the truth is big business loves obama

"I'm generally supportive [of the financial reform bill]. To be sure, there are details of it that I think I'm less sure of, but I think, on the whole, financial reform is, absolutely is essential and I will say that last week, in New York, I listened to a speech by Barack Obama at Wall Street, and one of the points he made resonated with me because I’d said it myself. He said that the biggest beneficiaries of reform will be Wall Street itself.” 

- Lloyd Blankfein, CEO Goldman Sachs (Homeland Security & Government Affairs, Permanent Subcommittee On Investigations, U.S. Senate, Hearing, 4/27/10)

"We continue to believe that comprehensive health care reform will benefit patients and the future of America. That’s why we have been involved in this important public policy debate for more than a year and why we support action by the House to approve the Senate-passed bill along with the amendments found in the reconciliation legislation."

- Official Statement of the Pharmaceutical Researchers and Manufacturers of America (PhRMA), is the largest single-industry lobbying group in America on 3/21/10 regarding Obamacare.

"Climate legislation is one of the critical issues that will be considered this year on Capitol Hill.  The House passed the Waxman-Markey legislation, a comprehensive, economy-wide bill [that] represents a moderate approach that was supported by a wide range of major American companies who make up the US Climate Action Partnership – including companies with a strong Indiana presence such as AES, Duke Energy, Alcoa, Dow, DuPont, GM, Ford, and Chrysler . . . Exelon has been preparing for a low-carbon future for the last decade. [We have] [s]old or closed most of our inefficient fossil fuel plants, [i]nvested billions in our fleet of 17 zero-emission nuclear reactors. In summer 2008 [we] released Exelon 2020, our plan to reduce, offset, or displace 15 million metric tons of greenhouse gas emissions per year, equal to our 2001 carbon footprint, by 2020. We are one-third of the way to our goal, and have a plan to accomplish the rest."

- John Rowe, CEO Exelon Energy (Indiana Council on World AffairsMarten House Hotel, Indianapolis 1/20/2010)

So if you listen to any cable news network or read most any paper all you here is how Obama is "anti-business" and that it is for this reason that the economy is slowly recovering.  Well that is only a half truth in my opinion.  I don't think Mr. Obama is anti-business per se, although I do believe that he is anti-market, which is actually profoundly worse than being anti-business.  The three quotes listed above are all attributable to big business heavyweights: Blankfein is for financial reform, the PhARMA lobby was all for Obamacare and Exelon, one of the largest power producers in the midwest and mid-atlantic (the coal region), wants nothing more than a full cap and trade system.  Does any of this make sense?  Why would a financial giant like Goldman Sachs want more financial regulation?  Why would a power company that produces a majority of its power on fossil fuels want to have the price of those fuels increased dramatically?  The answer is easy of course: they see a future with less competition.

Take financial reform for instance.  Now I understand and agree that any sound financial system must have rules of the road.  However, I firmly believe that the rules should be clear and must be debated before they are enacted.  This is the opposite of what occurred in the Dodd-Frank Bill. There are no new clear cut leverage requirements, there are no new clear prohibitions on proprietary trading.  There are just directives.  These directives either require or authorize incompetent agencies like the SEC to issue rules it thinks are appropriate.  In total the U.S. Chamber of Commerce estimates that Dodd-Frank authorizes a total of 533 rules to be written over the next few years.  Are some of these rules probably necessary?  Of course, but instead of being written by the Congress in the full purview of the electorate they are going to be written in closed door meetings were you need to pay to play.  I bet Mr. Blankfein knows this and is happy about it.  Few firms have the regulatory, compliance and lobbying staff to compete with Goldman Sachs when the task becomes influencing the inept government agents writing these rules.  They will invariably benefit the biggest and most connected of the banks at the expense of their smaller competitors, hence their support for financial reform.  

The same can be said about Exelon's desire for cap and trade.  As Mr. Rowe mentions in his speech, Exelon has been moving away from carbon based energy for years now.  Exelon is a Illinois based power producer and was a major contributor to Barack Obama.  Now they want their reward.  Instead of having to compete on a level playing field where consumer demand requires energy companies to be as efficient and cost-effective as possible, Exelon wants the Obama administration to price its competition out of the market.  It's whole business model over the past few years is that it is trying to get into a position of strength by lowering its carbon footprint ahead of the U.S. legislation so that it could put its boot on its competitors once their costs were artificially higher because of diktats from Washington.  Now that cap and trade seems dead that are literally shitting their pants and demanding even more intervention from Washington on their behalf.  Notice how the other companies named in Mr. Rowe's comment are all major corporations with huge lobbying arms.  Their support is predicated on the belief that they will be able to influence who gets "free credits" and what parts of industry will be "exempt."  That sure is one way to compete effectively.

What these examples show is that government intervention in the economy always produces winners and losers.  For the most part the interventions most favored by Mr. Obama undoubtedly favor the largest and most connected businesses in the industries affected.  Be it the hundreds of new rules in Dodd-Frank that have yet to be written or the onerous requirement that all business entities must now file a 1099 for every supplier with whom they purchase over $600 per year in goods (courtesy one of the many unread provisions in Obamacare), red tape and government regulation most favors the largest firms with large legal departments and the funds to spend on lobbying.  Small businesses, the real economic and job growth engines in our society, have neither of those advantages.  They are forced to play by the rules negotiated by their larger competitors.  Usually this is to their disadvantage.  These same small businesses are not hiring for this exact reason.  

There are three costs that almost all small businesses face regardless of their type of business: the must pay for energy, they must pay for credit, and they pay for health care for many of their workers.  Under Mr. Obama's polices the price for all three is going up.  Throw in the fact that tens, if not hundreds, of thousands of these small business owners, who are often organized into partnerships, limited liability companies or Subchapter S Corporations, are about to see their taxes increased at the end of the year, it is completely logical that they are not hiring or expanding.  The best thing Mr. Obama could do to help the businesses is to be "anti-business" and instead be "pro-market."  Let them compete effectively with their larger competitors and stop disadvantaging them by enacting "reforms" that put these competitors in a position to write the rules of the game.  These businesses don't want handouts and special privileges, just the opportunity to compete fairly and let the market decide who has the best product.

why soccer will not become overly popular in america

On Sunday I watched the World Cup final with a couple of my buddies.  The game itself was ok, and I have been much less enthusiastic about the World Cup since the U.S. was eliminated by Ghana in the Round of 16.  As a life long fan of soccer both at the international level and at the highest professional levels in Europe, I was extremely excited about this World Cup in general.  The U.S. had received a favorable draw, and this was potentially their chance to make a big impact on the biggest of stages.  TV ratings for the tournament have been excellent back here in the U.S., leading many to conclude that soccer is poised to break into the stranglehold the big three sports (football, baseball and basketball) have on the American sports fan.  Like I said, I am a big soccer fan, but this type of talk is a little premature.  In fact, I have come to the conclusion that soccer will never become overly popular with Americans unless there are some fundamental changes to the game.  The reason for this is simple: the current rules and ruling body is fundamentally at odds with what American's consider the most important attribute of a sport: fairness.

Now don't get me wrong, soccer supporters will claim that the game is extremely fair.  However, depending on the source "fair" can mean quite different things.  Americans, very rightly and justly in my mind, believe in an idea of objective fairness.  They believe that fair means 'consistent with rules, logic, or ethics, or having or exhibiting a disposition that is free of favoritism or bias; impartial.'  This objective form of fairness means that you craft rules that are as objective as possible, and wherever possible ensure that conduct conforms to those rules.  This sense of fair would find it abhorrent if the results of the game were not justified based on the current existing rules.

For instance, this is why american football employs the use of instant replay in order to correct calls.  Americans demand that the flow of play be as consistent with the rules as possible.  If a situation occurs where a judgment call seems to be at odds with what the rules say should be the outcome, the ruling is changed to more accurately present the outcome that is consistent with the rule.  Obviously, this type of review is not as possible, feasible or even desirable in all situations as many sports include inherently subjective rules that cannot be altered with significantly changing the game itself.  However, one mark of the progression of sports in the United States is a move away from these subjective rules towards more objective ones.  Look at pass interference in football.  The rule, as defined by the NFL, is "There shall be no interference with a forward pass thrown from behind the line." This is obviously extremely subjective.  What constitutes interference could be drastically different from person to person.  However, as can be seen from the link to the NFL website above, the NFL tries extremely hard to characterize the rule in as objective a way as possible. The rule digest lists no less than nine specific acts that constitute the foul, eight acts that do not and five notes for officials to consider in borderline situations.  They have taken a subjective judgment call and made it as objectively fair as possible.  This is the essence of what American's consider fair.

However, fair can have another definition as well: 'just to all parties; equitable.'  This is what I consider the European definition of fair, and this type of fairness is the underlying rationale of many of the rules of soccer.  Rather than believing in objective rules that lead to predictable outcomes, European fairness means everyone should have a chance, regardless of skill or ability.  To them, it is more important that any and every competitor have a chance of success than rewarding the best teams that are most able to prosper under an objective set of rules.  Several soccer rules illustrate this point such as the running clock, refusal to entertain instant replay and the completely subjective definition of fouls/yellow cards/red cards.  For instance look at the Maurice Edu goal that was disallowed in the game with Slovenia.




As anyone who watched the goal will tell you (even an Slovenian who doesn't have his head up his ass) there was absolutely no reason to disallow the goal.  However, because of the subjective call of the under qualified Malian referee Koman Coulibaly, the U.S. only tied the game and had no other recourse.  The simple fact that Coulibaly was a referee at the most watched sporting event in the world is endemic of the European fairness doctrine.  Despite the fact that the best and most accurate referees in the world come from Europe and South America (because most of the high profile matches with a lot on the line are played in these locations) FIFA insists on using referees that come from every corner of the world to ensure that each region is "fairly" represented.  Wouldn't these countries be treated more fairly if the referees were competent and could apply the rules in a more objectively fair way?  And this is hardly the only example from this world cup.  There was Dempsey's disallowed goal against Algeria, the English goal that obviously crossed the goal line against Germany and Kaka's ridiculous red card just to name a few.  By moving towards objective rules that clearly define prohibited conduct and introducing a form of review to ensure that the rules are enforced in a consistent way soccer could grow in popularity by leaps and bounds back here in the U.S.

We take for granted the underlying rationale of rules in American sports: to ensure that, all else being equal, the best team on the field that day wins.  However, that is not the goal of the rules in soccer.  They want each team to have a chance, regardless of ability.  If this means that there will be objectively unfair outcomes, then so be it says FIFA.  This attitude is not only limited to soccer, but to almost all endeavors in Europe.  Thank god that is not the case here in the United States.  Until FIFA undertakes serious effort to prospectively change the rules of soccer to be more objectively fair, it will never be as popular in the United States where fans and citizens alike believe in the correlation between hard work, ability and success.

doublethink is alive and well

Prior to his election in 2008, the most common compliment bestowed on Barack Obama by the mainstream media was that he was an extremely skilled orator capable or persuading almost anyone of his point of view.  Swept up in the media storm that was Obama, he was constantly praised as the best speaker, even better than Reagan, of the last half century.  Obviously Chris Mathews is a full fledged Obama supporter, but just look at what he said a year and a half ago.



A simple youtube search will show numerous other examples of similar comments.  However, since becoming President Obama has not made nearly as many public speeches, and now that he is in a policy making position he has been a little more hesitant to expouse specific views on a variety issues.  Even the left has criticized him for failing to take the lead on issues ranging from healthcare to energy. However, I have notice an interesting trend when Obama does speak, and it is eerily familiar to a type of propaganda described by George Orwell over half a century ago.  Doublethink, the term penned by Orwell in his masterpiece Nineteen Eighty-four, was described by him as follows:

To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy was impossible and that the Party was the guardian of democracy, to forget, whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself -- that was the ultimate subtlety; consciously to induce unconsciousness, and then, once again, to become unconscious of the act of hypnosis you had just performed. Even to understand the word 'doublethink' involved the use of doublethink..

 Now obviously Obama's rhetoric has not quite reached that of "the Party," but he is slowly inching his way in that direction.  The more common terms, doubletalk and doublespeak, both derived their meaning based on Orwell's concept of doublethink, and they may be more apt terms for Obama's current rhetoric.  Defined as any language that deliberately disguises, distorts, or reverses the meaning of a statement, resulting in a communication bypass, doublespeak has been employed by governments throughout history in order to enact unpopular policies or to hide those policies true costs.  Let's take a look at a couple of things Obama has said of the past year.

On healthcare: "We agree on reforms that will finally reduce the costs of health care," Obama said. "Families will save on their premiums; businesses that will see their costs rise if we do nothing will save money now and in the future. This plan will strengthen Medicare and extend the life of that program. And because it gets rid of the waste and inefficiencies in our health care system, this will be the largest deficit reduction plan in over a decade."  This was one of the main ways Obama was able to sell reform: he claimed premiums would go down for current insurance holders, that he would strengthen Medicare and total government spending would decrease.  All this while giving over 33 million more Americans coverage.  This is the essence of doublethink. Claiming that we can dramatically increase the total number of services while paying less for it!  However, in May the CBO released a new estimate saying that the cost of the bill would be $130 billion more than originally estimated over the first decade, effectively eliminating any "savings."  And this estimate uses ten years of revenue to pay for only 6 years of benefits.  Just look at Medicare as an example.  The program now costs almost ten times what the original estimate said it would be when it was passed.  First year economics tell you when you drastically increase demand for a service (by adding 30 million new people seeking care) while instituting a number of new mandates (accept everyone with preexisting conditions, covering dependents until age 26, etc.) that the price will rise - in this case premiums.  A great example of what happens when government tries to take over the healthcare system is in Massachusetts, and the current debacle up there has been documented thoroughly in today's Wall Street Journal.

On Energy: "Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs – but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation – workers and entrepreneurs; scientists and citizens; the public and private sectors." - Barack Obama, June 15, 2010, from whitehouse.gov
Obviously this quote refers to the notorious cap and trade bill.  In his oval office speech on the oil spill, President Obama tried to make the case the economics alone justify getting away from fossil fuels. In the speech he did not mention the phrase "climate change" even once, instead claiming that job growth and prevention of oil spills were the main impetus behind a cap and trade bill.  Once again the contradictions in such a statement are apparent.  Raising the cost of carbon will make energy more expensive.  This will put businesses in a precarious position: either devote more of their limited resources to paying for energy, or buy less of it and produce less as a result.  This will leave all types of industries with less money to spend on new investments or hire workers.  Will there be more workers in subsidized industries like wind and solar?  Yes, probably.  But these will be far outweighed by the losses in traditional industries.  You simply cannot pay more for energy as a whole, decreasing the capital available for investment, and expect the total amount of prosperity to increase.  Regardless of how pressing an issue climate change may or may not be, trying to sell cap and trade as a jobs bill is contradictory.

paul krugman for budget director!

So Peter Orszag recently resigned as director of the Office of Management and Budget.  I figure that he wants to get out before the fiscal train wreck comes to a head, and I'm sure the director of the budget's job isn't any easier when Congress refuses to even pass a budget (as they have done this year).  There has been some speculation regarding who Obama will nominate to replace Orszag, but I recently found this article by Simon Johnson, the former chief economist at the International Monetary Fund.  It had the laughable premise of suggesting Paul Krugman as Orszag's replacement.  Right now Krugman is getting a lot of heat for his recent op-ed which suggested, if not promised, that the U.S. was doomed to slip into another great depression if the U.S. did not spend billions and billions of deficit dollars to stimulate the economy (article here).  Really?  A depression is inevitable without massive increases in government spending?  Now although I don't agree with the premise that government spending alone will turn the economy around, I don't think that anyone other than Krugman believes that it is the only way to avoid a depression.

Unfortunately this is a tough hypothesis to test; however, we do know that for the past two years almost everything that has been suggested by Mr. Krugman has been implemented as policy by Mr. Obama.  As has been outlined by The Wall Street Journal and others, Obama has followed Krugman's advice to spend, spend, spend in order to counteract the negative aspects of a lack of demand; Mr Krugman has stated numerous times that he believes that depressed demand is the main culprit for our current economic troubles.  In order to stimulate demand, the government needs to spend because private industry will not.  That is the Krugman economic fix.

President Obama has heeded his warning.  First there was Mr. Obama's first budget, in which overall federal spending rose 18%, or $536 billion.  And this doesn't even reflect the true increase in spending.  Thanks to low interest rates the feds were able to save about $65 billion on debt servicing, so the true increase in federal outlays was closer to 22%.  And that was only in ONE YEAR.  Throw in the $800 billion dollar stimulus (which was not included in the budget) and total spending increased by roughly $1.4 trillion.  This increased spending meant that total federal expenditures reached over 24% of GDP, a post-war record.  How much more spending does Mr. Krugman want?  Under Obama we already now have one in every four dollars earned by American redistributed by 535 people sitting in Washington, D.C.  And lest we forget, that spending will increase even more when the the trillion dollar plus health care entitlement begins running huge deficits. 

Despite all this spending and the promise of economic recovery that came with it, the results have not materialized.  And this isn't the only reason to question Mr. Krugman's credentials to run the Budget Office.  Check out this Krugman Article from 2003 when he blasted the Bush administration for increasing deficit spending.  According to Krugman, he refinanced to fixed rate mortgage because he was sure that interest rates were sure to rise.  The Bush administration's reckless spending and tax cuts — which increased the deficit to about 3% of GDP — would have to cause interest rates to sky rocket.  Here he is in his own words:

But what's really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government's solvency.

That may sound alarmist: right now the deficit, while huge in absolute terms, is only 2 — make that 3, O.K., maybe 4 — percent of G.D.P. But that misses the point. "Think of the federal government as a gigantic insurance company (with a sideline business in national defense and homeland security), which does its accounting on a cash basis, only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting . . . is an accident waiting to happen." So says the Treasury under secretary Peter Fisher; his point is that because of the future liabilities of Social Security and Medicare, the true budget picture is much worse than the conventional deficit numbers suggest.

Oh wait I'm sorry.  I guess Mr. Krugman does understand that budget deficits can be a problem, although it is only when the party in power is one he does not agree with. He was worried when deficits were 3% of GDP, but now that it is almost 10% he insists on more spending.  Demand-siders (my new name for those insisting on government spending as the best way for economic recovery) will counter by saying the spending is needed now to avoid a recession, but regardless whether it is needed or not will not change the effects of those deficits.  Even if the spending is desperately needed, higher deficit levels coupled with the looming social security/medicare insolvency (which Mr. Krugman did rightly point out) can lead to tremendously bad consequences.  Most likely these will be soaring interest rates and the inflation that accompanies the monetizing of the debt.  Mr. Krugman can't have it both ways, and unfortunately I think his 2003 analysis was closer to correct.

All of this is just further evidence that Krugman isn't much of an economist anymore and is more just a liberal columnist.  He simply uses his economic background to attempt to justify typical liberal policies: increase spending and redistribution of wealth.  He loves to bash business and blames excessive risk as the major cause of the recession.  He has called long term unemployment a "slow-motion human and social disaster" that must be counteracted at almost any cost; however, he also called the Waxman-Markey Cap-and-trade bill "well short of what the planet really needs."  You don't have to be a economics professor at Princeton to recognize that increasing the cost of energy and more environmental regulation will slow economic growth, making it even harder for the unemployed to find work. When he attacked Senator Jim Bunning's block of the extension of unemployment benefits for people that have been out of work for up to two years, he claimed that it was "bizarre" that anyone would think that providing employment benefits in continuum would disincentivize people to work.  However, a textbook authored by Paul Krugman called "Macroeconomics" contains the following passage:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . .  In other countries, particularly in Europe, benefits are more generous and last longer.  The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job .  Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European Countries.

 Like I stated Krugman seems less and less like a economist and more and more like a typical political columnist.  This in and of itself is not a bad thing, however, when people try to defend Obama's economic policies they often point to Mr. Krugman for justification.  I refuse to defer to his diminishing authority.

corporations are bad, mmmkay?

That's common knowledge today, correct?  Corporations are evil, greedy entities that steal from the poor and give to the rich.  They don't care about anything but profits.  This type of greed is inherently evil, and money is the source of that evil.  For generations progressives and socialists have made that argument.  According to them, profit seeking is not a good thing, and without Big Brother there to keep them under control, they will eventually plunder the nation.  Look at the bashing BP is getting right now.  Obviously, they deserve a lot of blame of the spill itself.  However, criticism of BP is hardly limited to the spill.  Often the criticism has been aimed directly at allowing the profit seeking motive itself.  According to many of these commentators, the profit seeking motive is flawed, as companies will not consider the public interest in making decisions leading to less desirable social outcomes.  Instead, they believe that that the government should exercise huge amounts of control over these corporations in order to coax them into doing what they consider is "right thing to do."

As I mentioned in an earlier post, I am currently reading Atlas Shrugged by Ayn Rand.  Although I am only about half way done, a recent rant by one of the characters really caught my attention.  His name is Fransisco d'Anconia, and this rant was aimed to be a defense of the profit seeking motive.  He said it better than I could say it myself, so here it is in his entirety.  I know it is really long, but I think it is right on point.  (Note: Also, I just want to say that although Ms. Rand's estate obviously owns the copyright to the following excerpt, I am reprinting with the intention to comment on its meaning, so as to explain its significance and relevance today.  I believe this is consistent with the fair use doctrine codified under 17 U.S.C. § 106.  I encourage any and all, if they find the following passage interesting or through provoking to purchase the entire book and read it for themselves.  A link is provided at the end of this post.)

"So you think that money is the root of all evil?" said Francisco d'Anconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value.   Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor--your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?

"Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions--and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth.

"But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man's capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made--before it can be looted or mooched--made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can't consume more than he has produced.'

"To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss--the recognition that they are not beasts of burden, born to carry the weight of your misery--that you must offer them values, not wounds--that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men's stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best that your money can find. And when men live by trade--with reason, not force, as their final arbiter--it is the best product that wins, the best performance, the man of best judgment and highest ability--and the degree of a man's productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money. Is this what you consider evil?

"But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires. Money is the scourge of the men who attempt to reverse the law of causality--the men who seek to replace the mind by seizing the products of the mind.

"Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose, if he's evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?

"Only the man who does not need it, is fit to inherit wealth--the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve the mind that cannot match it. Is this the reason why you call it evil?

"Money is your means of survival. The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men's vices or men's stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment's or a penny's worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you'll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?

"Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit. Is this the root of your hatred of money?

"Or did you say it's the love of money that's the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It's the person who would sell his soul for a nickel, who is loudest in proclaiming his hatred of money--and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.

"Let me give you a tip on a clue to men's characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.

"Run for your life from any man who tells you that money is evil. That sentence is the leper's bell of an approaching looter. So long as men live together on earth and need means to deal with one another--their only substitute, if they abandon money, is the muzzle of a gun.

"But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich--will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt--and of his life, as he deserves.

"Then you will see the rise of the men of the double standard--the men who live by force, yet count on those who live by trade to create the value of their looted money--the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law--men who use force to seize the wealth of disarmed victims--then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, 'Account overdrawn.'

"When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, 'Who is destroying the world? You are.

"You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it's crumbling around you, while you're damning its life-blood--money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men's history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves--slaves who repeated the motions once discovered by somebody's mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer, Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers--as industrialists.

"To the glory of mankind, there was, for the first and only time in history, a country of money--and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man's mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being--the self-made man--the American industrialist.

"If you ask me to name the proudest distinction of Americans, I would choose--because it contains all the others--the fact that they were the people who created the phrase 'to make money.' No other language or nation had ever used these words before; men had always thought of wealth as a static quantity--to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words 'to make money' hold the essence of human morality.

"Yet these were the words for which Americans were denounced by the rotted cultures of the looters' continents. Now the looters' credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide-- as, I think, he will.

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns--or dollars. Take your choice--there is no other--and your time is running out." (My emphasis added)

 Like I said, I am only about half way done, but this passage struck me as one of the most succinct, well-reasoned defense and applications of the principles first put forward by Adam Smith when he described the invisible hand of capitalism those hundreds of years ago.  With the America turning 234 on Sunday, it is important to keep in mind what made America great.  It was not those who wish to spend other peoples money for the "public good" but those who freely did what was in their best interest and along the way made a lot of money and just so happened to raise the rest of us up with them.