During his candidacy and his first few days in office, Barack Obama has made both public and private comments regarding the use and cost of various forms of energy. He famously whispered that as president he would attempt to bankrupt the coal companies and the utilities dependent on coal for power generation. Quite recently, he said that $5 per gallon gasoline would be good for the country. Because he’s never held a real job,  commuted an hour to work, wrestled with the problems of a small business or assumed personal reponsibility for a profit/loss statement, Mr. Obama knows nothing about the realities of life here in these United States of America. He wasn’t concerned about helping Mother Earth when these comments were made. He was talking about controlling the lives of Americans through the availability, cost and appropriate use of energy. With the dollar nearly valueless, energy is now the new currency. By constricting supply, redirecting its flow or outlawing certain uses, Obama and his puppeteers can now control the entire US economy.

The carbon credit cap-and-trade scheme provides no direct benefit to the environment, the economy or the citizenry. It does, however, give the government dictatorial powers to control industrial output, personal mobility, even the flow of information. All of it requires energy. Starve a certain economic activity of energy, and it disappears. Provide cheap, abundant energy to another sector, and it will flourish. That’s called a planned economy. See Lenin, Stalin, Mao, Castro, Chavez. Even if the carbon credit tax scheme (yes, of course it raises taxes) doesn’t come to be, Mr. Obama and the Democrats in Congress have a dozen other means to achieve nearly identical results. Energy, like money, can be used to reward political allies and punish opponents. Energy, like money, evokes strong emotions of envy, entitlement and greed.

If you’ve ever watched one of those post-apocalyptic movies that hit theaters every now and then, you can’t help but notice that almost every film, energy is highly prized. Everyone fights over the available energy source, be it ancient fuel depot or swine flatulence, to stay alive or to impose their will over others. The leftist wing of the Democratic Party senses this. The private foundations and academic loonies have been touting this as the ultimate means of control for decades. But, how to get Americans to relinquish their standard of living and personal mobility - both possible only with cheap and abundant energy?

Enter the bogeyman - Al Gore, with an alarming vision of an environmental Armaggedon, replete with celebrity endorsements, Bruce Springsteen playing background music and thousands of militant morons flooding into the streets.  And so, Big Al and the environuts have trotted out their shameless scam of global warming to scare gullible Americans into scaling back their energy use and accepting the exhorbitant tax schemes that are being layered into energy costs. The environmental bogeyman frightens Americans into giving up their personal mobility, scaling back their standard of living and limiting their economic freedoms.

The media play along. In recent days, Exxon was again lambasted for its ‘obscene’ 2008 profits of $45 billion - a one time event. No one in the mainstream media bothered to report that over half of this profit was confiscated by the US government in the form of corporate income tax. Nor did they mention that Exxon actually collected nearly $300 billion in federal gasoline taxes for the government and turned it over within a few hours of collecting it. It costs Exxon lots of money to collect those taxes, do the reporting and transfer funds collected from thousands of gasoline stations and credit card issuers. Exxon was not reimbursed. The government expended no effort in collecting those taxes, other than to call the bank to see if they were deposited. And then, moments later, our government spent it. Out the door. Up in smoke. Never to be seen again. At some point, if voters allow it to happen, the government will take control of the oil and coal industries to ‘protect’ us from price gouging, when in fact it’s the hidden taxes in energy prices that are making them unaffordable to working Americans.  Once the means of production are controlled (Hugo Chavez playbook, p. 1), the government can impose its will as it sees fit. Whomsoever controls the levers of power, now controls each and every one of us.

So, when the brownouts start happening on a regular basis, when local radio stations featuring conservative talk show hosts are put on a limited broadcasting schedule to conserve power, and when your monthly electric bill is roughly equal to your mortgage payment, remember who started it all - Obama and his cronies in Congress. Their dreary utopia of equally shared misery is the best that socialists can offer.

Political pundits and TV newsreaders make much of ‘crony capitalism’ - as if all capitalism is based on monopolistic tendencies. The mainstream media will usually characterize this as conspiratorial corporate collusion aimed at hapless consumers. Monopolies or price-fixing never last because they’re inherently inefficient and unmanageable in a dynamic free-market system. One needs only to look at OPEC, an openly conspiratorial and monopolistic bunch. Whenever OPEC oil ministers agree to set market prices at an artificially high benchmark it only takes a couple of weeks before one of their own is exceeding their production quota or lowering their prices. Despite all their machinations, they can’t control the price of oil. It’s market forces and human nature at work - good, bad or indifferent.

Typically, ‘crony capitalism’ involves government intervention or collusion, because the ‘cronies’ involved are usually government officials, elected or otherwise. Free-market capitalism by its very nature wouldn’t tolerate an unfair advantage, because market forces and competition would undermine the enteprise with an unfair or unethical advantage. This was true when our own government got involved in the corrupt practice of handing out special charters to politically connected individuals who would then form steamboat, railway, subway or trucking lines. These government-sponsored businesses were inherently inefficient and unprofitable not only because of the amount of bribery and graft involved, but because workers and management didn’t apply themselves, confident that their government charter protected their incomes. This is as true today as it was in the 1840s, when crony capitalism first began to appear. Compare Northern Suffolk Railways, a profitable private-sector operator, to Amtrak, a government-controlled operator that costs taxpayers millions each year. Fannie Mae and Freddy Mac, both government-chartered lenders, were subject to corruption and political gamesmanship that triggered the mortgage meltdown.

Pure capitalism has little in common with crony capitalism. In fact, crony capitalism is more closely aligned with socialism, where the government owns businesses outright. When government gets involved in business, those businesses will be run with the vision, energy and efficiency of government itself. In other words, it will be a disaster. Which doesn’t provide us much hope now that government is part-owner of banks, broker-dealers, insurance companies and carmakers.

Former Clinton Labor Secretary Robert Reich recently appeared on a Discovery Channel program that attempted to explain economics and capitalism. Reich, a seemingly well-educated man, kept referring to capitalism as simply dressed-up greed. In his fevered mind, there appeared to be no place for capitalism in the world, because it was based on greed. He referred to the writings of Adam Smith as proof that greed was the underlying motivation for capitalism - not personal achievement or bettering one’s life, not even providing the best for one’s family. It was just simple greed. Reich is not an idiot, but he is a demagogue. He’s entitled to his opinions, but when they are amplified and broadcast across the country, his extremist views influence others. The program provided no opposing views or commentary. This insult to our open, free-market economic system went unanswered, as do many other such insults.

Contrast Reich’s opinions with the observations of Alexis de Tocqueville, a French writer and political scientist who toured America in the early 1800s. He was struck by the incredible energy and vitality of everyday Americans - simple men and women who worked doggedly at improving their lot in life. He observed that this was possible only in America, because only in America did hard work pay off for the common man. Therefore, it wasn’t ‘greed’ that motivated Americans over the last 200 years, it was the possibility, the certainty, that if they worked really hard, no one could take their newly found prosperity away from them. It energized them, it gave them hope for a better tomorrow. And yes, a very few people became very rich doing so. But, the more important point is that hundreds upon thousands became very prosperous - much more so than if they’d remained in Europe. It was the growth and political stability of a solid middle class that distinguished America from any other nation at any other time.

This has always been the central argument against capitalism — the poor are exploited by the greedy rich. In Europe, the poor had been exploited by the rich and powerful for centuries, well before capitalism existed. And, there were proportionately more poor people in Europe during the 1800s than in America. They were held back by social barriers, denied education and opportunity, prohibited from relocating to areas with better economic conditions. This was the reality of life in England and Europe. Slavery was abolished in the United States by presidential decree in 1861. But only after pressure was applied by other European governments did Russia finally abolish serfdom for Ukrainian peasants in 1862, freeing hundreds of thousands from centuries of bondage. The lack of opportunity and incentive was a fact of life for millions of Europeans.

In America, those who escaped the rigid social and economic structure of Europe were becoming landowners, opened small businesses and sent their children to universities. This was impossible anywhere else in the world and in many places is still impossible today. What America’s largely classless society was able to accomplish was the marvel of the modern world - a relatively well functioning capitalist system with minimal interference by aristocrats, autocrats and bureaucrats. Was it perfect? No. Did excesses and failures occur? Yes. But, it’s still the best system ever devised by man. The irony is that the liberal elite who preach against a free-market economy and capitalism have benefited most from its bounty.

Take Robert Reich as an example -  he attended Dartmouth College and won a Rhodes scholarship to study in England. The Rhodes scholarship was endowed by Cecil Rhodes, a capitalist and diamond merchant. Reich then taught at Harvard University, the wealthiest educational institution in the world. Harvard endowments exceed $45 billion, most of them gifts from capitalist alumni. At Brandeis University he was the Maurice B. Hexter Professor of Social and Economy Policy at the Heller School of Social Policy and Management. He’s currently a professor at UC Berkley’s Goldman School of Public Policy. Maurice Hexter, Florence Heller, Richard and Rhoda Goldman are philanthropists who endowed the institutions that paid Reich’s salary. Where did their money come from? Capitalism. This ingrate, along with his former girlfriend Hillary Clinton and thousands of other liberals, have no problem taking money from capitalists only to turn around and bite the hand that feeds them.

But then, this is what liberals do. They resent the fact that someone else has worked harder, worked smarter or had the good fortune to accumulate wealth. Envy is a powerful emotion. It’s corrosive, destructive and insidious. Envy, dressed up as public policy, is what threatens free market capitalism. Demagogues like Reich and Obama have used envy to whip up class warfare, turning it to their own advantage. Socialism is their choice of socio-political structure, not because it’s inherently better than capitalism, but because it can be easily controlled by a small elite. That’s right: Socialist activists like Reich and Obama firmly believe in their own superior intellect and abilities, and they’re more than happy to impose their ideology on the rest of America. The average American can’t seem to grasp this. Why would someone dedicate their lives to telling other people what to do? There doesn’t seem to be any profit in it. And that’s the key - Americans are so conditioned to a direct linkage between effort and material reward that the desire to accumulate personal power is totally foreign.

They don’t understand it because they’ve never lived under despotic rulers or communist totalitarianism. Josef Stalin murdered millions and destroyed entire civilizations. He controlled the Soviet Unions economy with an iron fist. As the supreme ruler, he could have any material thing he wanted. And yet, he lived like a pauper. This is unfathomable to the average American. Unfortunately, Americans will need to get used to it. Obama’s monstrous plan to grow government means that all Americans will be working for the government, whether they understand it or not and whether they like it or not.

Reich, Obama and other well-educated liberal elites have no problem taking money from capitalists to feather their own nests. They have no problem taking money from taxpayers, either. Using our tax dollars, they will build a utopia in their own image and likeness. And, they’ll do it in the name of ‘fairness’. At some point, Americans will wake up and find themselves yoked to a huge and unyielding machine that sucks the life out of them. But it will be too late. Betrayed by liberal ideals, Americans will have allowed the most despotic form of government to take hold. They will have thrown away their freedoms and their future.

Obama’s surrogates and spokespersons are out on the news talk circuit, re-setting expectations for the Anointed One’s first year in office. The massive socialist spending spree promised during the campaign is now being repackaged as an economic stimulus and ‘infrastructure investment’ to quell fears on Wall Street and the world banking system. As before, they blame the ‘failed Bush policies’ for the current economic problems, but there’s a new twist - they’re now openly condemning our entire economic system. That’s right, Obama’s people are attacking free-market capitalism and the concept of private business. They’ve called free-market capitalism a ‘failure’ and they mean to change it. The $800 billion Obama intends to blow in 2009 is a down payment on a brand spanking new socialist economic system, complete with quasi-governmental corporations (remember Fannie Mae and Freddie Mac?), oversight boards loaded with government union representatives, and thousands of politically connected ‘consultants’ and ‘experts’.

Where are the media folks on this one? In fact, where are the Republicans? There is no doubt that Obama will be setting the agenda - he wants his marxist vision implemented quickly, before the masses understand what’s happened to them. This isn’t a matter of hyperbole or reactionary zeal. This man and his backers fully intend to take America down an irreversible path to socialism with a uniquely American twist. Wealthy liberals like the Kennedy’s, Kerry’s and much of the East Coast’s social elite will be protected from confiscatory income and capital gains taxes with rifle-shot exemptions and loosened regulation of private foundations, which are overwhelmingly pro-liberal. Read Phil Kent’s Foundations of Betrayal to get an eye-popping overview of how private foundations influence political discourse and shape national policy.

Working under the premise that repeating a lie often will find it accepted as truth, Obama’s people will relentlessly pound the ‘free-market failure’, drumming this nonsense into the heads of unwary and unsophisticated Americans simply looking for a handout in troubled times. Our fellow citizens will give away their economic freedoms and hope for the future in exchange for a government handout that will be gone in a week. Obama’s counting on it.

Republicans will sit back, shake their heads and pronounce that nobody’s stupid enough to give away economic opportunity in exchange for some cash, and this couldn’t possibly happen. They’re wrong. American voters have proven gullible to a breathtaking degree and demagogues like Obama have taken full advantage of it.  Never underestimate the shortsightedness of parasites or their champions.

The 20th century was certainly America’s greatest age - the first half, at least. The bitter and divisive Reconstruction Era of the 1870s and 1880s transitioned into a more or less cohesive national perspective on America’s place in the world by 1900. The Spanish American war, concluded successfully just two years earlier, gave American military leaders confidence in their abilities to wage war on a global scale. And so, when World War I erupted, president Woodrow Wilson wasn’t intimidated by Germany’s U-boat attacks and quickly mobilized a huge army that effectively won the war in Europe and elsewhere. World War II was a repeat performance on a larger scale. America emerged from WWII as a superpower. The armed forces executed their missions superbly. But it was the home front that made overwhelming victory possible - the manufacturing might of America’s relatively new steel and automotive industries, as well as shipbuilders and munition makers, was the key strategic factor. It wasn’t the Roosevelt administration or government bureucrats who were responsible for developing this overwhelming advantage. It was America’s entrepreneurs and business leaders. For example, under direct Army supervision, aircraft makers were turning out one B-17 bomber every four days. Under direct Ford Motor Company’s supervision, the output was increased to one B-17 bomber every four hours. America didn’t become a superpower on just the courage and dedication of its military personnel. Our military entered combat with more armor, more firepower, more munitions, more fuel, more food and more technology than any other armed forces on land, sea or in the air. It’s a position of strength we’ve never relinquished.

After WWII, the former Russian Empire, run by Josef Stalin and his thugs, emerged as an unintentional and adversarial superpower. They were a brutish, unsophisticated and xenophobic bunch. Soviet Russia was a superpower only in a military sense, and even that was questionable. Much of the government’s resources were consumed in keeping their own citizens under control. Russia’s non-military economy was a tiny fraction of even a war-ravaged Europe, much less that of the United States. In the end, Soviet Russia collapsed not because it couldn’t maintain an iron grip on its subjects and not because it couldn’t compete technologically with US weapons systems. It collapsed because America could out-manufacture and out-spend the Russians 10 to 1 and they couldn’t keep up.

Ronald Reagan realized this when he was developing his political platform in the late 1960s. America’s manufacturing muscle was our de facto arsenal of democracy. Not only did we have the latest and best weapons systems, we had more of everything than anyone else. Once he was elected President, Reagan put his strategy into action. Without firing a shot, Ronald Reagan was able to destroy Russian rule over its conquered neighbors by simply outspending the Soviets on every level. They couldn’t keep up. And once their economy  started to crumble, the political machinery unraveled as well. Soviet Russia was unable to keep an iron grip on its conquests. Millions of Belorus, Ukrainians, Poles, Czechs, Slovaks, Kazakhs, Georgians, Armenians, Lithuanians, Latvians, Estonians, Finns, Prussians, Ossetians, Turkmen, Azerbaijani, Tartars, Uzbecks and a dozen more ethnic groups now had a chance at freedom and self-determination.

Our manufacturing sector was responsible for ending the Cold War. Unfortunately, that manufacturing sector has been under attack for the last two decades. Poorly considered free trade policies, unscrupulous trading partners like Japan, India and China, the raping of corporate assets by trial lawyers, unrelenting pressure from environmental groups and a massive expansion of government have combined to deal a mortal blow to domestic manufacturing. Our own government has carried on a relentless assault, literally driving manufacturers out of business, some of whom were critical to national security. For example, our government drove the last domestic manufacturer of hand grenade detonators out of business by allowing non-US companies to bid on US military contracts. The only company in the world that can supply those detonators is located in Switzerland. When the US invaded Iraq, the owners of that private company refused to supply grenade detonators to the US and any other country that entered the war as part of the coalition. This is only the tip of the iceberg. No one knows how many mission-critical parts and pieces are manufactured in countries that aren’t particularly concerned with our national security. And no one within the government is talking.

From a military and national security perspective, it’s absolutely stupid to put American companies out of business and outsource critical technical components to China, Japan, India or just about anywhere but here. The US military relies heavily on foreign sources of microchips, memory and logic controllers. It is unbelievably easy to compromise weapons and communications systems with a little bit of re-engineering that’s almost impossible to detect. This is not paranoia. The China government sanctions and funds daily cyber attacks on Department of Defense servers from so-called ‘military academies’ and institutes within China. And, China has already leapfrogged American Internet technology by embracing TCP/IP and mobile protocols at least two generations ahead of our current versions.

From an economic stability perspective, it’s absolutely stupid to beggar our skilled and unskilled manufacturing workers by pitting them against workers in other countries who live and work in unbearable conditions. Unemployed Americans in the hundreds of thousands create economic instability and political problems. In their desperation, they fall prey to demagogues and panderers who promise them hope and handouts in exchange for their votes. If the government is going to ‘invest’ in America, the first place to make that investment is in revitalizing the manufacturing sector, and specifically, the repatriation of defense manufacturing. Every nut, bolt and screw should be made in America, not because it’s a trade protectionist urge, but because it truly protects the country to do so. Given the astounding level of waste, greed, corruption and inefficiency in government, rebuilding our domestic manufacturing capability is a low-cost, high-return investment.

President Elect Barack Obama has been tiptoeing around his campaign promises lately, carefully rephrasing his words and restating the problems he once sought to vanquish just by being Obama. There is little doubt that he and his cohorts in Congress will drive the country deeper in to debt with spending programs intended to reward his union supporters (please refer to earlier posts). That means infrastructure and school building projects that involve lots of union members and bureaucrats. This will be packaged up as an economic stimulus package, but that’s eyewash at best. In fact, it’s an outright fraud that our grandchildren and their children will still be paying off in the next century.

The best possible economic stimulus would be to enact a tax holiday - two months where no tax of any kind is collected. All the money is kept, and spent, by those who earned it. It’s an idea that’s been circulated previously and it would most certainly work better than anything coming out of Congress or the Office of the President-Elect. Which is why it will never happen.

The auto industry is a tempting carcass that even the vultures won’t consider. Typically, when a corporation the size of GM founders, corporate raiders of every stripe flock to the scene. They’re after the assets or the cash flow or sometimes the tax losses. Hedge funds and private equity groups would be sniffing around, looking for a great deal. That’s what happened to Chrysler. Cerberus Capital made a lowball offer for the ailing automaker once word got around that Daimler-Benz was willing to give it away. Unfortunately for Cerberus and its management, this was not a flip-and-strip. And even with a capable cost-cutter as CEO, a top-to-bottom reorganization will take many years and many billions of dollars. Throw in a disastrous turn in the economy and you have some real trouble on your hands. Ford and GM are also being pummeled in this recession. Sales are off by billions of dollars.

As of this date, the market value of GM and Ford stock combinedis roughly $9 billion. That means anyone with $9-10 billion can offer existing shareholders cash and effectively own both corporations. The combined annual revenues of both corporations is over $200 billion. One would think that vultures would have been circling for the past two years as both GM and Ford hemorrhaged cash. But they haven’t. In fact, Bill Gates or Paul Allen could easily write a check  out of their household accounts. No Middle East sheik, no Asian billionaire or Russian mobster has even considered a move. Kirk Kerkorian, the Vegas entrepreneur and investor, has taken a beating in his attempts to buy into GM and Ford.

What’s keeping the turnaround artists, the LBO experts and the private equity groups away is the lack of available credit and collapsing vehicle sales. Both combine to create an incredibly difficult and complex financial situation. Anyone considering a play to control either Ford or GM would need billions in low-cost borrowing in order to accomplish a restructuring - something both firms desperately need. And everyone is standing pat, waiting for something to happen. The $36 billion the carmakers are requesting is just a band aid. It will never be repaid because the Big 3 haven’t even earned $36 billion all told in the last 10 years. Consider it a gift from the American taxpayer. Congress should consider simply guaranteeing a $30-50 billion loan to anyone with a plan that shows they can do a better job of running GM or Ford than present management. Let’s ask Warren Buffet.

Senator Barack Obama is now President-Elect Obama. The crowds went wild in Grant Park and Times Square. Certainly, it’s a historic event - an African American candidate breaks the color barrier. But, there are many more accomplished and experienced African Americans who were ignored by their own parties, the media and voters in general. Why this guy? In any case, we’re stuck with our choices good, bad or indifferent. The Obama administration and a largely Democratic Congress will now shove through legislation and programs that will grow government and limit our personal and economic freedoms. It will be unprecedented in American history. Franklin Delano Roosevelt was a socialist elitist who firmly believed in and enforced a class hierarchy in the US. Lyndon Baines Johnson was a socialist elitist who firmly believed in a morally and ethicly ambivalent society. But, neither man was so brazen as to promise he would dismantle the protections of the Constitution and call for an internal, civilian security force equal in power and funding to our military. And neither man openly promised forced redistribution of wealth, pitting one class of Americans against another.

This will come as a rude shock to those who think that Obama will pay for their gasoline, pay their mortgages and give them ‘free’ health care. It will never happen. Instead, every form of taxation will be increased and new taxes will be instituted. Everyone will suffer. If you thought medical care was expensive, time-consuming and frustrating, wait until the government gets involved. You’ll be waiting line for an aspirin. There is nothing that our government does exceptionally well, with a few colossally expensive exceptions — aerospace and defense. And the reason these two areas can point to incredible technical and operational achievements is because cost, the taxpayer’s liability, is no object. Get ready for a $20 bottle of aspirin coming to a drugstore near you. Oh, that triple bypass that will save your life? You’ll have to wait 10 years. But, if you’re politically connected, perhaps a Democratic party apparatchik, you’ll be in and out in 4 days.