A similar housing crisis in the late 1980s led to stronger federal regulations in many areas of the real estate industry. One of the strongest holds the government took was upon independent appraisers.  Mitch Weiss’ in-depth AP article this week gives a good overview of that history. However, the rest of Weiss’ article was lost on the lament that the regulation is basically a paper tiger, lacking any teeth in bringing “rogue appraisers” to justice. Questions a thinking reader must pose include: What is such an appraiser cheating on? Whom is he cheating? According to what standard is such an appraiser deviating? Who says he is acting fraudulently? The reader’s questions may be endless in this respect.

Correctly understanding the principles of prosperity will enable even the most casual looker on to recognize the trouble and to take appropriate measures to right this sinking ship. Namely, one must begin to understand the relationship between agency and stewardship.

Key Points

• Regulation means discipline and well measured action. Regulation means maintaining honesty in transactions. Regulation is attached to stewardship.
• Stewardship properly lies in the parties involved in a given transaction. 
• In the 1980s real estate crisis, the federal government has erroneously yet effectively assumed stewardship of nearly every real estate transaction in the U.S. This happened progressively over the decades, first with the founding of the twin debacles of Freddie Mac and Fannie May; then with the Savings and Loan Bailouts where the government finally got a hold of the real estate agents and the appraisers.  
• This erroneous assumption of stewardship simply is not within the government’s proper role.
• This has robbed the buyer, seller, and lender of their agency, in that they have been unable to determine their own values in a given transaction—they must now seek government permission for the transaction.
• Government regulation begets black markets. Because the human soul is autonomous and yearns for that freedom, it will search for it and achieve it in any way possible. This has created a system that is broken and a bureaucracy unable and unwilling to enforce itself.
• Stewardship is very closely tied to self-interest. One who lacks self-interest will not do his due diligence in a given transaction; but one who recognizes much self-interest will seek to establish the truth regarding the transaction he wishes to engage in.
• Mortgage lenders also have a stewardship in real estate transactions because if a borrower defaults on a mortgage, mortgage lenders will want to make sure they are adequately collateralized. They have surrendered their stewardship because government agencies have guaranteed nearly every loan. This has robbed the lender of his self-interest so he feels no need to do due diligence.
• In the end, the entity that is defrauded in a given real estate transaction is ultimately the government because of those loan guarantees.
• No one, however, is willing to take responsibility of the due diligence.

Conclusion

On the John Pendleton show on the Accent Radio Network this morning, the author of Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis explained that to eradicate all regulation would make this problem worse. This introduces the question: Is it good to regulate? The answer is shockingly: Yes. However, what was missed on the radio and is also missed in Weiss’ article is that regulation must accompany stewardship. The regulation is the individual’s personal adherence to correct principles. As this problem illustrates, the government, ultimately, is unable to enforce such regulations unless it is willing to bring out the big guns to force its hand. Fortunately, this country has not seen the veritable bloodbath of its appraisers, real estate agents, and mortgage brokers. However, to continue down this path of ever tightening government regulation would ultimately result in such a bloodbath. Nothing short of a full-scale overhaul of the system will remedy itself of these problems. And when that overhaul takes place, the government must not be invited to the party.

Action Items

1. Evaluate your own life. Are there stewardships that you willing hand over to someone else, hoping that everything goes alright? Resolve to reinsert your own human life value (HLV) into the equation. Take back the stewardship and do your due diligence.
2. Write to your Congressman and express your opinion that the govern should remove itself from all real estate activity and allow the marketplace to overhaul itself.
3. Search for alternative solutions to the real estate crisis, including methods which do not require a mortgage for a lending  institution.

MRFC Principles:  (2, 3, 6, 11)

Sources

Mitch Weiss, AP IMPACT: Weak rules cripple appraiser oversight, Yahoo! News, August 17, 2008.

John Pendleton, The Tom Pendleton Show, August 19, 2008.

Paul Muolo and Mathew Padilla, The Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis, Hoboken, NJ, John Wiley & Son’s, Inc., 2008.

TAYLORSVILLE, UT | 13 August 2008 | The Fairness Doctrine, under the Media Ownership Reform Act, a bill that would force broadcasters to give equal air time to opposing sides of issues, has made the rounds in Congress lately. After being brought up by Democrats for consideration a few months ago, it was countered by the Republican sponsored Broadcaster’s Freedom Act, a bill that would ban the Fairness Doctrine from ever being passed. In childish response, House Speaker Pelosi then vowed that the Broadcaster’s Freedom Act would never come to the floor for a vote. At a virtual stalemate, both bills have been tabled as Congress has broken for their summer vacation. There has been talk that the Fairness Doctrine could be brought back to light after the inauguration of a new president.

In covering the ongoing banter, both the liberal and conservative wings of the media have focused almost exclusively on how they perceive the doctrine affecting their rights to free speech. Liberals feel that talk radio and other venues have been unfairly overrun by right wing nuts and that their side of the story isn’t being heard. Conservatives feel that regulated free speech is a horrific contradiction of terms that can never work. And, while free speech is important enough to have been the front-runner amendment in the Bill of Rights, focusing on it alone will cause us to miss the bigger picture—the fact that freedom itself is at stake in this debate.

Key Points

• The Declaration of Independence and Constitution are the greatest and most significant examples of proper use of free speech. After seeing that their cries for change had fallen on deaf ears, the Founders set forth a system of checks and balances that would allow for grievances to be effectively addressed.
• Regulation of free speech is a removal of those checks and balances. If one cannot address his views of a problem without fear of sanction, he has no avenue in which to protect his freedoms.
• While the Fairness Doctrine doesn’t provide direct sanctions against speech, it takes steps in that direction by limiting the amount that can be said. Effectively slicing broadcast time in half, it forces stations to cap the discussion from either side of any issue. Failure to provide equal airtime to either side (or to find someone willing to fill the necessary time slots for both sides) would result in sanctions.
• Plato said, “Where no contradiction is evident, there is no cause for reflection.” Opposing views are needed in the debate process to help us refine our views of truth and error.
  However, forcing the public to listen to views that are unprincipled or flat-out wrong will cause gradual acceptance of these ideas. Sales trainings often teach that repeated exposure to a concept will eventually break down objections and build familiarity and acceptance. This is also a tactic of the socialist agenda.
• Continued exposure to diametrically opposed ideas will lead to schizophrenic confusion and inaction (if the public are dumb enough to not turn off the radio when needed). Liberals foster this sense of helplessness in order to create a need for and dependence on government solutions, which is also a tactic of the socialists.
• In the free market system intended by the Founders, there is no need for a doctrine to mandate fairness. People are free to share their opinions and the system will sort out good from evil, truth from concoction. Dollars follow value and market will see that voices that are meant to be heard are heard.

Conclusion

Because a free market system will see that truth is brought to the forefront, one must question the motives of anyone who seeks to regulate or eliminate that system. If elected officials are doing what they believe is right, they will feel no need to regulate what is said about their actions. As they often have no idea what is right or do things that they know to be wrong, they fear people’s opinions and shy away from criticism.

It has been said that no single drop feels that it is responsible for the flood. But, regulated speech is always one of the first drops to hit the masses as the floodgates of socialism are opened. Viewing the Fairness Doctrine as either fair or harmless shows a wanton disregard for the principles that maintain and guard our freedoms. To see such a doctrine being considered in a free country is ludicrous. To see that it is being pushed by liberal minds who have often considered themselves the defenders of free speech is infuriating.

Action Items

1. Read the First Amendment to the Constitution.
2. Post here as to what you believe the Founders intended with this amendment and how Americans have mistranslated that intent.
3. Consider contacting your Congressman to express your concern about the loss of freedom that the Fairness Doctrine would lead to.
4. Support freedom in talk radio—listen to FreeCapitalist Radio live or via podcast, or check your local listings for a chanel in your area.

MRFC Principles:  (7, 9, 11, 12)

Source

“Fairness Doctrine Vote Not In The Cards”, FMQB.com, Aug 1, 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.)

TAYLORSVILLE, UT | 12 August 2008 | As the U.S. Government Accountability Office (GAO) released a report on Iraq’s stockpile of resources, outrage erupted on the Senate floor. And that outrage will most likely spill over into the minds and hearts of many Americans.

The reason for the outrage—while Americans have been paying the lion’s share of the bill for Iraqi reconstruction, Iraq has been building up a budget surplus that is projected to reach $80 billion by year’s end. Since 2003 the “United States has put about $48 billion toward reconstruction.” Spending by Iraq for its own reconstruction has been significantly less. Rising oil prices have caused Iraq’s revenues to soar, yet they are spending American taxpayer money to rebuild their nation. “The export of crude oil accounted for 94 percent of Iraq’s revenues from 2005 to 2007, the GAO reported.”

The outrage is understandable. The war and reconstruction have been costly. Despite buzz that the war has been all about oil money, major oil contracts have been handed out almost exclusively to non-American companies. Additionally, Americans were told that this was a cost they would not be responsible for. “Bush administration officials said on the eve of the war that Iraqi oil money would pay for reconstruction.” Deputy Secretary of Defense Paul Wolfowitz is quoted as telling the House Appropriations committee, “We’re dealing with a country that can really finance its own reconstruction, and relatively soon.’”

With an already troubled economy, many Americans have questioned covering the cost of the war itself, let alone the costs of rebuilding. Sen. Carl Levin says, “It is inexcusable for U.S. taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves.” And, while I agree that this should not be the duty of the American tax payer, I would say that it is equally inexcusable for us to push Iraqis to use government dollars for projects that should be privately funded. If Iraq is to ever have true freedom (something we don’t even have here), our focus cannot be the amount of money they do or don’t have. Our focus has to be adherence to the principles that form and guarantee freedom.

Key Points

• War and its devastations create a uniquely strenuous circumstance. The needs of the people are magnified as basic utilities, systems, and resources are rendered inoperable. Regardless of circumstance, principle is ignorant of need. God is the author of prosperity and He does not play dice with the universe. Principles govern at all times and in all conditions. When need is used as the basis for policy decisions, principle is discarded and freedom and prosperity will consequently die. It is when needs are greatest that principle must be adhered to if lasting solutions are to be found.
• For example, it would have been much more convenient for our Founders to avoid war with Great Britain and just remain subject to the crown than to stand for that which they knew to be right. Yet, had they chosen any path other than the principled one, we would not be the country we are today with the freedoms we enjoy.
• The Iraqi Government will never be able to stand and protect a free people if it is built on a flawed foundation. There are two major flaws being ignored in this foundation:
  • Encouraging the government of a prospective free nation to be the owner of oil reserves and incomes (or of any “public” property).
  • Establishing the habit of using government incomes to meet the needs of the people.
• Both of these flaws are plays taken straight out of the communist handbook. E.C. Riegel said, “When government undertakes to solve man’s problem for him it undertakes the mastery of society and it cannot be both master and servant.”

Conclusion

It is a difficult thing to perceive that the American Government can help establish a proper framework and set a proper example of freedom when we have strayed so far here at home.

Even if the Founding Fathers had chosen to enter a war like this (which they would not have chosen), they would clearly see the dangerous precedent being set here. While it has long been that oil and its revenues have been the property of the Iraqi government, this practice should be abolished in the process of setting up a free nation. Ownership of oil and its subsequent revenues should be private. James Madison said, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on the objects of benevolence, the money of their constituents.” I have never had to endure the immediate ravages of war and therefore have no concrete understanding of what it would be like. Regardless of the calamities, however, I believe that if I were an Iraqi, my request would be simple: “Let freedom ring, and let it ring completely.”

Action Items

1. Recognize teaching opportunities as you hear others complain that the Iraqi Government isn’t covering the cost of reconstruction. Share how freedom can’t be achieved by creating a socialistic welfare state.
2. Ponder difficult moments of need in your life. Do you stick to principle, regardless of the gravity of the situation?
3. Consider how you offer help to others. Do you teach them to help themselves, or do you create dependence?

MRFC Principles: 1 (1, 3, 13)

Sources

CNN, Iraq’s oil-fueled surplus could hit $80 billion, report says, CNN.com, August 6, 2008

Robert H. Reid, US officials defend Iraqi budget surplus, Associated Press, August 6, 2008

E.C. Riegel, Private Enterprise Money, a Non-Political Money System, 1944  (For more of Riegel’s writings, click here).

James Madison, speaking on the house floor, concerning a $15,000 appropriation for French refugees from San Domingo, 1794.

(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.)

OREM, UT | 11 August 2008 | The state of California is often referred to as a national trend setter in regards to many things, politics, fashion, entertainment, etc. Well…let’s see what ideas might be coming our way soon. 

One section of Los Angeles has a slightly higher than average number of obese people, roughly 30% of the population compared to 20% nationally.  This fat—I mean huge—no, I mean fat—epidemic that threatens the safety and peace of Los Angeles has led the city council to take action.  Councilwoman Jan Perry has started an initiative that she hopes will save the helpless citizens of South L.A. from having to live the tortured life of someone who doesn’t look good in a bathing suit.  She wishes to ban any new fast food restaurants from opening in a 32 square mile area. This particular area of the city already has over 400 fast food establishments, and very few grocery stores and sit-down restaurants.  The moratorium can last up to two years and is designed to give the city time to figure out a better solution.  The hope is that by banning fast food businesses other restaurants and grocery businesses will be attracted to the area and thus, naturally, making the citizens healthier.    

Key Points

• When a government uses force of law trying to entice new business into an area by restricting other businesses in that area, it demonstrates that it has no problem regulating, restricting, and violating the rights of citizens who move into the given area.

• The law is written with subjective definitions, thus taking on an arbitrary air, which can lead to favors, corruption, and graft.

• No matter how it tries, government cannot legislate skinny, healthy citizens into existence.

• It is not the responsibility of the government to dictate eating habits.

• The free market solution for healthier food is a much better idea, as we have seen fast food chains adapt their menus to accommodate those seeking healthier alternatives.

• Profit is the tool of validation, therefore the fact that there are many fast food restaurants that are profitable, obviously validates their existence, if other types of food service establishments would be profitable in that section of the city, then they too would probably exist.

Conclusion

Certainly eating healthy and exercising are beneficial for our bodies, but it is a very scary thing to see the liberty and the rights of the people trampled on by the government in a completely ridiculous attempt to force health upon the citizens.  It is our right as citizens of the United States to decide for ourselves the level of health that we prefer.  The only way that people will be happy and healthy is by their own free will, not by adhering to some strange new law.   Let’s hope that the law makers in California will soon wake up form this corrupt, poisonous dream that the non-thinkers in the rest of the country seem so quick to idolize.

Further, we have already witnessed the free market creating a much more realistic solution to the apparent obesity problem. Fast food restaurants have begun to offer a much healthier menu, offering fruit instead of fries, milk and juice instead of soda, and salads instead of burgers.  Isn’t it incredible that without any type of law being passed these businesses have responded to the market and have found additional ways to create value for their customers?  Also we have seen many new healthier fast food businesses spring up in competition to the traditional burger joint.  By allowing this competition to happen, rather than allowing government to stifle it to maintain the status quo, the citizens of L.A. will be free to choose whatever type of food and eating habits they desire, which by the way, is one of the many benefits of living under the protection of the Constitution. 

Action Items

1. Attend your local city council meetings and become aware of proposed actions, and make sure that your voice and position is heard.
2. Decide what your health and food preferences are, and then use your dollars to vote for them.
3. Read Atlas Shrugged by Ayn Rand and see what this type of thinking will ultimately lead to.
4. Help others around you turn their brain on by having discussions with them regarding liberty and rights.
5. Create a blog or website and regularly post your feelings about liberty and individual rights.
6. Become familiar with the Constitution and Principles of Prosperity so that you can easily articulate the ideas of liberty and freedom when having discussions with others.
7. Join the FreeCapitalist Project and invite others to join, so that our efforts to preserve freedom can be organized and effective.

Principles that apply:  (9, 11)

Resources:

Tami Abdollah, A strict order for fast food, Los Angeles Times, September 10, 2007.

Molly Hennessy-Fisk and David Zahniser, Council bans new fast food outlets in South L.A., Los Angeles Times, July 30, 2008.

(Dustin Lyons is a member of the FreeCapitalist Project, and a big supporter of freedom and liberty. Dustin’s entrepreneurial spirit has resulted with him owning and operating several businesses. Dustin currently lives in Pleasant Grove Utah, with his wife and three children.)

Today’s work-at-home environment poses new challenges that yesteryear’s work-at-homers perhaps didn’t have to deal with. Sue Shellenbarger, of the Wall Street Journal, reports that employers fear workers will take advantage of the lack of personal supervision and squander valuable time. The solution? Employing monitoring devices in employees’ computers to “look over their shoulders.” Naturally, questions of “Big Brother” arise both from employees and from critics of the process. So, is an employer justified in placing such monitoring devices? Or should the work-at-home employee have the right to work as he sees fit without the close electronic supervision? Several principles are at play in this this interaction.

Most recognize almost immediately in this story that force destroys freedom and that perhaps by using the monitoring devices employers are using force over their employees and therefore destroying their freedom. But other principles come into play that reveal a much deeper issue involved in the interaction between employer and employee: Productivity is the standard, and agency implies stewardship.

Key Points

• Employers own the businesses people work in.
• They own the equipment, the buildings, the hardware and the software associated with the business.
• They own the projects pertaining to the profitability of the business.
• They own the labor their employees have agreed to sell them.
• Owners recognize that labor rightly ordered (or as Napoleon Hill puts it, organized effort) is required to be profitable.
• Therefore, they have the right to monitor the productivity and effectiveness of the labor they have purchased from employees.
• To be honest, employees should be the most productive they can be during the times they sold their labor to employers.
• Employees often squawk about the monitoring of labor from their employers. They claim the employers take away their agency in this process.
• The best way to recognize where agency rightly exists is to answer the question: Who has stewardship in the matter? Regarding Employer/Employee exchanges agency and stewardship changes hands at different times.
  • Prior to the agreement, both parties have stewardship over their own self-interest—their personal and family welfare, business concerns, etc.
  • In the process of coming to an agreement both parties essentially say, “I see what you are wanting to do. My self-interest aligns with yours in ____ area, and I want to create value for you by ____.” The employee agrees to sell a portion of his life (time and labor) to the employer in order to accomplish both sets of self-interests. Or in other words, the employee sells a portion of his agency to the employer.
  • After the contract has been signed, the employee no longer has stewardship or agency over that portion of his life (time and labor). He must therefore fulfill his obligations in the contract by laboring in the manner and at the time his employer and he agreed upon.
  • The employer still carries the ultimate stewardship of the business, and has the right to monitor the employee’s productivity while on the job.
• Often employers like to share the responsibility of stewardship with their employees. Along with that responsibility, when properly executed by the boss, comes added agency for the employee. The employee then is able to make a few decisions regarding his time and labor.

Conclusion

Ms. Shellenbarger’s story dealt mostly with employers monitoring employees. Based upon the items listed above, this process appears perfectly right. However, often the comment was made that employers wish to monitor free-lance and contract workers at home as well. These types of individuals clearly fit into a more free category. While they have sold their time and labor to others, they generally do not sell those items in the same way an employee does. They have usually preserved for themselves a little of the agency and stewardship that the employee gives up. It would therefore be against principle for the employer to monitor the productivity of these people.  

The challenges between employer and employee have been around for generations. The boss wants the utmost productivity from his workers. The worker wants mostly to be left alone while working and to have the freedom to work as, how and when he chooses. A FreeCapitalist society—one in which both employer and employee choose voluntarily to live according to ancient principles of prosperity—can peacefully and easily solve these challenges by exploring the myriad solutions available to those whose brains are awake and switched to on.

Action Items

1. Review your own situation for creating value in the world, whether it be business owner, self-employed, freelance, contract worker, or employee.
2. Study out the level of agency and stewardship you possess by reviewing the agreements you have made for the exchange.
3. Resolve to stick to those agreements. If you do not like your agreement, stick with it until the opportunity presents itself to alter or abolish that agreement in advantage of a new one.
4. If you are the boss of work-at-home employees and you suspect that you are not receiving the level of productivity you desire or think is reasonable, discuss alternatives with your employees. Perhaps some of the following questions could be of help.
   1. What is the nature of the agreement you have with your employee?
   2. How much agency and stewardship have you afforded to your employee?
   3. Have you allowed the amount of agency and stewardship you intended?
   4. Is the amount of agency and stewardship facilitating or restricting the amount of productivity you desire?
   5. If no on #4, how can you make arrangements—including monitoring, or changing the employment status to freelancers or contract workers, etc.—with your employee to incite higher productivity?
5. If you are the employee in a similar situation, and you are dissatisfied with the current arrangements, it is also healthy for you to explore the answers to the above questions. If they are not to your liking, consider some of the following.
   1. Go into business for yourself.
   2. Seek to become a freelancer where you have control over your time and labor and whom you sell them to. Perhaps selling time and labor to several employers on a piece-rate method would be better than selling your productive time to just one employer.
   3. Become a contract worker, which carries a little more agency than an employee but not as much as a freelancer or a self-employed individual.

MRFC Principles:  (3, 7, 9, 10, 13) 

Sources

Sue Shellenbarger, Work at Home? Your Employer May Be Watching, Wall Street Journal, July 30, 2008.

If you are intelligent enough to read the Times or to boycott it on purpose because of its consistent left-biased slant, you are most certainly smart enough to be a voter, whatever your ultimate choice for the election.

His lament:

The truth is that a citizen who takes the time to study the major issues and reach a conclusion based on that study is definitely to be at least off-set by a voting citizen who will vote because he likes Obama’s tie or McCain’s fatherly white hair.

Most textbooks record the progression of suffrage rights as one of ever increasing inclusivity. Surely, the right for blacks and women to vote was necessary for this country to extend equal rights to all. Other steps may not have been as prudent—say, for example, amending the constitution to provide senators to be elected by the popular vote, thus robbing states of their power in the federal legislative process. Universal suffrage has resulted in many people being allowed to vote who, because of their general apathy or ignorance, have no business stepping inside the voter booth.

The Founders certainly had some discriminating issues to work through. They recognized that; and they recognized that it would take many generations to sort all that out. But, I suggest, they had a greater understanding of suffrage than we do. Many of our current woes in this area are a result of our departure from their wisdom.

Agency and Stewardship

Our Founding generation took upon themselves a responsibility very few had taken throughout all of known history. Theirs was a worldview in which man was governed by principles and not the whims of men. They believed God and not government gave rights to man. They understood very well that with high privilege comes great responsibility. Or in other words, agency implies stewardship.

The Founders treated the right to vote with great seriousness. Prior to the constitution the right to vote was attached to the ownership of property, and in many areas only landholders were allowed to vote. The traditions goes back to at least the ancient Greeks that only the truly free possessed the presence of mind to vote wisely. And they attached that wisdom to the material manifestation of land ownership. When someone owns land, he or she generally has a greater understanding of stewardship and responsibility, and has usually worked pretty hard to “deserve” the privilege of such ownership. The Greeks, Romans and others believed that sense of stewardship carried over into self-governance and wise participation in community service.

The British colonists used this method in many of the various American colonies prior to the Revolution. However, the idea universal inalienable rights exposed a side of landholding through the ages based more on aristocracy than on merit. It is evident that the Founders agreed with the landholding idea of stewardship breeding or revealing wisdom, but they feared the rise of an American aristocracy, so eventually this method fell out of use.

It is possible to see the concept of landholding and the attendant sense of stewardship in today’s society. In my personal life I wondered about this idea. Why would the voting privilege be tied to land? And then I bought a house. Suddenly, I became awakened to all the responsibilities of land ownership. I took my stewardship seriously and I found that not only my awareness grew, my ideas changed. I suddenly became much more aware of what political leaders were doing. I took my vote seriously because I recognized a deeper stewardship attached.

I have also been a landlord and I do not see the same stewardship attitude from renters. They have very little regard for property, and my personal experience with them politically is that they care very little for the affairs of the day. Even to the point that I once advised a friend that the best way for her to serve her country in that election cycle was to stay home on election day. When a person lives in someone else’s home, that person does not respect the stewardship and often does more damage than good, residentially or politically.

The Founders held similar views. Jefferson, for example, believed that:

Cultivators of the earth are the most valuable citizens. They are the most vigorous, the most independent, the most virtuous, and they are tied to their country and wedded to its liberty and interests by the most lasting bonds. – Thomas Jefferson, Letter to John Jay (Aug. 23, 1785)

Others held similar views. Simply put, voting rights without the sense of stewardship creates an electorate that eventually become apathetic and cynical to the welfare of their nation. One need not go far these days to see this in our society.

Spain’s Grand Invention

Jefferson also believed that “a nation [that] expects to be ignorant and free, expects what never was and never will be.” In other places he defined this as an enlightened electorate. He understood the stewardship principle as it attached to voting, but landholding held the stigma of a landed aristocracy and he wanted to move away from that stigma. He rejoiced in the attempts of the Spanish shortly after his presidency.

There is one provision [in the new constitution of Spain] which will immortalize its inventors. It is that which, after a certain epoch, disfranchises every citizen who cannot read and write. This is new, and is the fruitful germ of the improvement of everything good and the correction of everything imperfect in the present constitution. This will give you an enlightened people, and an energetic public opinion which will control and enchain the aristocratic spirit of the government. —Bergh 14:130. (1814)

 An electorate that is illiterate is unable to appropriately or effectively pick its leaders. As Jefferson so eloquently explained many times, the powers of government should reside in the people. Stored in any other entity, they will soon wither to tyranny. Further, Milton Friedman explains:

A stable democratic society is impossible without a minimum degree of literacy and knowledge on the part of most citizens and without widespread acceptance of some common set of values. Education can contribute to both. In consequence, the gain from the education of a child accrues not only to the child or to his parents but also to other members of the society.

But the electorate requires constant vigilance to remain stable and keep that power. It cannot be kept by mere watching of the nightly news or a quick discussion at the water cooler. Literacy is a starting point for this vigilance.

Unfortunately, the current government-controlled education system is failing this electorate, as 40% of students graduate functionally illiterate. If today’s elective system were set up in this way, how long until the government schools make it nearly impossible to locate a literate American electorate?

Perhaps if more voters in America were truly literate, we would not have had the problems we had in 2000 when so many voters in Florida were rounded up and brought to the polls in buses and told just to pick the one on the left.

Unfortunately, Spain did not let this process play out. The country eventually caved to the pressure of giving suffrage to every citizen regardless of qualification. Sadly, the great experiment failed before we could learn the result. Still, the principle as uttered by Jefferson dominates self-government: the more educated members of a society are on matters of stewardship and community, the better able they will be in holding those powers in check against the rulers in government.

Where Have All the Teachers Gone?

In 1940, Mortimer Adler published How to Read a Book. He provided great insights on literacy that have unfortunately fallen by the wayside as the country’s educational system has followed destructive models which took us away from the classical education of the 3 R’s. In a chapter titled “The Defeat of the Schools,” Adler explains, “If the schools were doing their job, this book would not be necessary.” Adler poses a few questions:

Is it too much to ask that a student be able to read a whole book, not merely a paragraph, and report not only what was said therein but show an increased understanding of the subject matter being discussed? Is it too much to expect from the schools that they train their students not only to interpret but to criticize; that is, to discriminate what is sound from error and falsehood, to suspend judgment if they are not convinced, or to judge with reason if they agree or disagree?

And this a decade or two before the real deliberate dumbing down of our schools began in the 1950s! Adler continues:

Why are these students not getting any help? …It must be because the educators simply do not know what to do about it; in addition, perhaps, because they do not realize how much time and effort must be expended to teach students how to read, write, and speak well. Too many other things, of much less importance, have come to clutter up the curriculum.

Too many other things? Indeed! Today’s system has failed us on many fronts, the most awful is perhaps the literacy question. Government schools, and most private schools I would add, do not do enough to help our children become literate. They have fine programs that teach letter recognition and word decoding; but the education seems to stop there. The schools simply do not have time to teach a student to use reading now to learn new ideas and to think critically about what they have read. Since the schools are not doing this, it is high time that such a practice become available somewhere else.

Free Minds Make Free Men

Adler, on the other hand, has been instrumental in the twentieth century in facilitating many great projects to preserve the great books and great documents of our time, including the Great Books series and the Annals of America, both by Encyclopedia Britannica. Inspired by John Erskine’s Columbia University honors program, Adler concludes his masterful work by explaining the importance of reading and learning in the functioning of a self-governing society and in the lives of “free men.” I quote at length for context.

I remember what John Erskine said when he launched the group of students I belonged to on the reading of the great books. He told us that for some years past he had noticed that college students could not talk to one another intelligently. Under the elective system, they went to different classes, meeting only now and then and reading only this or that textbook in common. Members of the same college year were not intellectual friends. When he had gone to Columbia at the beginning of the century, everyone took the same courses and read the same books, many of them great ones. Good conversation had flourished and, more than that, there had been friendships with respect to ideas as well as on the playing field or in fraternities.

One of his motives in starting the Honors course was to revive college life as an intellectual community. If a group of students read the same books and met weekly for two years to discuss them, they might find a new sort of fellowship. The great books would not only initiate them into the world of ideas but would provide the frame of reference for further communication among them. They would know how to talk intelligently and intelligibly to one another, not only about the books, but through the books about all the problems which engage men’s thought and action.

In such a community, Erskine said, democracy requires intelligent communication about and common participation in the solution of human problems. That was before anyone thought that democracy would ever again be threatened. As I remember, we did not pay much attention to Erskine’s insight at the time. But he was right. I am sure of it now. I am sure that a liberal education is democracy’s strongest bulwark. (Adler 356-357.)

He subsequently developed a study of great books from history that is nearly unparalleled in today’s educative practices. And the best part about it is no teacher is necessary to facilitate the program. Individuals and special interest groups may participate at their leisure in reading and discussing these books in a way that educates one’s mind and turns an individual on to the ideas throughout the centuries. The result is an education that readies the individual for acute discriminative citizenship.

I pull several statements from Adler’s comments that merit discussion.

• Students could not talk to one another intelligently.I challenge that if students of that day could not speak intelligently to one another, that today’s students are in even worse condition. And further that as bad as today’s college student has it, today’s adult population is so much more the worse. Neighbors live, eat, and sleep within feet of one another, yet hold hardly anything in common. Is it any wonder then that hardly anything happens at a caucus meeting or a townhall gathering?
• They would know how to talk intelligently and intelligibly to one another, not only about the books, but through the books about all the problems which engage men’s thought and action. The result of reading great books and learning to talk about them improves the general life overall of such an individual.  
• Democracy requires intelligent communication about and common participation in the solution of human problems.The challenges we face today will not be solved by 30-minute sit-com solutions or by expert savior-like elected officials who claim to have all the right answers. They will only be solved when a statistically significant proportion of the population begins to take control of their own lives by becoming literate in and effectively living the ancient principles of prosperity discovered by our Founding generations. We must learn to consider those ideas, to discuss them with our brains turned on, considering the merits of the ideas rather than the typically ad homonym prejudices we blindly attach to ideas. We must patiently work through these ideas and give them time to bear the fruit according to those unchanging principles.
• That was before anyone thought that democracy would ever again be threatened.The twentieth century is known as the bloodiest century by sheer numbers in the history of mankind. More lives were lost in the name of creeping socialism and tyranny than at any other time. And even more souls were lost to its devastating effects on those who physically survived. Is democracy [read: self-government] under threat? Absolutely! And we must do something now in order to stop the overflowing scourge that is filling us to the brim.
• I am sure that a liberal education is democracy’s strongest bulwark. Only an enlightened electorate is able to store the powers of self-government properly. It will take an even more enlightenment to return those powers back to their proper vestiges. Washington, Jefferson, Madison, and their contemporaries were raised up by studying the great books of their times. We are on the brink of a similarly revolutionary time of our own. One of the elements of raising ourselves up to the challenges of our times is to learn and understand the principles those great men implanted into our national psyche. This must be done before it is too late.

And this is only the beginning. Having a literate, enlightened electorate must then act upon the ideas they learn in order to be effective in restoring to them the powers of self-government.

A Test

“I believe that 100% of all citizens of a nation should be allowed to vote.” This is a great statement, one that I believe in. But rather than to stop at the period, one must ask a heavy question. What is a citizen? How can we know when someone has become a citizen? Immigrants who legally enter and live in this country eventually have the opportunity to become naturalized citizens. Among other things, they must take a test to accomplish this. The test is not incredibly difficult, but I wonder how many native-born Americans could answer these questions. Sample questions include:

1. What is the supreme law of the land?
2. The idea of self-government is in the first three words of the Constitution. What are these words?
3. What is freedom of religion?
4. Name one branch of the government.
5. What stops one branch of government from becoming too powerful?
6. The House of Representatives has how many voting members?
7. Who does a U.S. Senator represent?
8. What does the judicial branch do?
9. Who is the Chief Justice of the United States?
10. Under our Constitution, some powers belong to the states. What is one power of the states?

All of these questions are orally answered and none of them are multiple choice. Most of them seem simple enough, but think of Jay Leno’s “Jay Walking” and Sean Hannity’s “Man on the Street Interviews.” Many Americans could not answer these simple questions. These are topics that unless you care deeply about our country you wouldn’t necessarily know. That, therefore, begs the question: what is a citizen?

Isn’t it good enough just to be born in a country to be considered a citizen? I mean, after all, your parents worked darn hard to be in this country and to produce you kids in it. You should just be entitled to all the privileges of this nation, including choosing its leaders. Perhaps… But I suggest that a citizen is much more than just someone born in and living in a particular country. A citizen is one who is educated well enough to be a productive member of the society, one capable of self-government, one who possesses the ability to provide for himself and the wisdom to rule himself.  

So, in addition to the naturalization test mentioned above, I propose another test to prove a person’s citizenship and therefore his qualifications to vote: a test of personal self-reliance.

1. Is the individual economically, politically, and intellectually self-reliant?
2. Does the individual have a basic understanding of the founding of this nation, including the Declaration of Independence and the Constitution?   
3. Does the individual engage in meaningful personal civic service?
4. Does the individual engage in meaningful community civic service?

Conclusion

Mr. Weinberger knew he would take some heat with his article, and the commentary thereafter is indication enough that the majority of even those who seek to educate themselves on these matters are missing the mark. Images of blind and patriotic sheep conjure in the mind of those who have awakened and turned their brains on. But the fact is, in the marketplace of ideas, if you’re not taking a little heat from such collectivist, though well-intentioned folks, you’re not sharing enough of the truth.

Should everyone in America be allowed to vote? Definitely! If they can qualify as citizens on a much higher scale than we have required in the past. Citizens, true citizens, repeatedly demonstrate that they are able to rule themselves in wisdom by living disciplined, principled lives of self-reliance. This is not possible without literacy. Literacy is not simply the ability to decipher groupings of letters on a page, but rather a complex ability to read closely, discriminate proper principles, think critically about what one has read, to discuss intelligently, and to act upon that reading. In the political processes of our day, too many people vote by whim or by what they have heard say at the water coolers or on television or radio talk shows with pundits who know only a little more than they do. Candidates also reveal their lack of intelligence on a regular interval, showing they are hardly qualified themselves to vote, let alone to stand in their elected positions. Individuals often vote for the best looking or the most promising candidate rather than the candidate who has read and most fully understood the Constitution of the United States. Oliver Van DeMille poses the question: “How can there be Washingtons and Jeffersons today unless we read what they read, feel what they felt, and know what they knew?” To which I pose: And how will there be Washingtons and Jeffersons to elect unless there are Washingtons and Jeffersons literate and self-reliant enough to elect them?

Action Items

1. Read Adler’s How to Read a Book
2. Begin a Classic Reading course today.
3. Join a civic service organization, such as the FreeCapitalist Project, where you can associate with like-minded individuals also striving to realize self-reliance.
4. Become a real citizen of your country and community.

MRFC Principles:   (2, 3, 4)

Sources

Caspar Weinberger, Jr., Should All Americans Be Allowed to Vote? HumanEvents.com, July 28, 2008.

Milton Friedman, Capitalism and Freedom, Chicago, IL, University of Chicago Press, Fortieth Anniversary edition, 2002, p. 86.

Mortimer J. Adler, How to Read a Book,New York, NY, Simon and Shuster, 1940. (Note: In order to read the chapter on Free Minds and Free Men, you must obtain a copy of the book published prior to 1972. The older the copy the better.)

New Naturalization Test Questions, about.com

Oliver Van DeMille, A Thomas Jefferson Education: Teaching a Generation of Leaders for the Twenty-first Century,Cedar City, UT, George Wythe University Press, 2000.

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.)

TAYLORSVILLE, UT | 30 July 2008 | In their first 100 hours in control of Congress in early 2007, Democrats pushed to accomplish as much as possible and effect immediate change.  That change was to be reflective of the party’s ability to create quick, effective solutions.  Unfortunately, much of the legislation passed as part of the 100-hour plan has been perfectly reflective of the party’s abilities, or lack thereof.  A case in point would be the Fair Minimum Wage Act of 2007—a display-case trophy that not only fails to help, but actually hurts the people it was supposed to save.

Signed into law on May 25, 2007, the act raises the federal minimum wage from $5.15 per hour to $7.25 per hour in 3 incremental steps.  The 2nd of those steps went into effect on Thursday, July 24th, raising the wage to $5.85 per hour (a jump of 70 cents per hour). 

Breaking the change down into 3 steps was supposed to help businesses make a smooth transition into the final minimum wage of $7.25 (a jump of 140 cents per hour).  Really, easing into the changes has only given employers greater time to stew over the problems that this law will cause for them.  Seldom are the dire effects of bad legislation so readily visible at the very moment that the legislation takes effect.

Key Points

• Anytime the government dictates a minimum wage regardless of the value created by any given employee, they are creating a damaging sense of entitlement for that employee.
• If dollars follow value, then employees who receive additional dollars without creating additional value are a cumbersome burden on the intricate workings of the free market system. 
• In order to cover the higher wage, employers who wish to stay in business are left with 4 options, all of which hurt employers and employees because they violate the fact that dollars follow value:
  • Shrink profit margins—business need to have reserves that will carry them through lean months.  Shrinking or depleting those reserves brings businesses closer to the brink and often brings undue stress to the work environment.
  • Raise the costs of goods and services—in addition to the potential loss of customers, the net effect of raised prices is an increase in the cost of living.  Ironically, this increase in the cost of living is often greater proportionally than the increase in wages.  So, while minimum wage employees will take home more income, they will tend to keep less of it because they will have to pay more for bread, milk, and basic essentials.  “David Heath, owner of Tiki Tan in College Station, Texas, said the increase will force him to raise prices for his monthly tanning services by about 12 percent.  There just isn’t any room for profit, and so this is why prices will have to go up.”
  • Reduce payroll—the cost of giving “more green” to some workers is often giving “pink” to others.  Those who happen to keep their jobs will have the honor of fulfilling the duties of dismissed employees.  If a small business with 5 employees has to cut one, each remaining worker will have to do 25% more to keep pace with previous production.  If the 4 employees are kept at minimum wage, their income will increase approximately 12%.  And they call it “Fair Minimum Wage”.
  • Ignore the law—if an employer chooses to ignore the law and pay less, he is left with a limited pool of potential empleados/employees.  The sense of entitlement created by minimum wage laws is one of the major driving forces behind the mentality that there are some jobs that Americans just won’t do. 
• The pay increases laid out by Fair Minimum Wage Act of 2007 were calculated to keep up with a projected increase in cost of living.  Because recent events have caused the price of just about everything to go up, the wage increase is already obsolete.  “Walter Jasper, who earns minimum wage…will still struggle with the higher gas and food prices hammering Americans. “It will help out a little,” said Jasper.”  Any additional inflation caused by the increase in wages will only add to this problem.

Conclusion

Violation of principle will always bring unintended consequences.  Failure to recognize the connection of those consequences to their true cause will often lead to further violation of principle.  As minimum wage workers feel the negative effects of this law, they are likely to complain to their elected officials who will, in turn, push another damaging piece of trophy legislation and raise wages again. 

Amidst all of the manufactured turmoil, however, it is nice to see that the free exchange between individuals outpaces the 100-hour plan.  In spite of government regulation, “most businesses, even restaurants and other service sector companies, already pay above the minimum wage anyway… You can’t get a dishwasher for minimum wage.”

Action Items

1. Consider your income and pay increases.  Do you create the level of value that you agreed upon with your employer when they offered you your current pay level? 
   Ask yourself if you feel “entitled” to your income.  Consider how you can eliminate the destructive desire for a “free ride” from your mentality.  Commit an honest day’s work for an honest day’s pay.
2. If you feel you need greater pay, determine what you can do to create greater value for your employer.
3. Make a list of ways in which you can increase your human life value.
4. If you employ others, consider whether the wages you pay are commensurate with the value they create for you.

MRFC Principles:  (7, 11)

Sources

Ellen Simon and Anne D’Innocenzio, Federal minimum wage rises to $6.55 today, Associated Press, July 24, 2008.
Fair Minimum Wage Act of 2007, Wikipedia.com

(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.)

Key Points

• HLV determines the value of things. If every human ceased to exchange, the value of items in the market would drop to zero, as became apparent last week in Flint, Michigan, where a house that sold three years ago for $110,000 could not be sold for $6,900. This is a perfect example of how property values are worthless without the human element.
• People are driven either by fear or faith. When on fear, people usually refuse to act or begin to act very irrationally. We see that with the panic stricken lines in front of Indy Mac and other banks as they are forced to close their doors. (Funny how the government and others are playing games lately with these bank closings to reduce these panic lines, but that is a discussion for another time.) When people check their emotions with more rational thinking, faith has a better chance of setting in and people may find better solutions to their challenges.

Conclusion

There is really only one cause of recession and price deflation. That is the human element. When human beings exchange, those involved in the exchange become enriched. When exchange slows down, poverty and scarcity set in. The problem with all of thee fantastic gadgets to predict trends and explain conditions is that they tend to become self-fulfilling prophecies. When indicators show a slow down, people tend to panic. Panic reduces action and productivity, which in turn restricts exchange.

Humans determine value. Those who will profit the most in these economically difficult times, will be those who most successfully get others to exchange with them. This will require a lot of cool-headed thinking, a high degree of persuasion, and ideas that make life easier for those whom one wishes to exchange with. In short, the higher the HLV, the greater the value there will be in exchanging with that person.

Action Items

1. Whatever your chosen field may be, seek to increase your HLV by looking for ways to increase people’s willingness to exchange with you.
2. If third party lending is usually a catalyst to the exchange, like it is in real estate, seek for ways not to need that part of the equation for the exchange.
3. Improve your communication skills in order to persuade prospective people to exchange with you.
4. Specifically related to real estate, consider ways of exchanging while still holding onto that property until more people are willing to exchange, thus increasing perceived value in the market.
5. Seek other areas to create value in to offset your losses in real estate.

MRFC Principles: 6 (2, 4, 5, 6, 8 )

Sources

Lesley Wroughton, U.S. house prices overvalued by up to 20 percent: IMF paper, Yahoo! News, July 25, 2008.  

Valdimir Klyuev, What Goes Up Must Come Down? House Price Dynamics in the United States,imf.org, July 25, 2008.

Bob Ivry and Sharon L. Lynch, Fannie mae Unsold $5 Billion Homes Brings Peril to Shareholders, Bloomberg.com, July 23, 2008.

In America, we seem to be enamored with the idea of being self-reliant (and rightfully so).  As we contemplate our history, we gravitate to stories of the self-made.  We love tales of millionaires who started with nothing, of businesses that have been successful against all odds, and of an unlikely group of heroes who rose from oppression and tyranny to lay the foundations of America’s success.

So, when Congress finds a way to become self-made heroes, it shouldn’t surprise any of us.  One secret desire of virtually all elected representatives is to be remembered fondly when they leave office, regardless of their actions while in office.  And, while this Congress has set a few records, they are not the kind of records that will guarantee eternal popularity.  They therefore find themselves in the desperate position of having to engineer their fame by “solving” some major problem.   It ought to make us question, just a little, when they problem they choose to tackle is a problem of their own creation.

As the mortgage market continues to crumble, the media (at the bidding of politicians) is quick to point out “predatory” lenders and “innocent, victimized” borrowers.  All of this is simply setting the stage for the heroes to march in, slay the evil corporate dragons, and save the day.  It needs to be asked, however, if the accusation of predatory lending is even accurate.  Granted, the mortgage industry has its demons.  But, Thomas Sowell, conservative economist and author, suggests that it was Congress that prompted predatory lending in the first place. 

He explains, “It was not that many years ago when there was moral outrage ringing throughout the media because lenders were reluctant to lend in certain neighborhoods.”  To solve the apparent inequality, Congress pushed to make “redlining” (the practice of not lending in depressed neighborhoods) taboo.  In Sowell’s words, “In our own personal lives, common sense leads us to avoid some neighborhoods. If you want to call that “redlining,” so be it. But places where it is dangerous to go are often also places where it is dangerous to send your money.” 

The discriminatory nature of redlining makes it a natural target for socialist would-be-heroes.  And, when the unintended consequences of eliminating such a practice kick in, there is yet another problem for the heroes to solve.  In short, the “the Community Reinvestment Act forced (lenders) to lend in places where they did not want to send their money, and where neither they nor the politicians wanted to walk.” 

In a free market system, businesses are able to determine who they will do business with, what risks they are willing to assume, and what to avoid.  Government intervention forced lenders to accept all comers, even when it was a bad business decision.  Loans were given to people who should not have had them, and the lenders are now being painted as predatory.  And the stage is set.

Enter the heroes (obviously from stage left).  On Wednesday, “rescue legislation sailed through the House…aimed at helping 400,000 strapped homeowners avoid foreclosure.”  After helping put under-qualified homeowners into a situation that was likely to end in foreclosure, Congress is now making moves to ‘save’ them.  The legislation would provide $3.9 billion in grants “for buying and fixing up foreclosed properties” and was easily passed because it focuses on “dealing with the consequences of bad decisions and inaction and malfeasance from years before.”  When speaking of “malfeasance”, however, Rep Barney Frank (D-Mass) is pointing at lenders, rather than at his colleagues.  Incredibly, his colleagues will be lauded by the media and the public.

The problem here is that the heroes don’t understand heroism.  Rather than stand for what is right, they choose to stand for what is convenient, popular, and personally beneficial.  The Whitehouse and most Republicans were against this bill.  But, at the last moment, the President decided to put his support behind it because “a showdown with Congress over the proposal would be ill-timed.”  No time like the present, Mr. President, especially when the ramifications of this decision will only ensure the collapse of the mortgage market that you are trying to avoid.  The 45 Republicans that voted in favor were generally “from districts ravaged by the housing crisis and some facing tough re-election fights”.  The plight of one’s constituents is no basis for violating principle.  Nor is the desire to be re-elected.  Such moves do not make a hero.

As Thomas Sowell put it, “Politics is largely the process of taking credit and putting the blame on others– regardless of what the facts may be. Politicians get away with this to the extent that we gullibly accept their words and look to them as political messiahs.”

True heroism is about courage, nobility, and honor.  Heroes stand for principle, not for issues or situations.  Michael Josephson said, “People of character (heroes) do the right thing, not because they think it will change the world but because they refuse to be changed by the world.”  Much to their chagrin, this Congress will never be seen as heroes by those who understand heroism and principle. 

Sources

Thomas Sowell, “Bankrupt “Exploiters””, TownHall.com, July 22, 2008.

Julie Hirschfield Davis, “House OKs rescue for homeowners, Freddie, Fannie”, Associated Press, July 24, 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.)