illusion of prosperity. But the market quickly catches on, and there is no boost in output, just higher prices.


Next to Ronald Reagan, in the second half of the 20th century there was no more influential voice for economic freedom world-wide than Milton Friedman. Small in stature but a giant intellect, he was the economist who saved capitalism by dismembering the ideas of central planning when most of academia was mesmerized by the creed of government as savior.

Some words to remember from the middle of the article, on school choice, and why raising taxes on anybody is a bad idea:

The issue he devoted most of his later years to was school choice for all parents, and his Friedman Foundation for Educational Choice is dedicated to that cause. He used to lament that "we allow the market, consumer choice and competition to work in nearly every industry except for the one that may matter most: education."


As for congressional Republicans who are at risk of getting suckered into a tax-hike budget deal, they may want to remember another Milton Friedman adage: "Higher taxes never reduce the deficit. Governments spend whatever they take in and then whatever they can get away with."

Go here to read the whole thing.  Here are the closing paragraphs: 

In a recent tribute to Friedman in the Journal of Economic Literature, Harvard's Andrei Shleifer describes 1980-2005 as "The Age of Milton Friedman," an era that "witnessed remarkable progress of mankind. As the world embraced free-market policies, living standards rose sharply while life expectancy, educational attainment, and democracy improved and absolute poverty declined."

Here's an idiotic stencil from the "Occupy Wall Street Folks" who don't quite understand that increased trade and freedom are good things:


Well over 200 million were liberated from poverty thanks to the rediscovery of the free market. And now as the world teeters close to another recession, leaders need to urgently rediscover Friedman's ideas.

I remember asking Milton, a year or so before his death, during one of our semiannual dinners in downtown San Francisco: What can we do to make America more prosperous? "Three things," he replied instantly. "Promote free trade, school choice for all children, and cut government spending."

How much should we cut? "As much as possible."


One other thing...Friedman was much criticized for advising some of the regime of Pinochet in Chile.  Protesters met him at the airport, etc.  (No one said anything about him advising China's murderous commie regime, since the Communists were thought to have pure intentions.) 

I'm sending shipments to Chile and China in the next few weeks.  Since Friedman's consultations, these nations have gone from 3rd World Shitholes to prosperous places to live.  They can afford to purchase fruitstands made in the USA.  Chile now afford to purchase entire grocery stores worth of USA-manufactured displays. 

North Korea and Cuba are not yet customers.  Come back, Milton!  We need you !!!

Monday, July 30, 2012

Liberty Speaker Series - Guns, The 2nd Amendment, and You

"The right of the people to keep and bear arms shall not be infringed."

Sounds simple, doesn't it?

The Bill Of Rights is a list of ten rules to protect citizens from their government. If the government gets to have a militia, then the people get to have guns.


So why the controversy about gun rights?  If crazies, outlaws, and criminals have guns, shouldn't the populace be allowed to defend itself?  That's the subject for our next Liberty Speakers Series. We're getting together at the Radisson Hotel at 2540 Meacham Boulevard in north Fort Worth, 7:30 p.m. on Thursday, August 2nd.

(BTW, I scheduled this event before the mass-murder in Colorado.  I'm not intending to exploit the issue.  But folks, it's now possible to make a gun with a 3D printer.  They're not going away.) 

We have a great trio of speakers from two great organizations.

Scott Harmon is a Political Event Volunteer Coordinator with the National Rifle Association. He (and his family!) have worked tirelessly for years to protect the 2nd Amendment, publicize threats to your gun rights, and to educate the public about the pressures that are brought to bear on lawmakers in Washington and Austin. Scott comes to us highly recommended by the NRA's national office. After a few telephone conversations, it's safe to say that this won't be Scott's last speaking event for a Libertarian audience (Hello, Dallas County !) Scott makes some of us sound like Marxist Vegetarians. You don't want to miss hearing Scott Harmon talk about your gun rights, especially in today's political climate.



David Stroud is the First-Vice President of the Texas State Rifle Association, an organization founded in 1919 to protect (and expand) the rights of Texas gun owners. David got into the TSRA to participate in some of their competitive shooting events, liked what he saw, and began working in various administrative and leadership jobs in the organization. David will talk to anyone, anywhere, and any time about gun rights. He once took the TSRA booth to the Texas State Democratic Convention. Now that is commitment !!


Larry Keilberg is head of the National Association For Legal Gun Defense, an organization that provides legal aid for anyone who fights back against a criminal.  (Larry and his management team are a recent addition to this event.)  All members of the NAFLGD have an automatic $10,000.00 defense fund at their disposal should they be involved in a defense-related incident.  Their team of lawyers (Fort Worth based, BTW) is at your disposal. 


After we hear from Scott, David and Larry talk about their organizations, their importance, the latest threats in the state and national legislatures, they'll be taking some questions from you.

This will be an oustanding evening with some great speakers for a great liberty-minded audience. Hope to see you there ! Thursday, August 2nd, 7:30, at the Radisson Hotel at I-35 and Meacham Boulevard.

Saturday, July 28, 2012

On Chick-Fil-A and chickens

It seems like the internet, the Tweetosphere, Facebook, and the pitiful remnants of the print media are all a-clucking about Chick-Fil-A. 
Dan Cathy, Chick-Fil-A's CEO, in addition to supporting some anti-gay and lesbian organizations, made the following comments to the Baptist Press: 
Some have opposed the company's support of the traditional family. "Well, guilty as charged," said Cathy when asked about the company's position.


"We are very much supportive of the family -- the biblical definition of the family unit. We are a family-owned business, a family-led business, and we are married to our first wives. We give God thanks for that.

"We operate as a family business ... our restaurants are typically led by families; some are single. We want to do anything we possibly can to strengthen families. We are very much committed to that," Cathy emphasized.
Blah, Blah, Blah, blah, and blah.  If Dan Cathy wants to give money to a group called Gods And Ghosts and Goblins Against Gays, that's his business. If customers want to avoid his business because of it, more power to them.  That's their business, right? 

Here's what I don't understand.....How is it that the Leftosphere is going totally batshit against a Chicken Restaurant for their anti-gay stance WHEN THAT IS THE EXACT SAME POLICY HELD BY BARACK FREAKIN' OBAMA TWO MONTHS AGO ?????

Where was the outrage?  Why didn't lefties, liberals and the rest of the Great Herd Of Independent Minds decide to boycott the Democrat Party?  Why were the Libertarians the only ones standing up for Gay/Lesbian equality??? 

Hell's Bells, I'm a freakin' Shipping Manager and Freight Broker.  But I had balls enough to publish this in the Fort Worth Star-Telegram back when Barack Obama was still "evolving". 
Was it easy? No. 
Did I take a lot of crap because of it?  Yes. 
So why couldn't The Teleprompter Jesus do the same thing until the day after North Carolina voted on their anti-gay/lesbian marriage referendum? 

It's because he's a physical and moral coward.  (Hit that link.  He flip-flops around like a catfish on the lake bank.) 

Barack Obama is a chicken. 

Here's the LP candidate for President, Gary Johnson:
"I think I do better than Obama on civil liberties, I think I crush him when it comes to dollars and cents," Johnson said. "I think I do a lot bettrer than Romney on dollars and cents but I think I crush him on civil liberties."


Asked if he was the best candidate on gay marriage, Johnson said "There's no question unabashedly let's have marriage equality now, gay rights are constitutionally guaranteed."

A Johnson presidency would ensure a "libertarian president who's going to challenge Democrats to fix things when it comes to civil liberties and then get a libertarian president who's going to challenge the Republicans on dollars and cents, something they're horrible on."
End of rant. 
The picture of our president in a chicken suit came from here. 

Friday, July 27, 2012

Alex, I'll take "Jerusalem" for $500

The Horror. The Horror.

"I find your lack of gratitutde....disturbing".
Give me more of your money. 
You don't deserve all of it. 
We gave you help, whether you asked for it or not. 
Undeclared wars, trillions in debt, massive drug war casualties, an illiterate populace, wretched schools, millions on the government tit, and a nation of cynics.
And he still wants more.
To demand that he give us less is considered "outside the mainstream".
Unbelievable.
Here's the complete context that they keep harping about. 

Thursday, July 26, 2012

"In The Dust" - Mike Blakely

I went to hear Mike Blakely and Jeff Posey play at Zio Carlo's Brewpub on Magnolia last night.  It's probably the 12th? 13th? time I've heard Mike. 
Great, great stuff. 
The Jihadist Safety Consultant was supposed to meet me there but he's becoming less and less reliable as he ages.  (If you haven't read about the Jihadist Safety Consultant, just Google him.  Jihadist Safety Consultant. Or hit the label down below that says "Rickle Abue-Noir) 

This is my favorite Blakely tune.  Enjoy !!



There were eighteen dirt road miles and more
Between my place and her front door
When the weather got dry
That dust would cover my beat up Ford


I remember so well that first sweet night
She said please stay and I said all right
When I woke up in the morning
She was driving away to work

When I looked for a note I was out of luck
Till I walked outside to my beat up truck

She wrote:

"I" on the left front fender
"Love you" on my door
"Forever" all the way to the tailgate of my beat up Ford
She made hearts on all three hub caps
O what a sweet reward
"I love, you forever" written in the dust of my beat up Ford

Well I never could dream some words in dust
Would make my heart just dang near bust
Maybe you can understand now
Why I never do wash that truck

And a lot has changed ever since those days
We got three kids that road's been paved

O only yesterday in blew a wind storm full of dust
So early this morning she woke up
Found my note on her brand new truck

It said:

"I" on the left front fender
"Love you" on her door
"Forever" all the way to the tailgate of her brand new Ford
I made hearts on all four hubcaps
O what a sweet reward
"I love you, forever" written in the dust of her brand new Ford

So early this morning she woke up
Found my note on her brand new truck

It said:

"I" on the left front fender
"Love you" on her door
"Forever" all the way to the tailgate of her brand new Ford
I made hearts on all four hubcaps
O what a sweet reward
"I love you, forever" written in the dust of her brand new Ford

On the left front fender
"Love you" on her door
"Forever" all the way to the tailgate, she goes all the way
Made hearts on all four hubcaps
O what a sweet reward
"I love you, forever" written in the dust of her brand new Ford

In the dust
Left in the dust
Found it in the dust
She wrote "I love you, forever"
In the dust of my beat up Ford

Wednesday, July 25, 2012

The Best Libertarian(-ish) movies

Go here for a good discussion. 

And the correct answer is "Harry Potter And The Order Of The Phoenix". 
Dolores Umbridge IS the Nanny State. 

Tuesday, July 24, 2012

The top 12 things that Libertarians wish that everyone knew

Here are the top 12 things that Libertarians (IMHO) wish that everyone knew:

1)  The only Fair Trade is Free Trade.  All other arrangements are designed to protect political supporters.  And no, slavery isn't "Free Trade".  Slaves aren't free to make a choice. 

2)  You can't legislate morality.  There will always be a market for alcohol, tobacco, drugs, whores, gambling, and other things that the state doesn't like.  Prohibitions create a black market, and make the activity more dangerous.  This creates jobs for bureaucrats, which is probably the only rationale for the prohibition. 

3)  War is a racket.  Check out this rant from Medal Of Honor winner General Smedley Butler. 

4)  If you want to discourage something, tax it.  Or even threaten to tax it.  Now, take a look at our economy. 

5)  If it weren't for our arbitrary political boundaries, we wouldn't have the words "exports", "imports", "globalization", or "offshoring". 

6)  You can oppose government healthcare, education and safety standards and still support healthcare, education and safety standards.  I'm almost violently opposed to the public school system, but I like the idea of education.  Amazing, isn't it? 

7)  The "Invisible Hand", the way that markets work in a spontaneous unplanned way because of people trying to make a profit, is far more effective than any "planned economy".  See: Cuba. 

8)  There really isn't that much difference in Barack Obama and George Bush. 

9)  Gary Johnson, who spent twice as much time as governor as Mitt Romney, left his state with a budget surplus.  He vetoed more bills than all other governors combined.  He once told me that if he had been dictator of New Mexico, he could've cut government jobs and spending by 40%, and nobody would've noticed.  This would've left the taxpayers with more money to spend in the manner of their own choosing.  Gary Johnson is considered radical, and "outside the mainstream". 

10)  One day Cash For Clunkers will be linked with Mao's Cultural Revolution in lists of the most insanely destructive policies ever pursued by a government.  I might have to write the list myself, but it's gonna happen. 

11)  ObamaCare adds no doctors, only IRS agents and bureaucrats.  Therefore, it is going to be a disaster. 

12)  No private industry is as scary as any government agency.  Unless, of course, the private industry has the support of a government agency. 

Monday, July 23, 2012

Tarrant County Libertarian Meetup - BJ's Restaurant and Brewhouse !!

The Tarrant County Libertarian Meetup has rolled around again !!

Come hang out with us at BJ's Restaurant and Brewhouse, sample their homebrews, eat some good pizza, and help us solve the world's problems. BJ's is at 952 Northeast Loop 820, just outside Northeast Mall in Hurst/Northeast Fort Worth.


We'll be getting together on Tuesday night, July 24th from 7:00 p.m. - 9:00 p.m. (or later). And we have a lot to talk about.....

We have a Gary Johnson event coming up in August, plus a "2nd Amendment/Gun Rights" Speakers Series with the NRA and the Texas State Rifle Association coming up on August 2nd. Plus, there's an election coming up in November, right?

The Libertarian Party - Fiscally conservative, Socially liberal, Pizza tolerant, and Brewpub extremist. Show up and make your voice heard!!




Government didn't invent the internet

I always thought that our government invented the internet, and usually conceded that point in barroom arguments. 
I was wrong, and I apologize for the error. 
From the Wall Street Journal.  I'm scraping the whole thing before it disappears behind a paywall:

A telling moment in the presidential race came recently when Barack Obama said: "If you've got a business, you didn't build that. Somebody else made that happen." He justified elevating bureaucrats over entrepreneurs by referring to bridges and roads, adding: "The Internet didn't get invented on its own. Government research created the Internet so that all companies could make money off the Internet."


It's an urban legend that the government launched the Internet. The myth is that the Pentagon created the Internet to keep its communications lines up even in a nuclear strike. The truth is a more interesting story about how innovation happens—and about how hard it is to build successful technology companies even once the government gets out of the way.

For many technologists, the idea of the Internet traces to Vannevar Bush, the presidential science adviser during World War II who oversaw the development of radar and the Manhattan Project. In a 1946 article in The Atlantic titled "As We May Think," Bush defined an ambitious peacetime goal for technologists: Build what he called a "memex" through which "wholly new forms of encyclopedias will appear, ready made with a mesh of associative trails running through them, ready to be dropped into the memex and there amplified."

That fired imaginations, and by the 1960s technologists were trying to connect separate physical communications networks into one global network—a "world-wide web." The federal government was involved, modestly, via the Pentagon's Advanced Research Projects Agency Network. Its goal was not maintaining communications during a nuclear attack, and it didn't build the Internet. Robert Taylor, who ran the ARPA program in the 1960s, sent an email to fellow technologists in 2004 setting the record straight: "The creation of the Arpanet was not motivated by considerations of war. The Arpanet was not an Internet. An Internet is a connection between two or more computer networks."

If the government didn't invent the Internet, who did? Vinton Cerf developed the TCP/IP protocol, the Internet's backbone, and Tim Berners-Lee gets credit for hyperlinks.

.But full credit goes to the company where Mr. Taylor worked after leaving ARPA: Xerox. It was at the Xerox PARC labs in Silicon Valley in the 1970s that the Ethernet was developed to link different computer networks. Researchers there also developed the first personal computer (the Xerox Alto) and the graphical user interface that still drives computer usage today.

According to a book about Xerox PARC, "Dealers of Lightning" (by Michael Hiltzik), its top researchers realized they couldn't wait for the government to connect different networks, so would have to do it themselves. "We have a more immediate problem than they do," Robert Metcalfe told his colleague John Shoch in 1973. "We have more networks than they do." Mr. Shoch later recalled that ARPA staffers "were working under government funding and university contracts. They had contract administrators . . . and all that slow, lugubrious behavior to contend with."

So having created the Internet, why didn't Xerox become the biggest company in the world? The answer explains the disconnect between a government-led view of business and how innovation actually happens.

Executives at Xerox headquarters in Rochester, N.Y., were focused on selling copiers. From their standpoint, the Ethernet was important only so that people in an office could link computers to share a copier. Then, in 1979, Steve Jobs negotiated an agreement whereby Xerox's venture-capital division invested $1 million in Apple, with the requirement that Jobs get a full briefing on all the Xerox PARC innovations. "They just had no idea what they had," Jobs later said, after launching hugely profitable Apple computers using concepts developed by Xerox.

Xerox's copier business was lucrative for decades, but the company eventually had years of losses during the digital revolution. Xerox managers can console themselves that it's rare for a company to make the transition from one technology era to another.

As for the government's role, the Internet was fully privatized in 1995, when a remaining piece of the network run by the National Science Foundation was closed—just as the commercial Web began to boom. Economist Tyler Cowen wrote in 2005: "The Internet, in fact, reaffirms the basic free market critique of large government. Here for 30 years the government had an immensely useful protocol for transferring information, TCP/IP, but it languished. . . . In less than a decade, private concerns have taken that protocol and created one of the most important technological revolutions of the millennia."

It's important to understand the history of the Internet because it's too often wrongly cited to justify big government. It's also important to recognize that building great technology businesses requires both innovation and the skills to bring innovations to market. As the contrast between Xerox and Apple shows, few business leaders succeed in this challenge. Those who do—not the government—deserve the credit for making it happen.

Sunday, July 22, 2012

Iowahawk: You didn't build that

Iowahawk has sat down at his laptop and created a masterpiece. 
Of course he had help from his high school teachers, the people who paid private companies to build the roads and bridges and then gave those companies taxpayer money, he had help from the Department Of Motor Vehicles, some V.A. Hospitals, the General Accounting Office, the Department Of Health and Human Services, the people who wrote the latest Farm Bill, Cash For Clunkers, TARP, The Porkulus Package, the people making a fortune off of the Drug War, and the ATF people who send teenagers who look like adults into my favorite bar and try to trick the bartenders into selling them a drink so they can bust the bartender and fine the bar owner. 
Iowahawk had help from all of those people, but hit this link anyway.  Good stuff.