AIG spells nationalization of entire insurance industry

With billions of government handouts, AIG is able to offer peerless premiums. In a free market, offering such low premiums would be corporate suicide. But AIG is not a free market participant. It has government backing. Bernanke and Treasury Secretary Timothy Geithner have, on numerous occasions, voiced their intent to do whatever is necessary to keep AIG from folding. In this context, risks that would normally bankrupt the company do not restrict its behavior, because its liquidity flows from a seemingly bottomless barrel, the purse of the citizenry. Losses from these risks will continue to be subsidized, and those subsidies will encourage more risks, and bring on more losses.

A letter concerning economic reality

As a response to this bloomberg.com article, which declares and celebrates the end of laissez-faire economic influence, I shared with my mother (who forwarded the article to me) thoughts so relevant to the economic discussion in America today, they are worth repeating here:
This article, besides unpardonably confounding economic liberty with imperial oppression and brutal dictatorhip, [...]

Open bailout opposition letter to Congress

“That government is best which governs the least, because its people discipline themselves.” – Thomas Jefferson
There is a lot of hype in Washington this week, a lot of short-term thinking, but very little honest reflection and philosophically sound governance based on the long term prospects of the American economy.  Jefferson was right: our financial markets [...]

A proposal to strengthen the dollar

If there is one plain economic truth in the United States, it is the steady rise of prices. Inflation is something every American can see and feel. It is a painful reality we know too well. It is an issue around which nearly all Americans find themselves rightfully united; as a whole, [...]

If we the people leave, do they the rulers win?

“Truth is treason in the empire of lies.” – Ron Paul
The long-term economic outlook for this country is so grim–and this is well-researched and almost universally accepted–that I can hardly see myself sticking around to endure it. A free and great industrial republic has become a credit-addicted empire, propped up today not by human [...]

So many reasons to love Thomas Paine

Thomas Paine was, by some accounts, the most well-read Englishman ever to live. If you are reading this, regardless of who you are, or how many Nobel prizes you have won, you can rest assured that Paine’s education was more complete than your own. When you read his commentaries on money and the [...]

Wealth, Economics and Foreign Policy

A real financial tip: Don’t buy anything you can’t afford, and hold onto whatever property you have through this depression. This is not a sale on financial stocks, nor is it a time to be jumping into shallow pools of capital. This is the beginning of something unprecedented and horrible for this country, and the media [...]

Letter to the regulatory proponent

“Despite the long term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their [...]

Stealth bailouts and the Washington Mafia

You’ve been hearing about the Bush/Paulson plan for “streamlining” or “revamping” the “outdated” regulatory system.  Let me take the spin off of this story for you:
 The plan is to allow the Fed to do whatever the hell it wants to, injecting taxpayer money into whatever irresponsible bank needs it for the time being.  After the liquidity pressures [...]

Letter to the neo-American

I wrote the following to a dear friend and fellow American who will remain anonymous:
When I reflect on our conversations, and consider the compassionate and insightful person I know you to be, I find it hard to believe that you sincerely support the hostilities in Iraq, or that you cannot see through the confines that [...]