Wednesday, November 19, 2008

What If GM Going Bankrupt Would Really Be a GOOD Thing??

The rush to lend billions to US car makers, especially General Motors, is being done in the usual fashion: Wild claims of imminent disaster, very little skepticism or hard questioning by the media.

GM has put a video on YouTube summarizing the case, claiming a 4% drop in GDP, millions out of work, decimated tax revenues to the feds, and a loss of large industrial capacity that would cripple US national security (because GM and Ford make military tanks, for example).

Let's back up the panic bus for a minute here.

First, the argument is that *the entire US auto making industry* would collapse -- GM, Ford, and Chrysler. But think about it for a minute: If GM went bankrupt and *stopped making cars,* would that not be GOOD for Ford and Chrysler? A competitor -- who holds half the market -- has just gone away? Won't Ford and Chrysler start selling MORE CARS?

If you wonder, consider this thought experiment: Imagine that Ford and Chrysler are the only two US carmakers, and somebody comes along and proposes, at his critical juncture, to launch a gigantic new card company, one they'll call GM. Imagine the reaction: People would point out that huge new competition in such hard times would devastate Ford and Chrysler!

Well then: Wouldn't GM going away HELP Ford and Chrysler?

Of course it would. Not immediately, because there would be all those stranded GM cars in inventory, thrown on the market at firesale prices. But once that several-months inventory goes away, presumably Ford sales would jump.

Consider this: If Ford sales would *not* jump at that point -- that means Ford can't sell cars even when their chief competitor evaporate! So what would the point of "loaning" them billions of taxpayer dollars? They can't *possibly* recover! And can't possible repay the "loan." Could they!

Companies going out of business is a regular occurrence, even in a healthy economy. In fact, the risk and the fact of bankruptcy contributes to the health of a free economy. The worst thing for the economies of socialist/dirigiste/communist countries has always been the government-owned businesses that cannot fail, no matter what. They eat up resources; they produce inferior products nobody wants; they create a sense of entitlement by everyone in those companies; they encourage the worst tendencies among the populace towards "rent seeking," which is seeking success from the government rather than from the marketplace.

So let's ask the questions nobody so far, nobody in the mainstream media, seems to be asking.

* What happens--really--if GM declares bankruptcy?

* If GM reorganizes under bankruptcy law, they recast their relations with their trade unions and can seek to lower their oppressive costs. This of course alarms the unions, which explains some of the panic language all around-- naturally, the unions don't want to give up their rich contracts, contracts which every student of the U.S. auto industry considers the main cause of the distress of the car business in tough economic times.

* So we're lending billions to the car industry to protect the car unions?

* Doesn't this remind you of government programs that are ever in financial crisis and can never, ever cut costs, but must always, always get more money every year? Hmmm.

* Is that a good thing?

* Let's seriously consider what happens if GM goes Chapter 7 bankruptcy and actually goes out of business. (This is the scenario the auto industry and its unions are fearmongering.)

* Won't this help Ford and Chrysler? Might it not actually save them?

* Won't it also help the Japanese car companies, all of whom manufacture in the U.S. almost all the cars they sell here?

* Won't that create new job opportunities for the laid-off workers of GM?

* Won't getting rid of the oppressive, unaffordable, gold-plated, Senator-style retirement and health packages of GM be good for the industry? Currently, it can only afford these contracts during those brief times when the economy is in boom times.

* Wouldn't the bankruptcy of GM be likely to *save* Ford and Chrysler from bankruptcy?

* Will hundreds of thousands have to leave Michigan and find work elsewhere, in other industries? Won't the bankruptcy release tied-up capital and human resources for the rest of the economy?

Once we've taken the path, as we already have in the financial and banking sectors, of "too big to fail" bullshit, where does it end? Where is the line? Why would there be a line anywhere? Why would it end anywhere? Why wouldn't every business be encouraged by this to get as big as possible so as to be able to have that government guarantee for any future foolish behavior?

There are lots of questions. The politicians don't ask them because they like campaign contributions from industry and union lobbyists, and they don't like having union opposition in the next election. The press doesn't ask them because they get all their quotes from the politicians and from the interested parties. There are no more objective third-party commentators.

Except Reason Magazine. I await their next major feature dealing with all this in an honest and hardnosed way.

We are all doomed.

Monday, November 3, 2008

The Pleasures of Voting for the No-Chance Candidate!

I voted for the Libertarian candidate for President in the 2008 election.

What's his name.

It doesn't matter!

That's the great thing about voting for someone you know has no chance of winning: You don't have to worry about such practical issues as Will he stay on message once he's in office? Is he really competent or a knucklehead personally? How will he react to the unexpected crisis? Dos he have the experience to handle the job? Has he cheated on his spouse? Does he have anything else shameful or embarrassing in his past?

He's not going to win, so none of this matters a whit!

I can vote as an expression of my vision of the role of government in society. I don' t have to worry about distractions.

Try it sometimes! Try voting for the candidate whose politics are closest to yours. Or least far away. Leave out the personality issues. Leave out the stupid "horse-race" aspects too, the one the press obsesses about most! It doesn't MATTER if you "throw away your vote" -- this isn't ACTUALLY a horse race! Nobody's going to come to your door November 5th and pay you your winnings for having correctly bet on the winning candidate!

Vote your vision. Have a vision! Educate yourself! Then act! Without just mindlessly doing what the political class says! And what the press says, because they just echo the mindset and wordview of the political class!

Difference between McCain and Obama, really...

Mises Daily Article today:

"This year we have running for president a warmonger who's a reluctant socialist versus a socialist who's a reluctant warmonger."

That about summarizes it for me. I finally decided to go ahead and vote for my Libertarian candidate, who can't win but at least he's neither a warmonger nor a socialist of any kind....

- mac

Sunday, November 2, 2008

Campaign Promises in Hell (joke)

While walking down the street one day a US senator is tragically hit by a truck and dies.

His soul arrives in heaven and is met by St. Peter at the entrance.

'Welcome to heaven,' says St. Peter. 'Before you settle in, it seems there is a problem. We seldom see a high official around these parts, you see, so we're not sure what to do with you.'

'No problem, just let me in,' says the man.

'Well, I'd like to, but I have orders from higher up. What we'll do is have you spend one day in hell and one in heaven. Then you can choose where to spend eternity.'

'Really, I've made up my mind. I want to be in heaven,' says the senator.

'I'm sorry, but we have our rules.'

And with that, St. Peter escorts him to the elevator and he goes down, down, down to hell.

The doors open and he finds himself in the middle of a green golf course. In the distance is a clubhouse and standing in front of it are all his friends and other politicians who had worked with him.Everyone is very happy and in evening dress. They run to greet him, shake his hand, and reminisce about the good times they had while getting rich at the expense of the people.

They play a friendly game of golf and then dine on lobster, caviar and champagne.

Also present is the devil, who really is a very friendly & nice guy who has a good time dancing and telling jokes.

They are having such a good time that before he realizes it, it is time to go. Everyone gives him a hearty farewell and waves while the elevator rises...

The elevator goes up, up, up and the door reopens on heaven where St. Peter is waiting for him.

'Now it's time to visit heaven.'

So, 24 hours pass with the senator joining a group of contented souls moving from cloud to cloud, playing the harp and singing. They have a good time and, before he realizes it, the 24 hours have gone by and St. Peter returns.

'Well, then, you've spent a day in hell and another in heaven. Now choose your eternity.'

The senator reflects for a minute, then he answers: 'Well, I would never have said it before, I mean heaven has been delightful, but I think I would be better off in hell.'

So St. Peter escorts him to the elevator and he goes down, down, down to hell.

Now the doors of the elevator open and he's in the middle of a barren land covered with waste and garbage. He sees all his friends, dressed in rags, picking up the trash and putting it in black bags as more trash falls from above. The devil comes over to him and puts his arm around his shoulder.

'I don't understand,' stammers the senator. 'Yesterday I was here and there was a golf course and clubhouse, and we ate lobster and caviar, drank champagne, and danced and had a great time. Now there's just a wasteland full of garbage and my friends look miserable. What happened?'

The devil looks at him, smiles and says, 'Yesterday we were campaigning...


Saturday, November 1, 2008

Funny Obama Cartoon in Doonesbury Wednesday--Too Bad You Won't Necessarily See It

According to the SF Chronicle Saturday (Nov 1), Doonesbury cartoonist Gary Trudeau has turned in to publishers his cartoon for Wednesday, the day after the election. In it, his joke depends on Obama having been elected, so his syndicate offered a back-up cartoon--a rerun from the summer--in case publishers get cold feet.

The cartoon for Wednesday is described as set in Iraq where some GI's sit around a TV listening to the election returns. As it's clear Obama has won, one white soldier turns to another and, noting that Obama is half white, says "Son of a gun, what a great day. We did it." Another soldier, who is black, turns to his white colleague and says, "You must be so proud!"

*That* is *funny*! And gutsy. But most of all, funny as hell! And fresh: Few have taken up the half-white half-black aspect of Obama and twisted it around to mock racism like that. As one report said last week, a kid asked his parent why, if Obama is half white and half black, he's referred to as black; why isn't he called white? The classic rationalist dig against the "one drop of black blood" racism of slave days and after (Mark Twain wrote an absorbing novel on this theme, "Puddinhead Wilson," that plays havoc with its irrationality).

But if you get the SF Chronicle, you won't see this cartoon in your paper; the relevant editor says that since the comics section goes to press before the election results are known, he's playing it safe with the backup comic. "We certainly don't want to be doing a 'Dewey-defeats-Truman,'" he says.


Monday, October 27, 2008

The Coming Republican Crisis: What They Had Better Keep In Mind!

The Independent Institute's email newsletter today, October 27, tells what reforms Republicans must consider in the inevitable backlash that will occur after Barack Obama wins the presidency next week:

Conservatives in Crisis
Barack Obama's recent endorsements from Christopher Buckley and Colin Powell, and strong criticisms of the Republican Party made by fellow travelers such as Kathleen Parker, Peggy Noonan, and David Brooks, suggest that the G.O.P. is headed for a major shake-up after next week's election, according to Independent Institute Senior Fellow Alvaro Vargas Llosa, director of the Independent Institute's Center on Global Prosperity.

Vargas Llosa points to three factors within the Republican Party that have contributed to recent defections and falling popularity with voters: its blurring of a populism that mistrusts political pull and a populism that favors rural culture over urban culture; the clash between the rhetoric of limited government and the reality of growing federal expenditures under the Bush administration and its congressional supporters; and the spread of a neo-Puritanism. Until Republican leaders straighten out the mixed messages they are sending the rank and file, their party's electoral victories are likely to become increasingly elusive.

Vargas Llosa writes: "After the elections, conservatives will have to do some serious soul-searching and ask themselves a few simple questions: How was it that they let their movement and their party be hijacked by people who were hellbent on disfiguring the face of American conservatism? How was it that the self-styled party of individual liberty became, in the eyes of many, the party of big government, intolerance and jingoism?"

"The Conservative Rebellion," by Alvaro Vargas Llosa (10/21/08)
Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa.
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa.

Political Documentary "Do As I Say" Premieres Oct 30 in SF - See It! (I Will!)

The Nick Tucker documentary based on Peter Schweizer’s bestselling 'Do As I Say (Not As I Do): Profiles in Liberal Hypocrisy' will premiere in San Francisco Thursday Oct 30 at 7pm, sponsored by The Pacific Institute. Details of the event:

Screening and reception in Embarcadero 1 Theater, San Francisco
Reception at 6, screening at 7, followed by discussion w/Nick Tucker, Director.
[Parking avail in Embarcadero 1, w/validation prov. by Cinema]

Reserve 415-955-6110 or

"Americans can tolerate anything but a hypocrite!"

About the Film:

With the 2008 election cycle in full swing, it’s hard to turn on the television or open a newspaper without finding liberal politicians, professors, pop stars, and pundits blaming the world's problems on America's free enterprise system, its democratic tradition, and its core values of individualism and self-reliance. But how sincere are they about their beliefs? How do they live?

'Do As I Say (Not As I Do)' spent eight weeks on the New York Times bestseller list when it was published in 2005. Now, the book that The Economist named the ninth biggest selling political work on the planet is returning as a film. Nicholas Tucker and Lucas Abel are bringing Schweizer’s character portraits to life—because only a movie can really show us what hypocrisy in action looks like.

I'll be attending a trade tasting of Argentine wines all afternoon, so I may arrive at the screening in JUST the right mood for watching 90 minutes of two-faced idiots issuing orders! Hah!

Another clear explanation of "Mark to Market" rules and how they created the current financial chaos...

I enthusiastically recommend that you jump over to "Heckonomics: Mark-to-Market," at the web site, where you will find the clearest and most straightforward explanation of the Mark-to-Market banking regulations, and how they were key to destroying our financial system.

It echoes my own views in an email discussion with a friend a few weeks ago. The above is worth clicking, because you will be a lot clearer on this than you were five minutes ago.

As a libertarian, I am weirded out by this. I've been reading recent triumphant editorials about how 'massive deregulation' of financial markets is at the core of the disaster, where gimlet-eyed government regulators weren't allowed to pull us back from disastrous misadventure. Yet the actual government regulators on the banking side (yes, there are a *few*) completely failed to consider the impact of mark-to-market regulations -- *their* regulations -- and apparently never considered, or recommended, or mentioned, the possibility of suspendng, or temporarily softening, these regs in order to relieve pressure on otherwise sound banks -- a much cheaper and faster resolution to the panic than the huge spending plan and takeovers we'll be enduring for months if not years. 

Of course, being a libertarian, I can't help noticing that these same government regulators (unless you've got another, more competent crop somewhere else they plan to bring in just for this), the ones who would be smart enough not to let banks and brokers invest in newfangled financial instruments -- are the same government regulators who weren't smart enough last month to *notice* that their existing regs--inflexible, unadaptable regulations--were strangling the banking business.  

Maybe it was because they didn't read about it in the papers, because none of the financial reporters appeared to notice or ask about it. Then or since.  

I am disgusted with all of them and everything about this.


Obama vs McCain vs Barr: On the Other Hand....

The temptation to vote for Obama in this historic campaign is very high, for many reasons. On the other hand, there are fears and discomforts for a nonLiberal like myself (a Libertarian) that are summed up well in an Oct 18 article in The Economist by their columnist Lexington, titled "John McCain's Last Chance," which lists several things McCain's campaign should hammer on.

One is "the dangers of single-party rule in Washington, DC... There is a real possibility that they may attain a 60-seat filibuster-proof majority in the Senate... This would allow them to push through a wish-list of Democratic proposals on everything from "fair trade" to spending." This is a real worry. Not that the Republicans have managed to avoid signing expensive Democratic proposals into law...

"More significantly, though, is that Mr Obama has always been particularly close to two groups that are the bane of most businesspeople's lives--lawyers and trade unionists. Both Mr and Mrs Obama are lawyers....

"America's trade unions clearly regard an Obama administration as a golden opportunity to reverse their long-term decline: hence their willingness to spend more than $200m getting him elected. They want to get rid of secret ballots in decisions about unionisation. They also hope to get rid of right-to-work laws (22 states currently have such laws, which prohibit the 'closed shop' practice of requiring workers at a particular business to belong to a union.)."

".... Third, Mr McCain should point out that his opponent has never once in his career said boo to a Democratic goose. In Chicago he got on well with everybody, fro the local teachers' unions to the Daley political machine. In the Senate he has voted with his party 97% of the time. He toes the most liberal line on late-term and partial-birth abortion. Even a highly experienced Democratic president with a record of bucking his party would find it hard to tame a large Democratic majority in Congress. A neophyte with a record of going along to get along could find it impossible...."

Makes me crazy. I think I will just vote for my Libertarian candidate and stop trying to overthink it, or trying to be on the historic bandwagon....

Tuesday, October 21, 2008

The End of Libertarianism and Other Adventures in Financial Policy Fantasy

Don't blame free markets for the current panic

By Jeffrey A. Miron October 21, 2008 [on]

In a recent piece that appeared at Newsweek and his own web publication, Slate Editor in Chief Jacob Weisberg announces "the end of libertarianism."

Responding to commentators who believe that misguided government policies caused or contributed to the current financial mess, Weisberg asserts that the real culprit is the libertarian financial policy (which banned "any infringement of the right to buy and sell") that the U.S. has allegedly pursued in recent years. We're in the midst of "a global economic meltdown made possible by libertarian ideas," writes Weisberg, who adds that intellectually vapid libertarians simply cannot "accept that markets can be irrational, misunderstand risk, and misallocate resources or that financial systems without vigorous government oversight and the capacity for pragmatic intervention constitute a recipe for disaster." Libertarian policies have failed so miserably, he concludes, that it is time to toss libertarianism, like Soviet communism, on the trash bin of history.

Excuse me? Are you serious, Jacob?

Whatever one's views of libertarian policies, the incontrovertible fact is that the U.S. has not pursued such policies. Not in the past 10 years. Not in the past century. Indeed, except for a brief moment before Alexander Hamilton engineered the first U.S. bailout of financial markets, not ever. If the U.S. had truly been the "Libertarian Land" that Weisberg alleges, a huge range of policies that have helped fuel the current situation would have been radically different....


The Founding Father of Crony Capitalism: Alexander Hamilton

The current financial crisis demonstrates once again that Alexander Hamilton was one of the worst things to happen to America.

Daily Article from, the site of the Austrian school of economics
by Posted on 10/21/2008 . [Emphases below added by Mac]

As soon as the federal government announced its trillion-dollar bailout (for starters) of Wall Street plutocrats, defenders of the bailout pulled out what they apparently believed was their secret weapon: the myth of Alexander Hamilton as the alleged inventor of American capitalism. Hamilton, they said, would approve of the bailout. Case closed. How could anyone dispute "the architect of the American economy"? immediately published an article entitled "Alexander Hamilton versus Ron Paul" to make the point that libertarian critiques of the bailout should be dismissed, since Hamilton was such a great statesman compared to Congressman Paul and his supporters. The Wall Street Journal Online published a piece by business historian John Steele Gordon in which he argued that our real problem is that central banking is not centralized enough; called for a financial-market dictator/regulator; supported the bailout; and, most importantly, blamed the current economic crisis on … Thomas Jefferson! Jefferson opposed America's first central bank, Hamilton's bank of the United States, and was a hard-money advocate. It is this kind of libertarian, free-market thinking, said Gordon, that is the cause of the current crisis.

What all this frantic Hamilton idolatry demonstrates is how the myth of Alexander Hamilton is the ideological cornerstone of the American system of crony capitalism financed by a huge public debt and legalized counterfeiting through central banking. It is this system that is the real cause of the current economic crisis — contrary to the false proclamations issued by and the Wall Street Journal.

We live in "Hamilton's republic," as the writer Michael Lind has proudly stated. Americans may like to quote Jefferson, George Will once wrote, but we live in Hamilton's country. This is true, but it is not the blessing that people like Lind, Will, and others proclaim. Just the opposite is true, as I argue in my new book, Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution — And What It Means for America Today.

The Real Hamilton
Hamilton was the intellectual leader of the group of men at the time of the founding who wanted to import the system of British mercantilism and imperialistic government to America. As long as they were on the paying side of British mercantilism and imperialism, they opposed it and even fought a revolution against it. But being on the collecting side was altogether different. It's good to be the king, as Mel Brooks might say.

It was Hamilton who coined the phrase "The American System" to describe his economic policy of corporate welfare, protectionist tariffs, central banking, and a large public debt, even though his political descendants, the Whig Party of Henry Clay, popularized the slogan. He was not well schooled in the economics of his day, as is argued by such writers as John Steele Gordon. Unlike Jefferson, who had read, understood, and supported the free-market economic ideas of Adam Smith, David Ricardo, John Baptiste Say (whom Jefferson invited to join the faculty of the University of Virginia), Richard Cantillon, and Turgot (a bust of whom still sits in the entrance to Monticello), Hamilton either ignored or was completely unaware of these ideas. Instead, he repeated the mercantilist myths and superstitions that had been concocted by apologists for the British mercantilist state, such as Sir James Steuart.

Hamilton championed the cause of a large public debt — which he called "a public blessing" — not to establish the credit of the US government or to finance any particular public works projects but for the Machiavellian idea of tying the interests of the more affluent to the state: being government bondholders, they would, he believed, then support all of his grandiose plans for heavy taxation and a government much larger than what was called for in the Constitution.

He was right. They, along with Wall Street investment bankers who have marketed the government's bonds, have always provided effective political support for bigger government and higher taxes. That is why Wall Street investment bankers were first in line for a bailout, administered by one of their fellow investment bankers, Treasury Secretary Paulson.

Hamilton argued for a large standing army not because he feared an invasion by France or England, but because he understood that the European monarchs had used such armies to intimidate their own citizens when it came to tax collection. Evidence of this is the fact that Hamilton personally led some 15,000 conscripts into Western Pennsylvania (with George Washington) to attempt to quell the famous Whiskey Rebellion. He was eventually put in charge of the entire expedition, and rounded up two dozen tax protesters, every one of whom he wanted to hang. They were all pardoned by George Washington, however, to Hamilton's everlasting regret.

In a publication entitled "A History of Central Banking in America" the Fed proudly labels Hamilton as its founding father, boasting that he even spoke just like a contemporary Fed chairman. The First Bank of the United States, which was opposed by Jefferson and Madison, created 72 percent inflation in its first five years of operation, as Murray Rothbard wrote in A History of Money and Banking in the United States. It was not rechartered in 1811, but was resurrected by Congress in 1817, after which it created America's first boom-and-bust cycle, which led to the Panic of 1819, the title of another of Rothbard's great works on American economic history.

After years of generating political corruption and economic instability [c.v. Fannie Mae/Freddie Mac--mac], Hamilton's bank finally came to an end by the early 1840s, thanks to President Andrew Jackson. This led to the twenty-year "free banking" era. Hamiltonian central banking was resurrected once again in the 1860s with the National Currency Acts. This is an important reason why some historians have labeled the postwar decades as a period of "Hamiltonian hegemony."

When Anna Schwartz, Michael Bordo, and Peter Rappaport evaluated this precursor to the Fed in an academic publication, they concluded that it was characterized by "monetary and cyclical instability, four banking panics, frequent stock market crashes, and other financial disturbances" (see their paper in Claudia Goldin, ed., Strategic Factors in Nineteenth-Century Economic Growth). Naturally, the government's response to all of this economic panic and instability caused by centralized banking was to create an even more centralized banking system with the Federal Reserve Act.

Hamilton is perhaps best known among economists for his Report on Manufactures. In his 1905 biography of Hamilton, William Graham Sumner wrote that Hamilton's report advocated "the old system of mercantilism of the English school, turned around and adjusted to the situation of the United States." Thomas Jefferson also wrote that Hamilton's "schemes" for protectionism, corporate welfare, and central banking were "the means by which the corrupt British system of government could be introduced into the United States." He was right.

Hamilton's reputation as having had great expertise in economics and finance has been greatly exaggerated, wrote Sumner, who also wrote that Hamilton's economic thinking was marred by "confusion and contradiction" and that Hamilton was "befogged in the mists of mercantilism." Unfortunately for us, all of Hamilton's bad ideas "proved a welcome arsenal to the politicians" who succeeded him, noted Sumner.

At the constitutional convention Hamilton proposed a permanent president who would appoint all the governors of the states and would have veto power over all state legislation. His opponents correctly interpreted this as advocating a monarchy and, worse yet, a monarchy based on mercantilism. The reason for consolidating all political power first in the central government, and then in the hands of one man, the permanent president, was so that an American mercantilist empire could be centrally planned and controlled without any dissenters, such as tax protestors or free traders who resided in the various states. Hamilton (and his political heirs) understood that forced national uniformity is the only way in which such a central-planning scheme could work. The socialists of the 20th century understood this as well.

Hamiltonian mercantilism is essentially the economic and political system that Americans have lived under for several generations now: a king-like president who rules through "executive orders" and disregards any and all constitutional constraints on his powers; state governments that are mere puppets of the central government; corporate welfare run amok, especially in light of the most recent outrage, the Wall Street Plutocrat Bailout Bill; a $10 trillion national debt ($70 trillion if one counts the government's unfunded liabilities); a perpetual boom-and-bust cycle caused by the Wizard of Oz–like central planners at the Fed; constant military aggression around the world that only seems to benefit defense contractors and other beneficiaries of the warfare state; and more than half of the population bribed with subsidies of every kind imaginable to support the never-ending growth of the state.

This is Hamilton's curse on America — a curse that must be exorcized if there is to be any hope of resurrecting American freedom and prosperity.

Thomas DiLorenzo is professor of economics at Loyola College in Maryland and a member of the senior faculty of the Mises Institute. He is the author of The Real Lincoln, Lincoln Unmasked, How Capitalism Saved America, and, more recently, Hamilton's Curse. You can receive the Mises Daily Article in your inbox. Go here to subscribe or unsubscribe.

The End of Libertarianism? Don't blame free markets for the current panic! and more...

The End of Libertarianism and Other Adventures in Financial Policy Fantasy-- Don't blame free markets for the current panic
In a recent op-ed, Slate Editor in Chief Jacob Weisberg blamed the financial crisis on free market ideas. But as Harvard economist Jeffrey Miron writes, the incontrovertible fact is that the U.S. has not pursued policies that even remotely resemble libertarianism.

"Heat" on PBS Tonight-- A review of the new Frontline documentary on big business and climate change
Will it take a push from the government to get big business to take action on climate change? That's the argument made during tonight's episode of the PBS show Frontline. But as Science Correspondent Ronald Bailey writes in his preview of the show, previous government pushes haven't exactly been huge successes.

The Rise of Disaster Socialism-- I've seen the past...and it works
As America heads toward a recession, the "disaster socialists," writes Michael Moynihan, are once again presaging the death of capitalism. And once again, they're wrong.

Midnight Bias-- Can the nation survive without fair and balanced Sarah Palin jokes?
Sarah Palin didn't actually do much during her celebrated appearance on Saturday Night Live this weekend. But as Greg Beato writes, it was a shocking tableau nonetheless. After mocking Palin relentlessly for the last month, SNL actually made her complicit in their crimes against democracy.

From Hit and Run, Reason's staff blog:
Strangely, Developing World Still Not Drained of Brains
In 1987 Fijians of Indian descent began to emigrate in large numbers. Spurred by a political coup they felt damaged relative prospects at home, they left for places like Canada, Australia, and New Zealand, all of which privilege skilled, educated immigrants. As smart Indian Fijians left for Sydney, observers lamented the "ominous," "crippling," even "horrific" loss of human capital. One population researcher charmingly compared the migration to a massive increase in the death rate.Economist Michael Clemens decided to find out what, exactly, was going on. By using the (static) ethnic Fijian population as a control group, he and Satish Chand decided to test the effect of labor movement on human capital stocks.Read the rest here.

Daily Brickbat
Waiting for Uncle Sugar
An auction for 56 foreclosed properties in Utah fell through when the owners rejected the bids. Auctioneer Eric Nelson says the banks and private lenders who owned the properties decided to wait and see if they might get a better offer from the federal government.

Sunday, October 19, 2008

"U.S. Tax System Explained, in Beer"

Ah, a classic!

And exactly and precisely true. (The top 10% of earners pay something like 60% of all personal income tax.)


U.S. Tax System Explained in Beer

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20. 'Drinks for the ten now cost just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers?

How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

'I only got a dollar out of the $20,' declared the sixth man. He pointed to the tenth man, 'but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too.. It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man.

'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man ( the richest) didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

PROP 8 in California, Against Gay Marriage: We Must Tackle the Real Problem!

Whatever happens in the vote in California over banning gay marriage, this problem will be with us forever. If the reactionaries win and ban gay marriage, gay activists will push to overturn it because they can't in good conscience just let it be over. If the proposition is defeated, reactionaries will keep fighting too, because they think their souls are at risk. There is no resolving that problem.

What CAN be resolved is answering this question: Why is the government involved in this?

Remember, what both sides are fighting over is control of the levers of state power to allow or to forbid same-sex marriage. If the state weren't the entity that declares what legal marriage is, then they'd have to fight over something else, and the noise level would go down a lot.

History lesson: Back before the USA was founded, it was taken for granted in Europe (and most of the Colonies) that it was the duty and obligation of the government to declare an official religion, and support that religion against other religions and against irreligion. It was thought to be the government's duty, since the souls of the people/subjects were at risk. The stability of society was at risk: You couldn't just have people believing in whatever they wanted, or in nothing!

Several of the colonies refused to establish and support through taxes any religion, which was a shocking development in the 1700s. People noticed an amazing thing: When the state wasn't picking religious winners, the battle among religions for control of the government evaporated. Religious battles declined in ferocity. People still argued, but since they weren't arguing over who got to control the tax authority and the police to pursue their beliefs, the arguments lacked that degree of fierceness they had for hundreds of years in Europe.

So the USA established a government that stayed out of the religious wars, a radical notion. And we haven't had religious wars here since. So here is another radical idea: How about if the government gets out of the religious wars over marriage?

The state has only one interest in the question of marriage: It's a matter of contract law. We already have well-established history of dealing with contract issues. There are default contracts, there are assumptions and presumptions in contracts, and the state doesn't have to approve the contract or approve the people entering into a contract. They just establish the defaults for all contracts.

We should do this with marriage too. The state already has a contract-law setup when it comes to common-law marriage: If you live as a couple long enough, you have obligations with regard to children and community property similar to those of a formally married couple. No problem.

So let the states establish the contractual defaults for people who declare themselves married (or who enter common-law arrangements). If you sign a marriage contract, then you are subject to the contract laws; your contract can specifically override any given provision of marriage contract law; anything not specified otherwise is handled by the default marriage-contract laws.

This would be called something other than Marriage, to stay out of the religious wars over "defining marriage as...." The contract law here would apply to anyone declaring a marriage, with the State not approving the people contracting, or the contract, or anything else.

Then if you want to get "married" formally, you go to your favorite church or religious institution. They "marry" you. And the various factions can argue over whether they should do that or not. Some churches or religions may refuse to marry two specific types of people; that would be their right. If you don't like it, argue with that church -- leave the state out of it, the state has no power over this topic, it's between you and that religion. If a church does marry people you don't think should have their marriage "sanctified" by that church -- again, go argue with the church, leave the state, and its idiot politicians, out of it.

You can establish your own church to marry people you want that other churches turn away. You can establish some *other* institution that is not a religious church to do the santifying, if you want to dream up something like that. Argue among yourselves. Leave the state out of it -- it's none of their business.

The idea that we should *vote* on who can "marry" whom, the idea that *politicians* get to weigh in on an issue like this -- it's ludicrous! Isn't it about time we applied the wisdom of our 18th-century forebearers to this 21st-century problem? We learned our lesson 300 years ago -- let's remember the lesson!

Otherwise we'll just be arguing about this forever. I aim this lecture especially at the anti-Prop 8 activists, because the other guys will be back, and back, and back, and all they have to do is win once. Better we change the rules of the game.

And I also aim it at those who believe same-sex marriage an abomination: The gay activists will be back, and back, and back, until they win, and then you'll be fighting all over again -- forever. They ain't going away. Better you should change the rules of the game. Win where you can; stop trying to *force* society -- virtue is not imposed by law!

In a Presidential Election Quandary --Vote for More Government--or for More Government??

I've been unable to decide what to do on Election Day for some weeks now.

I'm a Libertarian, so my default mode is to vote for our candidate, Barr. That's what I'll do if nothing else comes up. But the temptation to vote for Barack Obama, as a historical moment in American history, is hard to resist.

I like his personality too. But he's a conventional Democrat in many ways -- he's promising to end tax cuts, launch big new costly programs, "fix" medical care by, to all intents and purposes, nationalizing it; and, in effect, as some have noted, changing us into a European socialist system. I don't want that; the slow growth and even greater government intrusiveness characteristic of European economies has no attraction to me. And I know that, once we're well into that mode, the special interests will lock us into it for a long time; no European country has succeeded in escaping it.

Some argue that Obama is much more reasonable than that -- more of a Clinton type, who will govern from the middle, fend off the most extreme Democrat proposals, and produce the prosperity we need. But Clinton managed to do that in part because for most of his time in office, the legislature was majority of substantially Republican. That gridlock was good for the country, and helped make the Clinton presidency look better than it otherwise would have.

The Obama presidency won't suffer from gridlock, unfortunately. The Democrats will dominate Congress. Obama will be able to do anything he wants -- and his personal sense of proportion notwithstanding, he will be under a lot of pressure from Democrats to produce all those government programs, all those tax shifts and increases, all those government agencies the Dems so badly want. He will not be in much of a position to veto some grand piece of Democrat leftist/socialist legislation.

So I fear that; I fear Euro-socialism taking over the country.

On the other hand, I fear McCain, mainly because I fear his enthusiasm for meddling in the world. I don't want us to go shooting at Iran. Or anybody else.

Then we get to the contradictions. Obama may lead to expanded government and higher taxes, and a weakened economy. But Clinton's administration led to tempered government growth, no increase in taxes, a balanced budget, and a booming economy. The joke at the time was that Clinton is the best president the Republicans ever had.

Bush, by contrast, has led the biggest and longest expansion in government power and spending in our history. The champion of smaller government is the best president the expanding-government Democrats could have wished for. The Republican president has given us a double-whammy -- the foreign wars beloved of conservatives, and the nationalization (of the financial sector) beloved of socialists. We've lost coming and going!

So I can vote for a guy who promises to expand government, increase taxes (or at the very least, eliminate tax cuts), meddle in more of the economy -- and, based on recent history, won't do any of those things. Or I can vote for the guy who promises smaller government and better tax policies but, based on recent history, will certainly preside over ballooning government, ballooning debt, and greater intrusiveness -- and go to war anyway on top of that.


Looks like I have no choice but to vote for the only candidate who wants to reduce the size and intrusiveness of government -- really, not just in rhetoric, who wants to stop promising favors to every interest group -- really, not just in rhetoric; who wants to keep our noses out of other countries, really; and who supports a free market and a free people--really. The Libertarian candidate. He won't win, of course -- you don't win office by promising *not* to meddle, spend, intrude. But at least I can vote without feeling like I have to wash my hands afterwards...

Wednesday, October 8, 2008

Why We Still Need to Privitize Social Security!

From Reason today:

"Private Accounts Still Make Sense: Why the market meltdown doesn't negate the case for privatizing Social Security"
Senior Editor Radley Balko explains why the privatization of Social Security still makes sense and still matters after the bailout.

from mac:
To those over 50: If you think Social Security will be there your whole retired life, you're a fool. To those under 50: If you think Social Security will even EXIST when you retire, you're a bigger fool!

"Building a Better Bailout: How Washington COULD have helped the market at no cost to taxpayers. And what it SHOULD spend $700 Billion on.

From Reason, "Free Minds/Free Markets" today:

Veronique de Rugy and Philippe Lacoude explain how Washington could have helped the market at no cost to taxpayers (and what it should do if it's hell-bent on spending $700 billion).

What You Need to Know About the Bailout (and Why You Should Be Really Worried)

From Reason, "Free Minds/Free Markets" today:

On Reason TV: George Mason University economist and author Russell Roberts, who blogs at the always interesting Cafe Hayek, sat down with to talk about the nation's shakey economy and the government's bailout plan. Watch this six-minute interview to learn where the problems came from, why the bailout won't address them, and what sort of hurt we're in for over the next several weeks, months, and years.

Click here to watch.

"The Winner of Last Night's Debate? Washington: Both candidates embrace central planning as prudent economic policy"

From Reason, "Free Minds/Free Markets"

There once was something approaching consensus in the industrialized world that central economic planning was for losers, writes Editor in Chief Matt Welch. But as last night's debate demonstrated, we are truly entering the re-regulation era—at least if Washington politicians have anything to do with it.

Tuesday, October 7, 2008

Anatomy of a Train Wreck: Causes of the Mortgage Meltdown

The Independent Institute of Oakland, CA, has published its 29-page report, Anatomy of a Train Wreck: Causes of the Mortgage Meltdown , available as a free PDF download. 

If you want to be MUCH better informed about this critical issue than you are likely to become listening to TV or radio, or reading your daily paper, check this out: You'll get lots more depth and a reality check you need. 

Here is the Institute's description of the report:

"Why did the mortgage market melt down so badly? Why were there so many defaults when the economy was not particularly weak? Why were the securities based upon these mortgages not considered anywhere as risky as they actually turned out to be?

"This report concludes that, in an attempt to increase home ownership, particularly by minorities and the less affluent, virtually every branch of the government undertook an attack on underwriting standards starting in the early 1990s. Regulators, academic specialists, GSEs, and housing activists universally praised the decline in mortgage-underwriting standards as an “innovation” in mortgage lending. This weakening of underwriting standards succeeded in increasing home ownership and also the price of housing, helping to lead to a housing price bubble. The price bubble, along with relaxed lending standards, allowed speculators to purchase homes without putting their own money at risk.

"The recent rise in foreclosures is not related empirically to the distinction between subprime and prime loans since both sustained the same percentage increase of foreclosures and at the same time. Nor is it consistent with the “nasty subprime lender” hypothesis currently considered to be the cause of the mortgage meltdown. Instead, the important factor is the distinction between adjustable-rate and fixed-rate mortgages. This evidence is consistent with speculators turning and running when housing prices stopped rising."

"California's High-Speed Rail Plan Is Flawed" -- Reason

In a column for the Los Angeles Business Journal, Reason's Adam Summers writes:

Californians are being asked to consider a $10 billion bond measure to build a high-speed rail system, but the proposal is critically flawed and should give voters serious pause, especially in the current economic climate.

Proposition 1A would authorize $9.95 billion in general obligation bonds to start building an 800-mile high-speed rail system linking Southern California with the Bay Area and Sacramento, including the backbone Los Angeles-San Francisco segment. There are crucial questions about the financing of the project, however. For starters, where will the rest of the money come from?

The $10 billion bond would cover less than one-quarter of the projected $45 billion project cost. Proponents hope that they will be able to coax one-third of the cost ($15 billion) from the federal government, which has budget problems of its own and is currently struggling with a planned $700 billion bank bailout and a possible $25 billion bailout of the auto industry. The remainder (about $20 billion) is supposed to come from the private sector, and there is similarly no guarantee that this money will ever materialize. Furthermore, a business plan that the California High-Speed Rail Authority (CHSRA) was required by law to submit by September 1 still has not been completed, and, conveniently enough, apparently won't be available until after the election.

Full Column
Due Diligence Report on California's High-Speed Rail Proposal

[Reason Foundation is a nonpartisan think tank for freedom; it publishes Reason Magazine, whose slogan is, "Free Minds/Free Markets."

"Time for California to Say No to Borrowing"

In a column for the San Francisco Chronicle, Reason Vice President Adrian Moore writes:

California Gov. Arnold Schwarzenegger says he may go begging to the federal government for a $7 billion bailout so the state can pay its bills in the coming weeks. And yet the state still wants to borrow $16.8 billion through the various bond initiatives on the ballot, including Proposition 3.

Prop. 3 asks for $980 million to expand children's hospitals - undoubtedly a great cause. It's such a wonderful cause that California taxpayers borrowed three-quarters of a billion dollars for it just four years ago.

In 2004, voters passed Proposition 61, authorizing $750 million in bonds to help children's hospitals. As of June 1, 2008, just over $400 million of Proposition 61's funds had actually been awarded to eligible hospitals. That leaves nearly $350 million unspent. Why?

Including interest payments, Prop. 3 will cost taxpayers $2 billion. The state budget deficit is $15 billion. Schwarzenegger may borrow another $7 billion from the feds.

And thanks to bond initiatives like this, California has been on a wild borrowing spree for years.

The state's authorized general obligation bond debt has nearly tripled over the last six years, from $42 billion in 2001-02 to a massive $120 billion in 2007-08.

Borrowing is way up because state lawmakers don't want to make difficult budget decisions.

When times are tough, families cut costs. We stop eating out, carpool, or cancel cable TV service to save money. Politicians just ask for higher credit limits.

Legislators could free up some funds for escalating hospital construction costs and the need for advanced medical technologies, or just make children's hospitals a higher priority in the annual budget.

Instead they want to put this on the credit card.

Eight private and five University of California children's hospitals stand to reap the rewards of Prop. 3. The Chronicle reports the private hospitals are spending about $900,000 each, $7.2 million total, to pass Prop. 3. Why not spend that $7.2 million caring for kids?

Because they think it's an investment. Each of the eight private hospitals would get about $98 million if Prop. 3 passes. In this economy, with $750 million in bonds recently approved for children's hospitals (and more than $300 million still unspent), taxpayers should say no.

It is time to cut up the credit cards and pay as we go.

Teach the Controversy? Hey--teach THESE controversies while you're at it, Buddy!

Now THIS is hysterical -- get your Teach the Controversy T-Shirts!

Just choose WHICH "controversy" you would like to have taught in our government schools:

Can you identify each Controversy?

This would make a fun poster or card to hand out around town, wouldn't it?

Tell 'em Mac sent you!

Friday, October 3, 2008

Why they chose '$700 billion' for the bailout

How the feds chose $700 billion as the amount they'd ask for to bail out the US economy has been bugging some people--especially after officials were quoted as saying, "It's not based on any particular data point," and "It sounded like a really large number." Which makes it sound like they are idiots pulling numbers out of their asses.

But I have another explanation as to why they choose that amount: because they wanted to charge into battle with overwhelming force.

If you're going to stop the greatest financial panic we've seen in our lifetimes, you don't do it by being coy. It's critical that you show up with an amount of cash that not only IS large enough to do the job, but SEEMS large enough to do the job--and then some. 

So you pick the largest plausible number you can think of -- you want the reaction from the market, "Wow, $700 billion! That's a HECK of a lot of money! That will SURELY be enough to do the job!"

You don't want them thinking you're nickle-and-diming at a critical time like this. You want to come in with an amount so stupendous that it shuts everybody up. And, you hope, makes the panic back off. That's why they chose that number--not based on a close analysis of how much they'd actually need and not a nickel more.

Whether it IS enough, you can only guesstimate; the outstanding mortgage market is something like $1.5 trillion, the current guessed-at value is something like $1.2 trillion, most of which is not at risk; so $700 billion certainly SOUNDS to economists like MORE than enough to do the job of buying up all at-risk mortgages.

It's such a large number that, I'm guessing the officials are hoping, THEY WON'T ACTUALLY SPEND that much in the long run, so they can proudly announce, in a year or so, that they "only" spent $400 billion, or $300 billion, or whatever. They'll look like heroes -- they galloped up with an overwhelming amount of money to save the day, and then came in under budget. Heroes!

Whether it will actually work that way, of course, nobody knows, mainly because when you throw that amount into a highly politicized shark tank, all kinds of things can go wrong, by which I mean every politically connected business (read: every one with a lobbyist in DC) will try to get a chunk of that money, preferably by selling the Feds assets, whether troubled or not, at a premium price. The Feds, I think, just hope that if they can just get the panic to stop, the financial system can reboot, and after that, everything else is merely a matter of waste and corruption -- which we can deal with better with an economy that's back at work. 

And who knows, they might be right. I've heard lots of alternatives that would likely have worked and not cost so much and not enriched so many jerks (and I'll try to post some), but who listens to us libertarians?


Friday, September 26, 2008

An actually GOOD Presidential Debate!

I hate listening to candidate debates because I have to listen to the Democrats and the Republicans promote state action with nobody thinking to call them on anything.

But now I have found a Presidential Debate I can enjoy! Reason Magazine is hosting Bob Barr, the Libertarian candidate who is, of course, excluded from the debates -- in a simulcast: He is sitting in a studio, broadcasting on the Web, with a TV showing the main debate and periodically Barr mutes the sound and gives HIS response.

Check it out at !

Barr's answers are absolutely top-notch! This guy used to BE a Senator, don't forget; he knows stuff. He makes smart remarks, like saying McCain's foreign policies will make Bush look like a peacenik.

Worth watching!!!

Wednesday, September 24, 2008

"The free market has nothing to do with the current financial crisis"

"Corporatism, Not Capitalism: The free market has nothing to do with the current crisis"

Reason Magazine, "Free Minds/Free Markets," says today (Sept 24, 2008):

There's nothing free market about the [US federal goverment] bailout [of the financial sector of Wall Street], writes Senior Editor Radley Balko. It's a peculiar kind of corporatist socialism, where good risks and the resulting profits remain private, but bad risks and the resulting losses are passed on to taxpayers.

Monday, September 22, 2008

Uncle Jay explains our current financial crisis--as well as anyone!

If you haven't discovered the joys of watching Uncle Jay Explain the News each week, this is an excellent opportunity for you to start. Go to:

and Uncle Jay will explain financial crisis, in an episode that does every bit as good a job as anything you've watched on CNN in the past few days, or are likely to hear from the nearest politician!

Uncle Jay explains the news "to little minds," by which, I foolishly thought for a brief while, he meant kids. Nope.

Thursday, September 18, 2008

Believe It or Not, Here are 4 Presidents Who Were Even Worse Than Bush!

According to recent public opinion polls, only one third or fewer of those surveyed approve of President Bush's overall job performance. More startlingly, about one quarter consider George W. Bush to be the worst president in U.S. history. If these respondents took the time to look closer at other U.S. presidents, however, they might well rank them even lower than they rank Bush, as Independent Institute Senior Fellow Ivan Eland suggests in his latest op-ed.

Eland offers a litany of costly mistakes, bad precedents, and unconstitutional abuses by previous U.S. presidents. James Polk, for example, lied to get Congress to declare a war to grab land from Mexico. William McKinley permanently expanded the president's power at the expense of Founder's vision of the balance of power between the three branches of the federal government, and he also turned the anti-colonial United States into a colonizer in the Philippines and in other lands formerly occupied by Spain. Woodrow Wilson plunged the country into World War I and helped set in motion a chain of causation that would lead to World War II. In addition, writes Eland, "Wilson's violations of civil liberties during World War I were the worst in U.S. history and make Bush's look fairly mild." Harry Truman enshrined Wilsonian interventionism, permanently burying the traditional U.S. foreign policy of military restraint. Eland also takes Truman to task for intentionally bombing civilians in World War II and the Korean war, unconstitutionally fighting the Korean War without a formal declaration, laying the groundwork for the first large permanent peacetime army in U.S. history, and more.

"Make no mistake," Eland concludes. "George W. Bush has been a horrible president and is one of the worst in U.S. history. But of the 42 men who have served as president, these four men--Polk, McKinley, Wilson, and Truman--were probably worse."

"Is George W. Bush the Worst President in U.S. History?" by Ivan Eland (9/13/08)

Also see, "To Make War, Presidents Lie," by Robert Higgs (10/1/2002)

"No More 'Great Presidents,'" by Robert Higgs (The Free Market, 5/1/97)

The Empire Has No Clothes: U.S. Foreign Policy Exposed (Updated Edition), by Ivan Eland

Center on Peace & Liberty (Ivan Eland, Director)

"A Conservative for Obama" editorial: Don't hate tax cuts, hate spending increases!

Someone sent me a copy of an essay published in September in the Dallas city magazine, Big D, in which the former publisher of the conservative National Review says he's going to vote for Obama because he's less likely to get us into a war than McCain, and Obama also shows glimmers of useful pragmatism.

Good essay. He's right about the Republicans not being conservatives in any helpful sense any more - or for a long time. I am not confident that the Democrats are a whit better, but still... He's not promoting the Demos, he's promoting Obama, and he makes a good case.

However, I hate the misreading of the value and meaning of tax cuts -- first, we are not in debt because of the tax cuts -- the improvement in the economy since then generated more money for the government than projections had it earning before the cuts. Second, we are in debt because we are spending even more, if that is possible, than ever before - much, much more. Much of that on the war, but equally profligate in every other area Washington touches. There is simply no amount of tax money that will pay the bill when the politicians hold the credit cards. Just try asking a politician or a tax-eating special interest how much is enough? You'll never get a useful answer--because enough is all of it. There will never be enough money to satisfy them. Every increase in revenues is overmastered by a bigger increase in spending - whether in war or peace, in crisis or in flush times.

Third, if the economy is indeed staggering at this time, the worst thing on earth is to increase taxes -- not even on those awful, awful people, the "rich." JFK made this exact same argument while President, and then signed the largest tax cut since WWII - which was followed by the boom that helped define the economics of the 60s. The right thing to do, in reality, would be to cut marginal tax rates, especially where they will boost the economy most -- on the rich, on investment, on capital gains, on corporations. Yeah, I know -- all the devils of the modern world, what could I be thinking?

And then, of course, to cut government spending, which we should be doing even if revenues are up and even if we increase taxes. But we will never, in our lifetimes, have a budget of any level of government that goes down from one year to the next. Or even stays even. The most we can hope for is that a planned 20% increase will be held to, say a 12% increase -- whereupon we'll have to endure complaints that spending has been "slashed" 8% and how we are suffering!

Marlarky, baloney, bullshit. I weary of it.

But as he says, Obama is marginally less likely to invade someone, and might actually be a Kennedy type of character who would hesitate to kick the economy in the nuts, if he's really as "pragmatic" as this guy is hoping. We can all only hope.

McCain would be better, even with his lust for invasion, if only he were a real Republican conservative, who would cut taxes, reduce government impositions, reduce spending *somewhere, anywhere*, regulate less impulsively, and argue against government intervention in every aspect of human endeavor. But of course he's not a conservative in any of these areas, he's only, like all of his kind, a lifetime member of the Republican faction of the Politicians' Party.

So is Obama, though for a shorter lifetime, and so less embedded. A tiny flicker of nonpolitician hesitation would be a welcome relief at this point. Not to mention any little hope, however faint, that we won't try to play policeman or Superman to anyone outside our borders for the next four years.

But me, I'm voting Libertarian across the board. The heck with it. Maybe we'll get lucky and Obama will get the nod instead of McCain. But either way, I'm not voting for the Politician's Party this year either. Marginal variations in levels of oppression are welcome, but not worth my vote.


Monday, September 8, 2008

Election 2008: Experience versus Judgment?

The Independent Institute in Oakland, CA, has an original and interesting view of this debate!


Both Democratic presidential candidate Barack Obama and Republican vice presidential candidate Sarah Palin have been criticized for their "inexperience." In his latest op-ed, Independent Institute Senior Fellow Ivan Eland argues that experience should not be a determining factor in the selection of national political leaders. Richard Nixon and James Buchanan, for example, had lots of experience before becoming president, yet neither was a good president, according to Eland. In contrast, Chester Arthur was a good president despite having previously held only two mid-level jobs in New York and being vice president for a mere six months when the assassination of James Garfield thrust him into the Oval Office.

John McCain, although a more experienced candidate than Obama, has shown poor judgment on several matters of foreign policy, according to Eland, including calling for greater U.S. involvement in Iraq and advocating Georgia's entry into NATO--a move that could draw the United States into a military confrontation with Russia.

On the other hand, Obama, writes Eland, "was against invading Iraq from the start, has astutely championed withdrawing U.S. combat forces during what is likely to be a temporary lull in violence, and was much more measured about the conflict in Georgia, which threatened no vital U.S. strategic interests." McCain, Eland concludes, has too much experience in getting co-opted into making bad judgments from serving too long in Washington's military-industrial-congressional complex.

"A President Needs Good Judgment Rather than Experience," by Ivan Eland (9/8/08) Spanish Translation

The Empire Has No Clothes: U.S. Foreign Policy Exposed (Updated Edition), by Ivan Eland

Center on Peace & Liberty (Ivan Eland, Director)

Tuesday, September 2, 2008

The Three Ways to Pick a Candidate

There are three basic issues you can use to help you choose  a leader:  
1. Their ideology: What their philosophy of government is, what they  think the government's proper role is, and where they draw the line.  There can be a very significant difference here, but it's hard stuff.  Also, the two main parties in the US (and mostly elsewhere) are  primarily the Politicians' Parties whose ideology is limited mainly to  getting elected and reelected.
So if you're stuck with politicians, you can try:
2. Their character: If you can't get the other guy on their vision of  government, maybe you can get them on personality? Whether they are  stiff (Nixon) or at ease (Obama), whether they fool around, whether they are corrupt, -- and  best of all -- whether they are hypocrites, the number-one favorite of  all political campaigns and of the press: Palin doesn't believe in sex  education in school and look - her kid gets pregnant, which shows she  can't control her kids (who can?) and that her ideas don't work in the  real world. That's why the Demos are jumping on this -- not because  they would do any better, or because they really think sex education and condoms in  schools would make a terrific dent in the teen pregnancy rate (studies are mixed), but because it makes Palin look  foolish. Zing!  
3. Their competence: Would they once in office be able to actually run  things and get people to do what they want? This is a combination of basic competence (ability to get things done at all), plus their influence over the political process in Washington. For an example of the latter, Obama amuses us with promises to "go over the  budget line by line" and eliminate waste and unworkable programs; in reality, as being  a Senator he knows full well, he'd  run into the Congressional buzzsaw protecting special interests. (Unless of course the entire  Congress is Democratic, and then you can eliminate "waste" easiliy since that, as all know, is championed  only by Republicans!). 
Hillary ran into this early with  questions by ultraconservatives about whether, as a woman mind you,  she'd be competent to run the government and put her finger on the big  red button. Well, they don't wonder about that any more, but instead are  scared of her. (Belatedly, after she lost the nomination, there were  articles about how poorly she ran her campaign compared to Obama, whose  campaign machine ran like -- well, like a machine. I found that a far more interesting comparison.)  
The variant on this is the Experience quibble, which gets very muddy  indeed. Obama doesn't have much "experience" and neither does Palin --  presumably, the only person with experience for this job is a past  President, wouldn't you think? 
Then you get into the question of *what  kind* of experience -- legislative, or executive? Is a Senator or a  Governor better suited, experience-wise? Of course, when neither has been  in higher office more than 4 years, nobody can claim they have  experience enough with a straight face -- can they?  So as a campaign, you zig and zag among these three methods of deciding  on a candidate, pickiug your strength and their weakness, and forgiving  your guy/gal for their weakness but being very unforgiving of the other  gal/guy's weakness.  Which wouldn't be so bad if the voters, who know better, used any kind  of sophistication in making their decisions.  
The great thing about being a Libertarian is that the second and third  issues don't mean bupkus to us. We're voting for our candidate's  ideology -- his vision of how the country *ought* to be run. We don't  care if he's *actually* competent to be President -- he never will be!  He hasn't got a prayer, so who cares? What an enormous relief!
Nor do we care about his morals or  hypocrisy or character -- like I say, he's never going to win an  election, so we vote for him strictly as a powerful symbol of our  ideological beliefs about right government. It's quite relaxing not to  have to worry about any of this, or pay much attention to the noise at  the major-party level.  
And it's quite depressing to know full well that no matter which pair of  major-party candidates gets elected, we're just as screwed -- the  details may vary slightly, but the trendlines are just bad, bad, bad, because their ideologies mean they will choose bad options, push for solutions that don't solve anythng, and never, never learn from their mistakes.
But then, we voters don't either, so why should they?

Dave Barry nails Obama Speech: "Read from stone tablets...!"

Dave Barry, of all people, nailed Barack Obama's acceptance speech at the DMC last week:

"...Barack Obama's now-legendary acceptance speech, which he read from stone tablets, in which he promised theAmerican public that if elected he would give them peace, jobs, healthcare, national security, energy independence, good schools, a clean enviroment, reduced government waste, lower taxes, the head of Osama bin Laden, giant underwater cities, time travel, and a magic flying zebra named 'Sparkle' for every American pre-schooler regardless of income level."

As I was listening to Barack speak, I became increasingly uncomfortable, and Barry has explained: Barack was basically promising the sun, the moon, and the skies -- and much of what he was promising was impossible to deliver, or really really hard to deliver even partially, or would be shockingly expensive to deliver even partially, or were simply fever dreams. 

Of course, that's the point: When politicians promise voters things in exchange for votes, they are just throwing pie up into the sky -- they have *no* idea how they could conceivably deliver the goods, even if all the opposition party went home and turned the whole government over to the speaker's own party.  

Paraphrasing, for example: "We are going to find and stop Osama bin Laden" -- how are you going to do that?? 

"We are going to deliver affordable, high-quality health care to every American" -- by government decree? 

The same government that screwed up when the hurricane ran over New Orleans? 

The same goverment whose every military campaign, military weapons project, major highway project, and major bridge project runs shockingly over budget? 

The same government whose waste and inefficiency is the stuff of legend? 

The same government that runs the DMV and the Post Office, the Army, the food stamps program, that monitors the health and quality of our food and our air and our purchases, that tells us how to live our lives and how to love one another and can't even keep the streets of our metro areas safe? 

That government?

Or is Obama going to bring in a backup government from the next county over?

Politicians would like you to think the solutions to these mindboggling, gigantic problems are just a matter of *political will* -- if we just *cared* enough, if we'd just be willing to make *sacrifices*, if we had courage, and if we could just vote for me and vote against the other political party--the one that is filled with people of ill will, who hate poor people and want to see the elderly die on the streets, who are all fat cats and brutes -- yes! All would be delivered to you! At no cost to you! We'll make the fat cats pay for it! The fat cats who are funding my campaign! The fat cats who pay lobbyists millions to meet with your Congressperson regularly! We'll go over the budget line by line and eliminate waste and get rid of programs that don't work anymore -- the programs that are sacred turf for this or that Congressional District -- yeah, I'll just slice 'em out.

If you believe even *one word* of that to be even close to true, you are a fool. Experience, history, human nature, and common sense are lost on you. As Dave Barry points out, Obama has promised us every good thing every Democrat has ever promised in the past fifty years. And of course McCain will pull out his laundry list of good things conservatives want, and promise them that at long last they'll get them. 

And we'll both believe them and vote for them on the one hand, while expressing our fake cynicism on the other. 

When governments take on every task, every challenge, promise everything at a cost of nothing, they not only play us for fools, they set up the entire government for failure. If you really DID care about the success of our government, you would be VERY careful what you let the politicians dump on its back. 

Plainly, the pols don't care -- they live for the moment, for the election. 

But you voters are supposed to care about the long term. 

Wake up, people!

Friday, August 29, 2008

What's wrong with gay marriage, asks Cecil?

"Gay men and lesbians are often portrayed as subverting the social order. But what are they trying to do? Join the military! Get married! Fix u the house na draise kids! In short, build the kind of world the religious rght dreams of... "

Cecil Adams, The Straight Dope column, Jan 28, 2000

Tuesday, August 26, 2008

Obama's pick of Biden as VP... Tough tradeoffs for Obama!

On this stuff--the controversy over whether Barack Obama should have picked an old politico like Joe Biden as his VP partner--I am lucky I can watch from the
sidelines since I vote Libertarian, which saves me a lot of grief,
especially of the "least bad choice" variety (or as one wit put it, "the
evil of two lessers").

But from the sidelines, Obama had a balancing act here: Another Change
person like himself would be young and not fully tainted and thus
vulnerable to McCain attacks on lack fo experience that have proven (to
my actual surprise) effective recently. Biden takes that club away from
McCain. McCain can call Obama a hypocrite for choosing an old warhorse
(like McCain) but the foreign-affairs club and the inexperience club are
both out of reach now.

Since Biden is practically McCain's twin on everythign that McCain has
been pushing, he does a good job of neutralizing McCain's most powerful
messages. Biden's wild-card big mouth will be a ticking bomb for months,
but on the other hand his wit and tendency to say naughty things might
give him something of a 'by' among voters who hate politicians and
politics. It will annoy those who wanted a clean break from politics as
usual (boy, will it!) but the Obama supporters can always argue that
Biden is a savvy political-campaign chess move that puts the "old-boy
network" guy in the secondary, VP position, whereas on the Republican
side the Old Boy guy is the top dog. If you want any hope of change,
there is only one choice.

Other than becoming discouraged and staying home, of course. Which is
always the ongoing danger when your campaign relies heavily on arousing
the youth vote or the disaffected vote--they become discouraged easily
and give up. Obama's gift of oratory will have to do a lot of heavy
lifting for the next couple of months....