SHIP OF FOOLS
To be sure, the S&P threw in a few references to the outstanding debt and the inadequacy of the remedies contained in last week’s legislation, but their persistent focus on political failings was inescapable. Notwithstanding the challenge from the White House that their math was “fundamentally flawed,” the S&P proceeded with the downgrade because the math isn’t the main driver of their analysis. They made plain that the primary reason for their decision was the bad behavior of the political players and that it is Congress who deserves the downgrade.
Not surprisingly, the American people agree. A new poll from the New York Times/CBS News shows the disapproval rating for Congress at 82%. Breaking that down further reveals bad news for Republicans who were dominated by their tiny Tea Party flank:
- All told, 72 percent disapproved of the way Republicans in Congress handled the negotiations, while 66 percent disapproved of the way Democrats in Congress handled negotiations.
- Forty-three percent of Americans now think the Tea Party has too much influence on the Republican Party, up from 27 percent in mid-April.
- Sixty-three percent of those polled said that they supported raising taxes on households that earn more than $250,000 a year, as Mr. Obama has sought to do — including majorities of Democrats (80 percent), independents (61 percent) and Republicans (52 percent).
- Forty-four percent said that the deficit was mostly caused by the Bush administration.
‘Atlas Shrugged‘: From Fiction to Fact in 52 Years
By STEPHEN MOORE in WSJ
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.
In the book, these relentless wealth redistributionists and their programs are disparaged as “the looters and their laws.” Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the “Anti-Greed Act” to redistribute income (sounds like Charlie Rangel‘s promises soak-the-rich tax bill) and the “Equalization of Opportunity Act” to prevent people from starting more than one business (to give other people a chance). My personal favorite, the “Anti Dog-Eat-Dog Act,” aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn’t Hank Paulson think of that?
These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion “Emergency Economic Stabilization Act” and the “Auto Industry Financing and Restructuring Act.” Now that Barack Obama is in town, he will soon sign into law with great urgency the “American Recovery and Reinvestment Plan.” This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion — in roughly his first 100 days in office.
The current economic strategy is right out of “Atlas Shrugged”: The more incompetent you are in business, the more handouts the politicians will bestow on you. That’s the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies — while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to “calm the markets,” another trillion of national wealth is subsequently lost. Yet, as “Atlas” grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate “windfalls.”
When Rand was writing in the 1950s, one of the pillars of American industrial might was the railroads. In her novel the railroad owner, Dagny Taggart, an enterprising industrialist, has a FedEx-like vision for expansion and first-rate service by rail. But she is continuously badgered, cajoled, taxed, ruled and regulated — always in the public interest — into bankruptcy. Sound far-fetched? On the day I sat down to write this ode to “Atlas,” a Wall Street Journal headline blared: “Rail Shippers Ask Congress to Regulate Freight Prices.”
In one chapter of the book, an entrepreneur invents a new miracle metal — stronger but lighter than steel. The government immediately appropriates the invention in “the public good.” The politicians demand that the metal inventor come to Washington and sign over ownership of his invention or lose everything.
The scene is eerily similar to an event late last year when six bank presidents were summoned by Treasury Secretary Hank Paulson to Washington, and then shuttled into a conference room and told, in effect, that they could not leave until they collectively signed a document handing over percentages of their future profits to the government. The Treasury folks insisted that this shakedown, too, was all in “the public interest.”
Ultimately, “Atlas Shrugged” is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand’s political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear — leaving everyone the poorer.
One memorable moment in “Atlas” occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today:
Galt: “You want me to be Economic Dictator?”
Mr. Thompson: “Yes!”
“And you’ll obey any order I give?”
“Then start by abolishing all income taxes.”
“Oh no!” screamed Mr. Thompson, leaping to his feet. “We couldn’t do that . . . How would we pay government employees?”
“Fire your government employees.”
Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax “for purposes of fairness” as Barack Obama puts it.
David Kelley, the president of the Atlas Society, which is dedicated to promoting Rand’s ideas, explains that “the older the book gets, the more timely its message.” He tells me that there are plans to make “Atlas Shrugged” into a major motion picture — it is the only classic novel of recent decades that was never made into a movie. “We don’t need to make a movie out of the book,” Mr. Kelley jokes. “We are living it right now.”
Mr. Moore is senior economics writer for The Wall Street Journal editorial page.
Ayn Rand’s credit crunch comeback
The libertarian novelist held money to be “the root of all good” and Alan Greenspan was a devotee. Why, when capitalism is in crisis, is Ayn Rand enjoying a revival?
How big is Rand’s comeback?
She has always had a strong libertarian following in the US, but her magnum opus, the 1,088-page Atlas Shrugged, has enjoyed a big surge in sales since the start of the financial crisis. It sold 200,000 copies in the US in 2008; this year it’s selling at its fastest rate since first published in 1957. Sales have spiked, says the Economist, whenever the US government has tried to prop up the economy: during the sub-prime crisis, last October’s bank bailouts and the passing of Obama’s economic stimulus package. In January the book reached 33 on Amazon.com’s bestseller list, briefly surpassing Obama’s The Audacity of Hope. It is now at number 20, four places above Thomas Paine’s Common Sense and The Rights of Man.
What happens in Atlas Shrugged?
Rand’s fourth novel describes a dystopian United States in which industrialists and the rest of America’s “producers” – oppressed by government regulation – are persuaded by the novel’s hero, charismatic inventor John Galt, to forsake the world of mediocrities, parasites and “second-handers” (ie those foolish enough to care about altruism and looking after the needy) and go on strike. The strikers, or “Atlases”, retreat to a mountain hideaway, where they build an independent, unregulated economy. The strike stops the “motor of the world”: machines break down, factories close, Fifth Avenue shops are boarded up, skyscrapers crumble, people riot, pirates roam the seas. The litter-strewn streets become hunting grounds for beggars and criminals. In the end, the socialists who have provoked this catastrophe beg Galt to take over the economy.
To whom does the book appeal?
People more scared of governments than bankers. Many right-wing pundits and bloggers in the US see shades of socialism in the response to the present crisis. Obama’s economic strategy “is right out of Atlas Shrugged“, writes Stephen Moore in the Wall Street Journal. “The more incompetent you are in business, the more handouts the politicians will bestow on you.” More fanatical market liberals even predict a Rand-style revolution, in which those tired of making sacrifices for fellow citizens decide to “Go Galt”, by withdrawing labour or refusing to pay taxes. On Capitol Hill, Republican congress-man John Campbell has been handing out copies of the novel to his interns. “The achievers, the people who create all the things that benefit the rest of us, are going on strike,” he says.
And who was Ayn Rand?
Born Alissa Zinovievna Rosenbaum in 1905 in St Petersburg, her father was an entrepreneur whose business was seized by the Bolsheviks. In 1925 she fled to America, changed her name to Rand, and began working for Cecil B DeMille in Hollywood, before moving to New York to become a writer. She wrote two short novels before gaining popularity in 1943 with The Fountain-head, the story of afanatical architect driven by the “second-handers” to blow up his own building. But it was Atlas Shrugged, published 14 years later, that made her a national institution and gave the world, or at least the US, a new philosophy.
What was the name of that philosophy?
Objectivism, which she described as “the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute”. The only social system consistent with this morality, Rand insisted, is pure, unfettered capitalism, and the only function of government is the protection of individual rights. She rejected religion. Altruism, in her view, was evil. President Obama’s view that the crisis requires all Americans to make sacrifices would have left her distinctly unimpressed. Noam Chomsky described Rand as “one of the most evil figures of modern intellectual history”.
And which Americans took Objectivism seriously?
Rand attracted a group of disciples, known (with self-conscious irony) as The Collective, which included former Federal Reserve chairman Alan Greenspan. It wasn’t just her ideas that inspired the group: it was Rand’s charisma. At the height of her popularity in the 1950s and early 1960s, Rand cut a highly exotic figure with her bobbed hair, heavy Russian accent, dollar-sign brooches and long cigarettes, smoked with a holder. She saw smoking as a Promethean symbol of creativity and regarded health warnings as a socialist conspiracy. When she died in 1982, a 6ft-high floral dollar sign was erected by her open coffin.
And did Objectivism outlast the death of its founder?
Rand’s turgid prose and uncomfy message made little impact in Europe, but a 1991 survey by the Library of Congress described Atlas Shrugged as the second-most influential book in the US after the Bible. Several universities have founded centres for the study of her views. Ronald Reagan was a fan; so were sports stars like Martina Navratilova and Chris Evert. But of all her prom-inent admirers it was Alan Greenspan who was most devoted. He even invited Rand to his swearing-in to Gerald Ford’s Council of Economic Advisers in 1974. His 18-year reign as chairman of the Fed, during which he presided over the unprecedented growth and deregulation of the US economy, was arguably the apogee of Objectivism.
Is Greenspan still a devotee?
Not as ardent as he once was. Last year Greenspan admitted there was a “flaw” in his free-market ideology. “I was shocked,” he told Congress, “because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.” This admission hasn’t gone down well with Rand disciples, who have distanced them-selves from their former champion. “I believe Greenspan sold his soul to the devil,” says Yaron Brook, the head of the Ayn Rand Institute.
‘Atlas Shrugged’ Movie, Adaptation Of Ayn Rand Book, Has First Trailer Released (VIDEO) | HuffPost
Published in 1957, “Atlas Shrugged” is Ayn Rand’s final Objectivist manifesto, arguing that an individual has the moral imperative to do as much as possible to enrich his or her self. It features the story of John Galt, an industrialist that leads a movement of creative and business masters who flee as government becomes more and more obtrusive, hoping to show what happens when innovators are not free to do whatever they want.
Sound familiar? It’s become a favorite of the libertarian and conservative movements, used to justify their free market beliefs, and has enjoyed a Tea Party and corporate-based resurgence in the past few years. Now, after nearly 20 years of pre-production turmoil, it’s being made into a film.
Working on a low budget, the book will be split into a two part series. Directing and starring as Galt is Paul Johansson, while Taylor Schilling takes on Dagny Taggart, the railroad owner forced by the government to use a steel company she doesn’t want to use for her trains.
Will the free market bring this film to the top? Regardless of politics, perhaps not, at least based on this first trailer. Watch and decide for yourself — then comment below.
P.J. O’Rourke reviews the movie version of “Atlas Shrugged”
Atlas and the common man
by Schumpeter | HuffPost
P.J. O’ROURKE makes a sharp observation in his review in the Wall Street Journal, of the film version of “Atlas Shrugged” (“Atlas Shrugged, and so did I”). For Ayn Rand, the put-upon wealth creators were all business tycoons. But these days big government has made its peace with big business, garlanding it with honours and stuffing it with tax breaks, and has decided to go after small business, instead. John Galt has gone downmarket:
An update is needed, and not just because train buffs, New Deal economics and the miracle of the Bessemer converter are inexplicable to people under 50, not to mention boring. The anti-individualist enemies that Ayn Rand battled are still the enemy, but they’ve shifted their line of attack. Political collectivists are no longer much interested in taking things away from the wealthy and creative. Even the most left-wing politicians worship wealth creation—as the political-action-committee collection plate is passed. Partners at Goldman Sachs go forth with their billions. Steve Jobs walks on water. Jay-Z and Beyoncé are rich enough to buy God. Progressive Robin Hoods have turned their attention to robbing ordinary individuals. It’s the plain folks, not a Taggart/Rearden elite, whose prospects and opportunities are stolen by corrupt school systems, health-care rationing, public employee union extortions, carbon-emissions payola and deficit-debt burden graft. Today’s collectivists are going after malefactors of moderate means.
In this blog, our Schumpeter columnist and his colleagues provide commentary and analysis on the topics of business, finance and management.
I have never really understood how the Evanga-publicans, Tea Baggers, and Foxpods could have taken Ayn Rand to their hearts. She is a despicable proponent the most extreme brand of selfishness and Narcissism. (Hmm…maybe it’s not so hard to understand after all). And she is an avowed, nearly militant, atheist. How does that jibe with the Christo-centric rightist movement in America?
The answer, of course, is that it doesn’t. Rand’s philosophy would be abhorrent to conscious religious conservatives. The problem is that so many of them are closer to catatonic than consciousness. Thankfully, most Americans are more aware and have dismissed Rand and her breed of mean-spirited egoism. The recent film version of her “Atlas Shrugged” was a monumental failure, creatively and financially.
But that doesn’t mean that her fans are non-existent or immaterial. So it was nice to see this video from the American Values Network and the accompanying documentation of Rand’s dementia:
Ayn Rand’s novel Atlas Shrugged has been among Amazon’s top 20 best sellers for much of the past year. This year she’s outsold Billy Graham, Joel Osteen, Rick Warren’s The Purpose Driven Life, and The Shack combined! Rep. Paul Ryan–the Republican choice to address the nation following the State of the Union and author of the Republican budget–credits Ayn Rand as the reason he got in to politics, and he requires all his staff and interns to read her books.
So who is Ayn Rand, and why this spike in interest in her teachings? Ayn Rand has resurfaced in recent years as the philosopher championed by the Tea Party and many prominent Republican leaders. But, as conservative evangelical icon Chuck Colson recently pointed out, Ayn Rand’s strong atheism, absolute rejection of Christ’s teachings, and goal of replacing religion with her belief system stands in total opposition to all that which America’s faith community holds most dear.
And a few quotes from Rand:
“I don’t approve of religion.”
“[Faith] is a sign of a psychological weakness. . . I regard it as evil to place your emotions, your desire, above the evidence of what your mind knows. That’s what you’re doing with the idea of God.”
“What I am fighting is the idea that charity is a moral duty and a primary virtue.”
“It must be either reason or faith. I am against God for the reason that I don’t want to destroy reason.”
Feel free to pass this on to anyone you know who has been suckered in by this freak.
images via NewsCorpse
Standard & Poor’s on Friday downgraded the United States Congress. You may have heard media reports that it was the country’s credit rating that was downgraded, but the statement issued by the S&P is unambiguous with regard to their reasons for the downgrade and whom they hold responsible:
[T]he downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges [...] The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
Reporting From: Sofia, Bulgaria
Folks… you just can’t make this stuff up.On July 6th, just two days ago, at least a dozen busybody Congressmen sponsored the introduction of HR 2411, the “Reduce America’s Debt Now Act of 2011.” They always come up with fantastic names for these pieces of legislation… and rest assured, the better/more patriotic the name, the more ominous the bill. This one follows the pattern.HR 2411 states that every worker in America should be able to voluntarily have a portion of his/her wages automatically withheld and sent directly to the Treasury Department for the purposes of paying down the federal debt.”Every employer making payment of wages shall deduct and withhold upon such wages any amounts so elected, and shall pay such amounts over to the Secretary of the Treasury…”That’s right. Uncle Sam is so broke that he wants to give all the good little Americans out there the opportunity to contribute an even greater portion of their paychecks to finance government largess.
Desperate? Hmmm…. Don’t worry, it gets better.
Obviously, if an employee feels so compelled and should elect to have a portion of his/her paycheck withheld, the onus of responsibility is now on the employer to make it happen. The employer has to do all the paperwork, withhold the money, send the payment to the Treasury, maintain the account records, and probably submit to all kinds of new filing requirements.
You can imagine that, if passed, the bill will result in a host of new IRS regulations, complete with a battery of penalties for employers who don’t fill out the paperwork properly, submit filings on time, or make some administrative mistake.
Think about it: if a small business owner has one single employee who is dumb enough to think that it’s his patriotic duty to pay down the debt and decides to contribute $1/month, that owner will have the responsibility for all kinds of new forms and filings, plus submit to new ‘debt reduction audits.’
But don’t worry, it gets even better.
So let’s say there are millions of sheep out there who elect to donate a portion of their toil and sweat so that the Chinese and big financial institutions don’t have to worry about an American default. How does Congress plan on rewarding its most patriotic citizens? By sticking it to them on their taxes, of course.
HR 2411 stipulates that any contribution made to the Treasury in order to pay down the federal debt IS NOT TAX DEDUCTIBLE.
“The [Treasury] Secretary shall include. . . a reasonably conspicuous statement that any amounts deducted and withheld from wages. . . are not deductible as charitable contributions for Federal income tax purposes.”
Imagine this scenario: You make $100,000/year. In a fit of complete insanity, you decide that you want to withhold your entire annual salary to pay down the debt. Hey, you can always move in with mom for the next year, right?
Well guess what– Uncle Sam will gladly take your money… and then STILL expect you to pay taxes on the $100,000 that you earned, so you’d have to come out of pocket with an additional $40,000 or so.
Don’t worry, though. The Social Security and Medicare wages are reduced by the amount that you withhold, making you only liable for state and federal taxes. Seems like a good deal, eh comrades?
There are so many things utterly wrong with his piece of legislation, it’s hard to know where to begin other than by saying that such intellectual and philosophical perversion is only capable of springing from unprincipled sociopaths whose sole capability is the destruction of value.
There’s a great quote from Atlas Shrugged that comes to mind which sums this all up:
“[W]hen you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you. . . you may know that your society is doomed.”
We’ve discussed the story of the boiling frog so many times before– a frog, when put into a pot of water and slowly brought to a boil, doesn’t realize that he’s in danger until its too late. I think the boiling frog just got a little hotter. Have you hit your breaking point yet?
Senior Editor, SovereignMan.com
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