Montana Policy Institute Piece, Bill Frezza on Corporations, and Ron Paul's Specific Budget Policy

Big thanks to Nick Schwaderer for getting a piece of mine up at the great Montana Policy Institute today.  Entitled "More Lies from the Lying Class," here is an excerpt:

During a recent “State of the Union” interview with Candy Crowley, White House Senior Adviser David Plouffe attempted to defend his boss’s new jobs plan. Crowley brought up a quote from “never right, yet still trusted” Mark Zandi of Moody’s Analytics, which asserted the jobs plan would be short lived; “"Beginning in 2013, and certainly into 2014, the plan is a drag on the economy because the stimulus starts fading away. So by 2015, the economy is in the same place as now, as if there were no jobs package." Anyone would be fool to listen to Zandi. But like a broken clock, a Keynesian quack can be right at least twice a day. And it doesn’t take a genius to figure out that stimulus spending ultimately runs out and leaves behind the dead carcass of undelivered prosperity.

Even in the face of such common sense, Plouffe doubled down and twisted Zandi’s message to say that “we” must act now to rejuvenate the economy. In a direct appeal to the democrat base, Plouffe warns of massive teacher layoffs and a lack of students being taught myths such as F.D.R. saved capitalism.

When reason fails, fear mongering makes for great cover. Especially when it involves children.

But as Crowley rightly asserts, “his point is that they (the teachers) will still be laid off once the stimulus money runs out.” Plouffe, knowing full well his goose is cooked, gives the viewer two options: take the pain now, or put it off till next election so that he doesn’t get a pink slip next November. He calls it “we can act right now, or not act right now.” My translation is more accurate.

Plouffe, like all bureaucrats in his position, claims that economic growth is coming without a shred of evidence to prove otherwise. He boasts that the Obama’s jobs act will drop the unemployment rate by one percent. Having the Fed print off a few thousand sheets of Benjamin Franklins to pay the unemployed to dig ditches would drop the unemployment rate to 0%; what’s Plouffe’s point? Despite what is taught in college economics classes, jobs don’t represent wealth creation, especially those funded through tax dollars.

Thanks again Nick!

Bill Frezza has a great piece on RealClearMarkets today focusing on the importance of limited liability corporations.  Like most commentators whom posses a big enough brain in their skull to be overly skeptical of some Occupy Wall Streeters (namely of the Marxist variety) that claim to hate capitalism while scheduling marches on their iphones, Frezza takes them to school:

Prior to the invention of corporate structures that allow companies to operate behind legal firewalls protecting third party investors, it was difficult to achieve scale in any business that required large amounts of capital. This may not be an issue for subsistence farmers, independent craftsmen, sole proprietors, closely held partnerships, family dynasties, landed nobility, or the King. But without modern corporate forms that concentrate capital from disparate shareholders, the industrial revolution could not have occurred. And without the industrial revolution most of humanity would still be bound to the land - rising with the sun, going to bed when it sets, and laboring like mules in between.

Utopians may idealize our agrarian roots, but there are good reasons such yearnings are confined to utopians.

First, our ancestors did not flock from the farms to the factories because farm life was so peachy. Voting with one's feet to escape the drudgery of living off the land is a process that continues in developing countries to this day. Progress is all about substituting machines for backbreaking labor. Ban the limited liability corporation and you reverse that process.
Second, a pre-industrial, corporation-free economy cannot support the billions of humans that currently live on planet Earth. Just who would you kill off in order to return to our noble agrarian past? I know an Al Gore-inspired environmental activist who openly wishes a flu pandemic will decimate the human race. Such intellectual consistency in a hardcore progressive is as rare as it is horrifying.

This is in the vein of one of my all time favorite quotes from Ludwig von Mises in regards to the Industrial Revolution:

The factory owners did not have the power to compel anybody to take a factory job. They could only hire people who were ready to work for the wages offered to them…. Their only refuge was the factory. It saved them, in the strict sense of the term, from death by starvation.

Not only does the quote embody both the principles of self ownership and cooperation, but it also demonstrates how basic standards of living by today's measures were only accomplished through participating in the process of production.  One could "live off the land" in brutal, back breaking conditions, or toil in a factory for a higher standard of living.  For those who demonize deplorable work conditions as the by product of evil capitalism, they never had the "luxury" of experiencing such an agrarian lifestyle.  Their mind would most likely change if given one day to relive such paradise.

Frezza is a phenomenal writer and makes the great case for capitalism but on any random peruse of libertarian blogs, one notices some who are reluctant to embrace "limited liability corporations" as they seem them as products of the state.  Without government legislation "creating" them, they simply wouldn't exist or so it's argued.  Like any advocate of statism who thinks schools, roads, prosperity, etc. wouldn't exist without the government first pillaging taxpayers to pay for them, they are simply wrong for denying the market's ability to replicate such a phenomena as "limited liability corporations" without the use of coercion.  Murray Rothbard explains:

"These corporations would not, of course, need any charter from a government but would "charter" themselves in accordance with the ways in which their owners decide to pool their capital.  The could announce their limited liability in advance, and then all their creditors would be put amply on guard.

There is a strong a priori reason for believing that corporations will be superior to cooperatives in any given situation.  For if each owner receives only one vote regardless of how much money he has invested in a project (and earnings are divided in the same way), there is no incentive to invest more than the next man; in fact, every every incentive is the other way.  This hampering of of investment militates strongly against the cooperative form.

In brilliant prose as always, Rothbard shows just how beneficial and democratic (in the non-violent, voluntary sense) corporations actually are and how they can be perfectly compatible with libertarian principles.  Just like how government legislation doesn't "create" anything, limited liability corporations are not creations of the state but another mechanism for pooling risk and capital together brought about through the desire to produce and the ingenuity of human intelligence.

Speaking of intelligence, check out Ron Paul's newly proposed detailed plan for an immediate cut in $1 trillion of federal government expenditures, via Politico:

Paul will elaborate on the plan during an afternoon speech in Las Vegas ahead of Tuesday’s debate. He’ll say that his plan for $1 trillion in cuts will create a balanced federal budget by the third year of his presidency.

Many of the ideas in Paul’s 11-page “Plan to Restore America” are familiar from Paul’s staunch libertarianism, as well as tea party favorites like eliminating the departments of education and energy. But Paul goes further: he’ll propose immediately freezing spending by numerous government agencies at 2006 levels, the last time Republicans had complete control of the federal budget, and drastically reducing spending elsewhere. The EPA would see a 30 percent cut, the Food and Drug Administration would see one of 40 percent and foreign aid would be zeroed out immediately. He’d also take an ax to Pentagon funding for wars.

Medicaid, the children’s health insurance program, food stamps, family support programs and the children’s nutrition program would all be block-granted to the states and removed from the mandatory spending column of the federal budget. Some functions of eliminated departments, such as Pell Grants, would be continued elsewhere in the federal bureaucracy.

And in a noticeable nod to seniors during an election year when Social Security’s become an issue within the Republican primary, the campaign says that plan “honors our promise to our seniors and veterans, while allowing young workers to opt out.”

The federal workforce would be reduced by 10 percent, and the president’s pay would be cut to $39,336 — a level that the Paul document notes is “approximately equal to the median personal income of the American worker.”

Paul would also make far-reaching changes to federal tax policy, reducing the top corporate income tax rate to 15 percent, eliminating capital gains and dividends taxes, and allowing for repatriation of overseas capital without tax penalties. All Bush-era tax cuts would be extended.

Wow, I have to say I am genuinely impressed.  I wasn't expecting Paul to come out with a firmly detailed plan such as this till later but it shows he clearly has his eyes on the prize.  His plan makes clueless Cain's 9-9-9 plan look like a pile of puke.  The reduction of the president's salary is still $39,336 too high but it makes a great point: if public service is really about "serving the public and putting its needs above your own prosperity" than it shouldn't garner any sort of above average pay.  It's not like the position doesn't come with free lodging, security, food, and babysitting already.  This is gonna make Nevada' debate great to watch.

Update- The man speaks:

Funny, I don't see any other candidates speaking with such young and attractive females in the background.