The Right to Bear Arms

By Tommy Leung on Monday, November 10, 2008 in Liberty, Politics

The last couple of months has marked the period of greatest international experience for me. I have not traveled the world but, to my fortune, many parts of the world have so kindly come to me. I have only traveled to one country outside of North America in my entire life and only stayed there for a week–not much cultural immersion from that.

I have spent every weekend in the last two months with them going to a variety of restaurants, bars, and clubs in New York City. These are some of the most interesting and fun people I have ever met–certainly some stand out above the rest. I can say with absolute certainty that the last two months have been the best time I’ve had all year.

One of the things I find most dear is the difference in opinion we have on social, political, and economical issues. In this period of global economic distress and an America that is generally despised around the world, these are inevitably topics of much discussion. It is certainly important to note that I am not some American nationalist or statist and I will never stand up for the American government or empire. I only defend the principles of liberty.

A recent topic of debate was about guns. One of my French friends had walked around one night looking for his friends and was greeted by a man with a gun at a psychic reading shop. No one knows if this was some sort of criminal, an off duty police officer, or other government official. The only fact is that he showed his gun as a means of intimidation.

The debate was certainly not in my favor as I was the only American and apparently every European nation has strict gun laws. They had a stereotype in their minds that every American is for the Second Amendment and obssessed with Wild West stories of cowboys and bandits. The reality is that I have had debates about guns with many people native to the States–especially in liberal New York.

My position on guns and gun laws is simple. An individual has the right to own anything they want as long as it does not intrude on the property rights of another individual. The government has no right to take away a person’s right to private property. There only job is to enforce contracts and rectify situations where one individual violates the rights of another individual.

I am not for guns but, I am also not against guns. This conundrum was too difficult for my European friends to grasp at the time–it may have been the alcohol.

If it was possible to remove all guns–or any weapon–from the face of the Earth and stop them from ever coming back and no individual’s natural rights are violated in the process, I would be in favor of it. The problem is that this is not possible. How can you remove every gun in the entire world, the knowledge behind that technology, and not violate people’s natural rights? It may be possible in a police state to confiscate all the world’s guns. It may be possible in an Orwellian world to brainwash people to such a degree that the common man would not even know what a gun is. But, all of those actions will require destroying all kinds of personal liberties.

Of course, even in a police state or an Orwellian dystopia, someone will have the guns. It might not be you or me but, someone in power will. I certainly don’t believe it is better to live in a gun-free world as a slave.

If we can agree that it is impossible to create this utopian world where guns do not exist and people can still live freely, what is then the next best thing we can do? Some might argue that passing laws banning guns or putting some sort of heavy punishment for having a gun will work. I argue that it will not.

Those of us who are law abiding citizens will obviously not have guns. We are also not the people who are going to commit crimes. The problem is in stopping the criminals from getting guns. They are criminals. By definition, they break the law. We have laws against thievery, yet they rob people. We have laws against drugs, yet they sell it. If the means to solving all our problems could be accomplished by passing laws, the world would already be a utopia.

In all my debates with people who are in favor of gun laws, they have never proposed a means to stop the criminals from getting the guns. Some people simply do not understand why passing a law is not enough to stop the criminals. I consider those people to be a lost cause. The others simply revert the argument back to a moral or philosophical one. The problem with that is that there is no disagreement there. I agree that the existence of weapons makes death easier and more likely.

In my experience, those who want gun laws feel that those who do not agree are in favor of death and destruction. I am against war and violence in general. The fact of the matter is that reality is not so black and white.

My solution to the gun problem is fundamentally the concept of a stalemate. It is most important that an individual’s rights are never violated in an attempt to create a sense of security. In a society where there are no gun laws and people can freely buy guns, it is possible that every person will own a gun. Some people will choose not to and that is their right to do so. Those of us who do not currently own a gun will not suddenly decide that they are going to buy a gun and kill everyone they see tomorrow. That is completely irrational.

The criminals who were already buying guns will still have guns so nothing changes for them. However, they now have to consider that the next person they intend to commit a crime against may also have a gun. Their risk to reward ratio has now changed dramatically. The risk was low when gun laws existed because your average person who abides by the law will not own a gun. Now, the risk is unknown to high because no such laws exist.

Of course, this doesn’t guarantee that no more crimes will be committed or that no one will die because of guns. Passing a law against guns also doesn’t guarantee any of that but, it does guarantee a violation of individual liberty.

It appears the United States is the capital for school massacres. The Columbine incident and the more recent Virginia Tech incident come to mind. It is easy for people to blame an inanimate object like a gun for these horrible events but, they are in fact blaming the symptoms and not the causes. These killers could have used a gun or a knife or a baseball bat or even a rock. They so happened to have used a gun but, how many murders by weapons other than guns occur on a yearly basis? Just recently in Japan, seven people were killed with a knife.

Passing laws willy-nilly is a lazy person’s way of dealing with a much bigger problem: why are people motivated to kill other people? Why do suicide terrorists blow themselves up? These are the real questions that need to be asked and problems that need to be dealth with. You can’t just pass a law and hope the problem goes away.

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A Guide to the Economic Crisis for the Rest of Us

By Tommy Leung on Monday, October 6, 2008 in Economics

The politicians in DC have been telling us that we need to act now in order to stabilize the economy. They passed a massive bailout bill against the voice of the people last week in order to do just that. Afterall, the bill was named the Emergency Economic Stabilization Act of 2008. In predictable fashion, markets around the world closed lower in the days and even minutes after the bailout was passed. Could it be that the politicians have misdiagnosed the problem and is now proceeding with the wrong treatment?

On the popular TV show House, patients with mysterious illnesses are treated by Dr. House. He and his team of doctors try to find out what is wrong with the patient in order to cure them. The kicker is that it is never simple to diagnose the problem. In fact, that point of the show is that it takes a doctor who thinks completely outside the box to solve these medical mysteries.

Fortunately, our economic crisis is not as mystifying as the patients on House. The mainstream economic school of thought is just not capable of understanding the current state of the economy. The politicians believe we can just throw more money at the problem and it will be fixed. They happen to be wrong.

In order to understand what we should do to fix the problem, we first must understand how we got here. Just a month ago, people who supposedly understood the economy was telling us that the fundamentals were strong. Clearly, they were not. In fact, they must have been held together by duct tape considering how quickly it has fallen apart.

This economic crisis, like those before it, was created during the economic boom. No one complains when the economy is booming and everyone feels richer. The free market is touted as the greatest thing in the world during these times. The free market might be the greatest thing in the world but, the it didn’t create the boom. The government created the boom. The boom created the bust. So, the government is responsible for the economic calamity we now find ourselves.

Every piece of legislation that is signed into law has an affect on market forces and therefore direct capital to places it otherwise would not go. The enforcement of the Community Reinvestment Act and the use of Fannie Mae and Freddie Mac to buy up mortgages directed massive amounts of capital into real estate. This alone didn’t create the sinking Titanic that we are on today but, it did contribute heavily.

The artificial lowering of interest rates flooded the economy with dollars. Due to legislation to make sure that every American could own a home, these extra dollars flocked to houses. This caused the price of houses to skyrocket from 1995 to 2005. The artificial lowering of interest rates was possible because we have a central banking system known as the Federal Reserve.

It is said that the Federal Reserve’s purpose is to create greater financial stability. In reality, it has only created more distortion in the economy.

With the government affecting the flow of capital and making it profitable to give mortgages to practically everyone, banks did just that and gave mortgages to everyone. They created all kinds of creative financing to put more people into homes because they were easily able to turn around and sell those mortgages to Fannie and Freddie. If the only problem was with mortgages given to people who would normally not qualify, this would be a smaller problem.

As housing prices went up, almost everyone refinanced and borrowed money against their homes believing that home values could only go up. Once the value of houses reversed course, many people found that they couldn’t actually afford their larger mortgage payment and with negative equity in their homes, they couldn’t borrow the money to make the payments–that is a bad idea anyway.

With the availability of loans against homes diminished, people could no longer live beyond their means. Spending had to stop. The price of houses had to come down as homeowners started to miss payments and foreclosures spread across the country. Without the same level of spending to drive the economy, jobs were also lost.

This economic turmoil will continue until all the bad debt is liquidated and there is once again sufficient capital to be invested productively. The only way for there to be sufficient capital is for people to save. Government cannot create money to spur the economy. What it does is create a bubble that leads to the economic destruction we are witnessing today.

In order for bad debt to be liquidated, companies will have to go bankrupt and cease to exist as we know them. People will lose jobs and homes and maybe more but, it has to happen. Trying to rebuild on a shaky foundation only means the crash will come later and be more painful.

The only way for people to save is to live beneath their means. We are going to once again learn to save our money for the things we want. We won’t be able to borrow money to buy all our trinkets and widgets. To put it in bleaker terms, our standard of living will go down. It won’t be fun but, it is the fastest way out of the crater we are in.

Wall Street is sinking into the abyss because of these economic conditions and it has to. The bailout bill that was passed last week doesn’t change the fact that banks are not willing to lend money like they used to. It is not as if banks aren’t lending money at all. They have to lend money to make money. The only difference between now and the last decade is that you need to be well qualified to get a loan–not many are qualified today.

Throwing money at this problem will not suddenly make the banks change their minds and lend money frivolously again and they shouldn’t unless we want this problem to get even worse. The unfortunate part of all this government intervention is that there is a consequence to printing so much money. They aren’t taxing us for the money. They are going to print it and that is worse than taxing us because we don’t see it. It is basically robbery.

I call the government “they” for a reason. The people are not the government and the government are not the people. The people should be the government but, this is not a perfect world. We didn’t want the bailout bill passed, it gets shot down and on that day the people won. The politicians couldn’t let that happen so it gets passed anyway and the people ultimately lose.

This drunken sailor creation of money is likely to cause runaway inflation like we’ve never seen before in the United States. We won’t see the inflation immediately since the banks are still not lending money to every person who walks through their doors. However, the banks will find themselves with a lot of reserves once they are no longer in fear of a run. When that happens they will begin to lend money because that is how they make money and inflation will skyrocket.

Next to hyperinflation, our current economic woes are going to look like a walk in the park. Every dollar that the government is creating to “fix” this economy is going to hurt us that much more. The price of necessities are going to go through the roof. If we think food and gas are expensive now, just wait until the government is finished saving the economy.

Washington DC has misdiagnosed the problem. They think the problem is that banks are not lending money. That is not the problem. The problem is that DC created the bubble by flooding the economy with too much money. Their solution to fix the problem is to flood the economy with more money. While that might make some sense if the problem was what they say, it makes no sense knowing what the problem really is. If too much money caused the problem, the solution is not more money.

Deregulation is also a popular topic in DC. The problem is not deregulation of the economy. The problem is too much regulation of the economy. Regulation of the markets is any form of government intervention. Just because the government is attempting to do “good” with bills like the Community Reinvestment Act, doesn’t make it non-regulatory. Those bills regulate the flow of capital–that is the definition of regulation. Because this problem was created by government intervention, more of it is not going to solve the problem.

The politicians are administering the wrong treatment to the economic crisis. If they don’t stop, things are going to get much worse before they get better. The way to cure cancer is to remove it from the body. In this economy, the government is cancer and we need to remove it.

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2008 Vice-Presidential Debate

By Tommy Leung on Friday, October 3, 2008 in News, Politics

I went into the debate expecting a meltdown of epic proportions for Sarah Palin. She has been unable to put together coherent sentences in interviews in the past weeks. One would naturally assume that this debate was going to be the equivalent of a goat heading to slaughter. If you watched the debate, you would know that it wasn’t the case. I once again viewed this year’s Vice-Presidential debates from Pace University’s Schimmel Theater in New York City where almost everyone was an Obama supporter.

I did miss the first 15 minutes of the debate due to an Indian club throwing an event with food. I love Indian food so I gave up the first 15 minutes of the debate for it. The topic appeared to be energy when I got to the theater. My first impression was how well Sarah was speaking. I had almost forgotten how well she spoke in her speech during the Republican Convention. The Sarah at this debate was more like the one who I thought had ended the Democrat’s chance at the White House this year.

As far as substance goes, there is really nothing new to report here. My views on the first Presidential debate apply here all the same. Both candidate’s ideas are ridiculous and not different from each other.

Biden did stress one point to be a fundamental difference between the two tickets: the Iraq War.

Unfortunately, Biden must not know the meaning of fundamental. I agree that we should withdraw from Iraq and end the wasteful war. However, that point alone is not a fundamental difference. Iraq is only one part of a much larger picture. That picture is the American Empire. We are in 130 countries–I can’t even name 130 different countries. When one of these candidates decide to talk about withdrawing all our troops from around the world, then they can call it a fundamental difference.

To make matter worse were their comments about Pakistan and Iran. I was displeased with what Obama and McCain had said in their debate and the same goes for Biden and Palin. Pakistan has had nukes for years and we’ve been giving them money in the tune of billions! Why is this suddenly a grave problem?

And in a spin-off of that topic, you would have thought that the citizens of Isreal would be voting for our President in November. What was the point of all that pandering to Isreal? Isreal has more nukes than any nation in the Middle East. They can defend themselves just fine. We are constantly coddling Isreal as if they are powerless. There are few countries in that part of the world that can match Isreal’s sophistication and military strength. If any country needs protecting, it is Iran.

In regards to the powers of the Vice President, both candidates need to more regularly read the Constitution. Biden referred to Article I of the Constitution and claims that it says the Vice President is part of the Executive branch. Of course, Article I does not say that but says that the Vice President is the President of the Senate and has no vote except when there is a tie. Clearly, that speaks of the Legislative branch and not the Executive. The VP in fact does have authority in the Congress since he or she is the President of the Senate. The VP would have no authority in the Executive. The best demonstration of the VP’s job functions is displayed in HBO’s recent John Adams mini-series.

When Washington was elected President, Adams was the runner up and became the Vice President. Adams in fact sat in the Congress bored out of his mind most of the time. He would advise the President from time to time as other members of the cabinet did. Otherwise, he could just as well has sat in the Senate and read the newspaper. I would have preferred if that was all Cheney did.

To believe that either Biden or Palin offered anything substantial, different, or meaningful is a reflection of how far we’ve strayed from the ideas of the Founding Fathers. I don’t want to constantly reiterate the same point but, both parties are the same! They will only make government bigger and take away more and more freedoms. The way that they do it might be a little different but, the end result is going to be the same. Big government has predictable consequences and it is never a good one.

The candidates also briefly talked about a topic that I have a strong opinion on: global warming or “climate change”. For some reason, we have changed the term describing this “crisis” from global warming to climate change. It might have something to do with the fact that the Earth is not warming–just a hunch. To claim that the climate is changing is absurd. When is the Earth’s climate not changing? I can write pages about the ridiculous government policies on climate change but, I will spare you from it. You can read what I’ve written in the past.

So who won the debate? Putting aside my dislike for both parties and both tickets, I would say that Sarah Palin came out the victor. I expected her to trip all over herself. She didn’t. She was charismatic–more so than Biden or Obama. She smiled often. She spoke in the vernacular. She looked confident–except for a few times where she seemed nervous.

While people in the big cities aren’t as likely to be wooed by Palin’s seemingly common-folk ways, I am still inclined to believe that the vast majority of Americans will be. She just feels warmer and less like a politician.

An example that demonstrates this point is when the candidates discussed how they were really just like you and me. Sarah talked about her kids–one going to war, one with a disability, and those going to college. She talked about paying bills, etc. Biden had his own story of hardship and how he is better off now. The big difference here is when they talked about sitting at the kitchen table to figure out the finances.

This is where Biden is so clearly a politician. He claims the American people are looking for help. I’m sorry, but I don’t want any government handouts and neither do the majority of the American people. We are hard working and self sufficient people. In order for government to “help” anyone, it has to steal from someone else and I do not support thievery. The only form of “help” I want from government is for them to stay the hell away–the further away the better. I am convinced that most people are still willing to make an honest living and Biden’s suggestion is an insult. 

In the study of marketing, the product is only one factor in a successful campaign. Sarah Palin can be the least qualified person to be a heartbeat from sitting behind the Resolute Desk but, if the rest of pieces are sound, she just might end up in that position.

The best case scenario is if the American people rise up and vote third party. The Republocrats are still on track to take us into the smoldering depths of hell. There are four other candidates in the running: Barr, Baldwin, McKinney, and Nader. Pick one of them.

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The 777 Point Collapse

By Tommy Leung on Monday, September 29, 2008 in Economics, News, Public Policy

The House defeated the $700 billion bailout plan today and the Dow Jones responded by dropping 777 points–777.68 to be exact. This was the largest single day drop ever. Analyst and politicians may start blaming the people for being non-supportive of this bill but, the market had to fall. It was up or held steady because of speculation that a bailout was coming and due to the naked short selling bans. The market is now merely doing what it is supposed to do: find equilibrium.

TV pundits and Washington elites will try and convince us that we need to do something now more than ever. We should continue to do nothing to bailout Wall Street. Any bailout will only compound the problem and cause more economic problems. We are in the worse crisis since the Great Depression and if government doesn’t keep its hands off, the problem is going to get much worse.

The idea that we need to ensure prices do not fall is a ridiculous notion. By propping up home prices, gas and food prices will go up as well and no one wants that. Housing prices cannot stay at their current levels. In most of the country, home prices have already fallen through the floor from their highs. There should still be more to go. In big cities like New York, real estate prices have held pretty well. It can’t and won’t last.

It was due to the government passing legislation that forced banks to lend money to anyone and everyone so that everyone could “own” a home that caused this crisis. If you cannot afford a home, you should not be buying one. Using “creative” financing is not a good solution. I don’t like to point a finger at any particular party but, in this case, it was the Democrats who pushed through the Community Reinvestment Act. It was originally signed by Carter in 1977 but, not well enforced and amended until 1995. Essentially, it was President Clinton who presided over the increase for mortgage access in inner cities and distressed rural communities.

This act also promoted the use of Fannie Mae and Freddie Mac as a means to unload these mortgages due to their risky nature. Fannie and Freddie were GSEs–government sponsored enterprises–and now they are fully government owned. The two GSEs would repackage the mortgages as securities and sell them on the open market. Because Fannie and Freddie were government backed, their mortgage securities were given high ratings even though they clearly did not deserve it.

The point is, the government caused this horrible financial mess we are in. If left to free market devices, the amount of bad mortgages would have never risen to such levels. So when politicians–especially Democrats–try to blame this crisis on the lack of regulation, they are lying through their teeth or just plainly do not understand economics. Either of which is not a positive for holding public office.

The exponential rise of real estate prices is directly attributed to the massive amount of buyers that flooded into the real estate market due to government demanding everyone own a home and bid prices up higher and higher. Now because everyone’s houses went up in value, some decided it a good idea to refinance and borrow against their home so that they could take that vacation, buy that new car, or whatever. It was fun for several years until people started missing payments and foreclosures started taking place.

Housing prices started to collapse and now millions of Americans have upside down mortgages with negative equity in their homes. The party had ended and here comes the hang over.

Government bailouts and interference of market forces is the equivalent of drinking more and more alcohol in order to delay the hang over. It is logically not a good idea. You need to allow the alcohol to leave the body or in this case, allow the bad debt to leave the market. In fancy-pants talk, we need to liquidate the bad debt. It won’t be painless–hang overs aren’t painless but, they are necessary.

The economy is not in good shape and if we can keep the government from trying to “fix” things, it will start to improve a lot sooner. However, if we allow the government to intervene like it did during the 1930’s, the 16 year Great Depression is going to look like a walk in the park. We do not need government works projects or any other absurd creation of Hoover or Roosevelt.

While it is difficult to do nothing while people are suffering–you and me included, one must remember the ideas of economist Frederic Bastiat. We need to take into account the opportunity costs that we do not see. It may look like a good thing if government provides jobs because in the short run unemployment would be kept in check but, new and more efficient jobs and markets will not get the capital they need because government had directed capital elsewhere. That is exactly how a short painful recession can turn into a long painful depression.

The other danger of government intervention is that the only way government is going to be able to pay for the bailouts and works projects is to increase the national debt by borrowing or by printing more dollars. Both choices are incredibly bad. The current economic crisis won’t kill us, hyperinflation will. Having a lot of dollars is meaningless if they can’t buy anything. The Federal Reserve has already increased the money supply by 8% in the last week to try and “smooth” the gears of the financial system–it won’t work. It is only going to devalue the dollars we currently have.

It was a great victory for the American people today that this bailout of the rich and well connected was defeated. We cannot privatize profits and socialize losses. It is unlikely that Paulson, Bernanke, Bush, and co. is going to let it go. They will try to push some sort of bailout through as best as they can. The Senate will vote on the bill later in the week. This bill does nothing to benefit the people. We need to tell our Senators that we do not support the bill and demand that they vote against it.

Any Senator who votes for this bill should not expect to be re-elected. This is a grand robbery of the American people and I’m glad we didn’t stand for it. The massive public outrage over this bailout bill played a great role in its defeat in the House. Today was a victory for the people. May we continue the fight.

For more insights into the economic crisis and its inner workings, check out LewRockwell.com and The Mises Institute.

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First 2008 Presidential Debate

By Tommy Leung on Saturday, September 27, 2008 in Politics

The first of 4 Presidential debates took place today and I watched most of it at Pace University in New York City. It was a very pro-Obama crowd as one would expect at a university in New York. I am against both of these parties because neither of them are speaking any sense and that was on display at the debate. I may have been the only person in support of a third-party candidate at the event.

The two candidates argued over a variety of issues including the economy and foreign policy. Neither of them would say whether they were in support of the $700 billion bailout. They just danced around the question when all they needed to say was yes or no. The majority of Americans are against this bailout bill and obviously neither of these candidates have the balls to take a stance knowing that the bill is unpopular and if they do nothing the economy will collapse. The economy will collapse whether this bill gets passed or not but, it is a lot harder to spin the collapse if they take a concrete position. I appreciated the moderator’s attempts to get the candidates to provide a solid answer but it was to no avail–in the end, McCain gave a half-hearted “sure”.

While some people may say that there is a real difference between these two candidates, this debate clearly demonstrated that there is not. McCain started talking about earmarks and pork barrel spending that–according to Obama–totaled $21 billion dollars. Clearly that is chump change with the Iraq War and all these bailouts and welfare programs. McCain then accused Obama of some million dollar earmarks for things of no matter while Obama dissected McCain’s tax cuts for the rich.

On the surface that might seem like a difference but, it is not. Neither candidate is willing to actually cut any spending. McCain proposed a spending freeze except for the war, veterans benefits, and welfare programs. My question it, exactly what spending are you freezing? The two biggest parts of our budget is the war and welfare programs. A spending freeze on useless things is not going to make a difference. Obama, instead of asking McCain the question I would have, argued against a spending freeze and basically danced around the idea of changing his plans to account for this $700 billion bailout if it passes.

Yea, they are so different. They both want to ensure that we continue spending ourselves into oblivion and maintain troops in 130 countries. Totally different candidates for sure.

On the foreign policy front, both candidates agreed that Russia was the aggressor and evildoer in the conflict against Georgia. I’ve written about that topic and clearly showed that the real story is that Georgia attacked two independent territories with a lot of Russian citizens and Russia merely protected its own people. McCain even told a story where he said he was in that area and saw a poster with Putin’s picture and a caption that read, “He is our President”. Yea, that is correct. The people living in that area associate themselves with Russia and not Georgia. Georgia attacked innocent people and Russia was just protecting them. Granted, Russia should not have invaded Georgia but, by no means is Georgia innocent.

The debate over war in the middle east was also nonsensical. Somehow we are soon going to attack Pakistan and Iran for no reason at all. Both candidates are willing to extend war into any and every country in the region. It is on this issue that I agree with Obama the most. We should leave Iraq and we certainly should never have gone in. However, I would take our troops out of every country and neither candidate is willing to consider that.

And of course, both candidates are trying to show how the American people are in support of their view on the war. Apparently, both candidates have a bracelet with a deceased soldier’s name on it. I don’t want to belittle the duty of our armed forces but, it was of some hilarity to see that both candidates had this same card under their sleeves and used it at the same time. Different? Looks the same to me.

All in all, the debate was a big waste of time. These candidates are not different. They are going to continue on the same course we are on now. There is no change and there is no maverick. And if you didn’t know–and a lot of people apparently do not–there are four other candidates in the running: Barr, Baldwin, McKinney, and Nader. You might want to consider a second choice because McCain and Obama is really the same choice.

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Welcome to American Socialism

By Tommy Leung on Saturday, September 20, 2008 in Economics, Politics

I hate all kinds of central planning. I love free markets. The actions of the United States government in this past week and in the past months since our financial system have started its collapse has been the definition of socialism. Our politicians keep telling us that this is a necessary evil. It has to be done in order to protect our savings, our money, our economy. The reality is that they are destroying our savings, our money and our economy.

The Federal Reserve played chicken and decided to allow Lehman Brothers to fail to test the waters. The market responded by collapsing through the floor. This is what should happen and needs to happen. The Fed then decided they could not let AIG fail and bailed them out with $85 billion freshly printed dollars and an almost 80% stake in the company. So now the government owns Fannie Mae, Freddie Mac, and AIG. What if WalMart fails? Are we going to go to the government to buy groceries? This is ridiculous.

Our financial system was maybe a couple of days away from a complete meltdown. This would have been one of the biggest market crashes in history but, the government stepped in and estimated that they would spend half a trillion dollars or more to stabilize the markets. They are going to set up an entity similar to the RTC of the Savings and Loan crisis that would buy all the bad debt from all the banks. Who is going to own this bad debt? You and me. I don’t know about you but, I don’t like making bad investments. Especially not ones that I have no say in.

So now we are falling into the hellhole of socialism. There is nothing remotely good about socialism. The theory sounds nice but, the execution has always been the same. I don’t care if you want to redefine what socialism is to keep it a theory–it is never going to work. Central planning–regardless of the form–is never going to work.

Government has no money. They don’t produce goods and therefore cannot produce wealth. They can only steal from us. That is what they are doing right now. They are stealing our money to make sure that their friends on Wall Street don’t lose their shirt. Instead, we will lose ours. I don’t think you really support this. What is your benefit that Fannie and Freddie were “saved”? That AIG was “saved”?

If you have a mortgage that you couldn’t afford, you now still have a mortgage you cannot afford and on top of that, the dollar’s value is about to fall through the floor. Maybe you worked for Fannie, Freddie, or AIG and might have been out of a job if they collapsed. You’ll find a new one–yes, you will. Instead, we are going to put this giant band aid on the problem to push the day of reckoning later. It doesn’t help you. It is just going to make sure that you hurt harder later.

If the government wants to help America and the American people, they can pay off our mortgages. They can eliminate the interest on our credit cards. Pay our student loans. Get the people out of debt. How about, we bail out the American people? Why are hard working American people bailing out these giant corporations so that their executives can get their millions of dollars in salaries? I don’t want to pay their salaries. They made bad choices, they should live with it.

Millions of Americans made bad choices to buy a house they couldn’t afford. Bail them out. If we are going to have bailouts, we should bailout the American people. Not the multinational corporations.

The economic blow back of these policies are predictable. The ban on short selling of almost 800 financial institutions is market manipulation. The markets are going to go up in what will appear to be a bull market. There is no bull. We have not hit a bottom of any sort. The Dow Jones was more likely to have tanked below 10,000 than to have hit any bottom. With the government announcements of the biggest bailout that we have ever seen, the market responded by skyrocketing. The volatility of this past week could have either made you a lot of money or lost you a lot of money.

No one knows when this fake bull is going to take off the mask and reveal it is really the nastiest bear we have ever seen and send the market sinking like a rock. Playing the stock market now is exceptionally dangerous but, it can also make you an enormous return. Because of this “temporary” ban on short selling, the market will fall through the floor when it decides to correct. The officials say that they want to restore equilibrium but anyone who understands economics has to laugh at that. Eliminating short selling is doing the exact opposite of creating equilibrium–it is ensuring we stray as far away from equilibrium as possible. So when it hits the market that the stocks are not worth this much–and they aren’t–it will snap back like a rubber band.

Our markets are going to collapse. It is hard to determine when with all this government interference and manipulation but the law of economics cannot be suspended. If we really enter into a full blown form of socialism, we will all be equally poor in no time flat and our markets would have collapsed because of it. The alternative is that we stop bailing out the corporations and we enter into an incredibly painful depression. It won’t be fun but, at least there will be a future option of being better off. Socialism ensures that such an option won’t exist–there will only be one option: equality in the sense that we will all be equally poor.

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Say No to McBama

By Tommy Leung on Friday, September 12, 2008 in Politics

To be able to say that John McCain or Barack Obama has two different agendas with a straight face should grant one an Oscar. While Obama has been campaigning under the banner of “change” and “hope” and other undefined, substance-lacking terms, McCain has hijacked that same message. Sarah Palin as VP gives McCain the clout to do that.

Now they are both campaigning as candidates of change. Ironically, neither of them is going to change anything. The Republicans and the Democrats–to paraphrase Pat Buchanun–are but two wings of the same bird. I’m not sure how much more evident this needs to be. Even the campaign messages are identical now.

All anyone can talk about is change. The American people want change. We know that the path we are on is a death trap. We can feel that things are going the wrong way. The two major parties are well aware that the people are displeased with what they are doing but, they don’t want change. To them the question is: why kill a good thing?

The politicians and lobbyists benefit from our current system. The American people are suffering. With this understanding in mind, why would we think that electing more of the same people who are in power and enjoying the perks of the current system is going to change anything? They won’t. Obama-Biden and McCain-Palin is the definition of more of the same.

The Democrats will try to bombard us with messages of change and that we can’t have another term of a Bushesque Presidency. The Republicans will tell us that they are the real party of change and that they have kept America safe since 9/11.

The truth of the matter is that we can’t have another Bushesque Presidency so we can’t elect McCain or Obama. Obama is not going to be unlike Bush. Bush was not unlike Clinton who was not unlike Bush and the chain continues backwards with a few exceptions. The two parties will tell you otherwise. They will tell you that they are different in every way. These two parties are responsible for driving the country into the cataclysmic hellhole that is staring us in the face.

Neither party will change anything because it is in their best interest to keep things the same. The Republicans aren’t any better at protecting us from terrorists than the Democrats–they are both bad at it. Invading countries, starting wars, or voting for the funding the wars is not how we keep America safe. That is how we create more terrorists with an even greater hatred of America.

We are in Iraq not because President Bush tricked us into it. We are in Iraq because Congress gave up their power to declare war. Congress had every opportunity to say, “no, we are not going to war”. Instead, they gave the President authorization to go on ahead. Not only did the Congress give up their duty to declare war, they then proceeded to continuously fund the war. If the Democrats are interested in stopping the war they can stop funding it. They won’t. Instead, they put other things into the bills for their benefit and then vote to pass them.

These politicians don’t care if American soldiers are dying by the tens or thousands as long as they can perpetuate this system by diverting blame and spinning the news.

Obama is not change. McCain is not change. As long as we believe that we have to vote for either a Democrat or a Republican, there will never be change. With an Obama Presidency, we will continue to increase the size of government, have military bases in 130 countries, start new wars, and increase the national debt. McCain will do the same thing.

Other issues are meaningless compared to these issues. It is these issues that have driven us into a hole of epic proportions. They are the reasons why we feel things are headed in the wrong direction. The only candidates that are even interested in these important topics are third-party candidates. Instead of going to the voting booth in November and picking between a giant douche or a turd sandwich, go and vote for an independent candidate who is really about change. Each one of them is better suited to be President than John McCain and Barack Obama combined.

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FRE, FNM Nationalized

By Tommy Leung on Sunday, September 7, 2008 in Economics, News, Politics

It was just a matter of time before Fannie Mae and Freddie Mac became nationalized. Secretary Henry Paulson had pledged the full faith of the United States government behind these two bankrupt institutions to try and calm investor’s fears. Fannie and Freddie lost over 90% of its stock value since the beginning of the year and is holding onto at least a trillion dollars in bad mortgages–$5 trillion in total mortgages.

Paulson is expected to make an announcement this Sunday to take over the two troubled institutions. This is a bailout of epic proportions. The biggest losers in this deal are the taxpayers. These two semi-private institutions decided it was a good idea to buy all these mortgages. They took the risk and now they should bear the responsibility–not us.

It is expected that the vast majority of the loans on Fannie and Freddie’s books will be default and this will only end up costing taxpayers tens of billions of dollars. The accuracy of this estimation is probably low considering the government estimates of the sub-prime mess. The worst outcome of this bailout is the future bad loans that will be created because the government is backing all the loans.

If this housing crisis has been bad, it is only going to get a lot worse if banks can continue to make bad loans knowing that Fannie and Freddie will have the money to buy them. There are many who argue that allowing Fannie and Freddie to fail is worse than bailing them out. That is simply not the case.

It will be bad for a short while if we let them fail and credit becomes tighter–a lot tighter. The long term result is that the economy gets back on its feet faster and we can start seeing some real economic growth. Politicians don’t look into the future. They only look as far as the next election cycle and by no means do they want to be the ones in charge when all hell breaks loose so they will prolong it as long as possible.

So while we the government continues to provide socialism for the rich. The rest of us will suffer with a lowered standard of living.

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How the Democrats Lost in 2008

By Tommy Leung on Friday, September 5, 2008 in Politics

This might be premature–by definition it is–but, the Democrats have squandered a chance handed to them on a silver platter to put themselves in the Oval Office. With the horrible decisions that the Bush administration has made in the last 7 years, who was going to vote for more Republican control? Comparing the candidates of the two parties during the primaries made it almost crystal clear that the Democrats had the strongest candidates and the strongest candidate: Hillary Clinton.

If I had to pick a candidate for the Democrats, I would have chosen Kucinich. If we are talking about candidates who the media actually allowed to have a chance, I’d pick Obama. I don’t like either party so this is an exercise in picking crap amongst crap. The world practically worships the ground Obama walks on. Thousands of people gather to hear him speak when he is in foreign nations! He isn’t running to rule the world–at least that’s not in his tag line.

The first error the Democrats made was to nominate Barack Obama over Hillary Clinton. From a purely political strategy point of view, Clinton was a much better candidate to handle the only Republican left in the race: John McCain. Clinton is a stronger  candidate and is just better at playing the game.

Obama’s message of “change” has completely deteriorated. No one knows what change he is talking about. There is no substance behind the message. It didn’t have much substance to begin with but, as the campaign wore on, Obama’s views became less and less different than the political status quo.

To add insult to injury, Obama selects Joe Biden to be his Vice President. What? Biden had a shot to be the Democratic presidential candidate 1988 but, dropped out of the race because of a citation confusion when he was a law student? That was the best dirt they could dig up on him and he cowered to it? Of course, Biden has since become a part of the political establishment in Washington. Why would the messiah of change choose Joe Biden as the VP if Obama was really the “change candidate”? Obama’s entire brand and image has fallen out the window.

On the flip-side, McCain has had a reputation–for years–for being a maverick. In reality, the man is not so radical. He is only radical in the sense that he is really more liberal than he is conservative. McCain isn’t going to drastically change anything either but, he has the image going for him. He is a terrible speaker and lost that Straight Talk Express bravado that the media gave him in 2000. Up until McCain picked Sarah Palin to be his Vice President, I was still convinced that the completely uncharismatic John McCain and this historically low approval rating Republican Presidency would give the Democrats the White House in November.

Sarah changed everything. I’m not just going by the media buzz about Sarah Palin. When I first read this completely unknown name in the headlines, I felt it. The Republicans just did something few people expected. They picked a young, unknown, female candidate for the Vice Presidency. I didn’t know who she was, where she was from, or anything and I also didn’t care.

The hardcore Democrats are going to give you a million reasons why Sarah is unqualified for the job. All those reasons are meaningless to the majority of the voters. You don’t need to have served public office your entire life to be qualified. The liberals are literally eroding their own image of change by attacking Sarah in this fashion. Because she is so young and apparently so unqualified, she is also the perfect person to actually enact change. She isn’t going to but, neither was Obama. It really is just a marketing game.

Sarah Palin has won the hearts and minds of millions of voting Americans this week. I don’t agree with a lot of what she said in her speech because it was towing party line but, she is a great speaker. She is easily likable. Her limited public office experience in the far away state of Alaska gives her the image of being the farthest thing from the political establishment in Washington.

I can’t help but like Sarah. I dislike both the Democrats and the Republicans because they are so similar but, it is hard to dislike Sarah right now. Marketing is a damn powerful tool. I won’t be voting for McCain/Palin this November but, I’m willing to bet enough people are that we’ll see them in the White House in 2009. With this one political move, the Republicans have literally turned the tables on the Democrats. The person with the most believable image of change amongst the four is Sarah Palin and she is why the Democrats lost in 2008.

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Rally for the Republic on Russian TV

By Tommy Leung on Wednesday, September 3, 2008 in News, Video



I watched most of the Rally for the Republic online. I couldn’t make it to Minneapolis for a variety of reasons. I really considered going but, it didn’t pan out. While the majority of our news media covered this event in a bad light or just completely ignored it, this piece from Russian TV does a good job.

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