Welfare and Borderline Cases

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

The city of Houston is both taking a cue from the Obama administration and attempting to make its own proposed intrusion into the economy sound palatable to Texans, who generally favor private property and capitalism.

Houston taxpayers could start footing the bill to help first-time homebuyers pay off debts and improve their credit scores, under a proposal before City Council this week.

The "Credit Score Enhancement Program" will give up to $3,000 in grants to individuals who are trying to qualify for mortgages through the city's homebuyers assistance program. City officials say some applicants fall short of eligibility by only 10 or 20 points on their credit scores, and paying off some debt balances can quickly improve their numbers.

First off, credit the Houston Chronicle for actually cutting to the chase with the injustice of this proposal, which mirrors the philosophy of the Obama Administration. Although it is still not the principled opposition to all government intrusion into the economy that I think Americans must ultimately discover before things will fundamentally improve, it is a start.

The lede is also an indication of how the Obama Administration and its emboldened imitators across America may ultimately benefit America: by proposing and enacting policies that make it crystal clear what is wrong with such government intervention. All forms of redistribution of wealth, being violations of property rights, are ipso facto, unjust. Clear examples like this can only make the heavy lifting of principled advocates of individual rights easier.

What is interesting to me here is how the proposal is being sold to the public as fiscally "conservative" by virtue of the fact that only people who just barely fail to qualify for mortgages will have some credit card debt wiped out. After all, we can probably all see ourselves in such a situation. This tactic has been the stock in trade of altruists and collectivists since time immemorial: Draw attention to the common humanity of donor and proposed recipient long enough to distract the donor from the issue at hand, and then take advantage of his good will.

Certainly, if I had the resources to help, a loved one was a few thousand short of qualifying for a mortgage, and this was not because of poor judgement or character, I'd consider helping. But this is not the same thing. We're talking about strangers. I am not privy to why they have fallen short. And, most importantly in a political context, the money being used to help has been stolen from its rightful owners. The fact that this proposal entails the passing around of loot makes it wrong no matter who is on the receiving end.

Thus we see a borderline case in the realm of lending standards -- which exist for a reason and are being subverted, by the way -- being used to obliterate a black-and-white moral objection to a government policy of theft and passing out stolen goods.

The icing on the cake is invisible, though, just as Frederic Bastiat pointed out over a century and a half ago. That icing is the fact that, for all this feel-gooding about potentially helping borderline cases -- presumably people who are otherwise upstanding and responsible -- it would actually do exactly the opposite of what its supporters claim to intend.

What of all the taxpayers who could afford to pay off their expenses, like credit card bills, but for the fact that they have had their money stolen from them? How many of them have had to put off buying a home, forgo a vacation or a new car, or simply do without something because of the high cost of the welfare state?

They go completely unmentioned, even by officials nominally opposed to this idea. The problem with this idea is not that it is "well intentioned but ... would go too far." The problem is that stealing even one cent from someone else, no matter what the purpose, is immoral.

The backers of this proposal favor government theft, pure and simple. I'll be damned if I'm going to cast a smile their way and pretend that giving the loot to someone I might, conceivably consider helping on my own somehow absolves them of that fact. When the city collected the taxes of the people who would foot the bill for this -- regardless, by the way, of whether it made them unable to buy a home -- it "went too far."

-- CAV

Quick Roundup 407

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Lightning Links

So I'm headed out of town again and fell asleep last night when I should have been packing.

"This'll have to be fast," I'm thinking.

"Might as well call 'em 'lightning links,' I reply to myself.

"Damn! I kinda like that! Why didn't I come up with that, oh, about 407 installments ago?"

Bushtalgia -- or Wamnesia?

I spotted a link to this post by the Anchoress, "Yep, I miss Bush," over at Instapundit the other day, but didn't get around to it until this morning.

I'm no fan of Obama, but I can't get enough past the cries of hypocrisy (regarding the leftists who are now admitting to being enamored of Bush's policies) -- or the dropping of the bar to the ground that is necessary to make Bush look good -- to read through all of it at once.

The fact that welfare statists want to continue Bush's policies is no admission on their part of Dubya's superior wisdom. To the contrary, it is usually a sign that what Bush did wasn't really so hot.

On top of that we are necessarily not privy to the alternative to Obama, namely John McCain enacting policies substantially the same as his.

For the conservative movement to become a true alternative to the left, the concern must be that whoever is in power be a champion of individual rights. Bush was not, and McCain wouldn't have been. I want better than to take false solace in the President being "our guy" (which, as a welfare statist, he can't be, anyway, at least for me).

Amit Ghate provides an executive summary at his blog of what the Republicans ought to consider.

Hsieh's on a Huge Roll

Wow! Another big op-ed and a couple of good LTEs by Paul Hsieh.

Here's one of the LTEs.

When the economy is bad, welfare statists say, "We must expand government programs because everyone is hurting." When the economy is good, they say, "We must expand them because we can finally afford it."

If I didn't know better, I'd think that they wanted to increase people's dependency on government programs regardless of the reason.

Quote of the day, there!

Objectivist Roundup

Heh! I finally remembered to submit something again. Yes. I'm stretched that thin.

All indications are that it will appear at Making Progress later today. I'll update with a permalink when I can, but that may be as late as tomorrow morning.

Fashion Predictions, circa 1930

Quoth Karl Martin Mertens, "Actually, pretty bang on."

More Podcasts!

Stephen Bourque lists the last four Leonard Peikoff podcasts with teasers. I like to listen to them in small bunches, and I see that I have a set of four new ones to enjoy.

-- CAV

Two Hsieh LTEs in Rocky Mountain News

By Paul Hsieh from NoodleFood,cross-posted by MetaBlog

The Rocky Mountain News has published two (!) of my LTEs on consecutive days.

On February 18, 2009, they printed this letter opposing the latest proposal for "single payer" health care in Colorado:

Single-payer health care has failed in every other country
Paul Hsieh, Sedalia

Response to your story, "Dems' bill shoots for universal health care" from 2/5/2009 by Ed Sealover.

Single-payer health care has failed in every other country that has tried it. Canada controls health costs by forcing patients to wait months for MRI scans and cardiac surgeries that Americans can get in a few days.

Single-payer advocates mistakenly claim that health care is a "right".

Health care is a *need*, not a right. Rights are freedoms of action (such as the right to free speech), not automatic claims on goods and services that must be produced by another.

Instead of single-payer health care, America needs free-market reforms, such as allowing patients to purchase insurance across state lines and use health savings accounts for routine expenses. Insurers should be allowed to sell inexpensive, catastrophic-only policies to cover rare but expensive events.

Such reforms could reduce costs and make insurance available to millions who cannot currently afford it, while respecting individual rights.

On February 19, 2009, they printed this letter on the Obama Administration's expanded welfare state programs:

Heads they win, tails we lose
Dr. Paul Hsieh, Sedalia

When the economy is bad, welfare statists say, "We must expand government programs because everyone is hurting." When the economy is good, they say, "We must expand them because we can finally afford it."

If I didn't know better, I'd think that they wanted to increase people's dependency on government programs regardless of the reason.

Hsieh OpEd in Washington Examiner

By Paul Hsieh from NoodleFood,cross-posted by MetaBlog

The February 23, 2009 Washington Examiner published my latest OpEd entitled, "America Doesn't Need a Health Care Czar". Here is the intro:

America doesn't need a 'health care czar'

By Paul Hsieh, MD, OpEd Contributor - 2/23/09

KEY DATA: Free market health reforms could reduce health insurance costs by over 50%.

TAKE HOME: President Barack Obama's plans for a "health czar" would represent an unprecedented and dangerous intrusion of government into the practice of American medicine.

Former senator Tom Daschle's withdrawal as President Barack Obama’s nominee for Secretary of Health and Human Services has left the White House administration scrambling to find a new "health czar" to implement their goal of government-run "universal health care."

But while the primary focus had been on Daschle's tax problems, Americans should also ask a more fundamental question: Why do we need a health czar in the first place?...

Read the rest here.

As usual, feel free to leave comments on the article website, as well as to forward it to friends, family, co-workers, elected officials, etc.

Update: The OpEd has started a vigorous discussion at LittleGreenFootballs!

Atlas Selling Like Hotcakes

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

Here's some very good news from the Ayn Rand Center:

Sales of "Atlas Shrugged" Soar in the Face of Economic Crisis

Washington, D.C., February 23, 2009--Sales of Ayn Rand's "Atlas Shrugged" have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold.

"Americans are flocking to buy and read 'Atlas Shrugged' because there are uncanny similarities between the plot-line of the book and the events of our day" said Yaron Brook, Executive Director at the Ayn Rand Center for Individual Rights. "Americans are rightfully concerned about the economic crisis and government's increasing intervention and attempts to control the economy. Ayn Rand understood and identified the deeper causes of the crisis we're facing, and she offered, in 'Atlas Shrugged,' a principled and practical solution consistent with American values."

Yeah!

Sales of "Atlas Shrugged" Soar in the Face of Economic Crisis

By from The Ayn Rand Institute Media Releases,cross-posted by MetaBlog

Sales of “Atlas Shrugged” Soar in the Face of Economic Crisis

Washington, D.C., February 23, 2009--Sales of Ayn Rand’s “Atlas Shrugged” have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold.

“Americans are flocking to buy and read ‘Atlas Shrugged’ because there are uncanny similarities between the plot-line of the book and the events of our day” said Yaron Brook, Executive Director at the Ayn Rand Center for Individual Rights. “Americans are rightfully concerned about the economic crisis and government’s increasing intervention and attempts to control the economy. Ayn Rand understood and identified the deeper causes of the crisis we’re facing, and she offered, in ‘Atlas Shrugged,’ a principled and practical solution consistent with American values."

----------------
 
Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared on the new Fox Business Network, FOX News Channel, CNN, CNBC and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business and foreign policy at college campuses, community groups and corporations across America and throughout the world.

To interview Dr. Brook or book him for your show, please contact media@aynrandcenter.org.

The Green Energy Fantasy

By Keith Lockitch from The Ayn Rand Institute Media Releases,cross-posted by MetaBlog

The Green Energy Fantasy

By Keith Lockitch

Will a green energy industry be an engine of economic growth? Many want us to think so, including our new President. Apparently a booming green economy with millions of new jobs is just around the corner. All we need is the right mix of government “incentives.”

These include a huge (de facto) tax on carbon emissions imposed through a cap-and-trade regulatory scheme, as well as huge government subsidies for “renewable,” carbon-free sources. The hope is that these government sticks and carrots will turn today’s pitiful “green energy” industry, which produces an insignificant fraction of American energy, into a source of abundant, affordable energy that can replace today’s fossil-fuel-dominated industry.

This view is a fantasy--one that could devastate America’s economy. The reality is that “green energy” is at best a sophisticated make-work program.

There is a reason why less than 2 percent of the world’s energy currently comes from “renewable” sources such as wind and solar--the very sources that are supposedly going to power the new green economy: despite billions of dollars in government subsidies, funding decades of research, they have not proven themselves to be practical sources of energy. Indeed, without government mandates forcing their adoption in most Western countries, their high cost would make them even less prevalent.

Consider that it takes about 1,000 wind turbines, occupying tens of thousands of acres, to produce as much electricity as just one medium-sized, coal-fired power plant. And that’s if the wind is blowing: the intermittency of wind wreaks havoc on electricity grids, which need a stable flow of power, thus requiring expensive, redundant backup capacity or an unbuilt, unproven “smart grid.”

Or consider the “promise” of solar. Two projects in development will cover 12.5 square miles of central California with solar cells in the hope of generating about 800 megawatts of power (as much as one large coal-fired plant). But that power output will only be achieved when the sun is shining brightly--around noon on sunny days; the actual output will be less than a third that amount. And the electricity will cost more than market price, even with the life-support of federal subsidies that keeps the solar industry going. The major factor driving the project is not the promise of abundant power but California’s state quota requiring 20 percent “renewable” electricity by 2010.

More than 81 percent of world energy comes from fossil fuels, and half of America’s electricity is generated by burning coal. Carbon sources are literally keeping us alive. There is no evidence that they have--or will soon have--a viable replacement in transportation fuel, and there is only one in electricity generation, nuclear, which “green energy” advocates also oppose.

We all saw the ripple effects last summer when gas prices shot above $4 per gallon, and higher transportation costs drove up prices of everything from plane fares to vegetables. If green policies cause a permanent, and likely far greater, hike in the cost of all forms of energy, what shockwaves would that send through our already badly damaged economy?

We don’t want to find out.

Regardless of one’s views on global warming--and there is ample scientific evidence to reject the claim that manmade carbon emissions are causing catastrophe--the fact is that kneecapping the fossil fuel industry while diverting tax dollars into expensive, impractical forms of energy will not be an economic boon, but an economic disaster.

We in developed countries take industrial-scale energy for granted and often fail to appreciate its crucial value to our lives--including its indispensable role in enabling us to deal with drought, storms, temperature extremes, and other climate challenges we are told to fear by global-warming alarmists.

If we want to restore economic growth and reduce our vulnerability to the elements, what we need is not “green energy” forced upon us by government coercion but real energy delivered on a free market.

 

Dicatorship Outlaws

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

The One Minute Case For Capitalism

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

Capitalism a social system based on the principle of individual rights.

A capitalist society is based on the recognition of individual rights, including property rights. Under capitalism, all property is privately owned, and the state is separated from economics just as it is from religion. Economically, capitalism is a system of laissez faire, or free markets, where the government plays no part whatsoever in economic decisions.

Capitalism is the only social system compatible with the requirements of man’s life

To pursue the values necessary for his life a society, man requires only one thing from others: freedom of action. Freedom means the ability to act however one pleases as long as one does not infringe on the same and equal freedom of others.   In a political context, freedom means solely the freedom from the initiation of force by other men. Only by the initiation of force can man’s rights be violated. Whether it is by a theft, force, fraud, or government censorship, man’s rights can be violated only by the initiation of force. Because man’s life depends on the use of reason to achieve the values necessary for his life, the initiation of force renders his mind useless as a means of survival. To live, man must achieve the values necessary to sustain his live. To achieve values, man must be free to think and to act on his judgment. To live, man must be free to think. To be free to think, man must be free to act. In the words of Ayn Rand, “Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries.”

Capitalism recognizes the inherent worth of the individual

In a human society – one that recognizes the independence of each man’s mind – each individual is an end in himself.  He owns his life, and no one else’s.  Other men are not his slaves, and he is not theirs.  They have no claim on his life or on the values he creates to maintain his life, and he has no claim on theirs.  In a free society, men can gain immense values from each other by voluntarily trading the values they create to mutual gain.  However, they can only create values if they are free to use their minds to exercise their creativity.  A man is better living off on his own than as a slave to his brothers.  Capitalism recognizes each man as an independent, thinking being.

The individual is an end in himself

Just as no individual has the right to initiate force against anyone, neither does any group of men, in any private or public capacity. It is immoral to initiate force against any individual for any reason. This includes the initiation of force for “the public good.” The “public” is merely a collection of individuals, each possessing the same rights, and each being an end in himself. Any attempt to benefit the “public good” is an immoral attempt to provide a benefit to one group of individuals at the expense of another. In a free society, no individual benefits at the expense of another: men exchange the values they create in voluntary trade to mutual gain. The rule of law in a free society has just one purpose: to protect the rights of the individual.

Capitalism leads to freedom and prosperity

A free, capitalist economy has never existed anywhere in the world. The closest the world came to a free market was during the Industrial Revolution in Great Britain and during the late 19th century in the United States. The Industrial Revolution was a period of unprecedented economic growth and unimaginable improvements in quality of life. In less than two hundred years, the life of most people in the Western world changed from a a short life filled with poverty, plague, and near-constant war to a modern, comfortable existence that  even the kings of medieval Europe couldn’t have imagined.  Since 1820, the leading capitalist nations have increased their wealth sixteen fold, their populations more than four-fold, their productivity twenty-fold.  Annual working hours went from 3,000 to less than 1,700 and life expectancy doubled from thirty to over seventy years. ¹

Yet despite the undeniable material superiority of capitalist societies, its critics continue to attack it as inhuman and selfish.  What the world lacks is not evidence of capitalism’s practical superiority, but a moral defense of a man’s right to his own life.

Reference

1. Angus Maddison. Phases of Capitalist Development, p4 (1982)

Further Reading

• Andrew Bernstein: The Capitalist Manifesto
• Ayn Rand: Capitalism: The Unknown Ideal
• The One Minute Case For Individual Rights
• The One Minute Case Against Interventionism
• The Bernstein Declaration On the Principles and Possibilities of Capitalism
• The Capitalism Site

Our Government “Confidence” Men

By noreply@blogger.com (Edward Cline) from The Rule of Reason,cross-posted by MetaBlog

It is noteworthy that in all the glaring headlines and TV news media’s Pecksniffian commentary about Bernard Madoff’s $50 billion scam and now R. Allen Stanford’s multi-billion dollar gold brick, not one word has been heard about the federal government’s own ongoing confidence scheme. The recent “bailouts” of banks, mortgage companies and automakers, together with the $787 billion “stimulus” legislation and the $75 billion home mortgage “rescue” plan signed by President Barack Obama last week, share the same attributes and methodology as Madoff’s and Stanford’s, and differ from them only in scale. Compared to Congress, the U.S. Treasury, the Federal Reserve, and the myriad perpetuated entitlements such as Medicare, Social Security, the Federal Employees Retirement System, confidence men Madoff and Stanford are mere small-time grifters.

Some economic consultants of the major networks have even dared concede that the $787 billion commitment to “saving” the economy by spending the country into “prosperity” (but no mention of the solvency on which any prosperity is actually based) will balloon to over $3 trillion in a few years, allowing for whatever occasional expenses are dreamed up and sanctioned by Obama and a Democratic Congress.

What, other than an ignorance dulcified by an altruistic and collectivist bias, can account for an epistemology that can grasp a Madoff style scam, but not a government scam? It can see trees, but not the forest. What causes analysts, consultants, and columnists to fail to make the connections? Why do so many believe that the government is intrinsically capable of “managing” the economy, when the record of government intervention demonstrates the opposite? When Obama and Congressmen harp on the urgency to reestablish “confidence” in the economy, should one assume that they are true “confidence men” and have actively engaged in bilking Americans?

Frankly, yes. As in all political action taken in the name of altruism and collectivism, there are givers and takers -- and the ones who are forced to foot the bill in the name of the “public good.”

At the moment, for example, the news media are reporting unhappiness with Obama’s $75 billion home mortgage “rescue” plan, one expressed by homeowners who feel they are not only invisible to the government but penalized by it as taxpayers, as well, in favor of those who took advantage of the subprime legislation and could not or cannot make their payments. The solvent homeowners and the news media can be heard flailing about in confusion, seeking explanations, reaching some right conclusions. No one is telling them that the chief driving force behind the new “rescue” plan is: altruism. It is the nature of altruism that it will always penalize or ignore the responsible, the virtuous, the thrifty, and the morally and financially solvent, and reward the irresponsible, the amoral, the reckless, and the morally lame and halt.

Although there are differences between pyramid and Ponzi schemes, the key elements are the same. The Ponzi or pharaoh at the top receives the lion’s share of money that works its way up to him, while the incautious and foolish at the very bottom receive little but mostly nothing for their “investments.” The Ponzi or pharaoh is a creature whose chief task is to instill confidence in a “sure-fire,” “safe” means of investing and making money. Pyramid and Ponzi schemes work differently and have variations, but at the bottom of them are countless “recruits” or investors who have entrusted their money to the scheme, hoping for extravagant or better-than-average returns.

“Recruits” at the bottom of a pyramid scheme pay money to belong to it, which they are told is a form of fee or investment, but who have nothing to sell but the same kind of incentive to even lower strata of “recruits.” Investors at the bottom of a Ponzi scheme fall victim to the mere illusion of stability and legitimacy: a flamboyantly maverick, but respectable-looking CEO, lush corporate offices, in-house account managers, regular but fictive account statements, glossy marketing materials, conferences in exotic locales, and so on.

“A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered….Pyramid schemes exploit greed and gullibility. A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula.”

Both types of schemes must, by their nature, reach a “saturation” point; in the pyramid scheme, when there are more “recruits” than there are buyers of products or services to sell (if any); in the Ponzi scheme, when investors call for their money or attempt to close their accounts but learn that their money was never invested at all but siphoned off to the Ponzi’s personal accounts which pay genuine interest or dividends. Pyramid schemes crash when reality catches up with them because the frauds are too successful; Ponzi schemes crash when their victims exercise their volition by either wanting to cash in on their investments or when they suspect that their investment performance is too good to be true.

Unlike the government scheme, however, pyramid pharaohs and Ponzis are not motivated by altruism, but by a desire for the unearned.

The primary motive behind the government’s scheme, which is a vast, seemingly opaque combination of the Ponzi and pyramid models, is not greed, avarice, or even the “quick buck” (the latter except through inflation of the currency, when a government takes advantage of prices before it causes them to rise), but rather power. As the pyramid pharaohs and Ponzis fake reality in order to steal from their duped victims, politicians strive to keep reality at bay, that is, to postpone or delay the consequences of their past and current policies. They fake reality by blaming any financial crisis on anyone but themselves, usually on “unfettered“ capitalism (and there has never been a time in American history when it wasn’t fettered). Their role as “confidence men” is to persuade everyone else of it and to call for an expansion of the scheme, to assume more powers in an attempt to correct a crisis of their own making, literally with their fingers crossed. (“I need wider powers!” demanded Wesley Mouch in Ayn Rand’s prophetic novel, Atlas Shrugged.)

The magical incantation largely responsible for it is the phrase the full faith and credit of the U.S. government. “Faith,” of course, is not a means of cognition or a vehicle of rational certitude. From the first time I read that phrase, I distrusted it because of the term faith. As for the term credit, in fact, the government has no such thing, since rarely has it been able to meet all its fiscal obligations, legitimate or otherwise. Originally, in Article IV of the Constitution, the phrase applied to the interstate relationships regarding “public acts, records, and judicial proceedings.” Section 2 of that Article declared that all citizens would be protected in all states by the same federal but presumably objective laws.

But the phrase has, over time, come to apply to any debts the federal government contracts, as detailed in Article I, Sections 1 and 2:

“The Congress shall have the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States….

“To borrow money on the credit of the United States….”

The only “credit” the government of the United States should have theoretically is a balanced budget, a genuine surplus, and no outstanding debt. But, it hasn’t met the first two conditions in decades, if one applies the literal meaning of the term credit. One investors’ site says that the phrase full faith and credit is used:

“…to describe the unconditional guarantee by one entity to back the interest and principal of another entity’s debt….It is generally accepted that the U.S. government will never default on its loan obligations. The full faith and credit of the U.S. government essentially confers risk-free status to securities such as U.S. Treasuries.”

The first entity is the taxpayer; the second, the federal government.

It is hard to communicate the magnitude of the government’s debt and the scale of what it has committed itself to in terms of what it owes and will owe in the way of welfare state legislation, and what it must control, smother and destroy to even attempt to fulfill the commitment. The U.S. government has, in fact, repeatedly defaulted on its loan obligations, that is, has been unable to pay out the principal and interest on all its debt instruments. Congress has solved the problem by faking reality and regularly raising the official debt limit. In doing so it has merely perpetuated the debt and indefinitely mortgaged the productive sector over the course of generations.

“The United States total public debt, commonly called the national debt…is the amount of money owed by the federal government…to holders of U.S. debt instruments. Debt held by the public is all federal debt held by states, corporations, individuals, and foreign governments, but does not include intergovernmental debt obligations or debt held in the Social Security Trust Fund….As of February 12, 2009, the total U.S. federal debt was $10.76 trillion.” (Italics mine.)

U.S. debt instruments are Treasury bills, bonds and notes, considered to be “risk-free.” And the key thing to grasp, but which has not been grasped by any president, Federal Reserve chairman, or Secretary of the Treasury, or by any politician or news anchor that I know of, is that it is the productive private sector that gives any value to the fiat money printed and minted by the government. Because the government can simply print more money when it believes it is necessary, by implication it grants itself more baseless credit. That is the secret, unnamed belief and mystique behind the current usage of the full faith and credit of the U.S. government.

And if the government grants itself credit, then it is giving itself what doesn’t really exist. I could just as well arbitrarily say, with only $1,000 in the bank and $3,000 in credit card debt, “I’m giving myself a $1 million line of credit; think I’ll go out and buy myself a Jaguar and a bungalow in Antigua.” Well, I wouldn’t get very far with the car dealer or the real estate agent; I haven‘t the power to fake reality. But if the government does the same thing by being billions in debt and then by granting itself a higher line of credit in trillions, that action is beyond question.

Money “invested” -- or “borrowed” by the government -- in various government securities is money that could have been invested in the creation of productive goods and services, but instead is used to help fund the constant, unending cycle of indebtedness of the federal government, which always counts on the private sector to “do something.” It asks that sector to work and produce unceasingly as an indentured servant of debt.

Another element in this “confidence game” is that foreign governments have bought the same Treasury securities as have American citizens. Servicing the debt represented by these securities not only increases U.S. indebtedness, but keeps foreign governments, most of them operating the same Ponzi/pyramid schemes on their own citizens, in power and creates for them the illusion of solvency, as well, and allows them to continue their own irresponsible fiscal and domestic policies. They have always been able to count on the strength of these Treasury bills to offset their own indebtedness. Now they are feeling nervous.

As of February 17, according to the Treasury Department and the Federal Reserve Board, Mainland China holds the largest amount in U.S. government securities, some $696 billion. Secretary of State Hillary Clinton recently assured the Chinese government that the U.S. intends to honor those securities. The grand total of U.S. securities held by foreign governments comes to over $3.12 trillion. What is worrying these governments now is the possibility that, just as individual owners of Treasury bills are subject to the risk that our government may default on its obligations and concede bankruptcy, they also run the same risk.

A further peril in this practice is that the ownership of such securities allows such governments to exert an influence on U.S. policies. For example, there is a growing symbiosis between the U.S., which is becoming fascist, and Mainland China, nominally communist but fundamentally fascist, whose government, especially its military, is also deeply invested in its “capitalist” economy. In terms of policy influence, the next biggest group of governments holding U.S. securities, totaling $197 billion, is most OPEC members, including Iran, Saudi Arabia, and Venezuela, outspoken enemies of the U.S.

So, where are all the $787 billion and $75 billion and federal intragovernmental billions to come from, not to mention the money needed to service the billions in Treasury instruments? From the productivity of America’s private sector, such as will survive the regulations, controls, inflation, and other government interventions and actions, and now the current onslaught on it by an overtly fascist administration. And when the private sector, at the bottom of the Ponzi/pyramid, is utterly prostrate and unable to produce, when the law of diminishing returns reaches zero, then what?

That is when things will grow ugly. Choose your own scenario, but keep your powder dry.

Objectivist Blog Round-Up

By noreply@blogger.com (Nicholas Provenzo) from The Rule of Reason,cross-posted by MetaBlog

Welcome to the February 19th, 2009 edition of the Objectivist Round-Up. This week presents insight and analyses written by authors who are animated by Objectivism, the philosophy of Ayn Rand. According to Ayn Rand:

My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.

"About the Author," Atlas Shrugged, Appendix.

So without any further delay (and in no particular order), here's this week's round-up:

Rituparna Basu presents A Tribute to Darwin posted at The Undercurrent, saying, "On his 200th birthday, we should recognize Darwin’s immense contribution to science."

Ryan Puzycki presents High Crimes and Michael Phelps posted at The Undercurrent, saying, Prosecuting Michael Phelps—or anyone—for marijuana use is a rejection of the American conception of law and government."

Kendall Justiniano presents Strikes Two and Three – Time for a New Batter posted at simply Capitalism, saying, "Commentary on the "stimulus" bill and TARP II from the newest Objectivist Group blog, simplyCapitalism.com"

Khartoum presents Religion Versus Valentines Day. posted at Philosophy, Law and Life., saying, "This post deals with the opposition of valentines day by the three religions I have encountered in India -- Hinduism, Islam and Christianity."

Paul McKeever presents Paul McKeever’s Minimal Maxims and Bon Arrows, volume 1, issue 3 : Paul McKeever posted at Paul McKeever, saying, "one day, people will realize these statements aren't so weird after all."

Non Talbot Wels presents Averting a Crisis or Causing One? posted at The Undercurrent, saying, "Last year California passed a law meant to decrease man-made greenhouse gas emissions. Considering the enormous impingement on our personal freedom such measures bring about, shouldn't we at least be certain that greenhouse gas emissions are in fact as lethal as the law's supporters claim?"

Myrhaf presents Stealth Tyranny posted at The New Clarion, saying, "Hidden in the bowels of HR1 is a provision that will begin the rationing of health care in America."

Grant Jones presents Ayaan Hirsi Ali: There Is No Moderate Islam posted at The Dougout.

Diana Hsieh presents 1 in 7 Americans Functionally Illiterate posted at NoodleFood, saying, "America's government education system functions as well as the Post Office. Don't miss the excellent comments on this post."

Brian Phillips presents Mayoral Preview: Brian Phillips posted at Houston Property Rights, saying, "Over the past few months I have previewed some of the potential candidates for the Houston Mayoral election in 2009. I have even fantasized about my ideal candidate. But rather than continue to wait in vain for my ideal candidate to emerge, I am now declaring my virtual candidacy for Houston Mayor. (By virtual candidacy, I mean that I am not literally running for Mayor. But I will address the issues as if I were.)"

Daniel presents I Award You No Points posted at The Nearby Pen, saying, "This is a humorous quote that's worth committing to memory for those moments when somebody says something so stupid or so irrational, that you merely want to state your disapproval and move on without wasting any time on a lost cause..."

Rational Jenn presents The Art Of War For Parents posted at Rational Jenn, saying, "In this parenting post, I talk about whether it is ever appropriate to use force to get a child to do something against his will, and offer some techniques for handling conflicts with children."

Roberto Sarrionandia presents Making Waves posted at Tito's Blog.

Michael Labeit presents On the Origin of the Mentality that Endorses Obama and His Legislation posted at Philosophical Mortician, saying, "The rotten and unsophisticated propensity to yield oneself before the altar of President Obama has its origins within the schools."

Jim Woods presents My Strike posted at Words by Woods, saying, "What happens when Congress imposes its irrational whims upon business? Consequences."

That concludes this edition. Submit your blog article to the next edition of objectivist round up using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Update: Removed non-Objectivist link.

A fast one? If so, why?

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

One way I save time for blogging has been to note interesting links from lunchtime browsing at work so that I need not forage for material during blogging time the following morning.

Yesterday, I stopped by The Drudge Report and found the following interesting headline from the Phoenix area's East Valley Tribune: "Dobson Students Question Obama's Plan." I read it, found that, while the headline was music to my ears, the students, their participation in an advanced placement government class notwithstanding, were really just nitpicking about details at best. Far from being a story about independent thinking among America's youth, it was a snapshot of the very pathology that has gotten her to this point.

So I sat down this morning with the intention of dashing off a quick indictment of our concrete-bound, principle-poor, state-run, "progressive" educational establishment. I was going to throw in a zinger along the lines of, "What difference does criticism about the trains not running on time make, if the trains are all headed to the gulag?"

Instead, when I was about to start writing, I followed the link, only to be surprised by the fact that everything but the URL and the headline had been changed. [There is one exception. See story reproduced below.] Even the author's name was different. Now, instead of a story about a bunch of kids watching an Obama speech and saying "uh-oh", we have a puff piece about a class favorite getting to meet the President and spend "a boatload of time talking about basketball."

I have seen things a tiny bit like this on breaking news stories before. Personally, I'd put out a new URL for each update and link to previous versions, noting retractions if necessary. Up to a point, I can see why a developing story might need editing or updates as relevant facts come to light.

But even that for a mere Presidential photo-op? We're not talking about shifting winds and a wildfire here. And yet, far beyond a few updates, we see an entire story gutted and replaced by something completely different.

Your guess as to why the story -- but not its provocative headline -- got completely changed is as good as mine: especially considering that my point was going to be that the AP Government students did not really substantively disagree with Obama.

Below my initials are the two versions of the story I am speaking about. I do not normally quote entire news stories here, but under the circumstances, I must. I note that what I call the "original version" could differ in some details from what I read, but it is substantially the same.

-- CAV

Updates

Today: John Drake reports that, "[T]he original article seems to be back with a note attached: 'To our readers: Due to a technical error, this story was temporarily removed from our Web site. We apologize for the inconvenience.'"

== Original Version =====

[obtained this morning via Technorati from The Wave, all formatting except first hyperlink stripped]

STUDENTS QUESTION OBAMA'S PLAN
Thu Feb 19 2009 09:46:55 ET

EAST VALLEY TRIBUNE
Tim Hacker

A Dobson High School Advanced Placement government class with strong opinions about Barack Obama watched the president's speech Wednesday on a small, grainy TV in the corner of their classroom.

Some of the students attentively watched the speech, giving questioning looks and comments, shaking their heads and laughing at some of Obama's words. Other students listened, occasionally glancing up to watch, while texting on their cell phones, reading a book or finishing school work.

The gymnasium's events were shown simultaneously in rooms throughout the Mesa school, and teachers were given discretion on whether to show the speech, the students said. The students in the class were hopeful things will work out but questioned whether Obama's plan would actually work to dig the country out of its economic woes. They also expected a longer speech.

Senior Syna Daudfar took some notes during the speech and was among the most vocally opposed to Obama's words.

At one point, when he talked about the costs of his stimulus plan, senior Maaike Albach and Daudfar looked at each other and said, "uh-oh."

"Overall I think it's a good idea, but he's not addressing the issues of the economic crisis," said Daudfar, a John McCain supporter who added he leans more toward being a moderate conservative. "The spending bill he just passed is just progressing the Democratic agenda rather than addressing the economic issues in the country."

Daudfar thinks Obama's plan is backward and deals with the "less important stuff" first. "Bailing out businesses" and "providing better regulatory systems for giving out money to businesses" should have been first, he said.

"If businesses can't afford to hire people, then people won't be able to work and pay off their mortgages," he said. "It's kind of like putting money into a funnel." Albach, who is also a Republican, said Obama's plan sounds good but questioned how Obama can want to rely on "people's responsibility" when that is "what got us in this economic crisis in the first place."

"This puts us more into debt," said Albach, 18. "It's a horrible situation we're in."

Senior Brandon Miller wore a shirt with the words, "Hitler gave great speeches, too" above a picture of Obama.

Miller said he had been an Obama supporter "because of his speeches," but after debating the issues in this class and looking more into Obama's policies, his vote was swayed toward McCain.

He showed a video on his camera he had just taken of the president's minutelong motorcade and talked about what a "great experience" it was to watch it. Miller had also spent a couple of hours in front of the school, hanging out and watching the protesters.

"Even though I don't support him, I think it's cool he's here," said Miller, 18. "I just don't believe all the things he's telling us. His goal is just too big and broad."

Miller wanted to hear more about the costs and guidelines the stimulus bill entails.

Senior Katelyn Meyer, who also leans more toward being a Republican, said Obama's plan sounds good, "but it's easier said than done."

"I like the refinancing part, and I like the part about mortgages, but I'm afraid we're going to put the money in but won't see any effect," said Meyer, 18, who still thought it was "cool" to say the president was at her school, even though she didn't get to see him live.

The students also questioned why Obama chose their school for his speech since he wasn't talking about education and wondered how much money the district spent on beautifying the campus while district positions and services are being cut.

District officials noted this week that the landscaping project completed over the weekend at Dobson was already in the works and was just expedited by the president's visit. Funding came from voter-approved bonds.

New sod was laid in front of the school Tuesday, and Daudfar said, "The joke at the school is they're going to take it away when he (Obama) leaves."

AP government teacher Jeff Sherrer said his students "feel very strongly about the issues, maybe more than the general population." He thought at least one of his students was outside protesting, and he had planned to take his students outside as a class project to show them what was going on but didn't get the chance.

"These kinds of kids really get into it," Sherrer said. "During the election we had lots of debates on the issues."

== This Morning's Version =====

[obtained by following the URL above, all formatting and images stripped, "smart" punctuation replaced]

Dobson students question Obama's plan
Comments 54 | Recommend 46

Hayley Ringle, Tribune

February 18, 2009 - 2:59PM

Digg| Save| License| Print| E-mail| Decrease text size Reset text size Increase text size

Students inside Jeff Sherrer's advanced placement government class view President Barack Obama's address via closed circuit television on the campus of Dobson High School in Mesa. Feb. 18, 2009.

[Begin photo cation: This photo caption is all that remains of the "original version" above. --ed] Students inside Jeff Sherrer's advanced placement government class view President Barack Obama's address via closed circuit television on the campus of Dobson High School in Mesa. Feb. 18, 2009.
Tim Hacker, Tribune [End photo caption. --ed]

Matt Gehrman looked -- and sounded -- like a proud papa after President Barack Obama's speech at Mesa Dobson High School Wednesday morning.

When asked about the students' response to the president's visit, the principal paused, the grin on his face growing.

[Links to related stories omitted. --ed]

"My kids are awesome," he shouted, and pumped his fist. "From the kids in the press to the kids on stage singing to volunteers, every step of the way the kids represented us the way I want people to view teenagers."

Gehrman was with a small group of school officials -- including Mesa Unified School District Superintendent Debra Duvall -- who got to meet with the president before his speech. For being an "all-around good guy," Gehrman brought with him 17-year-old Casey Benford, a member of Dobson's varsity swimming, baseball and basketball teams, to meet Obama.

"It was an amazing experience," the high school senior said afterward. "I can't tell Mr. Gehrman thank you enough for letting me accompany him."

The teenager said that after introductions, he and Obama talked about school sports, with Obama offering to "find a ball and play a game of H-o-r-s-e."

"It's nice to know such an important figure in our lives can joke around with a 17-year-old from Mesa, Arizona," Benford said. "I was in awe. It's so weird seeing him in real life, shaking his hand."

The buzz was still going Thursday, Benford said.

"I know in my government class that's all we talked about today. We talked about what we thought about his speech in general, his visit," Benford said. In fact, the students talked about the visit in most of his classes, Benford said. "It's still a huge buzz."

Benford didn't tell many people about getting the chance to meet the president before Wednesday, he said. But several on Thursday came up to talk to him about it when lessons were done in classes.

Soon, he may have a picture to share as well.

Gehrman said Obama suggested a group photo, shot by a White House photographer before the speech.

"It was interesting. We met him outside the boys' locker rooms, of all places on our beautiful campus we could have been," Gehrman said. "Then there were all the processes and all the rules. It's very protective. Then he comes around and he's so warm and gracious and wanted to take the time to talk to us."

"We spent a boatload of time talking about basketball" with Benford, Gehrman said after Wednesday's event.

Obama is known to relax with a game of hoops with friends.

Benford said even his girlfriend pointed out that the experience is something he'll one day be able to share with his own kids.

"Some of my friends were giving me a hard time, 'why you?' But I guess I expected it. A lot of it is 'Casey you're so lucky,'" Benford said. "I'm just really grateful for it. I guess I didn't think about it. ... Now I get to have a story like that for the rest of my life."

High school senior Katelyn Wiley, 17, was also in awe. She got a call Tuesday night from the principal that she would be able to join the press corps at the event. She is student manager of the school's newspaper, The Mustang Roundup.

Standing up against the metal gates about 30 feet from Obama, Wiley snapped photos of the crowd, the president during his speech, and folks reaching out to shake Obama's hand afterward. She even got to interview Gov. Jan Brewer before Obama spoke.

"I asked her what she was expecting to hear, but I don’t know what she said. I was too nervous," Wiley said. "It was such a whirlwind. It went by way too fast. I just took pictures and stood in awe of being in such close proximity to essentially the most powerful man in the world."

Dobson student Najja Porter, 17, was one of those students who rushed up to shake Obama's hand.

"I'm really excited. I thought it was really fun," he said.

While some students waited in line for tickets to the event, others received tickets unexpectedly.

Hannah Minard, 17, a senior, said she received a phone call Tuesday afternoon that her marine biology class of 16 students got randomly selected for tickets.

"It was so amazing to see the president," Minard said, after the event.

Isaac Martin, 10, missed classes Wednesday morning at St. John Bosco, a private Catholic school in Ahwatukee Foothills, but said it was worth it. At the speech with his dad, Isaac also got to shake the president's hand.

"It was really cool. I shook his hand. It was really awesome," Isaac said.

His dad, David Martin, said it was a "good civics lesson" for his son.

== End This Morning's Version =====

Quick Roundup 406

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

America's Bloated Tick: Washington, D.C.

Just as I was about to check my Yahoo! email account Saturday, I ran across a news article about how one of America's largest metropolitan areas is apparently -- at least in the eyes of our journalists -- "unscathed" by the financial crisis:

As the nation's most populous metro area feels Wall Street's pain, the fourth-largest -- Washington -- is barely sensing the recession. In fact, Moody's Economy.com estimates that metro Washington's economy will actually grow 2.5% from mid-2008 through mid-2010. New York's economy is expected to shrink 4.2%.

It wouldn't be the first time that Washington benefited from a national crisis. Back in 1930 the District of Columbia was a quiet Southern town, scoffed at by New York sophisticates. But as the federal government ramped up to fight first the Great Depression and then World War II, its population grew 65% in two decades, vs. just 14% for New York City.

On second thought, forget the tick metaphor -- except as the nickname that Washington truly deserves.

This story reads almost like a scene from a modern-day horror story about vampires, where the man whom we're led to believe might save the day by hunting down and killing the bloodsuckers is, unfortunately, "guided" by the philosophy of pragmatism. At some pivotal point, he decides that everyone around him is too weak and anemic to make a good ally -- except for one man, who seems healthier than ever. In principle, this would make him a prime suspect, but principles are inconvenient, and our "hero" "chucked" them about page two.

"Now Vlad over there, them vampires ain't gettin' to him. He's still strong. I'll go huntin' with him tonight. He'll watch my back."

For the millionth time, the government acting as economic "planner", not capitalism, is the cause of this crisis. The less of our national lifeblood we give to the government in that capacity, the better. Washington, as a center of government, can run only off wealth produced by others. The degree of its "prosperity" in the present circumstances is unfortunately related to the degree that it is making prosperity in general impossible for America.

When the Shit Hits the Fan

Paul Hsieh, posting at Noodlefood, discusses a recent Glenn Beck episode dealing with worst-case scenarios for the financial crisis. (One guest was Onkar Ghate of the Ayn Rand Institute.)

Hsieh doubts -- as do I -- that we are headed for an Argentina-style meltdown, but nevertheless points to an article by one of its survivors as food for thought for other more likely emergency scenarios: depressing and frightening, but well worth reading and thinking about.

Distance learning is software.

I will occasionally note that it is mistaken to think that the economics truism, "Controls breed controls," applies only narrowly to economics. Government intrusions on the economy are acts of force that violate man's rights, forcing individuals to act in ways that they would not, if left to their own devices. Just as economics is a system of abstractions drawn from the totality of our existence, so do economic decisions affect other areas of our lives. Freedom is of a piece, and attacks on freedom do not confine themselves to any one area of life.

And why should the desire to dominate our lives not seep down even into language? The magic formulae used by the government to legally extort money from those its officials are sworn to protect consist of words, and when the words of the statutes on the books aren't extracting enough money, should it be any surprise that the government gives them new, Orwellian, meanings?

While it does not carry the weight of law, the New York State Department of Taxation and Finance's January 29 opinion has potentially far-reaching implications, given the state's role as a trend setter for other states. The department asserts that an e-course offered by SkillSoft Corporation, a New Hampshire-based company, should be subject to sales tax as "software" purchased by the student. In so ruling, the department has justified an unprecedented tax on educational services, according to a tax consultant familiar with the case.

"State governments are strapped for money, and this represents an administrative ruling that appears to me to broaden the tax base," said Melanie Hill, a tax specialist with Dow Lohnes Price Tax Consulting Group LLC. [bold added]

Skillsoft's students do not even get copies of software when they take such courses!

Thievery Corporation

Somewhat in keeping with the general theme of this post, I'll mention some music I've been enjoying lately during commuting time: The Mirror Conspiracy, an album released in 2000 by The Thievery Corporation, and part of a recent raft of goodies sent me by my good friend, Adrian Hester.

My favorite tracks are "Shadows of Ourselves" and "Lebanese Blonde". Links go to YouTube videos.

Wikipedia says that, "Their music style mixes elements of dub, acid jazz, Indian classical and Brazilian (such as bossa nova) with a lounge aesthetic." Based on my limited knowledge, the group seems left-wing enough that I might buy other music of theirs used....

At any rate, enjoy!

-- CAV

Making a Virtue of Selfishness?

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

The Center for Values and Social Policy in the Philosophy Department of the University of Colorado at Boulder is pleased to announce a "Think!" debate on Ayn Rand's Objectivist ethics.

• What: Debate on "Making a Virtue of Selfishness? A Debate about Ayn Rand's Ethics"
  
  
• Who: Dr. Onkar Ghate (Ayn Rand Institute) and Prof. Michael Huemer (CU Boulder, Philosophy)
  
  
• When: Monday, March 2nd, 7:30 - 9:00 pm
  
  
• Where: Old Main Chapel, CU Boulder (Campus Map)

About the debate:

Dr. Onkar Ghate will argue: "Ayn Rand challenges the idea, dominant in the West since Christianity, that morality consists of commandments. Even though this conception of morality has often been secularized, its essence has remained: the source of morality is something external to the self, to which the self owes obedience. In sharp contrast, Rand argues that the nature and purpose of morality is to teach one how to achieve one's self-interest."

Dr. Ghate is a senior fellow at the Ayn Rand Institute where he teaches at the Institute's Objectivist Academic Center. He lectures on philosophy and Objectivism throughout North America. Dr. Ghate received his doctorate in philosophy from the University of Calgary.

Dr. Michael Huemer will argue: "Ayn Rand champions an excessively egoistic ethic, one in which individuals must place themselves before everyone and everything else. This ethic can lead one to hurt, exploit, or simply ignore the needs of others, when it suits one's own interests to do so. Rand's ethic of selfishness clashes with the moral sense of philosophers, spiritual leaders, and ordinary people the world over. These people are not all wrong -- Ayn Rand is wrong."

Dr. Huemer is an associate professor of philosophy at CU Boulder. He has written on such topics as philosophical skepticism, the problem of induction, ethical intuitionism, free will, and deontological ethics. Dr. Huemer received his doctorate in philosophy from Rutgers University in 1998.

All "Think!" events are free and intended for the public. For more information, please visit the "Think!" web page.

For further information on the series, please contact Dr. Alastair Norcross at Alastair.Norcross(at)Colorado.edu. For announcements of upcoming "Think!" events, e-mail Diana Hsieh at Diana.Hsieh@colorado.edu with that request.

Upcoming "Think!" Events:

• Tuesday, April 14th: Prof. Ajume Wingo, "Politics as an Alternative to Violence," 7:30 - 9:00 pm, Old Main Chapel

"Think!" lectures are sponsored by the Center for Values and Social Policy in the Philosophy Department of the University of Colorado at Boulder and funded through the generosity of The Collins Foundation.

Glenn Beck on Worst-Case Scenarios

By Paul Hsieh from NoodleFood,cross-posted by MetaBlog

The February 20, 2009 edition of the Glenn Beck television show featured a chilling discussion of some worst-case economic and political scenarios facing the US in the next 5 years. Beck was always careful to point out that he and his guests weren't claiming that these scenarios would happen, but rather that they could happen (i.e., they were within the realm of possibility), and that thinking about them was an important part of working to prevent them from occurring.

Dr. Onkar Ghate of the ARI appeared to discuss possible restrictions of free speech if we started heading towards dictatorship and some of the warning signs we should look for. You can watch his segment here:



One of the other topics discussed in detail was the possibility of a large-scale financial meltdown on the order of the Great Depression (if not worse). Given the US government will dig itself into unprecedented levels of debt due to the various bailout programs, it may start trying to print money (i.e., inflate the currency) as a way to "solve" the problem:




Of course, this won't work. And Beck's guests pointed out that this unhappy scenario has already played out in other countries in the past, such as Argentina during the 1990s.

(One of the guests was Stephen Moore, the Wall Street Journal financial writer who also cited Ayn Rand in his widely read recent OpEd, "'Atlas Shrugged': From Fiction to Fact in 52 Years".)

Although I still believe that an Argentina-style financial meltdown probably won't occur in the US, I also believe that there is a small but nonzero chance that it might.

Hence, I'd like to point readers towards this very interesting essay by an Argentinian who lived through that country's crisis. The author dispels some of the extreme right-wing survivalist myths about such scenarios. More importantly, he also discusses the very real threats and challenges that ordinary people have to deal with in such circumstances, and he gives some worthwhile advice and recommendations on how best to cope.

Much of his advice would be applicable to any number of natural or man-made crises. Anyone who values his or her life might want to make it a point to cultivate the mental and physical tools necessary to survive such circumstances.

Again, I don't think this is the most likely future for the US. And I intend to concentrate my main effort in the battle of ideas, precisely to help prevent this from happening. But just as I think it's prudent to keep a fire extinguisher in one's kitchen or a first-aid kit in one's car as protection against bad events, I also think it would be prudent for Americans to plan for significant economic and political turbulence in the near future. Many of these actions are things most intelligent people would want to do anyways, such as minimizing/eliminating debt, keeping at least 6 months of living expenses in the bank, staying physically healthy, etc.

The recent history of Argentina offers Americans some important lessons. Whether we learn from them is up to us.

(Disclaimer: This is the first episode of the Glenn Beck show that I've ever watched. He's pretty good on some concrete points of politics and economics. But he also fell into the typical conservative error of stating that rights come from God, rather than being a consequence of our nature. But I'm hoping that there will be future opportunities for Objectivists to present the correct philosophic justification of individual rights on shows like his.)

Greenspan: A Bigger Traitor Than I Thought

By noreply@blogger.com (Dan Edge) from The Edge of Reason,cross-posted by MetaBlog

Should I not have been surprised that Alan Greenspan is now calling for the nationalization of US banks? I never expected the man to fall so low. My wife Kelly says it didn't surprise her, but I was truly shocked.

What a f**king traitor. We need a YAAFM Greenspan.

--Dan Edge

Empathy with Maniacs

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Gordon Brown wants slavery

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Quick Roundup 405

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Up late. Morning meeting. Taking my beautiful wife to the airport beforehand.

Living in the Future, Today

Whether you're local to Houston and feeling a touch of morbid curiosity about possible candidates in the upcoming mayoral elections, or generally sick of mixed-economy politics, you'll want to stop by Live Oaks. There, you can see what political positions a candidate who actually values freedom might take, were he to run today. Brian Phillips has declared his virtual candidacy for mayor and made a statement of -- What did he call those again? Oh yeah. -- principles.

"Our goal is to increase individual freedom. Our goal is to allow Houstonians greater control over their lives." We owe this virtual candidate the real support of stopping by to see why he has become a virtual candidate, and acting accordingly. The latter would entail thinking about the issue of increasing freedom, and urging others to do so.

As someone known to make a big fuss over principles once put it, "Anyone who fights for the future, lives in it today." Your virtual candidate has just invited you to try out life in a better tomorrow.

The Mother as Wiley General

With the wife and me contemplating parenthood after her first year of residency is over, I was intrigued by this entertaining, wide-ranging, and thought-provoking post by Rational Jenn: "The Art of War for Parents." No excerpt or short capsule will do it justice, but a pair of short quotes might give you an idea of what to expect. Here's the overarching strategy:

Children are human beings, but their brains are in the process of growing and developing. They are not fully rational . . . not yet. But one day (we hope), they will be rational. So when attempting to get the child to do something she might otherwise not want to do, I think it's right (and worth it!) to go the Reason Route first.

And here's a short bit of advice, given "Art of War" style:

Extricate yourself from pointless confrontations.

First, make sure you're not the one unnecessarily dragging things on. :o) Sometimes the child prolongs the confrontation beyond the point of all tolerance. I find that saying, "I know you're upset, but I'm all done talking about this now" very useful.

Say "Hmmmmm." Sometimes a kid needs to vent a bit. A well-timed "Hmmmmm...." allows you to acknowledge them while not engaging in the battle. (It also works for when they say something hilarious and you ought to respond but are afraid you might laugh.)

Good stuff!

Version 2.0 of todo.txt

A few months ago, I ran across a command-line program for managing GTD-style to-do lists, tried it out, and ended up adopting it. (I also use it to simplify making grocery lists.)

I thought work on the program had died down, but it was adequate for my purposes, and I figured I might tweak it myself if I ever really needed to. Fortunately, development was merely on hiatus: Version 2.0 is out, and I am happy to see that it allows for easier management of multiple lists, now!

If you like the command line, like multi-platform portability/hate vendor lock-in, and appreciate simple, effective programs, you should take a look.

I was being too kind, yesterday.

The Republicans aren't merely the "party of George W. Bush." They're also the party of Alan Greenspan. (HT: Andrew Dalton)

The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.

In an interview, Mr Greenspan, who for decades was regarded as the high priest of laisser-faire [sic] capitalism, said nationalisation could be the least bad option left for policymakers.

First, being "regarded as the high priest" of something often means you've fooled a lot of people. Second, at least Bush has the excuse that he never really knew what capitalism actually is.

Hmmm. On second thought, neither did many of the Republicans.

Quote of the Day

Encountered somewhat randomly, ...

If I were to say that many women [who] voted for Obama are irrational, politically ignorant, flighty, and confuse the tingling in their genitals with the kinds of political thoughts that actual grown-ups have, I'd be called a misogynist.

So I won't say it.

…I'll let the women in question say it for me. [bold added]

TJIC then proceeds to quote an account from a blogger for The New York Times. All I would add is that the issue here isn't strictly adulthood, not that this isn't juvenile.

-- CAV

This post was composed in advance and scheduled for publication at 5:00 A.M. on February 19, 2009.

America’s Presidents: Introducing The Powell History Rankings

By Scott Powell from Powell History Recommends,cross-posted by MetaBlog

Well, Something's Wrong!

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Writing almost entirely in the passive voice for Inside Higher Ed, Peter Katopes argues against what he calls "the business model" -- which is to say, a caricature of capitalism -- as a means of restoring (bringing?) accountability to higher education.

Almost predictably, he starts off sarcastically damning "the business model" for imposing the tyranny of the lowest common denominator on academia:

The business model is imposed, for example, when otherwise worthy academic programs are eliminated based on low enrollment alone since they couldn't possibly be academically valuable if they don't attract throngs; when professors are evaluated more on their popularity with students than on their teaching abilities ... or when institutions shun teaching high-risk students who might require more time and attention to graduate.

However, the business model, which prizes "customer satisfaction" or "efficiency" above all else, has led in higher education to an imbalance in the relation between student and institution, has led to a culture of entitlement and instant gratification, and has causal ties to the current fiscal crisis.

Set aside the sarcasm and lack of imagination of that first independent clause for a moment.

(I and about fifty other students are paying good money to take a class over the Internet that might never have been offered in the first place at an ordinary institution of higher learning. And then there's the matter of teacher evaluations. Who's to say that in a truly capitalistic system that this would be left entirely up to students? Would not the earning potential of a school's graduates, among other things, offer some sort of reality check?)

And let's also set aside the fact that government subsidies and loan programs are distorting the educational marketplace by artificially increasing demand for higher education, including bringing many people into our colleges who really have no business being there. There is an issue that Katopes is bringing up here. It is a legitimate issue, but he brings it up for illegitimate reasons.

That issue is the fitness of the customers of higher education -- increasingly infantilized students and their parents -- to judge what they are getting for their money. Katopes minces no words when he addresses this concern, but he is using this concern to insist that freedom in education would be a bad thing.

... Driven by the desire to satisfy external agencies regarding "accountability," many colleges for some 30 years have effectively altered the relationship between student and institution by defining students as "consumers" who are asked to evaluate instruction in much the same way as banks ask their depositors to rate their services. Driven by the student "revolutions" of the 1960s, colleges have effectively placed the responsibility for determining the quality of instruction and curriculum in the control of those -- the students -- who are least competent to judge. This is not to say that students should have no input regarding the instruction they receive, but is rather a criticism of student evaluation instruments that often are poorly constructed and which often hold faculty hostage to student opinion. ...

...

While it is true that 18-year olds have been awarded certain rights and privileges -- the vote, for instance -- which an earlier era restricted, American society has a very ambiguous understanding of what adulthood is. The extension of childhood well into a person's 20s has been a growing and generally accepted trend. The identification of "helicopter parents," that is, parents of college-age children who hover neurotically over their offspring even as they "send" them off to college, is becoming the bane of many college administrations. [bold added]

There is more than a faint whiff of plausibility to the idea that a business that caters to the whims of children and their doting parents -- who were (?) once children themselves -- might end up delivering inferior goods.

But is that the fault of capitalism, or does the cause lie deeper than that? Katopes helpfully provides a quick glimpse at the answer for those who learned how to read and comprehend, perhaps despite the enthusiasms of "progressive" education that the state educational monopoly has entrenched for several generations:

In the first 18-22 years of life, huge numbers of American citizens spend anywhere from 6 to 10 hours a day in some sort of school environment.

Public education is about as far from operating on a "business model" as one can get. So why, Dr. Katopes, if "the business model" is wrong, would someone, at nearly twenty years of age, be "least competent to judge" the product he is purchasing? Why would his parents? Might it be that the mission of progressive education, to "socialize" children -- or, as Ayn Rand once put it, to "breed ... helplessness and resignation" -- is being accomplished?

One cannot misapply a few trappings of capitalism -- like customer surveys -- to a largely socialist educational system and then point to capitalism as the culprit for its many ills. And one cannot expect a system based on individuals accurately gaging their own self-interest to function particularly well when they have had the whole idea of self systematically attacked by their own education. It is education -- the ideas and the method of thinking that children are being taught -- that needs fixing first. Capitalism will emerge and hasten the process of improvement once that has been accomplished.

As I once mentioned, commenting on a blog post about cheating, I realized even in high school what the purpose of an education was well enough that I did not find cheating "tempting" at all. Indeed, I even signed up for a whole slate of classes I was told would be "tough." To have picked a college based on how much like a cruise liner life there would have been would have struck me as particularly ludicrous. (In fact, I tended to look askance at places with reputations as "party schools".)

But then, my parents had not gone to college, and I was fortunate enough to be sent to private schools, where the development of my cognitive skills -- not "socialization" -- was the goal. My family and I, being from a "backward" state, had largely missed out on "progressive" education. Perhaps that's why I am not convinced that "the business model" is "wrong".

-- CAV

Embracing the N-Word

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

News from The Financial Times has it that the Republicans have taken a shine to the word, "nationalization" lately:

Lindsey Graham, the Republican senator for South Carolina, says that many of his colleagues, including John McCain, the defeated presidential candidate, agree with his view that nationalisation of some banks should be "on the table".

Mr Graham says that people across the US accept his argument that it is untenable to keep throwing good money after bad into institutions such as Citigroup and Bank of America, which now have a lower net value than the amount of public funds they have received.

"You should not get caught up on a word [nationalisation]," he told the Financial Times in an interview. "I would argue that we cannot be ideologically a little bit pregnant. It doesn't matter what you call it, but we can't keep on funding these zombie banks [without gaining public control]. That's what the Japanese did." [bold added]

The Financial Times goes on to claim that the Obama administration is "opposed to federal control" and "has tried to avoid panicking ... markets by entertaining the idea," but this is an illusion deliberately generated by a party of pragmatists and "Orwellian brainstormers", as Doug Reich recently put it.

What is going on here? Why aren't the Republicans at least mouthing objections to government control of the economy? Certainly, at least part of the answer lies with a fact I have mentioned here too many times to count. Namely, the Republicans fundamentally agree with the Democrats that altruism is the proper morality and that the state exists to serve the collective, rather than to protect individual rights. They differ only on some details of how to implement state control over the individual, and specific goals. The Bush administration, which was bad enough before it started the current orgy of chaining future generations with debt and government control, demonstrated this in spades.

But there's something else happening, too. Reich noted the deliberate attempts by the Democrats to at least conceal what they are doing. Why would they? Because political power still rests in the hands of the American people, who are, at least in some measure, still rightly suspicious of the government running their lives.

The Democrats -- who will avoid debating things at all when they can get away with it -- still feel it necessary to hide the true nature of what they are doing from the American people. The Republicans, who favor a theocratic version of the welfare state, once similarly felt the need to pose as defenders of capitalism, but apparently, they don't anymore.

Just as President Bush has set the stage for the Republicans to become an openly statist party in deed with his de facto nationalization of large swaths of the financial sector, so has he set the stage with his words. The above follows inexorably from Bush's own "chucking" of the pretense of having "free market principles". Back then, I said the following:

In his folksy boast, Bush has -- as usual -- conceded much more than he realizes, as men who attempt to go through life without thinking are wont to do: He has admitted that he never really held "free market principles".

Bush, not really appreciating the practical value of principles, sees them as a luxury (or, at best, as something it may be politically expedient to profess). To Bush, and, apparently, to too many other politicians from Obama's "opposition" party today, free market principles are "impractical", and, more, they think (rightly or not) that the American people see it this way, too.

(Otherwise, if the Republicans did really favor free markets or even wanted to pretend to, they would oppose all the bailouts, or at least explain why some were necessary to avoid complete calamity, as well as how they would be rolled back. This is far different from brandishing the word, "nationalization" as if it were the name of a new miracle drug.)

Remember. These are politicians, not profound political philosophers. Ideas guide them, as they do all men, but much of their thinking consists of second-handed guesstimates of what they can get away with before the next election. The Republicans, woozy from pragmatism and seduced by cries of "do something" from every direction, have chosen to pose as men of action, still somewhat in keeping with their "defenses" of capitalism as practical, but now free from such pesky constraints as freedom and property rights.

They never really believed what they said about capitalism, anyway, and they need a new mask. They can't compete directly for moral turf with fellow altruists, especially the religious Obama, so they will strike a pose of brutal honesty (and all that that thoroughly modern phrase implies) and "hard-nosed" practicality. They won't mind the Bush-Obama plan failing, so long as they can pin the blame on the "idealistic", impractical Democrats. Never mind that they can't solve the crisis, either. That's not what's really at stake, or so they like to imagine.

In other words, the Republicans, by all indications, will pretend that not thinking is both moral and practical. This has truly become the party of George W. Bush.

-- CAV

Vatican Attempts Takeover

By Jennifer Snow from Literatrix,cross-posted by MetaBlog

I've been pretty busy with school, but this article was just too awful to pass up. I'm sure to many this looks like the Church is finally attempting to make nice with science, but nothing could be further from the truth. The Church is trying to co-opt the prestige of science and reinstate itself as a reputable participant in the forum of ideas. While it's true that the amount of bad press generated by evolution-deniers on the basis that they are completely incorrect and anyone but an ignoramus can detect this fact has clearly generated this ridiculous attempt at appeasement, this doesn't have the same effect as appeasement by an otherwise rational person would.

The irrational (religionists, in this case) has nothing to lose by abandoning a nonessential part of their doctrine. Note that the Church isn't about to start claiming that reason is man's only means of knowledge or that A is A--no, they're just willing to allow that a particular datum might happen to be allowable under their irrational philosophy. They are counting on the person reading this announcement to make unwarranted assumptions about the truth of other Church teachings based on their willingness to glom onto other wandering true statements without any regard to the underlying epistemological approach that generated those statements. It is floating abstraction at its finest.

I also find it amusing that the unnamed "Vatican Official" mentioned Augustine and Aquinas in the same sentence--Augustine was militantly anti-reason and anti-science, whereas Aquinas' theories led in part to a rebirth of reason and science because he believed in the power of reason. He also believed, mistakenly, that the existence of God could be rationally proven, but otherwise you couldn't find two men whose ideas were more opposed.

What a farce.

A Comment on the FIRM Blog

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

I'm totally floored by this recent comment to We Stand FIRM. It was posted in response to an op-ed debunking the myth of administrative savings under "single payer" systems of government heath care. Read it and weep:

the Canadian healthcare system is not the best in the world and certainly not perfect. however it is still rated superior to the system (or lack of a system) we have here in the US by the WHO. call it "socialist medicine" if you like, but like chairmen deng once said, "no matter it's a white cat or a black cat, as long as it can catch mice, it's a good cat." lol.

the Canadian system is only at the 30th place in world ranking. how about looking at the other 29 better models? again, no single system in this world is absolutely perfect, but instead of picking faults (and i'm sure the canadians are going to have a grand time picking the faults of the american system, too), how about learning from their pros and cons and try to find the best system that works uniquely for the US? how about stop advertising your own personal beliefs and incentives, stop quoting our funding fathers who, though undoubtedly very wise in their time, could not possibly have foreseen the social condition and issues we are facing at present day? how about instead of dismissing new ideas regardless good or bad, try to focus on improving the efficiency of the government and fighting bureacracy, which is the primary reason why the many government programs didn't work, not the initiative itself?

the theory that lasses-faire or free market mechanism will improve the US healthcare system (or the lack of a system) without external (government) interference - has this been proven anywhere by any means? a lot of americans focus so much on individual rights and benefits, which is based solely on their "beliefs" without any scientific or socioeconomic justification. they have very little regard to the well-being of the group, the society and the nation as a whole. and they think by defending the (implied) meaning of the constitution, they're displaying such remarkable patiotism. honestly, i do not care what you believe, or what you think it right and morally acceptable. in fact, what i "believe" in completely irrelevant, too. what we should try to achieve, as a whole, is commonwealth and stability of our society, which will in turn benefit each and every individual within. what do you think is the priority of the government: defending YOUR personal ideals and beliefs, which is a lot of times the source of misinformaiton, conflicts, and chaos, or promoting the well-being of the society?

It would simply take too much time to comment on all that is wrong with that, so I invite you to pick your favorite bit of inanity to fisk in the comments.

Summer Conference on Capitalism

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

The Clemson Institute for the Study of Capitalism is taking applications for its annual three-day summer conference for undergraduates on "Ayn Rand's Atlas Shrugged and the Moral Foundations of Capitalism." Here's the general description of this conference:

Students attend lectures, participate in small group discussions, and have free time to discuss and debate the ideas presented in the formal sessions. Throughout the three days of sessions, students have ample opportunity to speak one-on-one with faculty and ask them questions in a more informal setting. The summer conferences, held on the campus of Clemson University, provide a unique opportunity for students to study with leading professors from around the country, to meet top students from around the world, and to study capitalism in a challenging, engaging environment.

And here's the description of the 2009 conference:

Ayn Rand's Atlas Shrugged and the Moral Foundations of Capitalism

What is the moral basis for the free market?

How do individual rights function in a capitalist society?

What does the history of capitalism teach us about its moral basis?

How is Ayn Rand's view of capitalism unique?

The Clemson Institute for the Study of Capitalism is pleased to accept applications for its third annual summer conference for college students. We invite you to join us for an exciting three-day program of lectures, seminars, and discussions. Students will arrive May 28 and depart on June 1, 2009, with the main event running from May 29-31.

Exciting Programs

Students will participate in an intensive and exciting program exploring the moral foundations of capitalism and Ayn Rand's novel Atlas Shrugged. Students will attend lectures, participate in small- group seminar-style discussions, and question and answer sessions. Outside of class, students can relax and socialize on Clemson's campus. Evening activities will include a barbecue dinner, a meet and greet with the faculty, and a career advice discussion.

Full Scholarships Available

The Clemson Institute will be accepting qualified undergraduate students to participate in the summer program on full scholarships. All housing and meals will be provided on the campus of Clemson University. Attending students are eligible for up to $500 for travel. Reading materials will be provided.

Application Information

To apply to the Clemson Institute's Summer Conference, visit our website and fill out the application form. Return it by March 5, 2009 to edan@clemson.edu or via postal mail at:

Clemson Institute for the Study of Capitalism
Summer Conference
343 Sirrine Hall -- Box 341310
Clemson, SC 29634-1310

Faculty

The Clemson Institute has assembled a faculty of leading scholars and teachers who study the moral foundations of capitalism, specializing in fields ranging from history and literature to philosophy, political science, and economics. Our faculty join students for meals and interact with them outside of class for informal discussions and questions.

Andrew Bernstein, Ph.D., Visiting Professor of Philosophy, Marist College

Richard Ebeling, Ph.D., Senior Fellow, American Institute for Economic Research

Eric Daniels, Ph.D., Research Assistant Professor, Clemson Institute for the Study of Capitalism

Onkar Ghate, Ph.D. Senior Fellow, The Ayn Rand Institute

C. Bradley Thompson, Ph.D., Executive Director, Clemson Institute for the Study of Capitalism, Clemson University

You can find the application form -- and more details about the conference -- on this web page. I highly recommend this conference!

The One Minute Case For Capitalism

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

Capitalism a social system based on the principle of individual rights.

A capitalist society is based on the recognition of individual rights, including property rights. Under capitalism, all property is privately owned, and the state is separated from economics just as it is from religion. Economically, capitalism is a system of laissez faire, or free markets, where the government plays no part whatsoever in economic decisions.

Capitalism is the only social system compatible with the requirements of man’s life

To pursue the values necessary for his life a society, man requires only one thing from others: freedom of action. Freedom means the ability to act however one pleases as long as one does not infringe on the same and equal freedom of others.   In a political context, freedom means solely the freedom from the initiation of force by other men. Only by the initiation of force can man’s rights be violated. Whether it is by a theft, force, fraud, or government censorship, man’s rights can be violated only by the initiation of force. Because man’s life depends on the use of reason to achieve the values necessary for his life, the initiation of force renders his mind useless as a means of survival. To live, man must achieve the values necessary to sustain his live. To achieve values, man must be free to think and to act on his judgment. To live, man must be free to think. To be free to think, man must be free to act. In the words of Ayn Rand, “Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries.”

Capitalism recognizes the inherent worth of the individual

In a human society – one that recognizes the independence of each man’s mind – each individual is an end in himself.  He owns his life, and no one else’s.  Other men are not his slaves, and he is not theirs.  They have no claim on his life or on the values he creates to maintain his life, and he has no claim on theirs.  In a free society, men can gain immense values from each other by voluntarily trading the values they create to mutual gain.  However, they can only create values if they are free to use their minds to exercise their creativity.  A man is better living off on his own than as a slave to his brothers.  Capitalism recognizes each man as an independent, thinking being.

The individual is an end in himself

Just as no individual has the right to initiate force against anyone, neither does any group of men, in any private or public capacity. It is immoral to initiate force against any individual for any reason. This includes the initiation of force for “the public good.” The “public” is merely a collection of individuals, each possessing the same rights, and each being an end in himself. Any attempt to benefit the “public good” is an immoral attempt to provide a benefit to one group of individuals at the expense of another. In a free society, no individual benefits at the expense of another: men exchange the values they create in voluntary trade to mutual gain. The rule of law in a free society has just one purpose: to protect the rights of the individual.

Capitalism leads to freedom and prosperity

A free, capitalist economy has never existed anywhere in the world. The closest the world came to a free market was during the Industrial Revolution in Great Britain and during the late 19th century in the United States. The Industrial Revolution was a period of unprecedented economic growth and unimaginable improvements in quality of life. In less than two hundred years, the life of most people in the Western world changed from a a short life filled with poverty, plague, and near-constant war to a modern, comfortable existence that  even the kings of medieval Europe couldn’t have imagined.  Since 1820, the leading capitalist nations have increased their wealth sixteen fold, their populations more than four-fold, their productivity twenty-fold.  Annual working hours went from 3,000 to less than 1,700 and life expectancy doubled from thirty to over seventy years. ¹

Yet despite the undeniable material superiority of capitalist societies, its critics continue to attack it as inhuman and selfish.  What the world lacks is not evidence of capitalism’s practical superiority, but a moral defense of a man’s right to his own life.

Reference

1. Angus Maddison. Phases of Capitalist Development, p4 (1982)

Further Reading

• Andrew Bernstein: The Capitalist Manifesto
• Ayn Rand: Capitalism: The Unknown Ideal
• The One Minute Case For Individual Rights
• The One Minute Case Against Interventionism
• The Bernstein Declaration On the Principles and Possibilities of Capitalism
• The Capitalism Site

The One Minute Case Against Consumptionism

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

There is a tradeoff between economic growth and consumption

Economic growth is made possible by forgoing current consumption. For example, consider the case of a teenager considering whether to save money for his future. If he spends his salary on toys and trinkets, he will never accumulate any savings. If, on the other hand, he minimizes expenses and saves money for college, he will forgo current consumption and invest in capital improvements. The same tradeoff applies to all consumers and producers: capital improvements require a sacrifice in current consumption to invest resources needed to expand future production.

Production, not consumption drives economic growth

The lack of a consumer culture is not an impediment to economic growth, as resources that are not consumed are invested into new markets and improving the capital. If a consumer forfeits a new car now to buy a better car at some point in the future, his savings are not lost. Instead of being directed into present consumption, his savings become the investment capital for new factories and R&D into cheaper and better cars. This is why such high economic growth is possible in “Asian tigers” such as Japan and China – high rates of savings support rapid technological progress and investment into industry at the cost of a much more frugal lifestyle than in the West.

Capital has structure

Politicians and the media treat GDP as a single number, but it is crucial to understand that producers face a choice between producing consumer goods and investing in intermediate goods used to create consumer goods. Those goods differ as well: a factory owner can invest in merely maintaining his factory, building a similar factory to expand production, or engaging in a long-term research and development program in a new product or production process. Thus, the goods produced by an economy can be one, two, or more level removed from consumer goods.

Capital investments require savings and stability

Economic and technological progress requires that entrepreneurs make long-term investments in intermediate production goods many levels removed from the consumer. In order for this to happen, two things are necessary: that consumers forgo current consumption to invest in future production, and that reliable long term predictions can be made about future savings rates and demand patterns.

Monetary policy disrupts economic growth

Governments control over the currency allows them to use monetary policy to achieve short-term economic goals, such as increasing GDP. But the consequences of artificially manipulating interest rates are disastrous. By expanding the money supply through manipulation of interest rates or (as is happening now) sending money directly from the printing presses to banks and other corporations, the government is devaluing savings and redirecting them into increased consumer spending. This improves the economic statistics in the short run at the cost of wiping out the resources set aside for long-term capital improvements. Furthermore, the arbitrary nature of government intervention in the economy makes long-term predictions about future savings and demand impossible.

Let the market direct savings and investment or face financial ruin

There is no single right answer  to the tradeoff between current consumption and the savings available to invest in future production and increased economic growth. Every individual must choose for himself how to balance present spending with investments in his future. In a free market, the sum of individual savings rates becomes the real interest rate.

For the last few decades, America’s spending binge has been funded by foreign investment and rapid technological innovation, but ultimately, unless we drastically cut our consumption, and direct our income into savings and repaying our debts, we will find our money increasingly worthless both here and internationally.  The dire consequences of hyperinflation can be seen in Zimbawbe, where life expectancy has declined from 60 to 37/34 years, unemployment is at 80%, and as much as half the surviving population has left the country.

Further Reading

• The One Minute Case for the Austrian Business Cycle Theory
• Ludwig Lachmann. Capital and Its Structure 1956
• Friedrich Hayek. The Paradox of Thrift 1929
• Israel Kirzner An Essay on Capital 1966

Wither Wesley Mouch

By Kendall J from The Crucible,cross-posted by MetaBlog

Just a follow-up note to RealistTheorist’s post over at simply Capitalism on economic bureaucrat Larry Summers and the concern over what his influence on the Obama administration might mean. Yves Smith at naked capitalism has a great post on the consolidation of power by Summers and Treasury Secretary Timothy Geithner. Paul Volker has already been marginalized in his role. Here’s Yves take:

For the record, we have never been happy about the prominent roles Geithner and Summers are playing. Both played significant roles in creating and maintaining the system that lead to our financial mess. They are simply unable to see beyond their ideological blinkers. And as proteges of Robert Rubin, they are epitomes of what Willem Buiter calls "cognitive regulatory capture".

It seems Realist’s concern expressed in his original post is founded. Here’s a quote from Wikipedia describing Wesley Mouch, the character in Atlas Shrugged who ends up becoming the nation’s economic Czar:

Eventually he becomes the most powerful Looter, and the country's economic dictator, thereby illustrating Rand's belief that a government-run economy places too much power in the hands of incompetent bureaucrats who would never have positions of similar influence in a private sector business.

Atlas is becoming more prophetic every day.

Greenspan on the Free Market

By Kendall J from The Crucible,cross-posted by MetaBlog

It’s gotten to the point that whenever I read about any of Alan Greenspan’s new commentary on the economy, I’m sure to be unable to finish the article without disgust. I’ve been working on a small op-ed for my OAC class regarding the mortgage crisis and as a result I’ve had to read some of Greenspan’s commentary over the last few years. What I’ve come to understand is that in any given context, it’s not what he says that is so crucial it’s what he fails to say. Take his commentary last night at a New York Economic Club dinner regarding the recent crisis, from a WSJ blog entry. [bold mine]

In comments at a New York Economic Club dinner late Tuesday, the retired Fed chairman steered clear of much self-reflection on his role in the credit boom. But he did take a new swipe at the market’s self-correcting tendencies and bowed his head to a new period of increased regulation.

“All of the sophisticated mathematics and computer wizardry essentially rested on one central premise: that enlightened self interest of owners and managers of financial institutions would lead them to maintain a sufficient buffer against insolvency by actively monitoring and managing their firms’ capital and risk positions,” the Fed chairman said. The premise failed in the summer of 2007, he said, leaving him “deeply dismayed.”

Self-regulation is still a first-line of defense, Mr. Greenspan said. But after the financial collapse of 2007 and 2008, “I see no alternative to a set of heightened federal regulatory rules of behavior for banks and other financial institutions.” He said hoped hoped it would come in the form of tougher capital requirements for banks.

The glaring omission of course is that if sophisticated mathematics and wizardry did not allow bankers to see [past the distorted economic policy he himself was implementing – but I digress] the future then by what method will a regulator be able to a priori prevent the same thing from happening? This is the key omission when anyone clamors for central planning or regulation. Anyone can apply regulations in hind sight, which only guarantees that the next financial crisis will occur somewhere else that was also unforeseen.

Controls will not prevent financial crises. They will only breed more controls.

Rolling Out the Barrels

By noreply@blogger.com (Edward Cline) from The Rule of Reason,cross-posted by MetaBlog

It is almost amusing to watch President Barack Obama and Congress squabble over the contents of the “stimulus“ bill (a.k.a., the American Recovery and Reinvestment Act of 2009), almost as amusing as an episode of “Yes, Prime Minister,” except for two things: the posturing, chicanery, and logrolling apparent in Obama and the Congressional oligarchy are not as entertainingly stylized as the language, manners and decorum in the TV series, although the results will be the same in reality as they are in that satirical recreation of British politics -- the taxpayer will foot the bill and the economy will be effectively nationalized. The consequences will be real, regardless of what is kept in and cut from the biggest legislative earmark in American history, which will consume big chunks of productive wealth and redirect other chunks of it to programs favored by senators and representatives who secured their pork in committee rooms or during off-the-record caucuses in both Houses of Congress.

The machinations dramatized in “Yes, Prime Minister” have the character of a minuet, or of a game of musical chairs between conniving, cordial devils; the behind-closed-doors deal-making and arm-twisting in Washington elicit the visceral repellence of watching rival kennels of pit-bulls let loose on each other. Obama’s saccharine, hands-across-the-aisle tone has grown testy, impatient and too imperious to be populist; Congressmen have become querulous, sanctimonious, and transparently venal.

“My pork is more important to recovery than your pork!”
“Says you! My pork will employ more people than yours and perform a necessary and important public service! Yours just throws bad…I mean good money after bad!”
“Horse apples! Your pork will just get you more votes for reelection!”
“And yours won’t? Who are you kidding?”
“Tell you what, friend: I won’t vote to cut $150 million from your pork, if you don’t vote to cut $250 million from mine.”
“Well….Why don’t we hit the Foggy Bottom Bar and discuss this over drinks? You bring your pals and I‘ll bring mine. We gotta come to some kind of arrangement. We gotta please the Big Guy.”
“Yeah. And we don’t want Vlad the Impaler knocking on our doors again, either. He‘s scary.”
“You mean Rahmrod? Yeah, he’s a genuine Chicago strong-arm.”

The reader may fill in the names of the Congressmen and the nature and sizes of their pork barrels. It doesn’t matter whose names or which pork. There are perhaps one or two items in the stimulus bill that are arguably Constitutional, that is, the legitimate venues of government authority. Perhaps the Coast Guard really does need a polar ice-cutter. The rest are all either of an economically fascist nature or are generously boosted fiscal steroids for programs initiated or perpetuated by past administrations and Congress.

“The Senate bill greatly expands welfare spending. There are $13.3 billion earmarked to raise health insurance for unemployed workers, $27.1 billion for increased unemployment benefits, and $11.1 billion for ‘Other Unemployment Compensation.’ Another $20 billion will go to raise maximum Supplemental Nutrition Assurance Program benefits (i.e., food stamps).”

And if you thought former Presidents Bill Clinton and George W. Bush and Congress were Constitutionally out of line by instituting faith-based federally funded programs which intentionally undermined the church-state separation, Obama, ever shovel- and pickax-ready, plans to perpetuate the idea by creating his own faith-based “outreach“ office.

“Speaking at the National Prayer Breakfast at the Hilton Washington yesterday, Obama said the goal of the initiative ‘will not be to favor one religious group over another -- or even religious groups over secular groups. It will simply be to work on behalf of those organizations that want to work on behalf of our communities, and to do so without blurring the line our Founders wisely drew between church and state.’”

That is the height of doublespeak. Obama‘s rhetoric has often invoked the Founders, as though he wants to assure Americans that he is not advocating a departure from the principles that animated them (not that many people or politicos today know what they were, including Obama), and that he is not advocating the destruction of what they argued and fought for -- which was a constitutional republic with a government established to defend individual rights. He has not once enunciated what those principles were, nor identified what it is he intends to replace the republic with, which is a state committed to economic fascism.

“The office will be headed by Joshua DuBois, a 26-year-old Pentecostal who worked on religious issues for Obama’s campaign…DuBois said the faith-based office will employ about 50 people.” So, taxpayers will be paying the salaries of DuBois and his staff to administer federally financed faith-based “outreach” programs. This is the Left appropriating the religious fervor of the Right with a union of religious and secular organizations, a phenomenon many observers justifiably expected in a John McCain/Sarah Palin administration (Palin is also a Pentecostal). This does not merely further “blur” the line drawn between church and state; it chops it into several pieces. It is a certainty that much of the “stimulus” money (or a chunk of the $750 million reserved for nonprofits) will go to ACORN, the “community activist” organization being investigated for voter fraud and in which Obama took his basic training in political action.

While banks, mortgage companies, and the auto industry have monopolized the bailout headlines, the cultural establishment also wants a cut of the trillion dollar loot.

“We wanted to make sure arts were not left out of the recovery,” said Robert L. Lynch, president of Americans for the Arts, a national lobbying group. “The artist’s paycheck is every bit as important as the steelworker’s paycheck or the autoworker’s paycheck.”….In Congress the [stimulus] bill, approved last week by the House Appropriations Committee, includes a $50 million supplement for the N.E.A. [National Endowment for the Arts, which already has a $145 million budget] to distribute directly to nonprofit arts organizations and also through state and local arts agencies.

Among the demands of various government subsidized arts and “culture” groups asking for more money, is one that Obama create a cabinet-level position such as Secretary of Arts and Culture, and another that “culture” would be better served if the Department of Education assumed a greater role in arts education (and was appropriated an even larger budget). Either way, taxpayers would be forced to subsidize more mangled monstrosities that pass for sculpture, more “experimental“ theater, more multicultural festivals, more atonal compositions of noise, more Robert Mapplethorpe and John Cage caliber rubbish, all in the name of “free expression” liberated from the marketplace of ideas, values, and risk. And from money.

But even if the government promoted and subsidized art worthy of the name, it would still be a matter of coercion. What would a “culture czar” do? For one thing, become the object of petitioning beggary and the dispenser of money, favors and doles to individuals, organizations, and state and local governments. For another, help to further entrench and enlarge an already entrenched and suffocating “cultural” establishment.

The cited New York Times article is accompanied by a photograph of three musicians performing presumably a classical work for the Obama inauguration on the stage in front of the Capitol Building. It is known is that they were only going through the motions; the cold weather compelled them to “lip sync” to a recording. One of the musicians, Yo-Yo Ma, had difficulty restraining his laughter at the sham.

What is not well known is that Obama’s press conferences are just as phony and are essentially rigged. His press secretary draws up a list of favored reporters who on cue ask expected questions. Obama, after blathering vagaries in answer to one question for a few minutes, calls out the name of a reporter or nods to one he recognizes, then answers that person’s question with another mix-and-match selection of catch-phrases, colloquial gibberish and macaronics from his campaign rhetoric. And say absolutely nothing that the press hasn’t heard before. It is yada-yadaism elevated to a new rhetorical high, but journalists remain in awe.

This dishonest policy is aided and abetted by the White House press corps, and further abetted by the news media, which broadcast the press conferences as genuine news. It is a continuation of George W. Bush’s policy of fixing presidential press conferences to avoid too much embarrassment. So much for Obama’s “openness” and bringing “participatory democracy” to the people. What no member of the news media dares state, concede, suggest, or insinuate in public is that Obama has reneged on most of his “revolutionary” promises and that he has been mercilessly mauled by the pit-bulls of Congress.

If the country were not to suffer greatly from Obama’s moment-to-moment pragmatism and from the craven deference paid him by the news media, if the criminally fraudulent character of the entire picture were not so repellent, I would be genuinely amused. Unlike “Yes, Prime Minister,” however, Obama’s and Congress’s theatrics leave me numb with contempt and determined as ever to expose them.

Who “Owns” the Economy, “Owns” You

By noreply@blogger.com (Edward Cline) from The Rule of Reason,cross-posted by MetaBlog

Several of President Barack Obama’s supporters, inside government and outside of it, are suffering from a severe, contagious bout of foot-in-mouth disease. The one who contracted it and passed it on was Chuck Todd, NBC’s White House correspondent.

“On MSNBC just now, Chuck Todd frames the ‘blame Obama’ narrative while interviewing Obama economic advisor Austan Goolsbee: ‘You guys (Team Obama) own the economy at 12 o’clock eastern time today, correct? When Senator Obama announces his Treasury Secretary, announces the Larry Summers position. It is now Barack Obama’s responsibility on the economy, is that not correct?’”

Goolsbee’s answer is irrelevant. Todd repeated, and George Stephanopoulos, ABC’s White House reporter, modified the “ownership” metaphor to “He owns the economy.” Stephanopoulos has repeated it more often than has Todd or any other reporter. When the “stimulus” bill has been passed and is signed by Obama, it won’t be entirely true that he will “own” the economy. He will share that possession with Congress and with every federal bureaucrat and employee. The assertion will undergo a transmutation from metaphor to “fact.”

Stephanopoulos has been caught red-handed acting as Obama’s shill to sell the plan to the American public, having had numerous personal phone discussions with Rahm Emmanuel, Obama’s White House chief-of-staff, on what and what not to report. ABC has denied the allegation, claiming that Stephanopoulos’s sub rosa calls to and from Emmanuel were in the way of legitimate contacts. Charles Gibson, Dianne Sawyer and other ABC anchors are complicit in the fraudulent reporting, usually introducing Stephanopoulos to present his rhapsodic “reporting and analysis” as though he had fresh intelligence and insight to offer on what is really going on in the White House, when in fact it is nothing but disingenuous rationalizations about Obama’s difficulties.

Further, Stephanopoulos has compounded his fraudulent representations on his own website by handing Obama a “Report Card on Obama’s First Presidential News Conference” (February 10) whose wholesale theatrics and rigging were mentioned in “Rolling Out the Barrels” (February 11). One glaring tip-off of its phoniness was the teleprompter used by Obama. If the questions were authentic and not prescreened, and if Obama’s replies to them were genuinely spontaneous and extemporaneous, why would he need a teleprompter, unless it was flashing answers to prescreened questions?

First, he awards Obama an “A” for selling the stimulus package. Well, he might have sold it to the White House press corps, gagged as they were during that conference except for those privileged to ask a question. But both Obama and Stephanopoulos must know that most members of Congress have been swamped -- nay, deluged -- with protests by Americans against the package or its contents, so the notion that Obama has successfully “sold” the public on the virtues and necessity of the package is pure, unmitigated fantasy. Stephanopoulos, with his special, direct line to the White House and thence to Congress, surely must have this startling and unwelcome information but has simply brushed it off as unimportant.

Then he gives Obama a “B” for “reaching out” to the Republicans to enlist their bipartisan support for the stimulus package. Doubtless Obama, as well as George the Insider, are upset with the Republicans because most of them have, to date, obstructed passage of the package because of their objections to many of its contents. These objections were mostly arbitrary, non-objective, and rooted in partisan obstinacy -- there is too much in this pet project or too little in that specific earmark, or the earmark or set-aside is divorced from any honest idea of an economic stimulus -- but we should be thankful there were objections. Obama on February 6 called the delay “inexcusable and irresponsible.” What Stephanopoulos meant by his “B” is that he thought Obama wasn’t deceptive enough to win over the Republicans, so they could share credit for the stimulus package’s purportedly unknown consequences.

Stephanopoulos’s “report card” on Obama’s first presidential press conference is as bogus as was the conference itself. By contrast, conservative columnist Larry Elder, on February 12, in his column, “Obama in Prime Time: 7 Questions Left on Cutting Room Floor,“ helped to confirm the rigging of the press conference, and followed up with seven questions he would like to have seen posed. Obama would not have been able to answer those questions, which contrasted facts with Obama‘s fictive appraisal of the crisis. His mind would have shut down in a total blank-out, or he would have refused to acknowledge the legitimacy of the questions by calling them irrelevant or hostile or instances of “fear-mongering” or of “ideological nit-picking.” The reporter or journalist asking any of those questions would have been barred from future press conferences. Obama and Joe Biden, during the campaign, blacklisted reporters who asked them “unfriendly” questions.

“He owns the economy.” A very poor choice of words. Hitler “owned” the German economy. Dictator Hugo Chavez “owns” the Venezuelan economy. The Castro brothers “own” the Cuban economy. Vladimir Putin “owns” the Russian economy. One would think that it would occur to Stephanopoulos that this is hardly a flattering thing to attribute to a man he earnestly wishes to be perceived as a “man of the people,” that “owning” an economy is the sign of a dictator.

Of course, “owning” a nation’s economy is simply a crude metaphor for commanding it. No one can “own” an economy. A primitive society whose economy is based on the barter of beads or stones is governed by the same laws of private trade or government intervention or expropriation as an advanced society’s economy whose medium of exchange based on gold, silver, copper or fiat paper. The economy is autonomous and will serve out its own justice. As King Canute of legend could not command the tides to cease, dictators cannot command economies to defy reality and fulfill their wishes, not even when they employ brute force and not stealthy fraud. Reality will always out. A major “drag” on Nazi Germany’s economy, for example, was the cost of exterminating six million Jews together with using slave labor in its war industries, aside from the cost of conquering countries it intended to loot.

Nevertheless, Stephanopoulos and his ilk in and out of government want Obama to command the economy, that is, to tell Americans to behave in ways that will accomplish their fascist ends, to compel them to make decisions and take courses of action they would not otherwise choose to take. By implication, a tyrant who claims to “own” an economy, “owns” you, the private citizen. The contempt which Obama and Congress exhibited for the American people is unbounded but disguised in the alb and cassock of “care” and “concern.”

Conservative writer Michelle Malkin on February 13, in her article “The ‘Tiny’ Trillion-Dollar Turbaconducken You Don’t Care About,” reports an instance of that contempt in Democratic Senator Chuck Schumer’s derogatory remarks in the Senate on February 10 about Americans who opposed the stimulus package. “The American people really don’t care,” he complained, about those “little tiny, yes, porky amendments,” and sneered at conservative and other unconvinced and un-corrupted political observers, calling them “chattering classes.”

And, to pour salt into the wound, House Speaker Nancy Pelosi, reported Malkin, released a “fact sheet” on the 12th about the stimulus package, in which she claimed there were “no earmarks or pet projects.” Obama, Schumer, Pelosi, Harry Reid and the rest of our “social managers” in government are confident they can get away with such brazen behavior because the news media are largely on their side. Neither incident was reported by any of Stephanopoulos‘s colleagues, except perhaps on talk radio, the bane of and threat to the Democrats.

Arguably the most frightening aspects of the stimulus package not mentioned once by the news media are the socialized medicine provisions buried in the 1,100-page stimulus bill, as reported in Bloomberg News by Betsy McCaughey on February 9. Scattered throughout the package are appropriations for the establishment of controls on physicians, hospitals and patients. They are the natural end of Medicare and all the other federal, semi-socialist medical programs. In short, if you are elderly and require serious medical treatment, a Federal Council will decide whether or not that treatment is “cost effective” and a potential drain on Medicare resources. If some faceless bureaucrat decides it is not “cost effective,” you will be sentenced to endure the malady, or to “die quietly.”

Does this policy differ in any fundamental from, say, the Nazi policy of “thinning out the herd” by denying the elderly and disabled Germans medical treatment, or by cleaning out sanitariums of the mentally ill for “cost effectiveness” reasons? No.

I have dwelt on George Stephanopoulos here simply because he is the most obvious and noisome symptom of the betrayal of the news media. I do not know where he learned the basic principles of journalism, but it certainly could not have been at the Columbia School of Journalism, on whose gateway is inscribed Joseph Pulitzer’s warning:

"A cynical, mercenary, demagogic, corrupt press will produce in time a people as base as itself.”

Too many Americans have welcomed Obama and his fascist agenda, have cheered on a compliant Congress, and look forward to hearing the likes of Stephanopoulos hand in his report cards on the Obama administration. These Americans do not mind being “owned,” commanded, and given their marching orders. They are our carnivorous adversaries, as well.

I can only quote Francisco d’Anconia from Ayn Rand’s novel, Atlas Shrugged:

“Brother, you asked for it!”

Making Waves

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Christians seen as mad

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Money being ditched for wealth

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

The Right to Education vs The Right to Life

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

LTE Western Mail

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

The face of multiculturalism

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Activism Opportunity: The One Minute Case

By David from Truth, Justice, and the American Way,cross-posted by MetaBlog

In May of 2007, I introduced “The One Minute Case”:

The One Minute Case is a new collaborative blog which will present a brief argument about a controversial issue that can be read in under a minute. The goal is to publish one case per day. You can read the cases to learn something new about an issue or use them as a source for longer arguments of your own.

I started the blog because I believed that there is an opportunity to educate students by taking advantage of cost-effective advertising using Google Adwords. Has my strategy been effective?

From one perspective, no - there are only 33 posts, most of them from the first month. From another perspective, there is an average of 75 comments per post, the majority of them being unique users.  Various evidence suggests that many of them are students doing research for school papers.  Here is a weekly chart:

(There were no posts made during most of that time.)

I think the numbers suggest that the format I selected presents a good oppportunity for activism.  There’s many ways to measure the success of intellectual activism, and many motivations for writing,  but if you are writing to someone somewhere - congressmen, fellow capitalists/Objectivists, forum members, how does this compare with your results? If your goal is to make the maximum difference given the resources available to you, how does this compare?

If you are interested in supporting my efforts, you can help in three ways:

• Write or edit cases
• Financially sponsor my Google Adwords campaign
• Help me manage the Adwords accounts and come up with new ads

Bjorn Lomborg: Our priorities for saving the world

By David from Truth, Justice, and the American Way,cross-posted by MetaBlog

The vast majority of wealthy people in the developed world prefer to doom billions of people to death and poverty than to doubt the environmentalist/socialist propaganda taught in government schools.

Let Bankruptcy Courts Take the Wheel

By Thomas Bowden from The Ayn Rand Institute Media Releases,cross-posted by MetaBlog

Let Bankruptcy Courts Take the Wheel

By Thomas A. Bowden (February 11, 2009)

General Motors, having sucked up $9.4 billion of taxpayer cash since Christmas, now desperately craves the remaining $4 billion authorized by President Bush for disbursement in February.

And come March, once that new money has disappeared down the Detroit drain hole, renewed pleas for aid will undoubtedly land on President Obama’s desk. Will the new chief executive emulate Bush, bowing to the anti-bankruptcy sentiment fomented by Rep. Barney Frank, chairman of the House Financial Services Committee, and others who advocate bailing out the Detroit automakers? Or will he let the bankruptcy courts take charge?

“There’s only one thing you can do in bankruptcy that you can’t do outside of bankruptcy--break your word, break your deals,” said Frank in a “60 Minutes” interview. “It allows you to say to the small businesses who have been catering lunches for you, ‘sorry, we’re not paying you.’ It allows you to go to the workers and say, ‘sorry, we’re not paying you.’”

Really? So bankruptcy is a get-out-of-jail-free card that allows treacherous companies to escape payment obligations they would otherwise have to honor? Sorry, Mr. Frank, but that’s a fantasy.

Plodding behemoths like General Motors are not even eligible for bankruptcy until they’ve become insolvent, which means they already can’t pay their bills and have no prospects for recovery. What bankruptcy does is treat the victims of those broken deals fairly--by preventing the bankrupt company from playing favorites among unpaid creditors, and by giving those creditors a big say in the distressed company’s future.

If an automaker can return to profitability by streamlining products, cutting staff, or closing plants, a bankruptcy judge can allow a reorganization. But a company that’s hopelessly floundering may have to be liquidated through an orderly sale of assets, with income paid to creditors according to their existing contract rights.

Yes, Mr. Frank, some creditors walk away from a bankruptcy empty-handed, or collect only pennies on each dollar of debt. Caterers, assembly-line workers, material suppliers, landlords--everyone who does business with a company in a market economy assumes a risk of nonpayment. But that needn’t spell disaster if creditors take steps in advance to confine the pain of bankruptcy within reasonable limits. Wise businessmen check on credit histories, set limits on outstanding balances, and register liens on hard assets. Even unions can protect their members, such as by having pension funds placed in trusts sheltered from bankruptcy proceedings.

Under bankruptcy, the risk of financial loss stays right where it belongs, on those who assumed the risk of non-payment by voluntarily dealing with a badly managed company. But in Barney Frank’s bailout universe, Congress can simply paper over the reality of business failure by shifting those losses to taxpayers, competitors, and consumers--in short, everyone who doesn’t deserve to pay.

This means that if GM’s caterers don’t get paid for the hors d’oeuvres served to CEO Rick Wagoner and his team of corporate bailout beggars, you and I must foot the bill. And if UAW members fear losing the staggeringly high wages and benefits they’ve extorted over decades using pro-union legal privileges, society must ride to their rescue.

But shifting the financial pain of business failure onto society at large is unjust. Most obviously, taxpayers shouldn’t be forced to prop up failing companies’ balance sheets. But other victims abound. Think of the profitable competitors with hard-earned credit standings, watching with justified resentment as badly managed rivals line up at the public trough.

Consumers, too, pay a price for bailouts. Bailed-out firms flood the market with inferior products--GM cars, anyone?--by continuing to own assets that would have gone to making more desirable products if market forces had ruled. Just picture today’s city streets if the horse and buggy industry had been bailed out a century ago.

Is General Motors to become a brain-dead patient in a Federal bailout ward, languishing on tax-funded life support beyond all hope of recovery? Not if Congress steps aside and lets the bankruptcy courts do justice through adjudication.

 

Ayn Rand Center Launches New Blog: "Voices for Reason"

By from The Ayn Rand Institute Media Releases,cross-posted by MetaBlog

Ayn Rand Center Launches New Blog: “Voices for Reason”

Washington, D.C., February 9, 2009—Today, the Ayn Rand Center for Individual Rights has launched its blog Voices for Reason, where its experts will provide daily commentary on breaking news from the perspective of Ayn Rand’s philosophy, Objectivism.

According to Debi Ghate, vice president of Academic programs, “Every weekday, we will post new commentary on current events on topics such as the financial crisis, environmentalism, foreign policy, free speech, and property rights. We will also explore the principled solutions Ayn Rand’s philosophy offers for tackling today’s political, economic and cultural problems.

“It is our goal to make Voices for Reason the go-to source for our unique perspective on the most important news of the day and the state of our culture. Our writers will share their insights, evaluating current events using Ayn Rand’s philosophy of reason, individualism, and laissez-faire capitalism as their guide.”

Voices for Reason will also carry announcements and updates from the Ayn Rand Center and the Ayn Rand Institute.

Speaking Tour Celebrates Charles Darwin's Anniversary

By Keith Lockitch from The Ayn Rand Institute Media Releases,cross-posted by MetaBlog

Speaking Tour Celebrates Charles Darwin’s Anniversary

February 11, 2009

Washington, D.C.--In celebration of the 200th anniversary of the birth of Charles Darwin, Keith Lockitch, resident fellow at the Ayn Rand Center for Individual Rights, will be speaking on Darwin and evolution at four college campuses this week.

The speaking tour includes the following appearances:

 February 9: University of Texas, Austin.
 February 10: University of Alabama, Tuscaloosa.
 February 11: University of Georgia, Athens.
 February 12: University of North Carolina, Charlotte.

According to Dr. Lockitch, “The theory of evolution is often disparaged by its opponents as being ‘just a theory’, a speculative hypothesis with little basis in hard, scientific facts. But this claim carries with it the implied accusation that Charles Darwin was ‘just a theorist’, an armchair scientist whose life’s work was nothing more than an exercise in arbitrary speculation. A look at Darwin’s pioneering discoveries, however, reveals the grave injustice of this accusation.” As Dr. Lockitch explains in his talk, “Darwin was not ‘just a theorist’ and evolution is not ‘just a theory.’”

In this speaking tour, which also celebrates the 150th anniversary of the publication of Darwin’s masterpiece On the Origin of Species, Dr. Lockitch explores Darwin’s life and work, focusing on the steps by which he came to discover and prove the theory of evolution by natural selection.

---------

 

###

A Terry Schiavo Case in Italy

By Gina Liggett from NoodleFood,cross-posted by MetaBlog

Remember in 2005 when then-President Bush rushed back to Washington to get the Republican-dominated Congress to intervene directly in the Terry Schiavo right-to-die case? Terry Schiavo had been in a persistent vegetative state for 15 years, alive only because she was receiving nutrition through a feeding tube. Her husband and legal guardian--who knew she would never want to live like that--fought Terry's staunchly Catholic family in the court system for years over her right to die in such a circumstance. A Florida state appeals court agreed with Terry's husband and allowed the feeding tube to be removed in spring of 2005.

Out of all legal options, the family went to the top of the political ladder, and got President Bush and his religious-right powerhouse in Congress to counteract that ruling. Congress passed, and Bush signed, emergency legislation, sending the case back to the federal court. But wisely, the federal court did not overrule the previous decision. The feeding tube was not reinserted, and Terry was allowed to die.

The case was a sickening display of not only the breach of the separation of powers as well as the separation of church and state, but also of how quickly and deeply one's personal life can be penetrated by a government. A federal appeals court judge in Atlanta quite eloquently admonished Congress and the White House for acting “in a manner demonstrably at odds with our Founding Fathers’ blueprint for the governance of a free people — our Constitution.”

Fast forward to 2009, and there is an eerily similar kind of family nightmare in Italy. A 37-year old woman, Eluana Englaro, has been in a coma since a car crash in 1992. Her father, who claims that her daughter would not want to live in such a vegetative state, has spent years petitioning the Italian court system to allow her to die. Finally, doctors were allowed to implement a medical protocol for withdrawing Eluana's artificial nutrition--that is, until Prime Minister Silvio Berlusconi, after consulting with the Vatican, issued an emergency decree stating nutrition cannot be withdrawn.

Magnifying the absurdity of the Italian government's and Vatican's interference in the private lives of these citizens is the Prime Minister's justification for his decree: physically at least, Eluana was "in the condition to have babies."

Allow me to elucidate. Irregardless of the comatose woman's inability to consent to anything, the Italian Prime Minister and the Vatican are in effect saying that it would be acceptable for someone to impregnate this woman, have her body incubate a fetus, then deliver it; but to allow her to die a natural and dignified death by withdrawing artificial nutrition would be immoral, despite what Eluana would have wanted.

Cardinal Tarcisio Bertone, who pleaded with Berlusconi to not permit Eluana to die, told him "We have to stop this crime against humanity." (I must say, I find it ludicrous and ironic that the religious institution responsible for the horrific crimes of the medieval Crusades and the systematic enabling of pedophilia in the priesthood has the audacity to say anything about crimes against humanity.)

In these two right-to-die cases, Terry and Eluana were young when they suffered their irreversible brain damage and had not made their wishes explicitly known in writing. But those closest to them and legally responsible for making decisions on their behalf have a better idea than the government or the Church about whether or not they would want to linger for decades in an unconscious state.

Even more fundamentally important than the ethics of proxy medical decision-making is the right to die. I think this right is a corollary of Ayn Rand's concept of the right to life: "There is only one fundamental right (all the others are its consequences or corollaries): a man's right to his own life."

In their quest to take away the right-to-die, the Vatican and America's Religious Right are basically taking away the right to life, claiming your life belongs to God, not to you. This religious view is the reason the Schiavo family fought Terry's right to die; this was the reason they took their case to a President who actively promulgated religious initiatives; and this is what the Italian father is fighting.

Your right to life includes your right to end your life according to your values. If you would not want to be kept alive for decades in a comatose state--and your proxy decision makers know that--then they have the ethical and legal obligation to carry out your wishes. And any governmental or church interference with that right is an immoral and egregious offense to the citizens of a society obligated to uphold their Constitutional rights.

Update: Eluana died Monday Feb 9 as legislators debated her case. The Italian government intends to push for an anti-right-to-die law.

Yaron Brook on Product Safety

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

In this video, Yaron Brook answers a question on how to ensure product safety in capitalism via tort law. And he explains why the regulatory state undermines the incentives to make products safe found in a free market.



Exactly!

Why I Love Aristotle, Reason #82721

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

Here's a delightful passage from the Nicomachean Ethics, Book 7, Chapter 6:

That incontinence [i.e. lack of self-control] in respect of anger is less disgraceful than that in respect of the appetites is what we will now proceed to see.

Anger seems to listen to argument to some extent, but to mishear it, as do hasty servants who run out before they have heard the whole of what one says, and then muddle the order, or as dogs bark if there is but a knock at the door, before looking to see if it is a friend; so anger by reason of the warmth and hastiness of its nature, though it hears, does not hear an order, and springs to take revenge. For argument or imagination informs us that we have been insulted or slighted, and anger, reasoning as it were that anything like this must be fought against, boils up straightway; while appetite, if argument or perception merely says that an object is pleasant, springs to the enjoyment of it. Therefore anger obeys the argument in a sense, but appetite does not. It is therefore more disgraceful; for the man who is incontinent in respect of anger is in a sense conquered by argument, while the other is conquered by appetite and not by argument.

Aristotle is correct to say that indulgence in unjustified anger requires some kind of rational judgment, whereas indulgence in mere appetites (i.e. bodily pleasures) does not. I'm not certain that the difference makes indulgence in anger less disgraceful than indulgence in appetites; I'm doubtful that such a comparison is sensible. (The argument above is not Aristotle's only argument for that conclusion, however. He offers quite a few in that chapter.)

Regardless of such concerns, what I love about this passage is his analogy to the hasty servant and the barking dog. That's just priceless -- and oh so much like Aristotle.

Quick Roundup 403

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Bill out of Atlas Shrugged almost as long as Atlas Shrugged.

The final version of the so-called stimulus bill, which will make economic news continue to sound like it was cribbed from Atlas Shrugged, clocks in at 1,071 pages long (up from 424 pages long when first written). This is just 121 pages shorter than that prophetic work. Rich irony was just a back-room deal away!

Congress is admittedly poised to pass it without having read either tome. Were I a conservative, I'd propose a law that Congress would not be allowed to vote for any bill during a "cooling-off" period of a length of time it would take an average person to read the bill.

But I am not, and such a measure would be a mere band-aid. The way to fix this grotesquely wrong situation is for a substantial number of Americans to demand that the government do its actual job, which is protecting individual rights, and nothing else. If enough people read Atlas Shrugged, and began voting (and persuading other voters) accordingly, we wouldn't have to worry about what a bunch of little dictators are happily passing, unread.

WSJ: Bring Back Gold

Via HBL, I heard of an excellent article arguing for a return to sound money, and chronicling some baby steps in that very direction.

If capitalism is to be preserved, it can't be through the con game of diluting the value of money. People see through such tactics; they recognize the signs of impending inflation. When we see Congress getting ready to pay for 40% of 2009 federal budget expenditures with money created from thin air, there's no getting around it. Our money will lose its capacity to serve as an honest measure, a meaningful unit of account. Our paper currency cannot provide a reliable store of value.

At least some people are out there making arguments like this....

Objectivist Roundup

Stop by Titanic Deck Chairs to read it, if you haven't done so already.

My Take on the All-Ett

Before Christmas, I talked about wanting to try the "All-Ett", an ultra-thin wallet made of rip-stop nylon. I ended up ordering one myself and have been using it instead of my usual leather tri-fold for about a month.

I'm sticking with the All-Ett, but have to give it a mixed review. I went with the European Leather version, because I wanted something small and "sophisticated", as the product description bills its leather exterior. I wanted to try a thin wallet, but not so badly as to carry around something that would be embarrassing to take out of my pocket in public.

First, let's get the bad out of the way. The All-Ett is just barely passable as far as the fashion department goes. It is leather, but there is a prominent seam in the middle that runs the entire length of the outside of the wallet, and the brand name is stamped on the outside. Perhaps the latter won't bother most, but I personally hate my clothing and accessories to carry advertising.

The interior takes getting used to. The fabric that makes the All-Ett so thin is crinkly, and will make a racket when you add or remove bills. I have either gotten used to that or have since learned how to do this more quietly. Also, cards slide in and out easily. If you are, as I am, someone who can easily automate standing orders like, "Be careful opening your wallet, and always straighten out your cards before closing it," this won't be a problem. If not, it might be. There is nowhere to place photos. I may add plastic sleeves for this purpose later on.

Now, for the good. The thickness of my new wallet is less than half of what it was for the old. In fact, I now rarely notice my wallet when sitting down. That used to be especially annoying -- as in sleep-inducing to my leg -- when I wore jeans and drove. For trips of more than about fifteen minutes, I'd just take my wallet out of my pocket. Now, I can leave it in. And, if you want my wife's opinion (the one that really counts!), this image over at Life Hacker will give you an idea. She really dislikes the exterior of the wallet, but she's not exactly nagging me to get rid of it, either!

-- CAV

An Antidote to "Austerity Chic"

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Over at Spiked Online is a fascinating book review by Neil Davenport of Austerity Britain: 1945-51, by David Kynaston. The last paragraph should be enough to show you why I recommend it:

The best thing about Austerity Britain is that Kynaston provides the winning arguments for having the exact opposite of austerity. By exposing the suffering, the degradation and the desperation of the majority of people in the mid- to-late 1940s, Kynaston also helps to expose the poisonous mindset of today’s austerity cheerleaders. Who in his right mind would want anyone to return to ration-era Britain? As Kynaston reminds us: ‘Britain in 1945. No supermarkets, no motorways, no teabags, no sliced bread, no frozen food, no flavoured crisps, no vinyl, no CDs, no computers, no mobile phones, no Pill, no trainers, no Starbucks.’ If they had their way, environmentalists and well-to-do commentators would make sure that the vast majority of people didn’t enjoy access to any of these comforts, either. This is why, as millions of people fear for their jobs and livelihoods, they are hoping that the worst recession in 30 years will do that job for them. If you want to know why they are wrong, and morally warped, read this book about the last time austerity ruled Britain, when it did not liberate us or make us more spiritual, but rather punished, degraded and alienated working people across the country. [bold added]

Read the whole thing, and remember it the next time some you hear some hippie or some fundie -- or some fundie hippie -- gushing about how "good" our economic crisis could be for everyone.

-- CAV

This post was composed in advance and scheduled for publication at 5:00 A.M. on February 12, 2009.

Quick Roundup 402

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Gus Van Horn, Post-It Boy?

Via Karl Martin Mertens comes the latest silly quiz, "What Office Supply Are You?" Here are my results.

You Are a Post-It.

You have a good memory. You're memory is so good, in fact, that it can be down right annoying at times.

You don't mean to nag, but you like to remind people what they're supposed to be doing.

You may be a bit of a pest, but you're awfully cute. So no one minds it all too much when you pop up.

You would make a good manger, salesperson or attorney. You can cram a lot of info into that head of yours.

If writing everything down counts as having a good memory, then I plead guilty as charged!

Martin Lindeskog Gets Things Done

And speaking of writing everything down, or "distributed cognition," Martin Lindeskog has compiled a list of GTD-related things he wishes to explore. The books look intriguing to me, so I'll list them here and ask a question.

• Making It All Work: Winning at the Game of Work and Business of Life by David Allen.
• Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time by Brian Tracy.
• Career Renegade: How to Make a Great Living Doing What You Love by Jonathan Fields.

Has anyone read any of these? If so, what are your thoughts? And if you've read all three, but had to recommend only one, which would it be?

"GTD with Brains"

A while back, took the free "Jump Start" introduction to Jean Moroney's "Thinking Directions" workshops and found that I wanted to recommend it to others. She's offering another on March 26, and will soon be presenting her all-day seminar in New York on February 23 and, possibly, again in Boston on July 2.

One thought I had after taking the Jump Start course was that, as one who uses many of David Allen's productivity techniques, this "gives a brain" to his approach, which certainly helps one implement goals, but not necessarily to set or clarify them.

Honesty is the best policy.

David Veksler writes, in "The One Minute Case against Cheating," that:

The lesson that students need to learn is that the choice between the practical and the moral is a false dichotomy. Morality is the means to a successful life, not an impediment. Teaching the practical, selfish value of honesty is the best way to discourage cheating.

The primary purpose of an education is to provide the practical knowledge and thinking skills that allow success in life and career. Cheating erodes both those goals. In a career, success of failure has material consequences on one's work and the people it affects. A grade on a biology exam is just a number, but a doctor who takes shortcuts with patients, or a construction engineer who takes shortcuts with buildings endangers both his career and other people’s lives. The ultimate goal of education is not a piece of paper, but practical skills and knowledge, and cheating deprives oneself of that knowledge. Whatever immediate benefit cheating provides is outweighed by the long-term harm. Educators need to stress the practical value of their lessons, and the harm students do to themselves when they forfeit their education.

Back in high school, I always wondered why some of my classmates cheated for this very reason, probably in large part because I was lucky enough to have parents who stressed what my education was for.

In fact, I would have found the idea of being "tempted" to cheat ludicrous.

-- CAV

Updates

2-14-09: Corrected a hyperlink.

Obama Planner Hails Hopelessness

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Via Matt Drudge comes an article by Betsy McCaughey, a former Lieutenant Governor of New York, on an aspect of the "stimulus" bill that needs closer scrutiny: how it will affect the medical sector. Among many other very bad things is the following:

In [Critical: What We Can Do About the Health-Care Crisis], Daschle proposed an appointed body with vast powers to make the "tough" decisions [i.e., rationing --ed] elected politicians won't make.

The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle's book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept "hopeless diagnoses" and "forgo experimental treatments," and he chastises Americans for expecting too much from the health-care system.

Tom "Details Kill" Daschle, who supported socialized medicine during Bill Clinton's term, is behind many of these provisions.

This is two days in a row now that I have seen the Left calling for the government to force people to accept less freedom because some activity the government should have nothing to do with is costing -- whom? -- "too much".

And to think this administration is not yet a month old! Let everyone you can think of who might care know about this.

-- CAV

"Cornered" by Cultural Trends?

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Glenn Reynolds, calling it a "sad indictment of contemporary culture," quotes the following from The Corner, the blog presence of National Review:

"Compared to most of the talk shows these days, the old Donahue show was the School of Athens."

The above comment, by Jonah Goldberg, followed a comparison made by a reader responding to a video posted in an earlier blog entry, which showed a brief exchange between Phil Donahue and Milton Friedman.

As far as the comparison between Jon Stewart and Phil Donahue went, I would agree that Phil Donahue is the better interviewer, but we could do better in the vein of examining cultural trends. If you watch the video of Friedman, you will see that he does not even attempt to take or defend what rightfully belongs to capitalism, which he is allegedly defending: the moral high ground. He simply concedes the premise that greed is bad, while pleading that it's "practical". Worse, he implies that the whole world operates on "greed" (i.e., selfishness), which it doesn't, and equates "virtue" with altruism throughout his response.

With "defenders" like this, Phil Donahue, as a fellow opponent of capitalism with Stewart, does better in that way, too -- by handing Friedman the rope and letting him hang himself, which he does. So long as nobody raises a moral defense of capitalism, it is doomed, because when people who subscribe to irrational moral codes sense a conflict between the moral and the practical, they will, unless they are hypocrites, go with the moral. What people need is not an excuse to do what is right anyway: They need to know that there is a moral alternative to altruism, and that it provides the moral justification for capitalism. The fact that the GOP shares Phil Donahue's moral code is why the Republican Revolution of 1994 failed to dismantle the welfare state and devolved into compassionate conservatism instead.

And it is why, I suspect, that the same publication that regularly savages Ayn Rand, who defends capitalism on moral grounds, would heap praise on such a weak-kneed performance as Friedman's when far better alternatives are easily available and deserving of more publicity. At least "Uncle Milt" doesn't demand too much in the way of critical self-examination: The conservatives can continue going on thinking that they can have the fruits of the tree of selfishness while continuing to suck the sap from its roots.

Our cultural decline is a direct result of the irrational and impractical -- in sum, the self-sacrificial -- moral ideals that guide the majority of the members of our society.

Fortunately, while the conservatives are looking at the liberals, or the past, or at anything that will allow themselves to claim, "I'm not so bad," Objectivists are working to reverse the tide. When Ayn Rand appeared on Donahue, she was known primarily as a best-selling novelist; the intellectual movement she started was still very small. Now, it is common for educated people to know her philosophy by name, and have some inkling of what it is. (See Note 1.) The Ayn Rand Institute now runs a policy think tank in Washington, and, I am happy to see, has joined the blogging fray (HT: Diana Hsieh). That last is another small step in the right -- I mean correct -- direction!

The conservative movement -- as exemplified by the likes of "Uncle Milt" -- is incapable of filling today's intellectual vacuum. Fortunately, the real opponents of statism are!

-- CAV

Note 1: For example, when I recently mentioned getting published in The Objective Standard to a free-lance journalist I met at a networking event, he asked whether that journal came from a "Randian or libertarian or 'right-of-center'" angle. He added that he was no fan of hers, but still, he made the connection with no help from me.

The One Minute Case Against Wage and Price Controls

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

What is a job?
A job is a contract between two parties, in which one party agrees to provide certain services on a certain schedule in exchange for payment from the other party. By definition, an employee agrees to do job for a particular wage by his own voluntary consent. This is opposed to slavery, in which a slave is forced to work without his consent or compensation.

What determines wages? Can employers pay workers whatever they want?

A wage is the price an employer pays for the services his employee. While the two may negotiate any wage they come to mutual agreement on, the mutual self-interest of both and market forces intersect at a market-set price that represents the intersection of their interests. Disregarding non-economic factors, an employer wishes to pay his employee as little as possible. The maximum amount he will pay however is the value of the marginal productivity a given worker provides. (The marginal productivity is the value per unit of time the worker provides to the employer.) If the worker refuses to work at or below his marginal productivity, then the employer will not hire him, since doing so will incur a loss. Conversely, disregarding non-economic factors, the employee wishes to be paid an infinite amount. The minimum wage he will actually accept is the marginal value of his labor. This can be measured in terms of the next-most useful value-producing activity the workers may engage in.

For example, suppose that my marginal productivity as a programmer is $30 per hour. I will accept any job paying above $30 an hour, but no job below it, since I can find an employer paying that much in another computer or tech-related industry. A fast-food worker might have a marginal productivity of say, $6 an hour – the value per hour that his labor creates for the business. From the employer’s perspective, I create $40/hour of value, and the fast food workers creates $7 of value, so he will be willing to hire us. (Assuming that no one is willing to provide the same value for a lower wage.) However, if I only provide $20 of value, the employer will not hire me, because he would incur an hourly loss of $10 in doing so. Similarly, if the fast food worker only provides $5 of value, he would no be hired either because he would cause a loss of $1 for each hour he works.

Can the government increase wages when employers don’t pay enough?

Suppose that the government imposed a minimum wage of $8. Would the fast food worker who provides a value of $7 per hour now be paid $8? No, he would lose his job - because keeping him would mean a $1 loss for each hour he works to his employer. All minimum wage laws have a similar effect - they cause everyone with a marginal productivity below the minimum wage to lose their jobs - most often teenagers and the very poor. Wage caps (including progressive income taxes) have a similar effect - they lead the most productive individuals of our society to retire early or forgo new opportunities — resulting in a lost opportunity for them, and for everyone who might have benefited from their ideas.

What if the government creates a job by paying an unemployed worker to do make-work such as digging holes in the ground?

Where would the money to pay for his wage come from? It would have to be taken by force from the remaining employed fast food workers and computer programmers. Everyone will be paid less to pay for the government workers, but has a job been created? No - now the fast-food employer has $1 less to pay to his other $8 employees, so he must fire some of them or go out of business. Each new $7 government worker costs at least one $7 privately employed worker. This is always a social loss because by definition, the government worker is less productive. If he were not, then the private business would voluntarily employ workers to perform his job.  While a minimum wage causes everyone who produces less than the marginal productivity of the minimum to lose his job, each new government job causes at least one more productive worker to lose his job.

If the government cannot raise wages, can it lower prices?

Prices are determined by the marginal value of a given good, just as a wage is determined by the marginal productivity of an employee. Attempts to regulate the cost of goods have the same effect as wage controls: if the price is set below the cost of a good, producers will be unable to make any.   Since different producers have different costs, lowering the prices of a good will decrease the percentage of producers able to supply them, until they can make none at all.

So how can prices be lowered?

The only way for prices to go down is to increase the productivity of workers.  Productivity in the production of a good comes from the application of mental effort to the production of values. A profit (the difference between the value of a good to a consumer and the cost to produce it) is the reward of an entrepreneur for bringing about the new wealth he’s created. In the absence of government coercion, profits can exist only as long as men continue to create new values ,or improving on existing ones.  The only to make goods cheaper is to allow entrepreneurs the freedom to invest in improvements in the capital and labor methods used in production

Doesn’t a more efficient product result in lost jobs for those who were replaced by automation or better processes?

When oil lamps replaced candles, the cost of producing affordable lighting greatly decreased. In the absence of a government monopoly, competing lamp-makers quickly started making their own lamps, which brought the price decrease to the consumer. In the process of transitioning from candles to laps, many thousands of candle-makers lost their jobs.  However, oil lamps did created a new industry of their own and increased the prosperity of society as a whole, just as electric lighting did in the 20th century.  Since consumers could buy cheaper lamps, they now had more money to spend on other things, ,creating new industries, and raising their overall standard of living.

Technological progress and capital accumulation has both created new careers made us enormously more productive – we not only have a wider range of vocations to choose from but work far fewer hours.

Can government “soften the blow” when all these candle-makers lose their jobs?

In today’s world, the government would probably try to subsidize the candle or lamp-makers when their chief product became outdated. What would that subsidy accomplish? It would save the candle-makers jobs - but it would cost the jobs of everyone who stood to benefit from the increase wealth that came from cheaper lights. In the short term, the candle-makers might benefit - but in the long term, they would lose too, since they would lose the new, higher paying jobs the could have making electric lights and the new products the cheaper lights would allow consumers to afford. Meanwhile, the Thomas Edison’s, Graham Bells, Thomas Moore’s, and Bill Gates’ would be too busy working to pay off taxes to have the time or money for research.

Of course, we know that these inventors and entrepreneurs succeeded. But how many didn’t because they never got their first break in the field because of a minimum wage, or gave up before they tried because the red tape was too much, or the taxes too high, or they knew that the old, outdated industries would use the government to tax and regulate them out of existence? The real tragedy is that we will never know.

The One Minute Case For Capitalism

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

Capitalism a social system based on the principle of individual rights.

A capitalist society is based on the recognition of individual rights, including property rights. Under capitalism, all property is privately owned, and the state is separated from economics just as it is from religion. Economically, capitalism is a system of laissez faire, or free markets, where the government plays no part whatsoever in economic decisions.

Capitalism is the only social system compatible with the requirements of man’s life

To pursue the values necessary for his life a society, man requires only one thing from others: freedom of action. Freedom means the ability to act however one pleases as long as one does not infringe on the same and equal freedom of others.   In a political context, freedom means solely the freedom from the initiation of force by other men. Only by the initiation of force can man’s rights be violated. Whether it is by a theft, force, fraud, or government censorship, man’s rights can be violated only by the initiation of force. Because man’s life depends on the use of reason to achieve the values necessary for his life, the initiation of force renders his mind useless as a means of survival. To live, man must achieve the values necessary to sustain his live. To achieve values, man must be free to think and to act on his judgment. To live, man must be free to think. To be free to think, man must be free to act. In the words of Ayn Rand, “Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries.”

Capitalism recognizes the inherent worth of the individual

In a human society – one that recognizes the independence of each man’s mind – each individual is an end in himself.  He owns his life, and no one else’s.  Other men are not his slaves, and he is not theirs.  They have no claim on his life or on the values he creates to maintain his life, and he has no claim on theirs.  In a free society, men can gain immense values from each other by voluntarily trading the values they create to mutual gain.  However, they can only create values if they are free to use their minds to exercise their creativity.  A man is better living off on his own than as a slave to his brothers.  Capitalism recognizes each man as an independent, thinking being.

The individual is an end in himself

Just as no individual has the right to initiate force against anyone, neither does any group of men, in any private or public capacity. It is immoral to initiate force against any individual for any reason. This includes the initiation of force for “the public good.” The “public” is merely a collection of individuals, each possessing the same rights, and each being an end in himself. Any attempt to benefit the “public good” is an immoral attempt to provide a benefit to one group of individuals at the expense of another. In a free society, no individual benefits at the expense of another: men exchange the values they create in voluntary trade to mutual gain. The rule of law in a free society has just one purpose: to protect the rights of the individual.

Capitalism leads to freedom and prosperity

A free, capitalist economy has never existed anywhere in the world. The closest the world came to a free market was during the Industrial Revolution in Great Britain and during the late 19th century in the United States. The Industrial Revolution was a period of unprecedented economic growth and unimaginable improvements in quality of life. In less than two hundred years, the life of most people in the Western world changed from a a short life filled with poverty, plague, and near-constant war to a modern, comfortable existence that  even the kings of medieval Europe couldn’t have imagined.  Since 1820, the leading capitalist nations have increased their wealth sixteen fold, their populations more than four-fold, their productivity twenty-fold.  Annual working hours went from 3,000 to less than 1,700 and life expectancy doubled from thirty to over seventy years. ¹

Yet despite the undeniable material superiority of capitalist societies, its critics continue to attack it as inhuman and selfish.  What the world lacks is not evidence of capitalism’s practical superiority, but a moral defense of a man’s right to his own life.

Reference

1. Angus Maddison. Phases of Capitalist Development, p4 (1982)

Further Reading

• Andrew Bernstein: The Capitalist Manifesto
• Ayn Rand: Capitalism: The Unknown Ideal
• The One Minute Case For Individual Rights
• The One Minute Case Against Interventionism
• The Bernstein Declaration On the Principles and Possibilities of Capitalism
• The Capitalism Site

The One Minute Case Against Interventionism

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

Free markets created the modern world

A free, capitalist economy has never existed anywhere in the world. The closest the world came to a free market was during the Industrial Revolution in Great Britain and during the late 19th century in the United States. The Industrial Revolution was a period of unprecedented economic growth and unimaginable improvements in quality of life. In less than two hundred years, the life of most people in the Western world changed from a a short life filled with poverty, plague, and near-constant war to a modern life that even the kings of medieval Europe couldn’t have imagined.¹ This miracle was made possible by the philosophical and political ideals formed during the Enlightenment, and the freedoms demanded and fought by the philosophers, statesmen, and entrepreneurs of Western civilization. Yet the Enlightenment also laid the sees for the collectivist and materialist ideology behind socialism, which struck the first major blow against capitalism with the Sherman Antitrust Act of 1890.

Capitalism declined with the rise of collectivism in the 20th century

The assault on free markets was intensified by Herbert Hoover, who imposed unprecendented regulations of Wall Street to eliminate “vicious speculation”, regulated labor markets, and created government works programs.² FDR inherited these programs and created numerous government agencies which made the financial industry is the single most regulated industry in the economy and turned an economic recession into the Great Depression.³ The Federal Reserve was supposed to stabilize the currency, The FDIC was supposed to prevent bank runs, the SEC was supposed to be stop shady investments, Fannie May and Freddie Mac were supposed to make homes affordable to everyone. Yet also these restrictions on capitalism had the opposite effect of their intended purpose: the dollar has lost 95% of it’s value, the SEC is the main cause of corruption in Wall Street^{4 5}, and housing prices are unstable and highly inflated.

Interventionism is a vicious cycle of wealth destruction

Economic interventionism, also known as statism, exists in every mixed economy – a society in which the government interferes with market economy. In a interventionist economy, the state takes wealth away from from some enterprises and transfers it to other organizations or individuals. Whether it does so through taxation, corporate welfare and bailouts, monopoly privileges, wage and price controls, trade restrictions and tariffs, currency inflation, antitrust regulations, state-ownership of businesses, or “make work” programs, the effect is the same: to punish virtue and competence and reward vice and waste.

All the values created by a business are possible only because its customers value them sufficiently to pay for them. To the extent that any individuals voluntarily exchange value for value without harming anyone else, their actions benefit themselves and harm no one. However, in an interventionist state, the product of those individuals is seized and transferred to those who did not earn it. This is a vicious cycle, because it rewards those in the public and private sector who manipulate the state to seize unearned benefits and punishes the productive individuals who focus on creating values and create products and services that consumers want.

The more the looters seize, the fewer wealth is available to producers. The more productive businesses fail or move elsewhere, the heaver the burden is on those who remain. The more money is taken from the producers, the greater the incentive for the lazy to skim from their labor. When the burden of stealing sufficient wealth outright becomes too unpopular, politicians resort to stealing it by printing money, until the currency of the country becomes worthless, trade becomes impossible, and productive activity grounds to a halt. Inevitably, it is the executives of the productive businesses who politicians blame for the crisis their own policies created.

Entrepreneurs and CEO’s are the unrecognized heroes of the modern world

Capitalism cannot guarantee that all our needs will be provided for – no system can turn mere wishes into reality. But it does give entrepreneurs the incentive to compete to provide the best possible service they can. The brief flowering of freedom during the 19th century created the wealthy, industrial society in which we now live in - but it is being destroyed from within by the collectivist ideology of interventionism. When political connections rather than consumers decide who is allowed what values should be created, entrepreneurs have no incentive to improve their products or to try bold new techniques, and instead spend their resources trying to bribe politicians.  Politicians can force prices to be artificially low, but they cannot lower costs or substitute for the creative risk taking that drives the economy – they can only drive the remaining wealth creators out of existence.

References

1. The Capitalist Manifesto, The Industrial Revolution Brings Advance by Andrew Bernstein, 2005
2. Hoover’s Attack on Laissez-Faire by Murray Rothbard, 1963
3. Robert Higgs: How FDR Made the Depression Worse
4. Robert P. Murphy: The SEC Makes Wall Street More Fraudulent
5. See the The One Minute Case against the SEC

Further Reading

• The One Minute Case For Individual Rights
• The One Minute Case For Free Trade
• The One Minute Case Against Socialized Healthcare
• The Bernstein Declaration by Andrew Bernstein
• Global Capitalism: The Solution to World Oppression and Poverty by Andrew Bernstein

The One Minute Case against the SEC

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

Markets regulate themselves

Long before the existence of the Securities and Exchange Commission, medieval guilds and trading houses established common standards, accreditation agencies, and accounting rules that have evolved to the present day. The system of English common law has been evolving since the 12th century ¹, and the accounting system used today was codified in 1495.².

Numerous non-governmental bodies have continued to develop accounting rules and set auditing standards for public organizations.³ It is the American Institute of Certified Public Accountants, not the government, which sets ethical standards for the profession and U.S. auditing standards for audits of private companies; federal, state and local governments; and non-profit organizations.

Voluntary oversight organizations are embraced by their participants because they provide executives with a value - they allow them to discover waste and fraud and advertise honesty to partners and customers. Unlike government regulatory bodies, they are flexible, efficient, and competitive. When the compliance costs of accounting rules exceed their value, or when lax controls lead to unethical or risky behavior, the markets embrace new standards. The Securities Act of 1933 and the Securities Exchange Act of 1934 did not begin the process of regulating markets, but nationalized much of the auditing market and turned it over to politicians and bureaucrats.

Regulations hinder competition and raise costs for investors

The SEC subsidizes politically connected corporations at the expense of smaller firms, hindering innovation and encouraging corruption. Established corporations lobby the government to create burdensome regulations that smaller investment funds and markets cannot afford, thus creating coercive monopolies that raise profits a few firms at the expense of investors.⁴ Government bodies like the SEC, the MSRB, the FTC, the USITC, the Fed, the Treasury, the IRS, the OTS, the MSRB, and the state attorney’s offices issue hundreds of thousands of laws, rules, opinions, bulletins, comment letters and threats and require numerous reports, statements, forms, notices, and approvals that investment firms and public companies must obey. ⁵ This creates an artificial scarcity of investment products that benefits large corporations and discourages savings and investment. Smaller companies cannot afford to raise money by issuing stock, and investors are forced to choose between public but expensive mutual funds and secretive and risky hedge funds with entry fees that only the rich can afford.

The SEC creates corruption

Rather than making Wall Street honest, regulatory agencies are the primary instruments of fraud and corruption on Wall Street. Politicians who control regulatory agencies have an incentive to use their power to extract benefits for themselves and their constituencies, rather than to keep markets honest and efficient. Power hungry politicians like Eliot Spitzer use the power of the SEC to go on crusades again innocent businessmen ⁶, and thus force regulatory bodies to hide the evidence of real corruption.⁷ By blocking outsiders from seeing its records, the agency is makes it harder for investors to discover real fraud.⁸

The case of Bernie Madoff is a typical case study in how the SEC encourages fraud. Investors figured out that Madoff couldn’t possibly make the profits he claimed, and have been writing the SEC since 1999, urging them to put a stop to Madoff’s Ponzi scheme. However, Madoff used his close family ties to the SEC, and was instrumental in founding key regulatory bodies - and then nominated his family members to serve on their boards. When skeptical investors inquired about the irregularities in his fund, Madoff told them that the SEC had already investigated and cleared him over a period of three years.

While Madoff stole $50 billion dollars under their noses, the SEC’s budget surpassed $900 million dollars, and grew at record rates during the two Bush administrations. In response to this outrageous case of nepotism and corruption, the government will likely increase its budget and staff once again.⁹

The SEC makes markets more volatile and risky

By banning crucial market functions like short selling¹⁰ and “insider trading” ¹¹ the SEC hinders the market’s ability to react to new information, and makes markets more unpredictable and expensive.

The SEC cannot even oversee itself

While the SEC is charged with enforcing regulations like Sarbanes-Oxley, it consistently fails to control and report on its own processes and receives failing grades from the government’s own auditing body.¹² This is not surprising - like any socialist organization, it has no incentive to be efficient or responsible to stockholders.

The chief source of fraud and corruption in the United States is not Wall Street, but Washington D.C.

Notes

1. Medieval English common law: foundations for 21st century legal systems
   
2. Wikipedia: The history of accountancy
   
3. Self-Regulation in Today’s Securities Markets: Outdated System or Work in Progress?
   CFA Institute Centre Publications (September 2007)
   
4. See How the SEC Subsidizes Stocks by Jeff Scott and SEC: Protecting Investors Or Uncompetitive Companies?
5. (There are so many regulations that the department charged with publishing them can only report that “The Office of the Federal Register Library now contains more than 550 cubic feet .. which has the force and effect of law.” - History of the Federal Register
6. The Cost of the “Ethical” Assault on Honest Businessmen by Alex Epstein and Yaron Brook (Silicon Valley Biz Ink, July 8, 2003)
   
7. Deafened by the S.E.C.’s Silence, He Sued
   
8. The S.E.C. Prevents Investors From Discovering Accounting Fraud
   
9. The SEC Makes Wall Street More Fraudulent by Robert Murphy
   
10. See the One Minute Case for Stock Shorting
    
11. See Inside Insider Trading and Should Insider Trading Be Legal? by Yaron Brook
12. GAO Finds Material Weakness in SEC’s Controls

The One Minute Case Against Cheating

By heroic@gmail.com (David Veksler) from One Minute Cases,cross-posted by MetaBlog

Recent studies have shown that in the U.S., 56% of middle school students and 70% of high school students have cheated.^[1] Why is cheating on the rise?  The best place to start analyzing this question is to look at the issue from the perspective of the individual student.  What reasons does he consider for and against cheating?

For most people, the decision to cheat or not is guided primarily by emotion.  Does the feeling of guilt exceed the feeling of satisfaction he will receive from getting an A?  But emotions are ultimately based on one’s values and ideas.  The predominant idea behind cheating is that morality is a conflict of self-interest versus self-sacrifice.  Cheating is the “selfish” thing to do, and confers an advantage in class and in life.  The “right” thing to, whether justified by promises of divine reward, utilitarian considerations, or a vague appeal to social harmony, requires an immediate personal sacrifice.  In such a conflict, the “moral” choice is understandably difficult for students to justify.  Without rational ideas to justify honesty and integrity, hard-working and “practical” students believe that morality only holds them back from success in life, and that they can “play by the rules” once they are out of school, and give lip-service to morality when it comes to more abstract and non-practical matters.

This is a grievous error is created by bad philosophy.  The lesson that students need to learn is that the choice between the practical and the moral is a false dichotomy.  Morality is the means to a successful life, not an impediment.  Teaching the practical, selfish value of honesty is the best way to discourage cheating.

The primary purpose of an education is to provide the practical knowledge and thinking skills that allow success in life and career. Cheating erodes both those goals. In a career, success of failure has material consequences on one’s work and the people it affects.  A grade on a biology exam is just a number, but a doctor who takes shortcuts with patients, or a construction engineer who takes shortcuts with buildings endangers both his career and other people’s lives.  The ultimate goal of education is not a piece of paper, but practical skills and knowledge, and cheating deprives oneself of that knowledge.  Whatever immediate benefit cheating provides is outweighed by the long-term harm.  Educators need to stress the practical value of their lessons, and the harm students do to themselves when they forfeit their education.

Even though it is an attempt to deceive others, cheating is a form of self-deception as well.  Cheating to get ahead will cause oneself to lose a grasp of what his skills actually are.  Someone who cheats on a quiz will find out that he is unprepared for the final.  Students who cheat in an entry-level class will find themselves helpless in higher-level classes. The more a student cheats, the more ignorant he becomes of his actual knowledge.  The more he gets ahead by his falsehoods, the harder he has to work to keep up his un-earned position.  Even if his dishonestly-obtained diploma gets his dream job, he will still be unqualified for it, and forced to continue his deception at work.  He will attempt to hide his inadequacy from co-workers and bosses just as he hid it from classmates and professors.  Cheating is an addictive habit that will surely destroy a career even if it does not (publicly) destroy an education.

Honest peers compete on the basis of their skill and hard work.  Their mutual excellence inspires and motivates each other to success.  Classmates and coworkers who cheat on the other hand, compete by the standard of who is the better liar.  They lose focus of the purpose of their education or career, and try to outdo the audacity of each other’s frauds.  Their peers do not inspire and motivate them, but present the constant threat of having their lies unmasked.  As they lose sight of their real goals, they will find themselves slipping behind.

The solution to the rise of cheating is not to attempt to instill a vague sense of moral guilt, but to explain and demonstrate that cheating is counter-productive and self-destructive.  Honesty does not require guilt or the threat of worldly or divine punishment.  Instead, ambition, integrity, and pride should guide one to success.

Sources

1. Wilfried Decoo, Crisis on Campus: Confronting Academic Misconduct (Cambridge, Mass.: MIT Press, 2002), 23.

Quick Roundup 401

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

The Communal Womb

It is a toss-up to me whether the speed with which the following came out after the birth of Nadya Suleman's litter or its level of presumption is the more surprising.

After years of railing against abortion laws -- reproductive rights -- of saying its my womb and I'll do what I want with it -- Pulitzer Prize-winning columnist Ellen Goodman is now calling for the regulation of reproduction.

In a column today, she wrote: "Does anyone have a right to tell anyone else how many kids to have? Can only people who can afford them bear children? Do you need a husband to have a baby? These are questions that make us feel queasy when we are talking about old-fashioned families. But they take on a new flavor in the unregulated wild west of fertility technology." [bold added]

The linchpin of Ellen Goodman's argument, which assumes that the state must pay for everything as if that were some immutable law of nature, is that people like Suleman are breaking the bank of the welfare state.

As I said before, the solution isn't to violate reproductive rights, but to protect the individual rights of all. This would entail two things: (1) The protection of property rights by dismantling the welfare state so people like Suleman cannot steal from others in the process of creating families they cannot support, and (2) the protection of the rights of children from neglectful or abusive parents.

Superficially (and unfortunately), left and right appear to have switched sides in this latest twist in the debate over reproductive rights. The inhumanity of the left on full display as it is -- especially from enivironmentalists who see this issue entirely in terms of how much carbon dioxide exhaust each new baby spews out -- is bait too enticing for the right to pass up. Predictably, stands like Goodman's are being savaged, but sloppily (at best).

Take Don Surber's reaction:

So kids, there you have it. Goodman has abandoned "reproductive rights" in favor of the government dictating the size of families.

And she has abandoned the call for universal health care because, gee, it is so expensive.

Liberals used to have principles. I think.

Me? I like babies. The more the merrier.

Let's assume that Surber is not attacking abortion though the use of scare quotes around "reproductive rights". His response makes it appear that he supports socialized medicine.

Does Surber really support socialized medicine, or is he just failing to notice that he has made our choice look like "happy babies and socialized medicine vs. dictatorship"? Your guess is a s good as mine, but that is a false alternative. Our only choice is freedom and prosperity -- or tyranny and misery. Mixtures, like those supported by the left and the right, all move towards tyranny when contradictions crop up, like "reproductive freedom at 'taxpayer' expense."

The Geek Press Guide to Highway Survival

My initial impulse to the question of how one survives a skydiving accident is to say, "Ummm. By not skydiving in the first place?" I was nevertheless intrigued enough to read the article Paul Hsieh pointed to, and found it to be more generally applicable:

... [S]ituational awareness can mean the difference between life and death, whether you're hurtling toward earth at terminal velocity or driving 75 miles an hour on the interstate. Third, never give up. Many parachuting deaths could have been prevented if sky divers kept working on their problems. Human and mechanical errors might be fixable, but you'll never find out if you give up.

Skydiving isn't just a spectator sport: It's jam-packed with lessons for the rest of us!

And -- also from Geek Press -- if you have an iPhone and get pulled over by a cop while doing 75, you might be able to get out of (part of) a ticket!

Mental Clutter

Some time ago, Unclutterer, a blog about organization, came to my attention and I bookmarked it, presumably because I was going to blog something from it. (I rarely use bookmarks otherwise.) Curious, I followed the link and found a list of posts from 2008, among which was the following:

More reasons to purge disposable plastic bags and try reusable bags
With more stores and municipalities requiring patrons to use their own bags, we've compiled a more extensive list of reusable bag options -- all of which collapse. [bold added]

No! With more municipalities violating our property rights, it's time to stand up for those rights.

I've seen bags like these before, and they invariably are plastered with environmentalist propaganda. If I were forced to use these, I'd turn them wrong-side out until I could have some made with something like the logo at right imprinted on them. (And then, from where that logo came from, there are tee shirts and mugs....)

Ted Kennedy, Distraction?

C. August has an interesting thought concerning some of Ted Kennedy's recent public appearances:

Now I wonder if Kennedy is playing his part as a distraction--collapsing at an inaugural lunch, riding into Congress on a white horse to standing ovations and tearful accolades, all the while dramatically vowing to fight for the government takeover of health care--while the rest of Congress passes nationalization bills in the dark of night.

Read it all. We're in danger of getting health "care" that isn't from a "stimulus" bill that won't stimulate.

Trust Slug Nation

Stephen Bourque has a good discussion of the latest silly (but dangerous) idea to come down the pike: the idea that every baby should be a "trust fund baby".

-- CAV

School Prayer Stupidity

By Greg Perkins from NoodleFood,cross-posted by MetaBlog

Radio/TV host Glenn Beck had James "Focus on the Family" Dobson on to talk about a recent court decision that a 'moment of silence' rule in a public school was a sham to introduce sectarian religious belief into the classroom.



Beck poses as a victim, asking why it is that the 10% of the country who doesn't believe in God is pushing the other 90% around and forcing their nonbelief down their throats. Believers don't do that, he says, so why not just let people be? Of course, striking down a mandatory moment of silence-or-prayer isn't forcing nonbelief down peoples' throats -- it's only stopping believers from forcing their religion down others' throats via violations of individual rights. Talk about spin. Even purely secular-sounding "moments of silence" only exist because of believers' desire to get God into the classroom to indoctrinate children.

Beck goes on to exaggerate that "it's been deemed unconstitutional to even say the word 'prayer' to our children," and Dobson says that "they just have to eliminate even the possibility that someone might pray." Um, no: the kiddies are free to pray anywhere at any time as long as they aren't being disruptive. What's been deemed unconstitutional is taking money from taxpayers by force to fund schools students are compelled to attend, and then requiring them to do or be indoctrinated in your religion. Reading the text of the ruling, you can see how the judge traces out where and how the line is crossed. (Of course, if we didn't have government schools that people are forced to fund and required to attend, then this would be a non-issue. Don't like your school's policy regarding religious indoctrination? No rights violation there, and you're free to find or form another school. Have a nice day.)

So, does it count as dishonest or just weak-minded when Beck turns to a wider point to claim that "in this country, our rights come from God" and to ask the rhetorical question, "if you take God out of the picture, then where do rights come from?" Oh, I see your point: you don't seek to ram your religion down peoples' throats... but we really do have to make sure your religious ideas are rammed down peoples' throats lest civilization collapse. Got it.

But I'm happy he asks about the basis of rights, because it reminds me that more people need to appreciate the analysis Ayn Rand offered in her classic essay, "Man's Rights":

The concept of individual rights is so new in human history that most men have not grasped it fully to this day. In accordance with the two theories of ethics, the mystical or the social, some men assert that rights are a gift of God -- others, that rights are a gift of society. But, in fact, the source of rights is man's nature.

The Declaration of Independence stated that men "are endowed by their Creator with certain unalienable rights." Whether one believes that man is the product of a Creator or of nature, the issue of man¿s origin does not alter the fact that he is an entity of a specific kind -- a rational being -- that he cannot function successfully under coercion, and that rights are a necessary condition of his particular mode of survival.

"The source of man's rights is not divine law or congressional law, but the law of identity. A is A -- and Man is Man. Rights are conditions of existence required by man's nature for his proper survival. If man is to live on earth, it is right for him to use his mind, it is right to act on his own free judgment, it is right to work for his values and to keep the product of his work. If life on earth is his purpose, he has a right to live as a rational being: nature forbids him the irrational." (Atlas Shrugged)

Once again, the answer to the idea that our options are restricted to either religion or anything-goes subjectivism is that this alternative is malformed. Rather: it is either objectivity and facts, or whim. The right-religious whimsy approach to "rights" is just as wrongheaded and dangerous as the left-secular whimsy approach to "rights."

French Chicken in a Pot

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

As some of you might recall, I'm a huge fan of the fine cooks at America's Test Kitchen. I have a full shelf of their cookbooks, about 25 in all. I have a subscription to their web site, and I subscribe to their bi-monthly journal Cook's Illustrated. Oh, and I watch their excellent TV show, appropriately called America's Test Kitchen. Their recipes are not mere instructions: by their extensive testing and write-ups, they teach you the art and science of cooking. My capacity to cook a fantastic dinner of meat and veggies in thirty minutes from start to finish is almost entirely due to learning and applying their methods.

Since going on my new diet, I am more choosy about the recipes I make from them. I don't make their pastas, desserts, or any of their low-fat recipes. However, they have tons of great recipes for foods I do eat. And now that I've shed myself of my prejudice against fats, I often make the super-fatty dishes that I used to avoid, such as the brussels spouts braised in a cup of cream from their highly useful Perfect Vegetables cookbook. Also, I adapt their recipes to suit my diet, such as substituting reserved bacon fat or coconut oil for vegetable oil. Those changes are easy to manage.

Last weekend, I made their "French Chicken in a Pot." It was -- without a doubt -- the very best whole chicken I've ever eaten. The smell of it slowly cooking in its pot in the oven drove me crazy for hours. The taste of it lived up to my every hope. The chicken was amazingly juicy -- and the sauce made from the chicken drippings and few vegetables was intensely flavorful.

The "French Chicken in a Pot" recipe is available to web site subscribers here. It can also be found in the January 2008 issue of Cook's Illustrated. Since it was featured on their TV show, it's also available for free on that web site, provided that you register.

In making the recipe, I brined the chicken in saltwater beforehand to make it more juicy. I substituted reserved bacon fat for the olive oil. (Olive oil is great, but from a bit that I've read, it's not suitable for cooking at high temperatures. Plus, I love the slightly bacon flavor that the bacon fat adds.) I also added a carrot to the pot, in addition to the onion and celery. It took time to cook, but not much work.

In addition to the chicken, I also made Cook's "Quick Cooked Greens with Red Bell Pepper." That recipe is available on the web to subscribers; it was published in the January 1995 issue of Cook's Illustrated too. Once again, I substituted reserved bacon fat for the olive oil. Also, instead of mere chicken broth, I used some of the intensely-flavored liquid from the chicken. Those greens turned out quite well too.

If you're not familiar with America's Test Kitchen but you'd like to try them out, I'd recommend starting with a subscription to their web site. You can get a two week free trial, and the cost for the whole year is just $35. The web site doesn't have all the recipes they've published in all their specialty cookbooks. However, it has every recipe from over 15 years of the magazine, plus lots of helpful short videos, equipment reviews, taste tests, and cooking methods.

I'm definitely going to do more food blogging in the future -- hopefully with some pictures. I'll often point to a recipe from their web site, simply because that's what I use most often.

Utlity Shut Offs

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Towards a State-Run Media

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Via Alan Sullivan, I hear more bad news about the first subject I blogged this year: the metastasis of government "bailouts" to the newspapers. This time we're hearing it from two major markets.

First, we have David Scharfenberg of the Boston Globe asking for the government to subsidize the web presence of existing newspapers. Says Rick Moran of The American Thinker:

This would be a boon to liberal politics since the chances of any group getting this money investigating the Daschels, Geithners, or other Democrats are close to nil.

All I can add to that is that I would not want any government -- especially one, now that I think of it, that paid lip-service to my political beliefs -- controlling the media. Doing so inherently violates individual rights, and is therefore contrary to the proper purpose of a government.

And just wait for the government to force everybody to take some of the money, as it did with the banks, and then tell them how to do business just as it has and plans to more of with the banks. (How the hell is capping executive pay supposed to encourage better performance? Oh, right. "Better"? For whom and by what standard?)

And then we have the parent company of two papers in Philadelphia (of all places!) begging the governor of Pennsylvania for a bailout. This one provoked one of the better reactions from a newspaper I have seen to this dangerous trend so far. It appears in the Wall Street Journal:

[N]ewspapers aren't the lifeblood of anything if they are merely an adjunct of the state. Independent journalism is valuable, but only if it is truly independent. A newspaper that is bankrolled by the state, even if it's only a loan, is going to have a strong interest in not criticizing the state. Perhaps this is one of Mr. Rendell's goals, since like all politicians he prefers a favorable press.

The business of journalism is changing, and many newspapers will vanish in the coming months and years. But that doesn't mean that journalism itself is vanishing. TV, radio and national newspapers have an audience in Philadelphia. Smaller papers like the Bulletin are also working hard to reach a larger audience in the city. Internet news operations have popped up in Minneapolis, San Diego and other places, often started by former reporters for the big-city dailies. The fastest way to kill a newspaper is to make it dependent on the politicians it is supposed to cover. [bold added]

The last thing we need is for the government to stifle what little good journalism there still is in the newspapers.

-- CAV

Mending the Fabric

By noreply@blogger.com (Edward Cline) from The Rule of Reason,cross-posted by MetaBlog

A respondent to "An Inauguration of Tyranny" (January 20) chided me for writing so much about current political trends and events, such as Barack Obama's election and his and Congress's plans to "socialize" the country by hook or by crook -- chiefly by crook.

"What possible gratification can you find in following, articulating, and decrying the decline and possible fall of the United States of America under Bush...and now Obama?"

What gratification, indeed? Some "gratification" occurs when I have identified something that imperils my life and that of the country. It occurs also when I am able to articulate my observations and concerns. Writing about such matters is an invaluable aid to grasping the fundamentals of any issue. I do not envy the many individuals I encounter who share my awareness and concerns (not only about Bush, Obama, Islam, etc.) but who are unable to articulate them. The only alternative to focusing on such matters is to install a governor in one's mind and to say nothing.

There is another value to dwelling on the ubiquitous sordidness, political folly, and venal conspiracies in our culture: catharsis. If I could not or did not actively identify and articulate my concerns, I should go mad. Therefore, I purge myself of frustration, helplessness and anger by pointing fingers and saying that the king wears no other clothes but a swastika armband or a hammer-and-sickle toga.

Or, I write fiction. In the Sparrowhawk novels, I set out to do justice to the pre-Revolutionary period, to better dramatize why the American Revolution happened. The series is also an allegory on our own times. I have been told by parents, teachers, and students that there is more history in the series than what is being taught in schools today, and this is aside from the literary value they see in it. Just the other day I was informed that Book One: Jack Frake of the series has been chosen for an eighth-grade English class of 75 students. I have lost track of where else the series is being used in schools.

Sparrowhawk is making its mark on countless minds, all seven million words of it. It is making a difference.

However, one may as well scold any commentator or columnist for discussing the state of things, whether he be Left, Right, or rational. For example, a regular reader of Rule of Reason will know that the Social Security system was a fraud from its inception. Walter Williams on February 4th addressed this subject in "The National Ponzi Scheme," brilliantly and succinctly explicating the mechanics of the system. He values the truth about it and wishes to communicate it to his readers. That truth is not forthcoming from the federal government, of course, nor will it be reported by our patronizing, Sesame Street news media. Who would take up the lamp of knowledge for any reason other than for wanting to know? Williams seeks to debunk all the propaganda about Social Security and let his readers know exactly how they are being cheated, defrauded, and chained.

It does not matter that Williams' revelations have not sent Obama, Nancy Pelosi, Harry Reid, Barney Frank and all their ilk scurrying for cover all the while stammering denial. Williams has added titanium-jacketed dumdums to the arsenal of those who choose to lock and load their arguments for freedom.

The respondent went on to say:

"Your clarion calls in defense of national ideals are inspired and melodic, but such noble efforts seem wasted given the apathetic, deaf and decadent context of the times; indeed, I have an impression of you valiantly, but foolishly, trying to pitch a tent in an avalanche."

Such a compliment inadvertently puts me in the company of Cicero, Galileo, Patrick Henry and many others in history who pitched their tents, if not on an avalanche, than in its path. Would we be better off today if they had remained silent about the growth of tyranny or the suppression of the truth? Or judiciously taciturn about how such a crime can be committed? Wallflowers do not ignite revolutions. Nor do they save them. Cicero lost his fight and his life by indulging in such "foolishness." Galileo was forced to recant. But Henry won his fight, twice, first by uniting the colonies for the first time in a common cause with his Stamp Act Resolves to oppose Crown authority, and then by campaigning for the inclusion of a Bill of Rights in the Constitution.

"Why dwell on and deplore the frayed American fabric? I say: disburden yourself now and bide your time to mend it."

If I had disburdened myself long ago, would I have anything to say at all, or any talent to say it? Practice makes perfect, and if I had not practiced I would be hard put to identify and articulate my likes and dislikes, contentments and concerns, pleasures and fears, the is and the ought. Would I have written fifteen novels and innumerable dozens of published essays, book reviews, and articles?

An element of bitterness and despair redounds throughout the respondent's advice, which I have often felt in my career, perhaps more poignantly than he has experienced, for I have been in the front lines for decades. I have been rebuffed, ignored, and derogated more times than he could imagine. The antidote to such bitterness and despair is to act, regardless of the expected outcome. The only action open to me in today's circumstances is to write. To allow apathy, deafness, and decadence to discourage and silence me would be to surrender existence and my life to them without a fight.

Why should I bide my time to mend the American fabric, when I need to teach myself how best to baste, sew, and stitch that fabric? At the eleventh hour, could I count on the Muses of Declamation and Exposition to suddenly inspire me to speak? Doubtful. The Muses do not bother to disturb those lost in the resignation of quietism.

The respondent asserts that only physical coercion by the government will cause Americans to revolt.

"Yes, I think American government MUST sink THAT low before widespread public alarm and indignation will blaze up, inspiring legions of individuals to reclaim, champion, and demand their fundamental American rights."

Who and what will alarm the public? Who and what will move it to indignation? Who and what will inform the public that "now is the time"? Who and what will inspire legions to rise up, not only against the oppressors, but against the philosophy that sanctioned their power? Are not Americans being coerced now? Why do they tolerate it? Taxation, regulation and prohibition are all indirect but legalized forms of coercion. Who and what are to remind Americans that this is theft by stealth, and that it has the same consequences as undisguised armed robbery, serfdom and penury? Who and what will tell them that it is a republic they have lost and must reclaim?

Writers, and their words. Or, as John Milton put it in Paradise Lost:

"Thus Belial with words clothed in reason's garb counseled ignoble ease, and peaceful sloth, not peace." (Book 2, line 226)

Now, what could Milton have meant by those words?

Lecture: Separation of School and State

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

This lecture, by C. Bradley Thompson - is among the most enlightening I have ever heard.

The Separation of School and State: The Case for Abolishing America's Government Schools

Why do so many Americans—liberal and conservative—support a compulsory system of government-run education? What role should the State play in educating America’s children? Are government schools compatible with a free society? Is it possible to have a free market in education?

While listening to the lecture, I made the following notes. My additions are in square brackets, [like this.]

Background

Case for public education was made by Patrick Henry: proposed a payment to Christian teachers in order to make future generations believe in freedom.

James Madison said that

1. Faith isn't a function of the state

2. People have a right to choose faith

3. Faith would be destroyed by government intervention

Most people agree with Madison's principle of separation of church and state – widely unrealised corollary is separation of school and state.

Public schools are government schools: political institutions: run by force.
Force is:

1. Compulsory attendance

2. Imposed curriculum and training/certification of staff

3. Coerced taxation to fund it

Compulsory education = conscription of children. Government schooling is an initiation of force.

State of schools

Schools run by force, regiment, indoctrination. CCTV, metal detectors, drug sniffer dogs etc. [unsuitable authoritarian environment for development]

Early schooling is a free babysitting service. Later schooling is an extension of the police: schools are similar to prisons.

Primary purpose is not education for the poor. Schools were made to Americanise, protestantise, democratise and socialise the culture.

Schools are by the state, for the state.

Schools are an application of eminent domain [UK: Compulsory purchasing] of minds.

Teach to submit to authority by implication, prison environment bores students, students turn to drugs, alcohol and sometimes violence.

Parents seen by system as harmful and unenlightened, unfit to make choices. Country wants to become parent.

Government schools are anti-parent, anti-family. Children seized, indoctrinated – then insulted by being forced to pay for it.

Defence of Schools

Americans [and British] love government schools. Because of 4 arguments:

1. Sentimental: (they've always been there, national institutions, etc.)

2. Ethical: (Every child has right to education)

3. Political (Public interest to foster a culture)

4. Hubristic (They do a great job!)

Lecture focuses on ethical and political arguments.

Ethical:

• Proponents say right to education is fundamental, so can only be provided by state. (Incorporated into UN charter)

• Assumes that needs (education) are equal to rights – but there is no objective standard to a need, therefore no objective standards to rights, therefore no objective standards to duties. Proponents really mean that they should be given the power to dictate needs and duties.

• But rights are individual rights, never claims to specific things or the work of others. Government schools are against rights: initiation of force, creating an artificial monopoly.

Political:

• Proponents want to foster patriotism, create good citizens. Want to forge a culture for the “public good”

• Assumes that “public” is the standard of moral value, and the public is superior to the individual. Principles based on public good, argument will be flawed.

• But, no such metaphysical unit as “the public”. Therefore no real reference for good, public good does not truly exist. [proponents want to control what constitutes public good, therefore what constitutes good, moral and legal]

• Implicit purpose is to mould children with education they approve. Public institutions can pander to interest groups etc.

• Purpose is therefore to control learning.
  
  

For example: Liberals scared of Conservatives teaching religion. Conservatives scared of liberals teaching socialism and sexual agenda. (Both with good cause, because control is implicit in the system)

It is immoral to force parents to send children to ideological indoctrination centers.

Furthermore, it isn't actually in the public interest, most problems in culture (drugs, sexual nihilism etc.) come from public schools. Culture is a reflection of schools: not the other way around!

(Neo)conservatives talk about reforms: voucher systems and 'fixes' for public education [in UK: Only libertarians are calling for this]. They say they are for separation of church/state in theory, but at the present time it is impossible – so they make the 'least worst' of the 'necessary evil'. They say they will do a better job of running schools – probably true – but by fixing government education they are perpetuating it, and will be put in a position where they have to defend a system with immoral principles. Conservative [or libertarian] approach cannot work, as it accepts bad principles.

Also, vouchers would only offer a mirage of choice – as government would eventually end up dictating content of education

[eg: would vouchers work in clown school? Terrorist indoctrination centers? Scams where fake schools 'teach' children to turn up for 10 seconds to collect a cash alternative to the voucher?]
Vouchers perpetuate state monopoly on education.

It is futile to attempt to save the immoral system.

Solution

Rethink of principles (good principles lead to good practice). No compromise [like conservatives/libertarians] as compromise is self defeating.
Reject theory/practice dichotomy.

Question remains “How can we achieve the separation of school and state?”

Proponents must share a principle – remembering that reform is a contradiction of the principle.

Reform means conservatives would have to reform, fix and then change messages to abolish – reform is sanction of the status quo.

Proponents must be openly uncompromising when criticising government schools.

Proponents must focus on rights/responsibilities of parents. Individual is the starting unit (as consistent with individual rights). There can be no claim that education is in the public interest, children and parents posses rights infallible by the 'public interest'. Government cannot be allowed to make itself the bearer/dispenser of rights, and therefore of children.

Free market in education must be shown to be morally superior.

Parents have a moral obligation to educate their children. Individuals are made better by doing things on their own, independence is lost when education is done by the government paid for by a third party.

Parents are capable: millions home schooled/privately educated already, despite cost of fees and taxes for public schools.

Strategy

Free market must be only end goal – no compromise.
Short-term practical solutions possible if they don't conflict with the principle. EG: education subsidies equivalent to local property tax in order to facilitate explosion in free market education.

Abolition is possible: slavery was abolished despite being deeply rooted in culture, because abolitionist held firm principles. Emancipation of students is similar battle to emancipation of slaves.

I feel this is one of the most important lectures I've ever heard, and I wholly recommend you listen closely.

What we are up against

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Healthy Diet on Food Stamps? You Bet!

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

Ari Armstrong will prove that a person can eat a perfectly healthy diet of low-carb whole foods on a limited budget -- contrary to demands to extract more heard-earned dollars from taxpayers for government welfare programs. Here's his media release:

MEDIA RELEASE: ACTIVIST PLANS LOW-CARB DIET ON FOOD STAMP BUDGET
New Diet Protests Food Stamp Increases

A healthy diet is achievable on a food stamp budget, and Ari Armstrong plans to prove it, again. Armstrong, who previously spent a month eating for $2.57 per day -- see http://tinyurl.com/c35e8q -- will spend February 4-10 eating a highly nutritious, low-carb diet for less than food stamps provide.

Armstrong said, "Not only has Congress increased the food stamp budget since my $2.57 per day diet, but the so-called 'stimulus' package calls for additional food-stamp funds. Enough is enough. I oppose any increases to the food stamp budget, and call for the program to be replaced with voluntarily funded food banks, which offer more nutritious food at lower cost."

Armstrong's new diet, unlike his previous one, will be low-carb, roughly following the advice of such writers as Gary Taubes and similar to "paleo" or "cave-man" diets. The diet will consist of meat, dairy, eggs, vegetables, fruit, nuts, olive oil, chocolate, and spices. It will not contain any grains, vegetable oils, hydrogenated fat, potatoes, or processed sugar.

Armstrong will limit his daily budget to $4.74 per day, less than food stamps provide to a single individual. The Department of Agriculture -- see http://www.fns.usda.gov/FSP/faqs.htm -- offers a family of four $588 per month, or $4.74 per person per day. (The food stamp allotment is reduced for those deemed able to fund some of their own food.) Armstrong will not accept any free food, and he will shop only at nearby regular grocery stores. He will track all his purchases and receipts at FreeColorado.com.

"With the previous diet, my goal was to minimize daily expenses. With the new diet my goal is to show that a very healthy diet is possible on a limited budget. The cost of my diet will actually be inflated, not only because I'll be eating no free food, but because a week's diet is not able to take advantage of bulk purchases of sales items," Armstrong pointed out. "I've been known to purchase 40 pounds of bananas, a dozen squash, or twenty pounds of meat when they're on sale; obviously that's not possible for a single week."

Part of the motivation to track the new diet was a recent CNN report -- see http://tinyurl.com/d2lb5g -- in which a woman on food stamps complains, "We get like the mac and cheese, which is dehydrated cheese -- basically food that's no good for you health wise... Everything is high in sodium and trans fats... and that's all we basically can afford. There's not enough assistance to eat healthy and maintain a healthy weight."

Armstrong replied, "That's nonsense, and I'm prepared to prove it. I'm frankly irritated that some food stamp recipients waste our tax dollars on overpriced junk food, then complain about their grocery budget. I'll make the following offer. For anybody on food stamps who complains that they can't afford good food, I'll be more than happy to evaluate your entire monthly budget, including your grocery budget, and recommend judicious cuts, limited to the first five people who reply."

Hooray for Ari!

Whose womb is it, anyway?

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Over at Spiked Online, editor Brendan O'Neill comments on the fact that the recent birth of only the second set of octuplets to be born alive in the United States seems to have devolved into a "finger-wagging morality tale," with busybodies of all descriptions getting in their two cents' worth:

When Nadya Suleman gave birth to six boys and two girls in five minutes on 26 January, it was greeted as a "midwinter miracle", a story that "cheered recession-hit America", a "welcome relief from bailouts and bankruptcies". Now, with the eight babes barely one week old, it has become a shrill parable about overpopulation, resource depletion, the dangers of fertility treatment and the problem of "poor mothers". The story has shapeshifted from a "ray of sunshine for a nation in the grip of economic meltdown" to a "tale of seedy self-indulgence". [minor format edits]

Indeed, what initially grabbed my attention about the story was its title, "An act of extreme, wilful fecundity?" which was based on a rather snippy comment by one of the finger-waggers, and the fact that the front-line finger-waggers were, predictably, environmentalists, who saw, not eight babies, but eight un-natural defilers of (the rest of) nature.

But as I read the story, I realized, starting even with the following statement of support by O'Neill, that the problem is far more widespread than, perhaps, even he realizes.

To be sure, not many women would make the decisions that Ms Suleman made. Going ahead with a high multiple pregnancy can be dangerous, both for mother and babies, who tend to be born very small and very premature and thus are susceptible to heart, respiratory and brain-development problems. And the news that Ms Suleman, who is reportedly unemployed and not very well off, already had six children -- meaning that she now has a brood of 14! -- will have made the everyday, always-busy parents of two, three or four kids groan with exhaustive empathy. Yet if we are serious about reproductive choice, then someone like Ms Suleman must be free to opt for a Brady Bunch-style family, just as other women opt to have no children at all.[minor format edits, bold added]

I have no problem with O'Neill's broader point (or, at least, what it sounds like it might be) -- that how many children someone has is that person's business -- except for one thing. There is one thing that can and ought to constrain how many children someone has: the facts of reality, as expressed by the following old-fashioned question: Who will support these children?

Before I go on, I will note that due to time constraints and problems with my Internet connection at home (I am writing this in a word processor so I can mail it in from work.), I do not know whether the mother is living off the public dole, or is living off of private charity. But that question is immaterial to the argument I am about to make.

Suppose the worst fears from some quarters are right -- that Suleman will be on the dole, along with her fourteen children. In other words, money is being forcibly taken from some (who might, as a result, decide they can't afford more children of their own), in violation of their property rights, and being handed over to someone too irresponsible to consider whether she can adequately feed or care for eight more children.

Aside from the fact that there would be people being robbed to pay for this, there is the additional matter of whether someone this irresponsible is capable of even adequately caring for her children. In other words, the rights of her children also bear consideration.

Only if Suleman is capable of raising these children without relying on loot, and without harming them through negligence or abuse should she be free to have so many children. All other considerations are moot because beyond any case in which her actions violate the rights of others, what she does is, properly, her own business.

O'Neill is correct to note that there is a moral problem here, and we will return to that in a moment, but there is clearly also a political one. Governments throughout the West are failing to act in accordance to their only proper purpose: the protection of individual rights. Were the welfare state -- the apparatus by which the government loots the most responsible citizens in order to shower the unearned on others -- nonexistent, there would be no outcry over whether Suleman is wasting "society's economic resources" (or, really, spending money stolen from private citizens), because she would not have this money at her disposal. Instead, she would have to find another way -- i.e., adequate employment, family help, or private charity -- to feed her children.

And if she failed or refused? Her inadequacy as a parent would not be masked by the band-aid of government payments, and her children would, mercifully, be remanded by the government, protecting their rights, to more responsible caregivers until they were adopted or became adults.

Note that as we considered how the government has removed an important check on irresponsible reporduction, we also uncovered the one thing none of O'Neill's finger-wagging moralizers cared to become indignant about (except incidentally): How Suleman's actions might harm individual human beings by violating their rights. This is because every last "moralizer" subscribes to exactly the same type of morality: altruism, the notion that man does not exist for his own sake, but for the sake of others, be those "others" human beings, a social collective, or a "nature" that somehow does not include man himself as natural.

All of these rabid altruists are unanimous in condemning Suleman as "selfish" for taking whatever her children might need from some fictitious communal pot of resources". O'Neill rightly sees meanness of their attitudes here, although it is not clear to me whether he ultimately makes the same error himself, or understandably, due to the welfare state being so long-established, simply does not see the state is enabling the sacrifice of the responsible to the whims of others.

And here's the ultimate irony in this orgy of altruistic preening: If Suleman is on the dole, she is being anything but selfish here. She is sacrificing those who pay her way (and, perhaps, her own children) to her whims. And more, the welfare, which is justified on altruistic grounds, is what is making all this possible. Ms. Suleman should be free to bear a hundred children if she wants -- so long as she does not accept public loot to pay for their needs or harm them through negligence or abuse.

The welfare state and altruism are the problems, not whether someone makes the decision to bear eight children at once.

-- CAV

State-Imposed Angst

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

I recently highlighted the following paragraph from an op-ed titled "Environmental Angst", by Keith Lockitch:

The only way to leave no "footprint" would be to die -- a conclusion that is not lost on many green ideologues. Consider the premise of the nonfiction bestseller titled "The World Without Us," which fantasizes about how the earth would "recover" if all humanity suddenly became extinct. Or, consider the chilling, anti-human conclusion of an op-ed discussing cloth versus disposable diapers: "From the earth's point of view, it's not all that important which kind of diapers you use. The important decision was having the baby." The next time you trustingly adopt a "green solution" like fluorescent lights, cloth diapers or wind farms, only to be puzzled when met with still further condemnation and calls for even more sacrifices, remember what counts as a final solution for these ideologues. [bold added]

As frequently happens when a culture adopts and implements immoral and impractical ideas, truth turns out be be stranger than fiction. An environmental agency in California, the California Air Resources Board, is threatening to kill off a nascent aftermarket industry that adds additional battery capacity with plug-in capability to such cars as Toyota Priuses (via Instapundit and gas 2.0):

The other potential problem with plug-in hybrids involves unburned gasoline vapors [The other was that hybrids "cold start" more than normal cars, and catalytic converters don't work well when cold. --ed] .... When gasoline-powered vehicles are turned off, some of the fuel in the gas tank evaporates. These vapors are stored in an adjacent canister built to hold up to three days worth of vapors. If you leave your car's engine turned off for more than three days, the canister overflows and the vapors leak into the air and cause pollution. But if you turn your car on before the three days are up, the canister vents the vapors through the engine, allowing the catalytic converter to clean the emissions before they come out of the tailpipe.

Most people typically don't keep their cars turned off for more than three days. But with a plug-in hybrid, it's possible for the gasoline engine to not turn on for days or even weeks at a time. That's especially true if drivers never hop on the freeway and don't otherwise exceed 34 mph. As a result, it's possible for plug-in hybrids to spew gasoline vapors out of the vapor canister on an almost-constant basis, turning a Prius into a gross polluter.

Consequently, air resources board engineers are recommending that plug-in hybrids undergo extensive cold-start emissions and gasoline-evaporation testing. According to agency documents, the tests likely will cost about $20,000 to $25,000 per vehicle. Swanton said in an interview that the board may only require that one vehicle be tested, but the agency's own documents state that the board may force companies to submit up to five test vehicles, meaning the total test costs could amount to $100,000 to $125,000.

Such tests would be prohibitively costly for small startups like 3Prong Power. They also appear to be somewhat capricious. Swanton said the agency's concerns stem in part from testing by at least one major auto manufacturer, which found significant pollution problems in cold-start emissions testing of its own plug-in hybrid prototypes. But the test results "are confidential," because they're considered trade secrets, he said. In other words, a state agency is about to adopt new regulations that could cause some companies to go bankrupt based on testing results that allegedly reveal a problem that it won't reveal publicly. ... [bold added]

And this is just one small excerpt from a much longer article that, needless to say, completely misses the fact that the market for unmodified hybrid cars would ether not exist at all or would be far smaller were it not for government interference in the economy! Remember that when, as you read the article, one environmentalist after another suddenly becomes a champion of free markets.

Environmental regulations are immoral and, as this story shows amply, impractical when human life is the standard of value -- even if smuggled in as the desire to drive with less exhaust. They violate property rights and, in doing so, set the stage for unlimited government meddling in the daily affairs of everyone, including all the little dictators who clamored for them in the first place. When you cede the premise that it is okay for the government to dictate terms to the citizens whose freedom it should be protecting, you open a Pandora's box and end up, in effect, uttering supplications to power-drunk bureaucrats, like the following:

[T]he board's attempt to strictly regulate plug-in hybrids flies in the face of the sweeping new regulations it adopted just last month to combat greenhouse gas emissions. Among other things, the new rules will reduce the amount of carbon in motor fuels and require future cars to get better gas mileage. The regulations stemmed from a 2006 landmark law that put California at the forefront in the fight against global warming.

Clearly, the board's proposed regulations on plug-in hybrids are not in keeping with last month's vote, nor will they help California maintain its leadership role in combating greenhouse gases. It also makes no sense to snuff out the efforts of green entrepreneurs before they've even had a chance to grow.

Brothers, you asked for it! The moment you decided that your goal of clean air warranted forcing other people to change their behavior regardless of their best judgement of their own self-interest, you set the stage for that government gun to eventually point in your own direction.

-- CAV

Fiction Writers for Romanticism

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

Edward Kiser recently created a mailing list for Objectivist fiction-writers: Fiction Writers for Romanticism. The brief group description reads:

This is a group for Objectivists and students of Objectivism who write, or want to write, the kind of fiction and literature that appeals to the rational and heroic elements of humanity. We primarily discuss the techniques, challenges, and opportunities unique to this goal.

Here's the more detailed description

Welcome to Fiction Writers for Romanticism, where Objectivists and students of Objectivism, who also seek to write fiction (and are probably already working on something), can chat.

Beginning writers and amateurs and professionals are all welcome.

I created this group because I think that one of the ways to create a more rational culture is to encourage the creation of works of art that reward the rational elements in people -- works that ultimately create a feeling that rationality ultimately works and will lead to joy. Just like in real life.

I do not endorse propaganda or didacticism. The first job of a fiction writer is to tell a good story.

Every post, whether question or answer, should have something to do with the art of writing fiction, as seen from an Objectivist perspective. Techniques, challenges, pitfalls, and opportunities are all on topic.

I mean "fiction" to include short stories, novels, plays, screenplays, and teleplays -- anything with a story. Some matters of interest would apply to any of these, but sometimes a particular form presents a special problem which is also interesting.

I leave out poetry and songwriting because the problems they present are different in kind from those presented by the works that tell stories.

I strongly recommend reading The Art of Fiction, The Art of Nonfiction, The Romantic Manifesto, and the Esthetics chapter in OPAR. Any discussion of those works, and what they say about the issues, is on topic.

It is also permissible to discuss other books on writing (e.g., written by non-Objectivists), examples of good stories, and the like, provided one seeks an Objectivist perspective.

I'm not on the list because I don't write fiction. However, it sounds like a potentially useful group. So if you're an Objectivist writer of fiction, you can join the group here.

Distribute The Undercurrent

By noreply@blogger.com (Dan Edge) from The Edge of Reason,cross-posted by MetaBlog

The Undercurrent (TU) is an independent, student-run Objectivist newspaper distributed twice a year at college campuses across America. TU is currently looking for distributors and donors for its Spring 2009 edition.

If you would like to distribute, please visit http://the-undercurrent.com/order and buy your copies of TU today. If money is an issue, please email us at distributors@the-undercurrent.com. There is limited funding from donors for students who want to buy and distribute TU but cannot afford to do so. If you're part of an Objectivist campus club, you may want to see if your college will fund distribution of TU as a club activity.

If you don't have time to distribute, but would like to help us spread rational ideas in academia, you may want to consider donating to TU. A relatively small amount of money can make a big difference. For example, donating $26.50 gets 250 copies of TU distributed at a college campus in United States! And because TU is a 501(c)(3) non-profit corporation, donations are tax deductible. Please visit http://the-undercurrent.com/donate/ and contribute directly using PayPal.

If you have any questions about distributing or donating, please email us at contact@the-undercurrent.com.

Spreading rational ideas on college campuses is critical to making this world a better place.

Thank you for your support.

The Undercurrent

An ode to Insanity

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

The Nature of Compromise

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Philosophy - Not Parties

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Two on Hefner

By Gus Van Horn from Gus Van Horn,cross-posted by MetaBlog

Some stupid puns are impossible to resist!

[Editorial Note: While composing this post, I realized that using the obvious, four-syllable word to describe what I am discussing might make my blog unable to get past certain common filters. So I shall use the word "umptysquat" instead. Besides, I find it amusing.]

Via Arts and Letters Daily, whose blurb momentarily threw me for a loop by mentioning "the anatomical variety among bunnies," I found a couple of book reviews at the web site of n+1, a magazine that might be worth looking into. One of them discusses Playboy: The Complete Centerfolds, and the other, Mr. Playboy: Hugh Hefner and the American Dream.

I have always found whatever umptysquat I have encountered odd, off-putting, boring (more on that later), or just plain confusing, to the point that my curiosity about it has been mainly of an intellectual, or even anthropological, nature.

"Why waste time and money on magazines when there are real women out there?" might summarize my overall attitude, but there was always an additional rebellion against many of the subtexts I'd encounter. "Sex isn't wrong or shameful, so this isn't doing anything for me," would sum up much of this. And then there are the fetishes. Were I to take my own limited forays into umptysquat as an indication, I would conclude that I am the only man on earth who doesn't constantly fantasize about lesbian sex. Maybe I'm weird. Oh well.

Many of the attitudes about sexuality one encounters are, predictably, reflective of the views dominant in our culture, a major one being the Madonna-whore complex, which is the mind-body dichotomy as applied to sexuality. Human psychology and sexuality both being as complex as they are, it would certainly follow that much of the emotional fallout of our altruistic and collectivist culture would also play out as common, but warped sexual tastes, and views about sexuality.

So it was mainly boredom -- from a desire for more -- that really drove me away, and on many levels at that. Let's see.... What do I find more interesting? A random slut -- or an attractive woman I have taken the time to know? Sex with an endless parade of women I barely know -- or a shared life of physical and emotional intimacy with one woman I care deeply about? Notice what's missing from the umptysquat here: the fact that women have minds. (The efforts by Playboy to overcome this limitation as described in the first review were necessarily superficial.)

For a young man exploring his sexuality for the first time, this may be fine, but when I was growing up, Playboy wasn't even good for this because all the models looked the same.

In those days [starting in the mid 1950s --ed] Hefner liked his centerfolds "round, soft, and with a maximum emphasis on the beauty of being female." The Playmates of the first three decades follow this formula, flashing biteable bottoms and breasts. Things go downhill in the 1980s as breast implants became popular: the new boobs are globe-like and tactile only in the way that bowling balls are tactile. Some of them cast a glare, like cartoon balloons. Food metaphors no longer apply.

Something else (related) happens around this time: Playboy ceases to be about the erotic everyday encounter. Flesh and blood women turn to images; the "girl next door" becomes distinctly mediated. The bunnies were always mediated, of course, but something about the earlier photographs made you forget the medium and feel as though you were staring straight into the eyes of a luscious partner. Enthusiastic photoshopping has aided the transformation. Gone are the freckles and downy arm hairs of the predecessors. Breasts are surgically standardized; gym routines and spray tans produce identically toned and tinted bodies. Girls of all ethnicities blend together into one latte-colored woman, and the result looks computer-generated. When you try to imagine how the models might feel and smell, things like rubber come to mind. [bold added]

Exactly. If, as I do, you find beauty in actual women, including their inevitable departures from the Platonic "ideal" the entertainment industry wishes to foist on everyone, and you were trapped in the late eighties, you were out of luck even for window-shopping.

Having said that, sexuality is a very complicated phenomenon, involving one's deepest convictions (both in terms of how one views sexuality and in terms of what one responds to on an emotional and sexual level) and one's psychology (which can affect what optional things, such as what physical "type" one finds attractive, manifest as fetishes, or even affect sexual orientation). There is an enormous variety in what a rational, healthy individual can find sexually attractive. That strikes me as something to celebrate, rather than hide from behind the photoshopped pages of a tawdry magazine.

-- CAV

Talk Objectivism Needs Help

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

Jason Mosely of the podcast talkObjectivism e-mailed me the following request:

The blog for talkObjectivism.com is in need of someone to update it. I work two full-time jobs (day job and freelance) so I don't have time to do it myself.

All you would have to do is write the show notes for the shows. I can give you a login to the blog or you can just post the show notes in the Facebook group. I can copy/paste them into WordPress.

We have a lot of new listeners (300+ per week) and I think the show notes help people catch up when they first find the show.

If you're interested, contact Jason at jmosley(-AT-)talkobjectivism.com

No Stimulus

By Diana Hsieh from NoodleFood,cross-posted by MetaBlog

I just e-mailed my Colorado Senator Mark Udall the following message about the proposed "stimulus package":

Dear Senator Udall,

Please vote NO on the stimulus package. The economy doesn't need to be stimulated by government handouts and pork. Instead, congress and the president should:

• Cut the corporate tax rate. The US has one of the highest in the world; it damages our economy by enticing businesses to move overseas.
  
  
• Cut the personal income tax rate for everyone who actually pays taxes. Stop vilifying and punishing financial success. Stop discouraging people from using their own creativity, skills, and effort to succeed in business.
  
  
• Cut capital gains tax rate. It's unjust double taxation that distorts the market.
  
  
• Eliminate all tariffs and protectionism. Any barriers to trade hurt America.
  
  
• Massively cut government spending on welfare and health programs, eliminate corporate welfare, and eliminate the regulations that make doing business a mess of inane red tape.

Freedom -- not more government spending -- is the recipe for a speedy economic recovery.

Our other senator, Michael Bennett, does not list an e-mail address, so I called him instead, leaving a message saying basically what I said in the letter above. I'm also trying to call Senator Udall, but I'm on perpetual hold.

You can find contact information for your senator on Senate.gov. Please feel free to use my letter (or a modified version thereof) if you so choose. The most important thing is to write or call -- and just express your opposition to the stimulus package.

Update: I finally got through to a real person at Udall's office. I told her that I strongly opposed the stimulus plan -- and that I wanted to see tax cuts, not more government spending.

New Blog Online

By Kendall J from The Crucible,cross-posted by MetaBlog

I would like to introduce you to a new Objectivist blog devoted to discussion of economics, business and free-markets. It is called "simply Capitalism" and it is located at:

http://www.simplycapitalism.com/

Subscribe to our RSS feed at: http://feeds.feedburner.com/SimplyCapitalism

It is a multi-author blog, staffed by Objectivists who work in business and industry, and who have a special interest in economic and business issues. Our intent is to write on current events, attempting to dissect and disseminate clear ideas and principles.

Our audience is broader than just Objectivists. My intent in forming the blog was to try to insert Objectivist thoughts into a very vibrant blog environment that exists today covering economics. We are not an activist blog per se, but I expect that the topical concentration, the development of writers with that interest, and writing for a broader audience will eventually spawn activist efforts.

We've got a great panel of contributors, who each are seasoned bloggers in their own right, and who all blog regularly on economic topics. These include myself, and:

Galileo Blogs of "Galileo Blogs"
Doug Reich of "The Rational Capitalist"
Beth Haynes of "Wealth is Not the Problem"
Realist Theorist of "Software Nerd"

I'm excited about the concept and the stable of writers who've agreed to contribute their efforts! Check it out!

With that, this blog is getting re-tasked, and renamed. The Crucible and Column will become simply The Crucible, and its focus will become broader, although hopefully still known for thoughtful analysis. Most of my business and economic content will be featured over at simply Capitalism.

Appealing to thieves

By Roberto 'Tito' Sarrionandia from Tito's Blog,cross-posted by MetaBlog

Are patents stifling innovation in mobile devices?

By David from Truth, Justice, and the American Way,cross-posted by MetaBlog

In 2007, I wrote why software patents are not a good idea.  It’s easy to find examples of patent abuse but its not often to find a company that uses patents that stifle a whole industry.  Such may be the case with the Apple iPhone.

I purchased an iPhone shortly after it came out, because I recognized that it was a revolutionary device.  It was not a case of superior specifications, as many devices have better hardware.  It didn’t even run on the latest 3G network until the second generation.  Rather, it was a superior design, which featured an intuitive user interface that did not try to compete on the number of features but on usability.  Apple fully deserves the billions of dollars it has made and will go on to make from its device.

Yet something curious has happened. When Apple introduced the iPhone, those who recognized its revolutionary potential expected the innovations and design concepts it introduced to percolate to the rest of the industry.  To an extent, that is happening, but key iPhone technologies -a capacitive touchscreen with multi-touch, a 3-axis accelerometer, proximity sensors, graphics acceleration integrated integrated into the UI, and a number of other key innovations have not been found in competing products.  Part of the reason for this has to do with the particular culture and expertise found at Apple, but its indisputable than the 200+ patents covering the iPhone have gone a long way to discouraging competitors, who offer alternatives lacking key features - until now.

Palm, the company who created the first popular PDA is coming out with the Palm Pre, the first device to brazenly infringe many of the key iPhone patents.  Apple is already making threatening gestures, so an apocalyptic legal battle is almost certain.  Palm is the first company to go against Apple head on because  its status as the one-time leader in the PDA and mobile phone market makes it the only company capable of challenging Apple’s leadership.  While the Palm Pre clearly borrows ideas from the iPhone, the iPhone itself uses many of the innovations first patented by Palm as early as 1996.  Today Palm is a marginalized has-been for whom the Pre is a desperate gamble to save to company, but it still has the patent portfolio of a market leader.

The question of who is the bigger infringer in this battle is besides the point.  The issue is that the patent system is limiting innovation to large companies who have established sufficiently large patent portfolios to pose a credible threat of retaliatory patent lawsuits.  The best that new competitors can hope for in this environment is to be aquired by the giants or to establish their own patent portfolios - rather than create products than people want to use.