A Columbus Day Story: The Great Economic and Political Battle of Private Sector Taxpayers Versus Government Employee Unions
As I sit writing this commentary on Columbus Day, it occurs to me that I've worked all day. On a holiday. From 5 AM until 10 PM. I've run my business; run my Vice Presidential campaign; done numerous media interviews; and now I'm spending my night writing a political commentary. These are things you do when you're an entrepreneur with lots of ambition and no guaranteed paycheck each week. You earn your keep. From morning until night, you make phone calls, send emails, attend business meetings- anything and everything to survive and THRIVE. I know my friends in the private sector understand exactly what I'm talking about. When you work as a business owner, or independent contractor, or in sales (real estate, stocks, bonds, insurance, mortgages, automobiles), there is no such thing as an “off day.” We work early mornings, late evenings, weekends, holidays, birthdays, anniversaries, during our kid's ballgames and dance recitals. And the thought of “early retirement?” Well it's just not in the cards for ambitious entrepreneurs. If you're employed in the private sector, I know you understand exactly what I'm talking about. But if you're a federal or state employee, this kind of work schedule is something you can't even begin to understand. And that is exactly the problem. A big problem. A cancer upon our nation. It's a big problem for all of us- you, me, taxpayers, cities, states, our entire country. We are all in grave danger.
Because there is a war brewing in this country. I'm not talking about the Iraq war. Nor the Afghanistan war. Nor the threat of any war with Iran. I'm talking about an economic war that threatens to bankrupt our cities, our states, and our country. A war that threatens to burden our children and grandchildren with debt they can never hope to pay off. It is a war of government employees and their unions, versus all of us in the private sector.
We have created a monster- a privileged class of government employees who think they are entitled to a better deal than any of the rest of us- the taxpayers. They work for us, yet they think they're better than us. They act as if we work for them. They think that while the country is in recession, they deserve ever-higher salaries, pensions and benefits.
We are a nation in the midst of severe recession. Business is down everywhere. Ask any small businessman or woman- sales are down a severe 30% to 40% (or worse). Car dealerships are seeing 50% or higher drops in revenue. America is in crisis. Businesses are drastically cutting budgets and laying off millions of employees. Yet guess who isn't cutting? Guess who isn't laying off employees? Guess who isn't reducing salaries or pensions or benefits? I'll give you three guesses. Government. Government. And more government. Local, state and federal governments want more money during the worst recession of our lifetimes. Bigger budgets. Higher taxes. More money spent on education (which translates to higher teacher salaries). More employees. Higher cost of living increases. Bigger pensions. More health benefits. Can you even imagine the gall?
My business revenues are down 30% to 40% and they want increases? Government is still hiring, while the rest of us are laying employees off? Government is asking for budget increases, while the rest of us are busy cutting budgets? It's obvious that government employee unions want to bankrupt America the same way that auto worker unions destroyed the entire auto industry. The same way that auto unions wrecked the biggest companies in the world- Ford, Chrysler and GM. The same way they bankrupted the economies of the city of Detroit and the state of Michigan.
It is no coincidence that Michigan now has the single worst economy in these United States of America. They won't rest until all of us in the private sector slave away 9 months a year to meet all their demands, to pay all their obscene salaries and pensions and health benefits. They won't rest until the whole America is one big decaying, depressed, economic disaster like Detroit.
If you doubt me, please Google the Los Angeles Times cover story of Sunday 6/10/07 on this economic tsunami headed our way. The normally ultra-liberal L.A. Times reports that California will surely go bankrupt sometime in the near future under the weight of unfunded public employee liabilities. The Times reports that health care benefits alone for retired California public employees will grow from $4 billion today to $31 billion by 2020. That's just the healthcare! There is no possible way to pay for it all. It is a looming disaster for every state in the nation. But the bleeding-heart liberal, “People's Republic of California” is the perfect test-tube, poster-child for the disaster headed our way.
That article was “the canary in the coal mine.” It was written over a year ago. Today Governor Arnold Schwarzenegger is pleading with the federal government to loan California $7 billion dollars- or the state will go bankrupt. The chickens have come home to roost. You can't pay state employees 40% higher wages than other employees in the private sector- at least not if you want to survive economically. California now has the highest state income taxes in the country. Those two are no coincidence. In order to pay one privileged class a "decent living wage" (as liberals like to call it) you have to redistribute wealth away from those who actually earn it (by risking their own money and by creating actual jobs). In other words someone has to pay for all these big salaries and pensions for government employees- so taxpayers get fleeced. The result is that successful business owners (and anyone with assets) are leaving (or should I say escaping) California in droves. Tax revenues are therefore going down, not up, due to this exodus of brains and talent to low tax states like mine- Nevada.
The problem exists all over the country- although on a smaller scale (simply because California is that much bigger, more liberal, and obviously more ignorant of simple mathematics). The L.A. Times article entitled “Public sector reels at retiree healthcare tab” reports that local governments will soon be overwhelmed. "It will be impossible to meet their obligations. The only possibilities are bankruptcies, or a death by a thousand cuts in services to the public." That's a direct quote from the ultra-liberal Los Angeles Times. And that prediction of being overwhelmed “soon” is obviously referring to today. My prediction is that over the next 4 years, hundreds, if not thousands of cities throughout the USA will declare bankruptcy in order to get out from under their government employee union contracts. Bankruptcy will give them the leverage to renegotiate more reasonable (some would say “sane”) deals with government employees.
The Times quotes nonpartisan studies that report wages for state and local government workers are 40% higher than private employees, and retirement and fringe benefits are a whopping 60% higher. The liberal media bombards the public nonstop about the "divide between rich and poor in America." But this is truly the secret "fairness divide" the liberal media has up until now completely ignored (or hidden): the obscene compensation and benefits lavished upon public employees (who happen to vote virtually 100% Democrat just like the media), and the divide between employees of the public sector, and taxpayers of the private sector.
Why do public employees deserve so much more compensation than those in the private sector? Based on what? Small business owners like myself take massive risks, often put their life savings and homes on the line as “personal guarantors,” create jobs, make payrolls, pay millions in taxes (payroll, state and local, federal, sales taxes), and pay for health insurance for our employees. We make it possible for others to live the American Dream. And of course the massive taxes that we pay, make it possible for government to keep hiring, to keep over-paying government employees, and to keep expanding their bloated budgets.
To do all this, we in the private sector work weekends, holidays, birthdays, anniversaries, and overtime for no extra pay. We never get to retire early. I have yet to meet a business owner retired at age 55. Not one. Yet we in the private sector have no guaranteed paychecks (actually we often pay ourselves nothing in order to make employee payrolls when things are tight), no tenured jobs for life, no pension of any kind, and no one to pay our health insurance after retirement. Heck, we have no idea if we can ever retire.
Why do public employees deserve so much more than the rest of us? Why do they get to retire early on an obscene pension of 80% of their last year's salary for life? Why do they deserve health care for life, when the rest of us in the private sector don't?
Why do they deserve to get the day off for Columbus Day and weekends and sick days when the rest of us don't? There simply are no “sick days” when you own your own small business- you either show up or you lose your customers (and your business). There is no time to get sick when you own your own business- so you just don't. I haven't missed a day of work in 25 years. Why is this gigantic divide between public sector employees and private sector taxpayers “fair”? The answer of course is it is not. And it is time for a citizen revolt to end this travesty of justice- simply because the rest of us can't afford to pay for a privileged class anymore.
Tens of millions of American taxpayers are going to start asking these crucial questions: First, why should we in the private sector take all the risks, work 14 hour days (including weekends and holidays) and labor under the burden of ever-higher taxes, so we can pay for the lavish salaries, pensions and benefits of public service employees? Secondly, why are government offices closed on weekends and on holidays, when we often work on those days? Third, why should we slave away at work until the day we die, so we can pay for the early retirements at age 55 or 60 of public employees who get to play golf for the rest of their lives with pensions of 80% (or more) of their last annual working salary, plus full health care for life?
Why should the private sector taxpayers be stuck with this burden? Who are these government employees that they should be paid so much better than the typical taxpayer? No one is saying that they don't deserve to be paid a good wage. What we are saying is simply that it should be in line with what private sector employees with similar jobs receive. And when times are tough and the rest of us in the private sector are cutting budgets and laying off employees, government should be doing exactly the same thing.
The real issue is not whether the overwhelmed taxpayers and small business owners can pay for it or not- we cannot. The real issue is what happens when the unfunded liabilities come due? California, and the other 49 states are facing bankruptcies and economic crisis of epic proportions. Meanwhile the real heroes of the American economy- the job creators and risk-takers called small businesspersons and entrepreneurs- will be forced to work from January to October just to pay the 70% to 80% taxes that will be necessary to save this country from economic disaster.
Can that happen? It already has- it's called France. That's why our American economy is so successful year after year when compared to the stagnant French economy. It's because America encourages and rewards entrepreneurship, ambition and personal responsibility; while France encourages a welfare state where virtually everyone has a guaranteed job, guaranteed medical care and guaranteed pension for life. The result is high unemployment, high taxes, and shared misery for all. Unfortunately California is becoming our American version of France.
Brave politicians (if there are any left) must deal head-on with this looming economic crisis now, before public employee unions destroy the greatest economy in world history and bleed taxpayers and private industry dry. History proves that great democracies are always destroyed when too many citizens believe that they are entitled to feed off the public dole. When 1 of 5 (or more) citizens works for the government; and many more live off companies that do business with the government; and even more citizens depend on government handouts; our economy is in deep trouble, our way of life is threatened, our taxpayers are drowning in debt.
Worst of all, it is quite simply a recipe for political bribery and extortion (“Pay me more, increase my pensions and benefits, and I'll vote for you, support you, contribute to you, and my union will go door to door on your behalf”). Why should government employee unions that donate millions of dollars to politicians, then be allowed to negotiate with those same politicians for obscene pay raises? Why should one class (private sector taxpayers) shoulder all the burden of another class (entitlement junkies and government employees)?
Our Founding Fathers created our constitution to keep the government out of our lives. That constitution clearly gives the power to the people- not the government. But if a majority of Americans live off of, and work for the government, then the tables have turned. Those same people that work for the government; depend on the government; and pay their bills and mortgages with government paychecks; therefore desperately need the government to grow ever-larger (to protect their jobs, benefits and entitlements).
Afterall, the more government keeps hiring, the more employees are available to join the government employee unions. And therefore more union members available to contribute to union political action funds; to vote for union-friendly politicians; and to man phone banks or walk door to door to campaign for union-friendly politicians. These same union organizers and “community organizers” (as Obama calls them) can therefore be counted on to rig the system to continually fleece the taxpayers and benefit themselves- with the full cooperation of the corrupt politicians they helped elect.
I'm sad to say that this war being waged today is all about the same issues as the American Revolution of 232 years ago: freedom; excessive taxes; and taxation without representation. But today it isn't American peasants versus British soldiers. Today it is a battle of government employees and government employee unions, versus the rest of America (the taxpayers who create all the jobs and pay all the taxes). Today it is private sector, versus public service employees. No lives are being lost in this war. But taxpayers are fighting for our economic lives- and the future of our children. There is no blood spilled. But taxpayers are sacrificing blood, sweat and tears to toil all day, every day in order to pay the heavy taxes required to feed this privileged class.
When the ultra-liberal Los Angeles Times makes it a front page story, the disaster is bigger, closer and more devastating than we ever imagined. The time to act is now- before the people working for and depending on government outnumber the people that depend on ourselves and want government out of our lives.
My Columbus Day is now over. I've been working for 17 hours. I'm going to sleep. I have to be up at 5 AM again tomorrow…and the next day…and the day after. Remember, I have 4 young children, a big mortgage, no guaranteed weekly paycheck, no pension, no government guaranteed job for life, and no early retirement on the horizon. For me, it's “off to work I go” for the next 30 years (or more). For those of us who aren't members of the privileged class, there is no rest.
Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: www.ROOTforAmerica.com
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( 3 / 588 )There were no winners in the latest Presidential debate. But there was a clear-cut loser: the American taxpayer. While Barack Obama and John McCain argued strongly about a multitude of issues, they never even discussed or debated (or even commented) on the biggest bailout in American history. You know…that $700 billion dollar taxpayer rip-off that was so necessary to our economic survival that in the days since it passed, the U.S. stock market has literally crashed.
Bush, McCain, Obama, Biden, Pelosi, Barney Frank- they all joined hands and cried wolf. “Without the bailout, our economy is doomed, our stock market will plummet” they shrieked. So what do they say now? The market has plummeted hundreds of points SINCE the bailout was approved. We are in a free fall and it is obvious the vote is in: the average American stock investor has rejected the bailout. If I'm not mistaken, I thought I heard all of our politicians hysterically screaming in unison that only a bailout could prevent a stock market collapse. Yet now it appears the bailout is causing a stock market collapse. And to add to the misery, we have just thrown away another $700 billion of taxpayers' money to boot- the worst of all possible out-comes. The moral to the story is that anytime politicians hold hands, agree and sing Cum-ba-ya, grab your wallet because we're all about to get violated.
Yet in a critical national TV debate, with the whole nation watching, neither candidate thought to even mention the investor reaction to the bailout. Not a word. Not a thought. I guess if you pretend it never happened, it will all go away. As a matter of fact, all I heard from the two Presidential candidates (otherwise known as tweedle-dee and tweedle-dumb) in reaction to the economic crisis of a lifetime caused by government intervention, was MORE government intervention. Obama wants hundreds of billions of dollars worth of new spending- paid for by raising taxes on successful people and small business owners who create jobs. A surefire recipe for disaster.
And McCain isn't happy spending $700 billion through a massive government intervention. He announced a new $300 billion government intervention to aid homeowners. Where does it end? We all know California will now demand $7 billion (or more) from the federal government or threaten bankruptcy. Other tax and spend bastions of liberal thinking like New York, Massachusetts and Barack's beloved big-government, big spending Illinois cannot be far behind. Soon all of America will be on welfare- the people, the biggest corporations, and now even the states themselves. We're just one big, happy, bankrupt family.
Here's the crucial debate point that Obama and McCain both avoided. What did a few hundred billion dollars in pork and outright bribery have to do with a bailout that was supposed to save the U.S. economy? What does giving millions in tax breaks to rum producers in Puerto Rico do for taxpayers on Main Street? How does giving away millions of dollars to companies in American Samoa help taxpayers? Or how about giving away millions of dollars to the manufacturers of wooden arrows? Sounds like somebody has a wooden arrow manufacturer in their Congressional district. I'll bet that Congressman will be getting more than a turkey for Thanksgiving.
But worst of all, why was a provision added to the $700 billion dollar bailout bill that gives the I.R.S. the right to violate and entrap American taxpayers? Why was it “necessary” to give the IRS the right to spend taxpayer money to set up undercover sting operations? You mean imprisoning more American taxpayers on tax evasion charges will help prevent an economic meltdown? Really? Silly me- I just don't see the connection.
But wait- it gets better. The same bailout bill that had Nancy Pelosi smiling and laughing and hugging Congressmen and women like she'd just saved the world, also violates the privacy of American taxpayers. Not only does it allow the IRS to set up undercover operations to entrap our own citizens, it allows the IRS to now share your personal tax information with any federal, state or local agency. This isn't a bailout, it's a hold up. The American taxpayer is being gagged, robbed and violated by multiple government entities. First Congress takes the taxpayers' money without asking our permission, to pay for a socialist bailout of their biggest contributors on Wall Street…then they give the IRS permission to entrap us, imprison us and legally violate our privacy.
I have a better idea. I think my fellow taxpayers might really appreciate this suggestion. Here is my bailout proposal to Congress: Instead of asking taxpayers to take all that risk, and to guarantee $700 million in bad loans, let's put up current and future Congressional salaries, pensions and health benefits as the guarantee. Then let's see how many members of Congress want to proceed with the bailout? I'm guessing none.
Now there's an idea you didn't hear from Obama or McCain at the Presidential debate. There's an idea you'll never hear from two United States Senators (or any member of Congress). Why? Because they are only confident (or arrogant) when giving away YOUR money, not theirs. That's the kind of creative thinking that American voters are missing by not including Libertarians like Bob Barr and Wayne Allyn Root in the debates.
Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: www.ROOTforAmerica.com.
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( 3 / 1136 )After watching the Vice Presidential debate tonight, I have several opinions to share. I have a rather unique perspective- I'm the “other guy” not in the debate. I am the Libertarian Party Vice Presidential nominee. Now I know why I wasn't invited- the two parties are so much alike, having me on that stage would have exposed them as the fakes they are. There is so little difference between the 2 major political parties, it was painful to watch as they tried hard to look different. But I digress. First let me analyze the winners and losers. Then I'll get to the good, bad and ugly.
As far as winners- the clear-cut winner was Governor Sarah Palin. First, because expectations were so set so low. She did a very credible job- one that far surpassed what was expected of her. Second, because the biased liberal media once again has proven its own worst enemy. The media tried so hard to create the impression of Palin as being unqualified and “out of her league,” that they made her the big underdog. Palin more than rose to the occasion. What the media fails to understand is that America loves an underdog. The more the media belittles Palin, the more America (especially middle America) will rise to her defense. Third, the intellectual elite of this country thinks far too much of themselves. The pompous, arrogant “Beltway Insiders” crowd thinks that no moose-hunting, hockey mom and beauty queen contestant from the University of Idaho can ever debate them on a national stage. To the contrary, middle America loves to see one of their own do battle (and win) versus an elite D.C. establishment-insider like Senator Joe Biden. Most Americans- if given a choice- will always root for a Sarah Palin over a member of the millionaire boys club.
Palin lacks the U.S. Senate pedigree, law degree, or the D.C. Beltway credentials of Biden, but she has Reaganesque-like charm, charisma and middle American values. She also has something that even a brash New Yorker like me appreciates- CHUTZPAH. Sarah, in an “aw shucks” kind of way, is more confident of a speaker and debater than any 5-term United States Senator. Like Reagan, she knows how to connect to her audience- soccer moms and NASCAR dads (or as she calls them “Joe Six Pack”).
More than any other politician in the country, I understand why McCain took the gamble of a lifetime to choose Sarah Palin. She is a female me! We're both unusual non-traditional politicians. I speak often of being a small businessman, home-school dad, S.O.B. (son of a butcher) and citizen politician, from a far Western frontier state like Nevada- where we love guns and hate taxes. Sarah talks of being a small-town hockey mom who hunts, fishes and shoots moose, from a far West frontier state like Alaska- where they love guns and hate taxes. We both come from humble blue-collar beginnings- my dad was a butcher, my mom a homemaker. Her dad was a teacher, her mom a homemaker. We both speak often about our beliefs in smaller government and more power to the people. We are both family-oriented with long-lasting marriages and large families- Sarah has 5 children, including a new baby; my wife Debra and I have been blessed with 4 children, including a new baby. We're both young, enthusiastic, and passionate spokespersons for our political causes. We both get our supporters pumped up with enthusiasm. We are both proud of our lack of connections to Washington D.C. and fancy-pants lawyers or lobbyists.
And we both have a signature line that ties into who we are and where we're from- Sarah talks of the difference between hockey moms and pit bulls- lipstick. I talk of the big difference between my hometown Las Vegas and Washington D.C.- in Vegas the drunks gamble with their own money!
McCain sensed in the “Palin style” what I've understood for a long time: America is looking for a hero, an ANTI-POLITICIAN. Someone who is not a lawyer; not an elitist; not an intellectual; who understands middle America and small town values; who will govern with common sense; who wants to give the power back to the people- NOT the lobbyists and corporate interests. So I say BRAVO to Governor Palin for a job well done. You “get it” in a way so few politicians do (or ever have).
But that is where my compliments end. And that is also where our similarities end. You see Sarah is much like me when it comes to “style.” But when it comes to substance and reality, not so much (as Sarah would say). You see I'm the real thing. I'm a Barry Goldwater-loving, anti-government, anti-tax rebel who despises politicians, lawyers, lobbyists, government spending, earmarks, waste and corporate welfare.
Read my lips: I will NEVER in my lifetime support a tax increase- taxes are already far too high. I pledge to lower taxes, and oppose any attempt at a tax increase. How's that for putting a bold promise in writing? Etch it in stone- I will NEVER support a tax increase. When it comes to spending, I join great fiscal conservatives like Barry Goldwater and Dr. Ron Paul in playing the role of “Dr. NO”- I pledge to oppose any and every spending increase that is not authorized by the constitution. Government spending is already far too high. I will only vote (and fight) to lower government spending.
Governor Palin is not an anti-politician. She's been a politician for 13 years now. She is not against tax increases- she has in fact supported tax increases. She is not against earmarks- as Governor of Alaska she has requested more earmarks (per capita) than most any other Governor in America. She is not against government spending- while she did cut some spending out of the budget, she also signed the biggest budget in Alaska history into law. She was not against the Bridge to Nowhere- she was actually for it, before she was against it. After it was killed by public opinion, she actually kept the federal money allotted for the infamous bridge. And unlike me (a home-school dad)- she certainly is no fighter for parental freedom and school choice. To the contrary, she has publicly denounced vouchers in speeches in front of Alaska teachers unions. So it appears Sarah's “citizen politician” image is just that- an image portrayed by a skilled actress.
The Vice Presidential debate was most shocking to me for what it exposed- a 2 party system that I call big and bigger, dumb and dumber. There was no smaller government candidate on that stage in St. Louis. There were only 2 big government supporters arguing over how big to make it. The party of Goldwater is long gone. Palin and her running mate McCain support the $700 billion bailout that socializes the U.S. banking system- just like Obama and Biden. Palin used every opportunity at the V.P. debate to denounce “greedy Wall Street” just like Biden and Obama (instead of strongly stating the truth- that it was corrupt and incompetent government that caused our economic and credit crisis). Palin supports more government regulation over Wall Street- just like Biden and Obama. Palin supports carbon caps- just like Obama and Biden. Palin agreed that mankind has caused some degree of global warming- just like Biden and Obama. Palin thinks the federal government should spend more money on failing public schools- just like Biden and Obama. No mention by Palin of failing public schools; greedy teachers unions; the need for choice and competition; or Democratic politicians being bought and paid for by teachers union contributions. Note that Goldwater supported an end to all federal meddling and spending on education. Reagan promised to terminate the entire Department of Education (although he never did). Palin proudly promised to spend more on education. Palin never mentioned one program or cabinet department she would cut. Not one. I have no doubt that Goldwater and Reagan were rolling over in their graves after this performance.
And when it comes to taxes, Palin simply says she wants to lower taxes, while the Democrats want to raise them. But she never clearly stated a detailed case for dramatically lower taxation or spending. She had no answer at all when Biden pointed out that McCain has supported tax increases hundreds of times. Is this what it has come to? Both sides arguing over who has supported tax increases the most? Is a conservative now the candidate who has supported tax increases only 120 times, instead of 400 times by the liberal Democrat?
And when it comes to war, Palin obviously supports ever-expanding military budgets (and taxation) to support more intervention and wars all over the world. There was not a mention by either candidate of cutting foreign aid, military bases or waste in the pentagon budget. Perhaps major contributions by defense contractors got in the way of that possible policy difference?
In the end, this debate proved the differences between the two major political parties to be small. Both Biden and Palin stand for bigger government- the only debate is over how big. With Biden (and Obama) it's always just a little bigger. Palin was chosen by McCain to win back conservative and Libertarian votes. She is an actress playing a part: the part of Wayne Allyn Root- a fiscally conservative, anti-tax, Libertarian small businessperson and citizen politician from a Western state, that wants to restore common sense and give power back to the people.
Every 4 years Republicans pull the same charade- then they get elected and go back to bribing corporate interests and spending like drunken sailors (no offense intended towards drunken sailors). Democrats don't even bother to hide what they stand for- higher taxes, bigger spending, bigger government, more power to teachers unions. Republicans just hide their true intensions much better. They run for election as small government Libertarians, then get elected and expand government to record levels. I call it “the November surprise”- they talk like Libertarians, then govern like liberals. Only now- after all the decades of promises broken- it should no longer come as a surprise. Having me on that stage would have exposed the 2-party system for the sham that it is. I now understand why I wasn't invited to spoil the party. But boy would it have been fun!
Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: www.ROOTforAmerica.com.
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( 3 / 880 )A Simple Common-Sense Solution to the Economic and Banking Crisis that Does Not Fleece the Taxpayer- “Just Say NO!”
I've stated for months now on hundreds of talk radio shows across the USA that Republicans and Democrats have morphed into the same party- I call them big and bigger, dumb and dumber. McCain and Obama offer the same ideas- just with a slightly different right or left tilt. They both stand for corporate interests. You think only Republicans stand for Wall Street? Check the facts. Obama has gotten millions of dollars in contributions from corporate welfare queens like Bear Stearns, Lehman Brothers, AIG, Fannie Mae and Freddie Mac. You think Obama stands for change? When Obama is done with America, all we'll have left is change.The reality is that Obama TALKS about change. Just like McCain talks about being a fiscal conservative who believes in smaller government and lower taxes. It's all just the usual talk at election time. I call it the "November political con game." The politicians simply spout the same lies and broken promises to get elected every November.
In the end, both McCain and Obama are beholden to the same status quo- lawyers, lobbyists, corporate interests, and bigger government at all costs. No one- but the Libertarian Presidential ticket of Bob Barr and Wayne Root- is looking out for taxpayers on Main Street. Perhaps that could be the reason Barr/Root hasn't raised any major corporate money. Perhaps.
The good news is we aren't beholden to the lawyers, lobbyists or Wall Street. We are free to tell the truth. Only one party- The Libertarian Party- is looking out for the common citizens and taxpayers- the ones without armies of big shot lawyers and lobbyists.
So here's the truth. Journalist and Author Bernie Goldberg had it right…Crazies To The Left, Wimps To The Right. Both major parties are badly failing the American people. Let's look at the facts as to how this financial crisis came about. The seeds were planted in the Carter and the Clinton administrations with the good intention of helping low income families become homeowners. It all started with The Community Re-Investment Act of 1977 (under Carter). The intent of the CRA was to pressure banks into making subprime loans so that levels of home ownership among minorities and low income Americans would rise. Things got worse under liberal do-gooder Bill Clinton. The CRA was re-structured and promoted even harder under Clinton. The concept was simple- banks were told to loosen credit requirements for low income Americans or face regulatory pressure.
While the concept was noble, history proves that anything that manipulates the free market with so-called “good intentions” is destined to fail. And once the politicians- those crazies and wimps- started to tinker (to make it “better”), it was destined to get ugly (ie not just failure, but wholesale disaster of epic scale). Entire bureaucracies called Fanny Mae and Freddie Mac were created, and a new game called subprime mortgage-backed securities was created by the politicians- that is, by those same crazies and wimps.
If you ever had any doubt about the deficiencies of politicians, you need no longer suffer that delusion. NONE of the lawyers who make up most of Congress know anything about economics. Neither does anyone on their staff- they are almost all lawyers and career bureaucrats who have never run a business, never risked their own money, never made a payroll, or created a job in their entire lives. They live their entire lives with public money (from the taxpayers). They get paid by public money (government paychecks), and use public money to fund all their ideas, pet projects, earmarks and spending bills. Someone else (taxpayers like you and me) pays every bill, funds every idea, pays their way through life.
But it gets worse- few executives on Wall Street know anything about business either. The Wall Street big shots- investment bankers, money managers, hedge fund gurus, analysts, brokers, traders- create nothing of value. Like politicians they spend most of their lives talking about business- not doing it. And like politicians what little business they conduct is with OPM (Other People's Money). They analyze and sell stock in companies that other people created. They give opinions on whether other people will fail or succeed. And they look to their friends, the politicians, for opportunities to make gobs of money without risk- situations where any risk is passed onto you and me, the taxpayers.
Once Congress created this new “easy money” game of subprime mortgage-backed securities, Wall Street started playing it according to the rules of the game, rules established by the politicians. And they played it to the max- with both fists.
Once the gravy train started rolling, millions of low-income families took advantage of the “free money.” They were able to qualify to buy homes for the first time in their lives and they did. The problem, of course, was that they couldn't afford to pay the mortgages, which they should never have gotten in the first place. Then, the defaults began. It's obvious that government isn't the solution to this crisis- as you can clearly see above- government is the problem. Ignorant, irresponsible and corrupt politicians looking to legislate “equality” caused this mess by relaxing credit standards to scandalous levels. And what a mess it is. If we are to believe the politicians and Wall Street gurus, we are facing financial Armageddon at this moment. Of course, if it's true, it's because they caused it.
It is important to point out that several years ago a group of concerned people in Congress saw the problems coming and attempted to rein in a program that appeared- for anyone who had even a basic understanding of business- totally out of control. Unfortunately, by that time it was too big and too powerful to slow down. The Wall Street guys, who were getting rich at this wonderful new game the politicians had created for them, also knew how to play the game of politics. They led the key Senators and Congressmen to the trough (follow the big money contributions right to the doorstep of Obama and McCain). Once they were all wallowing in it together, it was too late to fix it. So they all kept “partying like it was 1999” and prayed the disaster would not occur until they were out of office, or out of the CEO suite.
So the crisis has come. The first thing to happen, of course, is the politicians pointing their fingers, calling the Wall Street guys “greedy,” when they were only playing a game whose rules the politicians had established. Naturally, the politicians ignore the fact that in addition to being ignorant and clueless about business, they were equally greedy. How about the banking regulators that followed the politician's orders to encourage banks to suspend credit requirements so that low income applicants could own a home (they could not afford). Or “community activist groups” like ACORN that stoked the fires. There is more than enough blame to go around.
Enough of how we got here, enough of the blame game. Let's look at the solution that is being stuffed down the taxpayer's throats- with little or no explanation, accountability or oversight- by the same people who caused this mess. They are trying desperately to convince us that they have the solution- even though they caused this whole mess and to make it worse, did not have the foresight to see it coming. Here's their big brilliant solution- give $700 Billion to a former Wall Street guy (the ex-chairman of Goldman Sachs Treasury Secretary Hank Paulsen), with an oversight committee made up of LAWYER LEGISLATORS. Then he'll use taxpayer money (yours and mine) to buy all the bad loans and bail out his rich Wall Street friends- using OPM (other people's money). Surprised? That's the only game that lawyers, politicians and Wall Street executives have played in their entire lives! What's wrong with this picture? EVERYTHING!
Now here's the part where it gets really bad- and the important thing to remember is that the financial guys on Wall Street knowing NOTHING about actually running a business. Now that we taxpayers own these billions of dollars (maybe a trillion) of bad loans, what are we going to do with them? The Wall Street guys say that's simple- you just hold the bad loans (or “paper” as they call it on Wall Street) until the market gets better and then you sell them. You see, for the financial types on Wall Street, the term "doing business" means moving money and paper around. That part is easy.
The hard part is what to do with the millions of defaults and foreclosures. Remember, there is a physical piece of property underlying these bad loans. When someone walks away, whoever holds the loan now owns a piece of property. When the banks and financial institutions own these mortgages, they have to take them over, fix them, and resell them. Who's going to do that when the taxpayers own them? Ah, here's where the politicians get involved again!
We are now looking at BILLIONS and BILLIONS more of our taxpayer money going to FOP's (Friends of Politicians)- mostly friends of the liberal Democrat-controlled Congress. Friends of Nancy Pelosi; Friends of Charles Rangel (who creates tax policy for the USA as Chairman of the House Ways & Means Committee, but recently was allegedly caught cheating on his own taxes); and of course, Friends of Obama- “community activist groups” (like the corrupt ACORN) who are going to be awarded HUGE contracts and government handouts to deal with the foreclosures (the actual physical property). These are the same people who caused this catastrophic crisis in the first place- by demanding that government force bankers to loosen credit standards for low income Americans in the name of “equality.”
What will these community groups do with all these billions of dollars of our taxpayer money? Since they have even less business acumen than legislators, and will have absolutely ZERO incentive to return the taxpayers' money from these properties, they will do what they always do- offer great deals to their friends and cronies. And the people getting the benefit of this theft of taxpayer money in the form of “can't lose sweetheart deals" will in turn give large contributions to the politicians who made it all possible. And you thought Wall Street was greedy? All the while, who is paying for all this- YOU, THE AMERICAN TAXPAYER! In this whole big mess it is the taxpayers- who bear none of the blame- who are the only ones on the hook for billions in losses.
So, what do we do? First it makes no sense to ask Congress to approve a bailout plan on 24 or 48 hours notice. I guarantee you that not one Congressman took the time to read the 400+ pages of this bloated piece of panic legislation. Or the financial acumen to understand the details of what they were reading, if they ever chose to read it. Think about that for a moment. Here we have the biggest taxpayer giveaway in history and none of our representatives bothered to read it or study “the small print” before voting on it. The devil is always in the details- so what exactly does the small print among those 400 pages say? I guarantee you it is a giveaway to special interest groups and a disaster for taxpayers.
My advice is to slow down, take a deep breath, and work on a plan that benefits the taxpayers on Main Street, instead of the politicians and their cronies on Wall Street. If this is truly so important that the fate of the entire U.S. economy hangs in the balance, why rush through a bad deal crafted on a few hours notice, and voted on without a discussion, debate or explanation to the American people?
My personal vote is to NOT do anything. Doing nothing is better than doing something bad that compounds the problem for generations to come. Let the free markets work. Let the companies who made the bad loans deal with them. If what the Wall Street big shots say is true, if these loans will rise in value over time, then let them hold them. If it's such a “sure thing” that the values of these loans will recover, then the bankers should take the risk, not the taxpayers. Of course, if the bankers and Wall Street big shots are wrong or worse- lying to the American people- their companies will fail. But last I checked, that's the very definition of capitalism. I did not realize that the difference between capitalism and socialism is that, in socialism the government nationalizes profitable companies, while in capitalism the government nationalizes failing companies. I guess that I missed that point in my economics class!
To bail bankers and Wall Street out is truly un-American. It is to socialize Wall Street and the American banking system. To make things worse, to give Treasury Secretary Hank Paulsen what amounts to a blank check for his Wall Street buddies is a disaster for the American taxpayer- who bears no blame in this mess. The powers requested by Paulsen would mean yet another unprecedented and unconstitutional expansion of government by the Bush administration. But hey, what's the big deal about yet another violation of the constitution among friends?
I say NO to the bailout. I say NO to bigger government. I say NO to any more violations of the constitution. I say NO to believing that the government that caused this mess has the answers to solving it. I say NO to allowing big government and big corporations to bamboozle the American taxpayer into paying for a mess that we bear zero responsibility for. I say NO to voting for a bailout 400+ pages long, the details of which we know nothing about. I say NO to allowing ACORN and other “community activist groups” to benefit by billions of dollars off the misery they caused. And I say NO to the hysteria on Wall Street that says rejection of the bailout will destroy the American banking and economic system. Perhaps it's the same Wall Street big shots and bankers who helped to cause this mess, that are manipulating the markets to freeze credit and drive stock prices down until they get a billion dollar bailout. I say let them (and the free markets) clean up this mess. Leave the American taxpayers out of it. The American economy has weathered worse, and it will weather this one as well. It's time to draw a line in the sand. My answer is NO!
I know what the politicians will say to my answer- that it is simplistic. Well yes, my answer is purposely simple. It was created with the American taxpayer in mind. What made it possible to think of such a simple, straight-forward, fair answer that doesn't fleece the taxpayer? Well that's simple too- I'm not a lawyer. I'm not a lobbyist. I'm not a union boss. I'm not a government bureaucrat. I'm not a politician. I'm not a “Beltway Insider.” I don't spend my days and nights thinking of ways to fool or fleece the taxpayers.
I'm just a S.O.B. (son of a butcher), small businessman, home-school dad and citizen politician from the common sense, low tax, limited government state of Nevada. And I hope to be your next Vice President of these United States. God Bless America, and the people that made this country great- the citizens and taxpayers.
Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: www.ROOTforAmerica.com
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( 3 / 862 )One of my heroes, Ronald Reagan, once said, “The 9 worst words in the English language are: I'm from the government and I'm here to help.” Well we're about to have what might be described as the greatest test of those words in the history of America. I was in New York over the last few days, being interviewed by the New York Times, which put me at Ground Zero for the cataclysmic events on Wall Street over the past 4 days. This is the worst financial crisis since the Great Depression- and, to be on the streets of New York, and around my friends on Wall Street, was to see, feel, smell and experience the fear up close and personal. I have never before seen such smart and confident people in such panic.
But there is also a big story about political corruption going on in New York at this moment- one that has not hit the national radar yet. But I believe these two big stories go hand-in-hand to prove just how out of control our government truly is. They prove the folly of government caring about “the little guy.” They prove what I call “The Big Lie:” the idea that our politicians serve the people, or for that matter even care about the people. The government may be here to help- but it sure isn't here to help the taxpayers.
Neither Republican nor Democrats care about anything but themselves, big donors, big corporations, and of course preserving the current system that preserves their power. The big national news story was the disintegration of Wall Street behemoths like Lehman Brothers, Merrill Lynch, AIG and many other household names rumored to be on the financial precipice (such as Wachovia). We are witnessing the worst financial meltdown of my lifetime- and perhaps any lifetime. And in response, politicians at all levels of government and the infamous Fed are giving away our money. Yes, I said our money- yours and mine. It is the greatest corporate welfare giveaway in the history of the world. The billion-dollar taxpayer giveaway started with Bear Stearns, then grew potentially to trillions of dollars with the federal takeover of mortgage giants Fannie Mae and Freddie Mac.
Now, AIG is the next lucky recipient of the government-giveaway game. No sooner had the Fed decided to draw a line in the sand and allow Lehman Brothers to fail, than the politicians re-started the giveaway game for AIG. The Democratic Governor of New York David Patterson literally begged the Fed to intervene on behalf of New York-based AIG, only hours after the Fed stood firm against a Lehman bailout. Could that theatrical and hysterical plea by the honorable Governor of New York have had something to do with political donations from AIG to Governor Patterson or Democrat politicians in New York? Wouldn't that be a big surprise?
In any case, just as I predicted, the Fed has already broken its own Lehman Brothers precedent to intervene on behalf of AIG. After bravely holding steady and drawing a line in the sand, the political winds blew that line to bits in a matter of hours. Undoubtedly Gov. Patterson was the first of many political insiders to call the Fed begging for help on behalf of AIG. I'll bet that every politician who has ever taken a donation from AIG was instructed by their bosses (at AIG) to get on the line with the Fed to demand a bailout. So much for the idea of “government backbone.” Who is next in line? Automakers in Detroit? Wachovia? The list goes on and on. The tab for AIG alone is $85 Billion (with a B). But hey, what's $85 Billion among friends? After all, it's only the taxpayers' money.
The excuse for all this federal government intervention is that these companies were all deemed “too big to fail” and would induce “catastrophic systemic failure.” The reality is Lehman was no different than the rest of the group, and its failure- while unsettling and frightening to investors- was actually absorbed quite well by Wall Street. I'm ashamed of my fellow capitalist warriors. The Kings of Wall Street play with other people's money; take gigantic risks; ignore the worst-case perils; crow about capitalism while they are making huge profits; but at the first hint of failure, they run to government demanding that taxpayers on Main Street pay for their mistakes with government handouts, loans and easy money from the Fed.
My question as a small businessman is, who is bailing out Americans like me when I'm in financial trouble? Who in the federal government or Federal Reserve hands money out to millions of my fellow small business owners when we're suffering a financial crisis? Small business is the economic engine of America- creating the majority of non-government jobs (and 75% of new jobs). Where are the late night emergency meetings on behalf of small business owners in distress? Where is the expansion of Fed Funds for the owners of small businesses on Main Street? Where are the government guarantees when we fail?
So let me get this straight. The government takes 50% of our profits (as small business owners), and when we're in financial trouble, they give us back ZERO. But when a big corporation with expensive, connected lawyers or lobbyists is in trouble, that same federal government takes billions of our tax dollars to handout to them. Now, that's a great deal if you can get it.
So it's a double whammy to small business (and a double slap in the face)- when we're in trouble there is no one to bail us out; we have to keep paying taxes into the system; and our monies are used to bail out others with political connections; all the while, these billion dollar bailouts devalue our buying power with the dollars we have left. Something is just not right here.
Worse, small business owners are merely in trouble because of a slowing economy. It's not our fault that sales are down. But these big billion dollar companies like Lehman, Bear Stearns, Merrill Lynch and AIG are in trouble of their own making. They are run by big-shot CEO's, who've made reckless decisions and bad bets. Why reward them for reckless behavior? Doesn't bailing them out merely encourage them to take those same reckless risks again and again? Isn't the point of capitalism and unfettered free markets to allow the smart and successful to rise to the top, and to punish those who make dumb mistakes or irresponsible bets? When did we change the rules of the game? When did CEO's of the biggest firms in America become welfare queens?
Why should average American taxpayers be put on the hook for all the losses from reckless CEO's wagering on exotic financial instruments like derivatives? Few of my small business owner friends even know what derivatives are, or how they work. I only know that they were a way for greedy Wall Street egomaniacs to leverage investor money by a factor of 20 to 1 (or higher), to produce massive profits on investments that no one (including the Wall Street analysts, experts or CEO's) even understood. The risks blew up in their faces and now they want the American taxpayer to bail them out.
Well, who is looking out for our interests as taxpayers? Certainly not powerful politicians who are wined and dined by lawyers and lobbyists on behalf of corporate giants- then are handed a big fat campaign contribution at the end of dinner. Small business owners- that economic engine that creates the majority of jobs- cannot afford big-shot lawyers, lobbyists or consultants. We can't afford to wine and dine politicians. We can't afford to pay for Congressmen's vacations. Nor can we afford to legally bribe politicians with big fat donations. We're too busy working and trying to earn a living. So it should come as no surprise or coincidence that taxpayers on Main Street get the short end of the shaft.
That brings up the second big story in New York while I was there. It turns out that powerful Democratic Congressman Charles Rangel- who is CHAIRMAN of the Ways and Means Committee of the United States Congress (the group that determines tax policy for all of us) doesn't like to pay taxes himself. It turns out that he's owned a fancy home in a fancy Dominican Republic resort for years- allegedly without disclosing his rental income to either the IRS, or to Congress (on required Congressional disclosure forms).
If you or I did that it would be called “tax evasion” and we'd be sent straight to prison. But Charlie Rangel appears to be different than your typical taxpayer. He simply confessed (after being caught red-handed by the New York Post), agreed to pay a small fine, and now refuses to give up his powerful Committee Chairmanship deciding tax policy for the rest of the country. Can you imagine? He allegedly cheats on his taxes- commits a FELONIOUS CRIME- and he thinks that he deserves to keep his job deciding our tax laws.
How do these two controversies tie together? Anyone who now wants government to create more regulations and take more control over Wall Street has learned the wrong lesson from this crisis. Government is incompetent. Government knows nothing about economics or finance. Government doesn't care about taxpayers. When government needs money, they simply create more money by raising our taxes and printing more money (which dilutes the value of the American dollar). When government wants to create jobs, they simply raise taxes on some of us, to create unnecessary jobs for others.
And then there are the people who run the government- the Charlie Rangels of the world. These arrogant politicians create the tax laws to pilfer money from our pockets as taxpayers- then they break the very same laws themselves. They believe they are above the law. They believe that tax laws are for the rest of us mere mortals- the little people.
Why would we want the same government that has produced a $400 Billion budget deficit, and a $9.5 Trillion dollar national debt, to take more control of our financial system? Why would we want the people, who have managed Social Security and Medicare to the brink of financial ruin, to take more control of our financial system? Why would we want the same people who already oversee and regulate Wall Street, and have therefore presided over this catastrophe, to now create more rules and regulations? What would make you think that the very people who presided over the first mess, can now prevent the next one? Why would we want the Charlie Rangels of the world to take more power and control over our lives? Why would we want to elect politicians who promise to increase taxes again- so that they can use the additional money they've taken from us to bail out the next Bear Stearns, Fannie Mae, Freddie Mac or AIG?
The only lesson to be learned from this financial crisis and Charlie Rangel's little “tax problem” is to take the power away from government. We must make government smaller. We must give politicians less power and control over our lives and finances. We must de-regulate, not add more regulations. We must lower spending and taxes dramatically to allow our economy to recover from this crisis. More taxes and regulations will only deepen the crisis. We must ask government to get out of the way. We must leave free markets free to profit and to fail. And if we want to avoid the next financial crisis, we must stop rewarding those who caused this crisis with their irresponsible decisions. We must stop bailing out and handing out taxpayer's money to those with the most powerful and expensive lobbyists and lawyers. Handing AIG more of the taxpayers' money when they fail is not the solution. Handing more power to Charlie Rangel is certainly not the solution. The only real lesson in this tragic story is that government doesn't have the solution. Government is the problem.
Both Republicans and Democrats are on record as supporting bigger government, more regulation, more power, more control over private markets and the American economy. Only the Libertarian Presidential ticket of Barr/Root supports smaller government, lower taxes, free markets, and more power to the people.
Wayne Root is the Libertarian Vice Presidential nominee on the Libertarian Presidential ticket of Bob Barr/Wayne Root. His web site is: www.ROOTforAmerica.com.
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