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Ron Paul on bailouts.

"An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned," Mr. Paul said. "But instead with a bailout, rewards are reversed – the proceeds from successful entities are given to failing ones. How this is supposed to be good for our economy is beyond me."

So simple, so true and so ignored by the government.  You don’t need to be a Harvard Economist to understand the veracity of that statement.

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Comptroller: NY may need fed help

The broke state begging the broke federal government.  That is a hoot!

There will be a fundraiser for the Mother of All Taxpayer Lawsuits on Tuesday, November 25^th from 7-9pm at Brennan’s Bowery Bar & Restaurant at Main and Transit in Clarence.

Donation is $25.  Pizza, salad, beer and wine will be served.

The lawsuit was brought against the Three Men in a Room by fifty NY citizens to end 1-3 billion dollars in illegal corporate subsidies each year.

You can get more details and read the legal documents here.

Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.

Except for a rare few, Members of Congress are unaware of Austrian Free Market economics. For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics. If they had had any understanding of the Austrian economic explanation of the business cycle, they would have never permitted the dangerous bubbles that always lead to painful corrections.

Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.

At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form. Congress added fuel to the fire by various programs and institutions like the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD mandates, which were all backed up by aggressive court rulings.

The Fed has now doled out close to $2 trillion in subsidized loans to troubled banks and other financial institutions. The Federal Reserve and Treasury constantly brag about the need for “transparency” and “oversight,” but it’s all just talk – they want none of it. They want secrecy while the privileged are rescued at the expense of the middle class.

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Government!

Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.

It then clamped fuel efficiency standards on the entire U.S. car fleet.
Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers’ wages in Social Security payroll taxes
State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.

The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth—vacations, holidays, work breaks, health care, pensions—for workers and their families, and retirees.

Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners.

Businesses need to be able to compete in a global economy.

Read it all.

However little it may often appear to be true, the social world is governed in the long run by certain moral principles on which the people at large believe. The only moral principle which has ever made the growth of an advanced civilization possible was the principle of individual freedom, which means that the individual is guided in his decisions by rules of just conduct and not by specific commands. No principle of collective conduct which bind the individual can exist in a society of free men. What we have achieved we owe to securing to the individuals the chance of creating for themselves a protected domain (their property) within which they can use their abilities for their own purposes.

— Friedrich A. Hayek (Law, Legislation, and Liberty, Vol. 3, p 151-2.)

Another retailer is about to bite the dust – Steve and Barry’s.

Steve & Barry’s LLC, the Port Washington-based retailer, filed documents with the Southern District of New York Bankruptcy Court that indicated it would starting a nationwide liquidation of its 173 stores, including ones in the Walden Galleria and Summit Park Mall. The pending closing comes on the heels of the retailing filing for Chapter 11 bankruptcy protection in July.

The upside is that a bad economy leads to nice bargains for people.  If you love a bargain, this is your time.  Besides Steve and Barry’s, Linen & Things is currently liquidating store inventories.  Next up could be Circuit City.

There is no reason to feel bad for these retailers, or the auto industry either, going broke weeds out inefficiency and the commitment of resources to products consumers do not want.  Some savvy entrepreneurs will step up and fill the void.

Unfortunately, many of the companies going belly-up have managed their businesses like the government; operating on borrowed cash.  Eventually a default must occur to correct the response to market conditions.

I am waiting, with my fingers crossed, for the mother of all defaults – local, state and federal government bankruptcies.  That is a market correction that is long overdue, and must occur, if we are going to travel down the road to economic salvation.

The citizen is sovereign only when he can retain and enjoy the fruits of his labor. If the government has first claim on his property he must learn to genuflect before it. When the right of property is abrogated, all the other rights of the individual are undermined, and to speak of the sovereign citizen who has no absolute right to property is to talk nonsense. It is like saying that the slave is free because he is allowed to do anything he wants to do (even vote, if you wish) except to own what he produces.

— Frank Chodorov, The Freeman [August 1990]

For immediate release:

Contact:
James Ostrowski, Atty.
(716) 435-8918
jameso@apollo3.com
http://blog.jimostrowski.com/?page_id=1110

The Three Men in a Courtroom
December 3rd Albany

Buffalo, New York, November 18, 2008.  Many people talk about doing something to cut taxes in New York.  Fifty brave New Yorkers actually did something about it.  They hired a lawyer and sued the entire political establishment in the state—the governor, the comptroller and the state legislature—to end corporate welfare.  Bordeleau v. State of New York, Albany Co. Index No. 6582-08.  Each year, the state hands out over a billion dollars of your tax money to wealthy corporations for “economic development.”  Not only has this failed to help the economy but it is illegal under the plain language of the State Constitution:

“The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking.”  Article VII, § 8. 1.

The political elite hired five big law firms to oppose them and they argued that the constitution doesn’t mean what it says. 

On December 3rd, in Albany, a state judge will rule on the defendants’ motion to dismiss.  A people’s rally in support of the lawsuit will be held on the Capitol steps at noon.  Oral argument of the case is at 1:30 p.m. across the street at 16 Eagle St. (Justice Thomas Lynch).

To help defray the costs of the lawsuit, the group is holding a fundraiser on November 25th from 7-9 pm at Brennan’s Bowery Bar & Restaurant, 4401 Transit Rd. (at Main), in Clarence, NY; $25.

The success of this lawsuit could save the taxpayers tens of billions of dollars in the coming years and pave the way for the outright repeal of the oppressive New York gas tax of 32.4 cents per gallon.

Read all the case documents online at:
http://www.jamesostrowski.com/case/people-ny-081001.html

Keep up with news about the case at http://blog.jimostrowski.com/?cat=20

Plaintiffs’ attorney: James Ostrowski, 63 Newport Ave., Buffalo, NY  14216 (716) 435-8918, jameso@apollo3.com

The lead plaintiff is Lockport stockbroker Lee Bordeleau–(716) 433- 0574, 271 East Ave., Lockport NY 14094

In the final analysis, the last line of defense in support of freedom and the Constitution consists of the people themselves. If the people want to be free, if they want to lift themselves out from underneath a state apparatus that threatens their liberties, squanders their resources on needless wars, destroys the value of their dollar, and spews forth endless propaganda about how indispensable it is and how lost we would all be without it, there is no force that can stop them.

— Ron Paul, The Revolution: A Manifesto [2008]

 

My faith in mankind is dwindling, people are rejecting freedom at every turn and meekly complying with each new government assault on liberty.

Politicians continually entice voters — especially as members of identifiable interest groups — to demand ever more government. Politicians do this because increased government activity is something they hope to use to leverage interest groups into supporting their re-election bids. And each increase in government appears as a political “success.”

A politician looks good when “his” or “her” program gets enacted . . . to help seniors, or “the middle class,” or “local business,” or “the children.”

The issues keep rotating, the better to ratchet up government growth at each turn.

But this process cannot simply go on forever. Even with the Federal Reserve in the federal government’s corner, inflating the money supply to exact a hidden tax, limits nevertheless exist to continual debt expansion.

Read it all:  The next crisis, the next choice by Paul Jacob

The portrait Brian Higgins is trying to paint of himself is becoming laughable.  He wants us to believe he is Mr. Goodguy in Washington, saving the taxpayers of WNY tons of money.

Now, he has the federal government investigating gasoline prices in WNY.  Gasoline is not a Constitutional Right guaranteed for each American.  It is a commodity that responds to market conditions.  Someone has to pay the highest prices, that is a given.  It just happens to be us, with one of the highest tax rates on gasoline in the nation.  I would suspect that demand for gasoline is also higher, which in turn will lead to a bit of a higher price.

Turning the FTC loose on businesses only costs that taxpayers more money.  You have the money spent to pay the government Gestapo conducting the investigation and you have the money spent by businesses providing information for the investigation.  Many small businesses will probably incur expenses they can ill afford.  If by some amoral authority, businesses get sanctioned for the imaginary crime of price gouging, you can be sure there will be repercussions at the gas pumps, either higher prices or shortages.  Honest, hard working, small entrepreneurs could be driven out of business altogether.

If you really want to see prices drop more, drive less or at least patronize the guys with the lowest prices.  The last thing we need is the government inserting itself into more businesses.

People believe that, when we demand free trade, we are motivated exclusively by the desire to allow labor and capital to take the direction most advantageous to them. Public opinion is mistaken on this point; this is merely a secondary consideration with us. What grieves us, afflicts us, horrifies us in the protectionist system is that it is the negation of law, justice, and property rights; that it turns the law, which should guarantee justice and the right to property, against them; that it both subverts and perverts the conditions under which society exists.

— Frédéric Bastiat, “Plunder and Law” [1850]

Needless to say, I am not at all happy about the results of the Presidential election.  If McCain had won, I would only be slight less unhappy.

It is now up to Obama to prove me wrong – I’m not holding my breath.  There has been virtually nothing that has come out of his mouth that makes me think he will make America a better place.  I fear that he will prolong the recession, much like FDR’s New Deal prolonged the Great Depression by 7 years.

Those who ignore history are doomed to repeat it.

In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt’s New Deal and determined his policies prolonged the Depression by seven years.

Harold L. Cole and Lee E. Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy.

 

In short, my post-election mood can be summed up by the following quote:

"We should never despair, our Situation before has been unpromising and has changed for the better, so I trust, it will again. If new difficulties arise, we must only put forth new Exertions and proportion our Efforts to the exigency of the times." –George Washington