President

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Where now is our last best hope on Earth?

Citado por Louis en el Opinador, este artículo de Peter Hitchens:

They knew it meant that America had finally switched sides in a global cultural war. Forget the Cold War, or even the Iraq War. The United States, having for the most part a deeply conservative people, had until now just about stood out against many of the mistakes which have ruined so much of the rest of the world.

Suspicious of welfare addiction, feeble justice and high taxes, totally committed to preserving its own national sovereignty, unabashedly Christian in a world part secular and part Muslim, suspicious of the Great Global Warming panic, it was unique.

These strengths had been fading for some time, mainly due to poorly controlled mass immigration and to the march of political correctness. They had also been weakened by the failure of America’s conservative party – the Republicans – to fight on the cultural and moral fronts.

They preferred to posture on the world stage. Scared of confronting Left-wing teachers and sexual revolutionaries at home, they could order soldiers to be brave on their behalf in far-off deserts. And now the US, like Britain before it, has begun the long slow descent into the Third World. How sad. Where now is our last best hope on Earth?

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How may votes did you cast today?

ACORN

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Cita del día

"The fate of the country ... does not depend on what kind of paper you drop into the ballot box once a year, but on what kind of man you drop from your chamber into the street every morning."

Henry David Thoreau




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Nationalize This!

The New Republic

By Alvaro Vargas Llosa

How America's financial meltdown gave Argentina's president an ideal opportunity to plunder people's savings.

WASHINGTON--I recently suggested that the U.S. government's bailout of the financial system, which includes the de facto nationalization of several banks, would arouse populists around the world and give them the perfect alibi to confiscate private property. President Cristina Fernandez de Kirchner of Argentina has been the first to confirm my prediction.

Terrified that she would not be able to pay off about $10 billion of public debt fast approaching maturity, Fernandez de Kirchner nationalized her country's private pension funds. The 10 affected funds constituted the biggest source of savings for Argentina's economy and the financial system's primary source of liquidity. With the stroke of a pen, the savings of 10 million people--about $30 billion--have been passed on to the Peronist government, which is sort of like putting the family jewels in Ali Baba's care.

Unlike what happened in other Latin American countries that privatized their social security regimes in the 1990s, Argentines who opted for private, individual accounts were allowed to go back to the old system if they so wished. When Cristina's husband, Nestor, was president, the couple announced that they would change their own private pensions back to the state-owned system.

If that is not enough indication that the hand of the authorities was never too far from the workers' pockets, consider this: The government was already using a large chunk of the money belonging to the private pension funds by virtue of the fact that 60 percent of their capital was invested in government bonds--something that was required by law. Given the magnitude of the government's spending commitments and the national debt, not even that was enough.

The government wants to pay off the debt that will mature in 2009 so that it can request new loans and sustain its populist model. With a 30 percent inflation rate and the prices of commodities going south, the model is already in dire straits: The price of soybeans dropped 50 percent this year, as did the price of oil. (Argentina exports natural gas, whose price shadows that of oil.)

One-third of the 10 million Argentines who owned individual pension accounts were still economically active and contributing 11 percent of their wages. The government is betting on those contributions as a source of funding for its ongoing populist spree once it pays off part of the debt.

The financial meltdown in the U.S. and around the world gave Fernandez de Kirchner an ideal opportunity to plunder the people's savings. "When the interventionist policies are adopted by the United States," the president said, sarcastically, "they are charming and intelligent, but when Argentina adopts them they are statist and populist." The pretext was that if the government did not nationalize the private pension funds, their investments would be dragged down by the financial crisis. Of course, as soon as the nationalization was announced, the Argentine stock market collapsed. The ripple effects were felt as far as Spain, where the markets also suffered dearly.

Unlike six years ago when Argentines took to the streets in order to protest the freezing and devaluation of their bank deposits, this time there has been little initial reaction. "Now," says Argentine economist Gabriel Gasave, "you will not find the victims of this plunder in the public square. Many of the people affected are future retirees for whom retirement funds are an abstraction."

Under the Kirchners, Argentina has been living in a world of make-believe. Following the old populist recipe, the presidential couple raised public spending 200 percent and salaries 40 percent in the last four years, kept interest rates artificially low, established price controls and created state-owned enterprises. But the truth is that there was little private investment and scant wealth-creation. Foreign direct investment dropped almost 30 percent in the last three years. Sooner or later, reality was going to explode ... in the faces of the middle class and the poor.

The Kirchners have prolonged Argentina's modern tradition of self-destruction. To think that six decades ago, when Europe was engulfed in World War II, Austrian author Stefan Zweig could write in his famous autobiography that in Argentina, "there was an abundance of food, wealth, surplus, there was endless room and hence food for the future!"

The delicious irony here is that even Juan Domingo Peron, the legendary populist whom the Kirchners regard as a national hero, declared in the 1970s that "nationalizing private pensions is theft." He was talking about his own heirs.

Alvaro Vargas Llosa is the editor of "Lessons from the Poor" and the director of the Center on Global Prosperity at the Independent Institute.

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Argentina Impoverishes Itself Again

Wall Street Journal

By MARY ANASTASIA O'GRADY

"It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder."
-- Frederic Bastiat, "The Law," 1850

Our subject today is not Barack Obama's "change" plan to "share the wealth." But readers who want to know what happens to a nation that legalizes plunder -- as the 19th century French economist termed the taking of private property for socialist ends -- will want to pay attention just the same.

Argentina is a constitutional republic with many historical similarities to the U.S. It has a rich immigrant heritage and an abundance of natural resources. But the U.S. is a rich, advanced country and Argentina is poor.

How did the breadbasket of South America fall so far behind? One explanation goes back some 90 years, when the Argentine Supreme Court began chipping away at property rights as a way of addressing economic inequality. Argentine politicians quickly learned that lawful plunder was their path to power.

This history is still being written, and the latest chapter ought to frighten Americans.

After seven straight years of driving up government spending and hammering every capitalist in sight, the Argentine government, which went bust in 2001, is running out of money -- again.

No surprise there. For more than a few years, analysts have warned that inflation, trade protectionism, disregard for contracts and confiscatory tax rates were having a deleterious effect on capital flows.

Suboptimal investment rates, the same analysts warned, would mean economic trouble when global growth began to slow and the commodity boom came to an end. But former President Nestór Kirchner (2003-2007) and his wife, current President Cristina Kirchner, had promised to bring change to Argentina and didn't want to hear it. They thought they saw better returns to their own bottom lines by stoking class warfare while increasing government spending.

That revenues would, at some point, fail to meet the rising expenses of the welfare state was predictable. The only mystery was when the wall would be hit and how the further plunder to make up the difference would be carried out.

On Oct. 21, Mrs. Kirchner ended the suspense by announcing that the nation's private pension system -- with a stock of $30 billion and a flow of $5 billion annually -- would become government property. To put that in words that Americans can more clearly comprehend, it would be as if the assets of all 401(k)s were suddenly swept out of owners' accounts and into a single government account.

Mrs. Kirchner defended her decision to seize the pension assets by asserting that the market is too risky for retirement savings, and that the returns earned by private-sector fund managers are not adequate.

That's quite a claim considering that the average annual return of Argentina's private-sector pension managers over the past 14 years is 13.9%. But it is even more absurd if one compares the private-sector returns to those of the government's pay-as-you-go social security system over four decades.

Last week La Nacion columnist Adrián Ventura reminded his compatriots of this "history of state fraud." In the 1960s, "the law guaranteed retirees 82% of their salaries," Mr. Ventura writes. But, he says, "it became impossible to calculate." How come? Because the government did not publish the true rates of inflation and, more broadly, because politicians had zero interest in protecting the assets. "The government did little to maintain its promise to pay good pensions to workers," Mr. Ventura explains, "and it did a lot to make use, for itself, of their savings."

The columnist was not just teaching a history lesson. He was reminding change advocates that plus ça change, plus c'est la même chose. Today, the Argentine central bank stands accused of manipulating official inflation data and, because politicians have been spending like mad, between now and the end of 2009 the government will encounter a $10 billion financing gap.

By law half of the privately managed pension assets are already allocated to government debt. But it is not unreasonable to suspect -- as more than 70% of respondents in a Buenos Aires poll said last week -- that Mrs. Kirchner is acting not to achieve better returns, but to get her hands on the rest of the money ahead of midterm elections next year.

Mr. Ventura echoes the fears of many when he writes that her legislation "puts almost no limits on how the money can be used, and if it did, nothing would stop the government from modifying it or ignoring it."

Long-suffering Argentines know well that once converted into "an instrument of plunder" there is no limit to the pain the law can inflict. Americans might note that even when government is already highly interventionist, things can get worse.

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On the Road to Argentina and Tyranny

Blog Critics

Written by Dave Nalle
Published October 28, 2008

With the election almost upon us and most polls showing Barack Obama with a substantial lead, many people are wondering what the future might look like with the Democratic party in control of the White house and both houses of Congress.

Speculation and fearmongering abound. Obama's Marxist background and openly socialist rhetoric have raised fears despite the moderate positions and conciliatory statements which have characterized his campaign. Talk of redistributing wealth and proposals for raising taxes on corporations, small businesses and individuals are a cause for concern. How will Obama pay for all of his promises and massive expansion of social welfare programs without huge tax increases? Based on the extraordinary level of hate-filled rhetoric coming from leftist partisans it's hard not to believe that they will be out for political revenge once they come to power.

It's unlikely that every dire scenario and gloomy prediction will come true, but recent events may be giving us a sign of what is to come. There is no question that Obama will need money for further bailouts, to pay for new programs like socialized medicine and just to meet already existing obligations and ballooning debt from entitlement programs. There is an absolute limit to how much he can raise from taxes, even if he taxes the middle class at unprecedented levels.

Yet there is one source of substantial wealth which could be tapped into, the nation's investment in pensions and private retirement plans. Pension funds, 401k plans and personal IRA accounts have a total value of trillions of dollars. If the government were to seize those assets and then replace them with low-yield, low-risk government bonds of equivalent value, it would give the government a huge cash infusion, and offer a more stable alternative to private citizens than controlling their own retirement investments. It would essentially be a second plan similar to social security. It might cause devastation in the stock market and retirement savings would probably grow more slowly than inflation, but President Obama would be able to pay his massive bills.

We can already see the model of this plan being implemented in Argentina, where socialist President Cristina Fernandez de Kirchner is preparing to seize private pension plans with a value of about $30 billion to keep her government operating and make credit available as Argentina faces the same kind of banking and credit crisis which is afflicting many other nations worldwide. In response to this plan Argentina's stock market fell 13%, further contributing to the worldwide financial crisis.

Congressional Democrats are already discussing similar proposals. Listening to the advice of economist Teresa Ghilarducci of New York's New School, Representative George Miller, chairman of the House Education and Labor Committee and Representative Jim McDermot who chairs the House Ways and Means Committee's Subcommittee on Income Security and Family Support, are seriously considering eliminating tax breaks for 401k accounts and redirecting future 401k funds into a system of government-run retirement accounts to which all workers would be required to contribute. Individuals would no longer control those investments, but would instead be required to invest in government bonds with a yield of only 3%.

The details have not all been worked out, and while it would not amount to outright seizure of assets, it would take away the tax benefits which encouraged people to invest in 401k plans in the first place; taking away future earnings and replacing them with a new social security style plan with a yield lower than the rate of inflation. Our current 401k plans would become regular stock accounts and 5% of our future earnings would go into government held treasury bill accounts. The 3% interest on those accounts would be added to our Social Security payments, while the government would keep the principal in the account for its own use. Paying 5% a year for a 3% return in the future really isn't a very attractive deal.

This $80 billion in bonus revenue and the gradual future infusions of cash into the government coffers from this plan will only provide a fraction of the additional revenue the Obama administration will need. Once they start down the road of taking private investment benefits away, why should they stop? Who could stop them if they control both houses of Congress and the presidency? The demand for money will far exceed what they can raise from taxes, and there's an awful lot of money sitting in private pension plans, IRAs and other retirement accounts. Why not take it all and pay the owners in government promises?

Of course, all of these different retirement accounts are the result of agreements between workers and their employers or citizens and their government. They are essentially contracts, and the sanctity of contracts is the most fundamental cornerstone of the law. When you put your money into a 401k, you did so on the basis of promises made to you by the government about how that money would be treated in the future. Without those promises you might have kept the money and used it for something entirely different. You scrimped and saved and denied yourself the benefits of that money you earned, and, if Obama and the Democrats have their way, you may not get the benefits they promised. Or, if they follow the Argentine model, you may lose all control over that money, trading it for a few hundred dollars added onto your social security check at a rate set at the whim of government bureaucrats.

There is a marked tendency among those who have been too long in government and especially those who subscribe to the share-the-wealth philosophy of socialism, to believe that all money essentially belongs to government and that it is only in the hands of private citizens because government chooses to let them keep it, at least temporarily. For them, the needs of government are greater than the rights of the citizens; once they reach the limit of what they can feed into the giant maw of the state from taxation, they will start to look for back-door taxes, and pensions and retirement accounts will be hard to resist.

This attitude is fundamentally wrong. It is a critical violation of the right to own property and enjoy the fruits of your labor, which is part of natural law; fought for in the revolution, explicitly recognized in the Bill of Rights. The money in your 401k, or any other retirement plan, is not the government's money. It is not your employer's money. It does not belong to the collective population. It doesn't belong to the "less fortunate." It is your money and belongs to no one else. When government tries to take it in violation of the terms they previously agreed to, they are no longer a legitimate government. On that day they will have become tyrants.




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Será McCain

Tal como lo dice Arnold Kling:

Senators Obama and Clinton frighten me more than McCain. Neither of them has overseen an operation any larger than a Senate staff. They only know political salesmanship and Senate procedure. They have never had to implement anything, and it shows. As they make their promises to the party faithful, the phrase "writing checks you can't cash" keeps occurring to me, like a song you can't get out of your head.

The prospect of President Obama or President Clinton ramming through judicial appointments and legislation is hardly appetizing. None of the leading contenders for President in 2008 has the humility factor going for them. You just have to close your eyes and hope that whoever we elect does only minimal damage.

Parece que el que puede llegar a hacer el menor daño es McCain.
Será...

Super Tuesday

Ganar la guerra contra el terrorismo
sin destruir a los EEUU en el intento.

(NO a McCain)

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Después de la baja de Mitt,

Hillary

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