In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
Innovation can change the world… if the world lets it. Unfortunately, society’s gatekeepers make it a point to constrain, regulate, and control these ideas. But their power is limited, and the power of innovation is too great. Unfortunately for regulators, there are some technologies they can’t control.
“Everything is proceeding as I have foreseen.” — Emperor Palpatine, The Return of the JediJon Stewart made great comedic hay during the Bush Administration out of the enormity of Dick Cheney’s “Sith Lord” malevolence. Events in Iraq in the past week have made especially palpable Cheney’s Palpatine-like quality.As Iraq unravels, you may suspect that Cheney might now […]
Entrepreneurs are high-tailing it out of the United States, and it’s the politicians’ faultThe U.S. government is driving some of its most productive citizens abroad. The only beneficiaries are countries such as Singapore and Switzerland, which offer sanctuary to Americans fleeing avaricious Uncle Sam.Three years ago Eduardo Saverin, one of Facebook’s founders, joined 1,780 other […]
Politicians love raising the minimum wage because they don’t have to ask voters to pay more in taxes. They just dump the costs onto shop owners. But they don’t act like politicians and go into debt to pretend like they have all the money in the world. They face real world situations. And sometimes that means replacing workers with more affordable options...
A cushy job in Hawaii that pays six figures. A beautiful girlfriend/boyfriend. Job security and professional experience that gives you plenty of future opportunities. Would you throw that all away to do what you think is right? Last year, one government contractor did just that. And now you see the world the government tried to hide from you.
As the world gets more digital, people forget about the benefits of transacting in cash. And government officials know that.
Regulation is supposed to keep you safe and make the economy function smoothly. At least that’s what they tell you in the news. But there’s another cost to regulation. One that you won’t hear about unless you have to deal with directly. And for the people in the economy who do, they’re the ones who have to pay the final cost.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
In his famous “you didn’t build it” speech, President Obama cited the Internet, fire departments, the GI Bill, the Golden Gate Bridge and the Hoover Dam as examples of government action that helps business owners.
Each needs addressing, but let’s start with the Hoover Dam.
The president is riffing off of Rachel Maddow’s MSNBC commercial in which the TV pundit dressed in her best black T-shirt and hoodie, points up at Hoover Dam and says words to the effect that the dam reminds us that an individual can’t build a dam — or a company, for that matter. It takes a country to build projects of this magnitude.
Having a soft spot for environmentalism, it’s surprising Maddow embraces the concrete monster. At the time, Hoover described the dam as “the greatest engineering work of its character attempted by the hand of man.”
The massive structure cost $49 million (or $736 million in inflation-adjusted dollars) and measures over 726 feet in height and more than 1,200 feet in length. It took five years and 4,360,000 cubic yards of concrete to build, and was finished two years ahead of schedule. About 16,000 people worked on constructing the dam, with over 100 losing their lives in the process.
There’s nothing new about government throwing taxpayer money around to create jobs. The Romans constructed aqueducts in small towns, industrial sites and large cities from France to Istanbul.
To construct the aqueduct of Segovia, Spain, Romans stacked massive bricklike granite blocks into a structure that reached a height of over 93 feet. Although no one knows for sure, it’s estimated that the aqueduct was constructed sometime during the reign of either Emperor Vespasian or Nerva to transport water from the Fuente Fria River over 10 miles from the city. The aqueduct has 167 arches and reaches its height at the Plaza del Azoguejo.
The impressive Roman structure only serves to attract tourists to the city of 55,000 today. When I visited two years ago, our guide, Jerry, told us Segovia’s population did not warrant such an expenditure when it was built. “The Romans primarily built the aqueduct as a show of power.”
Just as the Keynesian policies of the New Deal tried to cheat the laws of economics, government’s damming of the Colorado River attempted to cheat Mother Nature by bringing water to the desert southwest — water that just isn’t and never was there.
The great Western explorer John Wesley Powell was booed out of the room when he told the Irrigation Congress, “Gentlemen, you are piling up a heritage of conflict and litigation over water rights, for there is not sufficient water to supply the land.”
But 75 years ago, when the dam was nearly completed, FDR proclaimed during his dedication speech that millions of present and future residents of the Southwest could count on “a just, safe and permanent system of water rights.” The turbulent Colorado River that vacillated between droughts and floods would be tamed and become “a great national possession,” and be counted on for irrigation to support a human migration seeking mild winters and new opportunities.
“The nation took him at his word,” writes Michael Hiltzik, author of Colossus: Hoover Dam and the Making of the American Century. “Since that dedication year, the population of the seven states of the basin has swelled by about 45 million. Much of this growth has been fueled by the dam and its precious bounties of water and electrical power.”
As Hiltzik points out, the dam’s water promise gunned the growth of Southern California cities and attracted farmers to the West to grow water-intensive crops like cotton, despite the lack of normal rainfall required to support this kind of agriculture.
Just as government stimulus programs and artificially low interest rates that promise to spur growth and make up for the lack of private investment never work, Hoover’s promise that his dam would, as Hiltzik writes, “provide all the water their states could conceivably need to fulfill their dreams of irrigation, industrial development and urban growth” is literally drying up.
The water level at Lake Mead is down nearly 100 feet from its high water mark, revealing a white “bathtub ring.” According to Wikipedia, the lake’s water volume is just slightly half the amount the lake could hold at its maximum.
Now that millions have migrated to the Southwest and private industry has invested millions of dollars, Hoover’s and FDR’s promises have confined those living and doing business in the West “in the straitjacket of an ever-intensifying water shortage,” notes Hiltzik. And while Interior Secretary Gale Norton claimed to have stilled the “conflict on the river” back in 2003 with the signing of two dozen agreements transferring water rights between various Indian tribes, cities and governments, the battle for water will rage on. The supply will never catch up with the demand.
After the 10-year drought, an additional intake pipeline into the diminishing Lake Mead is being installed. Almost 90% of the drinking water for Las Vegas comes from the lake. The new intake pipeline, officially known as Intake No. 3, “will reach deeper into the reservoir to protect the valley’s water supply, should the lake shrink low enough to shut down one of the two shallower straws,” reports the Las Vegas Review-Journal.
The project targets 2014 for completion. “This new intake tunnel is 3 miles under Lake Mead, and then there is a tap of the lake about 3 miles out. I like to say it’s as if you’ve got your bathtub full of water, and now we are putting the drain into it while it’s full,” says Vegas Tunnel Constructors (VTC) Vice President of Operations Jim McDonald.
The contract amount started at $447 million, but the cost has risen by over $100 million since the project began. The tunnel, after excavated for the pipeline, unexpectedly filled with water three times in the project’s first six months.
Last month, excavation was delayed again when a VTC worker was killed 600 feet below ground when one of the tunnel segments was jarred loose, and pressurized grout was discharged, striking two of the workers.
Those in government never learn. They can’t print prosperity, and more water won’t magically appear if they dam a river. While the man on the street believes government infallible, politicians and bureaucrats cannot calculate the economic profits and losses of government interventions. Governments will forever fight over scarce water, and private use is increasingly being restricted by local ordinances.
“The spending for nonproductive public works, for the bureaucracy and for the Army led to excessive taxation, inflation and the ruin of the essential middle class and its leaders,” H.J. Haskell wrote in his book The New Deal in Old Rome, destroying the men French historian Leon Homo called “the general staff of civilization.”
The New Deal dam project that Obama and Maddow are so proud of provided a few thousand jobs 80 years ago, but has spurred migration, farming and development that is likely unsustainable and may ultimately be, like the aqueduct in Segovia, just a giant tourist attraction. This is something future tourist guides will call “an example of American government power.”