Recently John Stossel aired a special show about freeloaders. Now, I am a huge fan of Stossel and consider myself a fellow Libertarian as well. During his segment he brought up the freeloaders who take advantage of the program www.youwalkaway.com where individuals strategically default. Stossel calls this “immoral” and calls those doing it “freeloaders”. Normally I agree with John, however he has gone back to his liberal ways worrying about the greater good and moral obligations to society.
Lets consider what obligations a home owner has, morally. When a mortgage is signed, it is a contract. Now to a libertarian, a contract is sacred and crucial to property rights. By agreeing to a contract, two parties agree to terms. Now consider a home mortgage contract, basically the buyer of the home agrees to paying back the loan or risk damaging his/her credit and potentially having a deficiency judgment placed against them in the event of defaulting. They also agree that if they default, there is a formal process that will be adhered to and eventually they will vacate the property. Nowhere in this agreement, is there any place that says “you have a moral obligation to pay as a debt slave for life” nor does the contract state “you must pay in order to keep the neighborhoods value from falling”.
Stossel notes that there is a moral claim on society to be a debt slave and to pay a mortgage regardless of how poor of an investment it could be. This is liberal hogwash. A home owner is only expected to do what is morally best for themselves and their family. Ayn Rand would never expect a home owner who has lost 150k in a losing bet, to not walk away. Why would an individual not have a greater moral obligation to their best interest, not societies? A real libertarian view would be to look at this as any other business decision and a SWOT (Strength Weakness Opportunities Threats) analysis would be done. Consider if a business opened a new location, purchasing the land and building a property. If it threatened to be a very bad long term investment, wouldn’t the business simply analyze the situation and make a smart decision?
The moral hazard in this situation is the Lender and Investor. Lets consider a scenario; assume we have an investor who is willing to give $1,000 dollars to a lender. The investor must perform the due diligence to ensure the investment they are making matches the return they expect. Now the lender is responsible for making a loan that meets the investors guidelines. They must morally make an honest loan that meets the investors criteria. So then finally we have a borrower, who must meet the criteria of the investor who will be risking their capital.
So finally, let’s assume the investor says, “you can lend my $1,000 dollars to anyone you want, I am unconcerned about my investment”. So the lender finds a borrower, who just so happens to be highly addicted to crack. The lender warns this “highly addicted to crack” individual that if they do not repay this loan, their credit will be negatively impacted. The lender also agrees to lend the entire $1,000 dollars at a very low interest rate of 6%. Even better is the investor agrees to this term in addition to the crack user and the lender both agreeing. So not much time goes by and the crack user defaults. Is this a shock? No; we expected it. This should never happen in the real world, but is an example that helps to support my conclusion, where the real “moral” hazard is found.
The problem with the scenario above is that the investor did not perform the due dilegence. In a free market driven society that would never happen. Investors would never risk so much money on very risky loans. The real moral problem however, is that investor is the US taxpayer. However, this “true” investor has no say in the risk level. It is Fannie Mae and Freddy Mac as well as other federal loan programs that determine the risk tolerance they will purchase. They have a moral obligation to defend the investors assets. The real problem here is that those agencies are quasi government agencies. The investor that funds them is the taxpayer who have no choice but to say “yes” to it’s terms of lending. A GSE can simply demand more from taxpayers and the Federal Reserve, never worrying about the quality of the investment or borrower because it is not their money at risk.
In conclusion, homeowners walking away represent a completely logical approach. Rather than being a debt slave for life, they choose a wise business decision to cut their losses and follow the contract for which they agreed. Sorry John, I love your work and would work for you in a heartbeat, but I think you missed this one by a bit.
With more Union drama now threatening to kill the sport I love, the NFL, I have read recently about the de-certifying of the Union from the NFL. They are now trying to threaten the NFL owners with the Sherman Anti Trust Act bringing in the government to decide if the NFL enjoys a Monopoly on Football.
I have argued this many times, and I will put this out there one more time. Of course if you drill down with a subject you will say someone has a monopoly on something. Consider Burger King, and it’s Franchises which is exactly the same as the NFL, one corporation with Franchise Owners. Does Burger King have a monopoly on Whoppers? Sure I suppose, but as a consumer I have the choice to eat an unlimited menu of things from nearly limitless places.
So how can the NFL be accused of being a monopoly? What are they a monopoly of? The definition of a monopoly is : a commodity controlled by one party . So is Payton Manning the commodity being controlled. There is only one Payton Manning, so how could there ever not be a monopoly. There is only one Mark Zuckerberg who is a flat out genius, but Facebook has the monopoly on his talents.
The NFL controls no such commodity, I have the ability every day to go out to the field and play with other friends. I could organize my own league and compete at a professional level. The only thing the NFL has managed to win over is the Fans through excellent product marketing, and more importantly the product they put out. That product is entertainment. For 3 hours at a time you have the choice to go to the park, watch cartoons, listen to music, download whatever you do. All those things are competing for your entertainment. This is not the same as a single company having full control over the oil of the world. Nobody needs NFL Football we just love it, we need oil, and don’t have substitutes.
The NFL Union is not unlike every other Union, it is a parasite with no bounds. They are not fighting for benefits to those who are injured and can’t walk and do not have good health insurance, no they are fighting for millions more in their pockets. Now I do not blame them, I am a capitalist, but as soon as you go and cry mommy and get the government involved, I hate you. Tom Brady is my guy on the field, but suing a league that has made this man millions, helped create hundreds of thousands worth of jobs, you sue them and bring in government who will threaten to break up the NFL, sorry Tom. You lost me.
Ok so that headline is a little harsh. I do not want to fire all Public Employees. I do however want to fire 98% of them. I would like to keep all judicial employees as this is one required and useful function of government. I would keep a few other positions, but we need to gut the majority of positions before our lords in the Public Unions kill their host.
Here is an interested post in the USA today showing just some of the numbers of how much Public Employees are over paid.
Job comparison
Average federal salaries exceed average private-sector pay in 83% of comparable occupations. A sampling of average annnual salaries in 2008, the most recent data:
Job Federal Private Difference Airline pilot, copilot, flight engineer $93,690 $120,012 -$26,322 Broadcast technician $90,310 $49,265 $41,045 Budget analyst $73,140 $65,532 $7,608 Chemist $98,060 $72,120 $25,940 Civil engineer $85,970 $76,184 $9,786 Clergy $70,460 $39,247 $31,213 C omputer, information systems manager $122,020 $115,705 $6,315 Computer support specialist $45,830 $54,875 -$9,045 Cook $38,400 $23,279 $15,121 Crane, tower operator $54,900 $44,044 $10,856 Dental assistant $36,170 $32,069 $4,101 Economist $101,020 $91,065 $9,955 Editors $42,210 $54,803 -$12,593 Electrical engineer $86,400 $84,653 $1,747 Financial analysts $87,400 $81,232 $6,168 Graphic designer $70,820 $46,565 $24,255 Highway maintenance worker $42,720 $31,376 $11,344 Janitor $30,110 $24,188 $5,922 Landscape architects $80,830 $58,380 $22,450 Laundry, dry-cleaning worker $33,100 $19,945 $13,155 Lawyer $123,660 $126,763 -$3,103 Librarian $76,110 $63,284 $12,826 Locomotive engineer $48,440 $63,125 -$14,685 Machinist $51,530 $44,315 $7,215 Mechanical engineer $88,690 $77,554 $11,136 Office clerk $34,260 $29,863 $4,397 Optometrist $61,530 $106,665 -$45,135 Paralegals $60,340 $48,890 $11,450 Pest control worker $48,670 $33,675 $14,995 Physicians, surgeons $176,050 $177,102 -$1,052 Physician assistant $77,770 $87,783 -$10,013 Procurement clerk $40,640 $34,082 $6,558 Public relations manager $132,410 $88,241 $44,169 Recreation worker $43,630 $21,671 $21,959 Registered nurse $74,460 $63,780 $10,680 Respiratory therapist $46,740 $50,443 -$3,703 Secretary $44,500 $33,829 $10,671 Sheet metal worker $49,700 $43,725 $5,975 Statistician $88,520 $78,065 $10,455 Surveyor $78,710 $67,336 $11,374 Source: Bureau of Labor Statistics, USA TODAY analysis
I am really not a fan of the above chart, because it may be implied that if we lower salaries to the private sector levels, it justifies having the positions. This is far from the truth. Consider that most public employees really are not needed. They do jobs that others could do at a fraction of the price.
The solution should be to privatize as many functions of government services as possible. This will lower the cost to taxpayers the real heroes of our country. Services should die on their own merit if they can’t survive on it.
Many on the left feel it is the duty of government to pay a fair wage, this idea that digging holes and then filling them in just to provide work is the worst economic model. If this did work every poor country would have created all the jobs needed by now. Wealth is all about buying power or purchasing power, the less something costs the more someone can purchase, by driving down costs, we are creating wealth instead of destroying it. Government requires everything pay prevailing wages which do not exist to ensure things cost more than they should.
In return the taxpayers get less for their money. It is time to Fire All Public Employees. The country would be a much better place.
The tragedy down in Mexico is all over the news, and so far I have yet to hear why the heck are ICE agents even in Mexico? Last I checked Mexico is its own sovereign country, and are not part of the US territory. I don’t have a position on this yet, but I am trying to figure out what role are they supposed to be playing down there?
The War On Drugs has been a disaster, arming the enemy with the money and profits to become dangerous. The government can no longer protect us from the black market the government has created.
This is what it should mean to be a republican. Mitch is an American hero, and should be considered by everyone for president. Check out Mitch Daniels 2011 State of the State address.
Buy your silver soon.
For all of you who had hoped the US would be saved by the results of the last election, I am sorry to say you have been betrayed. Republicans have voted and passed the US Food Safety bill randomly on Sunday. The guys who we are hoping will shrink government just grew it even more. The US has the finest food system in the world, yet Republicans in the name of big government do it again, the join the evil liberals in destroying the American Dream.
Say goodbye to the mom and pop farmer, local farms. The fields have just been handed over to Walmart and other major corporations who will be the only ones that can comply and kiss the governments pinky ring.
I am always scouring the Huffington Post to see where the next attack on freedom will be launched from. We have all seen and heard about Net Neutrality and the crazy liberals who for some reason think government censorship makes sense. Now the next step in internet censorship comes into play.
Together with word this week that the Federal Communications Commission will be voting on net neutrality rules comes news that the United Nations is mulling new efforts that could shape Internet regulation.
“At a meeting in New York on Wednesday, representatives from Brazil called for an international body made up of Government representatives that would attempt to create global standards for policing the internet – specifically in reaction to challenges such as WikiLeaks,” wrote IT News.
The UN has announced that a “Working Group on Internet Governance,” made up solely of member states (governments), will consider changes to the Internet Governance Forum (IGF), a “forum for multi-stakeholder dialogue on public policy related to Internet governance issues, such as the Internet’s sustainability, robustness, security, stability and development.”
The UN is now considering ways to censor the internet. Could there be any thing worse than US taking its orders of internet freedom from China Russia, as well as all of those freedom loving countries.
Look out, liberals are always trying to take something great and destroy it. They have done that to US currency, US manufacturing, and everything else that wrong with this country.
By Andrew Ward
Senator Coburn’s office recently compiled a document that outlines even more reasons why we ought to be opposed to S.510, the grossly misnamed Food Safety and Modernization Act.
The senator first touches on why more regulation is redundant and hurtful to food safety:
Specifically, GAO found that in 2003, FDA and USDA activities included overlapping and duplicative inspections of 1,451 domestic food-processing facilities that produce foods regulated by both agencies… This overlap was evident in the egg salmonella scare. The Wall Street Journal reported (USDA Graders Saw Bugs and Trash at Egg Producer; Didn’t Tell FDA) that U.S. Department of Agriculture experts knew about sanitary problems at one of the two Iowa farms at the center of a massive nationwide egg recall, but did not notify health authorities.) USDA inspects farms and gives eggs their “Grade A” label, while the FDA technically is tasked with the safety of the final egg product.
In other words, it was over-regulation, not lack of regulation, that led to the salmonella scare.
The document also explains that S.501 would “require the Environmental Protection Agency (EPA) to participate in food safety activities and would require the Centers for Disease Control and Prevention (CDC) to enhance its participation in food safety activities.” Do we really need the EPA and CDC involved in our breakfast, too?
The document closes with a list of a few troubling regulations that should give any sensible lawmaker pause. Here’s their take on so-called performance standards:
The bill gives the Secretary the authority to “issue contaminant-specific and science-based guidance documents, action levels, or regulations.” The way the bill is written the authority is extremely broad and could be used by FDA to issue very specific and onerous regulations on food facilities, without even the normal rule-making and guidance process FDA food regulations normally go through.
A big thanks to Senator Coburn’s office for a well-researched document that is certainly worth sharing to those who care about food freedom, and especially to those congressmen who think more legislation is what’s needed to make your dinner safer.
Kentucky attorney general and Senate candidate Jack Conway runs a TV AD that deceitfully criticizes his mostly libertarian opponent, Rand Paul, for doubting the wisdom of laws that ban gambling, or require motorcycle helmets.
As usual, David Boaz has interesting thoughts about that at CATO’S BLOG.
In response to a question about whether he favors more gambling, Paul said he opposes legislating morality and then added: I’m for having laws against things that are violent crimes, but things that are non-violent shouldn’t be against the law.
The ad features that last sentence and then cuts rapidly to uniformed sheriffs … The sheriffs suggest that Paul wants to legalize selling drugs to a minor, mortgage fraud, burglary, theft, and promoting prostitution …
Paul might have been been wiser to use a term like victimless crimes or actions that don’t violate anyone’s rights in discussing things that…
…shouldn’t be against the law. Obviously burglary and theft violate rights and have victims, while gambling and riding a motorcycle without a helmet don’t. … Paul was making sense in 2008 when he said that a free society shouldn’t punish people who aren’t harming other people. And the attorney general of the Commonwealth of Kentucky should be embarrassed to broadcast such a dishonest twisting of Paul’s statements.
… Conway did not mention any of the normal victimless crimes, not gambling or helmetless riding, not pot smoking, not even pornography. He apparently thought he could only win this issue by claiming that Rand Paul held the ridiculous position that burglary, theft, and fraud shouldn’t be illegal. Let’s give two cheers for the social progress that his decision reveals.
