2012 is an ominous year. Does anyone else find it interesting that the Mayan calendar supposedly predicts the destruction of the world right after the possible reelection of Barrack Obama? While I don’t believe in the Mayan calendar I do believe an Obama second term is too real of an apocalyptic scenario that I find myself looking for signs of the end of Conservative hope. When the Jewish temple was destroyed by the Romans in 70AD, Josephus claimed that a cow gave birth to a lamb as a sign of the destruction that was to come (The Wars of the Jews 6.5.3). As shocking as this is, we have a similar phenomenon in this race. No, they didn’t give birth to anything odd or of another species (yet), but Republican candidates Newt Gingrich and Rick Perry have transformed themselves, almost overnight, from stalwarts of the conservative movement into class-warfare spouting, anti-capitalist Democrats. While this doesn’t foretell the end of the world, it does foretell the end of their campaigns and possibly heralds an Obama second term.

A couple days ago a Gingrich Super Pac came out attacking Romney because when his venture capital firm took over a company to transform it, many of the workers would be laid off. Gingrich could have distanced himself from the remarks, because by law a Super Pac can say what they want and raise as much money as they want, but it is illegal for them to coordinate with the candidate. However, instead of doing this Gingrich has come out in agreement with these anti-capitalistic charges. Never one to be outpaced in a race to the stupid-line, Rick Perry took the same course calling Romney a “Vulture Capitalist.”
Before going any further, let me assure you that I am no Romney supporter. I agree that Obama-care is simply Romney-care writ large, and I see him as too moderate to even imagine him as the conservative/libertarian firebrand this country needs. However, to have two supposed conservatives using such emotional charges to attack free market capitalism is appalling. I could hold my nose and cast my vote for Romney, Paul, Huntsman or Santorum (yes, it would take overlooking serious problems to vote for any of them). This would be a vote of “Anyone But Obama!” I might be able to hold my nose enough to vote for Gingrich, if he were to win the nomination—about as likely as the Colts making the Super Bowl. As for Perry, I have decided that I could not vote for him for dogcatcher.

When Perry first entered the race I had problems with his record, but was willing to overlook them. The biggest problem I had was the way he tried to force a new vaccination for HPV on the girls of Texas. I gave him the benefit of the doubt that his views on federalism would prevent him from trying such things on the national level. When voters are willing to overlook some things, it is helpful if the candidate doesn’t keep stacking on things to overlook. Pile crap high enough and it can no longer be overlooked, and much of what was coming from this campaign is pure crap. It is so bad, when a Perry ad comes on TV our houseplants get a fresh burst of life—as if they’ve been fertilized.

In a national debate, Perry, when questioned about his support for in-state tuition for children of illegal aliens, said that anyone who disagreed with him did not have a heart. I disagree with him and I have a heart—I keep it in a jar on my desk, so I can look at it. By doing this he alienated the whole other side of the argument. While many who disagreed may have figured that they could overlook his position, it is hard to overlook his stereotype of the opposition.

Perry soon found he was in trouble after this, and after he forgot his talking points in another debate (He couldn’t remember the departments he pledged to cut—it’s hard to trust you to keep your promises after the election if you can’t remember them during the election). To fix this he decided to pander to the basest feelings of the electorate. He came out with a promise to transform Congress into a part-time legislature. According to him, elect him as president and all Congressmen would have to return home to make a living between sessions. Their pay and benefits would be pared down to their new part-time status. While I agree our freedom is greatest when Congress is deadlocked or out of session, Perry forgot a little document called the Constitution. Congress makes its own rules, sets its own schedule and its own pay. He could recommend legislation along these lines, but who thinks a majority in both houses would support such a thing. This was the type of promise a politician loves—impossible to keep, so failure is not your fault.

As if these were not enough to give the finishing blow to the Perry campaign, he attacks Romney by smearing free-market capitalism. While many readers may agree with this assessment of venture capital and the process used in taking an unprofitable company and turning it around, you have to understand the reason such companies exist and why they do what they do.

Corporate revenues and resources can be broken down into outgoing and incoming. Incoming includes all revenue received from customers for product. Outgoing is everything needed to keep the doors open, the lights on and to produce the product that will bring in the revenue. A company is profitable when incoming is greater than outgoing—it must cost less to produce the product than is received through the sale of it. When failing to turn a profit a company can either cut its outgoing expenses or increase its incoming revenues. To increase income a company can develop (i) a new product line, (ii) a new customer base for its current products or (iii) raise prices. Note that the first two options will also increase the outgoing as new production lines must be opened and new employees hired, etc. The third is the easiest, but is only possible when the market will permit the new price. All three are tied to the market. If there is a market for a new line, one can be developed; if there is a greater market for the old line, it can be expanded; if the market will tolerate higher prices, they can be increased. The free market rules.

The other side of the corporate coin is outgoing expenses. These include facilities, equipment, materials, and wages. If unprofitable a company may move into smaller facilities to save on rent or mortgage. They may find more efficient equipment or a material supplier that is cheaper. Of course, these do not only go down. Over time they go up. Land, materials, equipment and wages are all inflationary, so a company’s profitability is affected, on both the outgoing and incoming side, by market forces. It is not uncommon to have a company pinched by falling prices for their products and rising prices for the materials to make the product. In time a free market balances these out if everything is left fluid to the demands of the market, but if even one area is unmovable then the market must take drastic action to set things right. This brings us to wages. Wages are usually contractual and while increases are easy to implement, cuts in wages are very difficult. Because of this wages tend to ratchet up.

In time the immovable nature of the wages may increase the cost of production beyond any hope of profitability. When this happens there are limited options. One, the company goes under and the employees are forced to take other jobs. These new jobs often involve a pay cut, which permits the price of wages to be adjusted back to market levels. The other company is for someone to take over who is not contractually obligated to the wage structure. This new management can offer to let employees keep their current jobs, if they accept cuts to pay or benefits. Those who will not accept are free to take their skills elsewhere. Either way, the market is balanced and wages settle back to where they should be according to the free market. The unchanging nature of wages in a company make these last two options necessary. We could do away with the corporate “takeover and turn around” if we set wages to fluctuate with the market, but this would not be popular—nor really even desirable.

Rick Perry should rethink his view of capitalism. While he and Newt Gingrich would be shocked to be accused of attacking capitalism, this is exactly what they have done. This type of pandering might work on the Democratic ticket of victimization and class warfare, but is out of place among Republicans. Republicans understand, in the words of Milton Friedman, “Capitalism is a necessary condition for political freedom.” Rick Perry and Newt Gingrich, in an attempt to undermine Mitt Romney, have each leveled their guns at freedom.

I am sick of hearing about the evils of gridlock and the virtues of compromise. I understand compromise is an essential part of our government, and to accomplish anything each side must surrender some of their pet ideology and seek common ground. However, the founders never imagined over 500 full time people whose only purpose to exist is the creation of law—easily defined as new limits to our freedoms. It is easy to see that our nation is never as free as when Washington is in full-fledged gridlock.

In the vitriol against gridlock, one target is the Republican controlled House of Representatives. Those of us who worked so hard to take the House last election have to understand that since we only control the House we are limited in our ability to influence law and policy. Only bills attractive to the Democrat controlled Senate will pass; so blocking the agenda of the Left is our most powerful tool. When you hear it reported that Congress refuses to get along and pass some bit of legislation, see such reports as banners pronouncing “Freedom Survives Another Day.”

I know many will complain that if Congress and the President don’t work together the economy will not be fixed. Actually it is government tweaking and interference that keeps the economy on the rocks. The best thing to happen to the economy would be a removal of that interference. If Congress won’t actively remove the onerous regulations that have strangled our economy, the next best is a gridlocked Congress that can implement no new ones.

Barack Obama rode a mantra of “Hope” and “Change” into the Whitehouse. The Republican Party was disappointed by leaders infected with the neoconservative heresy. Eight years of majority dithered away as Republicans acted like Democrats to buy votes. Instead, they alienated their base, lost their majority along with the White House.

In 2008 the GOP ran a candidate ill equipped to inspire the base. While he could promise little more than four years of the same, Obama promised something different. Of course it would be different. He was using the word “Change,” wasn’t he? He said he would change things. Of course there was little said about what he would change beyond such bromides as “share the wealth” and “fairness.” His Senate record of voting “Present” was no help pointing out the direction he would take the country. Yet he was able to inspire people and assure them that he was the savior they had awaited for so long.

This election we have a chance to make real changes in Washington. We have the House already, and a Senate majority is within reach. Hopefully both will be dominated by rock-ribbed conservatives. The problem is our ticket for the White House. None of this lot really inspires the base, in general. Sure each has their supporters, but none seem able to coalesce the base into a political machine. Each will have to rely on a fear of four more years in the Obama wasteland to keep their detractors in check, pushing them to show up at the polls, nose held tightly to cast their ballot. But show up they must. This is because while there they will vote for something even more important than the butt parked in the Oval Office. Every member of Congress and 1/3 of the Senate are up to reelection. Remember, the House initiates all appropriations bills (they hold the checkbook) and the Senate must approve all court nominees and treaties (they hold the keys to our freedoms).

The most important thing the GOP candidate can do is motivate. Rather than running as the Anti-Obama, this person must run as America’s answer—inspiring hope. Ronald Reagan did not simply run against Carter. Yes, his quip about a recovery being defined as Jimmy Carter losing his job was funny and creative—and oh, so very true! However, he spent most of the time playing up America and the bright future that was ahead for her if only the people would put him in office. We had just ended the long bloody Vietnam conflict. Inflation was rampant, unemployment through the roof. Things were so bad that previous laws of economics were rewritten giving us the previously unknown “stagflation.” After Nixon’s shenanigans, Ford’s questionable pardon of him, and Carters general ineptitude, people had a deep distrust for politicians. Well guess who is back. We have Jimmy Carter the sequel. It is time to send this guy off into the private sector, once and for all. The way to do that is to take a play from the Gipper and inspire. Don’t play on our fears; draw from our hopes.

Now we see the change that was promised and the only hope we have is a return to the freedoms that built this country. Obama sought to make this country more like Europe and with double digit unemployment and loss of economic freedoms he has succeeded. Hopefully, this Novermber we will see a return to sanity in Washington, but even with a major GOP win the freedom loving libertarian in me is skeptical.

Efforts to provide insurance coverage to all Americans sounds admirable. Speaking against the latest liberal efforts to extend such coverage is seen as hateful and uncaring. While no sane person wants another to suffer or die because of the cost of healthcare, we must ask what part of the Constitution gives Congress power to manage, or provide medical care for any Americans outside of the military. This element is being ignored by those who have taken oaths to support the Constitution.

This plan is blatant redistribution of wealth. As evidence of it, look at the various ways being considered to pay for this care. One of the latest is a tax on health policies costing $25,000 per year. This means that those who work hard and pay high premiums to get the best coverage would see their own health care costs to provide for others. “Soak the rich,” is a popular mantra of the left, but this promise must be viewed in light of history. Every government welfare program has started with taxes on the rich, but taxes always grow and the tax base always spreads.

Government provided healthcare, regardless of the method or the plan is an unconstitutional siezure and redistribution of wealth. Such programs subsidize bad decisions and punish productivity, while continuing to divide the nation along class lines.

A good friend of mine sent me this and I wanted to share it. Thank to Tom for the following:

It is the month of August, on the shores of the Black Sea. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town.

He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

The Butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town’s prostitute that in these hard times, gave her “services” on credit.

The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.

At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism..

And that, ladies and gentlemen, is how the United States Government is doing business today.

It is official, General Motors has declared bankruptcy and when restructured the US government will own 60% of the company. Of course General Motors and Barack Obama are defending this saying that it makes a GM vehicle a better choice because your warranty will be backed by the US government. One thing not being brought out is the constitutional ground for such an unprecedented action. There is nothing in the Constitution that permits the US government to invest in any business in this way. Think about it, the largest American auto maker is largely government owned.

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“If your friend jumped in the river would you follow?” Moms of every generation are famous for that line and even today, as a grown man, it is hard not to roll my eyes at it. This question has been used universally to deny permission to take part in stupidity. It has various versions as well: ‘in the river,’ ‘off a bridge,’ or ‘over a cliff.’ I would propose asking this question of 49 of the 50 states. It is always said: “as California goes, so goes the nation.” Should our nation continue to follow California? (more…)

A good friend of mine Daniel Lanotte has writte a great article on State’s Rights and posted it to his Carpentersmate Blog.