Who Is John Galt? We'll Soon Find Out 19 comments
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For those of you who wonder how our country will play out after November 4, look no further than Ayn Rand's 1957 novel Atlas Shrugged. In that book, anti-business policies in the form of higher taxes and more regulation caused the major captains of industry to go on strike, shutting down wealth-creation as we know it. That's the essence of Atlas Shrugged, and that is – at least directionally – what we may face if such policies are enacted in coming months and years.
Actually, "shutting down" isn't the only option for investors and businesspeople anymore. Back in the 1950s, when Ayn Rand authored Atlas Shrugged, the US constituted an extremely large share of the world economy. In 1951, the average American ate 50 percent more than the average European. Americans controlled two-thirds of the world's production, owned 80 percent of the world's electrical goods, and produced more than 40 percent of its electricity, 60 percent of its oil and 66 percent of its steel. America's 5 percent of the world's population had more wealth than the other 95 percent, and Americans made almost all of what they consumed: Over 99.9% of new cars sold in the U.S. in 1954 were U.S. brands. By the end of the 1950s, GM was a bigger economic entity than Belgium, and Los Angeles had more cars than did Asia.
There were very few other advanced, functioning economies. The US captains of industry had no ships to sail, no destinations to go. In this respect, the world has changed radically not only over the last 50 years, but perhaps the most dramatically in the last 15: The rise of the Asian economies from India to China, Eastern Europe and Russia, as well as Dubai as the Hong-Kong of The Middle East. Over 3 billion people now have cell phones – half the world's population. Cell phone penetration is Moscow is 176% -- the average Moscowite has 1.76 cell phones.
For this reason, unlike the industrial shutdown in Atlas Shrugged, we could simply see a giant emigration of capital, businesses and eventually people. This has started already, with individual investors and investment funds winding down US-domiciled investments in preparation for international transfers if the US becomes filled with anti-business, anti-rich and anti-Wall Street policies. Most Silicon Valley companies have already been locating an increasing percentage of their workforces abroad.
16 years later, Ross Perot would have called this "The Giant Sucking Sound." In Western Europe in the 1950s, they called it "The Brain Drain." People from all over the world, looking to get ahead, were moving their money, their businesses, and themselves, to The Shining City On A Hill – the place where the business climate was better. We saw it in our universities, we saw it in Silicon Valley, and we saw it on Wall Street. Well, I hope you captured those memories on your home video camera, because the new anti-business climate in America will make them only a memory.
Some Republicans used to make a big deal as late as 2007 about our immigration problem. Now they will have to focus on describing our emigration problem. In 2008, the emigration of our capital started, and it belonged to John Galt.
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This article has 19 comments:
What a ridiculous article. The collapse of the US economy came about during the Republican Revolution! The 'good old days' Mr. Wahlman is whining about were during the high-tax/high regulation/high unionization era!
Now, unions are dead, jobs are flying offshore, the rich pay nearly no taxes at all and still use piratical tax havens to hide their obscene levels of wealth. And pray tell, where did all the jobs go?
TO COMMUNIST COUNTRIES!!!! HAHAHAHA. Whew! I hope the John Galts of this world finally figure out the obvious. This is just too painful. And hilarious.
Thanks, Richard Nixon! Kissing Mao was the smartest thing a man ever did for the super-rich.
> jack
Emigration of capital -- intellectual as well as physical ? Seek out Galt's Gulch. This time, however, it probably will not be found within the bounds of the Fifty States.
Our economy is changing, for better or worse, but it is changing. Since the 70's, our inept government has done everything in its power to hasten the flight of manufacturing from our borders. From excessive taxation, labor laws requiring business to hire on a quota basis instead of the best qualified, excessive regulations, and turning a blind eye to the unfair trade practices by some of our biggest trading partners, it is no wonder that capital is fleeing.
I fail to understand why our public officials (dimocrats and refublicans alike are guilty) who are sworn to do what is in the best interest for their country, repeatedly fail to deliver on ANY kind of meaningful reform. Obama may well win this election, but I sincerely believe that the "Chosen One" will fail to deliver on anything other than pushing through the agenda of Pelosi, Reid, and that idiot Howard Dean.
The left-leaning social utopians Rand writes of are exemplified by the good people of New Orleans during Katrina. They stood around helplessly and complained that the government didn't do anything to help them. Contast that with the more recent hurricane Ike. Houstonians took matters in their own hands and, instead of waiting for the government, began clearing debris almost immediately. Now I know that some of the readers will accuse me of being a racist to dare suggest that the white residents of Houston were somehow better than the predominatly black residents of the Cresent City. Now, I don't pretend to know the racial demographics in Houston, but I would assume that they are racially diverse population with latinos being somewhat more prominate than New Orleans. The point I'm trying to make is that the residents of New Orleans (at least the ones complaining) have been conditioned by the government "help" in the past and are now handicapped by that very dependence. Ike's victims are typically self-reliant Texans who are used to doing for themselves.
much of the euphoria in Germany in the late 20's and early 30's.
Congrats. JIMBO ! Your responses and thoughts should be required
reading for anyone before voting or investing !
Between your demonstrated ignorance of tax policy and the issues pointed out by Jimbo, I'd suggest you do some research before your next post here. Include in that some research on JFKs position on tax rates. You did have your Democratic talking points down pat however.
Our tax policy is massively stupid. Flatten the tax code. Tax consumption and idle wealth more, income less. That is the only way to encourage long-lasting growth.
“I made a mistake in presuming that the self-interest of organizations, specifically banks and others, were such is that they were best capable of protecting their own shareholders and their equity in the firm.”
Surely Ms. Rand is turning in her grave. But I would guess that even she would admit that the world is more complicated than that laid out in the framework of "Atlas Shrugged".
This is the kind of anti-intellectual name-calling that only discredits your position.
I believe, and can prove, Rand's ultra-selfish philosophy. Do you think you can prove your Sermon on the Mount, self-sacrifical alternative moral code? Well, if you can, then you'd be the only one who's ever put forward a defense of that morality in the whole history of thought. Even Immanuel Kant couldn't do it. The Judeo-Christian demand for unselfishness is based on nothing but religous, mystical nonsense.
Trash? Here's the kind of trash I am: I have believed and practiced her philosophy for 46 years; I am a philosophy professor (Ph.D., Columbia, 1973), a book author, an editor, and a member of the Board of Directors of the Ayn Rand Institute.
As to Greenspan being the refutation of Objectivism, well that's an ugly, tragic joke. Greenspan is the living refutation of interventionism, of the idea that government knows how to regulate the economy. Greenspan, the "maestro," praised by liberals and conservatives, screwed up the money, creating the too-low mortgage rates. Will the next Greenspan somehow know how to do it right? It can't be done right, because the essence of "regulation" is to throttle the minds of individuals peacefully pursuing their own goals.
Oh, but "unbridled greed" you say. How could it be "unbridled" in a vast regulatory state? There were 51,000 NEW regulations imposed on the economy in the last 12 years. And which areas are the most regulated? Banking, insurance, and housing--the very areas that collapsed.
If you dislike "greed" (which is a smear-term, really) wait till you see what you get when the desire for money is replaced by the desire for dictatorial power. You don't trust the executives, the hedge fund operators, et al.? Wait till you see Barney Frank, Nancy Pelosi, and Chuck Schumer in charge of your money.
As to Ayn Rand's Objectivism, Greenspan departed from Objectivism a long, long time ago. I saw his apostasy begin in 1969, in an article he published in Barron's. Then Greenspan "saved" Social Security in the 80s by enlarging its reach. Objectivism opposes the very idea of government pensions. That didn't stop Greenspan. Then he took the job as the head of the Fed, when Objectivism holds there should be no such agency. In none of his speeches as Fed head did he espouse Objectivism or any of its doctrines. He betrayed Ayn Rand, who would damn him if she were alive.
As to the comment, "even [Ayn Rand] would admit that the world is more complicated than that laid out in the framework of "Atlas Shrugged," no she would not. Because it isn't more complicated. It appears complicated to those who can't think in principles, those who trapped in the concrete-bound epistemology of pragmatism, those who can't see the forest only the trees.
You want it simple? Here is the lesson of Atlas Shrugged: you fake reality, you lose in the end. That's exactly what is going on today--with more fakery (bailouts) to cover failed fakery (cheap credit caused by faking the money supply).
People can blame Carter and Clinton for the current problems if they like, but in the real world it is all about unregulated greed. Follow the dervitives, and write a book about how John Galt would have solved that problem.
The rich are rich because they are smart, and have access to the best information. The money will follow the path of least resistance, and taxes are a big part of the equation. Any sound biz plan is a risk/reward equation, and if the reward is increasingly confiscated by taxes, buh-bye.
www.youtube.com/watch?...
On Oct 27 01:37 PM Harry Binswanger wrote:
> "Anyone who believes Rand's ultra-selfish philosophy (for example,
> Alan Greenspan) is trash."
>
> This is the kind of anti-intellectual name-calling that only discredits
> your position.
>
> I believe, and can prove, Rand's ultra-selfish philosophy. Do you
> think you can prove your Sermon on the Mount, self-sacrifical alternative
> moral code? Well, if you can, then you'd be the only one who's ever
> put forward a defense of that morality in the whole history of thought.
> Even Immanuel Kant couldn't do it. The Judeo-Christian demand for
> unselfishness is based on nothing but religous, mystical nonsense.
>
>
> Trash? Here's the kind of trash I am: I have believed and practiced
> her philosophy for 46 years; I am a philosophy professor (Ph.D.,
> Columbia, 1973), a book author, an editor, and a member of the Board
> of Directors of the Ayn Rand Institute.
>
> As to Greenspan being the refutation of Objectivism, well that's
> an ugly, tragic joke. Greenspan is the living refutation of interventionism,
> of the idea that government knows how to regulate the economy. Greenspan,
> the "maestro," praised by liberals and conservatives, screwed up
> the money, creating the too-low mortgage rates. Will the next Greenspan
> somehow know how to do it right? It can't be done right, because
> the essence of "regulation" is to throttle the minds of individuals
> peacefully pursuing their own goals.
>
> Oh, but "unbridled greed" you say. How could it be "unbridled" in
> a vast regulatory state? There were 51,000 NEW regulations imposed
> on the economy in the last 12 years. And which areas are the most
> regulated? Banking, insurance, and housing--the very areas that collapsed.
>
>
> If you dislike "greed" (which is a smear-term, really) wait till
> you see what you get when the desire for money is replaced by the
> desire for dictatorial power. You don't trust the executives, the
> hedge fund operators, et al.? Wait till you see Barney Frank, Nancy
> Pelosi, and Chuck Schumer in charge of your money.
>
> As to Ayn Rand's Objectivism, Greenspan departed from Objectivism
> a long, long time ago. I saw his apostasy begin in 1969, in an article
> he published in Barron's. Then Greenspan "saved" Social Security
> in the 80s by enlarging its reach. Objectivism opposes the very idea
> of government pensions. That didn't stop Greenspan. Then he took
> the job as the head of the Fed, when Objectivism holds there should
> be no such agency. In none of his speeches as Fed head did he espouse
> Objectivism or any of its doctrines. He betrayed Ayn Rand, who would
> damn him if she were alive.
>
> As to the comment, "even [Ayn Rand] would admit that the world is
> more complicated than that laid out in the framework of "Atlas Shrugged,"
> no she would not. Because it isn't more complicated. It appears complicated
> to those who can't think in principles, those who trapped in the
> concrete-bound epistemology of pragmatism, those who can't see the
> forest only the trees.
>
> You want it simple? Here is the lesson of Atlas Shrugged: you fake
> reality, you lose in the end. That's exactly what is going on today--with
> more fakery (bailouts) to cover failed fakery (cheap credit caused
> by faking the money supply).
Whats so unrealistic about the book, communities always existed whether open or secret. The only difference between the USSR and the USA is the approach in population control. One knows its limits, the other thinks it has non.
A collective behavior as to cripple the Country or even the world from a quite exit is a wise approach. Soon they will speak for with wisdom, comes silence.
Bang on so far, re: market calls. For two years I have been mewling about the ticking time bomb in the US housing market. Written December 2007:
“Looming on the near future horizon – the growing global liquidity cancer spawned by the collapse of the US housing market. Long before this catastrophe becomes contained, banks and financial institutions will totter and fall. The gatekeeper of this mess – Freddie Mac and Fannie May and those who shield Mac and May….the US Congress and their refusal to discard Jimmy Carter’s infamous (CRA) Community Reinvestment Act.”
To attempt to blame the current economic situation on something as superficial and intellectually dishonest as whether a particular federal Looter has a capital R or D behind his or her name is to ignore the trend of the current and former administrations and congresses of devolving into the self-serving parasitic looter class that is so well epitomized in Rand’s novel, Atlas Shrugged.
I found it particularly interesting that you couched the assertions that “unions are dead” and “jobs are flying offshore” back to back as though they were unrelated, when from the logical perspective of reason, it would be far more descriptive and accurate to say “Unions have been alive and well, and as a result, jobs are flying offshore”. Your assertion, again, seems a non-coincidental parallel with the Looters described so eloquently in Rand’s novel.
Your humorous assertion that “the rich pay nearly no taxes at all” and an allusion that they are able to hide their wealth is, indeed, laughable when one takes a moment to consider the Truth that the top 1% of wealth creators paid 39% of the total individual income tax last year. The top 50% paid 97% of the total income tax revenues collected by the IRS …and the bottom 50% of earners contributed a paltry 3% of the individual income tax collected last year. Considering the fiscal impact of the unions, confiscatory taxation, and the plethora of federal regulations, (that you also seem to deny exist), it’s no bloody wonder that Business men and women with a lick of sense are moving their operations to countries that aren’t so hostile toward wealth creation and business. You have apparently subscribed to the false rhetoric of those promoting a populist agenda of class envy, and once again have epitomized the class in her novel that Rand characterizes as the “rotters”, who earn nothing through their own effort, but blame the successful producers of wealth for their own failure, and expect “society” or “government” to provide for them, based on their perception of their own needs.
Besides paying the lion’s share of all the taxes extorted by the federal government, this class of evil uber-rich people that you’ve been taught and learned to despise, also invent, research, and create the medical, technical and other products and services we all benefit from, and create the jobs and pay the wages and benefits for most of the job and career opportunities that exist in the Nation.
Your attempt to characterize the earnings of successful wealth creators as “obscene levels of wealth” made me chuckle at the stark similarity between your assertion and those of the inefficient and ineffective businessmen of the looter class, who sought to subsidize their own inadequacy by claiming that the successful and productive class was somehow preventing them from the success they deserved, (and they just can’t help it and it’s not their fault!), and by lobbying their looter counter-parts in government, they could create legislation and regulation to effectively penalize the successfully productive in order to reward their own non-productivity.
Oh, …and the John Galt’s of this world have already figured out the obvious, Elaine, …and are hoping the rest of you do, soon enough to allow the recession that will cure this mess, and avoid the depression that the parasitic looter class in the Congress and Whitehouse are so feverishly pushing us toward.
Trust me …this ain’t about “R’s” or “D’s”, it’s about keeping or relinquishing our individual Freedoms and Liberties.
…Yipes, Elaine, …You may eventually make contact with “the enemy”, …and discover that it is “you”!?!?