Year: 2013

Does the New York Times read NOL?

Brandon Christensen Liberty, Links , , , , , , , , , , ,

Parag Khanna definitely reads Notes On Liberty. From his latest op-ed in the New York Times:

Devolution is even happening in China. Cities have been given a long leash to develop innovative economic models, and Beijing depends on their growth. One of the most popular adages among China watchers today is: “The hills are high, and the emperor is far away.” Our maps show a world of about 200 countries, but the number of effective authorities is hundreds more. [check out “Federalism, Chinese Style” by Gabriella Montinola, Yingyi Qian, and Barry R. Weingast for a fascinating look at the ongoing devolutionary trends in China – BC]

The broader consequence of these phenomena is that we should think beyond clearly defined nations and “nation building” toward integrating a rapidly urbanizing world population directly into regional and international markets. That, rather than going through the mediating level of central governments, is the surest path to improving access to basic goods and services, reducing poverty, stimulating growth and raising the overall quality of life.

Connected societies are better off than isolated ones. As the incidence of international conflict diminishes, ever more countries are building roads, railways, pipelines, bridges and Internet cables across borders, forging networks of urban centers that depend on one another for trade, investment and job creation.

I’ve been making this same argument here at NOL for quite some time now, but Dan Drezner disagrees. He has three bones to pick with my argument (as augmented by Dr Khanna in the NYT):

  1. People were writing about devolution all the way back in 1995, so Khanna’s insights aren’t particularly new or exciting. This is true; if you’ll remember my recent post on federalism as an alternative to imperialism you’ll recall that Adam Smith was making the same argument as Khanna in 1776.
  2. Contra Khanna, states have always been in competition with other forms of governance (not government). Khanna needs hard empirical evidence to prove that the devolution he writes about is as prominent and fast-moving as he claims it is.
  3. Other academics, mostly economists, have been claiming precisely the opposite of what Khanna is arguing; namely that states have been increasing in size and scope over the past few decades. Drezner hesitantly errs on the side of the economists, who at least bring data to the table, but claims that there is probably a middle ground between Khanna and the economists.

As far as throwing out ideas to back up the devolutionist argument, it might be a good idea to look at the nation-state’s loss of monetary sovereignty to supranational (or quasi-national) organizations in the West. Or the separatist tendencies of regions within supranational organizations like the EU that threaten to break up nation-states. Or the fragility of African and Islamic states, as evidenced by the dictatorships and wars often found in these regions. Or the multilateral trade agreements that are becoming more and more inclusive, and more and more complicated. There are probably many more, and if you can think of any feel free to leave them in the ‘comments’ section.

With all of this said, Drezner has a point. The state has found a number of ways to counteract the various effects of globalization, and proving that the state is in decline is, for the moment, extremely hard to do. Yet Drezner’s point says nothing about Khanna’s overall argument, which is merely that devolution is a good thing and ought to be embraced by more progressively-inclined people.

The interesting question here is not the current situation of the state itself, but rather if a consensus can be forged, among thinking people, around the idea that political decentralization and economic integration leads to freer societies. Until a consensus built around this idea can be reached among intellectuals, I fear despotism will reign in most parts of the world at most times.

The Federal Shutdown, the Debt Ceiling and an Extremist’s Morning After

Jacques Delacroix Current Events, Politics , , , , , , , , ,

The fake government “shutdown” is already over. I hardly had time to enjoy it. I was just beginning to make a list of federal services that are “non-essential” according to the federal government itself. I was kind of hoping that the EPA, for example, would bite the dust. I does not seem fair.

The debt ceiling problem is also dealt with for the time being. It’s another expression of the same underlying problem that led to the “shutdown.” (See below.)

OK, after the crisis that just ended temporarily, it feels to conservatives like Great Britain in August 1944. The Luftwaffe rules the skies. Our few remaining pilots keep getting shot down. Our central city is bombed nightly. Everyone else who is civilized has already folded. Nightly, they are opening the Champagne in Berlin. We stand alone. It does not mean that we are wrong to stand.

Still, it also feels like the morning after. Time to look into it.

The so-called crisis is suspended for about four months. Nothing is solved. The Republicans collectively took a public opinion drubbing, it’s true. Speaking for myself, I will repeat what I said earlier: I am not attached to the Republican Party. I care only about limited government conservatism. Until now, the Republican Party was a not-so-bad vehicle for that view of the world. If it does not have the backbone to carry it further, so be it. Yes, I think that even if there is no other likely large vehicle in sight. I want to avoid pointless imaginings about my meaning by saying it clearly: What I fear most is not just another electoral defeat but a meaningless and useless electoral defeat such as the Republican Party suffered in the last presidentials. What hurts the most is the large number of nominal Republicans who just stayed home. Gov. Romney’s program was not the hill you want to die for. Gov. Romney was not the kind of commander who could induce you to die for that hill.

Here is the central conservative issue in a capsule. The phony government shutdown and the reappearing debt ceiling issue are parts of the same dark cloud:

A federal government that is deeply and routinely corrupt as well as shockingly incompetent keeps borrowing mindlessly to sustain the ordinary business of government.

It’s despotic; its’ a waste of resources; most of all, it’s immoral.

The mindless, nearly automatic borrowing is the worst part.

Myself, I think that I, my children and the federal government should only borrow under two circumstances:

  1. When the loan is to be applied directly to the acquisition of a tool that will contribute to greater earnings in the proximate future. I use the word “tool” liberally. Better freeways, for example, could easily qualify.
  2. When there is a strong presumption that we will earn more tomorrow . That’s with or without the condition in 1 above. This is separate. In the case of a country, for example demographic growth may by itself create such a presumption.

The present federal government’s borrowing fulfills neither condition. It’s borrowing to meet everyday expense. It’s as if I borrowed to buy bread for my lunch sandwich. There is also no reason so far to believe that the United States economy will grow a great deal tomorrow. (This could change the day after tomorrow if we had, for example, sudden access to new cheap energy. The Obama administration is doing its best to prevent precisely this from happening – Makes you think along dark lines, doesn ‘t it?)

Routine even legal, systemic federal government corruption: The widow of (wealthy) Senator Lautenberg received $174,000 from Congress because her husband took the trouble to die while in office. (WSJ 10/18/13, p. A12)

Federal Government incompetence: See the health insurance exchanges, in preparation for four years! Enough said! Note: I am not sure whether I am more afraid that its implementation will succeed or that it will continue to fail in exemplary fashion.

Mindless federal borrowing: It has become an integral part of the culture that the government must borrow to live. I said “integral part of the culture.” Below, an illustration I could not invent if I wanted to.

Larry Fink is the CEO of BlackRock, by some defensible measure, the largest investment firm in the world. Mr Fink said 10/16/13 or 10/17/13 (WSJ):

I have been in this business for 37 years. For 34 years I did not know there was such a thing as a debt ceiling.

Our point exactly! One of the highest placed business executives in the land takes government borrowing so much for granted that he does not know it’s subject to Congress-imposed limitations. He even sounds incensed when he learns the truth.

That’s what makes us conservatives, “extremists.”

Why do I care? I care because, unless there is another wave of fast economic growth lasting for several years, we are guaranteeing that our children and grand children will live in poverty. It’s wrong; it’s immoral.

And then, there is the growing phoniness of the public discourse including discourse by the mainstream privately owned press.

During the two days following the cessation of the pretend-government “shutdown,” the main media are eager to pretend that the multitudes feel great relief. They talk as if the average folks out there had experienced tremendous suffering because federal non-essentials were furloughed. I, for one, feel no relief at all. I don’t know anyone who does. (Agree, it’s an unsystematic sample but it’s a sample.) This is all the media’s deliberate exaggeration or a misplaced identification with federal public servants. It’s becoming more and more obvious that such public servants are overpaid and that they enjoy too many unearned privileges. (State public servants also, in some states, such as mine, California.) I don’t identify. It pisses me off. The more I know, the more pissed off I am.

They, the mainstream media, echo dumbly the noises coming from the administration about the alleged “costs” of the “shutdown” to the national economy. No one takes the trouble to do a net calculus, even to raise the issue of a net calculus. Isn’t it true that for each day certain federal bureaucracies are unable to do their job, some of the main producers in the nation are better able to produce? Again, the EPA comes to mind. And the IRS, of course. And a number of federal agencies whose names I don’t even know.

Besides, it’s an empty formula, a truism that (theoretical) wealth that fails to be produced usually is not regained, as the administration says gravely.

N. S. ! That’s what happens with Columbus Day and with Presidents’ Day, for example. (When only public servants and bank employees don’t work. When nearly the whole private sector keeps on producing wealth.) Why not cancel both holidays if non-production is a cause for worry? Why not make federal public servants come to work on both days if the president is worried? He only need issue an executive order. Bet you, he won’t even mention the possibility. And why do I have to state the obvious? Why aren’t the media doing their job? Have they been hypnotized? And, I almost forgot: if the president loses sleep over the missed production of federal employees, he could imitate the French in reverse and institute the federal forty-four hours work week. Would anyone notice?

Something else does not add up in the media’s discourse. For days, during the so-called “shutdown,” both administration officials and supposedly independent pundits threatened us with a world economic abyss because of number of non-essential federal employees were prevented from going to work. (I am not making this up; I am not exaggerating that we were told this ad nauseum; go back to those recent days, you will be amazed.) Yet, the day he current agreement is announced, the day we jumped form the edge of the supposed abyss, the markets reacted limply. The Dow Jones Industrial gained a lackluster 175 points that day. Now, that’s nice; it’s a gain for sure. However it’s no more of a gain than happens, for example, when the international price of the oil barrel comes down by ten dollars. The next day, the Dow Jones was flat. Trouble over; no big deal after all. Forget what we said yesterday. Forget the alarm. We were just kidding!

The Republican cave-in saves us from falling into the Grand Canyon and the market gives us a small hot dogs party by way of celebration! Does it make sense?

President Obama’s deftness never ceases to amaze me. No mistake seems to stick to him. On the day of the agreement, he declared that the new debt ceiling is not really debt. No one in the mainstream press questioned this absurd statement. Let me repeat, by the way, that I don’t think he is lying. He really does not know better. Academia is overflowing with his type of intelligent ignorance.

Perhaps, I am not grasping what’s going on, culturally. Perhaps, the reservoir of white American guilt concerning the long atrocity that was slavery, concerning racial segregation and discrimination also, is far from exhausted. Perhaps, the president can write checks on this for a long time to come. Or maybe, as Rush Limbaugh suggested, he struck a giant chord with the millions by giving them a chance to see themselves as victims. If you are a victim, almost any grotesque behavior is permissible. Soon only my wife, our grown children and I will be the only non-victims left in America. It will be a lonely existence. And, I wonder how long we will be able to support the victims because two of us are long retired (thus mirroring American demographics to come).

At one point one of Mr Obama’s servants referred gravely to the global reputational damage the shutdown has caused to the United States. (I don’t remember exactly who or when but I heard it with my own ears.) The “red line” in Syria about using chemical weapons does not in any way affect the credibility of the US, I suppose. The hundreds of civilians who died from chemical weapons died and all is forgiven. In the words of Pres. Obama’s former Secretary of State, “What difference does it make now?”

The day after the agreement the president gave another speech in which he advised those who don’t like something to just win elections in order to be able to change the something. I don’t think it was mistake. It was Freudian slip. President Obama does not believe that tea party Senators and Representatives who oppose him so tenaciously were just as elected as he was. It sounds familiar to me because I know history rather well and French history very well. The weakling tyrant, Louis-Napoleon, the Emperor Napoleon the Third (there was no Second) was initially elected. His supporters really thought that if you were elected by a sizable majority, you were morally allowed to do anything. They thought that was democracy. (There is a very nice readable piece by my old buddy Karl Marx on this topic for your reading pleasure where and when it rains: The Eighteenth Brumaire of Louis Napoleon, Abstract of Chapter I.)

Thus do we drift fast toward a one-party state. I warned about this a long time ago, before Mr Obama was even elected. (See also on this blog: “Fascism Explained“)

The unspeakable Senate Democratic leader Harry Reid said after the agreement was reached: “This is a time for reconciliation.” I don’t think so. I hope not.

Про политику народных волнений в России

Evgenii Grigorev Current Events , ,

С недавних пор в России стала очень популярна новая форма диалога с властью, которая получила название “народный сход”. В последнее время подобные акции случаются все чаще и чаще и носят все более спонтанный характер. Как правило, это несанкционированные митинги, которые зачастую переростают в погромы и столкновения с полицией. Буквально несколько дней назад в Москве прошел такой народный сход на волне резонансного убийства одного из местных жителей мигрантом с Кавказа.

Не буду рассказывать про толерантность, терпимость к незаконной миграции и засилью приезжих с Кавказа. Местное население устало, правительство считает, что “все нормально”. Другое дело, что градус эмоционального накала уже настолько высок, что достаточно малейшей вспышки, чтобы произошел взрыв. Район, в котором произошло убийство, славится своей овощной базой, которая по мнению местных жителей является центром этнической преступности. Не сложно догадаться, во что вылился народный сход: погром овощной базы, перевернутые автомобили, столкновения с полицией, 400 арестованных и так далее и тому подобное.

Убийцу-то поймали в конечном итоге. Но самое интересное не в этом. После народных волнений началась массовая проверка приезжих и незаконных мигрантов, несколько полицейских чиновников лишились своих мест…

Неужели власти надо каждый раз давать пинок под зад, чтобы она поняла: у населения кончается терпение. Как осел – пока не повесишь морковь перед носом, он никуда не пойдет. В данном случае роль морковки выполняют народные сходы. Это грустно.

Around the Web

Brandon Christensen Current Events, Links
  1. Generation Libre: a French libertarian website (why don’t you have Google’s Chrome yet?)
  2. eigentümlich frie: a German magazine modeled after Reason
  3. Contrepoints: a French magazine modeled after Reason!
  4. Consortium of Defense Analysts: a new blog with lots of great maps
  5. The Umlaut: an American blog with a German-sounding name

In case you are wondering, many non-American libertarians refer to themselves as ‘liberals’ rather than libertarians because once upon a time, American libertarians were actually liberals. The American Left stole (surprise, surprise) the term ‘liberal’ and began to use it as their own. In response, Americans dedicated to individual freedom became libertarians. Hayek talks about the peculiarity of the term ‘liberal’ in the American context in his book the Constitution of Liberty.

Update: I had to edit the hell out of this post, mostly for grammar.

Which is bigger Ponzi scheme?

Rick Weber Politics , , , , , , ,

A comment on my recent post made me realize that I’ve been wrong about Social Security this whole time. It isn’t quite a giant Ponzi scheme, but if we’re being flexible with our definition of Ponzi scheme it may still be the biggest.

Many people are happy to pay into Social Security thinking they’ll get a reasonable return on their “investment”. To the extent that that’s true, and that return is financed by other people paying in (rather than on actual investments) it’s a Ponzi scheme. But others don’t pay in voluntarily. To the extent that that’s true, it’s like theft but with the robber systematically dropping some of the money. Quasi-Ponzi scheme might be a better term. Social Security paid out $615B in 2008. Let’s guess $650B for 2012. If that was all happy money, it’s one big Ponzi scheme.

But the U.S. government has another project that more closely resembles a Ponzi scheme: Treasury bonds. Here people voluntarily fork over money for a return that is financed in part by later “investors” buying Treasury bonds. Of a $3.5T budget with a $1T deficit, 6% went to paying interest last year (that’s $223B). So 29% of the budget was deficit, and we might conclude that approximately $65B of interest (0.29*$223B) is “Ponzi-financed”.

So now the question is how much of Social Security is “happy money”? Anything more than 10% makes it the bigger Ponzi-scheme. But even if Social Security is heavily financed with “happy money” it is still taken at gun point while purchasers of bonds are there voluntarily. If the government were looking to save $223B and only Social Security benefits and interest payments were on the table, the more ethical choice is to default (if not repudiate). As I recall, I’m ripping off this point from Jeff Hummel.

What the Hell is a “RINO” Anyway???

Wood Liberty, Politics , , , , , ,

I have serious problems understanding the definition of the term ‘RINO’. The term is supposed to mean a Moderate Republican, i.e. a Republican that shares views with a Democrat. However, the term is used by so many contradictory parties that it lacks real meaning. Many people hold up President Reagan as the hard definition of a true conservative, with his quote of “the soul of conservatism is libertarianism”.

In the 2012 election, the four Republican candidates each represented a key demographic of the current Republican base. There was Mitt Romney, a Mormon westerner who had become merged with the moderate eastern Money Trust Rockefeller establishment. There was Rick Santorum, a right-wing Catholic obsessed with social issues and ready to wage a Christian jihad. There was Newt Gingrich, a Baptist-turned-Catholic career politicians who’d passed centrist legislation throughout the Clinton administration. And of course, Ron Paul, a libertarian carrying the youth vote, ironically carrying views of a politician born in the 1890s, who would have been a member of the bipartisan anti-Roosevelt Old Right coalition.

The idea of a RINO came into existence around the campaign of Barry Goldwater, an Arizona Senator, who won the 1964 nomination instead of Nelson A. Rockefeller, the grandchild shared by John D. Rockefeller of Standard Oil and Senator Nelson Aldrich, who pitched the original idea for the Federal Reserve. Even though he won the nomination, Goldwater was written off as an “extremist” by many, and Rockefeller was considered a “moderate”. But what does this really mean?

As America was still very homogenous in 1964, most regions had a strong local culture. At the time, the Republican base was comprised of Midwestern Lutherans, Western Mormons, wealthy New England Episcopalians, and transient career military families. At the time, most Southern Baptists and Catholics were still largely Democrats. Goldwater winning Southern states in 1964 did not permanently secure the Solid South as red states, despite the widely toted myth. (Third party Wallace of 1968 and Democrat Carter of 1976 prove this.) As a general phenomenon, the lower-middle-class flyover demographics were known as the extremists, while the upper-middle-class city and suburban folk were known as the moderates.

Despite being categorized as a “right-wing extremist” in 1964, Goldwater still had little in common with the heartland evangelicals of today. Goldwater had no connection to fundamentalist Christianity like Governors Perry or Palin. One side of his family was Jewish, and the other side was Yankee Episcopalians, and Goldwater was an Episcopalian his whole life. Goldwater supported no legislation in regards to gay marriage, drugs, or abortion. Goldwater is directly quoted as saying, “Mark my words, if and when these preachers get control of the Republican party, and sure they’re trying to do so, there’s going to be a terrible damn problem. Frankly these people frighten me”.

Everything Barry Goldwater predicted about the Christian fundamentalist hijack eventually came true. Now the term RINO has a whole new meaning than when two socially liberal Episcopalians were vying for the nomination in 1964. Many Republicans referred to John McCain (a career military man with no regional ties) and Mitt Romney (a flip-flopper from the far left state of Massachusetts) as RINOs or moderates. But when Obama ran against them in 2008 and 2012, his campaign spent countless efforts painting the two candidates as right-wing extremists

Since 2008, the mainstream liberal media outlets have generally painted all Republican candidates in the same stereotype: old, uncool, racist, sexist, cranky, corny, money-hoarding, miserly Mr. Scrooges, obstructing Obama’s hip-and-groovy “CHANGE”. It mattered little how moderate McCain’s and Romney’s records were, the media rhetoric implied that anyone running against Obama had a closeted agenda with the same motivations as the Thurmond, Wallace, or Duke campaigns. Vice President Biden shouted out to an audience during a debate with Paul Ryan, “Romney is gonna put you all back in chains”. The MSM saw no problem with this.

So what are the concrete issues that make or break the difference between the RINOs and a non RINO? Is it the military, war, and foreign policy? Is it economics? Is it Christian social issues? (a dead horse, as far as I’m concerned) Are the rants espoused by Limbaugh, Hannity, and other Fox News anchors the policies that anyone who runs as a Republican are “supposed” to have? Fox anchor Ann Coulter referred to libertarians as “pussies”, and implied that supporting drug legalization was RINO/moderate, by mashing  different ideologies from left and right. Everyone has different definitions of RINO.

So this brings up the question: Was Ron Paul a “RINO”? Fox News certainly said so in the 2012 election. Were Ronald Reagan and Barry Goldwater “RINOs”? Many Democrats who hate the Tea Party would say so today. Although one must acknowledge Ron Paul’s ultraconservative personal views, one should realize he would give power back to the fifty state governments, with the intention that each American demographic can carve out a haven. There is no point pretending that Ron Paul is a hip guy with young libertarian social ideas: his views have changed little since he was a medical student in the 1950s.

Despite this, Ron Paul had the potential to represent a purge of many issues that the left hates about the Republicans; policies relating to drugs, gays, abortion, corporate bailouts, but most importantly, the wars in the Middle East. This was only exacerbated by Rick Santorum’s extremist Christian authoritarian rants, and his comment that he wanted to “fight against libertarian influence in the Republican party”. Despite the Obama administration’s continued drone warfare allover the Middle East, the Obama 2012 campaign repeated the same 2008 rhetoric that this was Bush’s personal, Republican, corporate, Islamophobic war. Simultaneously, the other three Republicans called Ron Paul an isolationist coward for his foreign policy. Ron Paul could have been the perfect moderate with ideas compromising from both sides, and yet they trashed and defamed him every possible chance.

Unfortunately, it is the Tea Party, and not moderate Republicans or Democrats, who have been blamed for the government shutdown. Personally, I think the Republicans handling the shutdown is a poorly planned reactionary idea. This kind of political activism only works if the libertarian-leaning Republicans were to shut down the government about the wars in the Middle-East, or the incarcerations of non-violent drug offenders. Otherwise, the MSM will just paint them as quintessential obstructionist right-wing cranks, as they have done so far.

McCain’s machine of moderate Republicans have marched in lockstep behind Obamacare, in an attempt to make Ted Cruz and other libertarian-leaning Republicans look like the “extremists”, Obama-haters, and Confederate secessionists. Despite the fact that libertarians are supposed to share a good bit ground with progressives, Democrats and moderates are together pointing to libertarianism “the far right fringe”. Moderate Republicans need to keep in mind that when is all over, the liberal media outlets will put all Republicans, moderate and conservative, in the same category as tongue-speaking, back-alley-abortion-causing, end-of-times, Limbaugh-hypnotized, warmongering, theocratic neo-confederates no matter what.

If liberal Democrats prefer moderate ‘Rockefeller Republicans’, or big government Republicans, let them have each other. If they think the enemy is small town, small business people, let them feel that way. Democrats can have Republicans like the Bushes, an old New England Money Trust family, long term ally of the Rockefellers, with CIA connections and investments in the baby Standard Oil corporations. After all, when corporate exploitation, global imperialism, and war profiteering makes millions, they can cash in and use the money to look humanitarian later in life. Just don’t dress him up like a Texas good ol’ boy, and then blame flyover folk for him.

Not Reagan, Goldwater, Taft, Coolidge, Eisenhower, or possibly even Bush, Sr. would ever have done what George W. Bush did in Iraq and Afghanistan, or what Nixon did in Vietnam. (both cited for the claim: “Republicans are warmongers”) Meanwhile, Democrats Wilson, Truman, and Johnson started long wars based on the idealistic grounds of “spreading democracy”. It is the imperialist Republican war machine and CIA added to the liberal Democrat dream of international government that make a poisonous combination together.

Maybe a RINO is what we want. If RINO means secular Republican; with no evangelical Christian dogma influencing government policy, then RINO is good. If RINO means Republican who embraces science and new technology, then RINO is good. If RINO means anti-war Republican, who wants to cut military spending, then RINO is good. If RINO means socially liberal Republican, then RINO is good. If RINO does not recite unoriginal reactionary propaganda from Fox News, then RINO is good. If RINO is opposed to neo-conservative foreign policy, then RINO is good. Maybe RINO is what we need after all.

barry-goldwater-on-preachers

Balanced Budget Amendment Slated to be Rejected by Tomorrow

Rick Weber Economics, Liberty , , , ,

So Tomorrow’s the big day. The U.S. government is slated to hit the debt ceiling, and with it will be faced with the prospect of actually having a balanced budget. I think the situation is nicely summed up in the opening sentence to an article from Cato: “America faces two very serious budget problems: Democrats, and Republicans.” Of course behind those problems are voters who vote for their congressman to steal and object to others’ doing the same.

This root problem is interesting and I’d like to take a minute to speculate about it. It looks like long term economic growth in the U.S. will slow down. The pace of government expansion can only continue so long before growth slows to a crawl and we hit some equilibrium. What happens then? I think there will be two changes in patterns of entrepreneurship.

The first change is a general decline in growth-oriented entrepreneurship. As the returns to private investment fall, young innovative entrepreneurs will focus on improving their (non-taxable) lifestyle rather than getting rich. Better to run a cool boutique shop and spend lots of time loafing around than work your ass off to pay taxes. Even more likely, students trained in navigating public schools and subsidized colleges will find themselves more at home in bureaucracy than industry. C students will get productive jobs and A students will shuffle papers.

The second change is an exodus of entrepreneurs. The U.S. isn’t the only game in town. The ambitious few who decide they want to make it big (and whose entrepreneurial spirit hasn’t been ground down by life in a culture that isn’t any longer interested in such ambition) will go elsewhere. And places like the Cayman Islands will get freer and flourish as they attract these entrepreneurs.

The U.S. as a country will gradually fade from prominence, the world will be less free overall, but some places will do well and will perhaps foster long run shifts.

Separation of Church and State (More Islamophobia!)

Jacques Delacroix Current Events, Law, Religion , , , , , ,

…Malaysia’s appeal court ruled Monday [10/14/13 – JD] that a Roman Catholic publication can’t use the term ‘Allah’ to refer to the Christian God, despite its widespread use among Malay-speaking Christians.

…
The dispute dates back to 2007. After Syed Hamid Albar, then the home minister, prohibited the church’s Herald newspaper from using the word ‘Allah’- arguing it should be solely for Muslims….

From Gangopadhyay and Fernandez in WSJ 10/15/13, p. A13.

Technical note: “Allah” is a foreign word to all Malaysians. It’s an Arabic word. All Malaysians’ native tongues are unrelated to Arabic.

Yes, there may be more there than meets the eye. So? Try imagining a US court – state or federal- or a French court, ruling that Calvinists may not legally use a given foreign word, that the particular word is reserved for the use of Roman Catholics!

Not that the court ruling in Malaysia is that unfamiliar. They used to do stuff like that in Europe. It was some time ago, a long, long time ago, actually.

Obamacare: Working As Planned?

Warren Gibson Liberty

There has been a lot of talk about the problems of Obamacare as its rollout begins. “Obamacare may be imploding,” says Reason Magazine.  “Obamacare’s Website Is Crashing Because It Doesn’t Want You To Know How Costly Its Plans Are” says Forbes.

But what if these “problems” were fully expected and even desired by the more sophisticated perpetrators of Obamacare? What if they wanted it to fail? Why would they? Because they want its failure to lead to a total government takeover.

Ayn Rand’s villain Dr. Floyd Ferris in Atlas Shrugged comes to mind.  At one point he lays all his cards on the table:

We’re after power and we mean it. You fellows were pikers, but we know the real trick, and you’d better get wise to it. There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them…you create a nation of lawbreakers – and then you cash in on guilt.

Translation to 2013: if you don’t want to purchase health “insurance” we’ll make you a criminal. We’ll break your spirit and make you a helpless dependent.  (Incidentally, I put “insurance” in quotes because, as Dr. Beth Haynes so ably demonstrated in a recent Huffington Post piece, health insurance has been almost entirely abolished and replaced by prepaid medical expenses).

Of course the millions of boobs who believed Obama’s lies about the “Affordable Care Act” won’t be told any of this. They will continue to get the party line spoon-fed to them.

And the Obamacare perpetrators will never acknowledge that it was doomed from the start. They’ll acknowledge glitches, delays and screwups. They’ll blame them on software designers, Republican sabotage, anything and anybody but themselves. They will echo Wesley Mouch, Rand’s bureaucrat-dictator: “I need wider powers.” When they feel the timing is just right, and just enough problems have become evident, they’ll spring the trap: “single payer;” translation: total government takeover.

Ah, but this is a fine line they’re walking. Obamacare’s failure could be more catastrophic than they figured. There just might be enough of the spirit of liberty left in the American electorate to generate a backlash. The Republicans might take the Senate next year (not that they deserve it). Ludwig von Mises taught that a mixed economy is unstable but whether a particular mixed institution (Obamacare being perhaps 90% statist and 10% market) will move toward freedom or away from it.   Already the defenders of Obamacare are getting a little shrill, along the lines of, “it’s the law, get over it.”  And speaking of law, Obamacare is not law at all. It’s a statute. It utterly fails the test of genuine law, grounded in the natural rights of man. No one has any moral obligation whatever to obey this statute.

So stay tuned. While Single Payer may seem inevitable, to be followed by assaults on the remaining semi-free areas of the economy, one never knows. We live in interesting times.

Financial Armageddon; Hello Mongolia; Hello, Uganda!

Jacques Delacroix Current Events, Economics, Law, Politics , , ,

Today, this blog has had a hit from Mongolia and one from Uganda. I have no way of knowing whether any of these hits correspond to someone actually reading an item. WordPress, the sponsor of this blog, does not keep this kind of numbers. And, perhaps, it’s just as well. Visitors from outside North America are very welcome on this blog. They are also welcome to make requests. And I prize their rare comments.

This is the Nth day of federal government so-called “shutdown.” The American Left, the Obama Administration, various international pundits, have been predicting world financial Armageddon because of the shutdown and because of the budget battle that will probably follow. Instead the most common stock index, the Dow Jones Industrial Average, was up 62 points today. That’s not much but it’s not nothing. It’s up, not down. It’s not quite half a percentage point up (.42%). The French CAC40 was also up. Up is not down, no matter how you look at it.

The coming federal budget showdown (don’t confuse with “shutdown”) is about the executive branch borrowing money. It’s not borrowing money because it’s facing some extraordinary expense. It’s become routine. The belief that the federal government cannot operate within its financial means has become deeply anchored without ever being presented to the people for a vote or even for a talk. Conservatives object.

Many conservatives affirm that government borrowing should never occur except under dire and exceptional circumstances. Me, I am a wishy-washy moderate conservative. I could be convinced that federal borrowing is virtuous but I want the discussion to take place in the open. We are working on it.

There is a small technical thing that bothers me around talk of government “defaulting.” Perhaps, something can help me with this. Suppose I own government debt; suppose I own a Treasury Bond for $1,000 coming due on October first. If the federal government fails to give me my money on October 1st but, instead hands me on an IOU confirming it owes me $1,000 that it will pay soon, how worried should I be? Is my landlord not going to accept the IOU? Is the bank going to toss it into the waste basket?

And would the executive branch of government do something illegal, unconstitutional by issuing such an IOU?

Inequality Unexplained

Fred Foldvary Economics, Liberty , , , , , ,

There is a new economics documentary film that stars Robert Reich, former Secretary of Labor under President Clinton and now a professor at the Goldman School of Public Policy at the University of California at Berkeley. The film, Inequality for All,  directed by Jacob Kornbluth, won a U.S. Documentary Special Jury Award and has been shown nation-wide.

Unfortunately, Robert Reich has not explained why the US has had an increasing inequality of income. Neither in the film nor in his writings and interviews does he examine the cause. Without the elimination of the cause, there can be no remedy. As usual in documentaries of social problems, most of the film just describes and tells stories about the inequality.

Inequality for All is typical of welfare-state presentations in jumping to governmental responses that only treat the symptoms and effects. Reich advocates a higher minimum wage without any analysis what determines wages in a market economy.

Most basically, in a free market, ordinary workers are paid what economists call the “marginal product,” or what an extra worker contributes to output. If a worker adds $10 each hour to total output, then that is what he is paid, and that is what he is worth to the company. If the company pays him any less, say $8, that provides an opportunity for a similar company to offer $9 and get the $10 worth of output, so competition will drive the wage up to the worker’s contribution, his marginal product.

A minimum wage forces the firm to pay more than the worker’s marginal product. The firm will not hire a worker who costs more than he is worth. The reason that workers are not all dismissed is the law of diminishing returns. In a farm or factory, if there are only a few workers, each worker’s marginal product is high, because there is a lot of land and machines, and few workers. As workers are added, each extra worker contributes less extra output. Workers are hired up to the quantity for which the wage equals the marginal product.

The minimum wage acts like a tax on labor that forces the firm to reduce the number of workers employed to that level where the higher marginal product equals the required wage. In some cases, the firm will also respond by reducing benefits such as medical insurance such as by hiring part-time instead of full-time labor.

Many firms in competitive industries respond to the higher minimum wage as they would to a higher tax. They pass on some of the costs to the customers. The higher price reduces sales, production, employment, and income.

The minimum wage is lethal to the economy as it acts as an extra tax on employment on top of payroll taxes, unemployment taxes, workers insurance taxes, and the income tax on the profits of the firm. All these taxes reduce employment and reduce the take-home pay of the worker.

Henry George stated in his 1883 book Social Problems that “There is in nature no reason for poverty.” Poverty is caused not by any lack of natural resources but by human institutions that deprive workers of the ability to buy what they produce. The institution with the power to impose this intervention is government. The totality of restrictions, mandates, taxes, and subsidies reduces enterprise and takes away much of the product of labor. Then impoverished workers need the welfare state to provide the necessities of life.

The ideology of welfare statists makes them only think of governmental aid and reject the idea that governmental intervention is the source of the problem. They sneer at “free market fundamentalism.” They don’t understand the fact that taxes on labor redistribute wealth from workers to landowners as government taxes wages to pay for public goods that generate higher rent and land value. They don’t understand that the worker-tenant pays twice for the public goods of government, once by having half his wage taxed away, and a second time in the higher housing rental he pays because greater governmental services increase locational rents.

The effective remedy for poverty is to remove all punitive taxes and land-value subsidies. We can remove subsidies to the landed interests by having them pay back the rent generated by useful public goods such as roads, schools, and security. Without taxes on labor and enterprise, the cost of labor is lower to employers, while the worker’s take-home pay is higher. The replacement of wage taxes with land value taxes would reduce economic inequality while also increasing the productivity of the economy.

Of course the elimination of poverty also has to include better education, and that can be accomplished with vouchers, payments not to schools but to parents. A voucher is a ticket that a parent could use to send his children to the best schools. It provides an incentive for educators to produce better schools. It is not a panacea, because the home and neighborhood environment are also important, but it would shift the incentives towards better schooling.

It is not only unfortunate but astonishing that a leading professor of public policy who cares about the poor would not make the prosperity tax shift, replacing wage taxes with land value taxes, the core of his policy proposal. I suspect his response would be that while this is a good idea, it is politically unfeasible, while raising the minimum wage has political support. But the reason it is politically unfeasible today is precisely that leading reformers such as Robert Reich refuse to bring the effective remedy to public attention in the ultimately futile effort to advocate policies with the least current political resistance.

Much of the gains from economic growth and welfare get captured by higher rent and land value. Raising the minimum wage is futile because if all workers get a substantially higher minimum wage, their landlords will be able to raise their housing rentals by the amount of their greater ability to pay, and the landed interests will end up with the gains. Why do you think that housing costs have been escalating while wages stagnate?

News you can abuse from the New York Times

muricaderp Books, Economics, History, Links, Religion , , , , , , , , ,

Annoyed New York Times readers are asking why the Gray Lady recently deigned to publish an advice piece on avoiding interpersonal and legal troubles with one’s household staff. I can answer this:

1) A paper must cater to the demographic that actually buys the obscenely overpriced, and roundly obscene, items that it advertises, instead of just staring in amazement that such things exist. The Times’ gleaming new office building across from the Port Authority ain’t paying for itself, now.

You probably are not part of that demographic. When I’m cooking my own quesadillas and potato-onion stirfries in a housekeeping motel in Springfield, Oregon, I most certainly am not.

2) It is excellent click bait and a good business practice to regularly troll the poors.

My main topic tonight, however, is this week’s book review of a new Malthusian work, Countdown, arguing that the world population is overshooting its carrying capacity and nearing a crash.

I definitely find some of the alleged threats in question quite concerning, in particular the brittleness of modern crop monocultures (the Ug99 wheat stem rust is partially contained so far, but it’s no joke) and the depletion of the world’s fisheries. It’s worth noting that that’s why Somalia has so many pirates these days. Somalia has gone a generation without a coast guard. As a result, it has practically no fishery left, foreign trawlers having effectively strip-mined it in the absence of any functioning sovereign government, but as Captain Philips could tell you, it is a nation (if that) lately renowned for its fishers of men. Notice, too, that Iceland, settled by Vikings, does not have pirates or an extremist sectarian militia but does have a coast guard that opens live fire on poaching vessels within its territorial waters. These things are related.

The author, Alan Weisman, starts with a buzzkill for those who love them some Biblical living. According to the review, “Because of agricultural irrigation, the Jordan River is now a ‘fetid ditch’; pilgrims who attempt to bathe at the spot where Jesus is said to have been baptized will develop a rash and, if they swallow the water, will most likely vomit.”

Actually, Ecclesiastes was right: there’s nothing new under the sun, at least not in Holocene times. Check out this foreign army commander bitching to Elisha’s messenger in 2 Kings 5:12 about the skankiness of the Jordan, presumably not knowing its coming longue durée: “‘Are not Abana and Pharpar, the rivers of Damascus, better than all the waters of Israel? Couldn’t I wash in them and be cleansed?’ So he turned and went off in a rage.”

Dude eventually listened to the obscurantists, took his dip, and was cured. These days, the Jordan will more likely give a man leprosy, but it isn’t so much different as merely worse: thousands of years ago, rational people were scared to swim in that shit.

That said, things can get really unstable as they’re scaled up. A few tens of thousands of people watering their riverside farms from the same glorified creek may be sustainable. Several million people trying to water major cities and industrial monocultures from the same glorified creek is not sustainable at all.

The inevitable result is war. What, all sides swear that they’re holy peoples living in the Holy Land? Tough titty: they’ve still got war. In fact, they’ve got even more of it, since they’re not just desperate for resources but also inflamed by sectarian passions, the two aspects of their anger feeding one another.

As an institution, it’s good for a lot more than Edwin Starr ever wanted to contemplate. The Nazi expansion into Eastern Europe was about the glory of the Deutsche Volk, but it was also about the oil fields of Ploiesti. Hitler was a megalomaniac, but he wasn’t a total fool. Japan had an even starker motivation for its invasions of Korea (coal) and Indochina (oil, lumber, rubber): it was a heavily populated archipelago devoid of many important natural resources and, starting in 1941, under American embargo at a time when the US was the world’s top oil producer.

In a moral sense, though, Starr was right. War is a travesty. One has to be a bit dense or a lot immoral and atavistic not to recognize this. (These are great traits for government “service,” by the way.) A huge portion of the restiveness in the world can be straightforwardly explained by blatant resource shortages in times of growing population. It’s a total buzzkill for the nationalist and the End Times aficionado (similar personality types, and often the very same people, no?) but it’s true. Surely there must be an alternative to this madness.

There is. Brace yourselves.

Japan.

[T]he fertility rate is so low–1.4 children per female–that the population has been declining since 2006. This might make Japan something of a best-case situation, but an aging population means there are too many senior citizens, and not enough young people to take care of them. Already Japan has a shortage of geriatric nurses. Weisman visits Nagoya Science Park, where Japan’s oldest scientific firm has built RIBA II, a robotic white bear designed to carry elderly people around the house. It has large, widely-spaced black eyes, cute little ears and a painted smile.

“I will do my best,” says the bear, as it approaches a man who is lying on a hospital bed. “I will carry you as though you were a princess.”

RIBA II slides one paw under the patient’s knees, the other beneath his back. The robot cradles the man in its arms. It carries the man across the room, and lowers him tenderly into a wheelchair.

“I’m finished,” announces RIBA II, and it’s hard not to wonder whether the robot speaks for us all.

That bear won’t be finished with me until it can respond to my follow-up command: “Fuck you. Bring me a White Russian.”

Even if you’re familiar with Hello Kitty, you’ve probably been mercifully ignorant of Fukuppy. No more. He (she? it? ooh, goody: “indeterminate gender”) is like the Maytag Man, but actually a smiling Humpty-Dumpty with angel’s wings. Don’t blame me; I’m not the one using that imagery to market refrigeration equipment.

Why do I get the vague sense that there’s something off about modern Japan’s zeitgeist that isn’t all about raw demographics? Hello Kitty, Fukuppy, girls’ shopping getaways to Vegas, the hikikomori and the dame-ren, virtual girlfriends, a popular magazine imploring young people to start having sex again, a robotic bear that promises to carry old geezers like princesses: this isn’t just a skilled nursing shortage. If the papers aren’t reporting about how similar demographic changes play out in, say, Russia, it’s probably because the results aren’t weird enough. Babushka hoeing her cabbage patch again while her grandkids shoot smack behind a disused asbestos factory, or shut-ins who only leave the house to go on “honeymoons” with pixellated “girlfriends” while bedridden grandpa is romanced by ElderBear: which would you rather read?

There is, however, a bit of good news about Japan’s demographic profile. Rod Serling would approve.

La Fermeture du gouvernement fédéral

Jacques Delacroix Current Events, Politics , ,

Le gouvernement fédéral est fermé, enfin, en partie, enfin, un peu. C’est arrivé parce que les deux grands partis n’arrivent pas à se mettre d’accord sur le budget a venir. Jusqu’ici, on prend encore au sérieux ici la disposition constitutionelle qui fait du parlement la seule institution capable de décider du budget fédéral. Le Président peu tonitruer et pleurnicher tout ce qu’il veut; il n’est pas encore prêt à violer la constitution aussi visiblement.

Le gouvernement fédéral a été obligé de séparer ses fonctionaires entre les “essentiels” et les “non essentiels” pour décider qui mettre temporairement à pied. C’est un pas en avant pour le jour ou on fera vraiment le ménage.Il y a beaucoup trop de fonctionnaire fédéraux et ils sont trop payés; ils possèdent aussi trop de privilèges économiques inexpliqués.

Au raz du sol, la vie continue comme d’habitude sauf que le parc national du Grand Canyon a été fermé pendant quelques jours. La Bourse, elle, a haussée les épaules malgré les avertissements de Fin du Monde de l’administration Obama relayés et amplifiés par les presses étrangères aussi ignorantes que bebêtes.

Extremist Republicans Did the Right Thing

Jacques Delacroix Current Events, Liberty, Politics , , , , ,

There is a poll suggesting that the Republican Party is taking a public opinion thrashing for provoking a government so-called “shutdown.” I don’t think there is much of a shutdown. And I don’t think a single poll means anything. If there were four convergent polls showing the Republicans being blamed, I would still support Republican e “extremists”, including Ted Cruz.

We will not get Obamacare defunded. That was hardly ever in the cards. It was just a good time to draw the American’s people attention to the abnormality that it the federal government. It’s a good time because its own actions right now illustrate both its pettiness and its gross incompetence. Keep veterans out of veterans’ monuments and fail just about 100% on the implementation of a vast ambitious program legislated on a completely partisan basis.

In addition, thanks to the crisis, many young people will be astonished to discover that, like them with their credit cards, the Federal Government cannot pay its bills to Peter without borrowing from Paul. Nothing new here; its’ just that many citizens don’t know this simple fact.

I don’t buy the argument that, of course, there was going to be technical glitches with Obamacare. Implementation of Obamacare is a big big project, of course, but it does not involve any novel technical challenge. And they had four years. And they could have asked Facebook, for example, to take charge. The federal government rarely does a small trivial thing well. There was no reason to believe it could do a big important thing well.

The main things Pres. Obama said four years ago about reforming health care turn out to be wrong, false. I don’t think he was lying then. I believe he and his advisers never had any idea of what they were talking about. They still don’t.

I am glad there were members of the Republican Party in Congress who manned up enough to point to the obvious.

If the Republican Party suffers as a result of the present crisis, I think it will have been worth it. Personally, I am not much invested in a Party that’s a little of everything and of anything. It’s conservatism that matters, the conservative perspective on the world. It’s the perspective that says that the best government is that which governs least. It used not to be a radical thought.

Yesterday, we buried my friend Filip. I had only known him for a few years but his departure leaves a hole in my mind and in my heart. At first, he was just a needed financial adviser. Then, we became friends around conservative politics and braised sweetbreads. We had both in common because we were both immigrants. We both detested authoritarianism and we both liked earthy foods. I was reared in France. My earthy food talents are good. Filip was reared in Communist Romania. His authoritarianism detector was superb. We were complementary.

Misunderstanding freedom of the press

Tibor Machan Current Events, Law, Liberty , , , , ,

Katherine Rushton of The Daily Telegraph wrote a column trying to embarrass those in America, like Republican lawmaker Kieran Michael Lalor, who oppose bringing in Al Jazeera television on to the American television news market. Ms. Rushton feels such opposition is a kind of ethnic prejudice, not sound journalism. Dubbing Al Jazeera “Al Jihad,” such efforts may well be over the top but not necessarily.

Suppose Americans had opposed making room for Pravda and Izvestia in America or some Nazi or fascist broadcasters in the past. Would this prove them to be prejudiced, unfair, biased? I personally object to NPR (National Public Radio) and PBS (Public Broadcasting Service), not at all because I am prejudiced but precisely because I consider it dangerous to treat government funded and supported “journalism” and “entertainment” as if it were just like some private outfit such as HBO, The New York Times or Time magazine.

When governments fund news outfits, they go astray in several ways. They take money by force from citizens to support what those citizens may well not want supported! They enjoy a competitive advantage as against those who do not use taxpayers’ resources. And when it comes to Al Jazeera, there is no other government-owned – it is owned by the Qatari government(!) – service pretending to be journalists instead of propagandists. (Not everything on Al Jazeera has to be tainted by government bias for one to be justified in being suspicious of the content of its broadcasts.)

Frankly, even the venerable BBC is a misguided institution and its reputation rests mainly on its traditional commitment to straight newscasting, not on its official restraint. Ms. Rushton complained that “Meritocracy is all well and good for certain ethnic minorities.” But evidently not for those with Middle Eastern or Islamic ties.

Maybe not so. Maybe what bothered Kieran Michael Lalor has nothing to do with ethnic ties but with evident enough efforts by Al Jazeera to cast jihadists in a favorable light. I don’t know this for sure but if so, that would certainly justify skepticism about Al Jazeera’s credentials and a bona fide news-broadcasting organization. Whenever I check out Al Jazeera, I sense that jihad is treated with kid gloves.

Genuine freedom of the press has no government involvement of any kind. Competition among newspapers, broadcasters, magazines, etc. arises from the initiative of entrepreneurs! Otherwise we are back to Pravda and the like, which should not be treated as agents of a free market of newscasting.