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.

The current attacks on Mitt Romney for changing his political views are a bit short-sighted. Truly, we want a candidate who will stand for his beliefs regardless of the political cost or outcome. Yes, it would be nice to have a candidate who believes what he has always believed without change. However, if this is the criteria for trust, why attempt to convince others to change views? If a person, once pro-choice, cannot be trusted upon changing to pro-life, why try to convince abortion supporters to change? What good are debate and discussion if we are going to only trust those who maintain their view despite the evidence?

Personally, it can be preferable when one says, “I once held view ‘A,’ but evidence convinced me otherwise and I know hold view ‘B’.” Such a person demonstrates thoughtfulness in their views. Rather than regurgitating the view of a parent, teacher, professor or preacher, they think through issues to find the truth. Those who have never changed any views were either very lucky to be spoon fed perfect truth without error, or (most likely) they have put little thought into their beliefs. Why would we automatically reject the thoughtful converted one in favor of someone who shows no sign of thinking through positions? Simply agreeing with us, is not proof of deep thought or even reasonable views.

Several years ago I was discussing with a friend his childhood in a very strict Anabaptist sect which I won’t name. He told me that his father used to say, “Beware the converted.” Though the Christian gospel requires Christ’s people to reach out to the unbeliever, this group became so untrusting of outsiders that even those responding to the message of Christ and seeking membership among them were held in suspicion. This would shock most Christians, but this is exactly how does this differ from how we treat those who change their political views.

When a candidate stands up and says, “Yes, I was once pro-choice, but now I’m pro-life.” We should celebrate a victory and ask what convinced them. It is possible the argument or experience that convinced them would work on others. Don’t forget, even Ronald Reagan—hero of the conservative movement—was once pro-choice. While I cannot attest to Mitt Romney’s credentials as a pro-lifer, I am not going to spend years working to convince others that life begins at conception and then slap a candidate who says he now agrees simply because he once disagreed. There is a certain place for giving the benefit of the doubt.

Last night Republicans in Iowa spoke out about the future of this country. The final results are interesting because the party mainline candidate won, but only by eight votes (according to the numbers published by Fox News). Right on the tail of the winner was Rick Santorum and Ron Paul. Santorum is so close their results are almost indiscernible and Ron Paul slipped ahead enough times to cause the mainline GOP pundits to develop a twitch.

It is of course easy to tell what happened. A set number of those attending decided their primary qualification was a sense of electability and held firm for Romney. Then the ideologues were split among Santorum and Paul. Of course, this was inevitable. Santorum appeals more to the evangelical, social conservative, while Paul appeals more to the fiscal conservative. Being libertarian many of Paul’s views on social issues would be seen as libertine and unacceptable to most evangelicals. Sometimes I think I am the only libertarian evangelical in the world—though I know a couple others who may qualify.

Since Iowa is a state where voters can show up at the caucus and change their affiliation to vote, a large number of independents supported Paul. This of course skews the numbers for Santorum because it means the lion’s share of rock-ribbed conservative GOP voters in Iowa must have voted for him. Had Paul not been in the race, it is likely many of his GOP supporters would have selected Santorum as the anti-Romney candidate, giving Santorum a runaway evening.

Last night is a perfect example of what will happen if there is a third party run by a serious candidate. Unfortunately, Paul refuses to take such a run off the table. He did so early in the race declaring that he would not go third party but would run as a Republican, but recently on a late night talk show he said a third party run was still possible. In Iowa, Santorum was the candidate closer to the values of the state. Don’t get me wrong. I am not a Santorum supporter and believe he has much to answer for and could be very vulnerable in a general election, but Iowa is not the beltway. He should have been a shoe-in, but with the addition of another ideologue candidate taking away a large enough number of the base and a good number of independents, Iowans ended up with a candidate they have little in common with—one whom the majority of the state did not want.

This scenario is going to keep playing itself out. State by state, Ron Paul and Rick Santorum (or Perry in some) will split the conservative vote and Paul will bring in enough independents to pad his numbers until we end up with Mr. Romney as the official candidate for our party. I fear the skewed numbers will convince Paul that he has a shot and he’ll leave the GOP at the last moment to run a third party candidacy. If this happens get ready for four more years of Obama.

How to Win a Local Election

Recently the House of Representatives passed a huge tax bill masked as an energy plan. HR 2454, which none of the House read prior to the vote, adds artificial costs (just another form of tax) to energy production and distribution. The goal of the bill is to make green energy more palatable and competitive so that market conditions will coax the nation to develop and switch to these new technologies. This is sort of a round about way to answer the critics of green energy who say that these sources of energy are cost prohibitive and that the market does not want them. Rather than letting market forces work, Congress wants to make the energy we currently use so expensive that other sources will become magically attractive. This is in keeping with the motto of the Democratic party: “If you can’t beat them, tax them into submission.”

Unfortunately, certain Republicans in the House of Representatives thought that you and I do not spend enough on utilities and voted with the majority to dip into your wallet. It is my hope that the eight voting for the bill will face serious primary opposition and be removed from office next time around.

The eight who voted to raise the consumer’s cost of energy:

Mary Bono Mack (R CA)
Michael Castle (R DE)
Mark Kirk (R IL)
Leonard Lance (R NJ)
Frank LoBiondo (R NJ)
John McHugh (R NY)
Dave Reichert (R WA)
Christopher Smith (R NJ)

Unless the courts intervene Al Frankin is set to be the next Senator from Minnesota—the the home of Governor Jesse Ventura. Since I know many wonderful Minnesotans I won’t badmouth the state or its people. To find a more beautiful place is near impossible, but in the election of candidates only Chicago is more stupefying. (more…)