OPINION

Is Big Always Beautiful

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In 2008 Russian billionaire Roman Abramovich paid $33.6 million for Lucien Freud's "Benefits Supervisor Sleeping." The price established a record for a living artist. Lucien Freud was grandson of Sigmund Freud, who to this day remains the most famous neurologist and father of psychoanalysis. Although as years go by greater pieces of Freud's theories are chipped away, his influence hasn't waned in the minds of the general public. It all began with his book "Interpretation of Dreams" which introduced among other ideas the Oedipus complex.

It's the day after the State of the Union address when the nation was sold a dream of a country that must find a way to destroy itself while morphing into an idealized nation all while not enduring any pain. The ugly America is going to become a beautiful butterfly over the next four years. But beauty is in the eyes of the beholder. Without a doubt many people find "Benefits Supervisor Sleeping" a work of beauty and its model Sue Tilley attractive. There is little debating the painting strikes a reaction from all that view it.

The Colossus - A Beast that Only Gets Hungrier

This is the same with President Obama's dream of a gigantic government that takes care of people, invests in areas like clean technology, and keeps individual ambition in check with a combination of humiliation, regulations and massive taxes. To underwrite this Colossus the government will need lots of money. The government will become more bloated, unyielding and lumbering. The government and its army of drones will become even more omnipresent and omnipotent. It would be so huge and yet soft and gentile to those that fall in line and drink the Kool-Aid - which would be free, by the way.

Giant government with its giant debts and overbearing ambition is sexy for some and fair for others, but it eventually puts the rest of the nation into a coma - a long sleep where talents, skills, ambitions, innovations and grit fade into a fleshy mush. We all like the idea of spending more on educating our children, but the honest answer is many are dropping out of good schools now. The real investment has to be one that's rooted in a nation that appreciates intelligence and rewards hard work that goes into good grades. The nerd has to be as popular as the captain of the football team or the dropout around the way that can dunk a basketball.

New buildings and computers are nice but a community mindset that school is a waste of time will not change. Therein lays the rub; by pushing this hot button the government gets to grab more cash ostensibly for the children and even create villains out of those against paying a "tiny bit more" in the process. The part of this message nobody speaks of is that the guilt trip against the rich also serves as a convenient excuse for those children that decide to drop out. Moreover, by sawing the ladder of opportunity in half more people have reasons for not pursuing a great education.

People simply don't see why they should work harder to get ahead and that especially applies to children and the notion of putting in the elbow grease needed to be a great student. In the meantime the children are put up as the biggest reason to have the biggest government possible.

On June 29, 1956 President Eisenhower signed the National Interstate and Defense Highways Act of 1956, otherwise known as the highways act. Many said the project would bring to life ideas put forth by FDR. The plan was to connect the nation over a ten year period, spending $25.0 billion administered through the newly formed Highway Trust Fund. In 2007 $146.0 billion was spent to build, operate and maintain highways in America and that trust fund is nearly broke despite a $0.185 federal tax on regular gasoline. Nothing eats up money like slow and lumbering highway projects.

The stimulus plan from four years ago was also pitched as a magic elixir and cure-all for the economy. Later President Obama would snicker there were no shovel-ready jobs. Since then billions have been spent, deflected and for the most part squandered. We pay crazy tolls and high taxes under the guise of paying for highways but there is never any money around. The highway system is gigantic and for the most part lumbering and frustrating. Sure, bridges and tunnels need tuning up but that doesn't create long term prosperity.

Highway Jobs Myth

There is no doubt the nation benefited from the build out of highways but it's not a clear cut fact more jobs were created. The "act" was passed as a defense measure as a way to roll out troops and tanks in case of the invasion of America. From July 1956 to December 1960 there was only a net of 1.5 million jobs; twenty-six months saw losses while only twenty-seven enjoyed gains.


Big Lives Long

While there is no doubt big government is lumbering and greedy proponents could argue it has great longevity. The largest living organism in the world is Armilaria Ostoyae in the Blue Mountains of Oregon. It's a fungus that is currently 2,384 acres in size, or the size of sixteen football fields. It's also thought to be 2,400 to 8,650 years old. Like other humungous organism this fungus sucks up all the water and nutrients in its path, consequently killing other living species in its wake.

Big government does the same to its citizens and businesses when its sucks up gobs of taxes and revenues while paying massive interest on debt.


Conclusion

President Obama has taken a page from Lucien and Sigmund, combining his fascination with big stuff and ability to sell the indefensible like uncontrollable debt with basic reverse psychology. I think it's early but many are already discussing President Obama's legacy. If he gets more deals that see higher taxes (current official targets are hedge fund managers and corporate loopholes) and more spending ... or supposed investing then one thing is for sure based on nature. His legacy will live a long time.

By the way, Sue Tilley who posed for the painting said it was hard work. Lucien Freud made her come in every weekend and she posed for hours, only taking off three days in two years. Part of the reason for this is he didn't want her to go on holiday and be tempted to hit the beach, preferring her pale and taunt. Big government dreams and policies have already made this recovery sluggish and promises to keep economic gains pale and taunt.

Retail Sales

According to the U.S. Census Bureau, retail sales during January increased year-over-year by 4.4 percent and increased month-over-month by 0.1 percent, in line with the Street's consensus estimate. Excluding automobile related revenues, retail sales increased year-over-year by 3.6 percent and increased month-over-month by 0.2 percent, better than the Street's consensus estimate calling for a 0.1 percent month-over-month rise. Gas sales were up 0.25 percent month-over-month: the news didn't move the needle or answer if people are pulling back because of payroll tax or economy. However the number sans autos and gas points to tepid spending and a cautious mood.