Imagine if George W Bush had been nominated for the Nobel Peace Prize just 12 days after taking office in 2001 and then receiving the award on October 9, 2001, when his personal favorability ratings were at their peak and the most of the world stood with America in the aftermath of 9/11. Liberals, Democrats, Republicans -- anybody -- would rightfully call it a joke and a travesty.
Any credibility the Nobel Peace Prize committee may have had left, it lost yesterday. Awarding such a prestigious and lofty honor to a man who has accomplished NOTHING apart from execute a well- (community-) organized political campaign and make a few speeches that make some select Americans FINALLY proud of their country and a few foreigners feel good about America again, would be hysterically funny if it didn’t have such dire, bloody, tragic consequences. Barack Obama has completed less than one year of his term; the economy, unemployment and public finance are in a shambles not seen in at least 30 years, the Holocaust-denying Iranian regime is on the fast track to acquiring nuclear weapons, and the ‘good war’ in Afghanistan isn’t quite so good anymore, resulting in a blitzkrieg-fast renunciation of commitment to our allies.
From Detroit to Teheran and from California to Carracas, America is weaker than it has been in at least a decade, and that’s no small part of what the Nobel Committee must be cheering. Horray for the not-Bush! There will be a nasty wake-up call for these cheerleaders and the rest of the peace-loving world when the consequences of that weakness play out.
You have got to be kidding! Even if the man is destined to be worthy of the honor, let him actually accomplish something before awarding the prize. Has the Committee no shame? Has there ever been a more nakedly partisan political award by a supposedly objective, non-partisan organization? The actual effect of President Obama’s policies on world peace cannot, will not be conclusively known for at least months, more likely years. Republicans, conservatives, libertarians and I join Democrats, liberals and socialists in hoping and praying that the next years will see a reduction in human suffering, war, disease and oppression throughout the world. But to declare it to be so because we wish it so is precisely the kind of mass intoxication that resulted in World War II, 9/11 and a hundred other calamities.
People, wake up, grow up and get serious. Peace is not some touchy-feely Starbucks pastry. It’s a serious imperative of civilization that must be DEFENDED, with courage, lives, and yes, guns, bullets, tanks, aircraft and bombs. Bozo the Clown has done more for world peace than ANY first-year US President, with the possible exception of Harry Truman.
Saturday, October 10, 2009
Sunday, July 19, 2009
How the Barbarians invented Banking
Once upon a time on a planet not very far away...
There was a street next to a pile of stones. I forget whether the stones were there to repel foreign invaders or to channel irrigation water, but it was a high and long wall. So they called the street Wall Street. And all the people of the village would gather there to exchange their goods. You see, after generations of making everything for themselves, the villagers figured out, one by one, that they would be better off if they made (or grew or hunted) something they they were good at and exchanged it for something someone else was better at producing. Igor was good at hunting rabbits, so he dedicated himself full-time to hunting rabbits and brought them to market and exchanged them for carrots raised by Uk. That way both Igor and Uk had more rabbits and more carrots than either of them would have had if they had had to produce them all by themselves. Aggar had a talent for spinning wool, so she did that and exchanged with Kolo, who was good chopping firewood. Aurel had a problem, though. He was the best ox-breeder in the village, but every time he brought a unit of production to market, he had to butcher it right there and exchange the meat for different products of others, or go home without exchanging with anyone. Even when he did butcher the animal, he couldn't always find traders for the whole result, so much of it spoiled. He hadn't gone to an ivy-league university, but something told him intuitively, instinctively, that one ox ought to exchange for more than a pound of carrots or one rabbit. But he didn't need a hundred rabbits or 500 pounds of carrots at a time; he needed a broader variety of goods, but a barter system was a very clumsy way to obtain it.
Yag liked to dig, and he found a yellow metal in the ground. He brought the metal to market and exchanged it for other goods. People gave him rabbits, carrots, wool and even oxen for his yellow metal because it was beautiful, could be used to decorate household items as well as the persons themselves, fill tooth cavities and manufacture electronic microprocessor components. Best of all, it was soft, heavy and malleable; it could be cut to just the size/weight/amount needed in the moment and a small amount was highly valuable. Even those people who had no use for the gold themselves figured out that they could exchange their goods for gold, then exchange the gold for something else they really did need. Not everyone needed a rabbit or a carrot every day, but almost anyone would be willing to accept gold in exchange if the amount were right. Money was born.
Droughts, pestilence, floods, earthquakes and hurricanes were a big problem. Whenever such a disaster hit, it would wipe out all the goods anyone had and there would be nothing to exchange or eat. So Beul invented the weather-proof warehouse, and charged the other villagers a fee (in gold) to store their goods safely. But even without droughts, floods et al, some goods couldn't be stored for long without spoiling. Gold, on the other hand could keep virtually forever, but this virtue created problems of its own. If one accumulated more gold than needed for a short period (a day, a week, a month) then it would be too inconvenient to carry around and too dangerous to leave at one's house. Still, people wanted to save wealth so that they could be assured of having resources, food and clothing in the future, even if they couldn't hunt, farm or spin then. So Beul expanded his business and offered to let people store their gold in his warehouse. Initially he put each customer's gold into individual safe-deposit boxes and gave them a piece of papyrus with their name on it and a number matching the number on the box, so that the customer could claim his or her gold later. But very quickly he realized that gold was fungible, that is, that it didn't matter which gold went to which customer, as long as the quantity matched the number on the receipt. So he kept all the gold together (which was more convenient) and handed out receipts, which he called dollars, with a specified amount and the picture of a dead president, king, foreign plenipotentiary or other dignitary on them. When people needed their gold, they came back to the gold warehouse and exchanged some of their receipts for gold. If they had more gold than they had immediate need for, they took the excess gold to the warehouse and got more receipts.
But then another funny thing happened. People started using the receipts themselves as if they were gold. They started exchanging rabbits, carrots, oxen and wool for the papyrus receipts. They knew they could always exchange the receipts for the real gold any time, but since it was so easy to carry around the papyrus instead of the metal, most of the latter remained in the warehouse most of the time. Ogmo came up with another idea. Through his trading and saving, he acquired a significant number of receipts for gold, more than he needed for his immediate consumption. So he allowed other people to borrow them and use them, as long as they promised to return them all, plus a few more, in a year's time. Financial credit was born.
The whole thing functioned quite well until one day Beul got a sneaky idea. He was running low on wealth of his own. He had a warehouse full of rabbits, carrots, wool and gold, but none of that really belonged to him; it belonged to the customers who held the receipts. His only claim was to the warehousing fees charged for his services. The goods themselves were not his. But he disregarded moral principle and... wrote himself a receipt for gold, in an amount equivalent to 1% of the total gold in the warehouse. And he went into the market to buy rabbits, carrots, wool and oxen. What's the harm? he thought to himself. He realized that if everyone demanded their gold at once, he would be seriously short and the villagers would kill him. But, he thought, no one will notice, because never does everyone need their gold all at once. The receipts have taken a life of their own as the de facto money of the market.
But this original fraud did have an effect. Since Beul had the extra receipts first, he could buy goods which would have been bought by others. Incrementally, he bid goods away from other buyers, and the gold-receipt price of everything in the market started to creep up... by about 1%. Beul got addicted to his easy wealth. He continued to write counterfeit receipts to gold for his own use and spend them, first 2%, then 5%, then 10% of the total gold store. When the gold-reciept price level in the market reached 15% higher than its original level, more and more people started returning their receipts to the warehouse in exchange for real gold. Since there was now less gold in the warehouse, Beul's fraudulent receipts had a proportionately higher distortion effect on the market. Finally, when prices reached 50% higher than the original level, there was a run; EVERYONE who held a receipt for gold in Beul's warehouse demanded the gold. But by now, for every 3 receipts in the market, there were only 2 units of gold in the warehouse. Beul could not honor all of the promises. The villagers then realized how Beul had achieved his lavish lifestyle. They were compasionate; they sent him for rehabilitative therapy in the cave of the scorpions, vipers and smallpox.
There was a street next to a pile of stones. I forget whether the stones were there to repel foreign invaders or to channel irrigation water, but it was a high and long wall. So they called the street Wall Street. And all the people of the village would gather there to exchange their goods. You see, after generations of making everything for themselves, the villagers figured out, one by one, that they would be better off if they made (or grew or hunted) something they they were good at and exchanged it for something someone else was better at producing. Igor was good at hunting rabbits, so he dedicated himself full-time to hunting rabbits and brought them to market and exchanged them for carrots raised by Uk. That way both Igor and Uk had more rabbits and more carrots than either of them would have had if they had had to produce them all by themselves. Aggar had a talent for spinning wool, so she did that and exchanged with Kolo, who was good chopping firewood. Aurel had a problem, though. He was the best ox-breeder in the village, but every time he brought a unit of production to market, he had to butcher it right there and exchange the meat for different products of others, or go home without exchanging with anyone. Even when he did butcher the animal, he couldn't always find traders for the whole result, so much of it spoiled. He hadn't gone to an ivy-league university, but something told him intuitively, instinctively, that one ox ought to exchange for more than a pound of carrots or one rabbit. But he didn't need a hundred rabbits or 500 pounds of carrots at a time; he needed a broader variety of goods, but a barter system was a very clumsy way to obtain it.
Yag liked to dig, and he found a yellow metal in the ground. He brought the metal to market and exchanged it for other goods. People gave him rabbits, carrots, wool and even oxen for his yellow metal because it was beautiful, could be used to decorate household items as well as the persons themselves, fill tooth cavities and manufacture electronic microprocessor components. Best of all, it was soft, heavy and malleable; it could be cut to just the size/weight/amount needed in the moment and a small amount was highly valuable. Even those people who had no use for the gold themselves figured out that they could exchange their goods for gold, then exchange the gold for something else they really did need. Not everyone needed a rabbit or a carrot every day, but almost anyone would be willing to accept gold in exchange if the amount were right. Money was born.
Droughts, pestilence, floods, earthquakes and hurricanes were a big problem. Whenever such a disaster hit, it would wipe out all the goods anyone had and there would be nothing to exchange or eat. So Beul invented the weather-proof warehouse, and charged the other villagers a fee (in gold) to store their goods safely. But even without droughts, floods et al, some goods couldn't be stored for long without spoiling. Gold, on the other hand could keep virtually forever, but this virtue created problems of its own. If one accumulated more gold than needed for a short period (a day, a week, a month) then it would be too inconvenient to carry around and too dangerous to leave at one's house. Still, people wanted to save wealth so that they could be assured of having resources, food and clothing in the future, even if they couldn't hunt, farm or spin then. So Beul expanded his business and offered to let people store their gold in his warehouse. Initially he put each customer's gold into individual safe-deposit boxes and gave them a piece of papyrus with their name on it and a number matching the number on the box, so that the customer could claim his or her gold later. But very quickly he realized that gold was fungible, that is, that it didn't matter which gold went to which customer, as long as the quantity matched the number on the receipt. So he kept all the gold together (which was more convenient) and handed out receipts, which he called dollars, with a specified amount and the picture of a dead president, king, foreign plenipotentiary or other dignitary on them. When people needed their gold, they came back to the gold warehouse and exchanged some of their receipts for gold. If they had more gold than they had immediate need for, they took the excess gold to the warehouse and got more receipts.
But then another funny thing happened. People started using the receipts themselves as if they were gold. They started exchanging rabbits, carrots, oxen and wool for the papyrus receipts. They knew they could always exchange the receipts for the real gold any time, but since it was so easy to carry around the papyrus instead of the metal, most of the latter remained in the warehouse most of the time. Ogmo came up with another idea. Through his trading and saving, he acquired a significant number of receipts for gold, more than he needed for his immediate consumption. So he allowed other people to borrow them and use them, as long as they promised to return them all, plus a few more, in a year's time. Financial credit was born.
The whole thing functioned quite well until one day Beul got a sneaky idea. He was running low on wealth of his own. He had a warehouse full of rabbits, carrots, wool and gold, but none of that really belonged to him; it belonged to the customers who held the receipts. His only claim was to the warehousing fees charged for his services. The goods themselves were not his. But he disregarded moral principle and... wrote himself a receipt for gold, in an amount equivalent to 1% of the total gold in the warehouse. And he went into the market to buy rabbits, carrots, wool and oxen. What's the harm? he thought to himself. He realized that if everyone demanded their gold at once, he would be seriously short and the villagers would kill him. But, he thought, no one will notice, because never does everyone need their gold all at once. The receipts have taken a life of their own as the de facto money of the market.
But this original fraud did have an effect. Since Beul had the extra receipts first, he could buy goods which would have been bought by others. Incrementally, he bid goods away from other buyers, and the gold-receipt price of everything in the market started to creep up... by about 1%. Beul got addicted to his easy wealth. He continued to write counterfeit receipts to gold for his own use and spend them, first 2%, then 5%, then 10% of the total gold store. When the gold-reciept price level in the market reached 15% higher than its original level, more and more people started returning their receipts to the warehouse in exchange for real gold. Since there was now less gold in the warehouse, Beul's fraudulent receipts had a proportionately higher distortion effect on the market. Finally, when prices reached 50% higher than the original level, there was a run; EVERYONE who held a receipt for gold in Beul's warehouse demanded the gold. But by now, for every 3 receipts in the market, there were only 2 units of gold in the warehouse. Beul could not honor all of the promises. The villagers then realized how Beul had achieved his lavish lifestyle. They were compasionate; they sent him for rehabilitative therapy in the cave of the scorpions, vipers and smallpox.
Thursday, October 23, 2008
Public Billionaires vs. Private Millionaires
By Howard Hyde
Fewer than 600 people in
Meanwhile, these same people want you and me to resent, envy and punish the private businessmen, entrepreneurs, professionals and plumbing company owners who may earn more than $250,000 per year, or roughly 1/20,000th of what each of them command. Why? Why are the public billionaires so hostile to private (mere) millionaires? Is it too much of a stretch to suppose that they don’t want any competition from these unwashed upstarts?
Citizens, don’t be manipulated! The fact is, the millions of millionaires in this country are about a million times more qualified than the insulated, privileged billionaires in
Place your trust where it belongs, with the free people of the
Wednesday, October 15, 2008
Bail out the Oil Companies!
The price of a barrel of oil has dropped nearly 50%, to below $75, in just a few months. Surely this is a worse crisis than the 20% drop in the Dow. Aren’t the oil companies deserving of their own bailout? After all, it’s not their fault people lost money in the credit derivative markets due to government interloping and can no longer afford to speculate in crude futures. About $500 billion ought to do just fine.
For the public service of providing this vital insight to the market, I’ll take a tiny 1% cut of the gross. Really.
Sunday, October 12, 2008
Repeal the Bailout Taxpayer Robbery
By Howard Hyde
Resources
If the bailout package had failed to pass and the stock market had subsequently fallen by 20%, that would be taken by many as proof that government inaction was the cause of the crash and that immediate intervention was needed. Will anyone take the fact of the crash following the bill as proof that the government’s action was the cause of the crisis, and that it should be backed out? Don’t hold your breath.
In one stomp, the federal government expands its footprint on the economy by 25%, and the aggregate value of privately owned assets falls by 20%.
Is that a coincidence? We were told by Congress, by the president, by both presidential candidates and by the Wall Street Journal that, while ‘regrettable’, this is all necessary in order to forestall total collapse (I’m sure their wasn’t a dry eye in the Capitol as congressmen and senators emoted their ‘regret’ over grabbing an additional $1.3 billion apiece). But what we got was precisely… collapse, in exact proportion to the government’s action.
If the bailout bill was necessary and proper on its own merits, why didn’t it pass when it was just a few pages long? It didn’t pass until it was several hundred pages long and larded up with unrelated pork.
This is not noble leadership in a time of crisis; this is cynical business as usual in the worst sense of the term at an increasingly corrupt institution.
The bill didn’t pass on its own merits the first time around because the constituents of all stripes were opposed, and told their representatives so. Is the dominant divide in this country to be found between left and right, between the Democratic party and the Republican party, or is it really between the people and the power elites? This episode suggests the latter.
“But Howard, the market needs liquidity in order to continue to function.” I’m sure the Weimar German monetary authority said something like that in 1924, right before the price of an egg shot to 1 trillion marks. What do you mean, liquidity? You mean, flowing dollars? The people aren’t smart enough to make their dollars flow in the beautiful, graceful fluidity required by the economy, therefore Congress and Hank Paulson to the rescue?
Citizens, beware the euphemism ‘liquidity’!
When a politician uses that word, it’s code for 1) wholesale counterfeiting on the part of the government, i.e. inflation, robbing you of the purchasing power of your dollars, 2) contrived credit expansion via the Fed forcing interest rates below market, resulting in an artificial drunken boom which MUST be followed eventually by a bust due to the bad debts incurred, or 3) an excuse to take away your dollars outright in order to liquify them according to the federal government’s preferences, not yours. Markets function perfectly when they write down assets that are discovered to be worthless (or merely worth less than previously valued), in order to direct capital to its best use.
But no! We can’t allow the market to price assets according to revealed reality! We’re told that the government has to step in here, because greedy lenders and speculators abused the market. This is less than half the truth. Lenders were alternately threatened, cajoled and bribed by the government into making loans that they otherwise would not have made, if they had to assume all of the risks themselves. Speculators only did their jobs, which is to keep all the others honest.
As for greed, this term is meaningless as an objective, analytical tool of economics.
If greed is wanting more than one has, then everyone is greedy. Businessmen are greedy, speculators are greedy, homeowners are greedy, the Pope is greedy, Mother Teresa is greedy, yo’ mama is greedy. But greed is impotent without a gun. Greed doesn’t become crime (and by extension abuse and/or destroy markets) until someone uses illegitimate force or deception to make others bend to his/her will. Who has such power?
The federal government caused the crisis. Until it is reformed, it won’t be the source of a solution.
What’s needed in the market is not liquidity so much as rationality.
Who can forecast, plan and invest with confidence in a market where outcomes are not determined by fundamentals, by intrinsic value, by projected cash flows, by price-earnings ratios, by voluntary cooperation among millions of customers, suppliers and competitors, but by the whims and commands of Congress? Is the price of a share of stock of GM a legitimate political issue, to be determined by committees and lobbyists?
In a market, millions of individuals cooperate and compete to help each other, take real risks, identify real needs and opportunities, create wealth, enjoy successes from good decisions and suffer losses due to bad ones. In a casino, by contrast, the risks are contrived, the rewards are mostly chance, the house always wins, no net wealth is created and the games may be rigged.
The more the government commands the market, the more the market becomes a corrupt casino.
This crisis will not be solved by Congress, by the President (of either party), by the Fed or by the Treasury department (or the World Bank, the International Monetary fund,
A bad idea is still a bad idea, even (or especially) when it’s a done deal.
Repeal the bailout bill. It’s just a taxpayer robbery.
Resources
How Government Stoked the Mania - By RUSSELL ROBERTS - Wall Street Journal
Sunday, September 28, 2008
Stop the bailout bank robbery
By Howard Hyde
Government intervention in the economy, meddling and fiddling, fiddling and meddling, is what got us into this mess in the first place. More government intervention, artificial price supports and an unprecedented $700 billion taxpayer bailout won’t get us out.
Think it through, people. You want this problem solved, so you relinquish $700 billion more of your money … to the US Congress? Do the math people! That’s $1.3 billion per congressperson and senator, on top of the $2.5 trillion per year that we already give them. Politicians rail against the greedy rich, those making a whopping $250 thousand, and then demand that THEY (the congresistas) be put in charge of 24,000 times that --- apiece!
And for what? Mortgage delinquency rates of 6.4 percent? Unemployment at 6.1 percent? A dozen bank failures per year, the biggest of which has already been resolved in the market? Stock prices lower than what some would prefer? Housing prices falling to… reasonable levels? We’ve had much worse in the past, and the rest of the world, even much of
Never mind that Congress is a den of scoundrels. We could replace them tomorrow with 535 of the most wise, honorable and non-partisan sages in the nation, and they STILL wouldn’t be qualified or morally warranted to take on this task. They don’t have the information, the incentives or constraints to be able to judge the right thing to do for each of the hundreds of millions of the rest of us.
To the extent that free-market capitalism is still permitted to function in this county, it is already working. Bank of America bought Countrywide and Merrill Lynch. JP Morgan Chase bought Washington Mutual. The players who didn’t let themselves be swept away by the currents of moral hazard unleashed by the Fed and Congress are now in the relatively strong position to take charge of the assets which were mismanaged by those who did.
And so it goes. Joseph Shumpeter called it ‘creative destruction’. John Maynard Keyenes referred to ‘animal spirits’, which, as long as they are given free rein, will never be in short supply.
The Fed: Stop trying to force the interest rate where YOU want it, and start targeting it to where it would be if YOU didn’t exist. Stop fighting the will of a hundred million savers and investors who have their own market information (better than yours), time preferences and demands for rates of return. Stop counterfeiting dollars, debauching our currency. Peg the dollar to gold at a nice round number like $1000 an ounce (you don’t have to tell anybody, just do it) and take the credit for the ensuing monetary strength and stability.
Congress: Give yourselves a raise, say, $250,000 (tax free), and then get out of the way. Reduce the federal government footprint on the economy so that the forces capable of realizing the recovery can do their jobs. Cut marginal income taxes, abolish the death tax and the double-whammy capital gains tax. The best income tax cut strategy would be simply to remove all bracket-based rates except for the bottom one; everyone pays the same low flat rate from above the the poverty line to Barack Obama, Cindy McCain and beyond. The Laffer Curve effect will ensure that this results in MORE revenue, not less, to the treasury. Embrace your inner John F. Kennedy.
While you’re at it, lift all the unreasonable restrictions and bans on resource development, including offshore drilling. We can EASILY push the price of a barrel of oil below $50 while creating thousands of new jobs and business opportunities, which will contribute handily to enabling us to weather the monetary storm (of course, cheap energy is anathema to the radical environmental movement and they will oppose it tooth and nail in the fraudulent name of ‘saving the planet’).
The president (and presidential candidates): Thank you for a sincere effort. Please sign the bills lifting the federal boot off of our throats.
Taxpayers earning $250,000 or more. Keep your money; spend it, save it and invest it as you see fit. You have proven by your hard work, productivity and judgement that you are the most capable of making the right decisions, judging real asset values, and creating jobs. YOU are the saviors in this crisis, not Congress, not the president (regardless of party).
Speculators: Keep speculating. Keep the politicians and corrupt CEOs honest. If you’re right, you’ve done a public service and received your reward. If you miss, you’ll have less resources with which to influence the market in the future, and that’s as it should be.
But what about regulation?
The legitimate purpose of regulation is to prevent and punish murder, assault, robbery, theft, rape, persecution, conspiracy and fraud. So by all means, if any players have acted in criminally fraudulent ways, then hold them to account and institute regulation which minimizes the risk of unscrupulous players getting away with it in the future.
But let us never lose sight of the root fraud of all of this: It came from Congress, chartering and conferring indefensible privileges upon its favored companies Fan and Fred which predictably morphed into corrupt behemoths threatening the stability of the entire economy with their implicit taxpayer guarantee, as the Wall Street Journal has been warning for at least six years (http://online.wsj.com/article/SB121599777668249845.html?mod=article-outset-box); and it came from the Fed, inflating the money supply and expanding credit, a recipe for disaster that Ludwig von Mises and his disciples have been warning about for nearly a hundred years (http://mises.org/story/3128).
Some people, myself included, enjoyed the inflated home equity while it lasted. But that sentiment doesn’t qualify as a moral principle upon which to base public policy. It certainly doesn’t justify a massive expansion of federal government power.
Legalize captialism; the only solution.
Resources:
- The Rescue Package Will Delay Recovery by Frank Shostak
- The Great Bank Robbery of 2008 by Robert P. Murphy
- Fannie Mayhem: A History (a compendium of The Wall Street Journal's recent editorial coverage of Fannie and Freddie)
- The Bailout Reader (Mises Institute Compendium and Bibliography)
- Is Capitalism on the Ropes? by Larry Elder
- Bush’s Billionaire Banker Bailout: Are You Kidding Me? by Walter Moore, candidate for Mayor of Los Angeles
- Bailouts Will Lead to Rough Economic Ride by Ron Paul
Saturday, July 26, 2008
The Stockholders of Pemex
Leer en Español
Energy reform in Mexico seems like a very complicated subject that only the specialized politicians and elites can understand. But fundamentally, it’s not really that complicated. The fact that Pemex, the national oil company, is failing in spite of record world market prices per barrel illustrates a fundamental and timeless principle of economics: socialism doesn’t work; it’s not a solution but rather the road to serfdom.
The United States does not have a national oil company, yet americans are not any poorer for lacking one.
President Felipe Jesús de Calderón Hinojosa is heading up the movement to reform the energy industry in Mexico, which includes the possibility of privatizing Pemex. His former rival for the presidency, Andrés Manuel López Obrador (‘AMLO’) is rallying the political left against any privatization, arguing that the oil belongs to all mexicans and that it would be robbery (or even rape) of the national patrimonio to sell shares to foreign (read: north american) companies [‘Patrimonio’ is a rich spanish word with meaning somewhere among ‘estate’, ‘inheritance’, ‘heritage’ and ‘fatherland’, in the PAT-riotic sense].
The principles of capitalism will show the way to the ecomically correct solution even if politics can always cause a derailment. Those principles are: if it doesn’t have to do with murder, assault or robbery; if has to do neither with theft, nor fraud, rape, persecution nor conspiracy, then government should not interfere. The purpose of government is to defend the rights of the citizens; rights to life, to security against the violence of other citizens or foreigners, to liberty and to property. It is not the proper role of government, with its monopoly of violence, to promote the interests of one group of citizens against those of other groups or individuals.
Therefore any activity which has nothing to do with defending the lives, security, liberty and/or property of the citizens must be located in the private sphere, that is, outside of government. To act otherwise leads by nature to the violaction of these rights and to economic inefficiency. This is exactly what we are witnessing in the energy sector in Mexico today: privileges for a chosen firm, the absence of market freedom and discipline, exclusion by force of other, non-favored participants, and a poorly-served public.
If the mexican citizens are the rightful owners of Mexico’s petroleum, as Obrador asserts, then the management and bureaucracy of Pemex is cheating these owners. These owners are not enjoying what true proprietors deserve. The management and well-connected politicians run the company for their own benefit, and the people receive no dividend save for shortages and high prices.
If the citizens are the owners of the company, then they must be given their shares of stock and their rights to buy, sell and participate in corporate governance must be implemented, just as it is for any stockholder in other publicly traded company listed on, say, the New York Stock Exchange.
Once the citizens become stockholders of a company that participates in an open and free market, and that all privileges and protections have been lifted, the majority of the political conflict will disappear, because stockholders vote primarily through their buying and selling, and thus dictate how the firm must be run. Managers and divisions that fail to operate profitably will lose their privileges and capital and investment will seek more competent ones. Stockholders will insist that management contract with partners that have the knowledge necessary to modernize the facilities and technology, and that they seek new capital. They understand that any company that fails in this will face bankruptcy. The company and the market as a whole will end up healthier and more efficient, and supplies, quality and variety of products will all increase while consumer prices fall.
AMLO wants to portray foreign companies as sharks preparing for the kill, but the economic reality is, thank goodness someone already has developed the technology and saved up the capital that can provide thousands of jobs at increasing wage rates and millions of ever-cheaper barrels of crude. All that’s required is to permit freedom of contract and to defend the property rights of owners ---- the citizens of Mexico.
Friday, March 09, 2007
‘Human Needs before Profits!’
This sentiment is the embodiment of multiple errors of reasoning, and I can demonstrate this by a very simple proposition.
I ask (defy) you, reader, to:
- design a business plan guaranteed to generate profits while ensuring that no human needs be met. Or, if human needs are met, they are met only after profits have been earned and collected.
You may not kill, rob, rape, persecute or conspire; you must respect the lives and property of all other people at least to the extent of doing no harm, commiting no offense. But you must not provide any service that anyone needs, nor produce any product that is useful, nor add anything to a customer or beneficiary’s well-being or happiness. Or if you do, you must make sure you have pocketed your profit first. You must turn a profit consistently over the long term (say, eight out of ten years), without commiting any crimes, and without subsidies, protective tarrifs, or other government-bestowed privileges.
How would you do it?
Maybe you’d try the classic industrial capitalist model: build a factory, hire workers, produce and sell products. You’re in trouble from end to end! First, you must accumulate the capital to build the factory. Let’s pass over the implications of that and go to the next: hire the workers. Unless you are going to enslave people against their will (which is not permitted), you have to offer them wages and working conditions that are better than their alternatives, i.e., working on a farm or in a competitor’s factory. You have to meet their needs at some level long before you can even dream of profit. In other words, under capitalism, human needs --- the needs of the hired workers --- already do naturally come before anything, and profit naturally comes dead last. Revenue generally can only be collected after the product has been delivered to the customer, which is after the product was manufactured, which was after the workers were hired (and paid, and paid, and paid many times over), which was after the factory was built, which in itself required the hiring and paying of workers and the purchase of building materials and equipment. Profits come dead last if they come at all. If the entrepreneur fails to meet the most urgent needs of his/her customers at a cost that is less than the prices customers are willing to pay, then the profits don’t come at all.
It doesn’t matter what business discipline or industry you chose. If you are operating within the laws of the free market, which require you to respect the lives and property of all other people and to only engage in voluntary cooperation, then there is no way to earn profit without meeting human needs, and no way to reap the profit before meeting just about all stakeholders’ needs but your own --- employees, managers, creditors, customers --- first. If you go into a service business rather than industrial manufacturing, you’ll have to serve the needs of customers in some way (hence the term ‘service’). Whether you are an accountant, lawyer, physician, fashion consultant, beautician, personal trainer, software developer or masseuse, before you reap any profits, you’re going to serve some customers.
But what about speculators? Now there are some parasitic leeches, you say! Surely their profits come from no redemable humanitarian activity!
Actually, speculators are no less virtuous than any other actors in the free market. They indeed do play a vital role in meeting human needs, through their research and assumption of risks, which they transmit to their ‘customers’ through the price system of the market via their investments and trades.
An original equity investor provides funds to a company to enable it to get started or to expand operations: build a factory, hire workers, pay wages and salaries (meet human needs). Since the stock confer upon the stockholder an ownership claim to a portion of the assets of the company and hence the profits (and losses) thereof, it has a value of its own which can be sold and bought in the stock market. The price is determined by the average estimations of any number of investors as to how well the company is doing and its future prospects. The speculator’s role is to put a reality check on all other speculators and investors and to correct errors before their magnitude becomes great. If investors bid a stock price up (or down) beyond reality, eventually fundamental business processes of profit and loss will inevitably bring it back down (or up). These price swings can be very painful, particularly for the investors who buy when the stock is overpriced and find the price sinking far below their original outlay. The speculator helps to smooth out these swings, mitigating the damage. If he is right, his short-sell puts the brakes on the excessive appreciation of the stock price; likewise, his buying the stock when it is undervalued influences the price in the right direction.
Speculators in the commodities markets provide a year-round, risk-mitigated market for agricultural products[1]. The farmer is not at the mercy of what the price of corn happens to be on the day he harvests his crop. Because of the commodity markets and the speculators who research market conditions around the world and express their forecasts by their own commitments, risking their own money, the farmer can be much more secure than he otherwise would be as to what price he will be able to sell for, and can make the decision any time of the year via futures contracts.
The speculator only wins (earns profits) if he is right. If he short-sells and under-priced stock, he loses. So you can’t beat the human-needs-before-profits law by becoming a speculator (sorry!). Only in a market distorted by government intervention (high tarrifs, taxes, corruption, regulations that have nothing to do with preventing murder, theft, fraud or conspiracy) can a speculator earn profits at the expense of the general population.
Profits are the reward --- after the fact --- of meeting human needs.
So the slogan is true after all, even if those chanting it are clueless.
Copyright©2007 by Howard Hyde. All rights reserved.
[1] see also: The Social Function of Call and Put Options, by Robert P. Murphy at http://www.mises.org/story/2417
Saturday, November 18, 2006
Five Steps to Immigration Reform
By Howard Hyde
(ver en Español a: http://howardhyde-espanol.blogspot.com/2006/12/cinco-pasos-al-reforma-inmigratoria.html)
A realistic, politically feasible solution to the problems of illegal immigration which will actually work must be comprehensive, involving several interdependent aspects of security, politics, economics, citizens, immigrants, businesses and government agencies. It must be consistent with basic principles of how society actually functions, not on the ideology of narrowly-focused political factions or special-interest groups. And it will involve compromises with entrenched political interests; it will have something in it to offend everyone to some degree.
I see five pillars required of a comprehensive reform plan:
1. Legalize Capitalism. (Yes, you read that correctly.)
Abolish socialism. Stop paying able-bodied adults to breathe at the expense of fellow (taxpaying) citizens, many of whom are worse off than the beneficiaries but don’t meet the political requirements. Slash regulation of anything that doesn’t relate to murder, theft, rape, persecution or conspiracy (see the Ten Commandments). Allow businesses and individuals (including hospitals) to do as they see fit with what is theirs, including picking and choosing their customers, suppliers, employees, employers, investors and investments according to their own criteria and requirements. Allow medical savings accounts, deductibility of healthcare costs to individuals, marketing health insurance across state lines, and the right to refuse service to anyone. Abolish the abolition of unskilled labor (minimum wage laws). Cut red tape that keeps legitimate extra-legal and black market businesses out of the mainstream system. Understand that inclusion has been the number one challenge of capitalism for centuries; it is nothing new (see Hernando
2. Elevate Citizenship.
Require 8th-grade English proficiency for
3. Liberalize the quotas.
WE NEED the workers, unskilled and skilled, blue collar and professional. We need the professionals because their productivity and services maintain our leadership in the world and generate more opportunities at home. We need the laborers to perform jobs we’d rather not do, lower the prices of all goods and services, and free us to do higher-order work.
The current legal quotas are out of touch with reality by orders of magnitude. It is a lose-lose proposition to discourage educated professionals and force desperate poor people into illegality and danger with no benefit to ourselves. We need to make it easier, not harder, for economic immigrants to come into the
4. Document the Undocumented --- without penalty.
Every immigrant should be photographed, fingerprinted, tested for infectious disease and documented in a national database. Non-citizens should periodically (once, twice or four times per year) provide a verifiable residence address, subject to random audit; guest workers may apply for a non-citizen’s driver’s license, NOT valid for obtaining public services reserved for citizens, and must pass the appropriate exam to receive it.
Do not require immigrants to have already been in the country for a specified period, or to return home after another. MAKE IT EASY to comply with the law, and people will comply. People want to live legitimately, out of the shadows.
5. Isolate the criminals.
If we accomplish the above four points, then this one will be much easier. We have made legal immigration easy, so there is a drastically reduced need for anyone to ‘sneak’ across the frontier zone. Citizenship is not automatic, welfare fraud has been shut down, and hospitals aren’t obliged (penalized for opening) to serve patients that don’t pay, so the draw of inappropriate benefits has been reduced. The only real magnet left is honest, hard work for willing employers and customers, leading to a better life for all.
Some criminal element will remain, of course. Drug traffickers, car thieves, pimping rings, and terrorists will always be attempting to penetrate our borders and society. Nevertheless, under the circumstances in which legitimate but ‘illegal’ economic immigrants no longer form a massive cover under which the criminal element may operate, the latter will be easier to target and interdict. With legitimate immigration easy, the waves of desperate and innocent families with children flooding across the desert will recede, revealing only the highly suspect. The immigrant database mentioned earlier makes us able to know who’s who and where.
As for terrorists, let us not forget that the 9/11 terrorists all entered the country legally and repeatedly. With limited resources, we would do better to scrutinize those few mosques and madrassas in the
A nation has the legitimate right to secure its borders, and a security fence can be a justified part of a plan to prevent illegal entry. That being said, a wall in and of itself is not a solution; if the above reforms are carried out, it may not be necessary. We have lived as neighbors with
The idea of criminalizing and/or deporting 12 million illegal immigrants en masse is logically ludicrous, socially destructive and politically suicidal (is the Republican Party listening?).
Spanish-speaking Puerto Ricans have few restrictions on their movement into and work in the continental
The solution is to allow the natural process to work.
Saturday, August 19, 2006
What is Capitalism?
A proper discussion of any topic cannot begin without a definition of its most fundamental terms. Most of the controversy over Capitalism stems from disagreements and ignorance of just what Capitalism actually is. My definition will not settle the arguments, of course, as it will provoke again as much controversy as it resolves. Nevertheless, it is based upon this definition that I make the Shocking, Outrageous Assertions, and it will be shown that with this definition established (if not agreed upon), the common arguments against Capitalism lose their power and frequently turn on their wielders.
Liberty
At the heart of Capitalism is Liberty; the freedom of the individual to do as (s)he pleases with what is his/hers, unbounded by forcible coercion or fear of agression against his life; only constrained by the equal liberty of every other individual human being.
Without
Already I can hear the anti-capitalist critics screaming. “
Patience, please. We’ll get to that…
Security of Life, Person and Property
In order to be free in the civilized sense, an individual must know that his right to live, and to live free of fear of physical threat or theft of what it his, is respected and defended. Since one individual is no match for the agression of multitudes, society must construct institutions which constrain, prevent, and as a last resort, punish violations of individual liberty. This conclusion is easily deductible from secular, dispassionate observation of human society. Remarkably enough, it is also freely available in the form of one of the oldest religious codes in the world, to wit, the Ten Commandments.
I am not a religious scholar. Nevetheless, permit me to go out on a limb for a moment to give my interpretation of this ancient text as it is relevant to our current discussion. The first 4 commandments instruct human beings in how they should relate to God; to believe (exclusively), to not profane the name or image of God, not to engage in idolatry, and to honor Him with the weekly Sabbath. The last 5, which I call the 5 Secular Commandments, or the ‘Secular 5’, deal with how human beings are to treat one another, specifically prohibiting fundamental forms of agression against innocents:
- Thou shalt not murder
- Thou shalt not commit adultery
- Thou shalt not steal
- Thou shalt not bear false witness against your neighbor
- Thou shalt not covet thy neighbor’s wife, …house, his field, or his manservant, or his maidservant, his ox, or his donkey, or anything that is your neighbor's.
The fifth commandment, ‘Honor thy Father and thy Mother’, seems to serve as a bridge between the spiritual commandments and the more worldly ones.
My next 2 sets of critics are screaming: the fundamentalist religious and the militant anti-religious atheists. The first are ready to fry me over my superficial and sophomoric analysis, which doesn’t agree perfectly with theirs, and the second are furious at my corrupting a ‘sacred’ secular topic with fairy tale mush. Hasn’t Howard heard of Separation of Church and…Separation of Church and…Economics? Uh,…
None shall murder, rape, rob, steal, defraud, or falsely prosecute.
I haven’t set out to write anything necessarily claiming that God endorses Capitalism. Nevertheless, I find it very interesting that I can find nothing in the most fundamental, religion-given law to contradict the most fundamental principles of Capitalism. For if all people followed the 10 Commandments (or at least the Secular 5), then
The commandment against murder validates the primacy of the individual human life. Capitalism takes this principle as its first axiom; by definition, capitalism cannot exist unless innocent individuals have an inviolable right to theif lives. About adultery there may be less of a connection with Capitalism (I cannot say that Capitalism per se requires abstinence from extramarital sexual relations), but both this commandment and Capitalism would be in agreement as proscribing rape. Religion teaches that rape is morally wrong; Capitalism is undermined by and therefore incompatible with violent coercion and violation of life, liberty, property and/or body of the individual.
‘Thou shalt not steal’ is a validation of private property rights, fundamental to Capitalism. For if there were no such thing as private property, there could be no such thing as theft. If what’s mine is yours is his is theirs is hers belongs to all and any, then if I take what is yours, it is the same as if they took what was hers or you took what was mine, or if you took what was your own. So what’s the problem?
The problem is that without security of possessions, there is no
False prosecution of innocent people is morally and socially destructive and is therefore proscribed by spiritual authority and incompatible with Capitalism. It is not enough to say, none shall murder, rob or rape; neither shall anyone acuse anyone else of the same, knowing the charge to be untrue.
The final commandment as enumerated in the Bible deals with ‘coveting’, or envy. Believers (and non-believers alike) are exhorted not to look upon the possessions of others as objects of provocation, inspiring feelings of inadequacy, jealousy, and the temptation to appropriate those thing from others by force or stealth. Envy is a poisonous emotion, causing destruction among the envious and the envied alike. In the political arena, some have elevated it to a high art, seeking to satisfy constituents through the punishment, plunder and restraint of other people for no better reason than that such others are perceived to be more prosperous than the supposed beneficiaries of the policy. ‘Soak the rich’ for the benefit of the poor, or the ‘Robin Hood’ political syndrome, are examples of this.
As it applies to Capitalism, for individuals to commit murder, robbery, rape etc. is just as much not permitted when done out of envy or jealousy as for any other reason. Moreover, the ambitions and plans which arise from envy --- conspiracy to commit murder, theft, fraud --- are worthy of the attention of the institutions which defend Capitalism. In order for Capitalism to exist, it is not sufficient only to punish violations after the fact; it must strive to prevent them (protect innocents) proactively. Thus Capitalism is consistent and in agreement with the tenth commandment, implementing it with prevention of violence and enforcement against criminal plots.
Again, I don’t expect to settle long religion-based and/or moral arguments. Nevertheless, I observe that Capitalism is a system of private property and voluntary cooperation holding individual human life and liberty to be sacrosanct, a position with which the religious commandments seem perfectly compatible.
The Ten Commandments are imperative, value-laden judgements. Capitalism takes most of the same statements as definitional, without passing moral judgement per se. Capitalism does not require or endorse government enforcement of the first four ‘spiritual’ commandments. It does require institutions of society to enforce the last five as they pertain to the limits of agression against other people.
Ownership of property is documented, standardized, and leverageable.
Under Capitalism, not only are individuals free to own possessions (foodstuffs, clothing, tools etc.) and property (homes, land, businesses and other long-term assets), but that ownership is documented, recognized and respected by the society as a whole. A title deed from
The first consequence of this documentation and standardization is that, unlike primitive tribes, third-world countries or citizens of states struggling to emerge from communism, capitalist owners are secure in the knowledge that their property cannot be capriciously taken away or otherwise violated. The second, and most powerful consequence, it that assets thus secured are able therefore to become living, leverageable Capital. A documented and recognized owner may take out a mortgage (incur debt in exchange for cash), sell all or part of a property, sell equity shares in an enterprise, or derive other financial instruments from his otherwise ‘merely’ physical assets. This is the truly powerful nature of capital, and the key element missing in so-called ‘third-world’ and post-communist countries. Hernando
Rule of, and Equality before, the Law
Capitalism is defined as a social system in which all individuals are governed impartially, without privilege or prejudice, by laws consistent with the preservation of individual life, liberty and property. ‘Rule of Law’ differs from ‘Rule of Men’ in that the latter are capricious, favoring themselves and their cronies, unbounded by fundamental principles. A ruling dictator may makes laws or arrive at judgements binding on others because he feels like it or because they favor himself or his friends, without reference to any transcendent priniciple beside his own pleasure. This is the antithesis of the rule of law.
Rule of law differs from ‘Rule of Lawyers’ as a system in which well-connected power brokers jockey for advantage. Neither is it necessarily synonymous with democracy, which for all its merits is still corruptible, allowing for tyrannical majorities or caucusses to vote for themselves the expropriation of the property of others, competing caucusses.
Rule of Law means not just any law, but natural law which respects and defends the most fundamental rights of individuals and does not seek to engineer social outcomes per se. The founders of the United States of America and their precursors such as John Locke and Thomas Hobbes, considered that law was not something to be invented or made up for the caprice of the moment, but rather something innate in the nature of the world, God and human beings, to be discovered and understood. When we say that Capitalism requires rule of law, we mean law that is in harmony with transcendent, immutable principles.
Minimal, Democratic Government
Under Capitalism, government has only one job; the defense of
In an imperfect world, governments formed on the principle of equal right of participation in the governing process by all adult citizens --- democratic governments --- have the best track record of respecting individual liberty and promoting Capitalism. Thomas Jefferson’s statement that ‘government is best which governs least’ is consistent with Capitalist definition and principle.
While still clinging to a fragile lead, the West in general and the United States which Jefferson contributed so much to found in particular, have strayed far from the original principles of minimalist, democratic government. The
Freedom of contract and of exchange
The next part of the definition of Capitalism flows freely from the prior. If individuals are free in relation to other adult human beings to own themselves, their bodies, their possessions and their property, then it follows irrefutably that they have the right to do with these things as they, not others, judge best, including exchanging them with others.
Under Capitalism, individuals are free from coercion or compulsion in deciding whether to hold onto something they own (including their own labor), or to exchange it for something else with another individual. Third parties do not interfere in the free exchange of goods or services by others unless (s)he can demonstrate that the exchange violates his/her own liberty in some way.
Individuals are free to trade with friends, family, neighbors, strangers, foreigners or aliens (intra- or extra-terrestrial). They may voluntarily form groups or organizations for purposes of mutual aid, spritual fellowship, commercial enterprise, charitable works, artistic patronage or any other desirable human activity. Individuals may choose to join such organizations as paid employees, unpaid volunteers, leaders, advisors and/or contingent stakeholders. And they may choose to leave. Individuals may contract their labor with other individuals freely willing to employ them. Individuals acting alone or in concert (i.e. as a corporation or labor union) may agree to perform services or provide goods to one another over short or long periods of time, with agreement on consequences should one party be unwilling or unable to fulfill the bargain. Capitalism requires that contracts freely entered into be enforced according to their original terms, not capriciously discarded at the whim of one party to the detriment of the other or to be reinterpreted and/or rejected by third parties; to permit otherwise is to permit and commit fraud and theft.
I can hear the yawning. So what, you say?
The critical element in all of this is that absent a demonstrable violation of the liberty of one or more individuals, no interference, compulsion or regulation by third parties is required or permissible under Capitalism.
Capitalism is, by definition, freedom of contract and of exchange.
Freedom of Competition
Under Capitalism, individuals are free to offer their goods and services on the market as they judge best, at prices and/or terms of their choosing. No individual or corporate party is prevented from entering into any business, industry or profession except by the limits of their own abilities, skills, knowledge, competence and experience. No privilege is reserved for parties already in a certain industry or market against newcomers. Anyone is free to compete with anyone else, to offer their own (presumably better, cheaper, higher-quality, better-tasting-less filling) product or service to consumers or clients, who are free to make new purchases and contracts which differ from the ones they had made in the past. ‘Stealing’ market share from competitors is not theft punishable under capitalist law (unless achieved through coercion or threat of force), but represents customers freely choosing to do business with different entities in the present and future than they had in the past.
Parties on the losing end of any market competition have five alternatives:
- Improve their market offering; lower prices, higher quality products, better service etc.
- Go to work for the leader; for the individual, this may mean seeking employment with the leading competitor in a subordinate position; for a company, this may mean being bought out by the leader (with mixed prospects as to what the buyer will actually do with the acquired assets).
- Leave the market segment, industry, trade or profession and find one in which one’s abilities, products, services, etc. can be more competitive.
- Appeal to his/her fellows for aid or charity to avert bankruptcy and starvation.
- Fail in the business or occupation, consume remaining assets, and in the extreme case, starve to death.
It is this fifth, extreme condition that most critics of Capitalism latch onto to claim that Capitalism is a cruel and vicious system where compassion and caring for the less fortunate are absent and only the ‘law of the jungle’ prevails. We will defer the discussion of this criticism to a later chapter. For the moment note that without denying the reality of this case, we have with reason placed it at the end.
The sixth alternative, appealing to the government for aid, that is, having the government intervene by virtue of its ability to coerce and force appropriations in the marketplace, to take resources from one set of citizens (including the winning competitor) in order to subsidize or ‘bail out’ the failed individual or business, is not a capitalist concept. This is an interventionist action inconsistent with laissez-faire capitalism, practiced to some degree by all governments on Earth, from the most liberal to the most tyranical.
What Capitalism is NOT
I will defer discussion of the claim that Capitalism is the exploitation of the poor by the rich. For now I want to make clear some frequently misunderstood notions about Capitalism.
First, Capitalism by definition is NOT a system in which government is ‘pro-business’ in the sense of providing subsidies, protectionist tarrifs, special tax breaks and privileges for corporations. Capitalism is freedom from interference, and equality before the law. Under Capitalism, businesses are free to succeed without punishment, and to fail without privilege (we will talk about the very very VERY important role of failure in detail in a later chapter).
Capitalism does not sanction slavery, or the forcible coercion of workers to stay in jobs that pay ‘starvation wages’. It only permits anyone willing, to offer or deny employment, or to accept or forgo the same. It may happen under Capitalism that workers are not paid as much as they (or third parties) feel that they are worth (and this can and does happen at any level from non-skilled manual labor to high-level professional work). But this is not the same as ‘forcing’ people to accept inadequate compensation.
Finally, no activity of government qualifies as Capitalist. If a government runs a factory and sells the goods in a store ‘for profit’, this is still not Capitalism, because the government has the ability (which a private company does not) to tax and regulate the market, in other words to forcibly coerce individuals and groups to its own advantage. This is inconsistent with
Government acting in defense of liberty in preventing and punishing murder, robbery, rape and fraud, acts in support of Capitalism. But Capitalism is the thing being defended, separate from the agency defending it.
With this definition of Capitalism in hand, then, let us elaborate upon how Capitalism solves so many of the challenges of human existence.
[i] I heard this in the mid-1990’s when Walter Williams, professor of Economics at
[ii] We’ll deal with Eminent Domain and its abuse another time.
[iii] Some might argue that Jefferson himself was the first significant violator of his own principles, with the massive land purchases and the government financing of the Lewis and
Copyright © 2006 by Howard Hyde. All rights reserved.
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