Too big to fail?

We have all now been thoroughly introduced to the "too big to fail" argument. AIG can't fail, Goldman Sachs has to be bailed out, who will save Merrill Lynch? you know the drill. It was the primary rationale that the political class gave us for massive bailouts and we continue to bail out bad business models. Everyone was rattled to the bone with statements like "If you think it is bad now, you don't want to see how bad it could get!"

So the answer of course is to keep spending, throw money at everything, and see what sticks. While we can disagree with whether the bailouts should have happened or not, we surely aren't in disagreement that there is no such thing as a cut back in government, right? When did government ever contract? Answer...never. Washington is the only place where cuts in the rate of growth are considered reductions.

So let me ask you a question...is government ever too big to fail? Answer...never.

All this spending is under the disguise of economic stimulus but what do you think will happen when the "stimulus" funding ends? Will we cut back? You already know the answer. The argument will be that program x or program y is too big to fail. After all, look at all the people that will be hurt if we cancel or cut something. It will be argued that government is too big to fail.

And unfortunately many will buy into the argument.

So the only answer will be even higher taxes and even more rationing. It is a re-run movie folks and it has been played over and over again. So I repeat from my January blog..."we are so screwed."

Read it again here...go on you know you want to...

The War on Business and Capitalism

Politicians often bring focus on the issue of the day by conducting wars. Consider these:

• Lyndon B Johnson's "war on poverty"
• Richard Nixon coined the term "war on drugs"
• George W Bush's "war on terrorism"

So it is appropriate for Barrack Obama to have his on war; the "War on Business and Capitalism". But unlike my earlier examples, this war won't be declared nor will "soldiers" be mobilized in a open and public manner...it is being conducted in stealth...but with the tacit support of the American public.

Rest assured, this war is being waged.

Look at where we are...

• Wall Street is taking ALL of the blame for this recent financial and economic crisis
• CEO pay is considered a public debate
• The union sponsored "card check" law is gaining steam
• The Paycheck Fairness Bill has passed through the House
• Lilly Ledbetter Fair Pay Act has passed through the House
• Free trade with South America is dead on arrival in Congress

The list really goes on...

{Sign} Folks, this is completely unhealthy. We are letting the political class and the media lap dogs paint Business and Capitalism as Evil incarnate. It will truly be our down fall when the American economic engine slows to sub 1% growth as a result of their war. That is exactly what will happen because...

• the innovators amongst us will not innovate when they are stifled under multiple tiers of regulations and laws (California?)
• businesses are taxed to the point where it makes more sense to do business in another country (All industries? I give Exxon 10 years to remain a US Corporation)
• overbearing legal costs for businesses spread into our purchased goods and services to the point where we are uncompetitive (Healthcare?)
• unions will force businesses into a cost strata that is not sustainable (GM?)

We live in interesting times. Pay attention -- you are witnessing an unprecedented opportunity to understand the true differences between conservatism and liberalism.

Tax Day!

Being a small government, anti-tax kinda guy I thought I would be remiss if I didn't post a blog on the day we all either pay or pay and file a delay.

Have a beer, sit back, and commiserate with the the rest of us -- but don't think you are finished yet! According to the Tax Foundation (http://www.taxfoundation.org/) you have 8 more days of work before you have earned enough (on average) to pay off your taxes. Yes, you read it right. On an average we have to work from 1 January 2008 to 23 April 2008 to earn enough money to pay your taxes.

So while today is tax day, 23 April 2008 is this year's Tax Freedom Day.

See the graph below for a history of Tax Freedom Day.



Overlay the data with who was the president and see the difference...