Forbes: How Capitalism Will Save Us

By Steve Forbes (Forbes Magazine) |We are experiencing the devastating consequences of a chain of major economic policy errors, which, to use a current cliché, created the perfect storm. These government blunders temporarily paralyzed the global credit system and are now sending the U.S. and Europe into recession, while sharply cutting back Asia’s growth rates.

Left to its own devices, the credit crisis, which began in August 2007, would have crushed economies as severely as did the Great Depression.

Belatedly, but thankfully, governments recognized that the only way to get credit flowing again was for them to make quick and direct massive infusions of new equity into beleaguered banks, as well as commit to other emergency measures hitherto unimaginable.

If sensible rescue efforts continue–and they will–the immediate crisis will quickly pass. Shell-shocked businesses and consumers won’t recover rapidly from the trauma of recent months, especially as we now cope with recession. But the downturn shouldn’t be prolonged: The economy here and those overseas should start to pick up no later than next spring.

That soon? Despite the crisis, the global economy still retains enormous strengths. Between the early 1980s and 2007 we lived in an economic Golden Age. Never before have so many people advanced so far economically in so short a period of time as they have during the last 25 years. Until the credit crisis, 70 million people a year were joining the middle class. The U.S. kicked off this long boom with the economic reforms of Ronald Reagan, particularly his enormous income tax cuts. We burst from the economic stagnation of the 1970s into a dynamic, innovative, high-tech-oriented economy. Even in recent years the much-maligned U.S. did well. Between year-end 2002 and year-end 2007 U.S. growth exceeded the entire size of China’s economy. Obviously China’s growth rates were higher, but China was coming off a much smaller base.

The world is flush with cash. It’s frozen because of fear, but the cash is there. Productivity gains are burgeoning.

So, will this global boom resume next year, slowly at first and then with increasing momentum? It should. Whether that happens, however, depends on the next, highly dangerous phase: <<<Read the Full Story>>>

>>>Learn more about Capitalism and becoming a capitalist

Communists: US Crisis will help us regain power

REUTERS INDIA | MOSCOW (Reuters) – Russia’s Communists expect the global financial crisis will cause social unrest and help them challenge for power, the party’s leader said on Saturday.

Gennady Zyuganov told the party’s annual congress the Communists should make maximum use of the growing public discontent caused by the economic downturn to try to restore their political strength.

“The wind of history is blowing in our sails again … At this time of crisis the world of imperialism is starting to die. We are standing on the threshold of political and social shifts,” Zyuganov said in a 2-hour speech opening the congress.

Russia’s Communists ruled the Soviet Union for eight decades and remained a major opposition force for several years after the collapse of the Soviet Union at the end of 1991.

But the party has since lost much of its authority and many analysts say it is too weak to seriously challenge for power.

The Russian authorities are trying to minimise the impact of the financial crisis by promising billions of dollars of state aid. Prime Minister Vladimir Putin has pledged higher social payments to the needy and lower taxes for business.

“The authorities are clearly not coping with managing the country … A mass social protest is brewing and it is hard to predict now when and in what shape it will explode,” Zyuganov said.>>>>Read the Full Article

Rogue Agency Arrests Utah Mom

Imagine you’re Annie Bradley, a married stay-at-home mother of eight. Two weeks before your 43rd birthday, its 9:00 pm and you’re sitting down with your husband and two house guests discussing a very difficult topic—the sale of your home.  Uncharacteristically, your seventeen year-old daughter interrupts the discussion with a stunned look on her face, informing you that police and federal agents are surrounding your house.  An armed Sheriff’s deputy has followed closely behind her and now stands before you asking, “Are you Anna L. Bradley?”

The scene in the Bradley’s neighborhood Tuesday was much like something you might expect to see on the big screen, or read about in one of those hard to believe mystery novels.  But for Annie, her husband Randy and their eight children, it was a very real nightmare.

“I begged them not to take her,” explains her husband.  He couldn’t understand why law enforcement was at his house in the middle of the night, demanding $10,000 cash for bail, or they were going to be taking his wife.  At 9 o’ clock in the evening, when banks and businesses are closed, it’s close to impossible for an average family to come up with that kind of cash.

So, at approximately 9:41 pm, after local agents from the Utah County Sheriff’s office, accompanied by at least two federal agents, had surreptitiously surrounded the family’s home and afterwards made quite a scene for the neighborhood, law enforcement agents placed Annie Bradley under arrest, handcuffed her, and led her the long way across the front lawn, in front of inquiring neighbors, stunned house guests, her confused and bewildered husband, and perhaps most difficult, in front of her sobbing children.

When asked why they were doing this in the middle of the night, with so little opportunity for the Bradleys to even reach an attorney, one member of the Utah County Sheriff’s department replied, “Well, we don’t usually deal with nice folks like you.”  Annie was booked into jail and held on $10,000 bail.

Annie Bradley's Arrest Photograph

While the image of her arrest might seem dramatic, the facts surrounding her arrest are even more bizarre. Annie Bradley wasn’t arrested, as it turns out, because she’s suspected of committing some violent crime.  The barrage of law enforcement officers didn’t surround her house to execute an arrest warrant because she’s suspected of some kind of drug involvement or some other dangerous crime.  Annie Bradley was arrested because she and her husband have been caught up in a political battle related to the Utah Department of Commerce.

In February of this year that Utah Division of Securities Director Wayne Klein resigned under a cloud of suspicion for corruption and mismanagement.  Randy and Annie Bradley were one of the cases originally overseen by Klein.  Earlier this summer, on July 3rd, an independent audit of the Division was delivered to the State Legislature citing widespread abuses, mismanagement, miscarriages of justice and a government agency rife with internal conflict, lack of leadership and suffering serious internal divisions.

But what does this have to do with Annie Bradley?

Well, let’s start with the basics.  A lifelong resident of Utah County, the last year and a half has been an exceptionally difficult time financially for Annie her family.   In a situation becoming all too common in America today, with the mortgage market in shambles, and the credit industry in upheaval, Annie and her family are in the middle of an unplanned move.  The guests in her home Tuesday night when she was arrested, were negotiating the purchase of several pieces of furniture to be sold along with their house.

The previous success of her husband’s small business Race Holdings, LLC—which had enabled the family to move from Springville just a year and a half ago into their dream home on the west side of Mapleton—has become a thing of the past.  With no business income to speak of for most of the past year, the family has been living on food storage, modest financial reserves, and the hard work of the entire family to bring in whatever they can.  Randy has recently taken a job working over six hours away from his family, in Montana.

The Bradleys however, are no strangers to hard work or sticking together.  Generations of both sides of the family have made a living at hard work in Utah, with no troubles or run ins with the law and no questions about their integrity or reputation.  What they are unable to comprehend however is in the midst of these difficult circumstances, why was Annie Bradley arrested, handcuffed and taken from her family in the middle of the night.

The entire Bradley Family

What would cause the Utah County Sheriff’s office, in conjunction with Federal Agents, to surround the family’s home as if they were conducting some kind of undercover sting operation?  Why would law enforcement arrest a stay-at-home mother in the middle of the night when it’s almost impossible for the family or friends to reach an attorney or to get access to cash for bail?

The charges made against Mrs. Bradley, according to the affidavits and other documents provided by the Utah Division of Securities allege that Annie was involved in committing securities fraud against her neighbor.  The Bradleys dispute the charges. Annie Bradley never worked for her husband’s business and was never an employee or manager of the company.

The neighbor, Mrs. Wendy Hendry, who owns and manages her own real estate related investment company loaned $30,000 to Race Holdings, LLC in June of 2007.  The loan from Mrs. Hendry’s company to Mr. Bradley’s company, was a high interest loan charging 36% annual interest.  According to banking records the entire loan plus interest and fees was repaid in full by Race Holdings in November of 2007.  No subsequent business was transacted between the parties.  Annie Bradley had nothing to do with it.

So what were the grounds upon which to make such a dramatic arrest of Mrs. Bradley? Apparently, Annie was arrested as part of a legal strategy related to another case being investigated by Securities Division Enforcement Director Michael Hines under the direction of his superior Ms. Francine Giani the Executive Director of the Utah Department of Commerce.  Their plan was evidently to increase pressure on Annie’s husband, Annie’s friends and some of her husband’s former business associates related to another case.

Substantiating the chain of events is a reputable and prominent Utah County securities attorney who has represented clients and worked directly with the Utah Division of Securities for more than a decade.  FCD has obtained multiple audio recordings substantiating the shocking reality behind Mrs. Bradley’s arrest, but has been asked not to reveal the identity of this attorney for fear of reprisal and other consequences from the Utah Government.

Apparently Mr. Hines believed that Randy would do “just about anything” to keep his wife out of jail.  In the recordings obtained by FCD it is revealed that Mr. Hines’ intention was a strategic decision to implicate Mrs. Bradley regardless of her actual involvement in any suspected wrongdoing, in order to bring pressure on her husband to “turn State’s evidence.”

Hines reportedly explained,

We have to put maximum pressure on people…and if Mr. Bradley can’t provide me information that would help me then we are going to charge them both   The information that would help is for Randy to say contrary to that whole affidavit basically, to say he received misrepresentations.

Annie and her Husband Randy Bradley

In the same conversation Annie and Randy were told that if Randy wasn’t able to provide the information he was looking for, Hines intended to follow through with his threat to put Annie in jail.  At one point in the conversation Mr. Bradley can be heard asking,

“What if there isn’t any information?… I would have to commit perjury to say that.”

The formal audit released to the public after several complaints about these kinds of abuses, explains that obtaining cooperation or even false confessions under the threat of jail time is a “Division Tactic” where investigators attempt “to coerce cooperation by intimidating and threatening that the person would be arrested.”

At one point in the recordings it is revealed that in an earlier conversation with Hines, prior to her company even being repaid, Mrs. Hendry was uncomfortable with Mr. Hines agenda, insisting;

“We don’t care about the money.  Let’s just rip up the promissory note.”

Even though Annie was not involved, even though her neighbor apparently did not want to complain against the Bradleys, and even though Race Holdings, LLC did in fact repay the full amount of the loan in question as per the written agreement, Michael Hines had another objective and it required that the case proceed against Annie.

According to Hines, he could charge Annie with a crime based solely on one conversation she had with her neighbor in church one Sunday.  Evidently, during a short stretch of time in mid-2007 when her husband’s business had fallen behind on monthly payments Mrs. Hendry approached Annie looking for re-assurance that the debt would be paid. In defense of her husband, Annie reportedly replied, “My husband is an honest man, and he will repay this debt no matter what.”

Annie Bradley, targeted by Michael Hines

That statement, innocently made by a spouse, in a Sunday church meeting, according to Hines, “constitutes an inappropriate statement or omission of material facts, and therefore constitutes fraud.”

The Bradleys are confused as to how Annie’s statement could be considered fraudulent, especially since her husband later did exactly as she had suggested, ensuring that his business repaid the very high interest loan, plus all interest and fees, as agreed.  The Hendrys profited, according to FCD calculations, in excess of $10,000 in six months and received a full recovery of principal prior to the note’s maturity.

Answering the question of how such a situation could be construed as fraud, Utah Securities regulator A. Gary Bowen provided a rather lengthy but insightful explanation.  He explains:

“People do not understand the nuance of securities regulation.  Most attorneys do not…we can go after these people and we have been just overwhelmed by the filings, you get into my office I’ve got them practically stacked up to the ceiling and I’m not making this up and I’ve got them stacked all over the floor so we’re pursuing them…

“I’m going to recommend you look at section 61-1-1 which is entitled ‘Fraud Unlawful’ and you’re going to discover a definition of fraud that your average attorney is going to be totally clueless about…the nuance that the average attorney doesn’t get, whose competent in real estate, competent in corporate or business law, competent in contract law, is the mere omission of a material fact… do you know what the implication of fraud is, criminal prosecution, time in jail!”

Mr. Bowen who according to his own representations has been charged with advising Utah citizens and business owners about how to avoid breaking the law for more than ten years, later admits that its impossible to pin down what might be construed as “fraud” if the government wants to press charges.  He continues,

“If you look at our definitions section, I’ve been working for this for years and read it a number of times but it really sunk into me here this summer when I was reading it and talking to someone like you, you go in and read the definition actually under 61-1-13 of fraud, and its one of those things that you say, well, what does that mean? The answer is, I don’t know.”

With a definition like this, its no wonder that Utah has become known by some as the “fraud capitals” of the West.  Mr. Bowen’s advise boils down to a simple axiom.  If the government thinks it is fraud, its fraud.

Even experienced attorneys, according to Mr. Bowen, can’t understand what the enlightened public servants in the Department of Commerce might allege.  Or, in short, all Utahans should be very careful when discussing their spouse’s integrity in church on Sunday.

As 2008 rolled around, the Bradleys lived with the daily uncertainty and fear of being charged with fraud as a result of Mr. Hines strategy.  It didn’t seem to matter that both parties agreed the loan had been satisfied and that Annie Bradley had nothing to do with it, other than being married to the business owner.

At one point Randy reveals that the stress became unbearable.

“I came close to considering saying whatever Mr. Hines wanted me to say if it meant it would keep my wife out of jail.  I decided against it, but I couldn’t trust Hines anyway if he was willing to build another case based upon a lie.”

Resigned. Former Director Wayne Klein

But this past February things started to look brighter from the Bradley’s perspective, when Utah Securities Director Wayne Klein was forced to resign because of scrutiny being placed on the Securities Division for its alleged abuses.  The Bradleys along with many small business owners in Utah hoped a new Director would be more just in his oversight of the Division and more effective at reigning in employees like Hines.

Lying, by “any person” during a proceeding under Sate Securities Laws is a 3rd degree felony.  While Randy decided against going along with the enticements of Hines, Audit Manager Tim Osterstock’s performance audit of the Division clearly documents that the Division had been engaging in deceptive practices, evidently believing that government employees are exempt from the requirements of the law.

“The division has, at times, violated the terms of its settlement agreements.  In one case, the division agreed to not publicize the action or commence further administrative actions and then violated both terms of the agreement.  The person accused told us he felt compelled to plead guilty to a lesser criminal charge rather than place his business in jeopardy defending a greater charge.  The division agreed to not seek additional charges but nevertheless pursued an administrative action.  The respondent then signed the settlement agreement after the division agreed to not publicize it.  However, the day the settlement was signed, the division publicized the information on its web page and also published the information in its newsletter the following month.”

The audit also revealed that the Division made false allegations against innocent businessmen as part of its coercive tactics, obtained false confessions and false settlements by threatening citizens with arrest and jail time, and that the State of Utah had been violating its own legal settlements with impunity while Department employees escaped criminal investigation for such activity that clearly violates State law.

With this information now public, the Bradleys anxiously waited for the government to take action to reform the Department.  They also continued to correspond regularly through their attorney with the Division of Securities and specifically with Securities Division attorney Scott Davis who works for the Utah Attorney General’s office.

Mr. Davis corresponded multiple times with the Bradleys about resolving the civil concerns raised by the Division, but never informed the Bradleys that they were in eminent danger of being arrested or criminally charged.  Things seemed to be looking better for the Bradleys, and they were hopeful they could soon put this troubling ordeal behind them.

Then, out of the blue, new rumors began circulating of the Bradley’s pending arrest.  The rumors came from the most unusual of places.  For some unexplainable reason in early August of this year, Mr. Hines called Ron Hendry and explained that the Bradleys were being charged criminally and would soon be arrested.

“I didn’t know what to make of it,” said Randy about the phone call from Hines to Hendry.  Mr. Hendry subsequently began sharing the information with other Bradley neighbors including their religious leaders.

Although the Hendrys had profited handsomely from their transaction with Race Holdings, Mr. Hines, in very questionable legal territory, evidently had some reason for giving them a “heads up.” As it turns out, Hines had told the Hendreys that they were witnesses, as victims, in the now criminal case against both Randy and Annie.

Hines, according to Ron Hendry, had been in contact with them seven our eight times throughout the months of June and July.  During this same time, the Bradleys unsuspectingly continued to hope things were getting closer to being resolved.

When Randy received a surprise phone call from his local Bishop asking about his pending arrest, he wasn’t sure if Ron Hendry was just spreading gossip, or if the strange collaboration between he and Hines were actually fact.  So, through their attorney the Bradleys went straight to the government.  They contacted Scott Davis of the Utah Attorney General’s office.  Randy explains,

“I thought we were working things out.  Through our attorney we were in regular communication with the State.  They are the ones who postponed our last meeting.  Through our attorney we contacted the Attorney General’s office and Scott Davis, the man we were told was the attorney for the Division and he acted surprised and claimed he knew nothing about any criminal charges.  He acted completely embarrassed and didn’t seem to know what Michael Hines was up to.”

Huntsman Appointee, Executive Director of the Utah Department of Commerce, Francine Giani

Seeking to defend herself and her Department, once the audit was released, Francine Giani publicly insisted that her Department had taken all necessary corrective action.   However, one of the major indictments in the audit was that Giani’s staff was repeatedly in violation of Utah State law related to how the State’s lawyers from the Attorney General’s office were being ignored as the Division pursued its own agenda.  The audit reads in part,

“[S]taff from the AG’s office are assigned to represent the  division.  Securities law states “The attorney general shall advise and represent the division and its staff in all matters, administrative or judicial, requiring legal counsel or services in the exercise or defense of the division’s power or the performance of its duties” (Utah Code 61-1-21.5).  There have been conflicts with both how the former director utilized the attorneys representing the division and the level of authority the attorneys should have in defining division activities.  In some cases, it appears the former director assumed the role of the attorney.”

Despite the Attorney General’s office claiming that they knew nothing about criminal charges or arrest warrants, to the shock of Annie, Randy, and their attorney, such warrants were indeed issued.  Randy was arrested on August 29, 2008.

After Randy’s arrest he worried that his wife would be next.  Through their Attorney, the Bradleys made an agreement with prosecutors that with Randy voluntarily returning from his job in Montana, surrendering to the Utah County Sheriff’s office, and providing the required $10,000 bail, the warrant for Annie’s arrest would be withdrawn.  A few short days later however, local and federal agents were surrounding the Bradley’s home and in almost no time, Annie was in jail.

“I told them that we had already taken care of things,” says Randy.

“I begged them not to take her.  I explained that the prosecutor had agreed to release the warrant for Annie’s arrest since I cooperated and posted $10,000 bail.  The Deputy told me that he believed me, but since I had nothing to prove it, there was nothing he could do.  I wasn’t angry at the Sheriff’s office, they were professional and doing what they were supposed to do.  But, who is going to stop Michael Hines from ruining people’s lives while he does whatever he wants?  That is what makes me so angry.  He doesn’t care about my wife, my kids, or our family.”

Annie and Her Two Daughters

So, how and why was Annie arrested so dramatically this past Tuesday night, even after the prosecutors had agreed to release the warrent for her arrest? Why didn’t the government follow the usual procedure when dealing with reputable citizens, not charged with violent crime, having no past criminal history, and just deliver a “Summons to Appear?”  Evidently, that wouldn’t work for Mr. Hines strategy.

Annie Bradley was arrested because Randy and Annie had the courage to resist Mr. Hines for almost a year.  That, evidently, is just not acceptable to the State of Utah, Department of Commerce.

It’s not just the Bradleys who have had to make this tough choice.  The pattern of unjust enforcement by the Division of Securities is revealed unmistakingly in the formal audit results, but Ms. Giani and her boss Utah Governor Jon Huntsman Jr., have neglected to address the gravity of the situation.  Certainly, Ms. Giani and the new Securities Director Keith Woodwell have failed to reign in Hines and others engaged in the abusive practices.

The actual truth related to Annie Bradley’s arrest might have never come to light except that a number of individuals, attorneys, businessmen and even Department of Commerce employees have grown weary of this unchecked abuse and have begun using audio recording’s to try and help document this behavior.

The recordings obtained by FCD are a collection from multiple sources, and cover a multitude of cases. These recordings, and hopefully others yet to be provided to FCD by interested citizens, are beginning to serve as a powerful tool to provide critical insight and political leverage to address this rogue government agency reeling from criticisms, rife with internal conflict and desperate to cover-up its own current and past misdeeds.

Nevertheless, some bureaucrats can’t seem to understand how persecuting small businessmen in Utah (and their wives) is the same as persecuting normal families.  Some government officials can’t seem to understand how unjust it is to have a government agency justify their supposed administration of justice with lies, cover-ups, excessive force, coercion and deceit.

Annie Bradley’s arrest is one more revelation in a series of events alerting Utahan’s to the very real consequences of a corrupt government agency, the conduct of malicious bureaucrats and an incompetent government appointee—Francine Giani—who seems more worried about the appearance of “protecting investors” than she is about following Utah’s laws and protecting all Utah citizen’s civil rights.

The Bradleys have now had to come up with $20,000 cash bail so that they could continue remain free to take care of their family while continuing their fight against a corrupt government investigation.  This amount pales in comparison to the mounting legal costs they’re incurring in a legal circus that could last many more months if not years.

But, instead of heaping added difficulty on their heads, the State of Utah should be issuing the Bradleys a sincere apology as part of its first step to clean up the seriously damaged reputation of the Utah Government.  We should all be grateful for families like the Bradley’s that stand up to corruption, that work constantly to provide a good life for their children, that conduct an honest business, and do all they can–even if they’re late on payments—to always pay their personal and business debts as agreed.

“This has probably been the most difficult emotional thing that has ever happened in our lives, but we’re going make it through,” says Randy, soberly.  “Annie has said that if this is what it takes so that someone will finally put a stop to people like Michael Hines, its okay, I’m okay with it.”

In the face of America’s current economic difficulties it seems like the Executive Branch of Utah’s government has somehow forgotten the virtue of families like the Bradleys and the responsibility to protect all Utah citizens equally.  It is, after all, small businessmen and women, along with their families, who regularly take risks and assume responsibilities that creates more jobs, deliver more services, and add more value to our community than any government appointee and her bureaucrats.

Despite Mrs. Giani’s public assurances, there is an obvious problem in the Utah Department of Commerce.  Evidently this problem extends all the way to the head of the Executive Branch into the office of Governor Jon Huntsman.

Despite calls by numerous state legislators for the removal of Ms. Giani and several of her remaining staff; and despite the multitude of problems revealed in the recent performance audit of her Department; and finally despite even the personal appeals made directly to him from Utah’s own Attorney General for her firing, Governor Jon Huntsman (who is the only elective oversight provided by State law over Francine Giani) seems to share the philosophy of Giani and Hines, namely, that innocent people being wrongly accused is simply a price Utahans should get used to paying if they expect the government to do its job.

That’s an interesting theory of government.  No matter how nice, pleasant or polite Governor Jon Huntsman, Jr. comes across — there is no mistaking that he was not elected to simply look good in office.  Hard decisions sometimes have to be made, and in this case, when dealing with the Department of Commerce, the direct action that needs to be taken just isn’t that hard to discern.

Tyranny, at any level, only works for so long.  What is happening in the Utah Department of Commerce is wickedness; there is no way to skirt around the issue.  A full audit of all divisions within her stewardship will reveal even more succinctly that it is time for leadership in the Governor’s office, in the legislature, and in the judiciary in dealing with abuses like the Giani’s absurd, forceful, and dramatic arrest of Annie Bradley.

This problem will come to a head and the unjust, and in some cases criminal, activity of government bureaucrats along with the startling incompetence of executive management in the Department of Commerce will ultimately cost some politicians and employees their jobs.  Someone with courage will ultimately step forward to address and correct the very serious problems.

In the mean time however, the dirty politics and renegade operations of the Utah Department of Commerce will ensure that more Utah families like the Bradleys will be trying to explain to their small children why mommy or daddy was dragged away in handcuffs, in the middle of the night.

It just doesn’t seem like America.

The Bradleys

Fast Food Slow Down in L.A.

TAYLORSVILLE, UT | 30 July 2008 | Amidst the ongoing news of a heated and controversial election, failing companies and markets, and myriad world conflicts, talk of fast food seems a low priority. The city of Los Angeles thinks otherwise, however. In a unanimous vote, the city council voted on Tuesday decided to “place a moratorium on new fast food restaurants in an impoverished swath of the city.”Their reasoning? “A proliferation of such eateries and above average rates of obesity.”

Their goal? “To attract restaurants that serve healthier food.”

Their problem? For whatever reason, restaurants that serve healthier food have not already freely chosen to operate in the area, and the number of fast food restaurants is not likely to be the thing that has kept them away.

Key Points

• After analyzing market conditions and local customer base, many restaurants have decided that it is in their best interest to operate in other areas of town.
• The only real incentive that the government has to attract new business to the area is tax breaks.
• Use of tax breaks to attract a business to an area that doesn’t have the customer base to support it is a recipe for failure. While lower taxes appear to increase profit margins, the increase is synthetic. Without revenues from a loyal customer base that can afford the products offered, there will be no need for tax breaks—there will be nothing to tax. Both the business and the government will be frustrated when the venture doesn’t work.
  Blocking other ‘less desirable’ establishments from opening is an abuse of the city’s power. If the market supports the fast food joints, they should have the freedom to operate as they please, where they please.
• If people really are looking for healthier choices, then the market will support the restaurants that offer those choices. Those businesses should compete based on their merits, rather than on government-given advantages.

Conclusion

Just like some of the left believe that they should keep the price of gas high because it will force people to quit ‘damaging the earth’, the L.A. City Council believes that they can force the people to be healthy by limiting the amount of fast food available to them. This is faulty logic. Dollars follow value. That means that people spend on the things that are important to them. “They should have better things for children,” said Rebeca Torres, a South Los Angeles mother of four. “This fast food really fattens them up.” If the price and convenience of unhealthy fast food has caused people to ignore healthier options (inside or outside of restaurants), then it is unlikely that any amount of government planning will lead them to patronize healthier, government-sponsored restaurants.

When the Nazi’s came to believe that there were problems with certain groups in their society, they began eliminating them. Their impossible goal was the social engineering of a perfect race. While the tactics being used by the City of L.A. are significantly less harsh, they are based in the exact same vein of thinking. With all that is going on in the world today, fast food does seem a low priority. But, the underlying attempt at social engineering is highly disturbing and should be a high priority to any freedom loving capitalist.

Action Items

1. Look at some of the ordinances passed by your city council. Do they generally tend to promote individual freedom or limit it?
2. Pick an ordinance that has been in place for a long time. Does the ordinance really make any difference in the city?
3. Make a list of ways that the community (citizens, not government) could persuade its citizens to effect the same changes without using force.
4. Take a deeper look at your personal relationships. When you want something to change in someone else, do you persuade or try to force?

MRFC Principles: (2, 4, 7, 8, 9, 11, 12)

Sources

Christina Hoag, LA blocks new fast-food outlets from poor areas, Associated Press, July 29, 2008.

(Matthew Pilling is a member of the FreeCapitalist movement known as the Canadian Capitalist. Despite his time in the Great White North, Matthew loves America and all that it stands for. He lives with his wife and two children in Taylorsville and works in finance.)

The Moral Confusion of Wal-Mart Haters

MAPLETON, UT | 16 May 2008 | It’s not that uncommon for people to resent big business – and the degree of their resentment is usually in proportion to the size and success of the object of their hate. In response to an article on the Huffington Post, I would like to examine the claims of one particular writer, who is not alone in his delusion – such is the tone of criticism heard in many venues against the successful businessman. This writer’s wrath was kindled as he observed efforts to entice people to spend their “economic stimulus tax rebates” at Wal-Mart. In explaining why he thinks such action won’t truly stimulate the economy, he reveals a deeper misunderstanding of moral economics:

With its low price focus, Wal-Mart may appear to help the U.S. economy. But, the reality is that with its poor wages and benefits, massive China sourcing and tax avoidance, Wal-Mart makes its workers and the communities where it operates poorer.

How is it possible for a company that hands out millions of paychecks every year to be “making its workers and the communities where it operates poorer”? No matter how small the paycheck and benefits are, can you actually become poorer by getting paid? Would even a 10-cent paycheck not make you 10 cents richer than you were before? If you could magically wave your hand and make the Wal-Mart disappear from your neighborhood, would people suddenly start becoming wealthier? Maybe the writer believes that unemployment benefits and other government programs are the key to wealth.

Think about what even a small raise for Wal-Mart’s 1 million+ workers would mean nationally, or what it would mean to your city or town if everyone at your local Wal-Mart got a raise.

What a great idea! Here, the writer, from the perspective of someone outside the relationship between Wal-Mart and its workers, proposes changing the terms of employment for the good of the community. He doesn’t bother to ask how to accomplish it, nor does he consider any consequences other than the presumed benefit to the people as a whole. In this mentality, it is assumed that the costs of such an idea will simply be borne by the wealthy, who have enough already and can afford to give more to everyone else. Presuming a beneficial outcome for “the people” is supposedly justification enough. Readers of Atlas Shrugged will immediately recognize this philosophy, and the consequences of imposing it on the producers of value by force.

As our nation’s largest employer and most financially-successful company, Wal-Mart is a singular American institution. It occupies a unique position in our world by virtue of its size, reach and responsibility for the livelihoods of millions of workers and the needs of billions of consumers. And with such overwhelming influence comes certain moral responsibilities. It is the acceptance or rejection of those responsibilities that determines greatness.

There is both praise and damnation in this statement, acknowledging Wal-Mart’s success while simultaneously using that status as tool of condemnation. These words embody the very morality of the modern socialist mentality. It is a sentiment that views profit as guilt, a burden to be relieved by giving it to others. It is the claim that the degree of one’s success is the degree of one’s indebtedness to others – that it is an indication not of the value one has created, but of a debt owed to society by virtue of its ability to do so. Here, greatness is measured by obedience to “certain moral responsibilities”, which are unnamed, undefinable, and subject to no standard other than the self-loathing of the moocher. No recognition is made of the effort required to succeed, only demands made of the fruits of those efforts – as if such fruits were simply a matter of luck and required better allocation.

Ironically, if a person were to win the lottery, few would claim that the prize should be redistributed to all those who weren’t lucky enough to win (despite the fact that those winnings were created from the pockets of all those who participated freely). But when the prize is earned through value creation and free exchange (from the pockets of the customers of Wal-Mart), many call for the profits to be more “fairly spread”. Such a mentality rewards gambling and penalizes effort, and breeds the idea that the lottery is a fair game where no one wins at the expense of others, while mercantile exchange is a dirty business.

Wal-Mart has rejected those responsibilities and because of that choice, the money spent there does nothing of what it could to strengthen our economy. Higher salaries, quality affordable healthcare and paying what they owe like any good American, are just three things Wal-Mart can do tomorrow that will make them a company worthy of our money.

By ignoring the debate about whether government handouts (taken from the taxpayers or from the printing presses) are even capable of “strengthening our economy”, and proclaiming the presumed evils of Wal-Mart, this writer has successfully avoided any meaningful discourse on how to effectively stimulate any economy. In the process, he has revealed his true agenda: to discourage people from shopping at Wal-Mart due to their failure to adhere to the moral standards of the moochers and looters.

Conclusion:

At the core of this argument is the presumption that if everyone who worked for and shopped at Wal-Mart knew (as the writer claims) the “hidden costs” of doing business with Wal-Mart, they would cease to do so on moral grounds. The fact that millions of people choose freely to accept wages and purchase goods from Wal-Mart is the greatest evidence of the morality of its business, and a far greater indicator than the complaints of this writer. As is usually the case in the socialist mindset, the writer presumes to know better than millions of free individuals how best to use their resources (even their own labor) – and given the power (of government), would likely use force against the villain he condemns, claiming to do so “for the good of the people”. And like every other well-meaning tyrant in history, would ignore the evidence and the freedom of the actions of “the people” for their own sakes.

If Wal-Mart – or any company – is not in the business of creating value for its employees and its customers, it will not be in business very long. Thus Wal-Mart’s success is evidence of the value it has created (Principle 6: Profit is the Tool of Validation). As long as its business does not rely on force or deception in its transactions, whether for wage labor or for cheap laundry soap, there can be no greater statement of the value it provides to each individual and thus, to our economy as a whole, than this confession by the writer:

“…our nation’s largest employer and most financially-successful company”

Action Steps:

• Examine your relationship with the people and companies you do business with – are your dealings with them voluntary, and free of force or deception?
• Write a letter to the editor in your local newspaper in support of those businesses (big or small) that are successful as a result of the value they create for you.
• Research what laws are being proposed in your community (from the city council to the state legislature) that seek to control prices, wages, or other terms of free exchange. Contact your representative and express your opinion.

MRFC Principles: 6 (5,7,8,9)

References:

Why Wal-Mart Does Not Strengthen Our Economy – by David Nassar
http://www.huffingtonpost.com/david-nassar/why-wal-mart-does-not-str_b_99463.html

Senate Seeks Control of Internet

HIGHLAND, UT | 23 APRIL 2008 | In 1964, Ayn Rand wrote about the chaos that was previously the radio industry. She explained that capitalism was the perceived blame for this chaos but countered that the lack of ownership of the airwaves, rather than a rational system of ownership of them, was the actual blame. Forty years later, the nation is still grappling with this chaos, and it wishes to bring radios younger brother into the fray: the Internet. John Dunbar of the Associated Press (AP) reported Tuesday that the Senate, specifically Olympia Snowe (R-Maine) and Bryon Dorgan (D-N.D.) introduced legislation that would force Internet Service Providers (ISPs) to assume a policy of “network neutrality.” Currently, ISPs admittedly prioritize data packages, sending what they believe is more important ahead of lesser important ones. This, to some, seems unfair, and Dunbar reports that this debate has lately heated up. Adequately understanding the government’s proper role would aid greatly in this matter—the issue is not about fairness; it is about property rights.

Key Points

• Rand teaches, “Any material element or resource which…requires the application of human knowledge and effort, should be private property—by the right of those who apply the knowledge and effort.” In other words, the person who put forth this Human Life Value should be the rightful owner of his efforts.
• The Internet exists in name only, for it is merely a system of wires, hardware, and software, no matter how high tech; all assembled by individuals and therefore individually owned, operated and maintained. The government neither owns nor controls these devices collectively.
• There are many levels of ownership involved with the Internet. For example, those who own the servers, routers, cables, etc; and those who own the intellectual property stored and transmitted on these devices.
• An individual user owns the data he created, an email for example. He is simply renting the rest. He therefore has no more right to those devices than a driver on the road has a right to owning the guardrail or the lines painted on the street.
• Though acting more like a pipeline than hauling buckets, the transmission of data through this web of communication is only facilitated by the work of human hands.
• Ayn Rand explained, “It is the proper task of the government to protect individual rights and, as part of it, to formulate the laws by which these rights are to be implemented and adjudicated. It is the government’s responsibility to define the application of individual rights to a given sphere of activity—to define (i.e., identify), not to create, invent, donate, or expropriate.” In other words, if the dispute over ISPs discriminating between pieces of data does come to government’s doors, government should ask one question: “Whose property is this?” When the owner is sufficiently found, government should then say, “Great. All the rest of you, do what the owner says.”
• However, there is a great sickness in our land. It is the sickness of collectivism. Too many people believe in the mantra what’s yours is mine. Dunbar reported beautifully on this when he quoted Justine Bateman, the TV actress, “The idea of your site succeeding or failing based upon whether or not you paid the telecom companies enough to carry your amterial or allow quick access is appalling.” A closer look at this statement reveals an entitlement attitude regarding activity on the Internet, and a lack of understanding of how the web works.
• A great way to sort this out is to return to the first statement: “Any material element or resource which…requires the application of human knowledge and effort, should be private property—by the right of those who apply the knowledge and effort.” With this it becomes understandable that individuals own the Internet and it is their agency and stewardship to manage data traffic the way they see best. If customers are dissatisfied, they have the right to seek out a more satisfying Provider and become their customer. If data traffic is handled inefficiently, the market will decide who stays in business, and who finds a different line of work. This is as it should be.

Conclusion

Just as radio revolutionized the way we communicate, the Internet has revolutionized that revolution, making the availability of information almost instantaneous around the world. It has revolutionized the way we communicate, how we do business, how we store information, how we pass time. Properly understanding the hard lines of property ownership will aid each one of us in acting appropriately in this matter. The government’s role is not to demand fairness, as seen in the eyes of those who would rob others of their hard work, but rather to insure that the lines defining ownership are clearly drawn and that those who would cross those lines are duly dealt with. Anything else is an abuse of power.

Action Items

1. Review Ayn Rand’s “The Property Status of Airwaves” (p. 122–129 of Capitalism: The Unknown Ideal). Decide how her message applies to the question of Internet use and government restrictions.
2. In questions of “Is it good to do _____” (i.e., Is it good to demand that ISPs treat each bit of data equally?), start asking, “Whose property is ______?” Then act accordingly.
3. Evaluate your own life. Identify areas where you may have misunderstood the principle of property rights. Resolve to change your perspective regarding property rights.

MRFC Principles: 13 (11, 12, 13)

Resources

John Dunbar, “Senators Debate Future of Web” AP, Yahoo! News, April 22, 2008.

Ayn Rand, “The Property Status of Airwaves,” Capitalism: The Unknown Ideal, Signet, 1967. pp. 122–129.

Superheroes? Carl Wimmer and Friends

UTAH COUNTY, UT | 4 April 2008 | The Salt Lake Tribune’s least credible columnist, Paul Rolly, has recently demonstrated how scared and inept the democratic party loyalists are when conservatives get organized in Utah. Absent any credible criticism of Carl Wimmer (R – Herriman), Ken Sumsion (R-American Fork), Chris Herrod (R-Provo), Keith Grover (R-Provo) and Steve Sandstrom (R-Orem) Rolly decided to make a political argument by sarcastic metaphor, but like most liberals – he doesn’t quite come to grips with the power of action over rhetoric.

For example, Rolly whimsically claims that the GOP is out to “rescue its superheroes” because of a flier recently distributed for an event designed to support the “Fab Five” state legislators. Funny thing is that Rolly has no argument to back up why a normal, organized fund-raising & event is a rescue attempt. Perhaps it’s a victory rally? Of course, Rolly doesn’t see it that way, because like many in his camp he’s still too busy gloating over the Utah vouchers issue to see much of anything. In fact, Rolly’s only substantive remark in his entire essay is that “All five dutifully followed leadership’s admonition to vote for vouchers…”

The facts are however, as they say, stubborn things. They are especially difficult for Attila like bullies who call it a job to poke rhetorical fun at good men who serve their community.

Fact #1 – Vouchers.

Rolly argues that the GOP leadership is supporting these five legislators because they “dutifully” followed orders this past session. Funny thing is that three of the five campaigned in support of vouchers long before receiving any orders from anyone. Sometimes Democrats forget that to hold office you don’t actually have to wait for a leader to call you up and tell you your position.

Fact #2 – Stand-Out Legislation

Rolly glosses over all of the legislative details with a blanket accusation that none of these five elected representatives had any “stand-out legislation.” The first error in Mr. Rolly’s argument is t o think that Utahans, especially Republicans, send freshman legislatures into office solely for the purpose of writing new laws.

I think it is a serious surprise to most liberals to actually try and imagine a government whose effectiveness isn’t measured in the number of new laws passed. Additionally, Rolly ignores records like Wimmer’s where fully half of his “introduced bills” were proposed amendments to existing laws, on such important subjects such as child abuse, environmental crimes, toughening prosecution on those who hurt children, etc. Other legislation sponsored by this freshman group included immigration reform, the rights of adopted children, and the reform of certain outdated criminal codes. Of course, this isn’t “stand-out” to Rolly because it left out global warming.

It is quite obvious that Rolly doesn’t count on educated Utahans to simply hop on the Internet and take 15 minutes to view the actual records of these freshman legislator’s – which records speak for themselves (with or without the support of leadership).

Fact #3 – Republican Challengers

It is true that four of the five candidates mentioned are being challenged by members of their own party, however it is far too early to tell how serious the challenges are. The state and county conventions will play their role, and the newly elected delegates will get to decide if any of the challenges are serious enough to merit a primary election. The irony is that Rolly lumps Wimmer into the same analysis (Wimmer is the Mr. T of the group Paul, just to answer your question) – when he is not even opposed by a Republican. Wimmer, as Rollly notes, is opposed by a “former” Republican who is now running as a democrat. Small details, I’m sure, for Mr. Rolly. Think about this for a minute, Dave Hogue was in the state legislature for ten years as a Republican and has now come out of the closet as a democrat (which most of us already knew by the way.) Stubborn facts.

Rolly’s “ad hominem” humor is no substitute for “brain-on” activity. Thank goodness he writes for the Tribune, or else some voters who are actually affected by the decisions of these legislators might have been confused.

It does take a superhero these days to stand up against the politics of liberalism, socialism, and do-gooders who think that the reason a man or women is elected to office is to continue the plunder of previous legislatures. Rolly also ignores important events that are actually working to root out government abuse, waste, and corruption here in Utah, events that would not be happening without the support of men like these. For example, it will be interesting to see what tongue in cheek quarterbacking Rolly offers when the legislative audit of the Utah Department of Commerce comes out if it tarnishes the reputations of his fellow travelers such as Francine Giani, Wayne Klein, and Thad LeVar. But, we’ll leave that for a future day.

The truth of the matter is Rolly is simply trying to stoke the flames of some internal conflict with the Republican party, but as appropriate, the Republicans are best left to solving their own problems. In the end we can all be thankful that the “Superheroes” and the “A-Team” showed up this past legislative session because the alternative would likely have been some version of Mr. Rolly staring as Pinky’s “Brain” devising some new diabolical plot to take over the world. That, is certainly, frightening.

As for me, I’ll side with Representative Wimmer and his superhero colleagues, thank you.

Reference(s):

Date: Friday April 4, 2008
Source: Salt Lake Tribune – Paul Rolly: GOP Out to Rescue its Superheroes
Author: Paul Rolly
MRFC Principles:

The Economic Crisis of 2008: Bank Collapse Avoided?

ALPINE, UT | 17 March 2008 | I remember as a kid being told about the “Great Depression” and how the banks had collapsed and the government had to come in and bail everyone out. I remember hearing about how FDR had saved America, etc. I had no idea then, how tainted my perspective was based upon the politicizing that had gone on for generations about what had actually happened. Similarly, I’m not sure how many Americans are paying attention today to what is actually happening right before Read more

Should Congress Make Talk Radio Fair?

ALPINE, UT | 11 March 2008 | For the last several years it has becoming increasingly clear that many of the elected officials in Washington D.C. are not happy about what is happening in the marketplace, especially with talk radio. After years of failed attempts to find “more suitable” talkers to fill the airwaves (most shows have simply gone broke and were unable to entice programmers to continue) lawmakers are Read more

Parents Ordered: Vaccinate Kids or Go to Jail

ALPINE, UT | 12 March 2008 | It is becoming more and more common to see stories where parents are being attacked by government agencies for choosing not to vaccinate their children. Independent of the merits of their choice, contrary to the conversations that usually ensue when this subject is discussed, to the “Brain-On” Free Capitalist the real issue is Read more

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