Ayn Rand: Atlas Shrugged Prophetic?

Friday, November 13th, 2009

A new book by Anne Heller about Ayn Rand, and her philosophy of objectivism is making rounds these days, re-igniting the relevance and debates about Rand’s 1957 bestseller “Atlas Shrugged.”

Like many others before, the first time I read Atlas Shrugged it changed my life. It clarified my understanding of the world we live in, of the business world, of markets, and particular spoke to me about the obstacles of starting and building a business, and the kinds of people who could either help or hinder the entrepreneurial process. If you have not read it, you should. It is a great and epic story of what Rand felt was going wrong in America, and to a very large degree, it has been prophetic of the economic collision we are currently facing.

In her preface, Heller notes “Because most readers encounter her (Rand) in their formative years, she has had a potent influence in three generations of Americans.” I was 15 when a friend lent me The Fountainhead (he let me keep the book, a Signet paperback costing $3.50). I liked the novel, but was mystified by Dominique and Roark’s relationship. Though impressed by Anthem and We the Living, it was Atlas Shrugged that knocked me sideways.

If you are at all entrepreneurial about your business, Atlas Shrugged will clarify the world for you, move you, and speak to you.

In a Wall Street Journal column, last year Stephen Moore discussed the prophetic nature of Rand’s 50 year old multi-decade bestseller.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

In the book, these relentless wealth redistributionists and their programs are disparaged as “the looters and their laws.” Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the “Anti-Greed Act” to redistribute income (sounds like Charlie Rangel’s promises soak-the-rich tax bill) and the “Equalization of Opportunity Act” to prevent people from starting more than one business (to give other people a chance). My personal favorite, the “Anti Dog-Eat-Dog Act,” aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn’t Hank Paulson think of that?

These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion “Emergency Economic Stabilization Act” and the “Auto Industry Financing and Restructuring Act.” Now that Barack Obama is in town, he will soon sign into law with great urgency the “American Recovery and Reinvestment Plan.” This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion — in roughly his first 100 days in office.

The current economic strategy is right out of “Atlas Shrugged”: The more incompetent you are in business, the more handouts the politicians will bestow on you. That’s the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies — while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to “calm the markets,” another trillion of national wealth is subsequently lost. Yet, as “Atlas” grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate “windfalls.”

I found this speech by Comcast Spectacor Chairman, Ed Snider, in which he describes how as an entrepreneur, Atlas Shrugged changed his life and the lives of his children, that he went on to found the Ayn Rand Institute, in order to foster teaching Rand’s Objectivism in universities across America, because he saw that so many young Americans were clueless about entrepreneurism let alone what capitalism once was.

Part 1 - 9:13 minutes

Part 2 - 2:21 minutes

Also, if it interests you, here is the original footage of Ayn Rand’s 1959 interview with Mike Wallace:

Part 1:

Part 2:

Tags: Ayn Rand, Burdens, Business World, Collapse, Crises, Downward Spiral, Fairness, Formative Years, Fountainhead, Government Programs, Havoc, Moral Of The Story, Objectivism, Productive Sectors, Roark, Sectors Of The Economy, Signet Paperback, Stephen Moore, Three Generations, Wall Street Journal
Posted in Markets | No Comments »

Memo to All My Valued Employees

Monday, December 29th, 2008

Listening to AM640 here in Toronto today, I heard an excellent discussion about the letter from “The Boss,” a truth-be-told debate about the value of tax-cuts, stimulus and taxation. In the current climate of government intervention, and neo-socialism, the letter is a breath of fresh air for those of us who have made the greatest productive contribution. Thanks to Charles Adler for posting the letter at his blog.

To go one step further, it is reminiscent of the world of Ayn Rand’s “Atlas Shrugged,” in which the story’s heroes, the entrepreneurs, the innovators, the captains of industry, the prime-movers, decide the best remedy is to withdraw, to go on strike, as the world is looted by bureaucrats, socialists, pseudo-intellectuals, and mystics.

Memo to All My Valued Employees

Author: The Boss

There have been rumblings around the office about the future of this company and, more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. The good news, however, is this: The economy doesn’t pose a threat to your job. What does threaten your job, however, is the changing political landscape in this country.

First, while it’s easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You’ve seen my big home at last year’s Christmas party. I’m sure all these flashy icons of luxury conjure up idealized thoughts about my life. But you don’t see the back story.

I started this company 12 years ago. At that time, I lived in a 300 square foot studio apartment for three years. My entire apartment was converted into an office so I could put forth 100% effort into building a company, which, by the way, would eventually employ you. My diet consisted of noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn’t have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting Nordstrom for the latest fashion item, I trolled through the Goodwill store extracting any clothing item that didn’t look like it was birthed in the ’70s. My friends refinanced their mortgages and lived lives of luxury. I did not. I put my time, my money, and my life into a business with a vision that, some day, I too, would be able to afford the luxuries my friends had.

So, while you physically arrive at the office at 9 a.m., mentally check in at about noon, and then leave at 5 p..m., I don’t. There is no “off” button for me. When you leave the office, you are done and you have a weekend all to yourself. I, unfortunately, do not have that freedom. I eat and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a one-year-old special-needs child. You, of course, only see the fruits of my labor — the nice house, the Mercedes, the vacations. You never realize the back story and the sacrifices I’ve made.

Now the economy is falling apart and the guy who made all the right decisions and saved his money have to bail out all the people who didn’t. The people who overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for. Yes, business ownership has its benefits, but the price I’ve paid is steep.

Unfortunately, the cost of running this business and employing you is starting to eclipse the marginal benefit. Let me tell you why:

I am being taxed to death and the government thinks I don’t pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers’ compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then, guess what? I have to pay taxes for employing him.

Most of my time is now occupied with government mandates and regulations and all the accounting that goes with them. On October 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my “stimulus” check was? Zero. Nada. Zilch.

The question I have is this: Who’s stimulating the economy? Me, the guy who has provided 14 people good-paying jobs and serves more than 2,200,000 people per year with a flourishing business? Or the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (read: stole) 50% of your paycheck, you’d quit and you wouldn’t work here. Why should you? That’s nuts. Who wants to get rewarded for only 50% of their hard work? Well, I agree, which is why your job is in jeopardy.

Here is what many of you don’t understand: to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn’t need to pay taxes, guess what? Instead of depositing that $288,000 into the Government black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don’t defibrillate by shocking his thumb to bring him back to life, do you? No. You defibrillate his heart. Business is at the heart of our economy and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers believe the mud of economy is the essential driver of the economic engine. Nothing could be further from the truth.

So where am I going with all this? It’s quite simple. If any new taxes are levied on me, or my company, my reaction will be swift and simple. I’ll fire you. I’ll fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child’s future. Frankly, it isn’t my problem anymore.

Then, I will close this company down, move to another country, and retire. You see, I’m done. I’m done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed and, with it, will be my citizenship.

While tax cuts to 95% of the people sounds great on paper, don’t forget the back story: If there is no job, there is no income to tax. A tax cut on zero dollars is zero. Who understands the economics of business ownership and who doesn’t? Whose policies will endanger your job?

Answer those questions and you should know who might be the one capable of saving your job. While the media wants to tell you “It’s the economy, stupid,” I’m telling you it isn’t. If you lose your job, it won’t be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the Constitution, and changed the landscape forever. If that happens, you can find me in South Caribbean sitting on a beach, retired, and with no employees to worry about.

Signed,

Your Boss

Who is John Galt?

Tags: Ayn Rand, Breath Of Fresh Air, Bureaucrats, Business Owner, Canada, Captains Of Industry, Charles Adler, Christmas Party, Flashy Icons, Government Intervention, Innovators, Intellectuals, Mystics, Noodles, Political Landscape, Prime Movers, Productive Contribution, Socialists, Square Foot Studio, Stimulus, Studio Apartment, There Have Been Rumblings
Posted in Economy, Markets | 5 Comments »

Five Simple Steps to Becoming a Billionaire: The Greenspan Method

Sunday, January 20th, 2008

Five Simple Steps to Becoming a Billionaire: The Greenspan Method

Courtesy by Johnny Debacle, LongorShortCapital.com

This is very funny:

1. Become Fed Chairman
2. Lower interest rates until you create an asset bubble. Hold them low until stagflation is in the air and a real estate bubble is floating
3. Stop being Fed Chairman and release a book on how you didn’t do anything wrong and have no regrets. If possible, time it perfectly with the worst real estate market in generations
4. Join the hedge fund which has profited more in % and dollar terms than anyone else has from your mess (which you didn’t create)
5. Build a platinum statue of your muse, Ayn Rand, and sleep with it every night

It also helps if you are mostly unethical.

Tags: Ayn Rand, Billionaire, Debacle, Dollar, Dollar Terms, Fed, Five Simple Steps, Funny, Generations, Greenspan, Hedge Fund, humour, Information, interest rates, Miscellaneous, Muse, No Regrets, Platinum, Real Estate, Real Estate Bubble, Real Estate Market, Sleep, stagflation
Posted in Markets, Oil and Gas | No Comments »