Sunday, February 01, 2009

Atlas Is Shrugging

First a couple of books mentioned in the video: Atlas Shruggedand The Road to Serfdom

Stephen Moore, who you saw in the video, started the ruckus with the article in the Wall Street Journal called Atlas Shrugged': From Fiction to Fact in 52 Years.
Some years ago when I worked at the libertarian Cato Institute, we used to label any new hire who had not yet read "Atlas Shrugged" a "virgin." Being conversant in Ayn Rand's classic novel about the economic carnage caused by big government run amok was practically a job requirement. If only "Atlas" were required reading for every member of Congress and political appointee in the Obama administration. I'm confident that we'd get out of the current financial mess a lot faster.

Many of us who know Rand's work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that "Atlas Shrugged" parodied in 1957, when this 1,000-page novel was first published and became an instant hit.

Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated "Atlas" as the second-most influential book in their lives, behind only the Bible.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.
And the take over of our economy need not be by nationalization. Ownership need not change hands. All that is required is "regulation".

Here is what commenter John Lynch had to say at the Classical values post Obama's Plan For Failure.
There is no plan to "recover" the US economy. There is a plan to transform US economics. The transformation requires that capitalism bow to statism. Private enterprise is secondary to the state, as is individual enterprise, innovation, and flow of capital.

Hence, most investors are pulling their money from the market. Redemptions far exceed losses from major funds and stocks. People are pulling their money from the market. Funds are gong under not because of losses but because of redemptions.

Further, most corporations are pulling back rather than investing in great buying opportunities: equipment, factories, and inventories.

Every industry that anticipates heavy government involvement, solicited or undesired, expects a lack of oxygen - a lack of business opportunity and freedom to profit - thus retrenches. Examples include auto, airlines, aircraft manufacturing, defense, healthcare, finance, and banking. Together these industries comprise more than 50% of what we had called private enterprise, even though they were heavily regulated before the latest round.

Now, in the name of economic stimulus, these industries, and more, will be minor players in a government run set of directives, funded by and controlled by US regulators already shown to be both uncaring of economic reality but also corrupt in appointing overseers for political gain.

Welcome to Change (tm).

It is the administration's interest to ensure that we, the people, recognize that this transformation will take years, and that we should not expect the stimulus package to yield results within the next couple of years.

Never mind that every other stimuli package that worked took months, not years to produce results - except that of Roosevelt, New Deal Creator, that showed only extended depression until events overtook policy after WWII.

Buckle down. Convert your assets. Find jobs with economic value, not services oriented.

Events will eventfully overcome this situation. Politics will not.
Sounds like pretty good advice.

In any case it leads us to the underground economy.
The underground economy or black market is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided. The term is also often known as the underdog, shadow economy, black economy or parallel economy.

In modern societies the underground economy covers a vast array of activities. It is generally smallest in countries where economic freedom is greatest, and becomes progressively larger in those areas where corruption, regulation, or legal monopolies restrict legitimate economic activity.
Untaxed and unregulated. So how big is the underground economy?
Some economists estimate that the underground economy in the United States alone accounts for up to 1 trillion US Dollars (USD) per year in unreported cash holdings.
So there you have it. If you want to be untaxed and unregulated go underground. More and more people every day are shrugging off government by doing just that. As that mafia guys like to say, "It's just business."

Cross Posted at Classical Values

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