Posts Tagged ‘politics’

Aim Beyond the Target

April 13, 2012 1 comment

There is a subtle game being played with our constitution.  Recall when President Obama said he wished we had a charter of positive rights, which said what the government must do for us (see the second bill of rights) but unfortunately we only have this charter of negative rights saying what the government can’t do to us (see the first bill of rights Note: I don’t trust some of the details in this article).  The natural response of a conservative is to be alarmed by his desire for a different constitution but at least a little placated by his recognition that the actual document does in fact not conform to his ideal.  However, the real problem with this is that it still mischaracterizes the nature of the constitution in an important way. Read more…


Why the Left Hates Religion

February 14, 2012 4 comments

Many libertarian types, especially the college crowd, are somewhat hostile to religion.  This is unfortunate because it plays into the hands of the progressives who know they must destroy civil religion to accomplish their goals.  Because of this libertarians find themselves in danger of coming down on the wrong side in matters regarding church and state.  My goal here is to convince the atheist libertarian that they should (usually) come down on the side of the church.

I will start by defining religion.  As I explained in this post there are boundaries to what reason and observation of the physical world can tell us.  There are two types of information which lay beyond these boundaries.  The type explained in the above post is positive information regarding the laws of nature.  Some of this information is knowable but we don’t know it yet and some of it is theoretically unknowable like what forces created the universe and created the laws of nature.  The second type of information is normative.  All normative questions are inherently unanswerable by reason and observation alone.  Reason can tell you how to build a gun but it can’t tell you who you ought to use it against.  It can tell you how to make a car safer but it can’t tell you how you should value the risk to your life or the lives of others or the costs of being safer.

A religion is a system of beliefs that offers answers to these questions which reason cannot answer.  These questions include mainly: where did we come from? Where are we going? What should we do in between?  Now the important thing to notice is that everyone, at some point, has to answer something to these questions.  Even an agnostic, must consciously answer “I don’t know” to the first two questions.  A nihilist must answer “there is no answer” to the third.  Nonetheless, these are belief systems which are carefully constructed to arrive at these conclusions, and therefore they are religions by my definition.  (Note: obviously, you can define it in a different way which separates them but this is the definition that is germane to the point I am trying to make so just go with it and see if you really don’t agree with the point when I’m done.)

Read more…

Atlas Now?

April 24, 2011 2 comments

If Ayn Rand wrote dialogue like this, you know her detractors would call it ridiculous and unrealistic.

This was one of nearly a dozen “clawback” orders signed in two months under the state’s new Republican governor, John Kasich. There will be more, says his job-creation director, Mark Kvamme: “We need every single dollar we can get our hands on.”

YUSA’s view: “Give me a break,” says Chris Fairchild, the auto-parts firm’s controller. “For crying out loud, we’re doing our darnedest. While other local businesses have gone bankrupt or gone to Mexico or other states, we’re right here. You’d think there would be a little respect for that.”

The budget vise squeezing states and cities is changing the economic-development game. Governments are attaching more strings to their offers of tax breaks, cheap rents and bond deals designed to lure business, and are getting tougher on past recipients who didn’t come through.

Here’s the full story.

Categories: Atlas Now? Tags: , ,

“Added to the Economy”

March 24, 2011 Leave a comment

I keep seeing this commercial for natural gas where they say that natural gas “added…..dollars to the economy.”  There is a profound confusion underlying this notion of adding to the economy and it demonstrates how the current central bank economic paradigm distorts our understanding of economics and even our morality. 

You observe a firm.  It has costs of $1000 and revenue of $1200.  How much did it “add to the economy?”  The correct answer is $200.  The cost of $1000 represents the value of the goods that they used up to create whatever their output is.  The benefit to society generated by this firm is the excess of the value of what they create over what they use up, or in other words their profit.    But nobody who says “added to the economy” is ever talking about the amount of profit a firm generates.  On the contrary, whenever you see a politician or a pundit speak of profits it is always with scorn.  After all, profits are the elixir of the greedy corporations.  It shouldn’t be about how much you profit from something, it should be about how much you add to the economy.  That’s how much your endeavor benefits other people…right?

So usually when people talk of “adding to the economy” they are talking about the $1000 of costs (sometimes they are talking about revenue, I don’t know what the natural gas people mean but both are incorrect).  They act like the money spent on inputs is created out of thin air the moment it is spent on something that gets used up.  Come to think of it, this is the same way they talk about consumption isn’t it?  You add to the economy by using things up.  This is one of the oldest fallacies in economics.  Any clear thinking microeconomist will see through it and point out that in fact, if someone doesn’t spend money on one thing, that money won’t just disappear, it will be spent on something else and the resources which could have been used in producing that thing will be used for something else.

So who is right?  Well, in a natural economy the latter theory would be completely correct.  The problem is that we don’t have such an economy.  In fact, when people spend money it actually is (to some extent) created out of thin air.  It is created by borrowing.  The key to preventing an economic meltdown is to maintain a high enough level of money and consequently of debt.  In this environment it is more important to prevent the monetary contraction than to efficiently allocate resources.  This means that anything that causes people to borrow more money and spend it on something is beneficial.  Buying up resources and using them to produce something of lower value is good because it increases the money supply and drives up the prices of those resources.  It’s actually better if they are not employed too efficiently because if they do it will drive the price of whatever they are producing down.

This is how the government can take a firm that has $1000 in costs and produces $800 worth of output, give it a $300 subsidy and then claim that the firm is adding $1100 to the economy when in fact it is wasting $200 worth of goods.  They are not talking about adding goods to the economy, they are talking about adding money.  This has driven us to the point where we worship waste and disdain profit.  This has even led Lou Dobbs–no progressive–to remark recently that the disaster in Japan would actually benefit the global economy because they would have to buy a bunch of stuff to rebuild.  You don’t have to think very hard to realize stuff they use to rebuild is stuff we could have been using to produce something else, which means we have less goods because of it.  But think of all the money that they will create by borrowing to buy that stuff….

“Unions” or “This is What Democracy Looks Like”

February 27, 2011 Leave a comment

If you catch the news out of Wisconsin, you will see people marching outside (and inside) the state capital chanting “this is what democracy looks like.”  It would do us a lot of good to notice what is going on there and that it is in fact what “democracy” looks like.  So let’s look at the facts.  First, a democratically elected legislature and governor tried to change the government’s policy with regard to union benefits and negotiations within the framework of the rules.  The Democrats didn’t like what they were doing so they fled the state to keep them from being able to hold a vote on the bill.  That’s what democracy looks like?  Second, if you watch the coverage on Fox News, you will notice that in every live shot the protesters go to great lengths to shout down the reporter with chants like “tell the truth.”  If you can’t see the contradiction there consider that it is impossible for someone to tell the truth when they are being shouted down.  If they were intellectually honest they would chant “just don’t say anything” but is that what democracy looks like?

So the first thing that you should notice is that the left is a contradiction at every turn and this should make it quite clear that they don’t really believe in the things they are always talking about.  They have certain goals and they are only interested in achieving those goals.  The means are not a concern for them.  So they talk about the democratic process and the will of the voters when they are passing healthcare but as soon as that will departs from their goals, it is no longer respected, it becomes the evil delusions of the ignorant and unenlightened (also probably racists).  Naturally, this must be defeated at any cost….in the name of progress, of course.  They talk about freedom of speech until someone gets on tv with a different opinion from them, then they must be shut down.  Otherwise, the ignorant public might get their heads filled with a lot of crazy ideas and then you won’t choose what they want you to, and that will make it hard for them to cloak their actions in the mantle of “democracy.”  But don’t worry, they are only shutting down speech which is not in the best interest of “the people.”

But if you really want to know what democracy looks like just look at a union itself.  Some workers hold a vote to determine whether or not they will unionize.  If a majority of them want the union, it is formed and imposed upon the minority who just wanted to keep their individual rights.  The union can then take the money of all of its members, including the ones who are members against their will, and use it for whatever they want.  Much of it gets used to support Democratic politicians and pursue other political activities.  To my knowledge, unions are the only organization in existence that can actually take money from people against their will and funnel it into causes that they don’t agree with.  This is what democracy looks like.

Furthermore, the people who’s individual rights are sacrificed for the satisfaction of the collective are not even really a minority.  This is because when a union forms, it destroys the rights of everyone who is not in the union.  If a union is created at a particular workplace, you are no longer allowed to bargain individually with that employer.  This means that if you are willing to do the job better and/or for less than the people who are doing it currently, sorry you don’t have the right to sell your own labor for a price which is acceptable to you because the union is able to wield the coercive power of government against you (and the employer) to prevent you from doing that in order to protect its own interests.  This is what Democracy looks like.

Perhaps the worst part is that the majority which binds everyone to this  arrangement only has to exist for a moment.  See this article* about a provision in Wisconsin to require a yearly vote to maintain a union.  “Under current law, workers typically vote just once to establish a union.”  This means that the union may have convinced a small majority of workers generations ago that unionization was a good idea and even though most people may not want it now, they are stuck with it anyway.  This is what democracy looks like.

A union is a democratically created fiefdom in which the individual rights of people both within and without are subjugated to the prerogative of the collective.  This is what democracy looks like.

*Notice the subtle way that bias manifests itself in journlaism in statements like “Attention has focused on a provision that would strip most public employee unions of most negotiating rights”  a blatant abuse of the terms “rights” and “most” said in passing with no evidence or analysis as though it were a sterile statment of the facts.

A New Public-Private Partnership

February 4, 2011 3 comments

There has been a lot of talk in recent weeks about Obama’s appointment of General Electric President Jeffrey Immelt as head of the White House Council on Jobs and Competitiveness signifying a newfound dedication by Obama to create a more business friendly environment.  Here is an example.  This, however couldn’t be further from the truth.  Immelt is a progressive who has been at Obama’s side all along.  This is exactly how progressives have always operated.  Let’s take a look at the history.

Recall the true story of the robber barons from a previous post.  Most of the “exploitation” that happened in the 19th century was not carried out via free market capitalism it was a result of so-called “capitalists” buying influence in the government and using it to get subsidies, raise prices, restrict competition and form cartels/monopolies.  The market can’t exploit you because it can’t force you to do anything you don’t want to do.  The only thing that can force you to do something against your will is the government. 

Fast forward to the great depression and observe another so-called “capitalist” Herbert Hoover who explained his approach to economic recovery in his memoirs:

With the October-November stock-market crash the primary question at once arose as to whether the President and the Federal government should undertake to mitigate and remedy the evils stemming from it.  No President before had ever believed there was a governmental responsibility in such cases.  no matter what the urging on previous occasions.  Presidents steadfastly had maintained that the Federal government was apart from such eruptions; they had always been left to blow themselves out.  presidents Van Buren, Grant, Cleveland and Theodore Roosevelt had all remained aloof…*

Hoover, however, did not remain aloof.  Instead he formed a vast “public-private partnership”.”  In November 1929, speaking to a group of industrialists Hoover said:

[Your agreement is] an advance in the whole conception of the relationship of business to public welfare.  You represent the business of the United States, undertaking through your own voluntary action to contribute something very definite to the advancement of stability and progress in our economic life.  This is a far cry from the arbitrary and dog-eat-dog attitude of the business world of some thirty or forty years ago.

In January of the following year an editorial in the American Federationist, a labor union publication proclaimed:

The President’s conference has given industrial leaders a new sense of their responsibilities….Never before have they been called upon to act together…[I]n earlier recessions they have acted individually to protect their own interests and…have intensified depressions.”

Thank God industrial leaders didn’t intensify the depression of 1929 by acting in their own selfish interests, or it might have gotten bad…. Hoover’s treasury secretary Andrew Mellon (who was not really a supporter of Hoover’s interference) characterized the situation as follows:

In this country, there has been a concerted and determined effort on the part of both government and business not only to prevent any reduction in wages but to keep the maximum number of men employed, and thereby to increase consumption.

After several years of  “advancing stability and progress in economic life,” we were, not surprisingly, still in a deep recession.  The public/private partnership continued however under FDR’s National Recovery Administration.  That’s the name progressives gave to big business getting together and setting prices and standards for their industries that would not allow smaller businesses to compete and having government enforce them on everyone.  You may have heard of the dry cleaner who was thrown in jail for setting his prices too low.

Maged had been pressing pants for twenty-two years and his low prices and quality work had kept him competitive with larger tailor shops in the better parts of town.  The NRA Cleaners and Dyers Code demanded that 40 cents be charged to press a suit.  Maged, despite repeated warnings, insisted on charging his customers only 35 cents.  “You can’t tell me how to run my business,” Maged insisted.  When threatened with jail, he said, “If you can send me to jail, go ahead.”

Not only was Maged thrown in jail, he was also slapped with a hundred-dollar fine.  “We think that this is the only way to enforce the NRA,” said Abraham Traube, a director of the NRA code authority for the Cleaners and Dyers Board of Trade.  “If we did the same thing in New York City we would soon get the whole industry in line.”

Carl Pharis, the owner of a tire manufacturing company in Ohio described the act.

The Government deliberately raised our prices up towards the prices at which the big companies wanted to sell, at which they could make a profit… where more easily,  with much less loss, they could come down and ‘get us’ and where, bound by N.R.A. decrees, we could not use lower prices, although we could have lowered them and still made a decent profit.

Similarly the Agricultural Adjustment Act sought to raise prices of agricultural goods by destroying crops while people went hungry.

By the time the [Agricultural Adjustment Act] became law and key people were recruited, corn, cotton, tobacco, and wheat were already planted, and livestock operations were moving along.  The contemplated output restrictions wouldn’t take effect until the following year.  So some of the New Dealers began to think their only option, if they wanted to force up farm prices soon, was to destroy crops already planted… Agriculture Department officials signed up about a million cotton farmers, and they were paid $100 million to plow under some 10 million acres of farmland….Hog farmers were paid to slaughter some 6 million baby pigs.  Economic historian Broadus Mitchell noted that “Most of this pork, under agreement of the government with the packers, became fertilizer; less than a tenth was saved as food and distributed in relief.” Mitchell added, “Over 12,000 acres of tobacco were plowed under.  California cling peaches were permitted to rot in the orchard.

So now we have the White House cozying up to the CEO of GE.  GE the parent company of the “thrill up my leg” network MSNBC which sings the praises of the Obama administration and slanders its critics 24 hours a day.  GE the maker of those stupid “green” lightbulbs that cost ten times as much as an incandescent lightbulb which but which you will be forced to buy soon thanks to the latter being declared illegal.  GE the maker of windmills which cost more to maintain than the energy they produce is worth but which the government is paying to build all over the country. 

The reason we get confused about these things is that we have been trained to see only groups and not individuals.  We see a businessman and we assume that his agenda is to help business.  But that’s almost always not the case.  The business man’s agenda is to help his business.  If you have a different business then that businessman in a position of power might not be so great for you. 

The greatest lie in history is that greedy capitalists screw everyone over through free markets but the reason it has been so successful is that it’s largely correct.  It’s true that people are greedy that’s a fact of nature, you can’t change it.  It’s true that capitalists are screwing us over.  It’s not true that they are doing it through the free market.  They are doing it with the government.  With a free market and rule of law, people’s greed drives them to compete by doing a better job, making a better product, or offering a lower price than their competitors.    It is greed combined with government that breeds destruction and disaster.  The progressive dream is to create a giant government populated by angels and have it control the greed of the less virtuous peasants.  If you can find the angels that plan wouldn’t be so bad.  As it is we need to start focussing on controlling the government.

*The quotes from this post were all taken from Robert Murphy’s excellent book The Politically Incorrec Guide to the Great Depression and the New Deal.  They are all from other sources which I am too lazy to cite.  I can provide them upon request if anybody is interested.


February 1, 2011 6 comments

Since I was a child I have been taught that democracy equals freedom.  But this is not the case.  Well at least it’s not the good kind of freedom.  To see what I mean let’s play the two codes game.  Consider two moral codes which both value “freedom” and despise “oppression.”  The difference is in what type of entity each code identifies as a candidate for freedom or oppression.  A holder of the first code believes the relevant entity is the individual and the holder of the second believes it is the collective.  You cannot simultaneously believe in individual freedom and collective freedom.  Here’s why.

If you take a free individual, his decision-making process is simple.  He looks at a situation, decides what he wants to do and then does it.   If you take a collection of individuals, the process is much more complicated.  The reason is that there is no way to aggregate preferences.   At least there is no way to aggregate preferences when you think of a collective as a collection of individuals.  If however, you consider the collective to be a monolithic being, then it becomes simple again.  You just ask it what it wants and then do that.  But how do you ask the collective to make a decision?  You have a vote of course.  And that’s democracy.  And as long as you only care about collective freedom you feel just fine about this because the collective always gets what it “wants.”  It’s free.

Of course if you care about individual freedom this just won’t do.  The reason is obvious.  This is tyranny of the majority.  If at any time, your life and or property can be disposed of by a majority of the other people in society you are not free.   This is problematic if you are not very popular.  But even if you are popular, you are bound to the whims of the masses at every turn and I think it is self-evident that the majority does not always make the right decision.  This, of course, is the view held by Bernays and the progressives which is why they devote so much energy to propaganda/public relations.  But it is also why they are such ardent advocates of democracy.  They believe the masses are idiots that they can convince to do whatever they want.  Of course not everyone is an idiot, but if you have democracy it’s ok, you only have to get 51% of them, the rest have no choice.

So progressives and I have one thing in common, we both don’t trust the masses to make the right decisions for society.  But we have different ways of dealing with it.  They want to vest as much power in the masses as possible (democracy) because they think they can manipulate them.  I don’t want to manipulate anyone, I just want to be free from the consequences of their potential idiocy.  To anyone who shares this desire, democracy is a terrible governing concept.

If you believe in collective freedom, then democracy equals freedom and all you would need to form the perfect union would be this:

“The government can do whatever it wants as long as it’s supported by a majority vote.”

If on the other hand you believe that government should be established for the purpose of protecting individual liberty then it is a much more delicate process.  It requires things like enumerated powers and a bill of rights.  These things exist to protect the individual from the masses.  These are the things which have been eroded by progressivism.  The perfect example is the case of income taxes I spoke about recently.  This allows the government to target certain people, and dispose of their property for the benefit of some other people.  Also we have the popular election of senators, socialized healthcare, etc.  And their justification for all these things is that it’s the will of “the people.”  As long as it’s what “the people” want, it’s ok. 

But it’s not my will.  I don’t want to be bound to a government-run healthcare monstrosity.  I happen to know that it’s a bad idea (in this case the majority seems to be on my side but they won’t be when it comes time to actually fix the healthcare system).  If we were left to our individual liberty, I could choose to participate in free market health insurance and the leftists could go voluntarily institute a collectivist healthcare collective.  The only difference would be that they couldn’t take money from those of us who think it’s a stupid idea in order to pay for it.  Then we could see which works best (even they know which one it would be that’s why they don’t do it this way) and make our own choices.  But progressives’ moral code holds that it is just to force anything on anyone as long as a majority of other people support it.  This makes it entirely incompatible with individual liberty, and that is why our founders did not establish a democracy.

I’m not very happy with this one but I have had writer’s block and I promised this one would be coming soon so I’m pushing it out, sorry.