Year: 2009

LET THEM FAIL (by Russell Roberts):

We’re going to run out of money.

We can’t keep GM and AIG and Fannie and Freddie and every insolvent bank and every mortgage afloat. It can’t be done. It’s not a strategy. It’s just desperation to avoid pain.

We’re going to have to start letting them fail.

Sooner is better than later. Otherwise, we continue to throw good money after bad.

Let them fail.

When you’re in a hole, the first lesson is to stop digging. Let’s start by putting down the shovel and admitting we are heading in the wrong direction.

Let’s taste some bankruptcy. Let’s let some resources and capital get out of the hands of the people who are misusing it and into the hands of people who can use it more productively, wisely, and prudently.

All Hail the Mighty State: Texas Independence Day:

173 years ago, George C. Childress hurriedly composed a document at Washington-on-the-Brazos while only 150 miles away, the Alamo was under a brutal and ultimately fatal attack by the Mexican army. The document, which was written overnight at a hastily formed convention of Texas leaders, accused the Mexican goverment of ceasing to protect the lives, liberty, and property of the people of Texas. It became the Texas Declaration of Independence.

…the people of Texas do now constitute a free, Sovereign, and independent republic, and are fully invested with all the rights and attributes which properly belong to independent nations; and, conscious of the rectitude of our intentions, we fearlessly and confidently commit the issue to the decision of the Supreme arbiter of the destinies of nations.

And with those words, the people of the Republic of Texas declared independence from Mexico on this day, March 2, 1836.

The Texas War of Independence had begun half a year earlier, on October 5, 1835, with the defeat of the Mexican army at the Battle of Gonzales by armed Texians who refused to surrender a cannon – the famous “Come and Take It” cannon – to the Mexican government, as it was their only means of protection against Indian attacks on the settlement.

General Antonio López de Santa Anna, the recently-elected president of Mexico, had just the year before abolished the Constitution of 1824 – which very loosely governed Mexican territories, including Texas – and enacted a harsh, anti-federalist constitution in its place. The new constitution took away liberties to which most Texian settlers had become accustomed, required that they convert to Catholicism, tithe 10% of their earnings to the Roman Catholic church and created the state of Coahuila y Tejas out of the former territory, with its new capital hundreds of miles away from the former capital of San Antonio. Texian settlers were furious.

After winning the Battle of Gonzales, local leader Stephen F. Austin began to round up volunteers to form a Texian Army, much to the fury of General Santa Anna. They saw their first great victory at the Siege of Bexar on December 11, 1835, defeating the Mexican army and General Santa Anna’s own brother-in-law, General Martin Perfecto de Cos, despite being outnumbered two to one and having very little ammunition or training.

The War of Indpendence reached a fever pitch at the infamous Battle of the Alamo, where General Santa Anna himself led an offensive on the Texian army members who were garrisoned at the Alamo, a former mission in San Antonio that was being used as a military headquarters. Between February 23 and March 6, 1836, the small number of Texians inside fortified the Alamo and were able to hold off the waves of Mexican troops. Ultimately outnumbered by twelve to one, the Texians were finally slaughtered – including the famous Davy Crockett, William B. Travis, James Fannin and Jim Bowie – and only a handful of survivors were allowed to leave the destroyed mission. Susanna Dickinson was spared by General Santa Anna so that she could spread the word of the defeat to her fellow Texians.

The defeat didn’t have its intended effect, as the defiant cry “Remember the Alamo!” was used to rally the Texian army during what would be the final battle of the Texas Revolution: the Battle of San Jacinto. The revolution came to an end here in Houston in a short, vicious battle. Although lasting only 18 minutes, over 600 Mexican troops were killed by an army of 900 Texians and two cannons. General Santa Anna escaped from the lost battle that day, April 21, 1836, and formally surrendered after being hunted down by a search party (who recognized the president in part due to the fancy silk underwear he was wearing).

A month later, the Treaty of Velasco was signed by General Santa Anna and David G. Burnet (the interim president of the Republic of Texas, prior to Sam Houston taking the reins) at what is now Surfside Beach. The treaty formally ended the Texas Revolution and recognized the Republic of Texas as a sovereign nation. The Republic existed as an independent nation for ten years before being annexed by the United States as the 28th state in the union.

And while it’s not entirely true that Texas retains the right to split into five separate states at any time (really, any state can split if it wants to) and it’s not at all true that Texas retains the right to secede from the United States at any time, one important thing is true (aside from the fact that the federal government has no control over our land or oil reserves; only our state goverment does!): Texans are strong, proud people who fight for what they believe in.

Happy Texas Indepdence Day, y’all!

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Photos courtesy of Flickr users kshilcutt, aggiechristine and R&R Finn.

Now they’re worried (by Russell Roberts):

An amusing moment in the SOTU address occurred when Obama said:

“There is, of course, another responsibility we have to our children. And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay. “

The Republicans roared their agreement. It was the only real point in the speech when they showed genuine emotion. But then Obama continued:

“With the deficit we inherited…”

And the Democrats roared back, mocking the Republicans. (And I think there was an ad lib in the middle where Obama mentioned that this was an issue where there was bipartisan agreement.)

The Republicans deserve to be mocked. All of a sudden they’re worried about big government and deficits. But it is ironic for the Democrats to do the mocking. They haven’t exactly been pushing for balanced budgets or reduced spending over the last eight years.

Obama’s Shocking Speech:

Voters respond enthusiastically to determined leadership at the moment of crisis. But laws made in a crisis atmosphere, from the Gulf of Tonkin resolution to Nixon’s wage and price controls to the TARP legislation, usually turn out badly. Democrats want to use this crisis to ram through government takeovers that they couldn’t achieve in any other period. We should slow down, take a deep breath, and carefully consider whether we want a clumsy, always-behind-the-times bureaucracy to take charge of our health, our access to energy, and our educational future.

A Way to Protest Obama’s Economic Plan:

I’m watching the President’s address to Congress. Or I was anyway. I’ve had enough. But after listening to him butcher economics for the last half hour, I have an idea for a little mass action that will both protest the ignorance of his plan and educate those who need it most in the process: Readers of this blog should email the office of their elected officials, and enclose the following link:

http://www.econlib.org/library/Bastiat/basEss1.html

That link is to “The Seen and the Unseen” by Bastiat. It is quite clear after listening to Obama’s talk tonight that he, and those who applauded him wildly, have no clue as to this fundamental point in political economy. Not once in all of his talk of what government would do did he ever even come close to acknowledging that what government spends on the one hand must be taken from the private spending stream on the other. In fact, at one point he touted his “transparency” plan by saying that it would enable “taxpayers to see how government money is being spent helping other taxpayers.” Maybe so, but he glosses over the fact that the money being spent came from those same taxpayers and would have been spent on other things, without the waste of the transfer, were it not for government’s intervention. Robbing Peter to “help” Paul only damages both in the process, and certainly stimulates no economic activity.

So let’s start our own little form of mass action and protest. Take a few minutes and email your elected officials (and members of the media!) a copy of Bastiat’s essay. And then you should spread the word to your friends and family and ask them to do the same. Feel free to enclose a note to the politicians and talking heads explaining why they should read it. It can’t hurt and it can only help. And wouldn’t it be great if this spread and members of Congress and the media (and the White House!) got deluged with dozens or hundreds or thousands of emailed copies of Bastiat? At the very least, no one can say we did nothing.