KWTN: The Blue Paper

Harnessing the Ants so the Hoppers Can Ride

by Hal O'Boyle

Fighting capitalism is a thankless task that requires not only a colossal arrogance, but a masterful mendacity. A notable example is the Obama administration’s bragging about having created 640,000 jobs with $159 billion of “stimulus” money. Whether that many jobs were created seems doubtful to me, but let’s assume it is true. We will also ignore that those numbers work out to $250,000 per job. The real questions are, “What are those 640,000 people doing for the money?” and “How does it stimulate the economy?”

We can be fairly certain the new job holders are not producing anything anyone wants. These are, after all, government jobs, which is to say, jobs that depend not on what they produce, but on funds drained from or borrowed on behalf of the productive the economy.

Though there are government jobs that people demand, like police and fire protection, stimulus jobs, created simply for the sake of creating them, are like hiring people to dig holes and fill them up again. They are a waste of resources. They don’t stimulate anything. No productive work is done. All money the job holders receive is taken from people who already have jobs. We see the money spent on these new jobs, but what we don’t see is how it might have been better spent by those from whom the government took it.

Continue reading here.

LETTERS: Response To Hal O’Boyle on Health Care

EDITOR’S NOTE: This commentary responds to Hal O’Boyle’s column on pending health care legislation, published in Key West The Newspaper on September 25.

Mr. O’Boyle:

I really look forward to your biweekly columns. I admire your logic, wit, word crafting and no-nonsense analysis... 99% of the time. Your recent “Hoping for the Impossible” is the rare exception.

You decry President Obama’s health care reform - and say that all we need is tort reform. Keep everything the same, just limit malpractice suits, and that will make health care cheaper and more accessible.

Well, that’s truly “hoping for the impossible” since allowing insurance companies to continue business as usual guarantees that nothing will improve.

First, let me point out I am an independent for 35 years now, so this is not a partisan viewpoint. As a Libertarian, you believe in smaller government. Republicans agree with that and under Bush, deregulated the financial markets... look how well that turned out! The banks and insurers made trillions in profits off consumers by marketing risky loans and making bad investments. When their bad investments tanked, they needed billions in bailouts from (guess who) taxpayers.

Hang On! I’m Sending Help!

by Hal O'Boyle

This column on socialism was originally printed in 2004.

Over a wonderful dinner recently a dear friend and lifelong socialist asked me, “What do you have against socialism? Don’t you want to help people?” My objection to socialism, I said, is that it is immoral and coercive. I want to help people as much as anyone but I prefer to use my own money rather than what I can swipe from my neighbors.

My friend insisted that socialists didn’t force people to do anything they didn’t want to. He pointed to the accomplishments of labor unions as proof.

I asked, “If socialists aren’t coercive why is it so dangerous to cross a picket line?”

“Well, those people… they’re just SCABS,” he said. He said the word “scabs” as if naming a vile subspecies in need of immediate extermination.

“So it’s OK to beat up scabs?” I asked, thinking that one man’s scab is another man’s low bidder.

Continue reading here.

Free Markets Versus Free Health Care

by Hal O'Boyle

My readers in their comments about medical care uniformly show a great, and on the evidence, inexplicable trust in Uncle Sam’s ability to do exactly what he promises. They show an equal distrust of ‘greedy’ insurance companies. While mistrust of insurance companies is understandable, often based on personal experience, faith in government’s ability or even desire to keep its promises demonstrates a deep misunderstanding of how governments and free markets work.

This misunderstanding is only made worse by the debate’s focus on insurance. Even Americans who know there’s no free lunch are succumbing to the ‘entitlement’ mentality. The debate over insurance is not about how to reduce costs, it’s about how to get other people to pay those costs for us. No one is looking for the reasons health care costs are increasing at such alarming rates, and even less at how insurance itself drives prices higher. If you had speeding ticket insurance, would you drive faster?

There is widespread agreement that free enterprise and free markets made America rich. There is a great misunderstanding, however, about what government has done and can do to ‘correct’ what are labeled ‘market failures.’

Keep reading here.

Hoping for the Impossible

by Hal O'Boyle

A persistent assertion from those hoping for the passage of ObamaCare is that government competition in the insurance market will lower costs.

Not much is said about how this will come about, or why the massive Medicare and Medicaid programs haven’t already provided the cost lowering competition that Obama Care will. The details of how government participation will increase competition remain vague, except to point out the obvious fact that if Uncle Sam is selling insurance it would represent one more outfit doing so. But there are already hundreds, if not thousands, of companies selling insurance. Presumably one more wouldn’t effect competition all that much.

Unless, of course, that one competitor had some special advantage. As it happens, the U.S. government does have an advantage. A couple of advantages, really. First, Uncle Sam doesn’t have to compete in the usual way. If the government is losing money on a venture, it can charge the losses off to taxpayers who may not even be involved. The second advantage is that government can simply force people to become customers whether they want to be or not.

Continue reading here.

Manly Men Doing Manly Stuff

by Hal O'Boyle

Manliness has fallen into disrepute in the parts of the world where people like to think of themselves as civilized. Even the word, manliness, has gained an almost Victorian quaintness, slightly silly, as outdated as straw boaters and spats.

Feminism rules our public discourse like the Queen of Hearts overseeing Alice’s tea party. Aggressive feminists dominate American public schools to the point where bureaucrats dose thousands of little boys with powerful psychoactive drugs to make them act more like little girls.

Popular culture is right in step with the trend. Manliness in its traditional guises, adventure seeking, independent, freedom loving, is shunned when it’s not mocked outright. Male pop idols tend toward the hermaphrodite, slight of build, sans body hair, pierced in places where a convenient handle would be a dangerous liability in a bar fight.

Continue reading here.

Ban the Doctors

by Hal O'Boyle

The president’s proposal to nationalize American medical care is much in the news lately. It will come as no surprise to readers of this column that this writer thinks nationalizing the medical industry is an appallingly bad idea.

In many ways it is much worse then nationalizing the car, insurance, and banking industries was. It will be economically painful and tragic for government to sustain those failed businesses like zombies in a horror movie, but medicine is often a matter of life or death. The government’s medical tragedies will be human, not financial. Zombie medical services won’t be able to bring us back to life.

I could wade into the morass of fascist coercion contained in the 1000+ page Obama Care bill, but it would make for pretty dull reading. Instead, I would suggest only that readers reflect on their last trip through a TSA airport check point, or their last IRS audit and ask themselves if they would like to have their medical care handled by the same species of crack government professionals.

"Statistically, banning doctors would be 28,500 times more effective in saving lives than banning guns."

Free OFMP, Get Yours Now

This morning, my wife Sally and I received some kind words from Key West blogger Rock Trueblood about our past in Key West real estate. Having people praise Sally as knowledgeable and honest is always appreciated, but nothing new. A reference to me, however, as anything but an extremist nut-job is such a surprise, I was compelled to send a note of thanks to Mr. Trueblood.

Because real estate is still of more than passing interest to Key Westers and us, I'll expand on my reply to Mr. Trueblood here. And for those who were less than dazzled by O'Boyle's economic foresight in the past, or unaware of it, I'll give you another chance to point and laugh.

You will find below a free OFMP (O'Boyle's Fearless Market Prognostication) worth at least double what you will pay for it. Don't cheat and look ahead or you may be turned into a newt. Continue reading here...

Passing the Painted Pig

This column from August of 2007 seems to have gotten it right. The Pigs are dead now, and resting comfortably on the Fed’s balance sheet.

by Hal O'Boyle

A recent front page article in the Wall Street Journal reported a meeting between a group of bankers from the world’s biggest banks and representatives of the U.S. Treasury Department. The meeting, we are told, is “in response to the world credit crisis.” It purpose is to “avert a crunch.”

Mark Twain once noted that no man’s property is safe when Congress is in session. A corollary to that rule can surely be found in what happens when supposedly competing bankers gather around a table with the people who are supposedly regulating their competition. The WSJ story is about just such a meeting. The reporters do their best to make it sound as if some good will come of it.

Continue reading here...

O'Boyle: Laws of Supply and Demand Won’t Be Conned

by Hal O'Boyle

You would think that the destruction of capitalism would be enough to keep our new president busy for at least a year or two. Nationalizing the banking, finance, insurance, and automobile industries is a pretty big bite to chew. But as they say in the ads, there’s more. Controlling your money is not enough. There’s your health to consider.

We can take some comfort in the fact that, since the prez is planning to socialize the medical industry too, many of us will very likely not live long enough to get the full effect of living in a socialist hell hole. By the time the country collapses in government run ruins, having our health care in the hands of the same folks who are doing such a bang-up job with Amtrack, Social Security, and the IRS, will spare millions of us the trouble of living long enough to see it happen.

If you’ve ever had to renew a driver’s license, apply for a building permit, or get on an airplane it should be obvious to you why government supplied health care is a lousy idea.

Continue reading here.

Where's Winchester?

by Hal O'Boyle

"Personal weapons are what raised mankind out of the mud and the rifle is the queen of personal weapons." — Jeff Cooper

“Where’s Winchester?” she asked. The woman is an expat American living here in Costa Rica. She was referring to the word embroidered on my baseball cap, trying to make small talk.

“It’s not a place,” I said, “It’s a rifle.” She could scarcely hide her horror. From her expression you would think I had offered her some beads for a peek at her tah tahs. She dove for cover at the buffet. PC angst at any favorable mention of firearms lives as large among expats as it does among liberals in the States.

Winchester, as anyone with a passing familiarity with guns knows, is synonymous with the rugged, lightweight, powerful rifle that won the American West, the Cowboy Rifle.
I thought of that question today when I learned that the U.S. Repeating Arms Company, after 140 years of continuous production, will shut down its factory in New Haven, Connecticut on April 1. The uniquely American weapon and icon of the American west, will be made no more.

Continue reading here...

Unlicensed Commerce

From the best of Hal O’Boyle archives, originally published in February 2005.

by Hal O'Boyle

Falling afoul of the enforcers in Key West’s fatuous and elaborate game of “Mother May I” put me in mind of a simpler time when we were not so eager to saddle ourselves with the attentions of the ethically challenged. I pine for the good old days when only the Mob ran protection rackets. The business model for our self-inflicted departments of licensing and permitting is the same. People don’t ask for permits, licenses and inspections because they want them. They do it for the same reason people pay protection money to the Mob, to avoid punishment.

It got me to thinking about the relatively unfettered economic atmosphere of my boyhood, a time when licensing was much rarer than it is today, and inspectors thin on the ground.

That was in the 1950s in the slowly withering coal mining city of Scranton, Pennsylvania. The veins of silver black anthracite were exhausted. The support pillars deep underground had been chipped away to thin sticks. Whole blocks of houses were sinking into the empty mines. Continue reading here.

Hal O'Boyle: Dangerous Drugs

The Spanish headline in Costa Rica’s biggest daily, La Nación, registered awkwardly in my old Gringo head, “Son kills with bullets the mother and himself shoots in the head.” The mangled word order didn’t keep me from having my next thought, however, which was a result of looking into similar, though idiomatically correct, headlines in the U.S for some time now. That thought was, “They must use Prozac in Costa Rica, too.”

And sure enough, the first paragraph of the La Nación article said the shooter, a teacher, had been “incapacitated by depression.” His neighbors reported that both mother and son “were taking pills.” They also reported that the pair had been close, a common theme in many similar antidepressant tragedies.

Once you start looking for it, the pattern becomes familiar. A murderous rampage followed by suicide. The victims are often family members, but not always. The news reports mention in passing, usually as a possible explanation for the suicide, that the murderer was undergoing treatment for depression. The news reports will almost never say what that treatment was.

Continue reading here.

Never Waste a Crisis: Hustling the Swine Flu Pandemic

"Rule one: Never allow a crisis to go to waste. They are opportunities to do big things."
--Rahm Emanuel, Obama White House Chief of Staff

Lately, some friends have helpfully passed along information about how to protect myself against swine flu. Information on how to avoid colds is pretty easy to find, and I rarely get them. Nevertheless, I appreciate my friends' concern for my family's well-being, and for that of humanity in general. However, what we really need in situations like this is information on how to avoid fear mongering propaganda.

I am deeply suspicious of the trustworthiness of my government and its ability, or even its desire, to protect me. My skepticism is based on the unquestionable fact that the government lies to us all the time. With that skepticism in mind, I'm also suspicious of why such a hoopla is being made of the "pandemic" of swine flu.

Continue reading here.

Lonely Extremist No More

by Hal O'Boyle

The new “leaner, smarter” Department of Homeland security under Obama’s recent appointee, Janet Napolitano, issued a report last week that identifies a broad swath of Americans as dangerous “rightwing extremists.”  The report, which is just a summary of a much larger, classified document, warns that people with certain opinions about abortion, immigration, gun control, taxes, and other issues bear watching by local and federal law enforcement. Perhaps coincidentially, the people holding these suspicious opinions tend not to be Democrats.

You would think the new, lean, smart DHS could come up with a snappy title for their report, but we got the same fat, dumb government work on that: "Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment” was the wonderfully bureaucratic headline on the 9-page report that went out to law enforcement agencies across the land. 

Continue reading here...

Hal O’Boyle writes from the suburbs of San Jose, Costa Rica. His articles are archived at his website, www.the-extremist.com.

A Change Without Hope

by Hal O'Boyle

You can hardly pick up a paper or listen to a newscast without hearing how inflationary Uncle Sam’s bailout efforts are. “Money out of thin air” is a phrase never so popular as it is these days. And, indeed, every bit of the money going to bail out the administration’s political cronies on Wall Street and fatten his constituency everywhere else is being created out of thin air.

The Federal Reserve recently proposed what may be the most inflationary policy in it’s history, directly buying government securities to the tune of a trillion or so. Thin air again is the well from which all the Fed’s funds are dredged up.

One might logically ask, with all this inflationary action by the Fed and Obama, why are the prices of so many things coming down like the Hindenburg? The answer is complex, but never so complicated that O’Boyle can’t oversimplify it with a few wisecracks.

Government Defines Moral Success

by Hal O'Boyle

NOTE: This column originally appeared in Key West the Newspaper in 2005. Ponzi schemes are much in the news these days. Scallywags in $1000 suits are fleecing the rich and famous. But the Ponzi scheme is nothing new, and our government still runs the biggest one in history.

President Bush in his 2005 State of the Union address called the U.S. Social Security System “...a great moral success of the 20th Century.” Mr. Bush was the leader of an immeasurably powerful government. The former president’s assessment of Social Security’s moral achievement must be that of a man who believes, despite abundant evidence to the contrary, that government is an agent of moral good. Otherwise he must assume the role of villain in his own life’s story, a role no one willingly accepts.

Keep reading here...

The Man Who Would Be King

by Hal O'Boyle

"Give me control of a nation's money and I care not who makes the laws."
— Mayer Amschel Rothschild  (1744 -1812)

Yesterday I listened to Ben Bernanke, current man behind the curtain at the Federal Reserve,  suggest with a straight face that the key to avoiding future financial meltdowns was to put the Fed in charge of everything. “Just make me King of the World,” says Helicopter Ben, “and all your problems are over.”

Mr. Bernanke’s greatest accomplishment as Fed chairman has been to distract the world from the obvious conclusion that the Fed caused the crisis by allowing a reckless increase in credit across the globe.

The Federal Reserve Bank is the private banking cartel charged with regulating the money supply of the United States. And since every major country in the world uses the U.S. dollar as a reserve currency, the Fed is in effect the world’s central bank.  Mr. Bernanke and the Federal Reserve already have power beyond the dreams of kings.

Continue reading here...

Don’t Tread On Me

by Hal O'Boyle

You don’t hear much about States Rights these days. The death of some 650,000 Americans in Mr. Lincoln’s war in the early 1860s firmly settled the issue. After wrecking the economy and burning a few cities, the Yankees ran Dixie like a rented mule for many years after. The topic hasn’t come up much since then.

Obama’s desire to nationalize just about everything has got politicians in many states thinking again about their own power and state sovereignty. I find the change refreshing. Twenty-two states have passed or are considering passage of resolutions declaring their sovereignty under the Tenth Amendment of the Constitution.

This little known item in the Bill of Rights reads as follows: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Continue reading here...

The Mother of all Pork Barrels

by Hal O'Boyle

The last thing I expected of the new Messiah was change. President Obama is an Illinois politician. The traditions of pork and payoff, logrolling and back-scratching run deep in the Land of Lincoln. It’s not the cream that rises to the top of the political caldron in the Windy City, it’s something more akin to what covers a stagnant pond, floating on a froth of taxpayer money. To judge by the “stimulus” package, BHO has taken his political traditions with him to the White House.

One change worth noting, however, is the audacity of Obama’s circumvention of the already barely restrained budgeting process. Mr. Bush wasn’t shy about using fear to get us nodding like bobble head toys at the mention of the evil terists. Obama understands the utility of fear no less than W did. The looming economic “catastrophe” is the reason he must spend a trillion in borrowed money, and right now. Saving the world can’t be delayed by contentious Congressional debate. Any delay would be disastrous. It would give us time to consider what he’s going to do with the money.

Continue reading here...

A Thousand Toys

by Hal O'Boyle

Danielito is just over three feet tall so he travels light. In this climate you don't need much. Ten degrees north of the equator it's never cold, wet sometimes, but not cold. He wears an orange and blue striped soccer jersey, number 14, denim shorts with pockets, dark blue low cut tennis shoes, one brown sock, one red. His hair is cut like mine, buzzed down short. You can't see scalp through his. Danny's eyes are too black to make out pupils. When he walks he pops up on his toes before each step and his arms spend a lot of time away from his body.

In his pockets and an old cookie box he's got what he needs for the three hours he will be here. The box is yellow and bears the Spanish slogan, Muuuuuuucha galleta, a lot of cookie, as if it were written "a laaaaahhhhhhht of cookie."

Continue reading here...

Rubbish Guilt

by Hal O'Boyle

Originally published 28 September 2005. Still a hot topic.

My sons have been home schooled all their short lives. This year they both started high school in what is as close to a real school as they have ever seen, a cooperative home school. It’s a first for our boys and a reminder for me of how woefully out of touch I am with the fate of America’s trash.

I teach a class at the school. The class is somewhat open ended. It was suggested to me that perhaps a recycling project would be instructive to my charges.

Fearing I would find myself correcting garbage journals, leading a field trip to a local dumpster or making chewing gum sculpture, I demurred. I mumbled something about wasted resources and silently hoped I’d be asked to teach something more in line with my talents, like beer drinking or pistol shooting.

Continue reading here...

The Fed Fights Deflation

by Hal O'Boyle

The Fed’s efforts to keep the money game going have reached a level that has leaped past astronomical to the utterly incomprehensible. Bailout costs are now estimated near $8 trillion. That’s roughly $80,000 for every American household, every penny borrowed from the Fed, every penny fetched right out of thin air. It won’t be enough, as this article, written when the Maestro was still the man behind the curtain, explains.----

The chattering classes have lately taken up a chorus of worry that our economy is experiencing too little inflation for its own good. The Greenspan Fed has announced that having battled the demon inflation to a stand, they would now take up their cudgel against the much more fearsome foe, deflation. Heaven forefend, think I, what cruel God would curse our industry and virtue with stable prices? How lucky we are that the wise and noble Fed governors will undertake a mission for which they have shown great talent and zeal, destruction of the dollar. Straight-faced, the Fed governors claim to have been too successful in their fight against inflation.

Continue reading here >>>>

Fed Poisons American Economy, Prescribes More Poison

by Hal O'Boyle

"There is no means of avoiding the final collapse of a boom brought about by credit expansion.  The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."  Ludwig von Mises; Human Action: A treatise on Economics, Regnery, 1966, pg. 572.

The New York Times reported yesterday the Fed has cut the interbank interest rate to “near zero.” That would be something south of a quarter of one percent. Investing $100 at that rate would earn you two bits a year. You could call that zero. It doesn’t matter much, though. They also report that banks aren’t borrowing from one another these days anyway. Can you blame them?

That means the Fed is out of bullets and the Indians have them surrounded. The Times, with no hint of irony, tells us the gnomes at the central bank are going to “have to reach for new and untested tools in fighting both the recession and the downward pressure on consumer prices.”

Continue reading here...

A Baby Step Back

To the Constitution

by Hal O'Boyle

The U.S. Constitution requires that the president be a native born citizen. President elect Obama is almost certainly not a native born U.S. citizen. I base this conclusion on the fact that he has chosen to leave the matter in doubt despite how easily he could prove it if it were true.

His opponent, Senator McCain, had a similar problem, having been born in the Panama Canal zone. But when McCain was confronted by opponents on the issue, he immediately dug up all the records and presented them to whomever was interested. As a result, Congress agreed that as the child of military parents stationed abroad in an American controlled zone, they’d consider him a native born citizen. The passed some kind of resolution saying so.

In dealing with similar questions about his birth, Mr. Obama has been something less than forthcoming. Obama’s grandmother said she witnessed his birth in Kenya. Among Kenyan officials it’s a state secret. Obama’s sister on different occasions reported her brother’s birth at two different Hawaii hospitals. Obama won’t release his college records, which some have speculated would show he is not a citizen. And finally, the Hawaiian “certificate of live birth” that the campaign released to a few selected, strongly supportive websites is one that doesn’t necessarily indicate he was born in Hawaii.

Irrational Exuberance is Back!

by Hal O'Boyle
Note: This week’s column originally appeared in Key West the Newspaper in Spring of 2007.

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." ─ Daniel Webster

It was 1996. Alan Greenspan, the architect of the largest financial house of cards in history, remarked that the markets might be experiencing a whiff of “irrational exuberance.” His observation caused a minor crash in those markets at the time, but the exuberance continued until reaching a dizzy height in January of 2000. From there the bloom came off the rose for a few years. Hope and Fear took a few rounds from Greed and Glory.

For a few years you could find a pessimist on Wall Street if you looked hard enough. But as we arrive at the ten year anniversary of Mr. Greenspan’s fateful remarks the punch bowl has been refilled to overflowing with paper hooch and “irrational exuberance” is back stronger than ever.

Unanimous thinking makes contrarian curmudgeons like this writer nervous. And I can’t recall a time when sentiment was as uniformly rosy as it is now, not even when the party was roaring in 1999.

Nurturing Cultural Intercourse

and English Language Dignity

WARNING: PG13 RATED COLUMN, MAY NOT BE SUITABLE FOR YOUNG CHILDREN OR PRUDISH BUSYBODIES.

by Hal O'Boyle

The school is a single room concrete block building up in the hills behind Santa Ana in Costa Rica. It’s poorly lit and cheaply furnished in the Costa Rican style. I spend four hours a week there teaching a few of the locals how to speak English. My students range in age from 14 to 64. A small core of about half a dozen are my most dedicated, another half a dozen drift in and out, attending classes sporadically.

Some evenings, especially now in the rainy season, there are only two or three students in class. They get a lot more practice in the smaller classes and improvement is often noticeable in a single lesson. Progress is gratifying for them and for me.

I’ve been teaching there for over six months now. We’ve become comfortable with one another. The classes are relaxed and fun. My ability as an expert speaker of English and determined, if often unintentionally amusing, speaker of Spanish seem to be appreciated.

If The Constitution Were Still In Effect

We'd Have Ourselves A Crisis

by Hal O'Boyle

The only reason I can think of to vote for John McCain is Barack Obama. And the only reason I can think of to vote for Barack Obama is John McCain. On the horns of such a dilemma, the choice between a fascist or a communist megalomaniac, my write-in vote for Ron Paul is surely just another pass by a cranky old geezer at the latest windmill. I preface this article with that observation because I don’t want you, my readers, to think I favor one of the dissembling gasbags over the other.  It is the moribund Constitution that interests me, in which I believe lies our only chance at lasting freedom and prosperity.

The destination of the American handbasket will not change after the impending election. That doesn’t mean, however that the contest is without its moments of revelation.

There is, stirring in a courtroom in Pennsylvania, a widely ignored lawsuit, Berg v. Obama, No. 08-cv-04083. Attorney Phillip J. Berg has sued Obama to determine if Barack Obama is a natural born citizen of the United States. The U.S. Constitution requires that our presidents be natural born citizens. I know not what axe Mr. Berg may have to grind, or if he has one at all, but that’s beside the point. Either Obama is or is not a citizen.

Uncle Sam's Foolproof Hangover Cure - Stay Drunk

by Hal O'Boyle

The greatest credit balloon in history is coming down like the Hindenburg. The sheer volume of hot air issuing from wealthy gasbags in the media, politics, and finance should be enough to keep the bubble afloat. Alas, that appears not to be the case.

The consensus among well-connected, high net worth hot shots all over the country is nearly unanimous. We need the U.S. government to pluck our bacon out of the fire. The question that springs to the mind of this poorly connected, low net worth scrivener is “Who is ‘we’?”

Much has been written about the “root cause” of the problem. Fingers are pointing in a flurry of blame fixing and blame dodging. Corporate greed appears high on the list of villains. Greed, however, is nothing new. Humans have been greedy for as long as there has been enough stuff to be greedy about. Yet before now, human greed has not threatened to cause world economic collapse.

The Booby-Trapped Economy

by Hal O'Boyle

I can never figure out why people are genuinely surprised when government schemes explode in taxpayers’ faces. Just about every government program is some flavor of Ponzi scheme, confidence swindle, or extortion racket. Every one is a time bomb whose clock is ticking from the start. In designing these bombs, the long delay between the set-up and the blow-up isn’t a bug, as they say in the software business, it’s a feature. When they finally blow, the solution is always the same: more government oversight, regulation, and taxpayer sacrifice. That’s a design feature too. 

Government programs are mechanisms for transferring wealth between groups. These transfers work in different but similar ways. Most commonly, political schemes reward small, politically well organized groups at the expense of a larger, less organized groups. Concentrating the benefits assures an enthusiastic constituency for continuing the swindle.  While spreading the costs thinly across the losing group makes any individual benefit to be had from fighting it hardly worth the effort.

Democracy in action. In every democracy political Ponzi schemes like Social Security, Medi Care, subsidized lending, FDIC insurance, and a host of others infest the body politic like ticks on a hog. Every tick imagines he’s living high on the critter, right up to the moment when the hog drops dead.