Category Archives: Capitalism

Nifonged

Business, Capitalism, Conservatism, Crime, Criminal Injustice, English, Free Markets, Ilana Mercer, Law

With respect to readers’ comments on the crucifixion of Conrad Black being the handiwork of the Left:

Fine, so long as we agree that by the “Left” we mean Republican Party hacks as well. Under their watch the most egregious prosecutions have taken place: Martha Stewart and Conrad Black.

As I coined the verb “Nifonged,” I’ll resurrect a quote with respect to the front runner in the presidential race. “Rudy Giuliani: That’s the guy who Nifonged Michael Milken, right?”—ILANA (March 4, 2007)

Yes, let’s be clear: when we speak of anti-business (and anti-justice) prosecutions launched by the Left, we include Republicans.

Capital Flight

Business, Capitalism, Economy, Free Markets, Government

Be afraid when a Democrat-dominated, “influential House committee is set to hear testimony from all five commissioners of the Securities and Exchange Commission today—the first time that has happened in at least 10 years.” Yes, the SEC is making a House call, as the Wall Street Journal put it.

What new havoc the SEC wrecking ball will wreak? That’s too early to tell. So far, according to FreedomWorks, the Republican Party’s Sarbanes-Oxley Act of 2002 has had the following effects on American capital markets:

“Between 1996 and 2001, the New York Stock Exchange (NYSE) averaged fifty new non U.S. listings annually; in 2005, it gained nineteen.

London’s AIM (Alternative Investment Market) had 335 initial offerings of securities in 2005 – twice the total in 2000, while Nasdaq had 126, down 65 percent.

In 2000, nine of every ten dollars raised by foreign companies were raised in the United States; in 2005, nine of the ten largest offerings were not registered in the United States, and of the largest twenty-five global offerings, only one took place in the U.S.

The government accounting office (GAO) found that the number of public companies going private increased from 143 in 2001 to 245 in 2004.

In 2000, nearly half, 46.8%, of the global IPO equity was raised on U.S. exchanges. However, in 2005, only 5.7% of dollars raised by non U.S. company IPOs was raised through shares listed on U.S. stock markets subject to U.S. regulatory rules and oversight.

The total inflation-adjusted value of securities class-action settlements increased to $9.6 billion in 2005 from $150 million in 1997.

The Sarbanes-Oxley Act of 2002, which placed extremely costly additional financial burdens, is estimated to have ‘cost in lost market value of U.S. companies at $1.4 trillion.’ In addition, it appears that the requirement for independent-director majorities on corporate boards has reduced the willingness of corporations to take risks, which will have a long run, adverse effect on U.S. economic growth.”

Crunchy Cons And Other Cud Chewers

Capitalism, Democrats, Economy, English, Free Markets, Government, Neoconservatism, Political Economy, Private Property

Jeff Tucker of the Mises Institute provides a powerful and pertinent review of Crunchy Cons, by Rob Dreher, a book I’m as likely to read as I am to see Al Gore’s Global Gibberish. Jeff writes:

“What’s really strange about this book is that it … is mostly a guide to how above-it-all the author and his family are, how they got to be so fabulous, and how they and their friends are to be congratulated and admired for having escaped the trappings of the materialism of our age. No Wonder Bread and Cheez Whiz circuses for them! They live a fully ‘sacramental’ life, from their choice of crusty multigrains to their love of fancy French cheeses.”

“It never occurs to the author that his crunchy way of living is a consumable good—nay, a luxury good—made possible by the enormous prosperity that permit [sic] intellectuals like him to purport to live a high-minded and old-fashioned lifestyle without the problems that once came with pre-capitalist living….”

And:

“The author doesn’t speak of demographics at all: the population of England soared from 8.5 million in 1770 to 16 million by 1831. This is the result of a vast increase in living standards. The result of the Industrial Revolution was not “a loss of the human in everyday life” but exactly the opposite: the vast increase in the number of humans who could participate in everyday life.”

“The world today has 6.5 billion people, and many of them are growing richer all the time thanks to the advance of capitalism. How does Dreher propose to feed and clothe and care for all these people? If they were all required to live a ‘crunchy con’ lifestyle they would die, first by the thousands, then by the millions, then by the billions. The world today absolutely requires a vast productive machinery called the market. I’m sorry that he doesn’t like it but this is reality. To be truly pro-life means to embrace free markets.”

Let us not forget “the evil of large retail shops driving smaller ones out of business.” Crunchy creeps are not original in this particular fixation. In a book review of Naomi Klein’s “deeply silly” No Logo for the Financial Post, I wrote that “in her discrete demarcation between big and small, local and transnational business, Ms. Klein ignores the fact that consumer patronage grows a small business into a large one. To her, consumers are dim. They buy products they neither need nor want, and even when their purchases are unsatisfactory, they keep at it. If they are so incompetent, why allow them to vote?”

Joining Klein and her crunchy-conservative cohort is another cud chewer: Charles Fishman, author of The Wal-Mart Effect. His think-piece was reviewed in The American Conservative by Marian Kester Coombs (the magazine has a preference for the double-barreled pretension). Now, even if a reviewer thinks a book is Bible from Sinai (not a metaphor TAC would tolerate, mind you), he ought to use some critical faculties to examine its flaws. That’s presuming such faculties exit.

Coombs is also a crappy writer: Wal-Mart, we are informed, is a “close-mouthed entity”; or “Wal-Mart knows the price of everything and the value of nothing.” I suspect both are mixed metaphors, and that Oscar Wilde is writhing in his grave.

She does nothing to articulate the mysterious mechanism that explains how exactly Wal-Mart impoverishes. By offering “the lowest possible prices all the time, not just during sales”? What exactly is the economic process that accounts for Wal-Mart’s ability to “expel jobs and technology from our own country”? Competition? Offering a product people choose to buy?

“Protecting the home market,” which is what this woman advocates, is to the detriment of consumers. It forces them to subsidize less efficient local industries, making them the poorer for it. To keep inefficient industries in the lap of luxury, hundreds of others are doomed to shrink or go under.

Our reviewer also froths at the mouth over “the teenage girl in Bangladesh … forced to sew pocket flaps onto 120 pairs of pants per hour for 13 cents per hour.” Look lady, Wal-Mart is either offering higher, the same, or lower wages than the wages workers were earning before its arrival in Bangladesh. The company would find it hard to attract workers if it was paying less, or the same as other companies. Ergo, Wal-Mart is a benefactor that pays the kind of wage unavailable prior to its arrival. More material, if the entrepreneur were forced to pay Third-World workers in excess of their productivity, he would eventually have to disinvest. What will the Bangladeshi teenage girl do when that happens?

Study George Reisman and Ayn Rand for College Credit!

Capitalism, Economy, Education

A note to undergraduate students: It’s not every day that we get the chance to seriously breach the left’s monopoly on higher education. But now, thanks to a collaboration between Professors George Reisman and Brian Simpson you can earn college credit for studying Dr. Reisman’s Capitalism: A Treatise on Economics and Ayn Rand’s The Virtue of Selfishness and Capitalism: The Unknown Ideal. More about this opportunity on Dr. Reisman’s blog, here.