Tag Archives: Politics

Why Dennis Prager is wrong

Dennis Prager recently wrote a column and placed it on his website that I find to be part of the endemic societal response to everything: fear and outrage. It would seem that everything that happens in America, and in the world, is the worst thing ever and clearly marks the point of no return for the human race. While sensational and profitable, it just ain’t true. So, in a totally different approach, I took Mr. Prager’s column and responded to each and every point, not to prove him wrong, instead to provide some perspective to what he is saying. The complete text of his column is initalics and offset with asterisks while my comments are in standard font.

*I cannot imagine any thinking person who does not believe the world is getting worse.

Well, I guess I might surprise him…

*The number of slaughtered and the number of refugees from slaughter is immense and growing.

Remember that hundreds of millions were slaughtered during the 20th century, not to mention other eras in history where populations were relatively much smaller and tens of millions were slaughtered.

*Islamic State now controls territories from Afghanistan to West Africa. Libya is in the process of being added to that list. And other sadistic Islamist movements hold additional territory.

Remember when the Soviets controlled a significant portion of the planet, either directly or indirectly, and had nuclear missiles a hop skip and a jump from Florida…

*According to Pew Research, approximately 10 percent of world Muslims have a favorable opinion of the Islamic State and terror against civilians. That’s more than 100 million people.

A country of more than one billion people used to be overtly hostile to the U.S. and is now a trading partner that depends on trading with us (China).

*The Iranian regime has just increased the reward it will give to anyone who murders Indian novelist Salman Rushdie, is increasing its repression at home, now has more than a hundred billion additional dollars to spend on terror and regularly calls for the annihilation of Israel.

Iran has been a rogue regime for many years and it is important to keep in mind that the existence of the current regime was in no small part due to our own intervention in wanting to depose the Shah.

*Iran just received from Russia the most powerful anti-aircraft weapons that exist outside the United States, making a successful air attack on Iran almost impossible.

Correct me if I am wrong, but didn’t the Soviets basically create the craziest regime on the planet (N. Korea) during the last century. And the idea that Iran is impregnable now is foolish and dramatic.

*Europe is allowing in another million migrants from the Middle East, few of whom share Europe’s primary moral values. One consequence is that European women are being sexually attacked in increasing numbers. Another is that European countries are making criticism of Muslims or Islam — no matter how rational the critique — a crime punishable by jail time and/or fines.

At one point in history, didn’t Catholics in Europe kill people for religious heresy and we refer to it as the Inquisition? The world recovered from that institutionalized religious attempt at eliminating competition by slaughter, and to think that this most recent attempt at the same ends will mark the end of civilization when a significant technological divide separates the aggressors from their would-be victims is sensational and hardly likely.

*The only thing stopping regular mass murder of Europeans and Americans is increased European and American police work. And no one believes that this will suffice to prevent future attacks.

I think Prager gives too much credit to both terrorists and the police; let us remember the TSA has never—to my knowledge—ever prevented an attack. If he wishes to present evidence that somehow crime rates are higher, I would be happy to see it, but most of the evidence points to diminishing crime rates in general; particularly when you control for non-violent drug offenses. This would be like making Coca Cola illegal and then stating that the rise in crime rates due to Coke related arrests is indicative of a society in collapse; it is sophomoric, illogical, and merely designed to scare people. The growth of the police state should concern Prager more. Remember those hundreds of millions killed in the twentieth century I mentioned earlier? They were all killed by governments that established police states.

*Russia is led by a KGB man who seeks to replace American influence with Russian influence wherever possible. And he is allowed to do so by the American president and the Democratic Party.

Russia—as the Soviet Union—was run by the people who invented the KGB and they also wanted to replace American influence wherever possible…and, remember Lenin and Stalin? I am quite certain that, while I do agree Putin is a security threat, his threat is hardly greater than that of his 19th and 20th century predecessors; do bad actors like Hitler and Mussolini ring a bell.

*While Russia continues to attempt, in Charles Krauthammer’s words, “to fracture and subordinate” Ukraine, the United States under Obama refuses to send Ukraine weapons.

We—at one point in history—not only stood idly by while essentially the same nation expanded by force, but we helped them (remember: FDR called Stalin Uncle Joe).

*The United States is led by a president whose primary foe seems to be the prime minister of Israel, even though the prime minister’s country happens to be the freest, most moral and most pro-American country in the Middle East.

And he is opposed by people who seem largely obsessed with the same man…just for different reasons. Perhaps if Bush would not have preached restraint to the Israelis while we carpet bombed our attackers, much of this would be a non-issue at this point. Incidentally, everyone does realize the Israel is a socialist state, right?

*The commander of the U.S. Pacific Command recently told Congress “that China is clearly militarizing the South China Sea,” in order to gain “hegemony in East Asia.”

Hmmmm…I am partial to the good ole USA, but it smacks of a bit of hypocrisy for us to spend more on defense than—I believe—the next 16 countries combined and complain when one of those 16 builds theirs too. We scoff at the notion from other nations that we are attempting to control the globe through military might, but use the same argument against China? That is politics, I guess.

*Cuba now has American recognition, and as a direct result has felt free to increase its subjugation of the Cuban people. In January, the Cuban regime arrested 1,414 political dissidents, the second-most ever recorded. It will be rewarded by a visit from President Obama.

There are five communist countries left on the planet and we have long traded with three of them (Cuba and North Korea being the exceptions); by the way, exporting capitalism was one of Reagan’s plans to topple the Soviet’s. If not trading with them is the way to break the Cuban regime, shouldn’t they be long gone by now?

*In the United States, most universities are being taken over by a fascistic expression of leftism. Student thugs take over administration offices with impunity, shout down speakers with whom they differ, and many faculty members support them. In the name of “diversity” and “tolerance,” American universities, once a jewel of free thought and intellectual inquiry, have become places Americans who cherish liberty and cherish America increasingly fear to send their children.

Universities have been leftist for a while now. Furthermore, I have a BS in political science and a Master’s in Economics (the equivalent of 6 years of higher education via several colleges/universities) and I have never encountered the iron-fisted liberalism which is often discussed on talk radio. In fact, my most liberal professor conceded multiple points to me (because I used evidence and not hyperbole). Additionally, that same professor offered to write me a recommendation for graduate school. I might suggest that the effect of liberal professors has become a convenient way for students with conservative parents to explain their mediocre grades…

*Contempt for America and its founding ideals are indoctrinated into America’s youth from high school on. If shown any of the iconic paintings of the Founders — such as signing the Declaration of Independence or deliberating at the Constitutional Convention — rather than seeing great people creating a great nation, most young Americans now only see racist, sexist, rich, slave-owning white males.

Fallacies about the founders—and much of history—are not isolated to progressives; conservatives also spread a lot of mis-information and this is not a new problem. [Example being that all settlers from Europe supposedly came fleeing from religious persecution and seeking religious freedom; the fact is that Puritans fled England because religion was too free and easy. They set up a colony with designs on imposing religion and even killed dissenters in some cases.] Furthermore, I would suggest that instead of people exhibiting the response Mr. Prager suggests most students would not know who the people they were looking at are.

*As its universities make clear, the West is committing suicide. At UCLA one doesn’t have to read a single play by Shakespeare in order to receive a degree in English. But one is fully indoctrinated regarding “White Privilege,” “systemic racism,” “income inequality,” “homophobia,” “hate speech,” “climate change” and whatever radicals care about.

First of all, while reading Shakespeare does have some entertaining value and historical context, it is effectively worthless for much of society; particularly an English major (because nobody talks like that). Secondly, those things are discussed rather sparingly, and are dependent on the field chosen. If you go into sociology you are likely to encounter a lot of leftist ideas, if you go into finance or economics, the discussions will be about markets and those things which increase economic activity like reduced taxes and the fallacy of the wage floor as a means to increase the well-being of society.

*A Republican presidential debate opens with a comment by the leading Republican candidate about the size of his penis. And the audience cheers.

I really could care less about this. Guys have been talking like that since the beginning of time and will continue to until the end. The fact that it leaked out on TV is of no measureable consequence to me (I am not a Trump fan, incidentally).

*The American president, a black man elected in the hope that he would unify the races, has overseen the greatest rift between the races since the 1960s. His repeated references to “Ferguson,” reinforcing the lie that a white policeman killed an innocent black teenager for no reason other than the young man’s race, is only one such example. One result is a rhetorical (and increasingly lethal) war on police that has led many officers to minimize proactively policing largely black areas.

This does not mean the world is doomed, just that when people make assumptions, the old adage comes true. And, FYI, he was not elected “in the hope he would unify the races.”

*The Democratic presidential race is between a socialist who has contempt for capitalism, the only economic system that has ever lifted large swaths of humanity out of poverty, and a woman who is so corrupt that she should be serving time in prison, not campaigning for president.

FDR was a socialist, Woodrow Wilson was a socialist, Johnson and Nixon (a felon, too) were authoritarians (as was GW Bush), and one of our Presidential candidates (and a founder) once killed a former Secretary of the Treasury (and founder), then fled to the west and plotted the overthrow of the government (Burr). So, to say this circumstance is unique or the worst ever is a bit of an overstatement.

*Meanwhile, the Republican race is led by a man who has mocks a POW as a loser; who repeats the libel that George W. Bush knew there were no WMD in Iraq; who calls for the killing of terrorists’ families; and, who, as noted, proudly talks to America about the size of his sexual organ.

Let us be honest, John McCain is a loser who has cost this country far more than any debt owed. As far as WMDs, if that was a reasonable cause for going to war, at least 40 other countries would likely need invaded tomorrow including China, Russia, North Korea, Great Britain, Israel, France,etc. So, guess what, invading Iraq and deposing Hussein was a bad move; I supported it at the time and am big enough to get over the fact I was wrong, maybe it is time for Prager to as well. As for the sexual organ thing again, I would suggest that Mr. Prager stop behaving like a 13 year old boy in health class when the reproductive system chart is pulled down; get over it.

*Many generations have believed that the world was getting worse. But since 1776, there was a great nation that one could still rely on to stem the decay. Now that great nation, under the influence of its own elites, men and women of the left, is itself in decay.

Prager is right, every generation swears the next is the last and he is playing into this. Over more than 200 years some ideas have taken hold I find deplorable (like Keynesian economics), but others such as slavery, Jim Crow, and the state as an institution of moral control have disappeared or lessened. I have come to find out that conservatives do not really have a problem with indoctrination at schools, only that their particular brand of indoctrination is no longer employed. The reason why we do not teach kids to think for themselves is that both sides feel threatened by such a concept; people who think hardly need others to think for them. Anytime an idea requires the point of a gun or a threat of a pain-filled eternity I am cautious; particularly if the intention is that those ideas be imposed on children. Any time an idea relies on force of any kind, we should be wary. Just to be clear, I am not anti-Prager, in fact I love his discussions on male-female interactions and relationships. I am, however, discouraged by this rhetoric that is over-inflated and largely without fact in light of other periods in human history. He intends to scare; which appears to be one of the common threads between the ideological right and left which seek to use fear to paralyze the population into inaction. For if we ever were to see that the fear is largely manufactured to control us, we would reject their fallacies and frauds and this scares them most. Political leaders have long known that fear is the greatest motivator and this is not lost on the Democrats and Republicans here.

*So, who can save the world now?

As for this last question, those who embrace liberty will.   Jefferson, Bastiat, Madison, Smith, Friedman, Williams, Sowell—some of the greatest minds in history—have one common message: that liberty is that mechanism through which all humans can advance. There is no other way. Liberty and the free market have been fighting authoritarianism on the left and right in America for several hundred years now; it has not lost yet. Instead, it has been the engine of the world and we must not let ourselves be dragged down to the level of fearmongering and the abandonment of logic.

 

 

Eat Once, Don’t Die?

      People so regularly like to spout off about the evils of capitalism and the depravity of the profit motive. Perhaps we should take a moment to gain some perspective on the matter. Human history has been dominated with periods of anti-capitalistic activities and economic structures. From the feudalist periods to the monarchies to just plain subversion to an eminent leader supposedly “ordained by God” (all three exhibit stunning similarities) and finally to an aristocracy (today we call this socialism or communism) there has been a constant throughout history when the rights of property were not identified and the profit motive was denied to the average individual.

     This constant in a world without property rights and capitalism was the motivating factor of human daily activities—eat once, don’t die. This could have been the daily motto for much of humankind throughout history—eat once, don’t die.

      Imagine this world without capitalism as people seem to fantasize about so regularly. Just imagine losing your car, your microwave, your smart phone, your internet, your air conditioning, your refrigerator, your television, your house, your job, running water, your toilet, the medicine you take to feel better (or, worse yet, the one you take to stay alive)…imagine losing your clothing and shoes in favor of animal hides to stay warm and more animal hides for your feet…imagine losing loved ones in their late twenties or early thirties, if you or them are lucky enough to live that long…imagine every day when you wake up your goal is not to merely be a pretentious ass that wishes a lack of luxury for others to make yourself feel equal, but instead you must struggle just to scrounge enough food for one meal for your family…imagine portioning that food out to your family not on the basis of fulfilling hunger, but on the basis of which family members would be more beneficial to survival if they have energy…imagine laying your head down at night being glad if nobody in your family died or not being surprised if one had.

      Imagine your daily motto was eat once, don’t die. This is the reality of the world before capitalism (and exists today outside of capitalisms reach); the human condition was that of strife, struggle, and immense physical and emotional pain. Is capitalism perfect? If by perfect you mean we all get to have what everyone else has regardless of effort, talent, or sacrifice…then no, it certainly is not. However, it is unambiguously clear throughout history that no economic system has ever brought more (or, I would argue any) people out of true poverty and complete squalor than capitalism.

P.S. By the way, capitalism and cronyism are in no way similar and the terms should not be used together, it makes people sound absurd to those of us who know better.

 

Accepting false pretenses: The real political problem

       It is often asked how we can possibly change the nature of politics in the U.S. Ironically, this question often directly precedes or follows a party-centric idealistic rant premised on the idea that one party or the other represents the solution. And this, in fact, is where the problem lies. But in all fairness it is not the existence of parties which is inherently bad, just people’s blind adherence to them that is dangerous.

     People use party identification to predict how a politician might act. This is a good thing and can be an accurate tool for quickly measuring a politician’s central platform. The problem is, people allow the parties themselves to define what that means; in this sense, party affiliation is a poor indicator. A proper analogy would be if a father were to allow his daughter’s date to effectively characterize himself as a celibate angel who would never have physical intentions…and then believe it. In the analogy, it is not surprising the date is trying to sell that garbage, only that the father buys it. The same is true in politics. I am never shocked that politicians are disingenuous; I am instead constantly shocked that we continue to fall for it.

     Two good examples are this:

a) Republicans constantly are declaring how Republican politicians like the free market and

b) Democrats continue to believe that Democratic politicians wish to help the “disadvantaged.”

In both examples, voters who blindly follow those assumptions ignore two important potential implications:

1) Both are ill-suited at accomplishing their positions or

2) They are spurious declarations of ideology.

      Let us assume the least offensive choice (#1) is true, then why do we keep voting for idiots who cannot, after many decades, even begin to accomplish their task. It is not as if these people have spared any cost in the “pursuit” of these objectives; so they have clearly availed themselves as incapable of accomplishing anything [perhaps this is why slip-on shoes are in such high demand in Washington?]. However, I am resistant to accept the explanation that they are just stupid which requires many more moving parts to be accurate.

       Next, let us address option #2, that the political parties are instead not being genuine about their intentions. This would better explain why seemingly intelligent people continuously act in ways contrary to their stated intentions. Employing Occam’s Razor would tell us that number 2 is the correct reason for politicians saying one thing and doing another.

     The logical next question to ask is why would they do this? Well, most simply put, because it works. The parties spew forth hyperbole, and the electorate laps it up. And when a voter is confronted with the fact that their party’s policies have been utter failures at achieving their stated objectives, the trained response is that it is the other party’s fault. This is evidenced by the parties constantly trying to redefine each other; they do not see earning voters through merit as a primary concern, instead they see affecting the others image as a more effective method of winning elections through voter attrition. Even those people who are self-proclaimed independents often buy into the party mantras. The sad reality of political failures is simple: if we (the voters) want to see what is wrong with American politics we would better benefit from using a mirror than a microscope.

Welfare Recipients: Moochers or Rational Actors?

      Often, people who accept and stay on welfare are accused of being mere moochers. To some extent, they do exhibit the primary characteristic of greed: the desire for something that belongs to someone else by compulsion or collusion instead of a trade of value. However, to leave it as simply as that fuels the lack of understanding as to how to remedy the welfare state problem that exists in America today.

      First, let me state it rather directly: people who seek out and stay on welfare for seemingly indefinite periods are rational actors. This may shock some people, baffle others, and even irritate a few; however, that does not diminish the fact it is true. A rational actor is someone who is concerned about their own prosperity and makes choices with the goal of maximizing this objective. In fact, all people are rational actors; we just do not always quantify what prosperity means in the same way as others do.

    The hazard at this point is to be side-tracked by a lengthy discussion that dispels the idea that humans are altruistic (which is the alternative to rational choice), but I will (mostly) avoid that for the time being. Instead, I will use a commonly cited example of altruism and explain briefly why it is incorrect. Fire fighters are often used as examples of altruistic actors; however, they get paid (rather well in many cases), have excellent work schedules, girls tend to like them, and society often idolizes them. Is there risk involved? Of course, but they face great risk—as we all do—by getting in their cars to drive to work. This idea that fear is a primary factor in all people’s decision-making is driven by those who place increased value on personal safety. To a person that is a natural thrill seeker or one that loves accomplishing things others may not dare, being a fire fighter is not altogether frightening or discouragingly risky. It is, instead, a rather rational choice.

       How does this relate to the welfare state? In a very important way, it highlights how people value things differently, some place great value on safety, some on personal “glory,” and others place increased value on wealth accumulation. People who accept being on welfare for extended—or indefinite—periods of time clearly have a high value on security. Additionally, it is likely they place a high value on rest or recreation. When we value recreation over wealth the ability to be free of the burden of work is much more important than having things or money. Conversely, those who value wealth are happy to trade hours of the day for success.

      Here is a scenario to illustrate why welfare recipients are rational actors. Let’s imagine a man named Jim—and his family—are on a myriad of assistance programs that net him the cash equivalent of $26,000/yr and he is offered a job making $32,000/yr. Will he take it? Let us look at the considerations that enter into this decision. First, Jim will have to take 40 hours of his week and trade it for $6,000/yr (that is $500/mth or $2.88/hr). On top of that Jim will have to pay payroll taxes and possibly (unlikely at that income level) income taxes. Would you do that? Ahhh, I can hear the ethical argument now…an argument that I fully sympathize with. So, let’s put it in different terms, if you made $30,000/yr working part time and got offered a full time job for $36,000/yr and this job entailed increased costs, would you take it? It is highly unlikely that you would, unless other considerations enter into your decision such as entry into the job of your dreams.

      People stay on welfare perpetually because they literally cannot afford to get off of it. Things like poor education, increasing minimum wages for entry level occupations, and an increasing menu of programs make this problem worse all the time. Individuals make choices based on individual circumstances, as they well should. What we must do is avoid continuing to lash out at people making a perfectly rational choice; instead, we would be much better served by actually trying to remedy the circumstances which drive these choices. Expanding the welfare state perpetuates the (relative) poverty it intends to cure and reduces the alternatives people have to staying mired in the muck of our burgeoning welfare state. And to completely answer the title question, they do qualify as moochers as well.

Is government absolution?

It has often been said that government is required to help the poor and disabled; however the evidence consistently shows that government’s involvement has not reduced poverty levels. Seeing that government has never (to my knowledge) cured a societal ill like poverty, why then does there remain so much confidence in it for future success? Could it be that support for government welfare programs stems not only from those who directly benefit from being on it, but also as a path to absolution by those who advocate for it?

So, what do I mean by absolution? First, let us discuss the idea that our government has a responsibility to the poor. Milton Friedman wisely pointed out that governments cannot have a responsibility to people…instead, only individuals can have responsibility. We often hear advocates of government welfare say that we are “our brother’s keeper,” a clear reference to the book of Genesis in the Bible; however, the verse is talking about an individual’s (Cain’s) responsibility to his own brother (Abel) and not society’s responsibility to a person or people. This is a blatant misuse of a Bible verse with the intent of misleading people who, by faith, feel an obligation to fulfill Biblical mandates (at least to some extent).

The question then is how does the brother’s keeper example contrast with government welfare and where does the concept of absolution come in? Let us assume that people do feel an innate obligation to help others; which is arguable, but for the sake of this discussion we must accept it generally. What is the easiest way for people to meet that obligation to others? One could work harder and produce more so that they may transfer (via donation) some of that excess production for the consumption of others. Or, one could spend a few minutes every couple of years voting for a group of people who will give money (that is largely not theirs) to others. Both seems to meet the goal of “helping others” yet one of the two options entails significantly less hardship on the individual choosing to vote instead of donate. It is certainly much easier to vote charity to others than it is to actually provide it. Particularly when a good segment of society pays nothing to fund these programs; the estimated percentage of people in America who file tax returns and owe $0 (or less) is 43% (as of 2013).

In the case of this group of people, a vote for welfare is not only costless and potentially beneficial, but also absolves them totally of any further responsibility to be their “brother’s keeper.” In fact, an IRS analysis of the 2012 tax year showed that the most generous states (by percentage of their income donated) were “red states” that voted for Mitt Romney. This implies that those people that believe government should not engage in coerced charity (to as great of an extent) are much more likely to give of their own money while people who see government as a reasonable and righteous source of charity (albeit at the point of a gun, a fact they often ignore) sees little reason to give of their own money when they can instead vote for “charitable” actions.

Therefore, a vote for government welfare represents a much cheaper way (for the voter) to donate largely because others pay the bill. Individuals can then fulfill their sense of obligation from the pockets of others and still gain the sense of giving that usually motivates people to actually give. This leaves people who preach an obligation to the poor and disabled from actually having any responsibility for meeting that obligation personally. Thus, the individuals that choose the voting method over the donating method have effectively been absolved of their responsibility to others. Effectively, those people do not practice what they preach; instead they demand others serve as their brother’s keeper, while they hold the moral high ground through their mere demanding of action by force.  This reminds me of the brilliant words of Ayn Rand who said:

“It stands to reason that where there’s sacrifice, there’s someone collecting sacrificial offerings. Where there’s service, there’s someone being served. The man who speaks to you of sacrifice, speaks of slaves and masters. And intends to be the master.”

Interestingly, the people most hurt are the ones who do, most significantly, need the help. For the real crime is not that everyone does not have access to “assistance”; instead, the real crime lay in the reality that those who truly cannot do for themselves are left in poverty so as to satiate the majority who wishes to forgo their own personal responsibility for their own monetary gain. Simply put the absolution through government costs the absolved little, while that release from obligations is paid for dearly by those they claim to be helping. This is the danger of idealism rooted in greater good terms; for the actual good is left subjected to the eye of the beholder while the intent of actions is weighted far greater than actual outcomes. I close with the definition of absolution: “the formal release of guilt, obligation, or punishment.”

The nature of black markets: why making commodities illegal is ineffective.

I think it is important to characterize the commodity in very a generalized manner—at least for now—therefore we will refer to our commodity in question as a widget. Now, it is of no consequence what a widget is because, when analyzing the effects of a black market, the only relevant factor is that widgets were made illegal by lawmakers. It is important to begin with a basic definition of a black market:

“A black market or underground economy is the market in which goods or services are traded illegally. The key distinction of a black market trade is that the transaction itself is illegal. The goods or services may or may not themselves be illegal to own, or to trade through other, legal channels.”

It is important to note that the definition also identifies that the goods (in our example widgets) need not be illegal to own. This refers to situations where taxation or regulations are used to limit, control, or inhibit the trade of a good or service (i.e. high cigarette taxes). However valid this discussion is, it will not be the focus of this conversation as we are assuming our commodity has been made illegal for the sake of simplicity.

Black markets develop because making a product illegal does not cause people to stop using it; instead, it merely marginalizes consumption, the production, and the distribution to those who are willing to accept and operate under greater degrees of risk. I know this may sound a little confusing which is why I created a graphic that illustrates the levels of acceptable risk for different groups of society:

Risk flow chart

In this graphic we can observe that the lower two segments (5 & 6) are those people who enjoy or are comfortable with greater risk levels; next (segments 3&4) we can observe the greatest amount of people as the average level of risk takers which would be generally averse to great risk, but partaking in some low/moderate risk; finally, in our upper two segments (1 & 2) we can see a portion of the population who range from mostly risk averse to almost exclusively averse to risk. This understanding of risk tolerance is important in the realization that making commodities illegal only serves to focus use and production on the risk loving segments which are most likely to partake in other risky behaviors (e.g. crime, violence, etc.) regardless of their use of a certain commodity. This reality is why the argument of illegality for the purpose of public safety is largely invalid.

Let us return to our concept of widgets again. If widgets are made illegal then we have some serious problems: 1) people are still demanding this product (although demand is now almost exclusively coming from groups 5&6 and a small part of group 4) so new producers will enter the market to meet this demand and receive the greater profits now offered by an illegal trade operating at monopoly pricing. 2) By compressing consumption to the risk loving segments we create a self-fulfilling prophesy – that the people using the widget will also be breaking other laws [don’t believe me?…look at why prohibition did not work for alcohol].

We can see a new and growing market segment dominated by those who are more predisposed to risky (read: criminal) behavior. Also, we have reduced competition in the production of widgets which would generally (particularly in a highly criminalized black market) lead to the production of “crappier” products at higher prices. Therefore, the risk factors of our widgets become even greater due to the lower quality. Additionally, in this market with limited competition, lower quality requirements, and huge profit margins we will observe more criminal (mob-like) activities in the production and distribution of our widget. In essence, criminal producers compete with force instead of with price or quality (or both) to gain customers; this has many negative effects on the communities in which these suppliers operate.

We are also presented with a consumption level distortion. The new consumer group—which is also isolated to higher risk tolerances—engages in the same activities they would have likely done anyway; however, now our widgets are given the credit (blame) for these activities. This creates somewhat of a paradox in that the results of prohibition become the best argument for prohibition because the correlation between widget use and other risky/criminal behavior increases due to us arbitrarily slicing segments 1, 2, 3, and most of 4 off of the consumer base. We have not eliminated any undesirable by-products of consuming widgets; we have merely magnified the (rudimentary) perception of the widgets’ effect on producing these negative by-products.

Why is this important? First, there are little to no positive effects of making products illegal beyond people making themselves feel better that they may have coerced others into not engaging in an activity this other person condemns [think Michael Bloomberg and soft drink sizes]. Second, by isolating supply to risk loving individuals we fuel illegitimate activities and isolate supply into the hands of people willing to exercise the most risk. Not only have we criminalized users, we have laid the foundation to launch a whole new and highly profitable enterprise that relies on criminal activity and violence as the primary means to restricting market entry. This incorporation excludes traditional competitive means (product differentiation and price) in favor of force, violence, intimidation, and a new criminal recruitment system resulting in social problems in these communities as well as losses in property values, tax revenues, and legitimate employment opportunities.

Gun rights advocates make this argument quite accurately and succinctly when they state that: “making guns illegal would only keep them out of the hands of the law abiding population who do not commit crimes anyhow.” This is a very astute observation. Unfortunately, this same group often fails to realize that the same is true for our widget example, or drugs, or prostitution, and was found empirically to be true with alcohol. Making any of those things illegal did not eliminate the use of them; it merely marginalized use and created a criminal enterprise where one did not previously exist. Does prohibition result in decreased use?…only a little because, if the product is inherently risky, a vast majority of the population will avoid it anyway. Does prohibition make society safer? No, in fact the evidence would indicate the opposite.

So, why does our society struggle with this idea? Because liberty is scary to so many people! Of course, liberty—like so many other things—is really only a good idea for ourselves, not for others. The false premise that one group of people has the responsibility or authority to try and save others is preposterous and, I would argue, excludes the people who hold that idea from having any real profound understanding of the concept of Natural Rights or the ideas that our founders held so dear in creating this greatest of countries. The land of the free has become the land of the busybodies, intent on utilizing their votes to gain access to the force that government wields to make individuals “mind” them. I do not wish to have a nanny state economically nor do I wish to have one for individual choices. Incidentally, one thing everyone should keep in mind, you do not get one of those without the other.

Unions are cartels that should be subject to anti-trust laws

        Most people are familiar with the general idea of anti-trust laws and proceedings; but, as with many things the devil is in the details. A major problem that underscores this greater issue is a lack of understanding of the exact nature of labor. People often think of labor and capital as having a protagonist/antagonist relationship and this misconception is quite profitable to labor leaders and their political allies. However, the pervasiveness of this misconception does great harm to those who directly control labor—individuals; particularly those individuals who have the lowest skill levels which are most often the poor, minorities, and young people. People see laborers as having no leverage in the business relationship and thus assign laborers a more limited value.

        First of all, there are two primary factors of production: labor and capital. Labor is the efforts of people in producing goods and services for trade. Capital describes the accumulation of machinery and tools (often thought of monetarily) that are used in the production process. Neither factor holds a distinctive advantage over the other as a general rule, but differing circumstances can tip the scales of control to one or the other.

        This can be seen throughout history and even today. For example, there was a period in time when labor was so highly demanded (thus, labor held the advantage) that employers would wait outside of prisons to hire people as they were released. In the modern day, people who hold strong skills in computer programming or web design (etc.) can command significant salaries and benefits. These are not the instances that the media and politicians focus on; instead they choose to highlight the false narrative of the minimum wage and the “plight” of entry-level, low wage workers. This misses the reality of the damage done by labor unions by creating a sleight of hand, parlor trick.

         We—rightly—prosecute the collusion (cartelization) of business (owners of capital) if they join together to fix prices or production levels in a manner to extract much higher profits from the market than the competitive (more often the monopolistically competitive) value of their outputs. However, when it comes to labor unions, who collude openly on a national scale and across industry sectors (e.g. SEIU and AFL-CIO), we see that not as being an extortion of the consumer as we do in the capital example. Instead, we see labor unions—simply groups of individuals colluding to monopolize and thus increase their market power artificially—as merely protecting their members from an otherwise predatory institution. This is not the reality when it comes to mega-unions. The reality is that they are utilizing their control of one of the two primary factors of production in the same way businesses do when they collude; therefore consumers pay significantly higher prices which would resemble monopoly level pricing.

     Furthermore, just as other monopolies who do not enjoy regulatory protection by government which controls market entry, they induce others to enter the market and capture their market share by offering superior products at lower prices [note: natural monopolies that do not rely on regulatory control of market entry do exist; however, they are quite rare]. The effects of the monopoly, outside of government intervention, are often limited in their scope. We can see the results of this in the automobile market where, as trade restrictions relaxed (which is good for the US consumer), the foreign car producers began to rapidly grow against the domestic ones which were plagued by higher than natural equilibrium labor costs and diminishing relative quality (as a way to fight costs) versus the competition. The eventual result was that all those people who owned and controlled the labor factor of production in the car market and enjoyed higher than appropriate levels of profits (pay and benefits) ended up dropping their long run incomes to zero as new competitors entered and captured market share. From a labor perspective, these new market participants would include southern state workers who drew in production facilities as well as foreign workers (via outsourcing).

      Additionally, areas densely populated with people who enjoyed this monopoly level pricing for their labors collapsed as the monopoly structure of their labor force declined. Their government, bloated on the excess of extracting unrealistic levels of profits in their labor force from other areas in the country, could not sustain the drop in tax revenues and have essentially become ghost towns (Detroit’s population in 1950 was 1.8 million and is approximately 700,000 today). Also, the greater than equilibrium labor cost overall in markets like Detroit due to unionization of the auto industry crowded out other industries making Detroit perilously dependent on one industry.

        The real long-run winners in the equation have been the labor unions themselves (not their members) and the politicians who have enjoyed control of their votes and contributions for many years. The losers in the short run were workers that did not gain entry into those industries and, in the long run, all the people of areas once dominated by big labor production. People often say that unions were once a good thing and that somehow is supposed to justify the existence of mega union entities; however, I find that logic to be severely flawed. Instead, I argue that unions are still positive things when they are constrained to plant (or perhaps firm) level entities. This reduces large scale collusion while granting the owners of labor a more even position in the negotiating process without giving them unfettered control of the production of certain markets completely. Owners of a particular firm control all of the capital for that firm, but no single laborer controls all of the labor for a firm; therefore, an alliance of firm level labor can be positive without being punitive to consumers or damaging to the industry sector. Also, compulsory inclusion in unions should not exist because this removes the competitive nature of markets which allow a fair blend of profits to capital and labor simultaneously, while ensuring maximum marginal value to the consumers.

Recent Middle East events prove we must stop ignoring reality…

        Here we stand, once again faced with abhorrent violence in the Middle East.  Violence which we are to believe is random, spontaneous, and to some extent – justified(?).  Through the blinding light of our own ignorance; the impediment to logic which is idealism; and paralyzed by the ongoing evidence that we may never be adored globally, we stand as a nation with leadership that is prepared to do…nothing to change the status quo.  This is the unfortunate position that America’s post-Cold War foreign policy has placed our nation in.  Reject reality, we say!  Instead, let’s hope the thousands of years of human nature are going to change overnight because…well, it just ought to.

       So, what is the goal of American foreign policy you might ask?  A form of idealism aimed at showing strength towards allies, passivity towards foes, and demoralizing our own people in the process.  Idealistic foreign policy is derived from the “progressive” notion that all nations will gather ‘round the fire, cook some smores, tell some ghost stories, and generally frolic together like a group of girl scouts after a successful cookie drive.  This is a complete shift in policy since the end of the Cold War in which we now attempt to get all nations to rise above their own national interests and become part of the global family.  Plus, at some point we have determined if nations do not like us, it is not their people nor their traditions, only their despotic leaders that do not like us.  Easy remedy, right, depose Hussein and the Taliban and the people of Iraq and Afghanistan will welcome us with open arms because of their newly instituted, American-style democracy…Yet another miscalculation of the “democracy builders” on the left and the right.

    So, how is it we miss the point so bad?  We have unrealistic expectations of people we largely do not understand; and when we do understand them, we try to insert our own, more favorable version of reality in the hopes that they too might embrace this alternate reality.  So, instead of the rioters in Libya or Egypt merely hating us, we are told they just did not like a movie.  There are plenty of movies I do not like, but I have easily refrained from killing anyone over them [note on Napoleon Dynamite…I would love to have those couple of hours of my life back].  Now, just how do we begin to fix it?

     The first remedy would be to incorporate a little bit of cultural relativism into our foreign policy.  Cultural relativism reminds us not to view other cultures through our own eyes to best understand them, but to consider their practices through their own worldview.  This is an important detail, not for some ill-fated pursuit of political correctness, but because understanding the other culture provides us information as to how they will act in the future and what potential impact our foreign policy may (or may not) have on them.  Our actions must be measured, but must not be measured arbitrarily through the lens of our own moral authority, regardless of how relevant that authority may be.

      Second, act on those things which we know to be true.  Understand that, as unfortunate as it may be, reality is just as advertised and no matter how much hope we engage in, we cannot change reality.  Example:  if we know that nation-building has a low probability of changing a group of peoples’ attitude towards the U.S., let’s save the money and move along (Iraq and Afghanistan).  We must act in our own national security interest!  This may seem conceited, but if we engage in trying to make the world what we wish it were, we will likely be ambushed by that which it certainly is.  We are not the teacher of some global kindergarten class in which our will can be imposed through idealistic efforts and frequent use of “time-out” (does that really even work in kindergarten anyway?).  Instead, we must realize that we stand as the only remaining superpower in a world which largely believes that it no longer has a requirement for one.

Additionally, appeasing terrorists, tyrants, and despots is ineffective foreign policy (see: pre-WWII French and British policy towards Hitler—then “Google” The Holocaust).  Furthermore, there is a reason we have a policy of not negotiating with terrorists because, if we did it once, we would be doing it all the time.  And, lest we forget that having a Bill of Rights and individual liberty does make us better than everyone else!   If we continue down the path of excusing inexcusable behavior and apologizing for our own global superiority, we will only perpetuate and encourage behavior like we are seeing once again throughout the Middle East.  We mortgage our future for the unattainable goal of popularity, but must wake up to realize this is most certainly not a high school prom court; in reality, we live in a world riddled with danger where we stand as the biggest prize for those who wish to prove something.

 

What is the Electoral College…and is it a good thing?

      Since the election I have had several requests to do a blog about what the Electoral College (EC) is and what purpose it serves.  The question is reminiscent of the same question that was asked following the 2000 election when the Electoral College and the “popular vote” split between Bush and Gore.  You may ask why I put the popular vote in quotations, and that is an easy question to answer:  there is no such thing as a constitutional popular vote for president and as such it is a measureable myth of sorts.

       Obviously most people know that the Electoral College is outlined in the Constitution (Article II, Section 1); however, it is 1) the value of the Electoral College and 2) how it came to be which causes confusion and creates a bit of disinterest in the electoral process.  First, I will tackle the most common questions surrounding its value in today’s world.  Second, I will give some background as to why the Framers of the Constitution felt it necessary for the resistance of tyranny.

Question #1:  Where does the number come from?

      There are 538 electors (half plus one equals 270 to win) which make up the EC and the number of those electors represents the composition of Congress; one for each of the 435 voting members of the House and one for each of the 100 voting members of the Senate.  I know you are beginning to question my math skills, but do not be concerned!  The additionally 3 electors represent the non-voting “representatives” from the District of Columbia.

Questions #2:  Why do some states have more this time than 2008?

      Great question!  The answer:  reapportionment.  Reapportionment takes place after every census based on the changes in population from state to state (and district to district).  For example, from 2008 to 2012 Ohio and New York lost 2 electoral votes each and Texas gained 4 electoral votes.  As population changes so does representation in the House and the electoral allocation.

Questions #3:  Since the “popular vote” does not count, why bother voting?

        Well, this is where I hear people showing concern as to whether to vote or not.  The statewide popular vote does determine the electoral allocation.  So, yes you should vote…but only if you take enough time to care and become at least moderately informed.  [Quick Tip:  If you do not know the names of both the current president and vice-president, do your neighbors, children, and fellow citizens a favor and keep it at the house; you can always vote on American Idol instead!!!]

       Now, this is where the water really muddies and we must begin transitioning into the purpose of the EC.  Our Constitution was designed, regardless of what your high school teacher or friendly neighborhood lefty may have told you, to enumerate (grant) certain specific powers to the government of the United States; the rest of which would be “reserved to the States respectively, or to the people (Amendment 10)…Seriously, it says it in there and was written by the same guy who designed the framework of the Constitution (James Madison).  In a nut shell, this means that the states maintain a level of sovereignty and this is the first step into understanding why exactly the EC is important:  (semi) sovereign states choose presidents, not the general public.

       In fact, the EC was an elaborately developed strategy to avoid a popular vote because the only thing the Framers may have feared more than the tyranny of a king was a tyranny of the majority.  Actually, the whole idea of even having a president was quite contentious, but I will refrain from that discussion for the purpose of keeping it as short as possible.  But what of all the cries of majority rule and we must follow the will of the people(?)…well, to state it simply, that is a bunch of crap.  Consider the words of Madison (Oct. 5, 1786) concerning majority rule:  “In fact it is only reestablishing under another name and a more specious form, force as the measure of right.”  Additionally, Madison (Oct. 17, 1788) warns that government’s oppressive capacity does not come from “acts of Government contrary to the sense of its constituents, but from acts in which the Government is the mere instrument of the major number of the constituents.”  Majority rule was anything but a well-respected concept then, as it should be now.

      However, if you are still not convinced that majority rule (which always results in the minority being taken advantage of, or worse) is a bad thing let me remind you of a few incidents in the history of both the US and the world in which the much-fabled majority ruled:  Jim Crow and slavery in America and the Jewish Holocaust orchestrated by that hero of democracy, Adolf Hitler.   Still want to order up a heaping helping of good ole democracy?  [Note:  that is why we are guaranteed a republican form of government in the Constitution and the term democracy does not show up even once.]

     There were other alternate ideas for voting the president into office, one was a vote by the House of Representatives (similar to the parliamentary system of England) and it was even kicked around that the Senate should elect the president.  These ideas were unsuccessful because they placed into peril the concept of the separation of powers by putting the legislature in control of the executive branch; and, seeing how much politicians try to bribe the people to get into office, it is hard to imagine the hijinks that would have occurred in that format.

        Because of those reasons (primarily) the EC was born as a system for which states chose the president, but not necessarily through any direct vote of the people.  [Fun Fact:  each state retains the power to determine how electors will be selected; so, if the states decided to let the state legislatures pick the electors, they could and the citizens of the state would no longer be able to vote for the president (depending on the structure of the state constitutions, of course).]  People often point to the limited campaigning in the several swing states as a solid justification for the popular vote by noting that more states would be important; however, that is naïve at best.  Instead of campaigns in the swing states, politicians would merely double down on large population centers in political strongholds to boost their margins in those areas in an attempt to outpace the popular vote of any competitors.  Thus, states like California, Texas, New York, Florida, and Illinois would become major players in presidential politics and it would seem profoundly imprudent to give California any further say in the president than they already have…besides they are too busy screwing up their own state to need any more responsibilities.

       The Electoral College seems to be wrapped in a shroud of mystery, but is a relatively simple and very relevant creation of our Framers.  The problem that comes in explaining it is that it requires the acknowledgement that majority rule is a profoundly poor system (a truth that the very designers of the system knew well).  Our Framers were not some obscure set of hick farmers with a lack of understanding of the principles of an organized society (as is sometimes suggested); instead they were a very highly educated, well-studied group of political scholars.  If you doubt this I would suggest you visit the Library of Congress and review the display of Jefferson’s personal library; it is full of volumes of political theory from Plato to John Locke (in French, English, and Latin).  They studied and understood political history and what had led to the failures of republics and the rapid erosion of liberty that plagued democracies throughout history; therefore, it is no wonder that liberty in America has survived many assaults and continues beyond the accepted life-expectancy of a free society.  We have already irreparably damaged a part of our Constitutional structure through the perversion that is the 17th Amendment (subject for another blog); and it is uncertain how many more assaults, by those who wish to impose the will of the majority through the police power of government, that our republic may be able to survive.

 

Regulation Is Not Our Salvation

        There is much talk of regulation and the need for it in every aspect of our “dangerous capitalistic” society; however, there is seldom talk of what regulation is and of what precisely it accomplishes. Ironically, the very people who exhibit the greatest disdain for “big business” are often the most ardent supporters of regulation (besides the big businesses themselves, of course). Democrats, and statists of all parties, are particularly interested in imposing regulations for the stated purpose of controlling the “animal instincts” of the free market. These are the same people who often deride big business publicly for taking advantage of consumers and keeping the “little man” down. And this is where it becomes interesting.

          What if I were to tell you that regulation is largely designed to do that very thing and that the politicians who both advocate and introduce regulation understand very clearly that it will remove competition by restricting new market participants? I know, I know–many people out there will be shaking their heads in outright refusal of this assertion. I can just hear it now: “we need government to protect us from big corporations”; or “that’s not what the news said”; or “Obama said we deregulated too much.” Food for thought, though: big opponents of airline deregulation were the (big) airlines and the big opponents of trucking deregulation?…you guessed it, the (big) trucking companies. That, by the way, is not an isolated situation.

          Now, before people start into the irrational argument that I hate all regulation or that I am an anarchist; try to refrain from acting arbitrarily dramatic, ‘cause it just ain’t true! Here is an example of the real world scenario and why most regulation is not only supported by “big business,” but also why they (and their lobbyists) write a significant amount of the legislation.

          Let us assume that I am a builder of houses in a small economy with a relatively static population (a miniature US, for example). I am the only builder of houses as I have been an innovator in early house building technology. Let us also assume I hired you to work for me as my helper and you worked your way up to foreman over some amount of time. At this point you realize that you know everything you would need to provide the same service that I do, but feel you can do it more cheaply (because I am operating as a monopolist and thus my pricing is artificially high). So, you strike out on your own and begin competing with me. This does not please me for obvious reasons.

          So, I go see the executive (president/governor) of this “state” we live and work in and I convince him that we should, for the safety of all consumers, get control of the house building market and pass some regulations so that amateur and dangerous new builders do not hurt anyone financially or physically. The executive, not wanting his constituents hurt or angry sees great value in regulation that will control the evil capitalists (besides me, of course as I will be grandfathered in…) and will make one of his major campaign contributors happy. He goes to the legislative branch and convinces them to draft a law; however, how can these lawmakers draft regulations about housing that will safeguard their citizens when they themselves have never built houses? Hmmmm…Wait, they have an idea—they should approach the local expert for help in constructing these regulations. My phone rings and I gladly accept my civic duty of drawing up regulations for housing standards so that I am guaranteed customers…I mean, so that the citizens are safe!

          Now, back to you, my only competitor; if am lucky I can build in professional fees and licensing, insurance, or even capital requirements that create a great enough obstacle to you not being able to continue in the market. If not, I have almost guaranteed that neither of our employees will likely ever be able to afford to compete with us.   Here is the best part, though. Having seen how well the appeal to citizens to safeguard them from “greedy profit-driven” capitalists worked out for his polling numbers; the executive decides to move on to another market segment. Once again, this executive finds great public support (who doesn’t want to be safer) and also finds he has more campaign contributions rolling in from companies which no longer have to fear any significant competition in their field.

     Here is the reality and the bad side of this equation. First, capitalism in this example no longer exists (incidentally, there has not been true capitalism in the U.S. for many decades except perhaps in some isolated market segments). The little man has been effectively “held down” and kept out of the marketplace. Skill, pricing, or a combination of the two is no longer that which is primarily supplied by market participants; instead, the ability to navigate the political waters and afford to pay for these regulatory burdens is what determines market participation.

          Second, the government has created a moral hazard in which the citizenry no longer feels responsible for ensuring quality in the products and services they purchase; additionally, government takes on no liability that the work they attest to (through regulatory obstacles) is of high or even good quality. For example, if you have a house built, it will have to be approved by government inspectors on many occasions for different purposes. However, if that house burns down later from faulty wiring that was inspected; the government that essentially told you it was safe carries no liability. This begs a tangential question: what is the point, exactly?

          Third, in fields that are “regulated” it has been made essentially illegal for people to work. To license something is defined as: the ability to grant a license to (someone or something) to permit the use of something or to allow an activity to take place. If something requires a license, it is otherwise illegal—ergo, it is illegal to work and earn a living if the government does not permit you to do so. Yet another disincentive towards working, just what we need!

          The rise in corporations over the last century is not due to not enough government. Inversely, it is due to too much government. I understand there is a long held belief in most people that government is there to help us, but we must get beyond misconceptions and use logic to approach questions. Whether a politician is well-intentioned or not, regulation still results in the same thing. Also, do not believe the hype that the Bush administration marked the biggest rollback of regulations in modern history—that could not be further from the truth. In fact, if you are a fan of regulation, you should have a picture of “W” over your mantle right next to your picture of Obama.

          If people actually understand what the true effects of regulation are, it is likely that we will tolerate less of it. However, I understand there is a draw in believing in wholesale regulation; the comfort of feeling like someone evil and rich is being halted on their wicked quest for world domination is probably great. But, perception a reality does not make. Regulation is the pet of “big business” that does not wish to compete and colorful plumage which politicians display to prove how “caring” and “egalitarian” they are; both, instead, use it largely as a tool to monopolize market segments and line their own pockets; perverting capitalism into cronyism.

          When you consider the effectiveness of government in solving all our problems you should truly ponder why all of governments “wars” of morality such as the one on drugs and the one on poverty have only resulted in more of both. Certainly, in the thousands of years of human history it is unlikely that humans have only recently gone bad; perhaps, we should realize that government has the anti-Midas effect of turning everything it touches into crap instead of gold.