Richard J Grant

Published in The Tennessean , January 31, 2010 Obama's inexperience, arrogance endanger country by Richard J. Grant In the early 1990s, while working in South Africa, I met Nelson Mandela for the first time. He was gray and wizened, but distinguished, bright-eyed, and energetic. I liked him. But then he went on stage and gave a speech. Whatever hope I had been given by the solid nature of the man that I had just met soon evaporated. His words betrayed the fact that he still lacked the understanding needed to be leader of a prosperous country. He spoke of nationalization and redistribution as if they were natural and to be expected. Everyone knew that Mandela had been a socialist and that many of his colleagues and supporters were still card-carrying Communists. But it had been barely two years since the Berlin Wall had come down, and the faith of most socialists had been severely shaken. It was that event that had opened the way to the unbanning of the ANC and to Mandela's rele...

Published in The Tennessean , January 24, 2010 The Fed's philosophy creates financial dragons by Richard J. Grant George Santayana's admonition, "Those who cannot remember the past are condemned to repeat it," is much-quoted and sometimes taken to heart. But it does not imply its often-assumed corollary, "Those who remember the past are guaranteed not to repeat it." The trouble with experience and the study of history is that neither presents us with self-evident life lessons. The lessons learned depend on the intellectual makeup of the observer. It depends on what we have within us to interpret the workings of the world. Although history never repeats exactly, we do see the same kinds of mistakes recur. Despite having a "student of the Great Depression" on the Federal Reserve Board during the past 10 years, we still found ourselves being threatened with economic depression. In his writings and speeches, we see that Ben Bernanke, now Fed chairman, ...

Published in The Tennessean , January 17, 2010 People still believe 'no cost' actually means free by Richard J. Grant Sign in a French hotel: "Breakfast is free." Sign in a German hotel: "You will pay for breakfast whether you eat it or not." Regional differences in breakfast habits aside, both signs say the same thing. In both hotels the same person pays for breakfast: you, the customer. That is what we must remember whenever the government offers us something "free." We must also be wary of promised cost savings. There are very few services that any government is able to offer more cheaply than could be done in the private market. In fact, we are lucky when a government can provide a service at only double the cost found in the private market. Many voters still believe they're getting something for nothing — and for some this could be true. But it can never be true for everyone in total. The "something-for-nothing" mentality, especi...

Published in Business Day , Thursday, January 14, 2010 Why SA would find weak rand more of a burden than a boon by Richard Grant THERE is an unfortunate tendency to blame currency strength for the relative slowness of SA’s recovery from economic recession. This assignment of blame is unjustified, but it is the mantra of the perpetual lobby for a weaker rand. During the past year, the rand has risen against the dollar, the euro, and a trade-weighted basket of currencies. But the exchange rate with gold remains volatile and, though the five-year uptrend in the rand-gold price seems to be slowing, it is too soon to declare the rand “strong” by that measure. The dollar, the euro, and all the other fiat currencies are, by definition, man-made currencies. This characteristic, which they share with the rand, makes them all susceptible to inflationary bias, especially during a recession. As a standard by which to judge the rand’s performance, they are a slow heat. The commodity money — gold — ...

Published in The Tennessean , January 10, 2010 Government interference led to financial crisis by Richard J. Grant What is the purpose of most government regulations? Answer: To correct the problems created by previous government regulations. This should be a big lesson of the recent financial crisis. Government regulations, like drugs, have side effects that can accumulate and overshadow the benefits. Also, it is not mere cynicism to note that there are interest groups that support particular regulations precisely because of the side effects. In politics, there are goals that are publicly stated and that appear, on the surface, to be desirable. There might also be effects that would be extremely unpopular if voters knew about them. From the perspective of stated public policy, these undesirable effects would be seen as “unintended consequences.” A familiar example is minimum wage laws. The publicly stated, and publicly acceptable, motivation for such laws is to help low income earners...

Published in The Tennessean , January 3, 2010 Health-care debate shows liberalism has lost way by Richard J. Grant If you could choose the country of your birth, would you choose a free and prosperous republic where your neighbors would respect your right to life, liberty and property, or would you choose a socialistic country where none of these rights is truly respected and life is very different? If you were to be born with a congenital ailment, say a heart defect, which country would you choose? Would your answer change in any way? In the free republic, no one would speak of your "right to health care." But in the socialist, workers' paradise, the right to health care would be an article of faith. So which would you choose? Whatever your condition at birth, your location will affect your life expectancy and quality of life. People like to imagine that proclaiming a "right to health care" will guarantee everyone a longer and better quality of life. But this a...