Monday, October 26, 2009

Ayn Rand Fear @ The New Republic

From my discovery of Ayn Rand and her philosophy of Objectivism more than forty years ago, I knew that I had discovered something important - the ideas that would play a profound role in America’s future. I couldn't possibly have any way of knowing when that would be, of course, or even if it would be in my lifetime. Ideas could take years, decades, generations, or even millennia to flower. Today, Objectivism is getting serious recognition.

I have long believed that the measure of Objectivism’s penetration into the American culture would be evidenced by the level and virulence of the attacks against it. Judging by not just the hostility but the growing interest in general, both pro and con, Objectivism may be approaching a key turning point. It is apparently emerging into the intellectual “mainstream” of American culture.

As evidence, I point to two new books: Goddess of the Market: Ayn Rand and the American Right, by Jennifer Burns, and Ayn Rand and the World She Made, by Anne C. Heller. Before I proceed, let me disclose that I have not read either of these books. While they have been portrayed as critical of Ayn Rand, I will reserve judgement until and unless I do read them. I will, however, note that Jennifer Burns appeared on The Daily Show in an interview with John Stewart. Objectivist and philosopher Dr. Diana Hsieh reports that Rand’s ideas were treated relatively fairly. Not only Ms. Burns, but the host Mr. Stewart “took Ayn Rand seriously…, knew something about her ideas, and he did not treat her as an object of ridicule” (which has been the classic tactic the philosophical establishment has traditionally used to avoid the necessity of judging Objectivism).

I will also observe that the two books are apparently scholarly enough to be the subject of a symposium at the libertarian Cato Institute. The focus of this post will not be on those two books per se, but on an illuminating and interesting review in the Left-oriented The New Republic by Jonathan Chait. Cleverly entitled "Wealthcare", this piece is an attempt to pass off the notion that Ayn Rand's ideas are simultaneously a heavy influence in American politics ... and a failure ... without really analyzing her actual ideas.

What grabs me as I read through the pages of Chait’s blistering polemic is the urge to demand an answer to the question, “Where’s the Beef?” The entire article is one long journey down a side road that bypasses any actual critique of Objectivism. We are treated to the fallacy of ad hominem, misrepresentations, evasions, distortions, contradictions, guilt-by-association, and a healthy dose of straw man attacks.

Now, an honest critique of Objectivism is certainly a valid undertaking, and would be most welcome. But it is just that – honesty – that is a prerequisite of any valid critique. One must first show that he understands the subject, explain it in its essentials, then proceed to demonstrate where and how one believes it is wrong. This article does no such thing. I couldn’t find a single instance of an intellectually valid attempt to discredit Objectivism (which is Chait’s obvious intention).

Chait employs a heavy dose of straw-man argumentation. He parades out a long list of assorted conservatives, Religious Rightists, republicans, and libertarians who cherry-pick isolated, out of context aspects of Rand’s philosophy for their own purposes, often misrepresenting her position. Interestingly, the aforementioned interview reveals acknowledgement of this phenomenon by host Stewart and by implication author Burns. Dr. Hsieh writes: “Stewart was seriously interested in the right's appropriation of Ayn Rand when convenient, then ignoring other ideas like her atheism. (I'm glad he pointed that out!)” (Emphasis added. I’m relying on Mrs. Hsieh’s observations here, since I have not yet viewed the clip.) Chait makes no such disclaimer. Instead, he irresponsibly attacks the positions of the alleged representatives of the Right as a proxy for Objectivist essentials, claiming that Rand’s “influence” on these individuals is all that is needed to disprove Rand’s actual ideas.

For example, Chait (using this straw man technique) ascribes to Rand such falsehoods as “the premise that wealth represents a sign of personal virtue” and “poverty the lack thereof.” (A lot of time is spent on this straw man.), that “hard work” is the primary essence of success, and that she is a champion of the rich. The central theme of Atlas Shrugged (AS), the role of reason in man’s existence, doesn’t warrant any of his attention. (AS is allegedly about “the rich going on strike”).

In this regard, let me point out a glaring contradiction here. “In essence”, Chait writes, “Rand advocated an inverted Marxism. In the Marxist analysis, workers produce all value, and capitalists merely leech off their labor. Rand posited the opposite.” Marx perpetrated (or at least popularized) the fallacy of the choice between two systems of exploitation – the rich capitalists over the workers (capitalism), or the workers over the rich capitalists (socialism). Thus, capitalism equates to a government that favors the rich, and socialism to one that favors the workers. It is a false choice between two forms of statism, and leaves actual capitalism – a social system based upon individual rights and a government that protects those rights equally and at all times, under the principle of the separation of state and economics – out of the equation altogether. This Marxian view is widely accepted today, not only by the Left but even to a large extent by the Right.

It is this Marxian view that Chait exploits to evade Rand’s actual ideas.

Rand didn’t posit the view that “[capitalists] produce all value, and [workers] merely leech off their labor.” Her view, evidenced in her description of the pyramid of ability, is that the human mind is the primary source of economic value, with the originator and discoverer of new knowledge contributing the most to the productive process, while all others benefit to the extend that they make the effort to acquire the knowledge and skills discovered by others and apply it to their own labor. All productive participants – capitalists, businessmen, entrepreneurs, scientists, inventors, workers, investors, artists – contribute value to the productive process in general proportion to the intellectual energy they expend (Financial reward does not necessarily correlate to intellectual labor, but rather to the value of one’s work product as determined by those who choose to buy it through free and voluntary trade, i.e., the market.). Physical labor, as such, contributes very little value. The vast majority of people in a capitalist social system, who are not originators, nevertheless gain the bonus of having access to a vast store of accumulated knowledge … knowledge made available by the originator higher up on the pyramid of ability. This does not mean, however, that the “average” man is a leech; and this is a point that Rand takes pains to make. To be productive and self-sustaining, a person must still make the effort to acquire the knowledge and skills necessary to earn his living. He is not a leech, so long as he does not demand the unearned and gives his honest best to his occupation. The man of limited ability (on the lower rungs of the pyramid of ability) who lives in this fashion is portrayed by Rand – both in her fiction and non-fiction – as equally virtuous to the heroes in AS.

Rand advocated capitalism precisely because it leaves people … all people … free to advance economically as far as their own efforts, ability, and ambition will carry them with no one leeching off of or preying on anyone. Indeed, anyone who actually read Atlas Shrugged would know that many of the primary villains in the novel are rich leeches and exploiters who exist by government favor and political pull, while conscientious workers of limited ability are portrayed virtuously. The point of the novel is that the productive rich … the greatest innovator, entrepreneur, businessman, and industrialist … should simply be left free from government controls and redistributive taxation and that all people at any level of ability have a vested self-interest in keeping it that way.

But that aside, it is true that Rand’s view of wealth production is the opposite of Marx. Marx promulgated the premise of the “labor value of wealth” – that physical labor is the source of all productive achievement (thus, his foolish focus on the “workers” as the exploited). Rand believed that man’s mind, his reason, is the source of economic value and that labor as such adds very little (a self-evident fact, in my view). It is this premise, the intellectual value of wealth, that she set out to prove in AS.

Yet, Chait sloppily contradicts himself by ascribing to Rand the view that “hard work” is directly correlated to wealth. Clearly, this is the Marxist view, which Chait earlier claims – correctly (“Rand posited the opposite”) - that Rand rejected.

Chait’s repeated references to Objectivism as a “cult” are a dead giveaway of his ignorance and/or dishonesty. “[Objectivism] tried to make its people live by the dictates of a totalizing ideology that failed to honor the realities of human existence.”

Considering the sweeping nature of that statement, one would expect at least some idea of what those “realities” are that Rand’s philosophy fails to “honor”. Since Objectivism teaches that one must accept the primacy of existence (an objective reality independent of one’s consciousness), focus his mind on the facts of reality (choose to be conscious), think and act on his own independent judgement based upon his own observation of those facts (reason and logic), organize his life based upon his own long-term best interest (rational egoism or virtue ethics), and respect the rights of others by renouncing the use of physical force in his relationships with them (the trader principle), one can only guess at what “realities of human existence” he believes Objectivism ignores.

But regardless of the actions of any of Objectivism’s alleged practitioners, a philosophy of reason that rejects faith logically cannot become a cult. Of course, any philosophy can be treated as a cult or dogma. This undoubtedly applies to many “followers” of Objectivism. Ayn Rand addresses this point in The Art of Nonfiction, pages 29-30:

“The purpose of philosophy is to guide a man in the course of his life…

“Philosophy does not tell you concretely what to feel or think; it tells you what is true or false - the right principles by which to judge, for example, a work of art, a government policy, [or] a personal relationship. Philosophy provides you with a criterion – but cannot apply it for you (my emphasis). In judging anything or anyone, you must decide whether it or he is good or bad.

“Philosophy cannot give you a set of dogmas to be applied automatically. Religion does that – and unsuccessfully. The dogmatic Objectivist desperately tries to reduce principles to concrete rules that can be applied automatically, like a ritual, so as to bypass the responsibility of thinking and of moral analysis.
They are ‘Objectivist’ ritualists. They want Objectivism to give them what a religion promises, namely, ten or a thousand commandments, which they can apply without having to think about or judge anything.”

“It” is first and foremost a set of principles to guide the life of the individual man in his own endeavors and in his relationships with others, based upon his nature as a rational being. “It” cannot “make” anyone do anything. To the extent that a person lives by Objectivist principles, is the extent to which that person lives by his own judgement according to his own assessment of the facts and “the realities of human existence”.

Due to its essentials, in fact, Objectivism is its own protection against any kind of dogmatism. Anyone who accepts any aspect of Objectivism on faith, or who searches for an “Objectivist position” on concrete issues, cannot claim to be practicing Objectivism. And anyone who claims that Objectivism is a cult is refuting his own words by demonstrating his ignorance of Objectivism.

The cult-like behavior of psuedo-Objectvists notwithstanding, Rand rejected as invalid one’s attempt to accept any philosophical principles or positions on the issues on faith – including her own. The charge that Objectivism is a cult is nothing more than another straw man intended to avoid the necessity of judgement. The author doesn’t know, or want to know, or honestly acknowledge Objectivism. Chait’s analysis can use a good dose of objectivity.

The fallacy of ad hominem - the practice of attacking the person and his personal failings, real or imagined – as a proxy for his actual ideas is on display here. I have no intention of delving into this portion of the article, which Chait deals with rather extensively, because it is irrelevant to Objectivism. Ideas stand separately from any person, including the originator or discoverer of those ideas, and should be independently evaluated on the merits. Rand herself understood this, rejecting the term “Randism” in favor of Objectivism, which is a comprehensive view of life and of existence drawn from an intense study of the metaphysical facts of man’s nature and his relationship to the universe. In short, Objectivism is a discovery … or rather a series of discoveries … not a set of floating abstractions (ideas disconnected from reality). As such, Rand’s philosophy must be critiqued by reference to the objective facts of reality. Objectivism can not be refuted by ad hominem (no ideas can). Objectivism is Rand's monumental achievement, but it is not about Ayn Rand.

Examining a person’s personal life in a biography is perfectly valid, of course, including the evolution of that person’s thought (which, apparently, is what Anne C. Heller attempts to do in her aforementioned book). But that cannot substitute for a critique of that person’s officially recognized philosophy.

There is the attempt to discredit Objectivism by the use of such descriptions as “apocalyptic thinking”, “hysteria”, and “expressions of terror” to describe “Randian thought”. But again, one finds no attempt to refute her actual meaning. Rand does have a flare for the dramatic, but that just plays to her strengths. Chait doesn’t actually refute any of this “hysteria”. Of course, the Left is so accustomed to the Postmodern practice of using words as a means to subvert communication and understanding that it can’t handle the clear and concise oratory of a philosopher who treats words as they are meant to be used … as abstract concepts that describe reality. Put another way, Rand tells it like it is, and thus invites anyone to tell us why it isn’t like she says it is. This petrifies the Left, which fears intellectual clarity above all else.

Even where an idea is accurately presented, such as the reference to Rand’s “black and white ethics”, there is no analysis of its meaning according to Objectivism. Instead, the reader is left hanging with the impression that Rand simply endorses the conventional definition of selfishness via the implied equation of her ethical system to Friedrich Nietzsche’s predatory individualism. It’s true that the early Rand was influenced by Nietzsche, and that she admired some of his work. But she ultimately rejected his brand of egoism:

“Nietzsche’s rebellion against altruism consisted of replacing the sacrifice of oneself to others by the sacrifice of others to oneself. He proclaimed that the ideal man is moved, not by reason, but by his ‘blood,’ by his innate instincts, feelings and will to power—that he is predestined by birth to rule others and sacrifice them to himself, while they are predestined by birth to be his victims and slaves—that reason, logic, principles are futile and debilitating, that morality is useless, that the ‘superman’ is ‘beyond good and evil,’ that he is a ‘beast of prey’ whose ultimate standard is nothing but his own whim.”

Chait doesn’t know, or want to acknowledge, the true nature of Ayn Rand’s ethical system. And he certainly doesn’t want the reader to learn. She actually has a very strong and comprehensive ethical system. But Ayn Rand’s morality is without question the hardest “sell” for Objectivists, and also the most misunderstood essential. For these reasons, and especially in view of Chait’s misrepresentations, this subject deserves to be explored a little further.

Chait ignores the central ethical element of AS embodied in the oath taken by the novel’s heroes:

“I swear - by my life and my love of it – that I will never live for the sake of another man, nor ask another man to live for mine.”

Considering the amount of time Chait spends on Atlas Shrugged, this cannot be an accident. A mere cursory bit research effort will reveal the equation of Rand to Nietzsche for the hatchet job that it is. Wilhelm Windelband describes Nietzschean egoism:

“The strongest impulse of man is the will to power… The will for power knows no bonds which prescribe what is “permitted”; for it, everything is good which springs from power and increases power; everything is bad which springs from weakness and weakens power…

“[Nietzsche] sets up the ideal of the over-man in contrast with the ordinary, everyday man of the common heard. Will for power is the will for mastery, and the most important mastery is that of man over man…

“All the brutality of trampling down those who may be in the way, all the unfettering of the primitive beast in human nature, appear here as the right and duty of the strong.” (A History of Philosophy, pages 678-79)

Leonard Peikoff describes the Objectivist concept of egoism as follows:

“The principle embodied in [the oath quoted above] is that human sacrifice is evil no matter who its beneficiary is… Man – every man – is an end in himself.

“If a person rejects this principle, it makes little difference which of its negations he adopts – whether he says “sacrifice yourself to others” (the ethics of altruism) or “sacrifice others to yourself” (the subjectivist [including Nietzschean] version of egoism). In either case, he holds that human existence requires martyrs; that some men are mere means to the ends of others… It is nothing but a haggling over victims by two camps who share the same principle.

“Objectivism does not share it. We hold that man’s life is incompatible with sacrifice – with sacrifice as such, of anybody to anybody. As Ayn Rand states the point in The Fountainhead, the rational man rejects masochism and sadism, submission and domination, the making of sacrifices and the collecting of them. What he upholds and creates is a self-sufficient ego.” (Objectivism, the Philosophy of Ayn Rand, pages 235-36. An understanding of the Objectivist definitions of the concepts of values and sacrifice would be helpful here.)

The diametrically opposed concepts of egoism between Nietzsche and Rand is clear, and clearly evaded by Chait. (For a definitive account of the Objectivist ethics, I refer you to The Fountainhead and Atlas Shrugged, and the non-fiction works of Ayn Rand, Tara Smith, and Craig Biddle.) She considered him to be “…philosophically a mystic and an irrationalist”. Rand’s ethics is, of course, “black and white”. Isn’t that the purpose of morality – to lay down a code of firm values or principles by which to judge what is good or bad for your life, and then to strive to adhere to the good? What good are gray ethics? Moral relativism, such as the social version of the Left, is in actuality no ethics at all.

Similarly, Rand’s concept of the “pyramid of ability” features an accurate quote, and then falsely equates Rand’s portrayal of the top of the pyramid with Nietzsche’s concept of the supermen’s domination and subjugation of the inferior masses. (See my previous comments in this post.)

There is a complete misreading of a disaster scene in AS, which misses the important lesson of not only the catastrophe but of the events leading up to it – that ideas have consequences and that no one can (nor should) ultimately escape responsibility for his own irrational intellectual premises and actions:

“Burns notes some of the horrifying implications of Atlas Shrugged. 'In one scene,' she reports, ‘[Rand] describes in careful detail the characteristics of passengers doomed to perish in a violent railroad clash, making it clear their deaths are warranted by their ideological errors.’ ”

What’s clear is not that the passengers’ deaths are warranted, but that the passengers are not blameless, because they promoted the kinds of human actions that culminated in the disaster. This is a huge distinction. The Postmodern Left is wedded to the deterministic belief that people are conditioned by their surroundings, meaning that the ideas they hold are beyond their control and thus they should not be held accountable. Rand rejects this view, believing that every person faces the basic choice, to think or not, and that this choice is ultimately his and his alone to freely make regardless of any “conditioning”. A good analogy would be the case of the drunken driving parent and his child killed in a car wreck. Are their deaths warranted by that parent’s belief that he can drive while intoxicated? That’s not the point. The point is, is that parent responsible? Clearly, the answer is yes. Chait misses the lesson implicit in that AS scene, and simply wants to shoot the messenger. Rand wrote “… although the political aspects of Atlas Shrugged are not its central theme nor its main purpose, my attitude toward these aspects – during the years of writing the novel – was contained in a brief rule I had set for myself: ‘The purpose of this book is to prevent itself from becoming prophetic.’ ” (Objectivist Forum, June, 1980, Emphasis added.) Chait (deliberately?) and apparently Ms. Burns miss the lesson surrounding that scene, wishing the reader to simplistically believe “the horrifying implications” that Rand believed that people deserve to die for “their ideological errors”… rather than that it is Rand's impassioned call through the medium of Romantic fiction to correct those errors.

Chait’s rude slap at John Allison is a revealing bit of window dressing in which Chait’s cloak of moral righteousness slips momentarily. As chairman and CEO, Allison guided BB&T through the financial crisis, keeping the bank giant out of the sub-prime mortgage business and thus allowing it to emerge as one of the strongest financial companies in the country – by adhering his company to the philosophical principles of Objectivism (see my post of 10/21/09). More tellingly, Chait exposes himself as a poster child for the real motives of the collectivist Left – a hatred and disdain for the successful achievers, the very achievers whose products are considered so valuable that they must be smothered by government controls and confiscatory taxation. Ayn Rand identified this mindset as “Hatred of the Good for Being the Good”.

There is much more to be said regarding Chait’s fallacial arguments. There is, for example, his utterly false statement that “Objectivism was premised on the absolute centrality of logic to all human endeavors. Emotion and taste had no place” (as if Rand was the creator of Star Trek’s Mr. Spock!). And then there is Chait’s reference to Rand’s “two-dimensional characters”, a falsehood and a slap at Rand as a Romantic novelist (or, the portrayal of “the hero … as an abstraction of man’s best and highest potentiality, applicable to and achievable by all men, in various degrees, according to their individual choices”. But I’ll leave it off here, for now. The important point to take from this article and the books is that Objectivism is being increasingly taken seriously - a major plus for Americans and America’s future if the interest does not abate.

Through all of the bluster and smoke that passes for objective analysis, one can see the clear intent of Mr. Chait’s phony polemic – his wish that “Ultimately the Objectivist movement failed…” The purpose of his construction and destruction of what amounts to a huge multi-faceted straw man is a desperate attempt to defend the welfare state against a new and rising threat – a moral defense of capitalism. He writes:

“[W]e can see the outlines of a coherent view of society. It expresses its opposition to redistribution not in practical terms--that taking from the rich harms the economy--but in moral absolutes, that taking from the rich is wrong. It likewise glorifies selfishness as a virtue. It denies any basis, other than raw force, for using government to reduce economic inequality. It holds people completely responsible for their own success or failure, and thus concludes that when government helps the disadvantaged, it consequently punishes virtue and rewards sloth.” (Emphasis added.)

From Barack Obama to Michael Moore, the Left is increasingly relying explicitly and openly on socialism’s ethical base, altruism, to advance its cause. With economics, logic, and history going against them, the Postmodern collectivists must be getting nervous that their last pillar of strength, the altruist card, is beginning to crumble. This is the clear message that breaks through the entire piece.

It’s entirely likely that Chait is exaggerating Ayn Rand’s influence on the American Right. The Republican Party is still dominated by the Religious Right, which adheres to the same altruist ethics as the Left. Still, one thing is becoming increasingly clear. The intellectual battle between capitalism and socialism … between individualism and collectivism … is now moving onto the “final frontier” – the moral battleground. This is the frontier upon which America’s, and civilization’s, future will be determined. It is the battleground occupied by the big philosophical guns of Objectivism.

Jonathon Chait and other more astute members of the collectivist Left are, I’m sure, well aware of this. But ideas cannot be defeated on the intellectual battlefield until and unless they are actually engaged, openly and honestly. Mr. Chait fails miserably in that regard.

On a final note, I want to reiterate very strongly that I have not read the two books by Ms. Burns and Ms. Heller. This essay should not be taken as a review of them, but as a critique of Jonathon Chait’s review at The New Republic. For an Objectivist perspective on Jennifer Burns’ book, see Ari Armstrong's introductory review, and a review of the entire book at Fun With Gravity.

Wednesday, October 21, 2009

"It's a Wonderful Life" - in Real Life

In my post of 10/6/08, I described how the values promoted in a cultural classic…the movie “It’s a Wonderful Life”…actually led, in practice, to the opposite result as depicted in the movie. Regarding the housing meltdown, I wrote:

In essence, we are witnessing the culmination of the battle between Henry F. Potter and George Bailey.

Since before the middle of the last century, it has been official U.S. government policy to promote and encourage home ownership.

The predicted consequences of this George Bailey-like policy are now coming true in many communities across America…the result of banks making loans that they would not have made in a free market, had they acted on their own judgements according to their own rational self-interest and long-term profitability.

Hadn’t these [banks] performed a public service by abandoning the cold and heartless policies of Henry F. Potter and allowed untold thousands of people to achieve “the American dream”? Is this not what their own government, which regulates them, called for? … Weren’t they, in fact, complying fully with the implicit premise as expounded in It’s a Wonderful Life…that the purpose of the banks are not their own profitable self-interest but to “serve” the public?

But what would a real-life George Bailey look like? And a real-life Henry F. Potter?

The private sector poster child for what went wrong is Angelo Mozilo, founder of Countrywide Financial. "More Americans should own their own homes”, declared President Bill Clinton in 1994. Riding the government’s axis of irresponsibility…led by the Fed’s easy money policies, Fannie and Freddie, the FDIC, and the Community Reinvestment Act…Countrywide charged ahead in carrying out the government’s affordable housing crusade. Time reports:

"The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them. In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage."

Countrywide became the leading champion of the alleged victims of the Potters of the banking world. He originated massive volumes of “exotic” mortgages, then sold them to the government-created mortgage giants Fannie Mae and Freddie Mac. Mozilo became a real-life George Bailey, taking in the “rabble” that the Potters neglected. Reported the National Mortgage News on February 17, 2003:

“Mr. Mozilo labeled downpayments as ‘nonsense’ and said credit score requirements are ’still much too high.’… the outspoken industry leader called on his colleagues to ‘take a chance on making mistakes rather than foreclose on the opportunity’ to put minorities and other underserved families into homes of their own.”

“The $1 Trillion We House America Challenge … embodies Countrywide’s long-standing commitment to lead the mortgage industry in closing the homeownership gap for minority and lower-income families and communities,” said Countrywide Financial Corporation Chairman and CEO Angelo Mozilo in a January 14, 2005 press release.

Leaving aside the racist and elitist implications of his banking philosophy (that “minority” and “lower-income” folks are incapable of practicing the virtues of thrift and long-term financial planning that would enable them to meet sound lending standards), there can be no doubt that Mozilo was upholding the spirit of George Bailey. The rest, as they say, is history.

John Allison, our real-life Henry F. Potter (but without the Hollywood window dressing of personal nastiness), ran his bank a little differently. Bank giant BB&T grew from $4.7 billion to $152B under Allison’s reign as CEO (since retired, but still the Chairman). But unlike the movie villain, seedy towns with graveyards standing where housing developments should have been is not his legacy. And unlike his real-life counterpart (Countrywide Financial), BB&T emerged from the crisis as one of the strongest banks in the country. Allison’s secret – strict adherence to an explicit business philosophy of rational self-interest.

In a wide-ranging interview with Russ Roberts, Allison (an unabashed Objectivist):

“argues for the virtues of profits, self-interest and production. His definition of justice, one of the core values of his firm, is that those who produce more, get more. He argues that Bill Gates would do more for the world improving Microsoft than running his foundation and giving away money. Allison praises Atlas Shrugged and refuses to let his bank make loans to companies that use eminent domain to acquire property.”

BB&T’s philosophy (the company is now run by Kelly King) is laid out in a special section on its website. The introduction stresses that although “Change is necessary for progress, … the context, our vision, mission and values, are unchanging because these principles are based on basic truths.” (Emphasis added)

Its core principles are led by its Values (reality, reason, independent thinking, productivity, honesty, integrity, justice, pride, self-esteem, and teamwork, with a final word on the role of emotions). Values are defined as “practical habits that enable individuals to live, be successful, and achieve happiness.”

These values define the Concepts That Describe BB&T, its Vision, Mission, and Purpose, and its Strategic Objectives. These set the tone for its relationship with its clients, employees, and the community at large, and define BB&T’s long-term goals:

Our ultimate purpose is to create superior long-term economic rewards for our shareholders. This purpose is defined by the free market and is as it should be. They take the risk if the business is unsuccessful. They have the right to receive economic rewards for the risk which they have undertaken.

However, our purpose, to create superior long-term economic rewards for our shareholders, can only be accomplished by providing excellent service to our clients, as our Clients are our source of revenues.

To have excellent client relations, we must have outstanding Employees to serve our clients. To attract and retain outstanding employees, we must reward them financially and create an environment where they can learn and grow.

Our economic results are significantly impacted by the success of our Communities. The community's "quality of life" impacts its ability to attract industry for growth.

Therefore, we manage our business in a long-term context, as an integrated whole (my emphasis), with the ultimate objective of rewarding the Shareholders for their investment, while realizing that the cause of this result is quality client service. Excellent service will be delivered by motivated employees working as an integrated team. These results will be impacted by our capacity to contribute to the growth and well-being of the communities we serve.

Charity (9:53 into the Roberts podcast) is a part of BB&T (which uses United Way), though it must be secondary and based upon rational self-interest. But charity and self-interest are not mutually exclusive, if you want to “create the good community”, as long as one’s giving is non-sacrificial. Allison frowns on “narrow” self-interest, which “is to let others create the good community, doing the work for you.” “By focusing on what life is about you can get meaningful rewards from other things than just making money.”

Under the heading “Business Ethics”, Knowledge@Emory writes in its post Why Principled Leadership Brings Profit and Pride to BB&T that “John Allison, who uses philosophy not only to guide his life, but to run a company, could easily be called a ‘CPO,’ or Chief Philosophical Officer.” We can see why.

The press has noticed. National Review Online’s Mark Hemingway authored an article called Objectivism for Fun and Profit – How a banker avoided ruin by cleaving to Ayn Rand’s system of ethics. Allison, a strong opponent of the government’s bank-bailout program:

…isn’t your typical bank executive. When he discusses his profession, he doesn’t talk about numbers; he talks about values and principles.

The fact that BB&T didn’t dive headfirst into the shallow pool of subprime mortgages certainly goes a long way toward explaining the relative health of BB&T as an institution. But how was BB&T able to resist chasing after all that new mortgage money?

The answer is simple: Subprime mortgages were bad for the people who took them out. That went against BB&T’s philosophy — not for reasons of altruism but because it would have been poor strategy. “We’re obviously a for-profit company, but we don’t think that it’s good business in the long term to do bad things to your clients, even if you make a profit doing it,” Allison said. “So we chose not to do negative-amortization mortgages because we knew it was going to get a lot of people in financial trouble.”

Allison navigated through the overheated mortgage market and the ensuing banking crisis by relying, in large part, on a philosophy that many others are now turning to: “I got interested in [Ayn] Rand in the late 1960s. I read Capitalism: The Unknown Ideal. I had already been interested in economics, and as I finished college, I got interested in finance. I saw the banking system as central to a capitalist economy.”

[Allison calls] Rand’s seminal work, Atlas Shrugged, “the best defense of capitalism ever written” and [has] made it required reading at BB&T.

Rand is often viewed as “extreme” because her defenses of capitalism and “rational self-interest” are seen as promoting greed and selfishness. Yet Allison is quick to note that the strong values and ethics that Rand’s philosophy promotes allowed BB&T to steer clear of shortsighted and greed-driven decisions.

“A lot of people miss the fact that Rand has a very strong ethical system,” he observes.

However, simply because Rand doesn’t endorse altruism for altruism’s sake, many people misconstrue her to be amorally selfish. Rand “doesn’t view ethics as self-sacrificial,” Allison says, “she views ethics as a rational means to success and happiness. If you described her in principle, she would say that you shouldn’t take advantage of other people because that is unethical behavior and self-defeating. But you also shouldn’t self-sacrifice. What you really need to do is run your life in relationship to other people in context to what she calls the trader principle. The trader principle is about what I call creating win-win relationships. We trade value for value and we get better together, and we find these common grounds where we can get better together.”

By adhering to a philosophy that demands a strict observance of the facts of reality (honesty), our real-life Henry F. Potter has proven to be the real hero in our real-life saga, “It’s a Wonderful Life”. His home mortgage borrowing clients, his employees, his bank’s shareholders, and the communities that they come from are all better off for his rationally selfish pursuit of profit and growth, and steadfast refusal to “take a chance on making mistakes”.

Not so for our villain, the real-life George Bailey, who was guided by a philosophy that “labeled downpayments as ‘nonsense’ and said credit score requirements are ‘still much too high’ ”. He wasn’t about to let any cold-hearted long-term principled strategy upset his altruistic plan to ‘take a chance on making mistakes rather than foreclose on the opportunity’ to put minorities and other underserved families into homes of their own.” What has happened to these adults saddled with “big fat exotic mortgages”, or the employees and shareholders of the now-defunct Countrywide Financial, or the communities they came from? They disappeared into that original movie symbol of the greedy, selfish, profit-motivated banker…the graveyard of the foreclosure crisis.

Has this real-life victory of Potter over Bailey taught us any lessons? Not to the architects of the current crisis. “[W]e have made a mistake in this society,” declared powerful House member Barney Frank. “The assumption that everybody can be a homeowner is wrong. We pushed and encouraged people into home ownership - people who, in some cases, weren't ready for it. You can't act on wishes that are unrealistic without having negative consequences”. He now proposes a government-backed plan to guarantee unlimited financing for rental housing – thus setting the stage for another meltdown!

What’s needed is a BB&T moral and philosophical revolution…for the country. John Allison, our real life Henry F. Potter, is optimistic. He tells the NY Times:

“In some ways, Ayn Rand filled in the ideas of Aristotle. It’s a whopping competitive advantage,” he says. “I personally believe Objectivism will be the dominant philosophy in this country in 25 years.”

Led by people like John Allison, who recently accepted a teaching role at the business schools at Wake Forest University, a small group of committed and highly motivated activists are fighting to make that daunting challenge come true.

(As an aside, the major New York Times article referenced above, entitled Give BB&T Liberty, but Not a Bailout, is a surprisingly positive piece, considering the newspaper. It describes BB&T’s growth under Allison, and how his philosophy acted as a guide not only for its long-term growth but also for steering the bank through these tough times.

(But the author can’t resist taking potshots at Rand and Objectivism, and I can’t resist returning my own. He hurls the usual kind of empty Rand criticisms that are impossible to refute, because they say absolutely nothing. For example, he claims that Rand can’t even qualify as a philosopher…because a poll said so. He apparently believes that facts are determined by popular opinion…just the kind of second-hand mindset that Rand condemns in The Fountainhead. As Craig Biddle writes at Principles in Practice:

("[T]he article includes a smear by subjectivist philosopher Brian Leiter, who expresses his wish that Rand is 'irrelevant' and that her ideas are 'simple-minded in the extreme' and 'embarrassing.' Well, I suppose her ideas would be embarrassing to someone such as Leiter, who, in the article, exposes his method for answering such questions as whether or not a given person is a philosopher: Take a poll."

(The reason why Rand’s philosophy is not for Leiter & Company is that it is for those who are willing to think for themselves rather than follow the herd, and who are not embarrassed by clear, straightforward arguments, which characterize Rand’s work.

(That the article's author, Andrew Martin, can carry Leiter’s denial that Ayn Rand qualifies as a philosopher, in the very same article in which he describes a major corporate success story demonstrating the eminent practicality of Objectivism, is an irony that is apparently lost on him.)

Related Reading:

Old Man Potter Lived a Wonderful Life—Tom Mullen for FEE

"It's a Wonderful Life" - in Real Life

Saturday, October 17, 2009

The Battle over Christopher Columbus

Was Christopher Columbus a hero or a villain? That is the question at the heart of a cultural debate now raging. It is a debate that is, I believe, crucially important because it cuts to the heart of our national identity. A pair of op-eds highlight the basics of the issue. On the pro-Columbus side is Thomas A. Bowden of the Ayn Rand Center for Individual Rights. He writes:

“We’ve been taught that Columbus opened the way for rapacious European settlers to unleash a stream of horrors on a virgin continent: slavery, racism, warfare, epidemic, and the cruel oppression of Indians.

“This modern view of Columbus represents an unjust attack upon both our country and the civilization that made it possible. Western civilization did not originate slavery, racism, warfare, or disease--but with America as its exemplar, that civilization created the antidotes.

“Throughout history, prior to the birth of Western civilization in ancient Greece, the world seemed impervious to human understanding. People believed that animistic spirits or capricious deities had supernatural powers to cure diseases, grow crops, and guide the hunter’s arrow toward his prey.

“This pervasive mysticism had practical consequences: festering disease, perpetual poverty, and a desperate quest for survival that made offensive warfare against human beings seem as natural as hunting animals. Such was the plight of America’s Indians before 1492--and such was Europe’s own plight, once the civilizations of Greece and Rome had given way to the mysticism of Christianity and the barbarian tribes.

“It was Western philosophers, scientists, statesmen, and businessmen who liberated mankind from mysticism’s grip. Once scientists revealed a world of natural laws open to human understanding, medical research soon penetrated the mysteries of disease and epidemic

“On a much wider scale, the Industrial Revolution employed science, technology, and engineering to create material goods in profusion, so that even people of average ability could become affluent by historical standards.

“Western civilization’s stress on the value of reason led inexorably to its distinctive individualism. Western thinkers were first to declare that every individual, no matter what his skin color or ancestry, is fully human, possessed of reason and free will--a being of self-made character who deserves to be judged accordingly, not as a member of a racial or tribal collective. And thanks to John Locke and the Founding Fathers, individuals were recognized as possessing individual rights to life, liberty, property, and the pursuit of happiness--rights that made slavery indefensible and led to its eradication, at the cost of a civil war.

“These are the facts we are no longer taught--and the measure of that educational failure is the disdain with which Columbus’s holiday is regarded in the country that owes its existence to his courage. It is time to take back Columbus Day, as an occasion to publicly rejoice, not in the bloodshed that occurred before Columbus’s arrival and after, but in our commitment to the life-serving values of Western civilization: reason and individualism. We do so by honoring the great explorer who opened the way for that civilization to flourish in the New World.”

Giles Howard takes Mr. Bowden to task in his op-ed at The Pitt News entitled, Conservatives, libertarians better off leaving Columbus controversy alone:

“But Bowden’s identification of Columbus as a representative of Western civilization who brought reason and individualism to the Western Hemisphere ignores the historical record.

“Far from Bowden’s construction of Columbus as a Promethean figure who brought liberty and reason to the Americas, contemporary records and Columbus’s own writings depict him as a savage governor, representative of two anti-liberal pillars in Western history: fanatical Catholicism and the government of Ferdinand and Isabella.

“It’s easy to put a positive spin on the grand impact of Columbus’s actions because, after all, none of us would be here today and the United States would not exist if it weren’t for Columbus’s ‘discovery’ of the Western Hemisphere in 1492. That being said, it’s much more difficult to defend Columbus as a man rather than a historical idea because his personal conduct reveals a profound barbarism.

“Indeed, Columbus’s rule was considered so savage during his own time that Ferdinand and Isabella had him arrested, brought back to Spain and imprisoned. Whatever his supposed role in the expansion of Western civilization, Columbus was understood during his own time as a barbaric tyrant and his actions, as recorded by his contemporaries, reveal him as a savage man who instigated countless atrocities in the new world.

“It is fascinating that support for Columbus has emerged nationally from an [O]bjectivist think-tank that’s … adopted their hemisphere’s first slave-trader as a symbol of Western civilization’s ‘reason and individualism.’

“[Instead of] picking a fight with the historians who did so much to discredit Columbus and the indigenous movements that continue to identify Columbus Day as an inappropriate celebration of genocide … The Ayn Rand Center should leave such battles to the religious Right that Ayn Rand herself so disdained and continue to do good work in the service of individual liberty…”

So who’s right? In fact, both are, factually. The real battle is analytical. The resolution of this issue comes down to essentials. In a previous op-ed, Mr. Bowden writes:

“We need not evade or excuse Columbus’s flaws--his religious zealotry, his enslavement and oppression of natives--to recognize that he made history by finding new territory for a civilization that would soon show mankind how to overcome the age-old scourges of slavery, war, and forced religious conversion.

“Thus, the deeper meaning of Columbus Day is to celebrate the rational core of Western civilization, which flourished in the New World like a pot-bound plant liberated from its confining shell, demonstrating to the world what greatness is possible to man at his best.”

The emergence of Western Civilization that Columbus unleashed was a revolutionary new direction for man in his painstaking rise from the cave. All of the negatives cited by Mr. Howard were commonplace during Columbus’ era, and not unique to him. This is the context that must never be forgotten. The essential truth about Christopher Columbus is his achievements and the historical chain of events that they made possible. This is what should be stressed.

In a letter of rebuttal to Mr. Howard, Amesh A. Adalja, MD puts it succinctly:

"Judging Columbus by the standard of today, given the context of the world he lived in, is invalid. If Howard wants to judge Columbus as begetting barbarism, he must apply the same judgment on the natives. For, in comparison to the New World, 15th-century Europeans were ages more civilized than the savage tribes residing in the Americas.

"The world owes Columbus its eternal gratitude for discovering, and paving the way for the civilization of, the New World. The Ayn Rand Institute should be lauded for not cowering in the face of the multiculturalism-worshiping establishment and recognizing the heroism of Columbus."

Human history progresses along a logical, hierarchical path. This is by no means always easily recognized or apparent. Fundamentally, it is ideas … i.e., philosophy … that motivate human beings and ultimately chart mankind’s course. The ideas of reason, science, and individualism that gave rise to Western Civilization and the United States of America… and that Columbus exemplified and advanced to the New World … is the primary historically significant fact. His atrocities are insignificant by comparison to the tremendous human good that Christopher Columbus’ vital role played in bringing it about.

Count me on the side of Christopher Columbus in this battle. Respect for Columbus and his achievements have been eroding for some time. Thomas A. Bowden has done a tremendous service to America by pushing back against the nay-sayers and helping to revive this lost respect. Context is crucial when analyzing history, and Mr. Bowden provides it. Mr. Howard, the “indigenous movements”, and the “historians who did so much to discredit Columbus” have it wrong; not factually but contextually and, consequently, as a matter of justice.

Note: Thomas A. Bowden is the author of The Enemies of Christopher Columbus and the lecture Columbus Day Without Guilt

Wednesday, October 14, 2009

Obama's Nobel Peace Europeanization Prize

As a follow-up to my post of 10/9/09 On President Barack Obama's Nobel Peace Prize, I want to bring attention to the perspective of Ambassador (ret.) Yoram Ettinger, an Israeli expert on US policy in the Middle East, among other things. Here are some excerpts from his piece, Obama’s Nobel Prize: A blatant attempt to Europeanize US policy:

According to Alfred Nobel's will – and in contrast with other Nobel Prize committees – the members of the Nobel Prize for Peace committee are not experts, but politicians, members of the Norwegian Parliament.

Awarding Obama the Nobel Peace Prize – in spite of the fact that the deadline for nominations was February 1, 10 days into Obama's Administration – constitutes a transparent attempt by European politicians to bolster Obama's determination in the global arena and improve Obama's standing in the domestic arena.

They are encouraging him to sustain his efforts to endear the UN to the American people and legislators and to highlight the UN as the key formulator of international relations. They identify with – and are eager to advance – Obama's world view, as they assess it: that the superpower role of the US is over; that moral equivalence – and not moral superiority – dominates relations between the US and non Western democracies; that the West must reconcile itself to the rise of the Moslem World; that the US must desist from unilateral political and military initiatives; that the US should advance multilateral initiatives which reflect values and attitudes shared by the majority of the UN membership; that there is no military option against Iran; that the battle against Islamic terrorism must be conducted diplomatically, economically and legally and not militarily; that there should not be a surge in Afghanistan; that retreat from Iraq should be accelerated; that the Palestinian issue is the core cause of Middle East turbulence and anti-Western Islamic terrorism, etc.

Awarding the Nobel Peace Prize to President Obama does not reflect respect, by the Nobel Price Committee, for the American President. It does not intend to express appreciation of the American legacy and American human and mega-billion dollar monetary sacrifice, which spared Europe defeat during World War I and World War II, produced victory over Communism and minimized Islamic terrorism in Europe. The Nobel Peace Prize Committee strives to improve Obama's image among Americans and to leverage his presidency, in order to Europeanize US policy, thus accomplishing the "wet dream" of US critics, rivals and enemies. Reservations expressed by most of the US public, legislators and media suggests that the Norwegian politicians may relive the Biblical episode of Balaam in reverse: They came to bless, but ended up cursing.

The subject of my 10/9/09 post, the hypothesis that "...the premature awarding of the Prize to Obama is an attempt to blunt the coming renewed recognition of Reagan’s indisputable achievement with the arrival next month of the 20th anniversary of the
crumbling of the Berlin Wall
– the symbol of the collapse of totalitarian communism.
", is consistent with Mr. Ettinger's theses. A "Europeanized" America could never have prevailed in the Cold War.

Friday, October 9, 2009

On President Barack Obama's Nobel Peace Prize

To widespread surprise and even shock, from both the Left and the Right, President Barack Obama was awarded the 2009 Nobel Peace Prize. According to Yahoo News:

"The announcement drew gasps of surprise and cries of too much, too soon. Yet President Barack Obama won the Nobel Peace Prize on Friday because the judges found his promise of disarmament and diplomacy too good to ignore."

A promise of disarmament and diplomacy? You know that something is amiss when the Prize is awarded for absolutely no reason whatsoever! The entire Yahoo article is full of statements by prominent world leaders fumbling for a way to say essentially the same thing … nothing. All they accomplished was to fall all over themselves to show just how mesmerized they still are with our president.

Obama certainly joins some prestigious company – Jimmy Carter, Yasser Arafat, and Al Gore, for example. Of course, they at least can boast of some concrete “accomplishments”, if you want to call them that. But still, Obama fits right in with that crowd ideologically.

Yet, there is something that doesn’t make sense. Even for a so corrupt an institution as the Peace Prize sector of the Nobel establishment, this is really over the top. There is not even a pretense of any claim to any kind of actual justification, however shallow, to support this embarrassing decision. The Norwegian Nobel Committee’s gibberish about “an early vote of confidence intended to build global support for the policies of his young administration” and “the change in global mood wrought by Obama's calls for peace and cooperation” and “pledges to reduce the world stock of nuclear arms, ease U.S. conflicts with Muslim nations and strengthen its role in combating climate change” just doesn’t quite cut it, even for this sorry crowd.

What, then, could be the reason for this rush job? There is a critical anniversary coming up on November 9th of this year. This is the clue that makes it all logical.

Obama is an appeaser, a proven path to increased conflict. So was
Carter, who did nothing about Iran’s act of war against us (the 1979 hostage crisis). We’re still paying the price for that. Arafat was a murdering terrorist.
Gore is a global warming statist and profiteer. The Peace Prize is a
Left wing sham.

Though a mixed bag politically and philosophically, Ronald Reagan got
at least one big thing right. He recognized that the Soviet Communist
Empire was an economic and ideological house of cards propped up by
the West. Only a very small handful of others believed that, including
Ayn Rand, Richard Pipes, and Margaret Thatcher. Against almost universal opposition,
Reagan acted. He removed the moral sanction of our détente and
“peaceful coexistence” strategies by declaring the Soviets an Evil
. Opposition dissidents behind the Iron Curtain were electrified
into action.

Then, as Margaret Thatcher recounted in her Reagan funeral eulogy;

“So the President resisted Soviet expansion and pressed down on Soviet
weakness at every point until the day came when communism began to
collapse beneath the combined weight of these pressures and its own

With continued Western economic support and moral sanction, the Evil
Empire could have survived for another generation or more, possibly
with cataclysmic consequences. Instead, the ever-present threat of
nuclear war was removed, and a billion people were freed … virtually
without firing a shot.

It is my belief that the premature awarding of the Prize to Obama is an attempt to blunt the coming renewed recognition of Reagan’s indisputable
achievement with the arrival next month of the 20th anniversary of the
crumbling of the Berlin Wall
– the symbol of the collapse of totalitarian communism.
The Left has never forgiven Reagan for that. When the accolades begin, the Left will attempt to diminish Reagan’s stature with the reminder that “Yes, that was good. But our guy won the Nobel Piece Prize!”

I believe that this award at this time is an attempt to prop up Obama's stature in the face of the coming remembrances of President Ronald Reagan.

But whatever the reason, unless and until it is awarded (posthumously) to
Ronald Reagan (jointly, perhaps, with Margaret Thatcher and Pope John Paul II), the Nobel Peace Prize will remain a sham and a moral abomination.

Wednesday, October 7, 2009

When Pragmatism Meets Ideology

“Abstract ideas are seen in today’s political world as meaningless curiosities. But bad abstract ideas cannot be allowed to fester and take root, because sooner or later they will be translated into action.”

I issued that warning on April 28, 2008, in Part 1 of my essay, Obama’s Collectivist Manifesto. In Part 3, I wrote:

“Senator Obama is a thoughtful, philosophical, and talented orator.

“[I]n this particular speech, [he] makes no concrete policy proposals. What he is doing is laying the groundwork for Statism. Statism holds that the will and power of the collective is embodied in and carried out by the state. The individual, being subordinate to the collective, is thus in practice subordinate to the state. In Obama’s universe, “We the People” in “America's improbable experiment in democracy” is the collective in whose name an Obama administration will carry out its welfare statist agenda.”

To the philosophically attuned mind, the ideological clarity of Obama’s rhetoric is all that is needed to decipher his policy direction. If one listens intently when Obama speaks, one realizes that he tells us, in abstract terms, all we need to know. That is his style. While people quibble over the details of his policy proposals, Obama forges ahead on the nearly deserted superhighway of ideas.

A good example of this is in the healthcare debate. Obama will entertain all competing ideas, as long as they point in the direction of his ultimate goal of socialized medicine. Bring up free market solutions, the only real alternative, and we are reminded in various ways of what I pointed out his message to us was on inauguration day - “that his agenda is not open to intellectual, philosophical, or moral challenge”:

"On this day", the new president told the nation, "we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics…the time has come to set aside childish things."

Obama media field commander E.J. Dionne makes clear just what those “childish things” and “worn out dogmas” pertain to – individualism and free markets. Time and time again, Obama came clean about what his “remaking of America” would look like. It is therefore shocking – yet, sadly, not surprising – to read Charles Gasparino’s 9/29/09 NY Post article titled Burned by Obama. He writes:

"In the depths of the financial crisis last year, people like Morgan Stanley's John Mack, BlackRock's Larry Fink, Greg Fleming (then of Merrill Lynch), JP Morgan's Jamie Dimon and Goldman Sachs' Lloyd Blankfein were telling everyone that candidate Barack Obama was a "moderate," and moderation was what this country needed.

"What a difference a year makes. They won't admit it in public -- but in private conversations, the top guys on Wall Street are feeling burned.

"The guy who seemed like such a steady voice -- vowing to curb runaway spending and restoring order to the banking system and the economy as a whole -- is instead so driven to achieve his big-government policy goals that he and his policy people are ignoring their own economic advisers on the severe economic costs that his agenda will cause."

“Let us be our brother’s keeper, let us be our sister’s keeper. Let us find that common stake we all have in one another, and let our politics reflect that spirit as well,” declared Barack Obama on March 18, 2008. There it is, in black and white. What do those words mean, if not “big-government policy goals”. But those are just words, abstract ideas, not to be confused with practical reality. He'll be sure to do what works, not what's consistent with his beliefs.

Well, practical reality is what those Wall Streeters thought they had in the “moderate” candidate Obama. They fondly remember another Democratic president:

“It's almost the opposite approach, the Wall Street crowd complains, from the last Democratic president, Bill Clinton, whose main first-term achievement -- deficit reduction -- was crafted by his chief economic adviser, Robert Rubin.

Like Obama, Clinton and Rubin promised to raise taxes on the "rich," and they did. But Clinton didn't raise taxes to embark on a wild-eyed redistribution of wealth and massive programs.”

What these Wall Street bigs failed to see was that while Clinton was the quintessential pragmatist, Obama, primarily, is not. Forget the “race card”. Obama’s weapon is much more pernicious. He is a philosophically astute, ideologically driven collectivist, who plays the pragmatist card to great effectiveness.

“Obama, according to Wall Street people who regularly deal with his economic and budget officials, is acting as if he has a blank check to do what he wants, while ignoring the longterm costs of his policies.

“As one CEO of a major financial firm told me: 'The economic guys say that when they explain the costs of programs, the policy guys simply thank them for their time and then ignore what they say.'

“In other words, the economic people feel that they have almost no say in this administration's policy decisions.”

Obama doesn’t care about “the longterm costs of his policies”, or of the economy, in any primary way. He doesn't care about the uninsured, or about the runnaway cost of healthcare. He is an altruist-socialist ideologue, who sincerely believes he can make collectivism work in America, contrary to all of the historical, theoretical, humanitarian, and practical evidence piled up by a century's worth of socialist dictatorships. To paraphrase Ayn Rand: Obama's audacity is an offer of "some vague hope that somehow, my gang will do it better".

He has told us that repeatedly. Mr. Gasparino lays it out for the financial titans:

“Wall Street should have seen it coming. Obama was among the most liberal politicians in the country, despite his campaign rhetoric -- and his record in Illinois and the Senate showed it. He has spoken glowingly over the years of the need to redistribute wealth, a measure that always leads to taxes on small businesses, the economy's main economic engine.

“The execs who had such hopes for the president are now wondering fearfully just how radical he really is.”

What can so blind the leaders of some of America’s top financial firms to the obvious? Pragmatism, for one thing. These men simply could not fathom that abstract ideas can connect to reality. Obama garnered their electoral support by exploiting their pragmatic refusal to see the ideological evidence right before their eyes.

But there is a much deeper failure on their part … a failure that points to the reason for American capitalism’s slow destruction. Now that they know the real Obama, how are they fighting back against the man they believe “burned” them? In short, they're not. Instead, they cower in moral, silent fear and ignorance:

“It's almost comical watching the Street's top players squirm when they hear 'class warfare' rhetoric coming from the White House, and it forces them to act in ways they'd never imagined. In addition to recently giving phony speeches about the sins of large compensation packages that they had no problem taking just a few years ago, many Wall Street CEOs are so terrified of being outed as greedy capitalists that they no longer use the corporate credit cards to charge business lunches at their favorite New York restaurants.

“The funniest story I've heard lately came from a former Wall Street executive and longtime Democrat who anxiously recounted a recent conversation with Obama.

“The executive said he told the president that he's at a disadvantage because he's relatively inexperienced in economic matters during a time of economic crisis. ‘That's why I have Valerie’ [Jarrett, who has deep ties to the Windy City's Democratic political machine], came Obama's reply.

“Now you know why Wall Street is so nervous.”

But that’s not the whole “why”. The above is a dramatic example of Why Businessmen Need Philosophy. Philosopher Leonard Peikoff has some indespensible advice for American businessmen:

"The Declaration of Independence states that all men have an inalienable right to 'life, liberty, and the pursuit of happiness.' What does the 'pursuit of happiness' mean? Jefferson does not say that you have a duty to pursue your neighbor’s pleasure or the collective American well-being, let alone the aspirations of the Bosnians. He upholds a selfish principle: each man has the right to live for his own sake, his own personal interests, his own happiness. He does not say: run roughshod over others, or: violate their rights. But he does say: pursue your own goals independently, by your own work, and respect every other individual’s right to do the same for himself.

"In essence, America was conceived by egoists. The Founding Fathers envisioned a land of selfishness and profit-seeking—a nation of the self-made man, the individual, the ego, the 'I.' Today, however, we hear the opposite ideas everywhere...

"The [conventional belief is] the idea that self-sacrifice is the essence of virtue, is no fantasy. It is all around us. Nobody defends selfishness any more: not conservatives, not liberals; not religious people, not atheists; not Republicans, not Democrats.

“The best among you do not believe the altruist mumbo-jumbo. You have, however, long been disarmed by it. Because you are the victim of a crucial power, against which you are helpless. That power is philosophy.

“We are all trained by today’s colleges never to take a firm stand on any subject: to be pragmatists, ready to compromise with anyone on anything. Philosophy and morality, however, do not work by compromise. Just as a healthy body cannot compromise with poison, so too a good man cannot compromise with evil ideas. In such a set up, an evil philosophy, like poison, always wins. The good can win only by being consistent. If it is not, then the evil is given the means to win every time.”

Obama statism is the latest and one of the most virulent strains of the plague that has been increasingly infecting this country more or less steadily for decades. The main victims of the statist trend in America are the businessmen. But they are not only victims. The Wall Street businessmen and others like them are also one of the guiltiest groups for failing to speak out. They are philosophically ignorant and morally disarmed. As a result, they are dragging down with them any American who values his freedom, and in the process helping to smother the unique and revolutionary ideals that gave birth to this great country.

It doesn’t have to be this way. Despite the aura of political pragmatism that he tries to cultivate, Obama understands better than most the power of ideological consistency. But his ideas are merely the skeletal remains of 20th century collectivism. They can only win by default. In concluding his talk, Mr. Peikoff points the way to an effective counter-attack:

“I do not advise you to break any law, but I do advise you to fight an intellectual battle against big government, as many medical doctors did, with real success, against Clinton’s health plan. You may be surprised at how much a good philosophical fight will accomplish for your public image, and also for your pocketbook. For instance, an open public fight for a flat tax, for the end of the capital gains and estate taxes, and for the privatizing of welfare and the gradual phasing out of all government entitlements is urgent. More important than standing for these policies, however, is doing so righteously, not guiltily and timidly. If you understand the philosophic issues involved, you will have a chance to speak up in such a way that you can be heard.

“This kind of fight is not easy, but it can be fought and won. Years ago, a well-known political writer, Isabel Paterson, was talking to a businessman outraged by some government action. She urged him to speak up for his principles. “I agree with you totally,” he said, “but I’m not in a position right now to do it.” “The only position required,” she replied, “is vertical.” (Emphasis added.)

Saturday, October 3, 2009

The Devilish Details of Healthcare Reform

In my post of 6/1/09, I described the disturbing nature of a “deal” between the Obama Administration and the representatives of the healthcare industry, in which the business groups “agreed” to offer up $2 trillion worth of “savings” (price cuts) over ten years. I wrote:

"It requires a monumental act of evasion to believe that there is anything “voluntary” about this agreement.

"There is a word for this. It is called extortion.

"[But a] certain amount of moral guilt must accrue to business leaders for not speaking out in opposition to Obama. After all, free speech is still legal in this country. But the pressure of their own government’s threats to “get on board or get run over” was just too much for a philosophically blind, pragmatic group of businessmen to overcome.

"So, in answer to the title question above, the answer is clear. What President Barack Obama hailed as "a watershed event" was coerced out of private industry by brute governmental threats. I doubt that most Americans understand the gravity and enormity of the shift away from the rule of law that has taken place over the past year under two administrations, which is now accelerating."

Two recent events have offered us a window into the scary workings and nature of a mixed economy government shorn of any guiding political principles. The first offers a lesson in making a deal with the devil, rather than taking a principled stand. The second illustrates the essentially tyrannical nature of our mixed economy welfare-regulatory state, and what happens when a private company steps on the toes of politicians wielding arbitrary power.

Paul Hsieh reports at FIRM (Knife In The Back) on a Wall Street Journal article entitled The Innovation Tax: How Max Baucus knifed the medical devices industry. Quoting from the article:

... Convinced by the White House that legislation was inevitable, most of the health-care lobbies decided to negotiate and pay ransoms so Democrats would spare their industries greater harm. Sure enough, the device maker lobby, AdvaMed, was among the "stakeholders" that joined with Mr. Obama in a Rose Garden ceremony in May and pledged to "save" $2 trillion over 10 years to fund his program.

But the word on Capitol Hill is that AdvaMed's tribute wasn't handsome enough for Mr. Baucus's tastes. The massive new tax [the $40 billion "fee" that Mr. Baucus wants to impose on medical devices and diagnostic equipment]—which wasn't a part of any of his policy blueprints released earlier this year—is in part retaliation.

Old Washington hands are saying the device lobby made a "strategic mistake" by not offering Mr. Baucus more protection money, but the real mistake was trying to buy into the ObamaCare process, instead of trying to defeat its worst ideas outright. (Hsieh’s emphasis).

The damage done by the industry’s attempt to curry favor with the administration goes well beyond the Baucus plan’s innovation-killing tax on their business success. By giving a much-needed boost to Obama’s plans for a government takeover of American medicine, they in effect stabbed the American people … including their own customers … in the back. Had they taken a principled moral stand in defense of their rights, Obamacare likely would be in even deeper trouble than it is now … if not dead.

But as I wrote back on 6/1/09, :

"One thing is certain. When the most prominent victims of an advancing tyranny fail to speak out, for whatever reason, the chances of stopping the onslaught are almost nil. And I do believe that fear is the prime driving force."

So what might have been the result had AdvaMed and the other industry representatives taken a firm stand against today’s political leadership? A good example of why fear drives American businessmen into the arms of their own destroyers is currently on display in a case involving Humana Inc. According to a Wall Street Journal article:

The Centers for Medicare and Medicaid Services launched an investigation into Humana Inc.'s effort to enlist beneficiaries to fight proposed cuts to Medicare's private plans.

The investigation, launched Friday, is looking at whether Humana, one of the largest providers of Medicare Advantage plans, violated marketing rules by sending letters to beneficiaries in Michigan, Florida and other states urging them to contact lawmakers to register their opposition to proposed cuts.

The letters state that "millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable" -- a claim congressional Democrats say is false.

Senate Finance Committee Chairman Max Baucus (D., Mont.) -- whose proposal to overhaul the health-care system would cut payments to Advantage plans by $123 billion over 10 years -- pushed for the investigation.

Humana is a major participant in a government-run program, which means it must follow strict government marketing rules. Those marketing rules are now being used to silence opposition to proposed legislation by the senator who crafted the legislation, Senate Finance Committee Chairman Max Baucus.

"[Humana's] tactics do a disservice to beneficiaries by spreading false claims about such an important bill in Congress", Baucus spokesperson Erin Shields blustered. We’re only "cutting the fat [$123b worth!] from the profits of private health plans that deliver Medicare…”

"Funding cuts of that magnitude would result in lower benefits, higher premiums and fewer choices for many of the 10 million Americans in Medicare Advantage plans," Humana spokesman Tom Noland said.

This is an example of how the mixing of government (the realm of legalized force) and the private economy (voluntary production and trade) opens the door to far-reaching threats to all liberty. In this case, the First Amendment is being attacked under the guise of “marketing rule” violations. Writes Don Watkins at Voices for Reason:

The implication is that Humana must be investigated for in effect defrauding its customers by misleading them about the nature of Baucus’s proposal. But what did Humana’s “fraudulent” claim consist of? Well, no one disputes the fact that the budget for Medicare Advantage could be slashed under the health care bills now in Congress. The dispute is over the effects this will have. Humana claimed it could potentially lead to some of its customers losing benefits—not an unreasonable view—but Baucus insists “The health care reform bill we released…strengthens Medicare and does not cut benefits.”

Think for a moment about the mind-numbing complexity of today’s laws... Then: think of what it would mean for politicians—hardly notorious for their scrupulous honesty—to be able to punish Americans because our claims about the effects of a proposed law conflict with their assertions.

In a free country, it is not a crime to question the claims of one’s political leaders. If Baucus’s action is allowed to go unchallenged, however, free speech is gravely threatened.

To be sure, our leaders will insist that the rest of us have nothing to worry about, that Humana is a special case, and that everyone else will remain free to criticize the government. Don’t bet on it. If the government can suppress the political speech of Humana because it opposes those in power, it can suppress the speech of any corporation, and if it can suppress the speech of a corporation (which is nothing more than an association of individuals), then there is no reason in logic why it cannot do the same to individuals.

Whatever one’s views on health care, it should go without saying that nothing could be more dangerous than allowing government representatives to get away with bullying and silencing those who challenge their claims. (Emphasis added.)

One might say that Humana doesn’t have to take Medicare patients, and one would have a point. But the same could be said of a whole myriad of issues relating to government involvement, from collecting unemployment benefits to taking a government job. The same principle will apply: Medicare is a compulsory government program, funded by taxes, and administered by “public servants” funded by taxes. Humana is a group of tax-paying individuals who are in the healthcare business, and thus have a right to participate in it. Does this mean that they forfeit the moral right to criticize it?

The problem for Humana is that they give ideological support to “healthcare reform”. So their situation is morally ambiguous, to say the least. Still, they have a right to speak out without political bullying, in my opinion.

Baucus’ brazen act of intimidation is being perpetrated in the open. As I showed in my post of 8/20/09, the politicians have innumerable ways to pressure private business. Considering the enormous control our government has over the American economy, imagine the hidden pressures, veiled threats, implied warnings, expressions of “concern”, etc., by politicians that must go on behind the scenes to bully American enterprise. It’s a scary thought.

It’s also a good example of why we need the separation of economics and state … i.e., capitalism.