Monday, June 13, 2016

Barack Obama's God Complex: The Danger of a Lame Duck President In An Election Year

One thing that tends to get lost in an election year where the incumbent is not on the ticket is the fact that the person in office is still at the controls of the government.  That is, if the media wishes us to forget. In 2008 they didn't want us to forget and they had Barack Obama running against George Bush even though he was not on the ticket.  But in 2016?  Meh...

In reality, this is actually the most dangerous time of any Democrat presidency because the lefty press has little motivation to focus on anything they are doing and would rather work to get the next Democrat elected.

And so we find ourselves in a perfect storm, with two pitiful candidates competing to replace the most harmful president in American history and the press is having a field day covering them. One wonders exactly how much damage Barack Obama is going to inflict on the country on his way out the door? As we get closer to the end of his term I have no doubt Barack Obama would like to see himself as a modern Louis-NapolĂ©on Bonaparte and simply refuse to leave, but I’m hoping he will not go quite that far. That doesn’t mean that he can’t do much damage however. Between giving away control of the Internet and suggesting the highest gas tax hike in 80 years he’s seeking to destroy both the new and old economies.

But it’s more than the economy in general he has his sights on however. Barack Obama knows without a doubt that the cities, neighborhoods and homes Americans choose to live in are fundamental to who they are. They are where we spend most of our family time, our free time and where we go to rest.  People pick where they live for a wide variety of reasons from commute time to the love of trees and lawns to the quality of schools. A mortgage is typically the most important investment any American ever makes. Even for renters the monthly rent is typically the single most expensive obligation they have every month.

And so it is right here at the heart of America where Barack Obama wants to put his stamp…
  1. He is seeking to force the broken neighborhoods of America’s inner cities on the suburbs where people have moved to escape the crime. How? By reconfiguring the Section 8 Housing program to drive renters out to the suburbs while and penalizing landlords and communities that choose not to participate. And it’s probably not a surprise that the Section 8 program has a long history of failure, harming both renters and landlords.
  2. At the same time, he is seeking to prohibit renters from doing criminal background checks on prospective tenants because minorities are disproportionately represented in the criminal justice system. Landlords say they must focus on the safety of their tenants… but unfortunately for them, that conflicts with Barack Obama’s agenda.
  3. He is forcing banks to make loans to unqualified lenders, which was exactly what caused the economy to collapse in 2007. One might think Obama must have slept through 2007 and 2008, but no, he was there, and unsurprisingly, he learned nothing. He is demanding banks lower credit standards in pursuit of the same “affordable housing” goal.
Taken together, these actions, building on the previous seven years of government evisceration of freedom and the free market, will not only have the effect of further depressing the already feeble economy, but they will destroy communities as the crime from inner cities spreads to the suburbs like a cancer as the already dysfunctional suburban schools simply collapse. If citizens can’t work hard and strive to live in a community where they feel safe and their kids at least have a shot at getting a good education, what’s the point of putting in the effort in the first place? The reward of living in a place where you feel comfortable and your family feels secure is one of the driving forces in the pursuit of the American Dream… and, no surprise, Barack Obama seeks to dismantle that in his pursuit of his version of racial “equality” and economic parity. Of course I’m guessing that wherever Washington neighborhood the Obama family settles in once they exit the White House – assuming they do – that their next door neighbors won’t be Section 8 renters.

When Bill Clinton left the White House he gave us the Mark Rich pardon and his team destroyed thousands of dollars worth of computer equipment, but for the most of the country was left relatively unscathed by last minute subterfuge. Somehow I don’t think the nation will be nearly as lucky with Barack Obama. After having spent seven full years seeking to – and doing a good job of – hobbling the American economy and fomenting race and class divides, we should expect nothing less over the last few months of his administration. As the press willingly ignores pretty much anything he does and a spineless, feckless GOP providing no opposition, Barack Obama’s God complex will likely rise to unseen levels. That doesn’t bode well for anyone, but it certainly shouldn't surprise anyone either... 

Monday, June 6, 2016

Freedom & Fortune... The Spoiled American Voters of 2016 Squander Their Inheritance

In the segment of the financial planning industry that caters to the uber wealthy, the rule of thumb is that by the 2nd generation 70% of family fortunes are lost and by the 3rd 90% is gone. Why? “Most of them have no clue as to the value of money or how to handle it.” Financial wealth is not so different than freedom and Thomas Jefferson knew it: Eternal vigilance is the price of liberty.

The United States has thankfully lasted much longer than 3 generations, but the writing is on the wall and the election of 2016 is proof.

On one side of the debate we have Bernie Sanders and Hillary Clinton. We have two people who have zero experience in doing anything even remotely productive in the private sector in their lives. Bernie Sanders has virtually zero experience in the private sector as most of his many short lived jobs being for public or government institutions of one sort or another. His first steady paycheck not coming until he was 39 when he was elected Mayor of Burlington, VT. He’s never started a for profit company, he’s never ran a business that had to actually make a profit and meet a payroll… He’s never had to compete to attract consumers who are willing to freely exchange their hard earned money for a free market good or service he is providing. And, if it’s possible, Hillary Clinton has even less private sector experience.

Both of the people running for the presidency on the Democrat side have spent essentially their entire lives working in the public sector. As mayor. As congressional aide. As Congressman. As First Lady. As Senator. As Secretary of State. All of these jobs are funded by the taxpayers and in both cases their passions have been fueled by the desire to use the police power of government to bend the public to their will… in the service of good of course.

Donald Trump on the other hand has never had a job in the public sector. He’s been a builder and developer his whole life. He’s also been an operator of casinos, a reality TV show star, the leader of an eponymous university and he’s lent his name and likeness to countless products. While he parlayed his father’s $1 million loan and influence with bureaucrats into becoming a very successful real estate developer and reality TV star, the rest of his repertoire has been… shall we say, less than successful. But at the end of the day he’s a billionaire and that’s largely due to his real estate success. Not surprisingly, in that – real estate – Donald Trump has been in bed with government just as much as Bernie Sanders and Hillary Clinton. From using government tax handouts to finance buildings to using government sanctioned bankruptcy laws to threaten and blackmail erstwhile partners, Trump’s real estate success has been built on a foundation of government intervention… and everything else is built off of that. But at least he knows about meeting payroll and attracting customers who have a choice as to where to spend their money.

The fact that America has selected these three big government candidates as the only viable options for the White House tells you everything you need to know about America in 2016. Like the 2nd and 3rd generations of wealthy families, an overwhelming majority of Americans are more interested in what someone else – the government in this case – can do for them than what they can do for themselves. An overwhelming majority of Americans have no idea of what made America great in the first place. An overwhelming majority of Americans don’t understand exactly how close the nation is to killing the goose that laid our golden egg.

Half the population is prepared to vote for a socialist wannabe Hillary Clinton or the actual socialist Bernie Sanders. Their basic premise for governing is simply more regulation on businesses and individuals, more illegal immigration, higher taxes on the rich and more redistribution programs for the poor. Absolutely nothing in their positions suggests anything about helping businesses be successful. Nothing suggests freeing up capital or entrepreneurs to start the next big revolution. Nothing suggests driving down the cost of business so that companies can innovate, hire more employees and offer yet to be invented goods or services to the public. No, for Hillary Clinton and Bernie Sanders everything is about what the government can do for you or will do to someone else.

A significant portion of the remainder of the population are prepared to vote for Donald Trump, a crony capitalist of the highest order. The problem with crony capitalism is that it’s not really capitalism at all… it’s coercion of others by the state for the benefit of friends of bureaucrats and politicians. Whether it’s Vegas’s tax breaks for the billion dollar NFL or Georgia’s tax incentives for Hollywood movie production or the Agriculture Department’s subsidies of corn or sugar or peanuts, it’s all crony capitalism. So too is it when banking or broadcasting or healthcare regulation becomes so onerous that they stifle competition and innovation because only the ultra rich friends of government can afford to pay the compliance costs.

One way or another it’s always taxpayers, small businesses and average citizens who are left holding the bag for government decisions where bureaucrats and politicians put their personal or political agendas ahead of individual freedom and free markets. Fundamentally this is because so many Americans simply don’t understand that a government can’t produce prosperity, it can only stand in its way. That a government that can take something from someone else to give to you today can just as easily take from you to give to someone else tomorrow. That a government that can write rules that favor you today can turn around and write rules that handicap you tomorrow. One need look no farther than Cuba, Venezuela, Spain, France or Greece to see what such government strangulation of free markets and free citizens does. Economies that stagger from one crisis to the next. Widespread unemployment. Flatline economic growth or outright decline. Unrest in the streets. Such things are the hallmarks of big government.

And the truth is, supporters of the three contenders for the presidential crown have no clue how prosperity ever came to the United States in the first place. American prosperity dominated the world in the 20th century like perhaps no other nation has in all of human history. While China and India may have had a larger share of world GDP two millennia before, the 20th century saw world GDP grow more, and more broadly ever before, and growth was driven by the United States. More than anything else, that American Century was characterized by freedom where government – mostly – left free markets to solve problems and innovate a wider array of new products and services than the world had had ever seen.

Those times and that leadership are long gone and they may never return. Beginning with the trickle of the New Deal and picking up steam with the Great Society programs, government regulation and redistribution policies began to strangle the American economy by the end of the 1970s. It was on life support when Ronald Reagan was able to revive it with spectacular success. Since then however it’s largely been downhill. From George H.W. Bush to George Bush government regulation continued to grow year after year. Bill Clinton took advantage of the “Peace Dividend” to grow it more in between. Under Barack Obama government regulation and strangulation of the economy has advanced at an unprecedented rate. And the economy has shown it. During Ronald Reagan’s first 7 years the GDP grew at an average of 3.4%, during Clinton’s it was 3.84%, Bush’s 2.46% and under seven years of Barack Obama the American GDP has grown at a stultifying 1.4% a year… and this is during a period when $10 trillion was added to the National Debt and the Fed pumped in an additional $2 trillion! (BEA data in Excel)

And so it goes… like the wastrel children and grandchildren who blossom under fortunes built by someone else and proceed to lose those very fortunes, Americans have lost their way with prosperity and may not find it back. National prosperity demands freedom. Prosperity for the many demands free markets. Widespread prosperity demands limited governments. But rather than look for a president who will roll back the suffocating leviathan of government and unleash free markets and entrepreneurship, Americans are instead choosing to support candidates who offer to use the power of government to tilt the scales towards them and their friends at the expense of everyone else.

The sad thing is, it’s not like that choice doesn’t have a clear outcome. It’s been tried over and over again around the world and it always fails, every time. And it will fail here too. The question is, is a fiery collapse that resembles the likes of Venezuela in our future or is it the slow calcification of France or Greece where the government slowly strangles the citizenry to the point where practically nothing works and eventually the nation begins to simply implode? In either case as the consequences of the disastrous 2016 election begin to play themselves out over the next couple of years Americans should be prepared to find themselves involved in more wars, experiencing more economic failure, buckling under more government regulation and enjoying less freedom of all types, particularly speech. Add to that more racial division, riots, crime and ultimately, much more despair and distrust of the system. Such are the conditions of revolutions, the hot ones, not the ballot box types…