Wednesday, May 02, 2012

Libertarians - Lose Not Join


From The Economist:

The government of the Netherlands collapsed after Geert Wilders, a right-wing populist whose Freedom Party had supported the coalition in parliament, withdrew from budget talks. Mark Rutte, the prime minister, will stay on in a caretaker role until early elections in September. See article
Obviously, the U.S. does not have a coalition-type government that requires a majority for the president to stay in power.  Unlike Parliament, we have an Executive Branch that can remain in power despite no support from Congress.  But the U.S. does have a Libertarian faction, a Tea Party faction, and an amorphous, poorly-defined Independent pool of voters who tend to lean one way or the other.

In the U.S. Libertarians have rallied around Ron Paul as their de facto candidate, although he is technically a Republican running for the office of president.  Dr. Paul has a long history of close association with the Libertarians and represents their anti-government-in-general philosophy fairly well.  Of course, Dr. Paul learned long ago that to play you have to pay and he has accepted the "Republican" label with a realistic assessment that he has had no chance of participating in the government process as a Libertarian candidate.

Interestingly, those who support Dr. Paul have certain "principles" that prevent their participation or the acceptance of the concept that Dr. Paul should participate as a candidate for Vice President.  For them, the notion that Dr. Paul would compromise his principles and run in with a "statist" candidate for President is incomprehensible... and would result in the loss of all support for Dr. Paul.

The point here is that, although the U.S. does not have a formal coalition system of government, there is an inherent coalition system that has operated since the beginning of this country's government.  No one agrees with everyone all of the time.  Yet, curiously, Libertarians seem to agree with no one all of the time... and prefer to go into the corner and pout rather than participate with someone whom they term a "statist"... even if the alternative is far worse.

They are very proud of this curious mentality.

As a result, it is highly possible that the Republican candidate for President... a "statist" in the minds of Libertarians regardless of who he is... will lose to incumbent President Barack Obama.  This may happen one of two ways: the Libertarians actively oppose the Republican candidate or the Libertarians withdraw from the election process.  This is essentially the same thought process of Geert Wilders' Dutch party... only more extreme because Wilders' party can participate in the government without heading the government.  In the U.S., this means the Libertarians remain an isolated fringe group.

It is all about principles... and nothing about consequences.  Better the Devil than the agnostic.

Ron Paul For Vice President

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
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Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)