May 10, 2011

Solutions: Regulations - Less is More.


The most bastardized phrase in human existence is 'To regulate commerce...' which is found in Article I section 8 of the U.S. Constitution. This clause, which speaks to commerce with foreign nations, among the several states and with the Indian tribes, has been used and abused by legislatures innumerable to excuse mounds of laws and regulations. Does one believe that the intent of the founders was that Congress could place extraordinary burdens on, and manipulate every aspect of, a foreign company? Of course not, no more than they intended the same be done to an American company. The intent was to prevent barriers to commerce, particularly between the States. Do you believe that Congress prevents barriers to business in America? Obviously the opposite is true. Laws and regulations cause barriers to business, are largely unnecessary, never achieve their stated goals, constantly have to be tweaked, steal the people's liberty, stifle commerce, diminish prosperity, cause unemployment, diminish the currency, shift power to elitists, cause corruption, remove incentive to interact in commerce, skew politicians intentions and destroy the republican form of government.

Let us clarify what we are speaking of here. Many may want to distinguish between laws and regulations. There are many technical reasons to do so, however, for my purpose they are specious. Laws and regulations are legal instruments to control the behaviour of businesses and individuals and thereby diminish the people's liberty. The entire purpose of this blog is to remind the people that when they lose liberty, they lose power, they lose prosperity, they lose life, they lose opportunity, they lose initiative, they lose ingenuity, they lose free market capitalism, they lose choice, they lose the republic. Laws and regulations diminish liberty and therefore diminish the people. There are many reasons to discourage the making of any new law or regulation. The most important is the loss of liberty. One of the travesties of our times is our acceptance of the legislature as a privileged class. They have put themselves above the very laws they make. Something James Madison never thought the American spirit would allow. The evidence is found in Federalist Paper #57, which in part states:

"If this spirit ever be so far debased as to tolerate a law not obligatory on the legislature, as well as the people, the people will be prepared to tolerate any thing but liberty." (emphasis added)

Do not malign your intellect by pretending that politicians have your best interest at heart. They do not, they have not, they never will. The founders noted that if we were angels we would not need government; but since we aren't angels we must chain government. Every single law passed is a spot of grease intended to assist the corrupt to slip the chains off the ankle of government. Every reading of the founding fathers letters, books, speeches or papers suggests that the intent was for Congress to pass very few, well thought out, constitutional laws, primarily to assist in the nations defense, maintain the value of currency, encourage the peoples ingenuity, preserve the peoples liberty, protect the peoples property and remove barriers to free market capitalism.

The exact opposite of these intents has been foisted upon the American people, primarily over the last 100 years. Law upon law is written, lied about, debated by honorless Men, passed, supported by bureaucratic structure, financed endlessly and never held accountable for it's consequences. These laws never solve the initial problem for which they were intended. These laws constantly require new laws and regulations to fix the new problems that they cause. These laws slowly squeeze the American economy preventing efficient commerce. A case in point would be the Sarbanes Oxley act of 2002. This act was intended to prevent the type of corporate failures we saw with Enron and WorldCom and others. Tricked up accounting propped up businesses allowing them to scam investors. The politicians are quick to beguile you with their braggadocios bravado about protecting the people with this massive regulatory fiasco. They are very less likely to inform you of the unintended consequences which are not typically discussed in the town hall meetings they host afterwards. We became the 'horror' of European economic partners. Massive delisting of companies from the exchanges took place. Charities were petrified that they would be exposed. Millions were lost to lawyers that could have helped people in need. By some estimates this act cost U.S. industry $200 Billion or more as of December 2008. The real tragedy is absolutely never discussed; that this act was completely unnecessary. The exchanges had already instituted new rules to govern corporate listing on the exchange, the SEC had adequate authority to approve and monitor accounting practices and the Justice Department had ample authority to prosecute accounting fraud. This act was completely unnecessary. However, it made good press for politicians. And you bought it. And you re-elected them. And you felt so warm and fuzzy cause Daddy government was watching the wolves while lil' Bo Peep slept peacefully at night. In the meantime it became exponentially harder for American companies to do business while foreign companies had no such shackles placed on them. This costs us prosperity, this costs jobs, this causes inflation, this stifles free market capitalism which hurts you, hurts your children and enslaves millions to mediocre jobs and prospects. The true costs will never be known. This was such a horrible law that both Paul Sarbanes and Michael Oxley voluntarily ended their terms in Congress. Books have been written about how awful this law was. 532 of our legislators voted for it.

Recently we have seen another travesty of this sort, the Dodd-Frank fiasco known as the Wall Street Reform and Consumer Protection Act. I just love the way they name these things. Don't you feel protected already? Especially knowing that the people who wrote it are largely responsible for the financial meltdown of 2008 through, you guessed it; regulation. Liberals have stuck their grubby little fingers into the housing market for decades now, writing and re-writing rules, refusing to let banks give mortgages based on ability to repay, threatening mortgage firms with more government regulation, chastising bankers as racists and insisting that all Americans deserve a house; whether they can pay for it or not. Surprise, Wall Street had to come up with exotic ways to make these worthless mortgages valuable and then the inevitable happened, housing prices fell and the whole thing came down like a house of cards. And who is going to save us? Why Goldman Sachs executives who now work in the government. Don't you feel safer already? First, if government had stayed out of it, this never would have happened. Second, they are only going to make it worse. Third, this bill doesn't even tackle the main problem, namely Fannie Mae and Freddie Mack; so called public/private collaboratives. This means privatized profit and socialized loss. They get the profits; we get the bills. The boards are stacked with current and former government employees. Surprised? It will not work. It will damage business. It will cost jobs. It will diminish freedom. It will further corruption. Finally, it will require future regulation to fix the unintended consequences of this despicable example of our political class's ineptness, corruption, and hubris.

In the past, only a natural disaster such as a flood or a drought would cause extensive hardship to the people. However, they would come together, rebuild and rise above, typically ending up better off for it. The new model is volatile markets struggling to find ways around government interference, ultimately crashing, instigating a whole new round of government manipulation, setting us up for the next crash, which is always bigger, deeper and more destructive of free market capitalism. Every problem that Congress proposes to fix, can be more adequately and expeditiously fixed with free market solutions. It is no surprise that we find ourselves at a precipice where this unsustainable model of the unholy alliance of business and government will ultimately bring down the entire country, leaving us ripe for a 'new model' which will undoubtedly be communist in nature.

Well...that's depressing, no?!? What to do?

Again, it's really not that difficult. The founders left us the tool to dismantle tyrannical government. The vote; and the structure of government where the House must be re-elected every two years, and they hold the purse strings. We simply vote only for politicians who are willing to go to Washington, not to write new laws, but to repeal old ones. Which ones? Doesn't matter. Ever have a big mess of string all knotted up and tangled that you had to unravel? Does it matter which knot you pick to first begin unravelling? No, the important thing is to start. After you get involved you will begin to see where you need to concentrate your efforts. It is slow and mundane and stressful. Then suddenly you realize there are only a few moves left and you have accomplished the impossible. The second most important thing is to be tenacious. You cannot quit. You must continue to pick and pull and unravel the string until you get every knot out. In this way, we must not waiver. We must elect only politicians prepared to dismantle this bloated government; to repeal laws; to diminish regulations; to 'burn' libraries full of worthless rules and unconstitutional law; to strip power from themselves and return it to the States or the People themselves. In the case of Sarbanes Oxley only 3 representatives and no senators voted against it. That means that 532 politicians should have summarily lost their jobs. But they didn't; we re-elected them. We believed that they had our interest at heart. It is a dismal failure; but did they repeal it? No. Why? It gives them power over business. Business must lobby for politicians to tweak the rules in their favor. You see, they have their interest at heart; not yours. They are disgusting excuses for human beings. They are willing to see the greatest country on earth die, if only they can enjoy power and prestige for their short meaningless little lives.

This is our country. They are our representatives. They will be just as sincere as we make them be. Vote them out every time that they do not unravel the string. Every time. Time and time again. Eventually, politicians being politicians will realize that in order to keep their jobs and stay in Washington and go to all of the parties, they will have to repeal laws, diminish federal control and return the people's liberty. It can be done and we can do it. But first, you have to get over your romantic ideal that politicians want to help you. They don't. They are rats in the sewer, sneaking around spreading disease throughout the land. Does this mean that there is not one good politician? Of course not. It means that aggregately, they are corrupt, inept and harmful. Never forget, it is not one politician that passes a law, it is the aggregate. Vote out every one that votes even one time for a new law or regulation giving themselves unconstitutional control over some aspect of our lives. One strike and you're out. Vote, rinse, repeat.

by: Keith D. Rodebush

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