Archive for the 'Politics' Category

BYPASS GOVERNMENT

June 27, 2010

BYPASS GOVERNMENT

As I said in a previous blog, it’s not impossible to reform the government, but very unlikely. The parasites, the politicians and bureaucrats, who benefit from the current statist system, have a great stake in its continuance and expansion. They will strongly resist any reform.

There are ways, however, that we can bypass some of the burdens of government by employing competing free market substitutes. We might find enough support for freedom in Congress to prevent interference with the competing services. I’m thinking in terms of private schools, private arbitration courts, and private police,

Our justice system is very costly. Its only aim is to “bring the criminal to justice” with no attempt to bring justice to the victim. Arbitration courts are much cheaper. A victim would prefer arbitration, because he can claim compensation for his loss. A criminal might prefer arbitration because he can avoid imprisonment, and instead earn the money, to pay compensation to the victim, in relative freedom.

We already have private schools. We would have many more of them, and many more students attending private schools, if their parents were relieved of the tax burden of supporting public schools as well as paying tuition to private schools. Home schooling or private schooling would enable parents to choose the values to be taught to their children.

The chief obstacle to competition with government agencies and services is the inclination of government to claim or grant monopoly privilege. For many years private shipping companies have competed successfully with the US post office, with the single exception of letters. The post office survives today only by virtue of the remaining monopoly for delivering letters.

Perhaps you can think of other government functions that could be supplanted by private enterprise.

ECONOMICS IN ONE LESSON

June 25, 2010

ECONOMICS IN ONE LESSON

The best book I know of to learn the essentials of free market (Austrian) economics is: “Economics in one lesson” by Henry Hazlitt. It is written in plain English without jargon, graphs, charts, statistics or math. Even I can understand it. I believe it is essential that we all understand economics, for it is in this battlefield that governments rob us of our income, wealth, and freedom. The book is available at http://mises.org/store/ for $12

The book teaches simply that to understand any economic choice, it is necessary to consider all effects on all people, both short-term and long-term. This is not much of a problem for you and me in our own individual economies; we generally do it automatically. The problem arises in macroeconomics, when government intervenes with some law or ruling which affects many people. Most such interventions are driven by pressure from lobbyists for special interest groups who hope to benefit from a change.

Here are some government policy fallacies exposed and explained in the book:
Public works to relieve unemployment.
Taxes that discourage production.
Cheap Credit that diverts production.
Spread-the-work schemes.
Protective tariffs.
Mercantilism.
Saving the X industry.
Commodity price stabilization.
Price controls.
Rent Control.
Minimum wage law.
Inflation.
The assault on saving.

INTERVENTION

June 24, 2010

INTERVENTION

Why does our Government insist on tinkering with the free market economy? Don’t they trust us to handle our own affairs? Or is it just lust for power and wealth? Politicians have certainly increased their power through the years, ignoring all the limitations on Government power written into the U.S. Constitution. Politicians are also under pressure from lobbyists, pressure groups, and campaign contributors to intervene in the economy in their favor, or to support their pet projects.

But Government has really botched all interventions intended to improve our economic affairs. First, what they do to the economy violates our freedoms. Moreover, they never succeed in achieving their stated purpose. And, worse yet, they cause disastrous, unforeseen problems. But worst of all, with each failure, and each resulting problem, instead of backing off, Government blames the free market, and adds more interventions in a vain attempt to fix the problems that the earlier interventions have caused.

The free market gives each person the opportunity to achieve the maximum satisfaction with the means at his disposal. In the free market, every exchange involves two people, and each of them profits by the exchange. Each one has acquired something he wants more than what he gave up.

Any interference with the free market can only inflict a loss on one or both people, either by preventing the exchange, or by forcing it to be made on terms that harm one or both people involved in the trade. Government intervention can only reduce the satisfaction of the people affected.

When intervention blocks people from their own priorities, they will seek other ways to achieve their goals. People are ingenious at solving problems, and many will find unforeseen ways to get around these interventions, or to use the interventions in unforeseen ways to their own advantage. Many others will soon follow suit. Unfortunately, those who try to control the destiny of others always fail to foresee this. They always underestimate the ingenuity of man.

WHY FREEDOM?

June 23, 2010

WHY FREEDOM?

Here’s a philosophical question I’d like you to consider; we each tend to make judgments on the basis of several more or less fundamental philosophies. Which is most fundamental with you?

My list includes the following:
Religious law, the rules of your religion.
Cultural law: the rules and traditions of your cultural group.
Egalitarianism: Does everybody get “fair” or “equal” treatment?
Libertarianism: Maximum freedom for each person.
Utilitarianism: The greatest good for the greatest number.
The golden rule: Do unto others as you would have them do unto you. Live and let live.
If you have a philosophy that differs from all of these, please contribute a comment.

These fundamental philosophies tend to overlap more than they conflict. Of course, each person has his own interpretation of each of them. And it seems that many religions initially were dogmatic and claimed precedence over any philosophy.

I’m libertarian, but I try to justify liberty as the best solution to the requirements of all other philosophies. Is this necessary? Can liberty stand alone, fully justified without reference to any other measure of right or wrong? I’ll give it a try

Liberty, like the golden rule, is not imposed from above, but is a simple rule each individual imposes on himself; “I will not violate another person’s liberty”. Perhaps this is the foundation of common law. It is the self government which makes anarchy workable.

Within liberty, each person is free to belong to any group, religion, or culture, and free to give up some liberty to live by the rules of the group. However, he is still bound by the rule of liberty; he shall not violate the liberty of any other person.

Trade is essential to our survival if we are to sustain our present population. Within liberty, all trade is free, within groups, and between members of different groups. Liberty is the only framework which assures that all groups, cultures, and religions can live together in peace and prosperity.

REFORM THE GOVERNMENT

June 15, 2010

REFORM THE GOVERNMENT

If it is possible for any people, in any country, to regain their freedom, it should be possible in the USA. This is because our country was founded for freedom, and everyone, and every politician, at least gives lip service to freedom. It should be possible to shame our congressmen, senators, and president into reversing the trend to Federal control of every facet of our lives.

In 2008 Ron Paul ran for the Republican nomination for president. His program was smaller government with a return of our freedoms and a sound dollar. His record in Congress showed that his program was for real. In debate with the other candidates he won every round. Yet, the media ignored him and the public didn’t understand his “End the Fed” message, so he lost the nomination

Since then, back in Congress, Ron Paul has entered several bills to halt the theft of our freedom. Each bill was blocked by tactics to see that none of these bills could ever come to a vote. Freedom is not on the agenda for either the Republicans or the Democrats, but neither are they willing to be seen to vote against freedom. The News media are almost completely dedicated to a welfare-statist, anti-freedom program. And the voters aren’t even interested.

This means that regaining our freedom is a long-haul task: a complete re-education of 2 or 3 generations of voters, so they can force the politicians to re-build the system and return to a Constitutional government.

This requires many things:

The voters must understand and care about freedom. Many don’t realize how much freedom we have lost, and many don’t care. If we can’t convince the voters how much freedom they have lost, where the trend is taking us, and how important it is, freedom is lost. I’m afraid apathy is the greatest threat to achieving the goal of freedom.

The voters must be informed enough to understand why and how we are losing our freedom, so they can engage intelligently in the process of reversing the trend.

Voters must think critically enough to see through politicians’ waffling and promises and lies, and discount the bias of the media and pundits.
Voters must be focused enough on the issue of liberty to abandon party affiliation and bogus issues to vote for candidates who will focus on freedom.

Members of the Supreme Court who ignore the Constitution in their decisions must be impeached. This court is the last bastion of freedom in the government. Test cases should be devised to reverse old decisions which violated the Constitution and stole our freedom.

We must impeach the president every time he exceeds his Constitutional powers. In the past century, they have all done it. Now it is routine.

Once we have enough freedom minded men in office, Congress should repeal thousands of laws which have chipped away at our freedom through the last 200+ years. This will mean shutting down scores of Federal Bureaus.

Easy? No. Impossible? No. But not this year, nor even this decade. Possibly we could achieve it in a century, with some really dedicated people spreading the word, and inspiring the populace.

Such is the route to reforming our government. Truthfully, I doubt we’ll ever achieve it, because of voter apathy, and the very nature of government. Power corrupts. Deceiving apathetic voters is easy.

RENT CONTROL

June 14, 2010

RENT CONTROL

Rent control is just one example of price controls. My experience with rent control in Chicago, after World War 2, amply demonstrated the results: the resulting shortage and the makeshift adaptations of the market which provided housing of sorts. That’s economics; people act to provide their wants within their means.

During WW2 housing shortages developed in Chicago. Rent controls, installed during the war, remained in force for years after the war. My wife and I, newlyweds, spent 5 months trying to find a rental within our budget. Rents were frozen on existing housing. New apartments were being built out in the suburbs, but charging much higher rents. With inflation, and frozen rent, existing apartments became relatively cheap, if you could find a vacant one. The only one we found was teeming with cockroaches. We passed that by.

Furnished apartments were not rent controlled. What qualified as a furnished apartment was pretty bad. The furniture was mostly cast-off junk. The “apartment” was usually 1 room with a hot plate for a stove, share the bathroom. One “furnished apartment” had its own bathroom because it was a bathroom, with bunk beds and a tiny table built in.

One “apartment” was a corner of a basement partitioned off by hanging bed sheets. When we arrived, there were 50 couples waiting to be interviewed by the owner. To qualify for that, you had to own a car and provide the owner 24/7 taxi service. We didn’t have a car.

What we finally took was one room with a couch which folded down to a bed. We had our own sink, a tiny gas stove, a small table and chairs, and a small closet, share the bathroom. When the bed was open, there was no room to walk around it.

We lived in 3 more furnished rooms in the next few years until we finally got lucky. A waitress in a café took pity on us, phoned a friend who had a friend who knew of an available place: a vacant, unfurnished apartment with a controlled rent.. We snapped it up.

The apartment, a third floor walk-up, was scorching hot in summer and freezing cold in winter. The steam heat would rattle in the pipes, and then shut down just as it reached our radiators. I went down to the owner’s apartment to explain this to him. Then I found out: he and his wife were freezing too; the rent they collected was barely enough to pay for the oil for heating the building. It left absolutely nothing for maintenance. Rent controls and inflation had destroyed the economic viability of the apartment building, which was to be their retirement pension plan.

Moving with my job, we moved to a far-out suburb, and found an apartment with uncontrolled rent, at more than twice the rent we’d been paying.

My next job took us to Los Angeles. There were no rent controls, and plenty of available apartments. We took a nice one bedroom apartment at half the rent of our last one, and little more than what we had paid for any of those makeshift furnished rooms.

My conclusion from those 6 years of house hunting; a rent freeze, rather than making cheaper rentals available, simply produce a shortage of rentals. Like all price controls, and all government interventions, it solves no problems but instead creates more problems. But makeshift though it was, the market, not the government, at least gave us somewhere to sleep and eat. When government creates problems, the market provides solutions.

SOCIALISM AND THE FREE MARKET

June 12, 2010

SOCIALISM AND THE FREE MARKET
The free market and socialism are not totally incompatible. It’s true that a free market cannot exist legally under a socialist government. That’s what they call a black market. However, socialist countries usually do have a black market and probably would soon collapse without it. This is because socialist bureaucrats do a really dismal job of trying to achieve what the free market does so well; the assignment of the available labor, materials, and capital to efficiently satisfy the wants of consumers. That’s what economics is all about.

What I say about socialism applies equally to all of its variants: communism, socialism, fascism, the welfare state, and others. The differences between them are more a matter of degree than of principle.

Socialism can exist within a free market. The oldest form of commune, the family, has always been an essential tool of survival. Communes of any size can exist legally within a free market system, provided only that membership in the commune is voluntary. However, the larger a commune becomes the less efficient and the more dictatorial it becomes. Only strong bonds of family, tradition, or religion can hold it together.

A commune within a free market system soon reveals its inefficiency by its poverty in contrast with the prosperity of the people in the free market. This strains the bonds binding the commune together, and hastens its eventual collapse.

The solution for socialism is to completely isolate the commune from the outside world. Thus after WW2, the Russian empire (The USSR) proceeded to block all contact with the rest of the world. Winston Churchill put it aptly, “An iron curtain has fallen across Europe”.

All Russian soldiers who had contacted Europeans during the war, even if only in combat, were sent off to labor camps in Siberia, quarantined there until they had been decontaminated of any possible negative thoughts about communism. For decades the Soviet leaders tried to hide from their people their poverty in contrast with the prosperity of the rest of the Western world. Now the USSR has collapsed and Russia has adopted what might best be described as a “corporate welfare state”.

Meanwhile, the USA has become an ever-expanding welfare state with politicians buying votes, and gaining campaign contributions, by granting privilege and power to assorted special interest groups. Why do we so easily sell our votes? Do voters realize that they are being bought? Do they care?

Do they all believe that somehow each of them can get more out of the pot than they put in? (That’s impossible). Those who do get more out than they put in are parasites. The rest of us are their victims. This is theft, not a free market exchange, where each party profits by the exchange.

Government budget bills are always loaded with amendments submitted by congressmen to allot some money for some project which will benefit the people of their particular congressional districts. This is called the “Pork Barrel”. This is how your congressman tries to buy your votes. He has no trouble getting his amendment inserted in the budget bill. It’s an unwritten agreement among all congressmen; “you vote for my bit and I’ll vote for yours”.

I suspect that most of the public goes to the polls uninformed, except for the sound bites repeated over and over on TV, and paid for by campaign contributions from the corporate and special interest groups. If we are that careless about our votes, perhaps we deserve to be taxed for the benefit of these parasites.

The men who produced our Constitution imagined informed voters electing wise, public spirited men to represent them in Congress. What we got instead must have shocked them. How do you remove such corruption from government? Power is what creates corruption. Is it possible to create a government without power? Free market anarchy is the only answer I can see. If you can think of something better, please add your comment to this blog.

WHY ECONOMICS?

June 11, 2010

WHY ECONOMICS?

You may have heard economics called “the dismal science”. Whatever exposure you may have had to economics in school or in the news, it probably seemed complicated, weird, or boring. There are good reasons for this. Certainly talk about finance is complicated, full of specialized jargon, and confusing.

Perhaps that is partly camouflage to cover the fact that finance is credit which is legalized counterfeiting. Counterfeiting is robbery of the stealthiest sort. I was shocked when I recognized that simple truth. If you understood that, you might rebel. That’s why it is important to understand economics. It’s all about our freedom.

There are 2 major (and many minor) schools of economic theory, all wrapped in very scholastic language and style, with even more jargon. You can read all about it, with a huge dictionary at your elbow, trying to learn this new language as you go. My goal is to reduce economics to plain, simple English. Economics is something we all practice every day, so, without knowing it, we already understand a very big part of economics.

One of the 2 main Economic theories is that of John Maynard Keynes, usually called Keynesian economics. It is only concerned with the guidance for government in managing all of the economic activities of a nation. Its main concern is how to control the money supply in hopes of achieving eternal prosperity, and simultaneously enable the stealth tax to finance the growing power of government. The control of the money supply requires control of the banking system through a central bank. In the USA that’s the Federal Reserve System.

Trying to make sense of Keynes’s theory might drive you mad, because basically, it doesn’t make sense. Yet it is still the economic mainstream, because it so perfectly fills the goals of governments of all kinds.

The other main theory is called Austrian because it was pieced together in Austria over 100 years ago. Now, it seems there are “Austrians” (economists) everywhere but in Austria, and mostly in America. Austrian economics is the economics of the free market.

The difference between Keynesian economics and Austrian economics is the choice between government control and freedom.

The message of this Blog is just this; if your government has no respect for private property, then it really owns everything you own, including you, your income, and all your worldly possessions. Without economic freedom, all other freedoms are meaningless.

If you value freedom, you need to understand economics to realize just how unfree you are. With understanding, we can regain the freedom which we wrested from King George in the Revolutionary War.

GOVERNMENT BY ANARCHY

June 10, 2010

GOVERNMENT BY ANARCHY
Just what is a nation? Is it the piece of land within some borders? Is it the people living therein? Or is it only the citizens therein? Is it the government of those people? What does citizenship mean?

I’m asking you to think from outside the box of the system we were all born into, and try to bring some insight into something so ingrained that we never really question it: the nature and purpose of government. I know that anarchy sounds scary, but anarchy is simply the absence of government. Thinking about anarchy could be a very powerful tool to understand government, and perhaps improve it.

From my perspective, government has always been an institution of power which enables some of us to use the rest of us, and to use the land, to their own benefit. A democracy or a republic is government which permits us some degree of choice of which bandits will “protect” us, just as the local mafia “protects” us. Democracy obliges politicians to offer us something in return for our votes. Usually we elect the ablest liars.

Conquest may clarify the relationship between people, land, and government. When we won the war with Mexico, the USA acquired what now comprises California, Nevada, New Mexico, and Texas. The inhabitants came with the land, and became Americans. They had no choice in the matter. So do the people own their land or does the land own the people? It seems from this example that the government owns both the land and the people. Wars are fought between governments to determine which government shall own the disputed land and people therein.

Do we really own the land we buy? I believe not. If government can tax us for “owning” the land, then the government really owns the land and we are paying rent to the government for the privilege of using it. When we “buy” the land we are really just paying the former “owner” for the transfer of the privilege of renting it from the government.

Who really owns the land becomes even more apparent when the government uses the power of eminent domain to take the property from you, compensating you with whatever amount it considers fair. That’s generous of government, since it really owns that land already, and you are just renting it. Government is just terminating your lease.

Income tax implies government ownership of people, and of what they produce. I have had the personal experience of having to file income tax returns for 2 different countries every year for several years.

From 1979 to 2000, I was resident in Scotland. Then I returned to the USA. I retained my US citizenship throughout that period, but was officially resident in Britain. During all that time, I had to file income tax returns for both countries.

The USA and Britain have a tax treaty agreement. The country of residence (Britain) at the time of the tax has first claim on my income. The country of my citizenship (The USA) has a second claim. If the American tax calculated on my whole income for the year exceeds whatever I have paid to Britain, I owe the USA the difference.

From this I deduce that, as a US citizen, the US owns me, and while I’m resident in Britain, the US shares that ownership of me with Britain.

Absolute proof that government owns us is the conscription of soldiers in time of war. The USA used conscription in the Civil War, WW1, and WW2.

So here’s my analysis; a nation is a territory with set borders. The land and the people therein are the property of the government. Wars are simply struggles between governments to secure ownership of the land and people.

A Libertarian/Anarchist Approach

As a libertarian, and a tentative anarchist, I find the power of government to be the big problem. With government, the government is sovereign and we are its servants. In the free market, the consumer is sovereign. He chooses those who serve him.

To view government from an anarchist or libertarian perspective, lets assume that government is here to provide some essential services for us, its citizens. How could we get the benefit of these services, but avoid the coercive monopoly of government?

Let’s see how a free market approach could provide these services. The free market prohibits coercion, and that eliminates monopoly. Suppose we have competing governments competing to provide us with their services. Such governments could offer services paid for by fee per service, or by subscription. You choose the government that offers the best value for money.

If you are disappointed with your choice, you can shop for a better deal from another government. Or you might get one service from one government and another service from some other government. There would be no room for politics, just competition. Competing governments would have to be efficient and honest to get and keep customers/subscribers/citizens. Government would be your servant, not your master.

The term “government” would hardly be appropriate in such a situation. “Service Provider” might better describe the new role of government.

Anarchist proposals are similar to this but they tend to designate these servants as insurance companies. Individual companies might specialize in one service such as education or roadways. Some might provide groups of related services such as police, courts & prisons. An insurance company might insure your life, safety, & property in conjunction with providing home security measures and police services. A free market in the services that governments provide would give us many choices. Competition would assure value for money. Wasteful bureaucracies would disappear.

Under competing governments, you and I might subscribe to different governments. In any transaction between us, we should agree in advance which government shall be given authority in case of a dispute. The Anarchists have this sort of problem worked out in some detail. Such arrangements would probably give us arbitration courts independent of the other services of government. The free market always produces solutions to problems with variations to suit everyone. I suggest you read “Chaos Theory”, by Robert P Murphy, ($8 from Mises Bookstore)

THE EFFECTS OF TAXES

June 7, 2010

THE EFFECTS OF TAXES
Many how-to books have been written on ways to minimize your tax bill, and a host of lawyers, advisors, and consultants earn a living by advising us on tax avoidance. Each type of tax influences us in our economic decisions. The income tax in particular is deliberately designed for that purpose, but the sales tax, too, can be tailored to affect your decisions.
Sales tax doesn’t apply to everything you buy. Prescription drugs are exempt. Years ago most foods were exempt. Services may be exempt. You will spend a bit more extravagantly on things that don’t incur that extra penalty of 5 or 6 or 7%. Because of this, the drug companies can hit you for a bit more of your cash than they would if their drugs were subject to sales tax. Yet nobody seems to realize that this is a taxpayers’ subsidy to the drug companies.
For every item that is exempt from sales tax, the state/county/city must simply tax other things a little bit more to make up their loot.
Even more of a subsidy is the income tax exemption for spending on prescription drugs. In this case the subsidy to Big Pharma can be 20, 30, or 40%, depending on your tax bracket. This applies too, to all medical expenses: a big subsidy to medical doctors, hospitals, and makers of medical equipment.
Does this puzzle you? It’s simple. Since the government gives you a tax exemption on such things, you are willing to pay more for them. The Medical fraternity happily charges us more for their goods and services while, to make up for the lost taxes on medical things, the government just taxes us more for other things.
So it goes with the income tax. It gives tax relief to some income (Capital gains) to encourage some of us (mostly the rich) to invest in capital and the growth of the economy, and charges the highest tax rates to the rich in order to be seen to punish them for the crime of being rich, and also to increase the incentive for the rich to invest in the capital market.
So the income tax is designed to control our economic decisions, as well as to provide the funds for the politicians and bureaucrats to spend.
THE STEALTH TAX – INFLATION
At the beginning of the 20th century the word inflation was understood by all to mean an increase in the money supply. This made it all too obvious what caused inflation: The counterfeiting by the banks, under control of the Fed, by command of the politicians in power.
That might be embarrassing for government, but government can “fix” anything. They changed the meaning of the word “inflation” to what is now its universal usage. Now “inflation” is taken to mean the increase in general price levels, (which is really the gradual, delayed result of the increase in the money supply). So politicians can say, “Shame on those greedy speculators, merchants, manufacturers, and unions that are selfishly increasing prices and wages and profits, causing this awful inflation.”
Government spending of the counterfeit cash diverts the means of production to their own purposes, offering high wages and profits to induce people to transfer their efforts to production of what the government wants (Perhaps armaments, men, ships, planes, and uniforms for war).
I worked for many years in the design of military electronics, earning perhaps 10% more than I could in the design of commercial consumers’ goods. The downside of this was the need to frequently find a new job when the current government contract was completed.
As a result of government spending of the stealth tax, there are fewer goods available for the civilian population, while there are more dollars circulating to spend on what’s still available. Prices rise, so that civilians are less prosperous (perhaps even including the ones who moved up to higher pay to work in the munitions industry). The people have paid a very steep stealth tax to fund a war.
So there you have it. Government has contrived to appropriate a very large slice of our income, as painlessly as possible. Robin Hood has a generous salary, plenty of perks and a bit of graft on the side, a secure job which makes few demands on him, and early retirement with a very comfortable pension, all at your expense and mine. And war is always his excuse to increase taxes and expand the power of government.