When Governments Try to Create Markets

It always ends in failure.

When the government decides there is not enough of something and gets involved in its manufacturer, sale and distribution, what soon will follow is Waste, Financial Loss and Corruption.

Example #1: Ethanol

George W. Bush, that Leftist spendthrift in a Republican cloth coat, decides to boost the agricultural industry by requiring the combustible derivative of corn, Ethanol, be a part of ALL gasoline sold in the United States. What a great idea! First the farmers will have a market for their corn since now we HAVE to have a percentage of corn squeezin’s in the nation’s gas tanks. It’s a Biofuel so it will be good for the environment, right?

Well the problem with corn as a crop is that it beats the crap out of the soil and requires intensive fertilization and attention. It’s not a cheap crop to grow. But the government is driving the bus on this industry and so set a very good price for what it will pay for Ethanol. It’s a higher price than the market would pay otherwise. But what the hey, it’s not THEIR money the good Senators and Representatives are playing with, it’s TAXPAYER money and who knows better than Congress about what to do with THAT when there are votes to buy from the Biofuels lobby, the Agribusiness lobby and the Environmentalist lobby even though NONE of them would ever think of voting for a candidate with an “R” by their name BUT they will gladly take the money. Thanks George!

So what happens? The Corn Boom literally caused an environmental disaster!

The fertilizer and insecticide run off from all the land that was thrown over to corn production has been killing our waterways. Land that was not a profitable environment for farming now becomes fields of corn.  If you are a farmer, what now becomes your motivation? “Why am I growing wheat when the government is paying so much for corn? Why am I dealing with dairy cows when the government is paying top dollar for corn?” etc.

Corn is now grown on over 400,000 farms across the nation making the U.S. the number one corn producing country in the world.

But is the nation any cleaner?  That’s a NO. Has the economy been improved by this government intervention in the marketplace? Again that’s a NO. Most of us don’t get to witness the areas of destruction that happens in the nation’s bread basket, and we don’t know what goes on when areas of an industry are never created. We just see the price go up on a gallon of milk or on a loaf of bread but we don’t know why.  Well, this is why.

Example #2: Clean Energy

When there is the Alternate Energy industry. This is an industry with more good intentions than demand behind it. There are many people who like the idea of using solar power and wind energy and in some places it is very practical like the “Cabin in the Clouds” on top of the windiest place on Earth, New Hampshire’s Mount Washington, where solar and wind power is the only source of electricity. But mostly solar and wind power has been a cottage industry since the solar panels, wind turbines and especially the batteries are expensive, providing the user with no monetary savings and the manufacturer with little or no profit.

Enter the U.S. Government!

With its subsidies, tax breaks and outright massive loans to their friends and lobbyists, the Federal government has injected heaping wads o’ taxpayer cash into this industry which have erected big manufacturers of solar panels, wind turbines and high-stress batteries almost overnight. And almost as quickly these manufactures are tanking, filing for bankruptcy protection and taking all that “investment” money with them. You’d think it was the 2007 housing crash all over again. 

By forcing automobile manufacturers to make electric cars that NOBODY wants and that can’t function to an enth of the ability of an internal combustion engine, the government has attempted yet again to make a market where none existed.

Who wants a car that has a range of less than 100 miles per charge, takes hours to replenish that charge, has a very expensive and highly toxic battery which is fully 1/3 the cost of the entire automobile, and even with massive subsidies still costs $40,000.00?  I'll take a show of hands...anybody?

And if you live in New England or worse, the Midwest, where it’s snowy, blowy and friggin' cold all Winter, the range is reduced dramatically by a force no government can legislate, PHYSICS! Batteries just don't perform well in cold weather.

Then there is that little problem of electric cars BURSTING INTO FLAMES.  No problem, we’ll fix that issue eventually, hop in!

This massive “Pay for Influence” racket is a gamble governments make to try to stay in power. Other industries that could have used that money, profitable industries, never got to see it because it was siphoned away from the buying public in taxes and then squandered on a useless commodity that people wouldn’t buy on their own. This is the insidiousness of government intervention in the marketplace.

This also causes a slippery slope for Government since once the effects of their bad policy become evident; there is no stepping back because the groups whose pockets they’ve lined with money now become the enemy, vowing to fight to keep their favors. Even if they do try to pull out of the mess they've made, the markets will be affected by the sudden pullout of funds. Corn prices would plumet to it's actual market rate and corn farmers take the hit until the market can regain it's natural balance.

Another clear example would be the current QUANTITATIVE EASING being applied by the Federal Reserve. If they should suddenly stop buying those Billions of dollars of bonds each month, the Stock Market, being dependent on that ready cash, will have a deep adverse reaction in the short term.  It's quite a hole the Federal Reserve has dug for the financial markets since even the mear talk of backing off their bond buying program shows up on Wall Street's leader board. And to think these guys went to school for this.

Example #3: The Electric Automobile

Yet another example of the government's attempt to create a market where one does not exist.

The "new" electric car is falling short of expectations. Expensive to make, expensive to buy and maintain, they can't compete with the efficiency and reliability of the gasoline engine. If the electric car was a good idea, it would have already been a mainstay in the marketplace already and not a government subsidized novelty item.

Perhaps most people don't realize that the electric automobile has a long history in the U.S. and at the trun of the last centry once competed with the gasoline engine on the open market...and lost.

Since the early 1900s the electric car hasn't really gotten any more efficient. Its range, weight and unpredicatbility in cold weather have not changed much in over 100 years. 

The electric cars biggest enemy is Physics. It doesn't operate well in cold weather and just where do you suppose all this electricity to run them comes from, electric powered power plants? Nope! It's Coal that drives this electric bus!

Electric automobiles have always been a Fad and had we put as much resources into developing a more efficient gasoline engine, Billions of dollars I might add, we coudl well have been seeing gas engines that get 100 miles to a gallon of gas by now.

But we don't get to see what does not get to happen.

The only way the electric car will catch on is if that was the only thing out there for the public to buy. Sorta like the old Soviet "that's all you're going to get" approach to marketing.

Which leads me to the last example...

Example #4 The Mercury Light Bulb

The incandecent light bulb has been outlawed by the U.S. government. If light bulbs are outlawed, only outlaws will have light bulbs. Actually they didn't ban them outright, they only placed a mandate that they reach an efficiency that they cannot reach.

But the result is the same. You will not be able to buy an incandecent light bulb. What you CAN get is the grossly unatractive and somewhat toxic Mercury light bulb. Yes, there is Mercury in them and so you are not really supposed to just throw them away. They should be disposed of in an environmentally safe manner. How's that for convenience? We all know that this is not going to happen.

But the main point is that government once again attempts to make us take a lesser product that has not proven to be popular and isn't even a good source of light.

Summary

This is for all those who still actually believe that Government is the answer to the nation’s problems. This is for people who think the government just has to “pass a law” and it will make things right. This is for people who think that FORCE in necessary to make people to comply with an arbitrary law. You can plainly see that these efforts always end in failure since solving problems is not what motivates government anymore.

Government creates problems it then tries to solve by more government and in the words of that great cartoon character, Rocket J. Squirrel from the Rocky & Bullwinkle Show; “But Bullwinkle, THAT trick NEVER works!”

A government subsidy or assistance may make you happy today but it will only lead to tears tomorrow. Depend on government if you want to cry and if you want to beg. Depend on yourself if you want to prosper and move forward and become a free person.

Recognize that today’s short-money handout is tomorrow’s dependency and a path to servitude. If you think that today you will take it so that your children will break out in the future, you are mistaken. If you as a parent don’t break out now, where will the example be set?

Fight for you human dignity. Fight for your right to grow and to learn from mistakes.

Start today.

Obama Vows to Bankrupt Country in Acceptance Speech

And people say Ron Paul has a dedicated group of followers…

In his acceptance speech for the Democratic Nomination, President Obama tonight vowed to continue spending, spending and spending taxpayer dollars on our big government programs and pledged to not take a step backwards on Medicare, Medicare or any other social program the government is running right now.

It comes as no surprise that President Obama remains ALL IN when it comes to sustaining the growth of government at any costs and tonight he has declared his intentions to go out on his shield.

Many people think that the biggest challenge to Barak Obama and his ideals is Republican presidential challenger Mitt Romney but it isn’t. Mr. Obama’s biggest challenger is…Math!

That’s right, with the Federal Government running a deficit of $16 Trillion dollars and making poor people out of the middle class, the dreams of sustaining any of his pie-in-the-sky plans is running into a numbers problem: Poor people pay less or no taxes. The more poor people there are, the less taxes that will come into federal coffers and right now the economy is cranking out new poor people every week. The increased tax burden on the working sector is also creating more poor people. It is a fact that there were more poor people out there last year than the year before and more poor people today than last year. 

The only growth industry in the U.S. right now is poor people. There are record numbers on Food Stamps, record numbers on Unemployment Insurance and record numbers who have fallen off of Unemployment Insurance. This is a direct result in increased taxation and regulatory burden on businesses and taxpayers. The less people have, the less they have to spend.

So where is all this money to continue Medicare, Medicaid, Social Security, Unemployment Benefits, Welfare, Food Stamps, Subsidized Housing and National Health Care going to come from?  Every economist in the world has confirmed that taxing what’s left of the wealthy is but a marginal sum in comparison to what the nation owes for these and other federal programs.

So where will the money come from? Sadly, Mr. Obama seems to have left that question unanswered in his gloriously received speech. I also don’t recall one mention of the looming national debt and what he was planning on doing about it. Perhaps in all the excitement he just must’ve forgotten to mention it with all that cheering and all going on.

Obama will smite the evil insurance companies, he will turn the cruel lenders into pilars of salt and he will vanquish those who seek to harness the great Satan of domestic oil supply. Verily he has spoken.

No, our seniors will not go without, our soldiers will not suffer for want and neither will the masses see any reduction in their health care. The Obama administration will simple lower the costs. This was a revelation! After enduring hefty yearly premium increases and with my deductable and co-pay soaring, it was a salve to my wounds to hear that the government, that stalwart of saving and thrift, will just have us pay less for health care.  Perhaps all it will take is a wave of Obama's almighty hand.  

But that trick never works. Nixon tried it in the 1971 if anyone cares to remember.   

With his worshipers fervently cheering to crescendo at every phrase, President Obama has put forth his his mission for all to see. But there should be no mistake, what he says will not happen upon his re-election. It can’t, it just doesn’t add up.

For all the promises, pledges, intentions and determinations of the President, it will be The Market that will make the ultimate determination of the soundness of his policies.

I believe The Market is speaking right now.

Free Health Care for All!

The latest farcical controversy between the Catholic Church and the U.S. government is astounding on so many levels as to confuse the most astute observer.

On one hand we have the government giving away yet another chunk of taxpayer money for the colossal non-issue of women’s contraception. Add to that the over-reach and tyrannical nature of government dictating to private organizations like hospitals and insurance companies on what they’re going to do with the money they make and the services they render. Then there is the other head of the Hydra, the Catholic Organization.  That’s just for starters.

Given the political and economic climate of the United States right now where we as a nation are broke but have an incumbent president who holds the dual sword of wielding more power than he was ever meant to have but lagging so low in popularity among the paying classes that he is driven to entice a large population of those who don’t to vote his inept behind back into the White House for another acrimonious and predictably disastrous four more years.

The government giveaway campaign continues with free contraception for women. No co-pay, no nothing, the contraception of your choice is free. And if the organization has an objection on religious grounds, no worries because their insurance company must pay for it anyway. Free of charge. That’s the plan.

But anyone with half a brain or without a political agenda will admit that there is no such thing as free. Somebody, somewhere will have to bear the costs of such a plan. Go look in the mirror. Who do you see? That’s right, you’ve found the person who is going to pay more for the same services that they receive while others get them for free. But wait, they’re poor and you’re loaded so what’s another $20.00 out of YOUR pocket? You’ve got it, moneybags, working for a big greedy corporation that rapes the unsuspecting consumer by charging a price for their products and services. There are so many more deserving of that money.  And so what if your phone bill has gone up, your car insurance has increased, heating your home has gone up and the cost of your health insurance has almost DOUBLED in the last four years. What’s another 20 bucks?

Then we find the Catholic Organization has cried “foul” at being forced to provide free contraception in their businesses. Yet they have for decades been in bed with the government on so many issues, the major one lately is illegal immigration. Another is their tax free status on not only churches but for Catholic businesses like the YMCA & YWCA. Their hospitals have benefited from government money. So now they’re upset that their “partner” wants them to hand out free contraceptives? So now they find religion?

For many reasons, the Catholic Organization’s influence is waning in the United States. For one they change “religious” doctrine to suit their needs. Another is that they’ve protected pedophile priests for perhaps centuries and they never seem to let religion get in the way of closing a church one they stop producing a revenue stream. Mexico and South America is teaming with Catholics just waiting to be tapped as a useful revenue stream. Hence, the “Catholicism as a business model” is all for illegal immigrants being granted amnesty.

The economy is ¾ driven by consumer spending. That axiom is repeated like a mantra across this land but the major malfunction I see is that every giveaway takes more and more money out of the regular person’s pocket so they have less to spend. Less purchases means a reduction in production. This in turn generates less taxes and so government has less to support its giveaways. Less spending, less production. less taxes, less giveaways. It’s Economics 101. Yet the giveaways are increasing without any thought to where the money or production will come to pay for them. The word for this is: Insane. 

There is nothing in my copy of the Constitution that says the Federal Government should be in the business of providing free contraceptives to women. In fact, there is no Constitutional mandate that I can find that gives the Federal Government the right to be in the healthcare business. Or the retirement business, or the business of educating our children or a government lunch program in those schools. But the Feds have bought their way into these areas and have made them a disaster. Everything they have made a policy of or a “war” against has become a costly, bureaucratic shambles. 

So here we have it: An omnipresent and dictatorial president pushing minutia and ignoring the difficult problems in an attempt to buy votes to extend and consolidate his power, a grasping kleptocracy of a government machine that can’t find time to produce a budget over the last three years but has managed to take over private enterprise in this country and raided the treasury for their own gain. A nation of youth that has had their future spent for them for short term political gain and short-lived economic balance, and the rest of us who played by the rules, saw this coming and knew better in the first place.

Just another day at the office in “Other People’s Money-land”.