The Freedom Factory

We are moving closer towards a political economy every day. Every dollar borrowed, taxed, printed, and spent by government really comes from the private sector.  Trillions of dollars of national resources are being allocated by politicians and bureaucrats towards things they claim will benefit our economy. Congress just passed a $3.6 trillion budget ($1.2 trillion in deficit), and combined the Federal Reserve and Treasury have dumped $13 trillion into the economy in the last 16 months. What we must all ask ourselves right now is whether or not we trust government with our money? Continue Reading

The trade wars begin-Mexico raises tariffs on U.S. exports in retaliation of truck project cancellation, Obama angry at A.I.G. over bonuses-tries to cut them, small businesses to be next bailout beneficiaries, government tries to track down and confiscate Madoff assets-who will keep them? China uses global downturn to boost competitive advantages, Jon Stewart rips apart Jim Cramer in debate on poor financial reporting…just the latest in your Freedom Under Fire Report! Continue Reading

Commercial real estate developers are the latest group of pigs to waddle to the federal trough. With upwards of $530 billion in commercial mortgages coming due in 2009, developers are warning “that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies.” Continue Reading

In a newsletter earlier this month, Senator Boxer wrote to Californians that her chief priorities are to “stabilize the housing market, create new, good-paying jobs, and get our economy back on track.” You can read a letter I wrote to her in response.

She cites a dour real estate market and a state-wide unemployment rate in excess of 8.2%. California is, indeed, facing tough economic challenges. The real estate market crash has hit the state particularly hard, with prices down about 33% between Los Angeles, San Francisco, and San Diego.

Some “fixes” proposed by the Senator:

1. Extend the food stamp program
2. Revise the COPS program that helps local law enforcement with staffing needs
3. Congressional “economic recovery” package to create infrastructure programs (build bridges, highways, and other big ticket projects)
4. Subsidize alternative energy projects

These political “fixes” are all misdirected and will spend lots of your money to do little. Food stamps, more police officers, and temporary construction jobs will do nothing to make the state more competitive, which is the real problem. Government construction is notoriously corrupt and inefficient-think Boston’s Big Dig which ran 470% over budget and killed a motorist with shoddy construction.

Let’s get real and propose policies that will actually grow the economy. California has two big problems:  over-regulation and over-taxation. We were hard hit by the housing downturn largely due to politically distorted real estate markets. Heavy taxation and restrictive labor laws drive businesses out of the state.

If Senator Boxer seriously wishes to help the state economy she should do something entirely foreign to her: figure out how to reduce government involvement in business activity.

• Identify and eradicate laws and regulations that decrease business profitability
• Address California’s punitive tax system that drives jobs out of the state

More government is not the answer, but politicians rarely admit that the best way to help is to step aside. Everyone wants the glory that comes with power.

I’ll keep you updated on the Senator’s response to my letter. From experience, I anticipate receiving a canned, automated response. I have yet to receive a response that actually addresses my concerns directly. Rather, I suspect low level staffers simply match the topic of my message with pre-written responses.

Check out this incredible invention…let’s you turn Capitalism on or off whenever you want!

Don’t waste your time with complicated Socialist revolutions.  Just clap on when times are good and you want the profits for yourself, and clap off when times get tough!

Simple and easy…the new American way!

Americans seem to have a problem accepting responsbility for their problems these days. During good times people proudly invoke the American tradition of free enterprise and the right to keep profits for taking risks. However, when things come crashing down these very people seem to be the first to demand someone rescue them. Our economic system has become one of privitizing gains and socializing losses. With $2.3 trillion in combined federal “stimulus” packages this year, it seems as though everyone is clamoring for a piece of the spoils! The most recent pigs to waddle to the federal trough are city and state governments. Continue Reading

Muhammad Yunus was awarded the Nobel Peace Prize in 2006 for his work in alleviating global poverty. He is the pioneer of the micro-lending movement, which targets the world’s poorest people for small loans that can be used for launching personal businesses. Yunus’s theory is that the best way to bring people out of poverty is to enable them to do it themselves. Yunus’s Grameen Bank never gives away money. They do not forgive loans when borrowers fall on hard times, instead merely restructuring terms and offering more money to alleviate immediate hardships. In Banker to the Poor, Yunus describes the path he and his bank took to discovering a winning formula that has saved the lives of millions of the world’s most desperate people. Continue Reading

Famous investor and writer, Jim Rogers (Adventure Capitalist, Investment Biker, and Hot commodities), recently stated that America is “more communist than China right now,” but our variant of socialism is geared towards the rich. He was referring to the federal government’s decision to bail out beleaguered mortgage giants, Fannie Mae and Freddie Mac. Tagged onto earlier questionable Federal Reserve bailouts designed to stabilize the financial system, as well as longer-term protectionist policy and corporate subsidies, Mr. Rogers might just be onto something…

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The Wall Street Journal reports today that $694 million has been returned to the Medicare trust funds over the last three years, found by contracted audit agencies. The Medicare and Medicaid Services agency has contracted with private auditors to review a total of $317 billion in claims just from the states of New York, California, and Florida. The auditors were looking for improper payments, of which they discovered 0.22% of were incorrect. That percentage doesn’t sound like much, but returning $694 million to the trust funds is an accomplishment for which government should be praised.

No one chooses to live at or below the poverty level right?  Well, I didn’t think so, but the Census data may prove otherwise.

As of 2000, there are 106 million households in the US.  I am first going to break the country into quintiles from lowest income to highest income (which means that the bottom 20% or 21 million households earn the least, and so on).

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