Byron 1776

I'm Back

2009-01-03T06:56:00.000-08:00

Sorry I have been gone for such a long time. I ended up teaching at Vanderbilt University...short notice... and getting ready for class CONSUMED me.

Is It Your Money?

2008-08-16T06:30:00.000-07:00

Sometimes the simple questions are the most powerful. So for today, lets start with a simple but powerful question.

When you earn money...
who's money is it?

This is not a trick question. You see, under liberal thinking, it is the federal government's money. They have the "first call" on as much of it as they "need." Their "first call" comes before your family's and before God's. In theological language, the Federal Government believes that it has the moral right to take the "first fruits." You get to keep the rest.... not because it is yours... but because they allow you to keep it. (For today, we'll limit our discussion to the Federal Government. The rights of State and Local Governments are different and demand a separate discussion.)

HOW MUCH?
How do we determine the correct amount the government has a "right" to take. I am not asking how much they want. I am asking where the government's rights start and stop. It is clear by the way the federal government operates, politicians believe that they have a "right" to whatever they want. Of course they will use the word need, not want.

First, we must define the word "right."

   right - noun
   - a just claim or title
   - a moral, legal or ethical principle

- an underlying cause of justice

Starting Point
First we have to agree to the necessary, non-optional, functions of national government. Clearly, there are necessary functions defined in the Constitution.

Defense of the nation
Codifying and supporting the Rule of Law
Limited infrastructure programs

No one will argue that these must be funded for our nation to survive and prosper. Government has "a just right and title" to the resources necessary to accomplish these literal and specific functions. But these things represent less than 1/3 of the total federal budget! Defense represents about 20-25%. Funding limited legal and physical infrastructure could easily be accomplished with 10% of the total budget. This is where the "rights" of the federal government end! All the rest are government "wants"... not needs... and certainly not "rights." But politicians have convinced themselves, and us, that all the other operations of the government are on the same moral footing as the 3 I mention above. They are not!

Remember, we didn't even have an income tax as we know it until the Civil War (1862). Wars always result in higher taxes. It wasn't until 1913 and the passage of the 16th Amendment that Congress received the actual authority to tax income on individuals and corporations.

Here Is Your Allowance
Where does the word allowance come from? It comes from the word allow. The Federal Government allows us to keep some of the money we earn. Today's politicians, in both major parties, act as if what is left after taxes is your allowance. It is given to you by the Nanny State. They can raise or lower it at will. My favorite example...

Tax Holidays: Tennessee, like many other states, declares a "Tax Holiday" a few weeks before Back-to-School. (While this isn't a Federal program, it is too good of an illustration to pass up.) Think about it! If the State Government does not "need" the revenue, why not lower the overall tax rate. The reason is simple. Legislators get to pass popular legislation, at least with the unthinking majority, thereby gaining political brownie points and securing power. It is horrible policy and trains us to appreciate government allowing us to keep more of our money. We are grateful that our allowance is increased for one weekend.

Where Do You Go For Real Change?
There are several terrific places to go for information, to influence policy makers and to sharpen your thinking on important issues like these.

For Action...
- The Club for Growth
- National Taxpayers Union
- Ron Paul's Campaign for Liberty
- The Cato Institute

For Learning...
- The Ludwig von Mises Institute
- Cafe Hayek (a terrific blog from George Mason University's Econ Dept.)

After you are armed with a little information, call your Congressman and Senators. Write letters to the editor. Engage your friends. Don't be silent. Do something! Start with this...

Pick One Organization On My List...
Support It Today!

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RINOs - Anything But Humble

2008-08-15T05:13:00.000-07:00

RINO:

Republican In Name Only

Regular readers of this blog know that I believe, and hope to convince you, that it is imperative to have frameworks through which to filter ideas, speeches, laws and the general illogical proposals that come out of Liberals and RINOs. While the actual frameworks/filters are different based on the concept being considered, the methodology for use is exactly the same.

"If you find yourself believing that you have found some new, unique and world changing insight to Biblical interpretation... STOP... you are wrong. Go read what the Church Fathers thought."

R. C. Sproul Jr.

Aggressively Paraphrased

The advice that R. C. gives is true for theology and for at least 2 areas beyond theology. For me, the specific areas for the use of frameworks and filters are...

Economic Policy ➪ Filtered by Free Market economic theory as embodied in either the Austrian or Chicago School.
Laws / Government Action ➪ Filtered by a framework of Original Intent and/or Strict Construction. Use the Constitution as the first and most important filter. (As a rule-of-thumb, anything from Supreme Court during the Warren Court or the Berger Court is wrong. As a hard and fast rule, anything!!!!... from the 9th Circuit is completely unconstitutional and is untethered from ALL reason and logic.)
Biblical Interpretation ➪ I use the Westminster Confession of Faith... but if you use Spurgeon's Baptist Confession of Faith (1689) or an equally rigorous, historic and non-postmodern confession that is in agreement with these type of documents ... I believe you are on a firm foundation.

Arrogance: RINOs and the "Gang of 10"
While RINOs try to sound humble and statesmanlike by being "bi-partisan" and pragmatic, what they really are is ARROGANT! They have decided that they know better than:

the Founding Fathers,
the long line of Noble Laureates in the Free Market tradition... and ...
the Church Fathers.

No matter how much they are praised by the mainstream media, they are demonstrating supreme arrogance. (At least true Liberals have a completely different framework that they hold to.) The framework for RINOs is:

I know best.
Whatever I feel is right.
Will the New York Times like it?

We recently saw this in spades in the "Gang of 10's" energy plan. Sadly, I am not at all surprised that one of my Senators...

... Senator Bob Corker (R-TN) ...

... was a part of this arrogant (disguised as bi-partisan) plan. Actually, my other Senator, Lamar Alexander (R-TN) is a RINO too.

The Best Guns For RINO Hunting

If you want to stop RINOs in their tracks, read policy papers from and financially support...

The Club for Growth
The Cato Institute
The Heritage Foundation
The Independent Institute...

... and read The Great Books.

Sorry I Have Been Sick

2008-08-15T01:14:00.000-07:00

On the way back from the best dude ranch in the world... Lost Valley Ranch... my whole family got sick with really bad colds. We turned the corner today. I can't wait to get back to the blog.

Please sign up for e-mail alerts as the posts will come fast and often now that I am well.

Back From The Ranch Sunday

2008-08-09T13:06:00.000-07:00

We will be back from the Lost Valley Ranch late Sunday.
Look for 7-10 posts next week.

Note: This is my oldest son and me on "the family ride."

Windfall Profits Tax: How To Kill Investment

2008-08-06T04:02:00.000-07:00

Obama wants to take a "reasonable share" of "windfall profits" from US oil companies. If you have read this blog before, you know that I try to point out the way politicians use language, redefinition and fuzzy logic to disguise and truth. These two are classic examples and show the danger in allowing politicians to do this unchecked.

"Windfall Profits"
The Wall Street Journal did a very nice job on its editorial page last Monday discussing the profit margins of various companies and industries versus Exxon Mobil and Big Oil.

They cited:
Exxon Mobil = 10% .... and the Big Oil Average = 9%
Electronics Companies = 14.5%
Pharmaceuticals = 18.4%
Google = 25%

From this, let's give Obama the benefit of the doubt and say that his definition of windfall profits does not simply mean high profit margins. He hasn't suggested a windfall tax on Google...yet. So what does he mean??? He seems to imply, as does the language, profits that seem high versus some nebulous or historic benchmark. So, if windfall profits should fairly be taxed at a different and higher rate, we have to understand what triggers improvements in profits. What causes a company's or industry's profits to be above the "norm?"

What Triggers "Really High Profits?"

Risk: Modern Portfolio Theory (MPT) states that risk and returns are highly correlated. The higher the risk, the higher the potential return... and, the higher the potential for loss. Every Nobel Laureate in Economics, financial planner, venture capitalist and entrepreneur knows this well. The Nike founders and early investors made a fortune. But for every Nike, there are 100+ companies that went under and investors lost everything. To take on this risk of losing it all, the potential return has to be substantially above the norm. Otherwise, everyone would invest in P&G stock.
Innovation: Media companies have had a terrible past 5+ years... especially newspapers. This is "old media". On the other hand, Google has continued to grow rapidly. Google is nothing more than a media asset that innovated and changed the world. Further, like in point #1, the Google founders and funders took on massive risk in order to reap "windfall profit."
Cyclicality: Then there are business that have huge fixed costs and move with the cyclical macro-economic trends. When things boom, they boom. When the overall world economy falls, they record huge losses. When Obama singles out Big Oil, he forgets that the entire commodities sector has been on fire. Everything from agricultural crops to coal have risen dramatically. World demand is incredibly high. Prices and profits are the mechanism by which demand adjusts and the ROI on substitute products becomes viable making new investment rational. BTW, in the 90s when oil was $11 a barrel and gas was under a dollar, I didn't hear any politician offer taxpayer dollars to bail out Big Oil.

Imagine The Damage
Imagine the damage to risk taking, innovation and cyclical industry investment if above average profits were capped via higher taxes. Innovation and infrastructure would move overseas. Silicon Valley would be nothing more than a place with great weather. And let's not forget Barack's Hollywood buddies. Because of innovation (creativity) and risk taking, blockbusters like Titanic and smaller movies like Shakespeare In Love reap incredible profits. That is why even low odds of success draws film funding. Does he want a windfall profits tax on every Hollywood box office winner?

Oh... That's What He Means!
What Obama really means is twofold. First, it is politically expedient to demonize Big Oil... logic and consistency be damned. It gets him votes. Second, by justifying taking more taxes ("a reasonable share"), he gets to further fund his redistribution of wealth and nanny state programs. The federal government gets to control a bigger piece of the pie. Politicians get to become more powerful.

Mr. Obama....

Profits Reward Risk Taking
Profits Fund Innovation
Profits In Good Years Make Up For Bad Years

Windfall profits happen when you buy a lottery ticket...
not when you invest in a business!

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Spirit of the West

2008-08-04T04:26:00.000-07:00

Yesterday we flew to Colorado. We will be staying the week at a dude ranch. I will probably only post 3 times this week as there is only WiFi in the main house.

The ranch, Lost Valley Ranch, is 2 hours from the airport. There is no cell phone coverage. In fact you get the "no service" signal 45 minutes before you even arrive at the ranch. The final road you turn onto is dirt, bumpy (really bumpy) with hairpin twists and turns and 9 miles long. There is no TV, no phones in the rooms and no one locks their doors. After you find your room, the first thing you do is get fitted for a saddle and get your horse. The horse I'm riding is named Dust Bottoms which I assume is descriptive of his and mine after a few hours on the trail.

Spirit of the West!
On the drive here, there are a few things that caught my attention. First, there are LOTS of motorcycles. Unlike Tennesee, most of the riders do not wear helmets. You see, there isn't a helmet law in Colorado. When I asked about how far schools were, I was told that a lot of families home school in the area. When I asked about 9 mile road to the ranch closing in the winter and staying repaired and drivable, the answer was "we do it." You see, the spirit of the west...the spirit of independence ... is still alive and well here in Colorado!

Compare this to the nanny state of California. In California, they are seriously considering banning use of trans-fats, banning fast food restaurants in poor neighborhoods and banning or heavily regulating home schooling. The spirit of the west.... the spirit of Reagan... died long ago in California.

Founding of the Libertarian Party
Then I remembered, the Libertarian Party was founded here in Colorado in 1971! Most libertarians are not anarchists. They have a strong bias toward freedom: individual and economic. The chart below was published by The Cato Institute. It is a terrific illustration of the basics of each core political position: Liberal, Libertarian, Conservative and Populist.

Regardless of the presidential election returns, the voters in Colorado have a strong Libertarian bias. It is everywhere. It is refreshing.

It is time we all went out, bought some cowboy boots, and decided to take care of ourselves and our families...

Saddle Up!

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Avoiding Disaster Now: The Principles of 1776

2008-08-02T04:10:00.001-07:00

When people first find my blog, most see the "1776" and assume it is in some way a patriotic or "American" blog. After you have been reading this blog for a while, you will understand that...

I chose 1776 for two primary reasons...

I argue that the Founding Fathers had radically different intentions when they founded our country and ultimately wrote the Constitution versus the way we are governed today. I believe the evidence shows that our long drift from our founding principles has come via activist courts, an overly powerful (imperial) view of the presidency and an abdication of responsibility by Congress. This move away from first principles has damaged our republic and threatens individual liberties.
The Free-Markets view of economics was first defined and gained momentum in 1776. In that year, Adam Smith published The Wealth of Nations in Great Britain. In this book, he redefined "freedom" and changed the world forever. I believe that the evidence supports this as the only correct economic model to maximize societal happiness, wealth and freedom.

Taken together, these are the lenses through which we should view and critique issues we face and actions taken by our federal government. (For individuals, families and communities, the Biblical lens is in my view also essential.)

Why Should You Care?
Both of the points above were massive paradigm shifts in understanding human association and economics as it effects individuals. (As an aside, the 3rd was the Protestant Reformation in 1517 and the Biblical principles it recovered.) Without these 2 events in 1776, your freedoms, your economic mobility, your personal liberties and your "station" in life would be radically different. Drifting from these principles reduces our freedoms and liberties. Further, it increases economic inefficiencies and reduces economic motivation. In today's post, I explain the basics of free market economics. This should be your filter to distill today's disastrous political theories and rhetoric.

Free-Markets 101
Since 1974 when F.A. Hayek won the Nobel Prize in Economics, free-market economists and their thinking have ruled the day with the Nobel Committee and within the academic world. It isn't just their ideas that have won... it is the body of factual evidence that has killed the Keynsian/Marxist views. Even so, if Obama has his way the old Keynesian central planning, regulation and redistribution of wealth model will have a tremendous resurgence, no matter how wrong it is.

There are two primary schools of thought when it comes to adherents of free-market association / free-market economics: The Austrian School and The Chicago School. (Over time, I'll write a 201 piece on how the two schools differ.)

While these two schools have some significant disagreements, they agree on a core framework that defines free-market economics:

- BOTH SCHOOLS BELIEVE...

Individuals, pursuing their own economic and non-monetary success, will ultimately maximize the economic success and freedoms within a society. Adam Smith called this "the invisible hand."
Because of this invisible hand, liberty and order can coexist.
Respect for private property is essential to freedom and progress. Without private property, there is no real mechanism for exchange.
Free trade, within and between countries, is essential to individual and therefore societal maximization.
For trade to be free, there must NOT be government controls on prices, the exchange process or wages (including minimum wages).
Limited government is essential. Government's only necessary functions should be defending the nation against attack, protection of individual property rights, and limited infrastructure projects.

There should be no central planning of the economy; it cannot be effectively done.
Deficit spending should not be needed.
Market intervention (as Keynes suggested) is not the path to economic stabilization.
Progressive taxes are harmful.
Using the tax code for social engineering is wrong.
Income redistribution and the creation of the nanny state hurts individuals and the nation by destroying their liberties/freedoms and reducing motivation.
Importantly, they oppose "corporate welfare", not just individual welfare.
Finally, they believe in privatization of almost all government assets.

The Current Issues
The principles and freedoms created in 1776 have become the freedoms threatened by our current political leaders and bureaucrats... disaster looms. The core principles of free-market economics must be used daily, especially in this political season. Obama wants to institute a massive tax increase and an equally massive program of central planning and redistribution of wealth. We just made a mistake by increasing the minimum wage (See July 24 post... Minimum Wage - Maximum Ignorance). The Social Security and Medicare disasters threaten our economy and have robbed individuals of prosperity. And the list goes on and on.

That is why we need to understand ...

1776
Now More Than Ever !

Note 1: I have just added a link to The Independent Institute.

Please take a minute and visit them.

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Congress: Doing More Harm Than Good

2008-07-31T01:00:00.000-07:00

Does having Congress in session, doing "the peoples work", actually make things better?

According to a new economic analysis of stock market returns, not if you are an investor!

Congress Consistently Hurts Your Investments
Eric Singer has done an interesting analysis of stock market returns going back to 1963. The analysis looks at the returns of the overall market as represented by the S&P 500. His analysis compares market returns when Congress is IN SESSION versus when they are OUT OF SESSION. To some of you, the results will be shocking. To those of us in the free market camp, the result are intuitive and expected.

S&P 500 Average Returns

(Past 44 years - Annualized)

When Congress is

OUT of session 17.6%

When Congress is

IN session 1.6%

Are You Surprised?
You may be saying... how could this be? Isn't Congress always doing things to help the US economy. Aren't they trying to help us? The sad part is that they are trying to help. But, they are incapable of helping!

3 Ways Congress Destroys Investment Returns

Regulation: Regulation constantly grows. It grows slower under Republicans than Democrats, but it grows. Why do we have regulation? Because Congress believes that they are "protecting" people. They are bombarded by lobbyists, the liberal media, constituents and even businesses wanting to be advantaged in some way versus someone else.

Just look at Rep. Barney Frank's comment in an interview on CNBC last week.

Q. Are you wanting to usher in a new "golden age" of regulation?
A. Yes!

Note: I spilled my coffee when he so directly said "yes" to a "golden age of regulation."

The more the regulation, the more the POWER. Power for Congress. Power for government agencies ... Power for bureaucrats...Power for lobbyists.

WHY DOES REGULATION HURT STOCK MARKET RETURNS?

Regulation, by definition, increases costs.

Regulation artificially advantages one group over another. It causes inefficiency. Businesses are not pure and innocent in this. They use lobbyists to influence Congress and Agencies to protect them from competition. Just think of the battles between the phone companies and cable TV companies.

Uncertainty: When Congress is in session and doing "work", it creates uncertainty. Investors (aka The Market) hate uncertainty! As Eric Singer says, "Talk is NOT cheap."

Taxes: Over the long term, Congress raises taxes. These taxes are not just used to raise revenue. They are used as instruments of social policy (redistribution of wealth, etc) and stealth regulation. All of these increase business costs and uncertainty.

For more on why Congress believes they are helping and why they are wrong, see my July 17 post on Nobel Prize winner in Economics... F. A. Hayek's... concept of the "Fatal Conciet."

Barney Frank's "Golden Age of Regulation"

Congress - Doing What It Does Best

Congress - Doing More Harm Than Good

Note 1: I am NOT a broker or financial planner. Eric Singer has started a mutual fund to turn this analysis into a stock market strategy. You can contact him directly if you are interested.

Note 2: It seems clear that there is a correlation present in Singer's analysis. I have not done any study to confirm causation.

The Bumper Sticker Strategy- McCain's Only Chance

2008-07-30T03:58:00.000-07:00

McCain's Problem - A Tennessee Story
I returned home to the great state of Tennessee about 7 years ago. (At the time, I planned on running for Congress in 6-8 years... which would be about now. That is another story for another time.) Upon my return, I began attending local Republican Party meetings.

Local Parties / True Believers
Local party meetings, for any party, are interesting. If you are not in the heat of an election, the meetings are small and made up of true believers. These people are well informed. They care deeply about issues and ideas. They are a little geeky in that they watch C-SPAN, read books on policy, know history and search the Internet for off season tid-bits. To my wife's dismay, I include myself in the "a little geeky" group. They are like the football fans that watch old games on NFL TV or ESPN Classic 365 days a year. The fight over ideas is in their blood! Most of these people are not planning to run for office. They are not carefully parsing and positioning for their own future gain. They are fighters... they believe.

Take Back the Governor's Mansion!
My first local party meeting was in Murfreesboro, TN. There was a discussion about "taking back" the Governor's mansion. I sat quietly...puzzled...thinking... "isn't the Gov. Don Sundquist a Republican?" Then I realized ... he is a Republican... but he really is a RINO. In fact, he was barely even a RINO. He supported creating a state income tax! For Tennessee Republicans, talking about creating a state income tax is like a discussion of who controls Jerusalem while sitting in an Orthodox Synagog in Israel. Sundquist supported all sorts of "moderate" tax, regulatory and spending policies. He had completely lost his true believers. They had disowned him. They were passionate about "taking back" their party.

A Tennessee Lesson
While true believers can easily distinguish real conservatives from RINOs, the general public, establishment / paid Republican party staff and the press do NOT make the same distinction. Republicans were all painted with the same brush. So, when election time came in Tennessee, we got a moderate Democrat as Governor. The fact that a true Conservative Republican was running against the former Democrat mayor of Nashville, didn't resonate with voters. Too many heard Republican and simply equated him with the RINO... Don Sunquist.

Taking Back The White House
This is where McCain has such a BIG problem with the true believers in the base. Bush has strayed so far from the heart of the true believers (except for appointing judges) that McCain's many non-conservative, press loving, maverick positions make them feel like a win will be more of the same... or worse. He has to tap into something else to sway the base... to entice the true believers.

My Favorite Bumper Sticker - McCain's ONLY Viable Strategy
If you drive through the South and Midwest, you see them all the time.... football bumper stickers. My favorite one is all about "the rivalry." And that is what McCain has to tap into. It just isn't about running against Obama. Every pundit says that for McCain to win, the election has to be a about Obama. I am saying something different. The appeal has to be more emotional. It has to be like ... College Football!

Favorite bumper sticker theme...

My favorite team is Ohio State - My second favorite is whoever is playing Michigan

My favorite team is Alabama - My second favorite is whoever is playing Auburn

My favorite team... you get the idea....

Somehow, McCain has to convince the base to hate Obama as much as Ohio State fans hate Michigan or Alabama hate Auburn. In any given season, you may hate your own coach or hate your quarterback... but you hate your arch rival even more! McCain has to tap into the passion behind my favorite bumper sticker.

McCain's Political Version Has To Be...

My favorite candidate is a true conservative...

my second favorite is whoever is running against Obama!

? ? ? ? ? ? ? ? ? ? ? ?

He has to pray that is enough...

because that is all he has!

NOTE: Getting a clear and consistent conservative message out there, especially on taxes, would be a huge step forward. I just don't believe that is possible with McCain and his team.

Fear And Loathing On The Campaign Trail

2008-07-28T16:25:00.000-07:00

"Politics is largely the process of taking credit and putting the blame on others-regardless of what the facts may be."
Thomas Sowell
Economist / Author

What The Democrats Are Teaching Americans
Ronald Reagan taught Americans to believe in the American Dream. We were already, and in Reagan's world view could be an even brighter, "City on a hill." After one term of decreasing regulation and slashing marginal tax rates, America was back on track! Do you remember Reagan's re-election theme ...

"It's Morning In America Again"

And it was! Entrepreneurial spirit and a pro-growth agenda were at the center of the Reagan vision and his success. Jack Kemp, Arthur Laffer and the gang re-launched America off of the USS Jimmy Carter... a sinking ship poorly lead by its captain.

Instead of the optimism of Reagan, Barrack Obama teaches pessimism and class warfare. His tone and style may be glossy, his suits stylish and his youthful smile bright, but his ultimate message is bleak and depressing. Even the leading, politically moderate, European business magazine sees this clearly:

"The rich appear in Barrack Obama's speeches not as entrepreneurial role models but as modern versions of the 'malefactors of great wealth' denounced by Teddy Roosevelt a century ago..."
   The Economist Magazine
   "Unhappy America"
   July 26, 2008

Unfortunately, Many Americans Are Believing It?
Today I was picking up medical records to send to an insurance company. Because I had a little heart problem a few years ago, I ended up filling out paperwork at the offices of a large heart specialist group here in Nashville. While I was sitting in the waiting room, the following exchange occurred between what appeared to be a 60 year old lower/middle class man and another couple that worked together in a small business (they own and drive their own 18 wheeler).

The man said:
"There are only a few people getting rich in this country."
"And they want to keep the rest of us poor."

The couple replied:
"Yep"

Fear And Loathing On the Campaign Trail
Herein lies the terrifying part. The story line manufactured by the Democrats doesn't just teach that talent and opportunities favor the rich, it teaches that the rich conspire to "keep the rest of us poor." While this may be good short term politics for Democrats, it is horrible for American and terribly damaging to individual American families. Americas prosperity is not a zero-sum game! There is not one pie to cut and share. As Reagan taught, we can and will grow the pie. Then, everyone can get a bigger piece.

And... It Is Not A Zero Sum World?
The softness in the US economy and the strength of emerging countries (BRIC - Brazil, Russia, India, and China) has a lot of workers scared. In fact, many believe that China's economy is already bigger, by a lot, than the US economy. In reality, at its current growth rate, which will likely slow in the coming years, it will take 25+ years for China's GDP to equal that of the USA (assuming the USA maintains the current growth rate).

Sadly, since we don't have a Ronald Reagan on the political stage, The Economist Magazine has to point out the true Reagan way of thinking. This same one pie mentality has many Americans, taught by liberals and labor unions, believing that we must retreat from free trade. This fits the Obama narrative perfectly. The Economist points out that even if "Asia's rise continues unabated, it is wrong...

... and profoundly unAmerican...

... to regard this as a problem! Economic growth, like trade, is not a zero-sum game. The faster China and India grow, the more American goods they buy. And they are booming largely because they have adopted America's ideas."

International economics is no more of a zero sum game than than the economics between American families and between the rich and the poor. Free trade and free markets will grow the pie for all. Ronald Reagan was right!

Sadly, Milton Friedman was also right when commenting on the past, present, and future of free market thought. He said...

"Adam Smith was a radical and a revolutionary in his time - just as those of us who preach laissez faire are in our time."

Finally, add to this a reminder from Ludwig von Mises ...

"There cannot be too much of a correct theory."

Note: Please read the first comment to this post and my response for some outstanding data on Reagan's economic legacy.

Who Really Killed The Reagan Revolution?

2008-07-27T14:30:00.000-07:00

-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-

The Reagan Revolution ...

RIP?

-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-W-FDR-

With the passage of the massive "Housing Bailout", many in the press are trumpeting the largest increase in government spending, regulation and expansion of power since FDR. (Even though the Congress has estimated the cost of the bailout at $400-700 billion, CNBC reports that the real obligation to taxpayers will likely be north of $1.4 trillion.) Sadly, the press has it right. Even sadder, the collapse of the Reagan Revolution started long before the sub-prime credit mess. It started in the White House and with Republicans in Congress.

Oh How Far We Have Fallen!

1. We should all remember what Ludwig von Mises said in his book Bureaucracy:

"He who is unfit to serve his fellow citizen wants to rule him."

2. Marry this to what I saw Rep. Barney Frank (D), Chairman of the Financial Services Committee, say in an interview on CNBC last Friday.

Q. "Do you want us to usher in a new golden age of regulation?"

A. "Yes !"

Headline On The Front Page of the WSJ ...

Friday, July 25

"Unraveling Reagan -

Sour Economy Spurs Government To Grab Bigger Oversight Role"

Summary from WSJ:

"... a major challenge to the movement toward deregulation..."

"... some proponents of a bigger oversight role for government are Republican..."

"... SEC Chairman Christopher Cox said the SEC should be given more power to regulate investment banks..."

"... state utility commissions are re-establishing control over power companies..."

"Both major party candidates are endorsing proposals to create new Fed-style commissions to limit greenhouse-gas... and to decide how to spend billions of dollars on energy-efficient technology."

"The movement started by President Reagan has taken several hits. 2001 terrorist attacks ➭ DHS ... corporate accounting scandals ➭ Sarbanes-Oxley. "

"The Treasury Department is seeking approval to buy equity stakes in Fannie Mae and Freddie Mac and to offer them unlimited lines of credit..."

☆☆☆☆☆☆☆☆☆☆

"Government isn't the answer to our problems, government is the problem."

President Ronald Reagan

☆☆☆☆☆☆☆☆☆☆

"W" and the "Republican" Congress

I put Republican in quotes because the Republicans of the past 7 years have not been elephants, they have been RINOs (Republicans In Name Only). But for appointing good judges, the President has not been any better. In the first 3 years of President Reagan's administration, he decreased non-discretionary spending by 14%. In contrast, "W" increased non-discretionary spending by 21% over the same time frame.

After 7 years of spending like drunken Democrats, "W" wakes up...

"Fiscal conservatism is one of my defining issues for the remaining months."

President Bush in a Neil Cavuto interview

May - 2008

The President finally wakes up... but...

If the wake-up call comes too late, you miss your meeting...

even if your meeting is with destiny.

3rd Parties Can Matter - A No Regrets Move

2008-07-26T09:00:00.000-07:00

As we approach the November Presidential election, many voters are planning to "hold their nose" and pull the lever in the voting booth. While much has been made of this point among true conservatives and Ron Paul supporters because of having McCain on the Republican side, it is equally true for Hilliary supporters and Blue Dog Democrats as they think about Obama. Obama's lack of anything approaching experience and his ultra-liberal record scares them to death.

What to do?

Use The Electoral College As Your Megaphone
Because we live in a country with an electoral college, overall popular vote does not count. (Ask Al Gore) If it is clear that either major party candidate is going to win your state, you are free and clear to vote for a third party candidate without risk. Further, you get to send a signal.

Obama Supporters should consider Independent candidate Ralph Nader, Libertarian candidate Bob Barr or Green Party candidate Cynthia McKinney.

Republicans should consider Libertarian Party candidate Bob Barr or Constitution Party Candidate Chuck Baldwin.

The Party Duopoly
Unfortunately, the parties and the media have conspired to keep 3rd parties from gaining any traction. State legislatures have passed laws making it extremely difficult for 3rd parties to even get on the ballot in some states. Further, the media excludes them from coverage. The Commission on Presidential Debates excludes them from all the Presidential debates. By using this election to send a signal, we can begin to break this duopoly. If the Democrats are really pro-choice, let them prove it by allowing voters a full choice on the election ballot.

This Strategy Can Work In 30+ States !
In most states, elections are not and will not be close. While Obama says that more states are in play and that he will campaign and spend money in traditionally Republican states, that is only true in a handful of states. Over 30 states will easily and clearly go for one candidate. Neither candidate or party will spend significant $$ or even campaign in these 30+ states. For example, if you live in Massachusetts, you can vote for any third party candidate you want. Obama will win the state by 20 points, no matter what.

This is not a good strategy for Ohio, Michigan, Pennsylvania, Florida, New Mexico, Colorado, Nevada, etc. If you are worried about an Obama presidency, you can just tell yourself that you are voting against Barack (not necessarily for McCain) and pull the McCain lever.

Note: PLEASE read my blog post from July 17...

"The Conservative Gambit: McCain or Not"

The 5% Solution
We NEED the Libertarian and the Green parties to each receive about 5% of the vote in these safe states. I focus on these two parties because they can receive enough votes to have a meaningful impact on breaking the duopoly. (Unfortunately, the Green Party nominated a crazy candidate that only Rev. Jeremiah Wright could love. Imagine if the Green Party had nominated Al Gore!) Hilliary voters and true conservatives can easily switch to a 3rd party with "no regrets"... their vote will not impact their state's outcome and therefore will not impact the general election.

Locked Out
Ballot access is a big issue in a lot of states. Democrats and Republicans have written legislation to make it hard for fledgling parties to gain any traction by making it difficult to even get on the ballot. Libertarians, Green Party, Ralph Nader and Constitution supporters need to pool resources to get all the candidates on the ballot every election. Citizens need to help by finding out about petition drives and by signing any party's petition to gain ballot access.

The Media... Lap Dog of the Major Parties (mainly the Democrat Party)
Finally, the media needs to get off the laps of the major parties and support ballot reform. If the media and Presidential Primary debate organizers had limited primary coverage and debates to just the big name, big money, high polling candidates... Hillary would be the Democrat nominee, McCain would have been knocked out early and the surprising excitement generated by Ron Paul would have been killed before it ever started.

--- You can use THIS ELECTION to send a signal ---
Hillary voters... are you listening?

Ron Paul Supporters... are you out there?

True Conservatives... Are you in a "safe state?"

A 3rd Party Vote - No Regrets in 30+ States

Minimum Wage - Maximum Ignorance

2008-07-24T14:00:00.000-07:00

The federal minimum wage increased...

70¢ to $6.55.

Next year, it will increase another...

70¢ to $7.25.

I'd like to discuss a few of the economic facts in hopes that you can easily fend off the emotional arguments put forth by well meaning but ignorant people. Yesterday my post pointed out that the minimum wage debate is steeped in emotional and misleading language. Today we'll focus on economic facts, personal responsibility and the protection of freedom.

"America's workers are the most productive in the world..."
(quote from Jerry Lee, President of the AFL-CIO of Tennessee)

This is a prime example of the hypocrisy or ignorance behind arguments from most liberal advocacy groups.

What is productivity? Productivity is the volume of output for a given worker.
This output is a function of the worker and the leveraging of capital assets/ technology.
This deployment of capital / technology makes a given worker vastly more productive.
If product demand is constant, a company needs fewer workers to provide the necessary supply of goods.

First, none of these minimum wage workers drive the incredibly high productivity of the average worker in the USA. By definition, minimum wage workers are low skilled. To bring productivity increases into this debate is disingenuous. While Americans work hard, I have no reason to believe that they work harder than workers in India, Vietnam or China. What I do know is that US business has deployed technology better and faster than most countries.

Second, let's remember that the AFL-CIO has fought every advance in automation and technology since the industrial revolution. For Big Labor to use per worker productivity improvements as an argument for wage increases is laughable and hypocritical.

A "Living Wage"

Now we get to the emotional trump card. How can anyone be against a "living wage?" Let's think about this.

Do you believe that the government should dictate the prices of goods and services in America? What if Congress decided to mandate what restaurants had to pay for eggs... or vegetables... or Pepsi? Labor is an input to a product, no different than eggs for a restaurant or paper for a printing company. --- Living Wage = Price of Labor for Businesses --- Government is not qualified to micro-manage prices of any input, be it eggs or labor costs. Income for the employee is a cost for the employer. Central management of prices has failed in every socialist and communist country in the history of the world.

While the press portrays business generically as Big Business, the fact is that about 90% of businesses in America have fewer than 20 employees. The bulk of minimum wage workers work in small businesses. These small businesses have a hard enough time absorbing the massive cost of government regulations. They can't easily absorb an increase of 40%+ over a couple of years for the price of their lowest skilled / lowest productivity employees. They will hire fewer employees, margins will shrink, or they will go out of business.

I really don't mean for this last point to be harsh. But... workers have to take personal responsibility for acquiring job skills! If not, you can wake up at 25, 35 or 45 and realize that you have no skills and can't find a good job. That includes staying in school, finding a career you want, and working at it. That may include finding and taking an entry level job, a job requiring no skill and paying a very low wage in order to get access to skills. But if the cost of these low skill jobs is forced higher by the government, the supply of these jobs will decrease... and so will the on-ramp to acquiring skills.

Who decides what constitutes a living wage? Several newspaper articles today said that inflation has eaten up all the increase workers were given by the increase. The implication is that the current $7.25 target is not high enough. So, what is the right number... $9, $10, $12.50? Instead of impacting 2.3% of employees as this increase does, will the "living wage" that liberals want impact 4%, 5%, 10%... of workers and businesses? How many businesses will have to raise prices, use technology as a substitute for workers or go out of business? And how much will prices have to increase to absorb this new "living wage" ... and how much will the new wages increase future inflation?

- The Minimum Wage -
Good Politics, Bad Economics
A Horrible Violation of Freedom

Note: Please review yesterday's post (Politicians and Language) on the fairness of "Income Distribution" in America.

Breaking News from Europe !

2008-07-24T11:04:00.000-07:00

According to a Gallup Poll taken this week, the French strongly support Obama.

Poll of French Citizens Over 18

Who do you prefer be elected...

President of the United States?

Obama 65%

McCain 4%

Whew, I feel better now.

Politicians and Language

2008-07-23T12:04:00.001-07:00

"It depends on what the meaning of is, is."

President Bill Clinton

Testifying in the Monica Lewinski Scandal

----------------------

One of the hardest things about understanding politicians is that they use language designed to manipulate the electorate. Confusion and misdirection are their weapons of choice.

"Income Distribution": A Liberal Favorite

Tomorrow we see an increase in the federally mandated Minimum Wage. You will see a lot of talk about the unfair income "distribution" in America. Use of the word distribution implies that the society and the government make top-down choices on how to "distribute" income to the people. Let's be completely accurate in the language here... Income is not distributed...

Income is EARNED! The lack of emphasis on earning and the focus on distribution removes all responsibility from the individual.

Obama's Vocabulary

For Senator Obama, his grand speeches are rich in second and third order definitions and connotations. For example, the Senator loves to talk about his plan to "INVEST" in our country. How can anyone be against "investment? Hold on... his "investment" is spending close to a trillion dollars on new programs. This is simply a redeployment of capital from the private sector (your family) to the Federal Government.

There is no new investment. Most Americans would consider investment something the private sector does. Government simply "spends" taxpayer money, "redistributes" taxpayer money or both. To consistently use "invest" is to confuse what is really happening.... but it sounds nice.

Democrats: the partial pro-choice party

I want to take this point in a different direction than normal. Rather than pointing out the obvious importance for Democrats of keeping the words "baby" and "kill" out of any sentence they utter, I want you to consider the fact that the Democrats are only pro-choice in the narrowest possible sense.

Democrats are not pro-choice when it comes to letting women decide where they can send their children to school. (No school choice)
Democrats are not pro-choice when it comes to allowing women to opt out of Social Security and choose their own investments for retirement. (No retirement choice)
Democrats are not pro-choice when it comes to whether women, who usually live longer than their husbands, can leave all of their estate to their children. They want the government to be able to decide where half goes... to them.
Democrats are not even pro-choice if women want to cut, color and style hair for a living. They want to license/regulate both the stylists and the business. ---- Whew, good thing the government has ramped up to protect us from bad haircuts. ----
... and the list goes on and on...

Let's be completely clear and objective... no matter what their language is...the Democrats are only the party of pro-abortion choice... nothing else. In everything else, they want to be your nanny.

President Bush's Strange Republican Lexicon

No, I am not going to make fun of the President for butchering words and sentences. My point is regarding the President's contorted use of the word "conservative." While we can argue about whether the President's foreign policy and view of Presidential power is truly conservative, there can be little argument about this fact:

- In Reagan's first 3 years in office.... non-defense discretionary spending decreased 14%.

- In Bush's first 3 years in office.........non-defense discretionary spending increased 21%.

By no definition, is spending like a drunken Democrat... conservative.

In this and every political season, you have to...

listen carefully

and

think critically.

Byron Smith Blog

Health Care - The Next "School Busing"

2008-07-21T16:08:00.000-07:00

The headline on the front page of the newspaper said it all:

Want to keep your doctor?

Pony up $1,500

Scary... isn't it. The first 3 illustrations in the article are about patients who love their doctors, but sadly can't afford to pay the $1500 annual fee the doctors want to charge. But wait... is that the whole story... not if you wade further into the article. There isn't just a patient side to the story. There is a doctor POV that is critical to understand. And then there is the patient side that is never thought through... look out !! ...

Health care is the next "school busing."

But first, you need some background.

The New Math For Doctors

Before you get upset with doctors, realize that there is new math for doctors. With the rise in clout of insurance companies, the Medicare system and malpractice attorneys, doctor profit and job satisfaction are at an all time low.

Doctor Job Satisfaction = (Profit per patient × Patients seen per hour × Hours Worked) ÷ (Private life expectations × Law suits × Rate of cost increases )

How many doctors do you know? I know several. Almost all, except for high end specialists and plastic surgeons, are not having fun. They are killing themselves working a ton of hours to make less money year after year. And they do not see light at the end of the tunnel. And here is the real tip that something is wrong... not one that I know would recommend their children go into medicine.... not one. Doctors want to retire earlier... they are simply burning out.

How the "Fee" Works

So, what does the $1,500 you have to "pony up" get you? If a doctor considers this new approach, he is actually selling a different / better product to his patients. Instead of having about 2,400 patients, the doctor cuts his load to 600. By having 1/4 the number of patients, they can spend lots more time with each patient and have more time to spend with their own families. The doctor can really know the patient and can be proactive. Further, there is less doctor burnout. These are often called "Concierge Practices."

An even higher touch approach reduces patient load to 50 families and charges $15,000 - $25,000. These are dubbed "VIP or High-Touch Practices."

These options enable doctors to work more years, thereby increasing the supply of doctors. They make general medicine more attractive. These new ways of practicing medicine make the entire field more attractive! The supply of good doctors increases.

Here Comes "School Busing"

Of course the articles about these practices decry this new trend. There is the warning of the "widening gap of care" creating a "new class system" in medicine. Doesn't that make you feel horrible. It may.. but it shouldn't. Let's consider the alternatives to having free market options for doctors and patients.

We can mandate what doctor you get to "attend".
We can mandate each doctor's "schedule."
We can force patients to change doctors in order to adjust for doctor ability. If one doctor is doing a much better job than another doctor, we can "bus" some of the good doctor's patients to the "bad" doctor.
We can mandate "quotas" for income, age, gender and racial makeup of patients for each doctor or group practice.
We can make medicine "unionized" with 3 pay tiers .... regardless of ability... regardless of results.... doctors can be locked into a pay tier.

In other words, we would have the equivalent of...

COURT ORDERED SCHOOL BUSING

... for patients and doctors. Will we attract the best and the brightest into medicine... NO! Will we have fewer great doctors... YES! Should the government control any one's free practice of their job... NO! If we fall for the class warfare arguments, this means that:

The primary goal of health care becomes

a low standard deviation of care,

even if the average level of care falls!

Don't get sucked into the emotional arguments.

Let the free market work...

For Doctors

For Patients

Byron Smith Blog

A Weekend Treat

2008-07-20T15:37:00.000-07:00

"Today's bear market in financial assets is nothing compared to the preceding crash in human judgement."

James Grant

Wall Street Journal

WSJ: Weekend Journal

I have come to enjoy the the Saturday addition of the Wall Street Journal more that the weekday addition. There are always terrific articles and editorials. For example, Peggy Noonan's editorial is always a great read.

This weekend, James Grant has an interesting article about the current financial crisis on Wall Street. Grant is a first rate economist and financial historian. I think you'll agree, it is...

The best article of the weekend.

☝

Click on the link above and enjoy his article titled: "Why No Outrage."

NOTE:

Please read the Saturday post below. I received lots of e-mails about it.

Byron Smith Blog

Framework for Freedom

2008-07-19T06:00:00.000-07:00

Before analyzing any proposal, argument or idea, you need a framework to filter the idea through. In religion, they call it doctrine and theology. Theologians know that demagogues can move people to believe anything given the right speaker, the right sermon and the right personal circumstances. This is why the Church Fathers worked for years distilling Christian doctrines into catechisms and confessions. They placed an emphasis on studying and memorizing these frameworks to protect their flocks from heresy.

In this Presidential election,

the risk of demagoguery is greater than ever!

Unlike religious denominations and churches, most people are not prepared with a mental framework through which to filter speeches, party platforms and glossy political advertising. Further, the emotional appeals of today's election rhetoric are amplified by $4.50 gas, Middle East conflicts, BRIC (Brazil, Russia, India and China) rising as economic powers, food inflation, and on and on. These circumstances make it easy to fall prey to someone giving a great speech and offering to "help" you with bigger government "solutions"... a nanny-state.

Always remember the BIG LIE...

"I'm from the government and I'm here to help you."

A Framework To Organize Your Thinking

In 1962, Milton Friedman wrote his classic and groundbreaking work, Capitalism and Freedom, on the linkage between economics and freedom... hence the title.

Milton Friedman

Nobel Laureate in Economics - 1976
University of Chicago - Professor
Hoover Institution - Sr. Research Fellow

I want to share a few important sections from this book in hopes that it will help you evaluate the policies and promises made by our presidential candidates.

Capitalism and Freedom

"It is widely believed that politics and economics are separate and largely unconnected; that individual freedom is a political problem and material welfare an economic problem; and that any kind of political arrangements can be combined with any kind of economic arrangements. The chief contemporary manifestation of this idea is the advocacy of "democratic socialism" by any who condemn out of hand the restrictions on individual freedom imposed by "totalitarian socialism... such a view is a delusion... only certain combinations of political and economic arrangements are possible."

"The kind of economic organization that provides economic freedom directly, namely, competitive capitalism, also promotes political freedom directly because it separates economic power from political power and in this way enables the one to offset the other."

"Fundamentally, there are only two ways of co-ordinating the economic activities of millions. One is central direction involving the use of coercion... The other is voluntary co-operation of individuals - the technique of the market place."

"Exchange can therefore bring about co-ordination without coercion."

"Political freedom means the absence of coercion of a man by his fellow man. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, or a momentary majority."

"... the market eliminates this source of coercive power. It enables economic strength to be a check to political power rather than a reinforcement."

Don't Get Confused

The growth in the power and reach of government will always result in a reduction in all kinds of freedom, economic and otherwise. A true free market is the best system to improve prosperity for ourselves and future generations. It is also the best option for protecting all individual freedoms. What Obama offers, what Hillary was offering, and to a lesser degree what McCain is offering is a Faustian bargain... nothing more, nothing less.

Just remember the BIG LIE... "I'm from the government and I'm here to help you."

Pick up a copy of Capitalism and Freedom.

Filter the rhetoric through a logical screen.

Notes:

There are a few great places to go to learn more about the freedom producing effects of free market economics.

- The Cato Institute

- The Club for Growth

- The Ludwig von Mises Instiute

I have links to all three to the left of this post. Byron Smith Blog

No Honor Among Thieves

2008-07-18T16:06:00.000-07:00

If there is one thing you should be calling your Senator about, it is the fact that Senate Majority Leader Harry Reid is going back on his PROMISE that he would confirm as many federal judges for President Bush as Republicans did for Clinton. The Republican controlled Senate confirmed 15 federal judges for President Clinton during the closing months of his Presidency. Reid, and his Democrat colleagues, have confirmed only 2/3 of the judges he committed to get confirmed and is signaling that they are through confirming Republican nominees to the federal bench.

Recall, this was a promise made as part of a compromise. The long history of the Senate, as opposed to the more continence history of the House of Representatives, is built on honor and trust between Senators on both sides of the aisle. The Republicans fulfilled their half of the bargain. Senator Harry Reid has reneged on his part of the deal.

We all know judges are important. But many incorrectly believe that it is only a social policy issue. This assumption is horribly wrong. The courts effect everything... business economics, separation of powers, health care... everything.

Call your Senator today!

Call Harry Reid today!

And call again tomorrow!

Even If McCain Wins...

Senator McCain has said all the right things on judges... RECENTLY. But his long term record shows no passion for or commitment to "original intent" jurists. I admit that he is saying the right things today to get the conservative vote. I am not convinced he will do the right thing if elected. An election year promise is worth 25% of the historic evidence and a non-election promise. (And we now know that a Harry Reid promise is worth NOTHING.) Even if elected, McCain will face a Democrat controlled Senate. They will likely try to block ANY true conservative.

Now is the time to light up the switchboard in the Senate.

You have to hold the Senate's feet to the fire....

Republicans and Democrats.

Byron Smith Blog

Your Highest Political ROI

2008-07-17T13:34:00.000-07:00

A couple of weeks ago, I walked into the kitchen to hear my wife yelling (in tone, not volume) at a fundraiser for the Republican Party. She was telling them the same story that they have heard a million times by now...

We won't give any more to the national party until:

The Republicans in Congress behave like true conservatives
The party nominates true conservatives to run for office
The President starts acting like a conservative (oops, too late)

Who Can You Trust?

There are only a few places that you can count on to find great conservative candidates. One of those places, and my favorite, is The Club for Growth.

There are 5 reasons The Club for Growth is a great place to invest your political contributions:

They vet candidates well... they are true economic conservatives
They only enter the fray in races that are winnable
They only enter races where $$$ matters.
They are willing to try to unseat moderate Republicans in primaries in favor of true, electable conservatives.
Their track record is second to none!

These 5 things make your ROI (Return On Investment) terrific. If there is a great candidate that is going to win easily, the Club doesn't get involved. You can be sure that your money will work hard and have a chance of changing the outcome of a race.

Call... The Club for Growth ... Today

202-955-5500

I'd suggest you start by giving them a little money in 3 different areas:

Give to a specific endorsed candidate (through them, not directly)
Give to the Club directly to support the work
Give to the PAC ($5000 maximum) so that they can get directly involved in campaigns

I have done all 3 and have never regretted it.

I wish I could say the same for the RNC.

Definitions for Politicians

2008-07-17T13:14:00.000-07:00

DEFINITIONS TO KNOW

Con-ceit: (kuh n-seet) - noun

an excessively favorable opinion of one's own ability
vanity or egoism

Fa-tal: (feyt-l) - adjective

causing destruction, misfortune, ruin or failure
a politician's plans to "help", "fix" or otherwise manage economic concerns

"The Fatal Conceit" ... A phrase /concept created by F. A. Hayek

Nobel Laureate economist - 1974
" for his penetrating analysis of the interdependence of economic, social and institutional phenomena"... Nobel Committee
University of Chicago Professor

THE FATAL CONCEIT

The egotistical and destructive idea that even very smart people can plan and centrally manage an economy better than the free market itself

Examples:

- Communist Party ... Old Soviet Union

- Communist Party ... Pre-capitalist China

- Communist Dictator ... North Korea

... AND...

- Liberal Democrats ... United States

- RINO Republicans ... United States

- Those with ... Hollywood Money

... SEE ALSO ...

Common political words signaling "The Fatal Conceit":

bailout
fair share
protect
regulate
manage
encourage
change

When you hear the grand rhetoric of politicians, especially in campaign season...

... REMEMBER ...

Their conceit can be fatal for America!

Byron Smith Blog

Obama is Not a Muslim ... BUT....

2008-07-16T05:00:00.000-07:00

Much has been made of the recent caricature of Barack Hussein Obama and his wife on the cover of this month's New Yorker Magazine. It is intended to poke fun at the 8-12% of people who answered when polled that they believe Obama is a Muslim, not a Christian. I am not concerned that he is Muslim.

I am worried about his unique brand of Christianity ...

... and how it influences his thought process.

What Kind of Christian?

For 20 years, Obama and his wife sat under a teaching pastor who subscribes to a form of Christian theology called "Black Prophetic Theology (BPT)." According to his teaching pastor, Dr. Jeremiah Wright, this theology "uses a different hermeneutic" from traditional western Christianity. (Hermeneutics is the theory and study of Biblical interpretation.) From everything I have heard and studied, Wright is absolutely correct! But it isn't just a different method of understanding the Bible. It is a radically different theology and method of interpretation. BPT says that the theological method originated prior to the"problem of western ideology." It is critical to understand that western civilization as we understand it and as it influenced all of American thought is, for Obama's theology, "a problem."

Exactly What Is Black Prophetic Theology (BPT)?

At first glance, it looks a lot like the "Liberation Theology Movement" found in the liberal vein of the Catholic Church in Latin America during the 1960s and early 1970s. And while BPT's activity in community, social outreach and care is commendable, its perversion of historic Christian theology is so far out of the mainstream of Christian thought that all its good works are tainted.

BPT views all Biblical texts and interpretation through the lens of the situation / emotions of "the oppressed."

And here it the important thing to understand. BPT adherents say that their interpretation is "bottom up" while historic western / American hermeneutics is "top down". To them, top down means "white." Unfortunately, this paradigm is drastically misinformed. I agree that their view is "bottom up". They have an optical vantage point that distorts all of Scripture as they read it. But the historic Western hermeneutic (specifically driven by the Protestant Reformation) is not top down, it is from the inside of the Bible out to other parts of the Bible. It simply says: let Scripture interpret scripture. It says to use clear texts to help understand unclear texts. It says to view the Bible as a whole, interconnected story. There is to be no emotional, external lens or vantage point skewing our view.

What Do We Get From This Distorted Theology?

Obama's BPT believes that the Christianity of America is "the Christianity of the slave holder." This theology calls for "radical change...a changed social order... changed laws." Hmmm, I wonder where Barack gets his passion for "change." His teaching pastor and denomination for 20 years believes that this is at "the heart of Trinity United Church of Christ." It carries with it a distorted view of America, the Middle East, economic policy, American History, and World history. As all sincere faith does, it permeates all of one's thought and all of one's life.

People steeped in the BPT tradition are comfortable using a special lens, an emotional lens, a lens different than most Americans, to order their logic and their thinking. (See the FYI below for a good example of how it distorts one's thinking.)

I know Obama isn't a Muslim.

But I also know this:

His form of Christianity distorts and misinforms how he thinks.

What kind of... change... does he really want?

----------------------------------------------------------------------------

Notes:

A Book to Consider Reading

The Decline of African American Theology by Thabiti Anyabwile

This book traces the journey of the black church from "historic Biblical faith to cultural captivity." It is published by IVP. The forward is written by Mark Noll. Noll is the author of The Civil War as a Theological Crisis.... also a good book.

FYI: Most quotes from Pastor Wright are from his speech before the Washington Press Club. You can easily view it on You Tube. And watch the Q&A too. In the Q&A, he stands by his belief that the US government may have created HIV/AIDS specifically to kill blacks.

Election Season Musings

2008-07-15T14:14:00.000-07:00

"Power tends to corrupt, and absolute power corrupts absolutely."

Lord Acton

"Render unto Caesar the things that are Caesar's and unto God the things that are God's."

Jesus speaking to the Pharisees

The Point

"Separation of powers" isn't just a safeguard to keep a single branch of government from overpowering the other two branches. All power is not vested in government. Individuals, families and churches also have independent jurisdictions.

Learning From GE ... Rediscovering Goldwater

2008-07-12T07:00:00.000-07:00

General Electric is a huge and complicated company spanning many unrelated businesses with global reach. GE is unique in that it is still a successful conglomerate (very recent results not withstanding).

Leadership
GE is also unique in that when it promotes someone to CEO, the person is always relatively young (under 50) and is expected to be CEO for 20 years. The CEO has to live with decisions and the results for a long time. The person is then asked to take a look at the company and make tough leadership decisions:

What are the most important things we should focus on and do well?
Are we uniquely qualified to meet the challenges this business unit faces?
Should we be in this business at all?

GE's leadership regularly admits mistakes, recognize changes in the marketplace, and exits businesses that would be better served by another company. They don't throw good money after bad! They get out completely. They get out quickly.

Federal Government
Remember, there are lots of things that the Federal Government is not mandated to do by the Constitution. Even if the mandate was there, it does not mean that the Federal Government / Agencies are the place it should happen. The Constitution mandates either decentralization to the states or divesting to the people.

Any Real Republicans Left?

"...the federal government should withdraw promptly and totally from every jurisdiction which the Constitution reserves to the states."

Barry Goldwater
The Conscience of a Conservative

Note the two important words in this quote: promptly and totally. By the way, I would add an important phrase to the end of the Goldwater quote... or to the people. There are things that the states shouldn't even be doing.

A Sad Case Study
Remember when Republicans wanted to abolish the Department of Education! This is a perfect case study. Nowhere in the Constitution is the word education, because the function of education is solely reserved for the states. In the early 1990s the House Republicans introduced legislation to abolish the Department of Education. Reagan had suggested it in the '80s. The Republican base LOVED the idea, but hold on ... did they REALLY want to do what Goldwater suggested... withdraw promptly and totally? NO!

At the time, the Department of Education had a budget of about $35 billion, but the legislation projected a savings of about 10% of the total budget. The Republican bill simply moved 90% of the functions to other departments. The public relations spin was there, but the Bill, proposed by Republicans, simply re-arranged the deck chairs on the Titanic. Grade for Republicans versus the Goldwater Test: D-.

How Far Have We Fallen?
As bad as that was, now we have a Republican President that created "No Child Left Behind". The President is now the Superintendent of Schools for the nation... the Congress and the Department of Education is the School Board.

I ask again...

Are there ANY real Republicans left?