‘The most frightening thing I’ve seen in the Washington Post, today:

The populist anger at the executives who ran their firms into the ground is increasingly blowing back on Obama, whom aides yesterday described as having little recourse in the face of legal contracts that guaranteed those bonuses.

Horror of horrors! Little recourse? What don’t people get about contracts? Why are they mad at Obama? The people should be overjoyed! Does anyone recognize that when a government can arbitrarily void private contracts, our system of law and justice will fall apart? Why would anyone bother to create a contract if it were in jeopardy of not being a contract, if it could be arbitrarily voided by a politician?

I think that not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States… -Obama

This makes me as nervous as hearing from someone, in almost any context: “trust me.”

From the International Herald Tribune:

On Foreign Policy magazine’s Web site, Freeman blamed pro-Israel groups for the controversy, saying the “tactics of the Israel Lobby plumb the depths of dishonor and indecency and include character assassination, selective misquotation, the willful distortion of the record, the fabrication of falsehoods, and an utter disregard for the truth.”

Well, this measured quote certainly isn’t taken out of context…

New York Governor David Paterson writes yesterday in the Wall Street Journal:

What is sometimes lost in the public discussion of our current economic crisis, amid the $787 billion stimulus package and the multibillion dollar bailouts of banks and insurance companies, is the root cause. The economic downturn began as a mortgage crisis and will not end until we solve that problem.

What is usually lost in the public discussion is the real root cause…

Here’s a government recipe for distorting (destroying?) the marketplace:

• Start with the CRA instructing banks to do what they otherwise wouldn’t do.
• Enable community organizers to stage protests or initiate lawsuits that pressure banks to provide loans to the unworthy.
• Provide a path to offload the questionable loans by creating a quasi government bank to bundle them as securities.
• Call the securities triple A and feed them into the market.
• Blame the market and demonize the banks when the real contents of the securities are discovered.

Why is anyone surprised by the result? The path of least resistance is just another government induced moral hazard.

And now Mr. Paterson wants to force the banks to renegotiate their contracts. I’m guessing none of the re-negotiations will favor the banks.

There are at least two broad and competing explanations of the origins of this crisis. The first is that the “easy money” policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today’s financial mess.

The second, and far more credible explanation agrees that it was indeed lower interest rates that spawned the speculative euphoria. However, the interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages. Between 2002 and 2005, home mortgage rates led U.S. home price change by 11 months. This correlation between home prices and mortgage rates was highly significant, and a far better indicator of rising home prices than the fed-funds rate.

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It’s always a pleasure to see Friedman quoted.

If a detailed, factual study were made of all those instances in the history of American industry which have been used by the statists as an indictment of free enterprise and as an argument in favor of a government-controlled economy, it would be found that the actions blamed on businessmen were caused, necessitated, and made possible only by government intervention in business. The evils, popularly ascribed to big industrialists, were not the result of an unregulated industry, but of government power over industry. The villain in the picture was not the businessman, but the legislator, not free enterprise, but government controls.

Ayn Rand, “Notes on the History of American Free Enterprise” – Capitalism: The Unknown Ideal.

It seems like the current administration thinks its proposed collectivist policies should be exempt from criticism. I get the sense that their position is the same for which they derided President Bush: “If you’re not with us, you’re against us.” Does he expect us to stand behind his proffered policies just because he can orate them slickly from a teleprompter?

Sun Tsu wrote a treatise on how to prevail. As a corollary, we might say his work was about how to cause your opponent to fail. It has been a significant document ever since (2500 years ago), much followed by military strategists over the centuries. More recently it has been openly cited as a source for developing effective corporate strategy in the marketplace.

Is striving to win no longer appropriate?

When you go to a football game and root for your team to win, don’t you want the other team to lose?

When you buy gold and take possession, you must be expecting that it will be a store of value. If its value increases, that implies our currency has lost value. So if you buy gold, are you wishing for the currency to lose value?

If you buy a stock short, are you wishing for a company to fail, or are you betting, based on observable activities in which the company is engaged, that it’s price will fall. It would be silly to think that you are really betting one way, and hoping, say, for the sake of the people who are employed at the company, that it will actually improve its performance.

If you opposed Fidel Castro when he took over Cuba, you probably hoped he would fail. To the extent that he succeeded, Cuba is obviously a failure.

I don’t know whether Obama is trying to hurt America on purpose, but it seems pretty clear that what he’s doing or hoping to do isn’t helping.

In light of that, I want liberty to win, which means, of course, that I too hope Obama fails.

What I do want is to see him dismantle the government stranglehold over healthcare that has created the healthcare problem. I want him to simplify the tax code so it can appear on a post card. I want him to end subsidies, tariffs, tax preferences and tax incentives across the board. I want him to end federal involvement in education and stand behind vouchers for all kids so they can go to any school of their choice.

Do I want America to fail? Of course not. But since I think Obama’s policies will lead to America’s failure, I naturally want to see those policies defeated. That is, I want to see Obama fail.

I’m playing to win. Are you?