Sunday, March 30, 2008
Friday, March 28, 2008
You show me a polluter and I'll show you a subsidy. I'll show you a fat cat using political clout to escape the discipline of the market and load his production costs onto the backs of the public. Tax-payers give away $65 billion every year in subsidies to big oil, and more than $35 billion a year in subsidies to western welfare cowboys. Those subsidies helped create the billionaires who financed the right-wing revolution on Capitol Hill and put Bush in the White House. While communism is the control of business by government, fascism is the control of government by business. True free-markets, in which businesses pay all the costs of bringing their products to market, is the most efficient and democratic way of distributing the goods of the land – and the surest way to eliminate pollution. Free markets, when allowed to function, value raw materials and encourage producers to eliminate waste by reduc-ing, reusing, and recycling. I don't think of myself as an environmentalist anymore; I consider myself a free-marketeer.Robert F. Kennedy Jr. seems to know something that too many libertarians don't know.
Hat tip: Kevin Carson.
Thud. That was the sound of the other shoe dropping. In response to severe problems in the credit markets, thanks to years of government intervention, the Federal Reserve, the government's counterfeiter and chief culprit in the current crisis, has opened its discount window to the investment banks. Interest rate: 2.5 percent. Until recently, only commercial banks could borrow money from the Fed. But now investment banks may also -- and here's the kicker: They can put up shaky mortgage-backed securities as collateral. Which means the American people are potentially on the hook for those loans. Should they go bad, we Americans will pay either in inflation-induced higher prices or higher taxes. Investment banks that may have invested in bad mortgages are already taking advantage of the new opportunity. Is this a great country or what?The rest of this week's TGIF, "Bailout Hypocrisy," is at the Foundation for Economic Foundation website.
Wednesday, March 26, 2008
A few years ago, FrontPageMag.com columnist Paul Marek wrote an article titled “Why the Peaceful Majority Is Irrelevant”. His thesis was that even if the majority of Muslims abhor violence, it doesn’t matter because “the fanatics rule Islam at this moment in history.... The hard quantifiable fact is, that the ‘peaceful majority’ is the ‘silent majority’ and it is cowed and extraneous.”
For Marek, the upshot is this: “We must pay attention to the only group that counts: the fanatics who threaten our way of life.”
He’s wrong. No, he’s worse than wrong, because his position could be used to justify mass murder.
The rest of my op-ed, "Why the Peaceful Majority of Muslims Are Not Irrelevant," is at The Future of Freedom Foundation website.
Tuesday, March 25, 2008
Friday, March 21, 2008
The U.S. government could be violating our freedom a lot more than it is now. During World War I, Eugene Debs was jailed for making a speech defending war opponents. This doesn't happen today. The main reason freedom of speech is more secure than it used to be is that the ACLU and other civil-liberties groups have for years promoted the idea to the public that free speech is a good thing. Moreover, whenever the state makes a move against it, these groups spring into action. That is, they act as private defense agencies. Interestingly, they are nonprofit and unarmed. Their weapons are ideas, which Hummel emphasizes are always the ultimate defenses against tyranny. As he says, "Force doesn't rule the world. Ideas rule the world because ideas determine in which direction people point their guns."
On the other side, Hummel pointed out, our freedom to own guns is to some extent protected by another set of private organizations, most prominently (if highly imperfectly), the National Rifle Association. Again, their weapons are ideas, not (ironically) guns.
This is not to say the protection is flawless -- far from it. But it is not insignificant. Think how much worse the U.S. government could be. If we want private protection to work better, we need to win people over to a set of ideas not as riddled by contradictions and compromises as the current set is.
But the point stands. Private organizations can defend liberty against tyranny. If they can do it with respect to the the U.S. government, they can do it with respect to any government.
Cross-posted at Liberty & Power.
But in damning "America," Rev. Wright makes an error similar to those who claim to be proud of "America." What is America? The doctrine of nationalism encourages people to identify country with state. The two are integrated into one. This is a dangerous move because it leads people to think that if they criticize the state, they are criticizing the "country." (That's why it is considered improper for an American to dissent from government policy while in another country.) It also leads them to think that an attack on the state they live under is an attack on them.
The idea of country is an abstraction that subsumes many things, admirable, condemnable, and neutral. The Declaration of Independence and Revolution are part of the country. My home is part of the country. But so are slavery, the Trail of Tears, Jim Crow, imperialism, colonialism, conscription, aggressive wars, carpet bombing of cities, the A-bombs, the early centralization of power and betrayal of the revolution, and so on. No one should let himself be trapped by the question, Are you proud of your country? (Leave aside the fact that taking pride in things you had nothing to do with seems problematic.) What the heck does that mean? If it means, Are you proud of the government and the people who run it? then my answer is no.
Nationalism is a scourge, an ever-present threat to liberty. This is a point worth making whenever possible. I don't salute flags. I don't pledge allegiance. I don't sing national anthems. I don't wear flag lapel pins. I refuse to mouth platitudes about pride in the country. I admire specific things in American history, and I'm happy to enumerate them if asked. But I will have no part of package deals that are ultimately designed to win unthinking loyalty to the state and acceptance of its crimes.
P.S. David Henderson has an excellent column on this subject here. I agree with his partial defense of Wright and his criticism of Obama.
Tuesday, March 18, 2008
Monday, March 17, 2008
Pushed to the brink of collapse by the mortgage crisis, Bear Stearns Cos. agreed -- after prodding by the federal government -- to be sold to J.P. Morgan Chase & Co. for the fire-sale price of $2 a share in stock, or about $236 million. Bear Stearns had a stock-market value of about $3.5 billion as of Friday -- and was worth $20 billion in January 2007. But the crisis of confidence that swept the firm and fueled a customer exodus in recent days left Bear Stearns with a horrible choice: sell the firm -- at any price -- to a big bank willing to assume its trading obligations or file for bankruptcy....To help facilitate the deal, the Federal Reserve is taking the extraordinary step of providing as much as $30 billion in financing for Bear Stearns's less-liquid assets, such as mortgage securities that the firm has been unable to sell, in what is believed to be the largest Fed advance on record to a single company.At Liberty & Power, Sudha Shenoy comments:
Fed officials wouldn't describe the exact financing terms or assets involved. But if those assets decline in value, the Fed would bear any loss, not J.P. Morgan.
The sale of Bear Stearns and Sunday night's move by the Fed to offer loans to other securities dealers mark the latest historic turns in what has become the most pervasive financial crisis in a generation. [Emphasis added.]
In the absence of Federal Reserve intervention & arm-twisting, Bear Stearns would undoubtedly have had to cease trading. And no doubt it would’ve been taken over, eventually -- at an even lower price. All that govt officials could do was to shorten this time period, & possibly prevent Bear Stearns’ value from falling even further. But even the almighty Federal Reserve -- the world’s largest & most powerful central bank -- could not prevent the huge capital losses that Bear Stearns’ shareholders suffered. In short, even the Fed could not stop the de facto failure of one of the world’s largest investment companies.Bear's shares were going for $30 on Friday. They were at $170 a year ago. J.P. Morgan Chase picked them up, with government help, for $2. The government tried to rescue these high rollers, but apparently there are limits to what this virtually unlimited government can do.
What does all this signify? Even the US govt -- the world’s largest & most frightening -- is not & cannot be, omnipotent. True, the Fed’s officials did their best to paper over the cracks -- but that was all they could do.
Sunday, March 16, 2008
The subprime problem has its roots in pro-business government intervention; the policies at fault were designed to help the housing industry and the lenders who write mortgages. Now the other shoe is falling. Big lenders and investors handling securitized mortgages who are in over their heads will get their promised bailout under the "too big to fail" doctrine. And the rescue will set the table for the next round of bad business decisions and the next bailout. It's called moral hazard.
What does this have to do with the free market? As Kevin Carson likes to say, if this is the free market, then I'm against it. Of course, it is not the free market. The free market is a profit and loss system void of privilege. When businesses fail, they are supposed to actually fail, not turn to the taxpayers. What we really have is (state or political) capitalism, corporatism, or fascism. An essential characteristic of this system is that while profits are private, losses are socialized, i.e., ultimately covered by the mass of people without political clout.
Unfortunately, potential allies of libertarians won't catch the distinction and will thus be further alienated from true free-market thinking. They won't realize that the free market is the system that would deliver what they want, particularly much of what they call "social justice."
Now is the time for us to draw the distinctions as sharply as possible. Down with "vulgar libertarianism"!
Cross-posted at Liberty & Power.
Saturday, March 15, 2008
I've been reading the news about soon-to-be-ex-New York Governor Eliot Spitzer with mixed feelings. Yes, mixed. On the one hand, there is something satisfying in seeing an insufferably self-righteous, politically ambitious, ham-handed, and ethically challenged former prosecutor lose his grip on power because he did what he used to prosecute other people for doing. On the other hand, he was caught in a victimless crime because the ludicrously named Patriot Act requires banks to inform the IRS when their depositors engage in "suspicious," that is, unusual, financial activity. Big Brother lives.The rest of this week's TGF, "Big Brother Really Is Watching," is at the Foundation for Economic Education website.
When a private company screws up, there is no shortage of people demanding more government intrusion in the marketplace. But when the government screws up, they don’t call for less government. They call for more.My latest op-ed, "The Government's Chickens Are Back," is at The Future of Freedom Foundation website.
The economy is slowing down, and the government is at fault. But, if anything, the policymakers and pundits want the government to do more of what got us into trouble in the first place. If a lot of poison is bad, a lot more is somehow good. That’s the logic of statism.
Friday, March 14, 2008
For more on this idea and its implications for "national defense," see the chapters by Jeffrey Rogers Hummel in Anarchy and the Law (with Don Lavoie) and The Myth of National Defense.
Thursday, March 13, 2008
No word on the percentage of Americans who know how many Iraqis have died since George II sent in his invasion and occupation force. But, hey, who's counting?
Well someone is. The box at the top of the right column gives you some indication.
Sunday, March 09, 2008
The big political buzz is over whether John McCain, Hillary Clinton, and Barack Obama are qualified to be president. The voters are expected to decide, but are they qualified to do that? Don't bet on it.The rest of my TGIF, "Are the Voters Qualified to Pick a President?" is at the Foundation for Economic Education website.
Saturday, March 08, 2008
I demand symmetry.
The current economic slowd0wn is another spectacular example of government corruption and incompetence. Time to severely restrict -- no, abolish -- the government's power to interfere with our consensual activities.