Sunday, November 3, 2013

The Mistake of Thinking that Obamacare's Failure is Just a Technology Problem

The rollout of Obamacare has been an unmitigated disaster. From a website that doesn't work to skyrocketing premiums, Americans are finding out "what's in it." The administration and its lackeys have now begun characterizing the problems as due to nothing more than technical problems or so called "glitches" that will be fixed in due time with perhaps another billion dollars of funding. According to this National Review article, Biden "apologized for the disastrous rollout of the federal health-care website , saying that he and President Obama thought that the website was ready, but didn’t understand it themselves." He added:
“Neither he and I are technology geeks, and we assumed that it was up and ready to run,” Biden told HLN’s Christi Paul in an interview. “The good news is — although it’s not, and we apologize for that — we’re confident that by the end of November it will be and there will still be plenty of time for people to register online.”
In other words, according to Biden, the failure of Obamacare is a short term technology problem that could have been fixed if only he and Obama were "technology geeks" that could have personally attended to the engineering of the website.  In another example, after voicing support for the law in September, Starbucks CEO Howard Schultz criticized the rollout of Obamacare but attributed the problem to practical implementation:   
”Unfortunately, in this kind of situation, execution trumps strategy," Schultz said on CNBC. "It might be a great strategy, but the execution is really flawed. It’s off the rails.”
Critics of Obamacare are committing an enormous error if they think the problem is simply a technology problem.  Like public education, public housing, and public toilets, the government's virtual takeover of the health insurance market is doomed to fail, because government intervention in the economy is always doomed to fail. Socialism is not "good in theory" but bad in practice, it is bad in theory and therefore bad in practice.    

Socialism in all its forms must fail because it destroys the private ownership of the means of production and with it the profit motive and the price system.  In fact, socialism's only purpose is the negation of the price system, i.e., the prohibition of private property and free exchange between individuals.  In destroying the price system, socialism destroys the central method of economic calculation by which individual businessmen and consumers weigh revenues and costs and substitutes for it the arbitrary judgments of government bureaucrats. In his treatise, Capitalism (chapter 8), George Reisman thoroughly demonstrates how "capitalism and the price system bring about a harmoniously integrated planning of the entire economic system" concluding: 
...socialism, in destroying the price system, destroys the possibility of economic calculation and the coordination of the activities of separate, independent planners.  It therefore makes rational economic planning impossible and creates chaos.   
The particular case of health care insurance is no different.  The entire system of health insurance was distorted by incentives in the U.S. tax code which led employers to pay employees in benefits rather than wages, a distortion compounded when states began mandating particular benefits which led to rising premiums, a distortion compounded yet again by Obamacare's mandates of even more benefits and regulations which have driven premiums even higher (see FIRM for a detailed history of government intervention in health care).  It is simple to see the effects of this distortion by comparing the heavily distorted health insurance market to the relatively less distorted car insurance market and observing that there is no car insurance crisis nor even discussion of ObamaCarCare, yet.    

At a more fundamental level, socialism represents a negation of man's nature which requires the freedom to think, act, and own property in order to survive and prosper.  Socialism is therefore not "good in theory" but rather, vicious in theory.  It is not a coincidence that it has resulted in nothing but poverty, misery, and tyranny in practice.  On the other hand, as Reisman states:
Freedom and free exchange create an inherent harmony of the rational self-interests of people.  When the actions of individuals are free and do not represent the use of force, their effect is necessarily to benefit everyone involved.  This is because each individual acts to benefit himself and must at the same time benefit those whose cooperation is to be secured, or else he will not receive it.  In addition, no one standing outside the transaction can be harmed, because any evidence of harm to the person or property of others is grounds to prohibit the action as an act of force and violation of freedom.  ....As a result, the inherent tendency of my action is to produce improvement for others as well as myself, and thereby to improve general well-being.
The more frightening aspect of this debacle is that despite a hundred years of theory and practice, so many believe "this time it will be different."  Unless the nature of the universe and reality change, it will not be different this time, whether Biden gets a computer science degree or not.   

Wednesday, October 9, 2013

Is Stealing Good For the Economy?

If I steal a toaster, is that good for the economy?  Hmmm. 

Well, stealing is the act of taking something from someone without their consent.  In other words, the thief receives a value and offers nothing in return. Obviously, if everyone was allowed to steal toasters it would be a disaster.  A lot of people would work to make the toasters while others simply took them without producing or offering anything of value in return.  It would not take long for the toaster maker to stop producing them.
    
What if the thief was a little more clever?  Instead of shoplifting the toaster through concealment of some kind, he prints a counterfeit bill in his basement printing press.  He takes the bill to the store and "pays" for the toaster.  Once again, he has done no real work and offers nothing to the makers of the toaster.  He has simply tricked them into thinking that they have received something of value in exchange for their work making the toaster. The thief has the toaster, and the toaster maker has a worthless piece of paper. 

What if the thief, rather than stealing the toaster or counterfeiting money, just stole real money from his neighbor?  Then he could waltz into the store with a fresh bill and just buy that toaster. 

How are these three situations different in principle?  In the first case, the thief overtly stole a toaster.  In the second case, the thief also stole the toaster, just in a slightly more clever way. In the third case, the thief stole the money for the toaster.  If the first case is immoral and impractical, why wouldn't the second and third cases be equally as immoral and impractical? In fact, all three methods are just different forms of theft and all have similar practical results. But don't tell that to an economics professor or politician.  

The second case is the essential basis upon which the entire Federal Reserve system operates and provides the ideological basis for the Nobel Prize winning academics that serve on its board. With the nomination of Janet Yellen as the new Fed chairman, this philosophy promises to be taken to an even more absurd height.  The third case is the essential premise behind government stimulus spending equally in favor amongst prize winning academics.  Are they all crazy or stupid?  In short, yes.           

How could the Yellen's and Bernanke's of the world possibly think that counterfeiting money is a good idea?  Well, they would say, once the toaster maker has the counterfeit bills, he can take those bills and trick his suppliers and employees, even if he doesn't know he has counterfeit bills. Then the suppliers and employees can take the counterfeit bills and trick others too.  In this way, they boost "aggregate demand" which in the short run tricks people into thinking that actual production is being exchanged value for value - even though it is not.  Somehow, they believe, this will be "good" for the economy.

What about government "stimulus?" This is the idea that if the government spends other people's money, it will be good for the economy.  In other words, if the government steals money from one group, ultimately through taxes, and simply gives it to another group, this will help the economy.  

So, can we really cheat reality in this way?  Can we just print counterfeit money and make goods appear? Can we take money from one group and give it to another in such a way that more is created?    If we think in these simple terms, isn't it obvious that none of these ideas will "work" in the sense of creating actual wealth and prosperity?  In fact, only creating wealth creates wealth, and the precondition to creating wealth is the freedom to produce and trade which, in turn, depends on the right to think, act, and own property free from coercion - particularly, from theft.      

Wednesday, September 18, 2013

Obama Brings Back the Carter Malaise

"If you are going through hell, keep going." - Winston Churchill

This quote captures the essence of an important psychological fact: most people can suffer through difficulty or tragedy if they regard it as temporary. On the other hand, when one adopts the view that the future is hopeless, either psychologically or philosophically,  it leads to a much deeper existential level crisis or depression. The latter is how I would characterize American culture in the late 1970's.

Growing up in that decade, I was too young to understand much about current events or political economy, but I do recall my general feelings from watching news and listening to adults or teachers.  It was horrible. After the turbulent events of the 1960's, Vietnam, and the Watergate scandal, the economy was in shambles amid the so-called "energy crisis," raging inflation, skyrocketing interest rates, and high unemployment. The never ending Iran hostage crisis taunted Americans daily culminating in Carter's bungled military rescue which only compounded the nation's angst. People were miserable, but it wasn't just a temporary sense of disappointment over some random tragic event.  It was deeper and more profound. There was a sense that the future of the country was hopeless.  America was in a cultural depression.

President Jimmy Carter, sensing this grievous state of affairs, gave an infamous speech in which he tried to address the "crisis of confidence" as he called it, and rally the nation around his political agenda.  The speech is now accurately referred to as the "malaise speech," even though Carter never used that word. The graveness of what Carter sensed was captured by the following excerpt:   
The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation. 
The erosion of our confidence in the future is threatening to destroy the social and the political fabric of America.
In addition to a lack of "confidence," he identified further symptoms of hopelessness observing, "for the first time in the history of our country a majority of our people believe that the next five years will be worse than the past five years" and he pointed to "a growing disrespect for government and for churches and for schools, the news media, and other institutions." Of course, Carter believed the government could solve all these problem if not for the usual culprits: special interest groups and those pesky ideological dissenters.  He claimed:
"What you see too often in Washington and elsewhere around the country is a system of government that seems incapable of action. You see a Congress twisted and pulled in every direction by hundreds of well-financed and powerful special interests.  You see every extreme position defended to the last vote, almost to the last breath by one unyielding group or another. 
And exactly what was this "action" he sought? According to Carter, a "balanced and fair approach" demanded "sacrifice" albeit just a "little sacrifice from everyone" - an approach that too often, he groused, "you see abandoned like an orphan without support and without friends."

The reason this is significant is that America today is in essentially the same state of economic and psychological depression as it was in the 1970's.  More importantly, it is in this position for fundamentally the same reasons as it was in the 1970's, and not surprisingly, it has a leader in power with the same underlying philosophy as Carter.

The American economy in the 1970's was in shambles due to government intervention in the economy.  Nixon abandoned the last vestiges of gold backed money in 1971 when he famously reneged on America's commitment to maintain international convertibility of dollars.  Shorn of any sound money pretense, the American government printing press went full bore, inflation spiraled, and interest rates skyrocketed along with unemployment, while government price controls led to shortages of basic commodities (see George Reisman's The Government Against the Economy for a thorough analysis of the 1970's, also incorporated into his book Capitalism: A Treatise on Economics as Chapters 6-8 which can be downloaded here).    

From the speech, it is clear that Carter seemed to regard the crisis as separate from his own statist policies or even the statist policies of his predecessors. It was as if the various economic and political maladies destroying America had suddenly emerged out of thin air like a plague and the only remedy was some mysterious undiscovered antidote. So clueless was Carter that, rather than understanding that the causes of the economic crisis were government intervention in the economy and proposing a logical solution such as removing government intervention in the economy, Carter proposed more of the very ideas that caused the mess in the first place!

For example, later in this speech he made various proposals including import quotas on oil (uh, to reduce imports of oil during a shortage!), the creation of something called a "solar bank," a "windfall profits tax" (evidently to reduce the funds with which American companies could search for and produce more oil !), forcing energy companies to switch from oil to coal (ahem), create the "energy mobilization board" (yes, a new government agency to "cut through the red tape and the "endless roadblocks" created by government agencies or, I guess, an anti-government agency agency), something he called "mandatory conservation and standby gasoline rationing," and my favorite:
I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel. Every act of energy conservation like this is more than just common sense -- I tell you it is an act of patriotism.
In other words, rather than liberating the American economy by establishing a free market in energy, eliminating price controls, and returning to sound monetary policy, he simply proposed a new round of even more disastrous government remedies and urged the sacrifice of individual happiness by riding in cars with strangers and parking your car, evidently, to do literally nothing.

Does this all sound really familiar?  Let's see - economic crisis caused by government intervention in the economy, more government intervention to solve the problems of previous intervention that causes even worse disasters, apocalyptic warnings of imminent ecological disaster, calls for more government "action" and denigration of dissenters as dangerous "extremists" or "deniers," eroding personal liberty, weakness and humiliation abroad, confusing blitzkriegs of government actions causing businesses to reduce production or close due to the uncertainty of new taxes and regulations, high unemployment, monetary inflation and debasement of the currency to finance the government's escalating debt, increases in the hoarding of precious metals, calls for ever more sacrifice from the remaining producers, growing cynicism and disrespect for law and institutions, and with no end in sight, misery, frustration, hopelessness, depression, and malaise. Wait, this is precisely the state of America today!

Why do statist policies lead to cultural malaise?

For an individual who adopts a rational approach to life, confidence in one's own efficacy, or self-esteem, is a natural result.  If an individual knows that he can go as far as his ability can take him, he naturally feels a sense of confidence in the future knowing that the logical result of hard work is success. The only political precondition to productive achievement is the freedom to think and act, and as long as people are free, they must work and produce to whatever extent their ability and character allow them. Political freedom, the freedom to think, produce, and own property without coercion, is the basis of America's extraordinary productive achievements, and underlies the American spirit of self-reliance, innovation, pioneering, and entrepreneurship.  

But what if an individual began to believe it didn't matter how hard he worked?  What if he realized that his life didn't belong to him and that in fact, the harder he worked, the more would be taken from him?  What if he knew that even if he worked very hard, a random government edict may derail his efforts at any time?  What if his competitors needed only political pull rather than ability to subvert his work?  What if by virtue of his efforts he was regarded as guilty until proven innocent and harassed and vilified? What if he was not allowed to charge a profitable price for his product or to freely negotiate with his employees or customers?  Would he remain confident about his ability to succeed? At what point would he slow down, not seek to achieve as much, or even fire employees who now constitute more of a threat than a value? And what about those who rely on the producers for employment or for their goods and services? Extrapolated to a cultural level, at what point would cynicism, apathy, and depression replace healthy optimism about an unlimited future?

While any given individual can lack confidence to varying degrees for a variety of reasons, for a "crisis of confidence" to pervade an entire culture the precondition to individual success, i.e., the freedom to think and produce, must be upended to an extraordinary degree.  Carter was right about Americans lacking confidence, but it's cause was not mysterious nor was the solution "faith" and "sacrifice." Much to Carter and Obama's chagrin, the antidote to cultural and economic malaise are simply the abandonment of their statist policies and a total rejection of the altruist-collectivist philosophy upon which they are based along with the adoption of a philosophy of rational self-interest, individual rights, free markets, sound money.

Benevolent optimism accompanies free men - malaise is what accompanies slaves.

Wednesday, September 11, 2013

The Reason Why Obama is Stumbling on Syria

An "enemy" is one who seeks to destroy that which you value.  Therefore, to identify an enemy you must first identify your own values.  The question of what one fundamentally values is a moral question. The reason why Obama is stumbling on Syria is that he has no firm moral convictions.  Without moral convictions, he doesn't know who to befriend or who to attack or why.

Should we consider Islamic radicals to be our enemy? What if Islamic radicals are fighting each other. Should we intervene on one side if the other is using really awful weapons? Why are awful weapons bad? Should we intervene in every war in the world if awful weapons are used? What are the interests of the United States? Should foreign policy decisions even be based on American interests - isn't that selfish?

These are all moral questions that force our leaders to identify and define that which America values and then to explain the degree to which some specific foreign military force threatens these values.  The practical question of whether our military can prevail is necessary but secondary to the identification of our allies and enemies.  

As I have claimed for years on this blog, Obama is essentially a philosophical pragmatist.  He eschews moral absolutes in favor of "action."  He consistently rails against allowing "ideology" to stand in the way of "action" and urges compromise based on consensus. So if he doesn't believe in moral absolutes, how does he choose what to do?  He must simply absorb the default values of modern intellectual "experts" which in today's culture are collectivism and sacrifice.

The nature of his acceptance of these "values" renders his views obvious and unassailable to him.  Why? Anyone who dissents, must have firm or absolute moral convictions.  In his mind, there is no valid argument for firm convictions, so the dissenter must be dismissed as a kook, a "dogmatist," or an "extremist."

So why did Obama latch on to Syria?  Doesn't the fact that he seeks to attack Syria demonstrate that he does have some moral compass guiding his actions?  No, it shows the opposite and proves my point.

Syria is engaged in a civil war between a theocratic dictator and a motley assortment of Islamic militants and tribal factions.  Both sides are America's enemy!  The fact of one side using awful weapons or barbaric tactics is obscene and tragic but does not affect America or our allies.  The fact that Obama has latched onto the supposed use of chemical weapons by one side demonstrates his lack of moral conviction and consequent inability to ascertain what to do.  He sees chemical weapons, which are awful, and as a pragmatist simply wants to "act" to stop them regardless of the context and regardless of the potential future implications or unintended consequences of his actions.

What distinguishes the American system is the protection of individual rights upon the secular recognition that man requires freedom in order to pursue happiness.  Secular happiness as an end or value is a profound moral principle that brightly illuminates America's enemies in the world. An objective observer would recognize that the purpose of America's foreign policy should be to serve America's interests and that regimes that seek to subjugate individuals to dictatorship are clearly enemies.  However, only regimes that actually seek to attack or threaten America should be considered for defensive military action.  A war of sacrifice on the part of American soldiers and taxpayers without serving some American interest would contradict the entire basis upon which our nation is founded. The lack of a principled, moral approach to foreign policy is why Obama has America stumbling around the world actually threatening America's interests rather than our enemies.    

Wednesday, June 19, 2013

Regarding the NSA Spying Scandal: "Thwarting Terrorism" is Not a Valid Justification for Violating Rights

The most popular justification for the NSA spying scandal is that such efforts have thwarted "terrorism." The Washington Post reports on testimony to the House Intelligence Committee:
Intelligence officials said Tuesday that the government’s sweeping surveillance efforts have helped thwart “potential terrorist events” more than 50 times since the Sept. 11, 2001 attacks, and the officials detailed two new examples to illustrate the utility of the programs.
Evidently, according to these officials on both the Right and the Left, as long as government surveillance efforts result in preventing an attack from occurring, any manner of rights violations is justified.  Is this true? Should we welcome an Orwellian Big Brother state as long as we are "protected from terrorism?"  The answer is an emphatic "No!" As I wrote about in a previous post concerning gun control legislation, the idea of protecting Americans from harm is not a blanket justification for violating rights:  
[L]et's consider the concept of "safety", which evidently is of paramount concern to those supporting the [gun control] legislation.  As usual, this term is being used out of context.  For example, if safety is the goal, perhaps we could station government agents in our homes to regulate our movements just like at airports. After all, they could make sure we are clothed properly for the elements so that no one is ever cold.  They could make sure we eat only nutritious foods and beverages that have been approved by Michelle Obama and Mayor Bloomberg. They could make sure that we are not warping our minds with violent video games or television programs unsanctioned by the state.  They could make sure that no "offensive" speech is uttered, particularly, by the racist tea party talk radio show hosts.  They could make sure we carry the appropriate medical coverage. To really thwart potential danger, we could all live in cages and have government agents decide when we are allowed to leave and with whom we may interact.  Then all would truly be SAFE!
The Fourth Amendment to the Constitution specifically prohibits the government from conducting unreasonable searches and seizures and requires the police to obtain a warrant based on probable cause. If we drop the Bill of Rights and allow the government to trample individual rights what exactly are we fighting for (or against)?  Should we give up freedom to protect us from those who would take our freedom?


Friday, May 31, 2013

I'm shocked that anyone is shocked by Obamacare's "rate shock"

If car insurance companies were forced to offer insurance on broken cars (or cars with "pre-existing conditions"), would you expect rates to go up?  How can you "mandate" more services for more people and expect costs to go down?  Does anyone think that if you get enough "policy" eggheads with calculators that you can defeat reality? Is 2+2 still equal to 4?

Not surprisingly, Forbes's Avik Roy reports that Obamacare health care premiums are expected to go up by 146% in California, "a problem [that] will be especially acute when the law’s main provisions kick in on January 1, 2014, leading many to worry about health insurance 'rate shock.'"

Of course, I do not believe that lower costs was ever the real intention of Obamacare.  Its proponents knew that it was only a stepping stone to so-called universal care where any vestige of a voluntary private market in health care would be completely eliminated.  Once the effects of this distorted mess are felt in terms of higher costs, worse care, longer lines, rationing, etc. it will lead the government to clamor for even more power to "fix" the problems created by these very policies.  This will lead inexorably to a total government takeover where the real costs of yet another entitlement can be heaped onto the gargantuan pile of government debt funded through even higher taxes or through hidden taxes like inflation that result from the government's printing press.  As doctors leave or never enter the profession, as costs spiral upwards, as care is rationed by government edict, the left will realize its egalitarian dream of everyone being equally miserable or equally dead.

If you are unprincipled enough to think that the government has some magic formula for defeating reality, remember, 2+2 still does equal 4.    

Tuesday, May 28, 2013

Blame the Government, Not Apple, for the "Double Irish Dutch Sandwich"

Say you work your ass off, invent a product that everyone loves, and sell it to millions of people who voluntarily pay you lots of money.  Then, your business gets so big that you hire thousands of people to help meet the demand and distribute your product around the world. You stay constantly aware of the competition and invest billions in research to develop even more products to sell to your adoring customers.  Over the course of years and decades, you enrich yourself, your employees, your customers, and your investors.

Is this an example of good or evil? Should the inventor be publicly celebrated as a hero and role model of the American dream or should he be vilified and threatened?  Evidently, in modern America, it is the latter.                

The U.S. federal government has erected a byzantine tax code nightmare forcing businesses to retain legions of accountants and auditors on a full time basis to comply with and pay a confiscatory 35% corporate tax rate (more than double any other developed country).  Then, when these businesses make perfectly legal efforts to minimize this burden, they are hauled before a Congressional show trial for public haranguing and intimidation.

Recently, Apple CEO Tim Cook testified before the Senate Permanent Subcommittee on Investigations "to defend the company from accusations that it avoids tax payments by shifting profits to offshore subsidiaries in Ireland." Evidently, multi-nationals like Google and Apple "funnel profits through two linked Irish subsidiaries" by making "tax-deductible payments to a Bermudan subsidiary via a Dutch affiliate in a related arrangement known as a 'Double Irish Dutch sandwich.'"

But why do companies go to such incredible lengths to avoid taxation?  Do these companies have the right to minimize taxation and maximize their profits? Addressing the charge that corporations are "hoarding" cash overseas, Cook told the committee:
“Apple has real operations in real places with Apple employees selling real products to real customers.  Our foreign subsidiaries hold 70 percent of our cash because of the very rapid growth of our international business. We use these earnings to fund our foreign operations, such as spending billions of dollars to acquire equipment to make Apple products and to finance construction of Apple retail stores around the world.
True enough, but fortunately, he identified the real culprit, the U.S. tax code:
Under the current U.S. corporate tax system, it would be very expensive to bring that cash back to the United States. Unfortunately, the tax code has not kept up with the digital age. The tax systems handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free movement of capital.”
The article also quotes Brian White, analyst at Topeka Capital Markets, who chastised the "misguided" kangaroo court: “Although the U.S. Tax Code is written by Congress, we found the complete lack of understanding and inability to grasp simple concepts around how the tax code works as it relates to Apple (and the remainder of corporate America), nothing short of astonishing (and sad).” White specifically exposed  committee members for not understanding the concept of double taxation: “What really astounded us was the inability of Senators such as John McCain and Carl Levin to grasp the concept that Irish subsidiaries such as AOI are responsible for managing Apple’s cash as a holding company but the profits have already been taxed in other countries,” 

Fortunately, Senator Rand Paul got it exactly right when he scolded his colleagues saying:  "I'm offended by the spectacle of dragging in executives from an American company that is not doing anything illegal." He added: "If anyone should be on trial, it should be Congress." Appropriately, he suggested bringing in a "giant mirror" to hold up to Congress for creating a "bizarre and byzantine tax code" that incentivizes corporations to move money and operations overseas.

More importantly, Paul implied a moral argument by calling on the Senate to stop "harassing" Apple, which he called one of "America's greatest success stories."  He added:  "Instead of doing the right thing, we drag businessmen and women in here to berate them for trying to maximize their profits for shareholders. Apple has done more to enrich people's lives than politicians will ever do."

I agree with Senator Paul, but, I would go further and point to the philosophy underlying the U.S. tax code.  What really should be on trial is a moral code that holds production and rational profit seeking as a vice and not a virtue.  When the idea that pursuing your own rational long term self-interest is regarded as a virtue, companies like Apple and Google will be brought to Congress, not for threats and harassment, but for medals of honor.

Thursday, May 23, 2013

Obamacare: Free and Worth Every Penny

Writing for PJ Media, Paul Hsieh details how support for Obamacare is waning as the country, to quote Nance Pelosi, "finds out what's in it." In fact, he notes, the federal government is planning on spending billions of your tax dollars in a PR effort to "promote Obamacare to the public." The Hill reports that even a variety of pro-Obama unions are breaking ranks publicly warning "that unless there are changes, the results could be catastrophic." A recent poll found that a majority of Americans want to go back to the pre-Obamacare system.

But did Americans need to get to the brink of full implementation before realizing that this law would have disastrous outcomes?  Or, more generally, at one point did anyone think that there is such thing as a free lunch?

In fact, nothing is free, particularly health care.  Those who demand "free" health care want one of two things (or both): either they want the doctor to work for free or they want some other person to work longer hours to pay the doctor on their behalf.  If doctors are forced to work for free or below their market value, most, at least the good ones, will stop working and there will be doctor shortages leading to higher prices, poorer quality, and waiting lines.  If third parties are forced to pay, besides the immorality of forcing an innocent person to pay for another's service, the blank check on care artificially increases demand leading to higher prices for those who do actually pay which, in turn, leads to rationing and poorer quality as the government attempts to control costs.      

I am sorry, but despite liberal intellectuals' candy dreams and rainbow wishes, there is no way around this logic.  Most of the bureaucracy, red tape, and draconian regulations embedded in this law are attempts to circumvent reality by getting doctors to take less and getting third parties to pay more which will only exacerbate the negative effects of these very policies.  Even thousands of pages of regulations can not change the nature of reality.

If a restoration of a fully voluntary, free market in medicine is politically unattainable in the short run, I agree with those who believe we should do no further harm and at least go back to the severely flawed pre-Obamacare system.  To that end, I agree with Hsieh who concludes:
ObamaCare won’t go down without a tough political fight. But Americans have the ultimate weapon on their side — their ability to say “no.” Don’t buy into the coming PR campaign. Don’t encourage people to sign up for the government-run insurance “exchanges.” Circulate articles and blog posts critiquing the health law. Support state governors who refuse to cooperate with federal mandates. But most importantly, don’t be a willing accomplice to a health law you don’t support.

Friday, May 17, 2013

Lesson of the Scandal: Tyranny is an Essential Feature of Socialism

I recently heard a television pundit lament the likely outcome of his own prediction that the liberally biased media, after a temporary fit of outrage over the egregious scandals engulfing the Obama administration, will return to its sycophantic posture just in time for the next election cycle. While I agree with this prediction, the more important question is why? Why is it unlikely that these scandals will transform the American political landscape in some meaningful way? Is there a more fundamental lesson to be drawn from these scandals that could change the political system?

The reason that the American left will continue supporting Obama and his ilk is that the liberal media, along with the vast majority of modern intellectuals, make no connection between the scandals erupting in Washington and the political ideology that they support. In other words, they might object to the Obama administration's seeming corruption or ineptness in managing the executive branch, but they do not object to the policies that he supports. As always, the left will observe corruption and tyranny associated with socialism but will simply hope that the next regime do better. They will conclude that while not always good in practice, socialism is good in theory, and urge the crusade to continue. If this is the lesson broadly accepted, then nothing in America will fundamentally change.

The lesson that should be drawn from these scandals is that socialism is bad in theory and therefore bad in practice. Tyranny and corruption are an essential feature of socialism, and whether it is Obama, Chavez, Castro, Kim Jong-il, Pol Pot, Mao, Stalin, or Hitler - statism requires force to be initiated against innocent people and only misery, oppression, and stagnation can result. The power to seize control of industry, tax and redistribute the income of producers, control prices, inflate the money supply and stifle dissent by controlling the media, thwarting the ability to assemble or preventing the ability to flee the borders necessitates the threat of violence.

Is it surprising to anyone that an administration that upholds an ideology that calls for coercion and violence against innocent individuals would commit acts of coercion and violence against innocent people?

America was founded upon the principle that the proper role of government in a free society is the protection of individual rights, that is, the protection of individual life and property from the initiation of physical force by criminals or foreign enemies. A government confined to this function leads to a society based on voluntary trade and cooperation where individuals selfishly pursue their own happiness while respecting the rights of other to do the same. When a government goes beyond this function and seeks to redistribute wealth or regulate the actions of individuals in the name of altruism and sacrifice, it must, by definition, use the threat of physical violence (fines and/or imprisonment) to coerce individuals to act against their own independent judgement. Once the principle of individual rights is abandoned and the government is enabled to initiate force against its own citizens, the only question becomes the degree of violence the state is willing to perpetrate.

Historically, the American government has been relatively constrained whereas other countries have taken socialism much more seriously - the degree of horror being directly proportional to the level of statist controls. While America does not yet have only one state media-propaganda outlet and a system of gulags to imprison and torture dissenters, the level of government control sought by the Obama administration has been a giant leap in that direction.

In a free society, the president would have very little to do, except in times of war, and elections at the local level would be far more significant to the every day lives of individuals. Under socialism, the executive and legislative central planners have the power of life and death over everyone in the country. This is one reason why national elections have taken on a preposterously distorted significance in our lives. In fact, tax and regulatory policies do affect critical areas of our lives from our income to our health care. For this reason, re-election of the regime (if they even bother holding an election) is vital, and central planners make careers in government serving their masters under the infamous credo: "the ends justifies the means." The recent scandals serve as excellent examples.

The Obama administration used the IRS as a means to attack and stymie its political opposition. The very person in charge of the exemption policies, Sarah Hall Ingram, was given bonuses and then promoted to an even more powerful position as the new head of the IRS enforcement wing of Obamacare - yet another program with life and death power.  But the IRS itself is an agency designated with the task of enforcing the legalized theft of income from every American citizen.  It is assigned the task of pouring through the minutia of every person's life, to "wait upon ladies at their toilett," to exact tolls for the very act of earning a living.  Is anyone shocked that such an agency would be used for "political" purposes?  

The Benghazi cover-up was necessary to protect the president before the election in two ways. First, it was necessary to cover-up the incompetence of the administration in protecting our consulate or for even having one that area in the first place. Second, the presence of Al Qaeda contradicted Obama's entire fantasy-land narrative surrounding Islamic terrorism. According to Obama, we are not at war with an ideology we are at war with a handful of "terrorists" who have hijacked an otherwise peaceful religion. The supposed killing of Bid Laden was equivalent to catching a bank robber - problem solved. The presence of a pre-meditated attack by a group motivated by Islam contradicts this premise, and so the idea of a spontaneous eruption of violence was crafted to fool the American public.

The broad usage of phone taps on the AP, all supposedly to find a national security "leak," is part of a pattern of press intimidation under this administration from day one designed to chill any opposition to its political programs.

While these scandals are egregious examples of a federal government run amok, Americans must understand that the abuse of government power will continue as long as we give the government the power to abuse. More fundamentally, we must reject the tragically flawed idea that socialism and the morality of self-sacrifice upon which it is based is somehow "good in theory." 

Wednesday, May 1, 2013

Dems Warn Climate Change Could Drive Women to Prostitution


According to The Hill: "Several House Democrats are calling on Congress to recognize that climate change is hurting women more than men, and could even drive poor women to 'transactional sex' for survival."

But, actually, that's good.  Recall the shortage of prostitutes in Bulgarian brothels that was blamed on climate change.  If these Democrats are right, climate change could help alleviate it!    

Tuesday, April 23, 2013

Bloomberg: Give Up Freedom To Protect Us From Those Who Would Take Our Freedom

Mayor Bloomberg says that the interpretation of the Constitution will ‘have to change’ after Boston bombing:
“But we live in a complex word where you’re going to have to have a level of security greater than you did back in the olden days, if you will. And our laws and our interpretation of the Constitution, I think, have to change.”
“...Look, we live in a very dangerous world. We know there are people who want to take away our freedoms." 
He is right about one thing.  There are people who want to take away our freedoms.

Friday, April 19, 2013

A Theory is Not Invalid Because It Is a Conspiracy Theory, Part 1

Say a government official, Mr. X, gets assassinated.  The official government investigation determines the murder was committed by crazed individual in a temporary moment of insanity.  However, eyewitnesses come forward and claim their testimony was ignored by the investigators and left out of the final report.  These witnesses tell other journalists they saw multiple people firing guns. A grainy video of the shooting emerges seeming to show gun shots fired from several locations.  Two of these five eyewitnesses suddenly die in separate car accidents within a week.  The government won't release an autopsy of Mr. X and it is learned that the body was cremated 24 hours after the murder.  Oddly enough, the person who took over for the murdered politician, Mr. Z, has a history of having his political rivals die under mysterious circumstances.  Furthermore, several aides to Mr. Z claim they witnessed him meeting with people in the days leading up to the event that are later identified as possible shooters in the video.  A theory emerges (theory #1) that Mr. Z conspired to murder his rival and cover up his guilt.    

At the same time, another "theory" of these events emerges on the internet (theory #2).  A website claims that pink lizard creatures from Jupiter have carried out the assassination as a prelude to an alien takeover of the earth.  No evidence is provided for this theory, but the author assures you that anyone who denies the story is part of the alien conspiracy.

Those concerned with these events push journalists to continue to investigate the story.  Others in the media dismiss these concerns as the ravings of "conspiracy theorists."  Press agents for the politician ridicule all of these conspiracy theories as the mad speculations of tinfoil hat wearing kooks on the internet.  After all, the government performed an investigation and determined the truth.

Note that both theory #1 and theory #2 are "conspiracy" theories in that they postulate that individuals (or aliens) secretly plotted and carried out a covert criminal act and then engaged in a cover up of the crime. But are theory #1 and theory #2 equally valid? Should we be equally suspicious of both theories because they are so-called conspiracy theories?  

Of course, theory #1 is a valid theory.  Although there is no "smoking gun" such as a confession from the perpetrator, actual evidence has been put forward that casts doubt on the official story that would lead any reasonable person to question the official narrative and at least be cause for further investigation.  Theory #2 is not a valid theory.  No evidence is put forward at all to substantiate the claims, the basic premise is at odds with known scientific facts, and the theory fails to account for the actual known facts of the case in any substantive way.  It should be dismissed.  

I have created this rather obvious example to demonstrate the point that conspiracy theories should not be disregarded merely because they are conspiracy theories.  They should be disregarded if they are bad theories or not a theory at all.  Of course, in reality, there is a spectrum of credibility as it relates to conspiracy theories ranging from very plausible to outright insane, but I believe there is a trend towards discrediting those who postulate alternative explanations of events merely because they postulate alternative explanations.  To many, the concept of a conspiracy theory has now become almost equivalent to "crazy idea" regardless of the merits of the proposed theory.

To maintain the integrity of government in a free society, serious violations of the law by government officials must be exposed and those involved brought to justice. If  legitimate theories about conspiracies are automatically dismissed because they are considered part of some class of automatically invalidated knowledge ("those crazy conspiracy theories") it creates a dangerous climate where anyone who questions the government is regarded as a nut or worse (as we shall see in Part 2). Conversely, if every theory, regardless of its merits, is considered something worth investigating, it not only results in a waste of time, but it tends to decrease the enthusiasm and support for legitimate investigations.

In Part 2, I will analyze a paper written by our old nemesis, Cass Sunstein, on the topic of conspiracy theories.  Sunstein as usual has some subtly scary ideas about what to do with all of these conspiracy theorists.

Tuesday, April 16, 2013

American Education Is Broken, Here Is How to Start Fixing It

I recently was made aware of an effort to produce a crucial documentary film, The School That Never Was. Quoting the kickstarter campaign website:
"We've seen the statistics and read the stories. If you're a parent, you live with it every day. Public education is broken. And no one seems to know how to fix it. It wasn't supposed to be like this. The American education system was once the envy of the world. Once. No more. 
The School That Never Was documentary will show how education got this way and what we can do to fix it."
The film will be produced by Chris Mortensen, an award winning writer, producer, and director who has created more than 100 hours of documentary and reality programming in the last fifteen years. His programs have appeared on History Channel, A&E, Discovery, TLC, BET, VH-1, ESPN, Travel Channel, and other channels. Most recently he completed a feature length documentary on the resurgent interest in Ayn Rand’s controversial novel Atlas Shrugged and the validity of its dire prediction for America.

What impresses me about this project is that it will not try to convince people that the current education system is flawed - everyone knows that. Instead, it will examine the development of American education by looking at the ideas that brought us to where we are today. In other words, it will take an approach virtually unheard of today, because it will consider solutions by first examining and identifying the causes of the problem! Again quoting the site:
The School That Never Was will identify and examine the fateful decisions that brought us to the low point we're at today. Then we'll navigate the road not taken to discover the school system that might have been but never was. 
Along the way it is our hope to answer such fundamental questions as:
- What are schools for?
- Who should teach?
- Who should be taught?
- What should they learn?
- Who should administer the schools?
- Who should pay for it?
- What role—if any—should the government have in educating our children?
According to the producers, the film will examine many viewpoints for how to improve American education--including radical positions often ignored by other media, but it will not be a polemic for any one position. Their goal is to be the first step in an education revolution by questioning every fundamental premise and rethinking every assumption underlying American education.  In my view, nothing short will do.  

If you want to be a part of the effort or contribute to the film's production or just watch the trailer, here's the link.

Thursday, April 4, 2013

Hear me on the "You Know I'm Right" Podcast!

I recently was a guest on Sunny Lohmann's podcast "You Know I'm Right" to discuss NYC and the Nanny State.

Check it out!

And check out her great blog at House of Sunny.

Wednesday, March 27, 2013

Concierge Medicine, The Antidote to Socialized Medicine

In 2009, I discussed an essay by Lin Zinser and Dr. Paul Hsieh in which they detailed the history of government intervention in the health care market and demonstrated how government, not the free market, is to blame for the state of health care today.  In that same post, I suggested that given the political reality of dramatic government intervention in health care, akin to the throwing of gasoline on a fire, doctors should simply refuse to contract with insurance companies or the government by setting up "concierge" practices that do not accept insurance or medicare but actually ask their patients to pay for the service (gasp).  

To follow up, I link to a current Forbes piece by Dr. Hsieh titled, Is Concierge Medicine Right For You?, in which he discusses alternative practice models being developed to respond to the phase in of Obamacare.  In the wake of an impending physician shortage due to a "silent exodus" from the profession and declining reimbursements, doctors "are establishing “concierge” or “direct pay” practices, where patients pay a monthly or annual fee for enhanced services, including same day appointments, 24/7 access to their doctor, e-mail consultations, and longer appointment times."  He goes on to discuss some key considerations and points out that you will likely face a choice:
Over the next decade, we will likely see the evolution of primary care delivery into two tracks. Some patients receive high-quality care from happy, motivated concierge doctors, whereas others will have to make do with rushed “assembly line” care from overworked providers trying to get their patients in and out the door as quickly as possible.
He concludes that "if you don’t choose, the choice will be made for you."

Monday, March 25, 2013

Michael Moore, Jim Carey, Bad Thinking, and Why "The Balance of Power is the Scale of Peace"

Once again, celebrity intellectuals give us an opportunity to case study bad thinking methods. First, Michael Moore recently "ranted against the Senate majority leader after Reid removed Sen. Dianne Feinstein’s proposal to prohibit military-style weapons from the bill because they wouldn’t have the votes."   Moore said:
“If a man with an assault weapon goes into the school where Harry Reid’s grandchildren go to school tomorrow and kills his grandchildren, would he stand in front of that microphone at five o’clock and say, ‘I know how Dianne [Feinstein] had to witness the mayor getting murdered, but my grandchildren just got killed today, but, you know, we can’t get it passed because we just don’t have the votes,’” 
In other words, according to Moore, if Reid were to have personally experienced the death of his grandchildren at the hands of a crazed gunman, he would be more likely to pass an assault weapons ban.  By this logic, Moore would have to argue that if Reid's grandchildren were killed by a knife wielding maniac, he would be more prone to ban knives.  Or, if his grandchildren drown, he would argue that Reid would be inclined to ban water.  Perhaps Reid would move to ban alcohol and automobiles if his grandchildren were killed by a drunk driver. 

Moore urges us to completely drop the wider context of individual rights, specifically gun rights, and focus on one concrete instance in which guns were used to murder.  Like the examples above demonstrate, if one were to consistently think this way, any instrument or device indirectly involved in a death could be used as a justification for banning that instrument.  

Not to be outdone in the bad thinking category, Jim Carey has launched his own attack on gun rights.  He is releasing a song titled "Cold Dead Hand" which he described on Twitter as follows:
‘Cold Dead Hand’ is abt u heartless motherf%ckers unwilling 2 bend 4 the safety of our kids.Sorry if you’re offended by the word safety! ;^}
The implication of his tweet is that the only thing standing in the way of children being safe is the drive of the "heartless" gun owner to satisfy his own selfish desire to own guns.  According to Carey, millions of law abiding gun owners do not mind seeing innocent children slaughtered by crazed killers, because they have no feelings.  Evidently, if they would only "bend", i.e., give up their right to own a gun, then the children would all be safe.  According to Carey, so evil are these gun owners that their lives are not even worth protecting.  

Ironically, the vast majority of gun owners are law abiding people who understand the practical limitations of police protection and possess weapons to prevent the slaughter of their own children.  Yet, Carey's solution to protect "our kids" is, um, to disarm these very people since they are the only ones who are likely to abide by laws restricting firearms!    

Obama made a similar emotional appeal, discussed in a previous post, in which he cited letters, not from legal scholars but from school children, urging passage of gun control legislation.  Like Moore, both Carey and Obama urge us to disregard the concepts of individual rights and self-defense along with the historical justification for the Second Amendment and instead focus on a primitive analysis of the following type:  
Man used gun to murder
If man didn't have gun, he wouldn't have murdered
Therefore, government should ban gun        
Arguments of this type provide great insight into the "thinking" of modern leftist intellectuals not just in this case but in every other as well.  Just as Moore and Carey make appeals to emotion, drop context, and fail to consider the unintended consequences of their ideas, modern liberal economists commit the same fallacies.  Moore and Carey see people murdered with guns and urge us to ban guns, just as their comrade economists see that the country is broke and tell us just to print money!  

In opposition to the Moore-Carey method, consider the context in which the Second Amendment was passed and focus on arguments made by great thinkers.  Fresh from fighting the War of Independence against a despotic monarch, the Founding Fathers rightly considered private gun ownership to be an essential deterrent to tyranny.  This web page lists many excellent quotes related to the Second Amendment such as the following from Thomas Paine: 
The supposed quietude of a good man allures the ruffian; while on the other hand, arms like laws discourage and keep the invader and the plunderer in awe, and preserve order in the world as well as property. The balance of power is the scale of peace. The same balance would be preserved were all the world destitute of arms, for all would be alike; but since some will not, others dare not lay them aside. Horrid mischief would ensue were one half the world deprived of the use of them; the weak would become a prey to the strong."
In other words, it would be really neat if no one had any guns, because we would all be equal, but because criminals and tyrants will not surrender their arms, it is necessary for individuals to possess arms in order not to fall "prey to the strong."  Consider another "heartless motherf cker", George Washington, in his address to the second session of the First U.S. Congress:
"Firearms stand next in importance to the Constitution itself. They are the American people's liberty, teeth and keystone under independence. The church, the plow, the prairie wagon and citizens' firearms are indelibly related. From the hour the pilgrims landed to the present day, events, occurrences and tendencies prove that, to ensure peace, security and happiness, the rifle and pistol are equally indispensable. Every corner of this land knows firearms, and more than 99 and 99/100 percent of them by their silence indicate that they are in safe and sane hands. The very atmosphere of firearms anywhere and everywhere restrains evil influence. They deserve a place of honor with all that's good. When firearms go, all goes. We need them every hour."
Here is James Madison, from "The Influence of the State and Federal Governments Compared," 46 Federalist New York Packet, January 29, 1788:
"Besides the advantage of being armed, which the Americans possess over the people of almost every other nation, the existence of subordinate governments, to which the people are attached, and by which the militia officers are appointed, forms a barrier against the enterprises of ambition more insurmountable than any which a simple government of any form can admit of. Notwithstanding the military establishments in the several kingdoms of Europe, which are carried as far as the public resources will bear, the governments are afraid to trust the people with arms. And it is not certain that with this aid alone they would not be able to shake off their yokes. But were the people to possess the additional advantages of local governments chosen by themselves, that could collect the national will and direct the national force, and of officers appointed out of the militia, by these governments and attached both to them and to the militia, it may be affirmed with the greatest assurance that the throne of every tyranny in Europe would be speedily overturned in spite of the legions which surround it."
Finally, consider this succinct quote from Noah Webster, 1787: 
"Before a standing army can rule, the people must be disarmed, as they are in almost every kingdom in Europe. The supreme power in America cannot enforce unjust laws by the sword, because the whole of the people are armed, and constitute a force superior to any band of regular troops."
What these quotes unequivocally demonstrate is that the Second Amendment was not enacted just to protect the hunting of squirrels.  The right to bear arms was considered essential in order for the people to protect themselves from tyranny - a concept fresh in the minds of those who fought the American Revolution.  Naturally, Feinstein et al. don't even consider the arguments of this type instead dismissing the concerns of millions of law abiding gun owners as petty politics. Said Feinstein:
“That’s the problem with this place. The gun lobby is inordinately powerful.”
No, Diane, that's not a "problem," because the gun lobby represents millions of people who believe the ideas upon which this country was founded are still inordinately powerful.  

Tuesday, March 5, 2013

Chavez is Dead, But His Evil Ideas Live On

In celebration of the death of Chavez, here is a link to all the posts I have written about his evil regime. I think my posts are still relevant because the theme of each is generally not political but rather philosophical.  So although I briefly analyze the evil of price controls and socialized medicine, the failure of public education, the stifling of free speech, the nationalization of major industries, etc. in the context of Venezuela, these specific policies should all be seen as instances of a broader philosophical movement - a movement which is haunting us today. It's important to explain and analyze the underlying philosophy of a dictator, otherwise, another one will quickly take his place.  In this context, I think some of the posts are more relevant than ever.  My favorite is this post which relates the philosophical premises of Chavez, Obama, and Van Jones and explains why they are similar focusing on the tragically flawed notion that socialists have "good intentions." This is my second favorite.    

Thursday, February 28, 2013

A Government Cut Should Be Called a Taxpayer Keep

Say a group of criminals shakes down local merchants every week.  One week, the merchants bravely ask the leader of the gang to take a little less.  The criminal scoffs.  "Don't you realize," the criminal says, "if we steal less from you, it will mean I have to lay off one of my crew, and we will each have to drink one less shot of whiskey per night.  That's not fair to us." Of course, such a response on the part of the criminals is preposterous.  It is not their money to begin with so how could they interpret the proposed cut as an injustice?

Yet, this is exactly the position of the Obama administration with respect to the sequester cuts.  According to them, if the mandated budget cuts go through, a vast injustice will be committed upon the poor souls in Washington D.C., and fire and brimstone will pour down upon the nation as the mad run riot in the post-sequester apocalypse.

But does the sequester actually cut anything?    

In his post, Earth to New York Times: Please Show Us these “Deep Spending Cuts” You Keep Writing About, blogger Dan Mitchell shows that the budget cuts mandated by the so-called sequester are actually not cuts at all.  In fact, based on CBO projections, these cuts merely impede the increase in growth of government spending - by a tiny amount.  In other words, these "savage" cuts are just a tiny cut in the rate of increase, not even an actual cut!  Senator Rand Paul has called out the Obama administration on its "doom mongering" and "histrionics" over these supposed cuts and introduced his own bill to cut the amount of mandated spending without any layoffs.  

But let's say these were real cuts and let's assume that, gasp, actual federal bureaucrats got laid off as a result of said cuts.  As was the case in the criminal example, when the government spends money, it is spending someone else's money.  The government ultimately can only fund itself through taxation, that is, through the expropriation of one person's earnings for the unearned benefit of another.  In what sense is it a "cut" when all this means is that the government will stop stealing a little bit of money for awhile and pissing it down the federal government budget toilet?  For this reason, a "cut" should be thought of and referred to as a taxpayer "gain" or to be more accurate a taxpayer "keep."

Remember, when Obama castigates spending cuts he is really criticizing your just demand to keep what you earn. So don't feel so bad.    

Friday, February 22, 2013

Study: Global Warming Can Be Slowed by Dying

Human beings must work in order to survive.  This is not an opinion.  It is a simple fact of nature.  If you lay there and do nothing, you will eventually die. You could get someone else to occasionally stick a berry in your mouth and pour water down your throat but then that other person would have to do work.

The necessity of work is part of our nature.  In fact, the more we produce, the better off we all are.  Without modern productivity, every person would have to spend all day just gathering enough food and water to subsist - a condition that was common prior to the industrial revolution and a condition that unfortunately still exists for much of the third world.

In an environment in which all of your waking hours were devoted merely to subsistence, there would be no time to research life saving drugs, invent better smart phones, find new sources of energy, erect skyscrapers, launch satellites to space, or study black holes.  In such a state, there would be no time to blog, post on Facebook, surf the web, listen to music, play video games, watch the sunset, take a road trip, go to the movies, visit a museum, take a cruise, go shopping, watch TV, attend a party, read a fashion magazine, practice an instrument, take a walk,  draw a picture, sit on the beach, go to a sporting event, watch your kids play, take a hike in the mountains, or do any of the other things people in developed countries take for granted.

Productivity is essential to the furtherance of human life.  As we find ways to produce more in less time, it allows for time to be spent on fulfilling other human desires which are unlimited.  That is why advances in technology do not create unemployment, but rather create a rising standard of living for all.

In light of this principle, what if someone were to suggest that doing less is actually beneficial? Not less in terms of any given individual's preference to work more or less based on their values, but rather, to do less in aggregate.  If someone were to make such a claim, wouldn't we have to question their definition of "beneficial" and ask "beneficial to whom?"

Well, such people do now exist and make exactly this claim. The Center for Economic Policy and Research, a liberal think tank, has concluded that working less hours is actually good for all of us.  According to this article:
A worldwide switch to a "more European" work schedule, which includes working fewer hours and more vacation time, could prevent as much as half of the expected global temperature rise by 2100, according to the analysis, which used a 2012 study that found shorter work hours could be associated with lower carbon emissions.
Evidently, working less will benefit us all, not by reducing our stress levels or for some other purported psychological or physiological reason, but to make the earth colder in one hundred years!

The article continues:
"The relationship between [shorter work and lower emissions] is complex and not clearly understood, but it is understandable that lowering levels of consumption, holding everything else constant, would reduce greenhouse gas emissions," writes economist David Rosnick, author of the study. Rosnick says some of that reduction can be attributed to fewer operating hours in factories and other workplaces that consume high levels of energy.
Let me get this straight.  What is completely certain is that by working and producing less, we will all be worse off in terms of living standards since we will have less.  Reality makes certain of this.  However, based on a highly disputed theory of global warming and the "complex and not clearly understood" relationship between "shorter work and lower emissions" we should adopt a more "European" work schedule which means work a lot less.  In other words, according to this study, we should reduce our material prosperity, life expectancy, and day to day happiness in order to possibly reduce emissions which may keep the earth from getting warmer in one hundred years.  And, on this basis, we should be willing to endure even higher unemployment rates by throttling "factories and other workplaces" down while higher unemployment and less production somehow affords the ability for us all to take "more vacations" (assuming he does not mean unemployment is equivalent to vacation).  

What this preposterous study really exposes is the environmentalist disdain for human life.  As George Reisman has pointed out before, if these people were truly concerned with man's welfare, they would suggest liberating the economy to create the greatest possible industrial base not only to cope with the day to day problems of human existence but also to cope with the possibility of "catastrophic events, whether those events be war, plague, meteors from outer space, intolerable global warming, or a new ice age."

What the religion of environmentalism really opposes is man's nature, i.e., the fact that man must reshape the earth in order to survive.  If one believes the earth is some kind of deity to be intrinsically worshiped apart from any concern with human life what amount of "slowing down" will appease them?  Is stopping the Keystone pipeline and preventing new coal plants enough for them? Are the 30,000 people that now won't have jobs really just on vacation?  How much less should we work? How much less energy should we expend in the pursuit of our life and values?  How much less should we live?      

Based on their actions and words, their answer is clear.

Monday, February 18, 2013

Repost: Where's Grover Cleveland When You Need Him?

In honor of President's Day, I am going to link to a blog post I wrote in November 2008 entitled Where's Grover Cleveland When You Need Him?

The post details a speech that Cleveland gave in 1893 in which he actually identified the cause of a particular economic disaster to be government and demanded the immediate repeal of the law that gave rise to the disaster.

In the wake of decades of destruction wrought by government policies that intervene in money, banking, housing, health care, drugs, agriculture, transportation, manufacturing, and energy to name a few, could you imagine any modern politician giving a speech recognizing government's role in creating disaster after disaster and advocating the repeal of even one law that has given rise to it rather than advocating for even more government power and more funding?

Wednesday, February 13, 2013

Obama and the Left: The Minds of Children

Anyone with kids has had some variant of the following conversation:
Kid: "I want a toy"
Parent: "No"
Kid: "Why?"
Parent: "Toys cost money"
Kid: "So, just get some money"
Parent: "And where should I get the money?"
Kid: "Just go to the bank or use that plastic card thing"
To a child, this is a simple matter.  He sees you buy things with money and just assumes that whenever you want something you just conjure up the money to pay for it.  In other words, he can not yet grasp cause and effect.  He doesn't abstract that you must earn money first, then offer that money to someone in exchange for something.  He assumes that you want something first, then for some reason there is this weird adult ritual where you must offer this green paper stuff for it.  Ultimately, it is just the desire to have something that is primary to the child, not the work or production that came before it.

Because they regard the green stuff as a mere formality that doesn't represent anything real, this leads the child to the following conclusion:
Kid: "I wish everyone just had a lot of green stuff (money) so you could just have whatever you want" or "I wish everything were free."  
While this seems like a cute anecdote to illustrate a child's first stage of conceptual development it is actually much more than that.  It represents the conceptual level of the entire left including the president, the federal reserve chairman, and Nobel Prize-winning Keynesian economists.  With respect to economics, I have blogged about this phenomena at length in at least three prior posts: "Have You Had 'Enough': Obama's Inversion of Reality", Cargo Cult Economics, and Production and the Primacy of Existence.

Naturally, this phenomena is not restricted to the field of economics. At the outset of the gun control debate, where profound conceptual level abstractions were being considered regarding the government's role in protecting individuals from crime, the purpose and meaning of the Second Amendment to the Constitution, the state's role in regulating the sale of firearms, the states role with regard to the mentally ill vis-a-vis criminal behavior, etc. the Obama administration offered letters, not from his adult constituents or legal scholars, but from grade school children.  According to this report:
....the White House released handwritten letters to the President from some of the children who will be at the White House when President Obama unveils his plan to prevent gun violence. The kids offer their own ideas on gun control - ideas that go significantly further than the President's plan.
Naturally, like with money, the children operate at a first order conceptual stage.  They know that a man with guns killed children.  Therefore, they ask the president to stop this from happening by getting rid of guns.  I remember thinking in a similar way as a kid growing up during the cold war.  Nuclear bombs were scary to me because they threatened to annihilate mankind.  Therefore, I reasoned, they should just get rid of the nuclear bombs. Of course, at that age I couldn't comprehend the difference between the West and the communist Soviet Union, nor could I understand that nuclear weapons had most likely averted another world war by threatening such destruction.

As I discussed in previous posts here and here, simplicity is the essence of good thinking within a certain context, namely that prior facts or principles be fully integrated into a conclusion.  For example, Einstein's theory that "matter is energy" sounds very simple, but it integrates an enormous body of prior knowledge.  The case of children not grasping cause and effect nor being able to integrate a vast body of prior principles such as the concepts of freedom, individual rights, and self-defense does not represent an example of "simple" thinking, but rather, an example of primitive conceptual development and therefore has no place in a serious discussion.  In the case of adults making the same errors, it is an example of illogical, irrational, or wrong thinking.  In the case of adults exploiting childrens' errors for propaganda, it is an example of evil.  

Saturday, February 9, 2013

Let's Drop Modern Economists from Helicopters Instead

Today's economics profession is a cesspool of myopic number crunching erected upon a foundation of disintegrated concepts, half-truths, and outright contradictions. Given this, it was not surprising to hear the recent discussions of trillion dollar coins nor was it surprising to read Adair Turner's recent lecture: Debt, Money, and Mephistopheles: How do we get out of this mess?.  Turner, in the style typical of modern academics, does not define anything, cites facts out of context, acknowledges cause and effect, but then attempts to have his cake and eat it too.  It is with this method that he seems to be laying the intellectual groundwork for dropping money from helicopters or OMF ("overt money finance"), the logical next step for central bankers, particularly those nicknamed "Helicopter Ben", whose computer models tell us there is nothing to worry about as long as this time they stay "massively more worried" about the droppings.

I once likened central bankers to firemen who are sent to put out a blaze but do not understand cause and effect so that they are as likely to throw a ham sandwich on the fire as to pour water.  This is exactly the position of today's intellectuals coping with the apparent dilemmas of so-called "monetary policy." Given that central planning has never worked and can not work in any sector of any economy, you might think they would question whether it could work when applied to the entire monetary and banking system of the largest economy in the world. Yet, their approach is never to understand cause and effect much less to question the very system of central banking itself.  Instead, their approach is to study data empirically and correlate lagging economic statistics to the various central planning "levers" at their disposal, hoping that some combination of the throttles will move some contrived statistic, such as unemployment or GDP, in some direction they have arbitrarily decided is to everyone's benefit.

But what if we consider cause and effect?

As George Reisman explains in great depth (see Chapter 19 Part B Section 5-9 from his book Capitalism full book downloadable here and here for the work of other Austrian economists), printing money out of thin air inflates revenues and incomes and encourages excessive debt to be held against this revenue and income. Artificially low interest rates encourage malinvestment or investment in businesses that only appear profitable because of inflation (see real estate in the 2000's).  When inflation stops, revenues and incomes contract leaving no means of paying back the debt which in turn leads to insolvency and bankruptcy setting off a "self-reinforcing spiral of deflation."  As depression and deflation take root, modern politicians and central bankers, ever in search of the path of least resistance, are led to re-inflate (create even more money out of thin air) as they attempt to reverse the disasters unleashed by their own policies.  In other words, inflation of the money supply by the government (and private fractional reserve banks) is the cause of depressions and deflation and the so-called boom-bust cycle.  In light of these facts, the solution to the boom-bust cycle must be the abolition of the federal reserve system and the imposition of a 100% reserve gold standard.

The fact that central banking itself is the cause of the very disasters that central bankers seek to remedy is of monumental importance yet completely ignored by establishment economists. Here we are, years into the worst depression in a half century, and their best minds are recommending dropping money from helicopters and creating trillion dollar coins. In this light, it is clear that what retards the intellectual growth of this profession is not just bad ideas but their method of thinking.  Scientific conclusions can be objectively scrutinized - weighed with reason and evidence and accepted or rejected. But irrational methods, like those of the religious mystic or the modern Keynesian economist, are impenetrable and can lead to truth only by accident.

Consider another example not from monetary policy.  Imagine you proposed cutting the government's budget by $2 trillion.  Most modern economists would instantly focus on the effect of the cut on the all important GDP since this would reduce government spending, a component of GDP.  In fact, Keynesian economists urge the government to deficit-spend to increase so-called GDP and therefore, such a cut would be regarded as positively horrifying.  They might perform a historical regression to measure the empirical effect of budget deficits on GDP. Most would add that cuts of this kind will lead to unemployment, a drop in consumer spending, and a spiraling downward effect on GDP...oh no!

Now, forget about GDP (a flawed Keynesian concept to begin with).  Imagine that instead of sending $2 trillion to Washington D.C. we invest it in the technology companies of Silicon Valley (or any productive area of the economy).  In the short run, many people in Washington D.C. would become unemployed.  (It might actually lead to a bad "jobs number" next month!)  In the long run, imagine how much better off we would be if this capital were redeployed in productive enterprises engaged in researching and developing technologies that make the world more efficient, healthier, and enjoyable rather than being spent on inefficient bureaucrats pushing paper in Washington (or worse, making life more difficult for businessmen by enforcing strangling regulations).  Imagine that eventually, all of the inefficient bureaucrats were eventually employed by businesses spun off by the new technologies created with the $2 trillion.  In which scenario would we all be better off?

The modern economist would never think this way. There is no regression to compute and no printing press and certainly no helicopter.     

Tuesday, February 5, 2013

Obama's Argument for Killing Americans

"Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety." - Benjamin Franklin
Since 9/11, the federal government has set one legal precedent after another abrogating individual rights in the name of fighting "terrorism." With the creation of the Department of Homeland Security, the passage of the Orwellian "Patriot" Act, FISA courts and the like by the Bush administration, the federal government erected the foundation, both legally and practically, for the creation of a vast police state. 

Under the Obama administration, this dangerous trend has only gotten worse. 

In 2011, I blogged about the National Defense Authorization Act ("NDAA"), which authorizes the arrest and indefinite detention of Americans without due process. In 2010, I blogged about a Washington Post expose on a vast "alternative geography" of top secret governmental efforts to control the internet and to monitor and control the flow of ideas. In the wake of fear unleashed by the events of 9/11, the American public has largely acceded to these violations under the illogical and unprincipled premise that these unconstitutional powers would only be applied to so-called "terrorists" - not to them.

Well, if you ever worried that burgeoning government power erected on the basis of non-objective, arbitrary laws could somehow go awry, then you were onto something.

The latest example comes in the form of a Justice Department white paper which argues for the "extrajudicial killing" of certain American citizens as long as they can be deemed to be "continuing threats." In a recent blog post, Jameel Jaffer, the depuy legal director of the ACLU, writes: 
The paper's basic contention is that the government has the authority to carry out the extrajudicial killing of an American citizen if "an informed, high-level official" deems him to present a "continuing" threat to the country. This sweeping authority is said to exist even if the threat presented isn't imminent in any ordinary sense of that word, even if the target has never been charged with a crime or informed of the allegations against him, and even if the target is not located anywhere near an actual battlefield. The white paper purports to recognize some limits on the authority it sets out, but the limits are so vague and elastic that they will be easily manipulated.
Jaffer rightfully concludes that such a power is so broad and vague, that it gives the government essentially unlimited power to kill whomever it chooses. He writes: 
....My initial reaction is that the paper only underscores the irresponsible extravagance of the government's central claim. Even if the Obama administration is convinced of its own fundamental trustworthiness, the power this white paper sets out will be available to every future president—and every "informed high-level official" (!)—in every future conflict. As I said to Isikoff, that's truly a chilling thought.
So what exactly is a terrorist and how exactly could we be sure that an "informed, high-level official" will recognize one before he decides to kill him?  We all seem to think that it is a guy with a bomb strapped to his back standing in Times Square with his finger on the detonator.  Fair.  But once the concept of "imminence" is eliminated, what exactly are we talking about?  Is a "threat" someone who is actively plotting an attack, or, is it simply someone who criticizes the government or is "suspicious" of centralized authority as recent DHS memo classified "right wing extremists?" 

As the government blurs the line between someone imminently engaged in violent action and someone who intellectually opposes government policy, at what point could anyone who affiliates with the Tea Party, believes in constitutional government, or defends the second amendment be considered a potential "terrorist" subject to inclusion on a kill list?   And, if your not worried about Obama's people, what about the next administration of "informed, high-level officials?" What will their definition be?  What will it be in twenty years?  

As I have argued in the past, given the legal traditions and relative freedom of Americans over the past two centuries, it is unlikely that America would devolve into a fascist dictatorship overnight. However, America has been philosophically ripened for fascism over the past century as a result of modern philosophy's assault on reason. These trends have eroded the intellectual ability to think in principle and for most to judge the actions of the government from the perspective of morality and individual rights.  This reckless disregard of the rule of law and individual rights has already strangled the economic sphere.  Now, theory is meeting practice in another way.  Dating back to the Bush administration, there clearly is a pattern of policies that use the specter of "terrorism" as a blanket justification for a pyramiding escalation of rights violations and more broadly, the overthrow of the Constitution and the rule of law. 

Chilling thought indeed.