Tuesday, February 2, 2010

The John Galting of American Finance

"Who is John Galt?" Some people know very well what that question means. To conservatives and libertarians it signifies absolute liberty. To those on the Left who understand it represents their greatest fear, the voluntary abdication from society of its most productive individuals due to ever increasing burdens on their time, technique, and tax rates.

Ayn Rand created the character John Galt decades ago in her novel Atlas Shrugged. As industrialists in this book felt the increasing grip of big government on their business, demanding concessions while all the while continuing the populist corporate greed rhetoric, they simply disappeared. One by one they slipped away, to the panic of the government that relied on using social pressure and the law to enslave their skills.

John Galt is the character who contacts these people and convinces them to join him in a strike of the minds. Doctors, industrialists, poets, college professors, and people from all walks of life join a strike of the minds. They simply choose to not be enslaved by social pressure, by accusations of greed when they want to keep the rewards of their work. Those businesses that stay on and conform to a populist government's demands first see their products become more and more shoddy, then they break down completely.

Although a fictional character, John Galt's spirit lives in America's financial markets. Barack Obama has destroyed the confidence that we have in the immediate future. He has no policy and when in doubt, turns to the left. Obama needs banks behind him, but seeks to gain support by rhetorically pillorying them in public. The administration seeks to raise taxes and spending while undermining key industries and financial institutions at the same time. In short, Obama is demonstrating to the US how bankrupt leftists ideals really are by putting them into action. Unfortunately we all have to suffer.

Those with money have decided to sit this one out. Markets should have bounced back by now. Obama populism keeps them in fear and so they have gone on strike in a sense. Who wants to invest their money when the president might wake up one day with the whim to attack another industry or decide that profits off investment are greed and tax them away? Where is the money going? Into gold and silver, which get hidden away in safes and safe deposit boxes. The truly smart have bought these items entirely privately and secreted them away because you never know what will happen with this president.

In the House GOP retreat, the president made light of those with deep concerns about his agenda. He asked rhetorically if they really believed that he was part of a Bolshevik plot. His hectoring tone could not have reassured any who heard the sound of his voice. Like Caesar, he tried to walk into the hostile assembly to cow them with his presence. Fortunately Republicans are not built like Roman Senators and Obama is no Caesar. However the damage to our economy has been done and cannot be repaired without a change at the top.

It is not Obama, Paul Volker, Ben Bernanke, or Nancy Pelosi who will lead our economy in the next few years. It is John Galt.

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