What YOU can do when Ron Paul has a money bomb
So you’ve heard that Congressman Ron Paul is having a money bomb to support his 2012 presidential campaign. You know that Ron Paul is the only serious presidential candidate who has opposed the Iraq War from the beginning, and that he correctly predicted President Obama’s lies about Iraq. Lately you’ve been learning more about his efforts to audit the Federal Reserve, and you’re starting to understand the connections between bad monetary policy and rising food and gas prices. Moreover, you have a friend who was hassled by the police for a drug-related issue even though your friend never hurt anyone, and so Ron Paul’s staunch opposition to federal drug policies really hits home with you. Bit by bit you’ve grown to realize that this guy just makes sense, and you think he has the potential to help America adopt more sensible policies, making us simultaneously freer and safer. You want to help him on that journey – but how?
1. DON’T donate immediately.
That’s right, I don’t want you to jump right into giving money to Ron Paul’s campaign. There’s a lot more to winning an election than just getting money, and there’s a lot more to achieving liberty than just winning an election. Besides, money is tight for all of us these days, and if you’re a college student or between jobs, the last thing we need is for you to go hog-wild with electioneering and wind up discouraged and short on cash. Your money is your own – keep it until you have made a sound decision to spend it.
2. Get educated and motivated.
Liberty doesn’t come from politicians, and it certainly doesn’t come from ignorance. In order to make the most of your work with the liberty movement, you should view every campaign as an opportunity to learn about the issues. Fortunately Ron Paul is very concerned about openness in government and helping to educate the populace, so his political positions are well-documented here and also here. I’ll list just a few highlights you might find interesting.
- Paul’s stance on foreign policy is one of consistent non-intervention, opposing war of aggression and entangling alliances with other nations.
- His warnings of impending economic crisis and a loss of confidence in the dollar in 2005 and 2006 were at the time derided by many economists, but accelerating dollar devaluation in 2007 led experts like former Federal Reserve chair Alan Greenspan to reconsider hard money policies such as those of Paul.
- Paul broke with his party by voting against the PATRIOT Act in 2001; he also voted against its 2005 enactment.
- Paul supports the right of those who engage in nonviolent resistance when they believe a law is unjust, bringing up the names of Martin Luther King, Lysander Spooner, and Mahatma Gandhi as examples of practitioners of peaceful civil disobedience.
- He believes the internet should be free from government regulation and taxation.
- [Paul is] the only 2008 presidential candidate to earn Gun Owners of America’s A+ rating.
- Paul stated that he supported the right of gay couples to marry, so long as they didn’t “impose” their relationship on anyone else.
- Paul has called for passage of tax relief bills to reduce health care costs for families.
- Paul contends that prohibition of drugs is ineffective and advocates ending the War on Drugs.
Now that you have learned a bit more about Ron Paul’s positions or taken a refresher course if you are a seasoned supporter, you should also watch a couple of videos to remind yourself why the issues of liberty are so important, and why Ron Paul is often considered the leading advocate for liberty in the modern political scene. Fortunately there are a vast array of well-made videos about Ron Paul and his courageous campaign to restore freedom in America. I humbly submit a few suggestions of my own, of which you might pick one or two to watch.
One of the best things you can do for the liberty movement right now, if you like these videos, is to simply send one or two of them to a friend of yours who isn’t already familiar with the ideas of liberty. You don’t need to be pushy or preachy – spreading liberty can be as simple as saying, “Hey, I saw this video and found it really interesting, so I thought I’d pass it along.” This is exactly how philosophies spread.
The last thing you need to do before you are prepared to take financial action in defense of liberty is to increase your knowledge on the day-to-day news of how government is affecting our lives in negative ways right now. Again there are fantastic resources available to you to do this. Maybe you don’t read articles on politics too often, but that’s why you should consider Ron Paul’s money bomb as a special opportunity to get involved in new ways. Try reading one article from the front page of LewRockwell.com, Antiwar.com, or the Mises blog. Just one or two articles is all it takes, and in ten minutes or so you can gain valuable new insight into the political issues that affect our country today. Remember, don’t be afraid to send these articles to friends if you find them genuinely interesting or know someone who would.
3. Donate a reasonable amount of money to Ron Paul’s campaign.
Ah yes, we’re finally at that step. You need to decide how much money you want to give to Ron Paul’s money bomb to help him advertise and get more attention in his battle for freedom. Take into consideration your personal financial situation, and remember that the number of people who donate to the money bomb matters at least as much as the total monetary amount. Ron Paul wants sincere support from every-day people, not big checks from special interest groups. This means that it’s completely fair to say no donation is too small, and you should never refrain from donating just because you don’t have much to offer. If you are a college student, ten or twenty dollars is a very reasonable donation to make. If you have a steady income, maybe you want to put down fifty or a hundred. I would never suggest that you give more than you feel comfortable giving, because that will only result in disillusionment and resentment in the long term. But you should give at least a bit if you possibly can, because the more donors Ron Paul has, the more his campaign staff can assess his support throughout the nation and the harder it gets for media outlets to ignore his message. So go on and click this link to send Ron Paul whatever spare funds you have to offer, and help the message of liberty reach more people.
4. Ask your friends to donate as well.
This step is intimidating for a lot of people, but it really should not be. You have earned the right to politely ask for contributions from your friends, because you have given money yourself. You are not just blindly telling people to fork over their hard-earned cash to some guy on the internet. You have investigated his positions, read up on the issues, and even put your own money where your mouth is. It’s not at all out of line to remind any Ron Paul-supporting friends you may have that today is a great day for them to help out, nor is it unusual to make a personal request to people outside the movement that they look into Ron Paul’s campaign. You can think of this as asking for a favor. After all, you care about liberty, and your friends won’t mind you making a genuine request regarding something that’s important to you. So go ahead – you made a donation to prove your dedication, now spread the word about the money bomb to as many people as you can.
Congratulations on participating in your first Ron Paul money bomb, and thank you for supporting the liberty movement! Rational individuals need upstanding people like you to pitch in to build a society based on voluntary associations, free thought, and free markets. I welcome your continued participation in our righteous campaign.
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Stop Corporate Charity
There are many reasons to oppose corporate charity. It is deceptive, immoral, and border-line criminal. It hinders economic growth for the wealthy as well as the impoverished, and promotes a culture of ambiguity, pompous grandstanding, and anti-productivity.
Under a strict construction of the ethics of contractual agreements, corporate charity is an act of theft against the corporation’s stockholders and other investors. This is obviously so because a corporation is by definition a for-profit entity, and its investors lend their capital to the corporation ostensibly to receive a return on investment in proportion to the corporation’s profits. Investment carries risk, of course, and if a corporation fails to produce a profit by the honest inadequacies of its executives, that is business. On the other hand, if it fails to produce a profit – or fails to produce as much of a profit – because the executives made a decision to donate some portion of revenue to charity, however small a portion it may be, the investors have been cheated out of returns they were owed under their agreement with the corporation. This is exactly the same crime as occurs when executives defraud investors by embezzling company funds into their personal accounts. It is only treated differently because of differing public attitudes about perceived greed and perceived charity, which, right or wrong, should have no bearing on whether theft is a crime.
An argument can be made that the situation is not so clear-cut because corporate charity has gained widespread acceptance, or at least widespread acknowledgment. Since almost all corporations engage in at least some level of charity, it could be argued that investors understand at the time they decide to purchase stocks that some portion of their funds will be given away rather than used for real investment purposes. That’s not a totally invalid point, but it’s extremely shaky. If a consumer buys a sealed box labeled “a dozen eggs”, but knows at the time it probably only contains ten eggs because a short dozen scam is widespread and typical in his town, the fact that he knew he was most likely getting scammed doesn’t make the scam okay. This is what is happening with corporate charity: investors are being scammed out of a portion of their investment, but they expect they probably will be. That doesn’t justify it.
Furthermore, even if we accept the argument that an expected scam is not truly a scam, that leaves open the question of precisely what is expected. Maybe investors only expect that the corporations in which they choose to invest will donate one percent of their money, but the corporations actually donate two percent! Maybe the investors expect that each corporation will steal whatever the average amount of stealing is, but in fact some corporations by definition must steal more than the average. Clearly there is no way to reason out of the reality that deliberately non-profit actions by an explicitly for-profit institution is a criminal act of theft against investors. This alone should be sufficient to compel any honest person to oppose all corporate charity.
This is nowhere near the end of it, though. As with almost all criminal acts, the damage done by corporate charity really extends far beyond the simple breaking of an abstract principle. The principles of contracts exist for a reason, and the violation of them has severe negative consequences for everyone. When executives steal from investors to donate to charities, they decompartmentalize the economy, blurring the lines between production and consumption, and making it harder for investors as well as consumers to make informed choices. Compartmentalization and specialization are necessary in a productive society, because they allow for the greatest success for the most productive entities and the most immediate failure for the unproductive ones. Both production and charity are made more efficient when they are handled separately.
Consider an entrepreneur who innovates in automobile technology, reducing the costs of high-speed transportation sufficiently that millions of families who were previously too poor to afford it now have access. Good for him. His company will likely make a very large amount of money selling these cheaper automobiles, and it should, because that profit is the incentive that brings about innovation. It’s a reciprocal relationship – the entrepreneur is wealthier precisely because he made poor people wealthier. The more people to whom he is able to provide transportation affordably, the more money he will have. In this way he has done a great service to himself as well as to others around him.
Now suppose this entrepreneur donates huge portions of his money to charity, or worse, steals from the investors in his company and donates their money to charity. No matter what sociology professors may say, this is economically a bad idea. It is known that the entrepreneur is talented in production. There is no reason to believe he is talented in charity. He has an inarguable eye for opportunity in investment. He may very well be no more competent than any other bloke when it comes to giving aid. In reality, it is almost assuredly true that he would do a far greater service to the poor – which is to say, would raise their standard of living by a far higher amount – if he would use this money to reinvest in research and development to continue to make his automobiles more affordable, or to add new safety features, or to market a line of trucks, or whatever else he discerns is a wise productive investment. Remember that, if he sells a million automobiles a year, then for every dollar by which he is able to reduce the price of his automobiles the poorer people save a million dollars. Simultaneously, his sales will increase, so he will become richer, and have more money to reinvest. That’s economics, and it works.
When entrepreneurs reinvest accumulated capital and thereby lower the cost of consumer goods, they have another effect which is even more profound. By raising the ratio of value produced to labor required, investors raise real wages for just about everyone. This means that while people need to pay less money at the store to get the things that they want, they also take home more money from their standard day job. That’s a compelling argument against corporate charity and for corporate investment from the standpoint of the working class people. As for those who are too uneducated, disabled, or disinterested to labor for a living, the argument is – believe it or not – even stronger. That’s because it is an empirically demonstrable fact that donations by ordinary people to private charities actually rise super-linearly with income. This means when people make more money, they give even more of the money they make to charity. Thus, a successful investment in research and development will in the long run raise charitable donations more than if the same amount of money were simply given directly to charities – and yet it will do so without the need for criminal deception and the taking of other people’s money. So why don’t these do-gooder corporate executives who want to help the poor start by helping their employees and stockholders, and let people donate to charity with their own money?
One can speculate further that there is yet another mechanism by which corporate charity ultimately reduces charitable contributions, and that mechanism is uncertainty and lack of information. It is assuredly true that, when people donate to charity, they value knowledge of where their money is going, and want to know that it is being used effectively. They want to know how much of their income they donate, and smoke and mirrors surrounding charity will cause skepticism. It is therefore very likely that corporations which engage in charity using money taken from investors without their direct knowledge or consent really discourage other people from donating explicitly and thus reduce total donations. In much the same way that people tend to avoid taking it upon themselves to help the unemployed and homeless when governments claim to provide protection, so also they probably scale back charitable donations when corporations claim to do it for them. This reduction in charity is perception-based, not results-based. So when governments and corporations fail to provide the benefits they claim, and the downtrodden are left to suffer, nevertheless members of the community do not respond, do not take up the burden of charity themselves, because they are told someone else is taking care of it, so it must be someone else’s fault. A mixture of pathological blaming and self-righteous grandstanding takes the place of real work by individuals to help their fellow men, and everyone is worse off.
Finally, corporate charity is used as a rationalization for bad corporate policy, rent-seeking, interference with public policy and government officials, and generally poor quality of products and services. It tends to be a last-ditch effort by inefficient executives to avoid the progress inherent in a free market. Suppose one company is able to sell a product for ninety dollars, while another sells it for the slightly higher price of one hundred dollars, but has a better reputation due to engaging in more charitable programs in local communities. That sounds nice, but almost certainly the latter company’s contributions really do not constitute ten percent of its revenue. Therefore, consumers would do better to buy the cheaper product from the less charitable company and donate just some of the money they save. Some of them will do this, but others will make the mistake of falling victim to feel-good reputation-building that obscures real market efficiency. A greater good is done for a greater number of people by pursuing the most efficient, not the most heartwarming economic goals.
Thus the executive who commandeers funds entrusted to him by others and uses them for his own purposes – even ostensibly charitable ones – is presented with an incentive structure which rewards grandstanding and hollow self-promotion, while the executive who commits the investors’ funds to their intended purpose is required to produce real benefits for the consumers in order to stay afloat. This leads us to a final and critical point which those of you who know me well may have realized was coming from the beginning: So-called corporate “charity” is not charity at all. It is avaricious crime which damages the people it claims to help and helps the people it claims to damage. Executives who presume to achieve moral superiority by being sacrificial with other people’s money are not generous; they are vicious. The particular charities which they happen to favor are deemed worthy of everyone else’s support. So if an executive happens to feel especially strongly about one kind of cancer because of a death in his family, others who suffer from a different cancer must see a loss in funding because the executive is quite happy to steal from the populace and redirect contributions to his favored cause. As a result, charity organizations focus less on creating real results which they can demonstrate to the average person and more on befriending the higher-ups. So-called corporate “charity” robs the investors who risked their money to support entrepreneurship, raises costs to consumers, lowers employee wages, corrupts charities, empowers executives to an even greater extent, and ultimately does exactly the opposite of its purported goal: getting money to charities to help people in need.
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NY Times: Ron Paul was right
Monday’s issue of the New York Times featured a rather remarkable article titled Rep. Ron Paul, G.O.P. Loner, Comes In From Cold. An improbable divergence from the Times’ history of mostly (though not completely) ignoring the world’s most prominent living libertarian, this article serves to illustrate the increasingly mainstream nature of Dr. Paul’s anti-government philosophy. Yet it is even more than that. The article does not simply observe and comment on Dr. Paul’s stance; it admits that many other mainstream figures who once criticized and mocked him now feel they should have listened to him all along. As former New Mexico governor and now 2012 presidential candidate Gary Johnson has observed, the news media feel they missed out on the movement in 2008, and they wish they had been on board. I wish to analyze and respond to the Times’ piece, item by item, in its entirety.
Rep. Ron Paul, G.O.P. Loner, Comes In From Cold
WASHINGTON — As virtually all of Washington was declaring WikiLeaks’s disclosures of secret diplomatic cables an act of treason, Representative Ron Paul was applauding the organization for exposing the United States’ “delusional foreign policy.”
For this, the conservative blog RedState dubbed him “Al Qaeda’s favorite member of Congress.”
A video of Dr. Paul speaking confirms this is true – and important. I’m glad the article opens with a strong statement relevant to current events. The dust hasn’t settled yet on the Cablegate controversy, but as of this writing, The Journal’s public opinion poll shows 89% of responders calling Wikileaks founder Julian Assange a “hero” as opposed to just 11% who regard him as a “villain.” This contrasts starkly with the views of the political establishment, who almost unanimously seek to silence or assassinate Assange.
There’s no sense in being timid about this. Dr. Paul believes wholeheartedly that the federal government is an excessively secretive and destructive organization which lies and deceives in order to achieve devious goals, especially regarding the occupation of foreign countries. He supports (and I support) anyone who, by peaceful means, attempts to expose the government’s deception to the public, and that includes Wikileaks. If anyone out there disagrees, he or she may as well stop reading and move on to another article.
It was hardly the first time that Mr. Paul had marched to his own beat. During his campaign for the Republican presidential nomination in 2008, he was best remembered for declaring in a debate that the 9/11 attacks were the Muslim world’s response to American military intervention around the globe. A fellow candidate, former Mayor Rudolph W. Giuliani of New York, interrupted and demanded that he take back the words — a request that Mr. Paul refused.
Once again video confirms that this debate occurred. What the Times fails to clarify here is that a myth sprung up surrounding this particular debate – namely, that Dr. Paul claimed the United States “invited” a terrorist attack – which is a pure fabrication. His true stance is much more matter-of-fact. He simply believes that blowback is a predictable consequence of an interventionist foreign policy, rightly or wrongly. Dr. Paul does not claim – and no libertarian claims – that the 9/11 attacks were morally justified or that Osama bin Laden should continue his vendetta against the American people. Rather, the non-interventionist philosophy holds simply that such attacks will occur as a result of United States meddling, regardless of whether they should, and as such policy-makers need to adjust their strategy from intervention to peace in order to keep the American people safe.
During his 20 years in Congress, Mr. Paul has staked out the lonely end of 434-to-1 votes against legislation that he considers unconstitutional, even on issues as ceremonial as granting Mother Teresa a Congressional Gold Medal. His colleagues have dubbed him “Dr. No,” but his wife will insist that they have the spelling wrong: he is really Dr. Know.
Correct again. A more interesting example in recent memory would be when Ron Paul cast the only “No” vote against granting subpoena power to an executive commission designed to investigate the Deepwater Horizon (BP) oil spill. Public opinion on Dr. Paul’s decision was low, but he cited the absence of any clause in the Constitution authorizing such a subpoena, explained that there were already other procedures in place for cleaning up oil spills which did not involve the shifting of power from the legislature to the executive branch, and lambasted the federal government for dealing with the oil spill inefficiently and using unprecedented executive authority.
Now it appears others are beginning to credit him with some wisdom — or at least acknowledging his passionate following.
After years of blocking him from a leadership position, Mr. Paul’s fellow Republicans have named him chairman of the House subcommittee on domestic monetary policy, which oversees the Federal Reserve as well as the currency and the valuation of the dollar.
I want to thank the author of this article, Kate Zernike, for going out on a limb here. I have heard from many fairly trustworthy people that the last time Ron Paul was in line to chair this subcommittee, the GOP simply abolished the subcommittee entirely rather than permit him to speak out. However, I can’t for the life of me find any primary source confirmation dated to the time this allegedly happened, 2008 or earlier. Everyone agrees that Ms. Zernike is right, but I can’t prove it. If you have a source for this information, please share.
Mr. Paul has strong views on those issues. He has written a book called “End the Fed”; he embraces Austrian economic thought, which holds that the government has no role in regulating the economy; and he advocates a return to the gold standard.
This is not true at all. I guess I shouldn’t be surprised, but I continuously am, at how even reporters who seem to care about their subject and do research can remain agonizingly ignorant of very simple economic issues. It’s par for the course for the NY Times to fail to be clear about how economics actually work, but to make an outright false statement … well, that’s par for the course, too.
Dr. Paul emphatically does not advocate the gold standard. He advocates for freely issued hard-asset currency in the long-term and legalized competing currencies in the short-term. Neither of these two things is the gold standard. Ron Paul firmly believes that no one should be forced to accept a currency which he or she does not value, whether that currency is a Federal Reserve note or a gold coin or anything else.
Furthermore, Austrian economics is not a political ideology, nor any opinion of any other form. Austrian economics is an objective method of studying economic phenomena. It makes no value judgments about what people should or shouldn’t do. A great economics professor, author, and personal friend of mine, Dr. Steven Horwitz, wrote at length to explain what Austrian economics is and what it is not, in case any reporters from the NY Times want to educate themselves.
Nevertheless, the real gem of this article consists of the subsequent several paragraphs:
Many of the new Republicans in the next Congress campaigned on precisely the issues that Mr. Paul has been talking about for 40 years: forbidding Congress from any action not explicitly authorized in the Constitution, eliminating entire federal departments as unconstitutional and checking the power of the Fed.
He has been called the “intellectual godfather of the Tea Party,” but he also is the real father of the Tea Party movement’s most high-profile winner, Senator-elect Rand Paul of Kentucky. (The two will be roommates in Ron Paul’s Virginia condominium. “I told him as long as he didn’t expect me to cook,” the elder Mr. Paul said. “I’m not going to take care of him the way his mother did.”)
Republicans had blocked Mr. Paul from leading the monetary policy panel once before, and banking executives reportedly urged them to do so again. But Republicans on Capitol Hill increasingly recognize that Mr. Paul has a following — among his supporters from 2008 and within the Tea Party, which helped the Republicans recapture the House majority by picking up Mr. Paul’s longstanding and highly vocal opposition to the federal debt.
Aides, supporters and television interviewers now use words like “vindicated” to describe him — a term Mr. Paul, a 75-year-old obstetrician with the manner of a country doctor, brushes off.
“I don’t think it’s very personal,” he said in an interview in his office on the Hill, where he has represented the 14th District of Texas on and off since 1976. “People are really worried about what’s happening, so they’re searching, and I think they see that we’ve been offering answers.”
If there is vindication here, Mr. Paul says, it is for Austrian economic theory — an anti-Keynesian model that many mainstream economists consider radical and dismiss as magical thinking.
This quality of journalism coming out of the NY Times is nearly unheard of. Rarely if ever have reporters been willing to take up this stance with such clarity: The establishment said one thing. The libertarians said the opposite. Time passed, and more and more people are thinking the libertarians were right. That’s just not an easy thing to admit to.
Even framing the debate that way is rare. Typically mainstream papers do their absolute best to portray every issue as a conflict between one vague tyranny and some other vague tyranny. When the NY Times summons the will to talk about monetary theory, it almost invariably discusses the arguments for government-created inflation versus government-created deflation. The idea of monetary choice is never mentioned, either because the mainstream reporters don’t want us to know about it, or because they sincerely can’t even imagine it.
But that is changing – fast – and this article proves it. I wonder how many people read the NY Times on Monday and then Googled Keynesian or Austrian economics. I wonder how many of them managed to find the rap video which explains the difference between Keynesian and Austrian views on the causes of and cures for the Great Recession.
Freedom comes when libertarians take control of the dialogue of the day and define the terminology to be used in discussion. As long as people are taught to think in terms of what kind of lifestyle will be forced upon them, progress cannot be made. But when ideas like those of the Austrian economists and others who identified the nature and significance of individual choice start to enter the discussion, the genie is let out of the bottle. A human being, once taught that he is capable of making decisions different from those of others around him without entering into violent conflict with them, cannot be de-educated, and cannot be silenced.
It is unnecessary for me to continue to pick a part the minutiae of this article with commentary. You can see the significance. Now read the remainder of it, observing the terms which I have chosen to emphasize. You will find that they have certain key characteristics. Namely, they are specific, which is to say, they refer to a definable idea or object which can be qualified and observed, they are relevant to serious issues that face America today, and they are oriented around a discussion of choice, meaning that they either are associated with advocates for violent intervention in the lives of peaceful people or associated with advocates for peace and freedom. By helping to shift the dialogue of our day to center around these words, the NY Times has (perhaps inadvertently) made a substantive contribution to the libertarian movement.
The theory argues that markets operate properly only when they are unfettered by government regulation and intervention. It holds that the government should not have a central bank or dictate economic or monetary policy. Once the government begins any economic planning, such thinking goes, it ends up making all the economic decisions for its citizens, essentially enslaving them.
The walls of Mr. Paul’s Congressional office are devoid of the usual pictures with presidents and other dignitaries. Instead, there are portraits of Ludwig von Mises and Murray Rothbard, titans of the Austrian school. For years, Mr. Paul would talk about their ideas and eyes would glaze over. But during his presidential campaign, he said he began to notice a glimmer of recognition among those who attended his events, particularly on college campuses.
Mr. Paul now views his exchange with Mr. Giuliani in 2008 as a crucial moment in his drive for more supporters. “A lot of them said, ‘I’d never heard of you, and I liked what you said and I went and checked your voting record and you’d actually voted that way,’ ” he said. “They’d see that the thing that everybody on the House floor considered a liability for 20 years, my single ‘no’ votes, they’d say, ‘He did that himself; he really must believe this.’ ”
His campaign that year attracted a coalition that even he recognizes does not always stand together: young people who liked his advocacy of greater civil liberties and the decriminalization of marijuana; conservatives who nodded at his antidebt message; and others who agreed with his opposition to the Iraq war.
During George W. Bush’s presidency, he was out of favor with the reigning neoconservatives who were alarmed at his anti-interventionism. He still gives many conservatives fits with comments like his praise for WikiLeaks.
And many of those who follow the Fed closely say his ideas are “very strange indeed,” in the words of Lyle E. Gramley, a former governor of the Fed who is now a senior economic adviser at the Potomac Research Group. “I don’t think he understands what central banking is all about,” Mr. Gramley said.
Putting such a critic of the Federal Reserve chairman, Ben S. Bernanke, in such a prominent role, he added, could damage economic confidence. [Editor’s note: Business is driven by the animal spirits!]
“The public doesn’t understand how serious the problem was and why the Fed had to take the action it did,” Mr. Gramley said. “Having someone in Congress taking shots at the Fed makes the situation uneasy.”
Still, Mr. Paul says, his colleagues respect his following outside Washington. “I was on the House floor today,” he said, “and somebody I don’t know real well, another Republican, he was talking to two other members, and he knew I was listening. He pointed at me and said, ‘That guy has more bumper stickers in my district than I do!’ ”
Interview requests are so common that Mr. Paul has set up a camera and studio backdrop in his district office to save him the hour’s drive to television stations in Houston.
His bill demanding a full audit of the Fed, which he had unsuccessfully pushed for years, attracted 320 co-sponsors in the House this year.
And the lunches that he has held in his office every Thursday, where lawmakers can meet intellectuals and policymakers who embrace Austrian economics, have become more crowded, drawing Tea Party celebrities like Congresswoman Michele Bachmann of Minnesota.
“For a long time, a lot of people in Congress on both sides of the aisle agreed with Ron a lot of the time but felt it wasn’t safe to go there,” said Jesse Benton, a longtime Ron Paul aide who ran Rand Paul’s Senate campaign.
The father is about to gain even greater visibility. He says he will use his new chairmanship to renew his push for a full audit of the Fed and to hold a series of hearings on monetary policy.
On Web sites for Ron Paul fans, there are urgent pleas for a father-son (or son-father) “Paul/Paul 2012” ticket. But in an interview, the senior Mr. Paul seemed taken by surprise by the suggestion of teaming up. While he is bursting-proud of his son, he is not necessarily ready to yield the spotlight: He is pondering another presidential run on his own.
“I’d say it’s at least 50-50 that I’ll run again,” he said, adding that he would look at where the economy is. (Aides add that it would depend a lot on what his wife, Carol, says.)
But for all the ways the Tea Party echoes Mr. Paul on fiscal issues, it is not clear such support would carry over into a presidential campaign. The last time he ran, he won less than 2 percent of the vote, though that was before the Tea Party became a force in politics.
Even many Tea Party conservatives are not on board with Mr. Paul’s beliefs about scaling back the United States military worldwide. And Paul supporters look on the Tea Party with some disdain.
Mr. Paul acknowledged the sometimes competing interests among Tea Party supporters and his fans. “What brings them together is this acceptance that there’s something really wrong, that we’ve spent too much money and government’s too big,” he said.
That, he added, was why he had to work at keeping up his influence, particularly in spreading the word about the cost of foreign interventions.
Still, he noted: “We’re further along than I would have expected in getting our message out in front. I thought I’d be long gone from Congress before anybody would pay much attention.”
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Lawson and Price debate
The Worst-Case Scenario had its second three-man mission last night. David Westbrook, David Hilburger, and I traveled to the Durham Transit Station in downtown Durham, NC to cover the debate between Democratic Congressman David Price of NC’s 4th district and his Republican challenger Dr. B.J. Lawson. The debate was hosted by the Independent Weekly, who organized the event carefully and ran it fairly. David Westbrook was able to film the entire debate and upload the video in four segments. I asked a question in the fourth video beginning at 0:50, which neither of the candidates was willing or able to directly, concisely, and completely answer. Over-all, though, the consensus is that the night was a smashing success for BJ, at least among the crowd of overwhelmingly Tea Party and FairTax supporters.
The four videos are embedded below along with the list of questions asked in each video and the time at which the questions are asked.
4:02 Price Opening Statement
6:08 Lawson Opening Statement
8:36 Question 1: “America has for over a decade, spent more per capita on healthcare intervention than any nation in the world yet has miserable comparative health outcomes, longevity, and quality of life scores. What impact will this years healthcare reform legislation have on this fundamental disparity, and what more if anything do we need to do as a nation to address gaps in coverage, availability, and outcomes?”
12:46 Question 2: “If you are elected during your term, America will likely enter its second decade of war in Afghanistan. Do you believe our nation and our current administration is on the right track or on the wrong track relative to the war, and what leadership would you bring as our US representative on this matter?”
Question 2 is continued in part 2.
2:25 Question 3: “As our nation tries to emerge from the deepest economic downturn since the great depression, what should the federal government do through spending incentives, and or tax policies to induce job creation, and to encourage a return to normalcy and growth, and has the additional national debt from the stimulus package been an appropriate price, or too high a price according to the results you have seen?”
6:59 Question 4: “More than 70% of the governments 30 billion dollars in farm subsidies goes to the largest 10% of farm businesses. Would you support cutting or revising federal farm subsidies?”
10:49 Question 5: “The Triangle has been blessed, or cursed, with rapid growth. The projections show more than a million new residents of Durham, Wake, Orange, and surrounding counties in the coming decade. What is working in our federal transportation policy, and what needs to change? What do you see as the relative roles of and funding for highway and roads, transit, and bicycle and pedestrian systems in our transportation future?”
00:04 Question 6: “Immigration and citizenship have become a new battleground in American Politics and the culture wars. Some argue that residency and eventual citizenship should come through only currently legal channels. Others not that immigration quotas are far more restrictive than under historic norms. Please let us know your views on the key components of immigration reform.”
TOWN HALL QUESTIONS BEGIN AFTER QUESTION 6
5:08 Town Hall Question 1: “With entitlements representing 57% percent of the total federal budget, what would you do to reduce such entitlements or generate revenue to offset them?”
9:29 Town Hall Question 2: “I would like to know your thoughts on offshore oil drilling.”
12:33 Town Hall Question 3: “In lieu of the recent supreme court decision to treat corporations like a person and the flood of campaign ads paid with money that doesn’t come from individuals and doesn’t disclose where it comes from. Would you be in favor of a law that makes requirements for clarifying the donors for such ads and from where the money comes?”
00:51 Town Hall Question 4: “The chair of the joint chiefs of staff has said that the greatest threat to national security is not Iraq, Iran or Afghanistan, but the federal debt. By 2013 the interest alone will exceed the entire defense budget. 100 trillion dollars in unfunded liabilities loom on the horizon for my generation over the next century. How will you, item by item, eliminate the 1.3 trillion dollar deficit that we had in 2010 to prevent federal default, troop defection, and severe social unrest in my future?”
5:44 Question 7: “Biotechnology is a major driver in the regions growth. One recent steady comparing six southern regions found that the triangle mustered 2031 university research dollars per regional worker. More than 75 times the equivalent figure for Charlotte and tops in the southeast. In 2005 the federal government spent less than 100 dollars per capita on NIH funding versus 1600 dollars on defense spending. Where do you stand on the desirability and appropriateness of today’s federal research investment?”
9:22 Closing Statements
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Cultures, rights, and burqas
Being that I am a pure voluntaryist and ardent objectivist, my moral code and sense of life is based on the conceptualization of man as a choosing agent advancing himself in a natural universe. As such, I hold it as objectively morally wrong, which is to say, anti-life, to forcibly control another individual for one’s own purposes. I further maintain that to a rational person there can be no pity for the guilty. This is to say, legitimate defense is not limited strictly to self-defense, but rather every righteous individual has the authority to forcibly intervene in defense of the innocent when a violation of rights is committed. It might, then, seem odd to suppose that defensive intervention is often not the best course of action for combating crime, but in fact I believe exactly that. Furthermore, I believe that intervention to combat the particular acts of violence and destruction which have become accepted to a certain degree as cultural norms is frequently harmful and wrong, and that those who combat social order with violent uprising often inflict collateral damage so as to incriminate themselves just like the demons they seek to eliminate.
There are many examples of violence and control which have been accepted in one culture or another throughout history. In many cultures, women are expected to be subservient to their husbands and can suffer beatings or worse if they behave as independents in public. Fear of such abuses of women has been used as a rationalization for a number of government policies, such as the recent burqa ban in France and the upcoming ban in Australia. Obviously, such a ban ignores the possibility that women wear burqas voluntarily, which is certainly the case for many Muslim women. Worse than that, though, is that it necessarily fails to accomplish the intended purpose of preventing men from beating their wives. After all, wife-beating is already illegal. Men who continue to do it are able to get away with it either because no one sees it happen, or because no one cares. Outlawing the burqa won’t stop that, and it won’t change the violent tendencies in anyone savage enough to beat an innocent person for religious reasons. What it will do, though, is convince leaders in local communities with high immigrant Muslim populations that Western governments represent a threat to their way of life. As such, they (especially the men) will feel an increased need to culturally distance themselves from Western natives and will enforce this on their wives and children. The burqa bans, like any other attempt to politicize behavior associated with race, culture, and religion, will have precisely one long-term effect: Incentivizing people to turn against one another violently, where before it was economical and rational to move towards tolerance. Donations to racist political demagogues will increase; the freedom of women will not.
So what makes women being forced to wear burqas in heavily Islamic communities in Western Europe different than, say, a grown man getting murdered on the street? In principle, these are both instances of aggression, and so they are both morally wrong. The difference comes into play in considering how effective various strategies for prevention can be. Murder of a grown man in a Western nation is extremely rare, and almost everyone recognizes that it is an egregious crime. As such, those who wish to foricbly intervene in defense of a murder victim can rely on the local community to support them and ensure justice. The opposite is often true of Islamic law. Suppose it is discovered that one particular woman in a Muslim community is wearing a burqa against her will on her husband’s orders. A squad of armed men come to her house to arrest her husband and give her a good lecture on her rights as an individual. Then what? The thirty other extremist Muslim households in the surrounding neighborhood ostracize her or potentially kill her. Now one might rightly say that not all or even most Muslims are so vicious and oppressive. This is surely so, yet in a community of moderate and tolerant Muslims, it is much less likely that there would be an oppressed woman in the first place. Violence is common in violent areas. In a community where aggression is accepted as normal, force to stop it is unsuccessful and provokes racial and cultural hatred and conflict.
What, then, can be done? The first step is always to depoliticize. Those who seek reform must accept the limitations of their abilities and not attempt to force a change for which society is not yet ready. Top-down government planning never achieves its desired goals and always causes collateral damage to innocents. After depoliticizing comes educating. The strongest weapon against bad ideas is and always will be good ideas. So to end oppression around the world, we must start by establishing a broad base of literature and other media promoting freedom, then spread that message in our daily lives. Anyone who wants to promote an idea needs to get onboard with the first-hand idea manufacturers – authors, philosophers, scientists. These intellectual leaders must be resolute in their commitment to both the theory of liberty and the specific goals such as ending oppression of women. Without a firm intellectual base, a movement cannot prosper. Attempts to skip the ideology and proceed straight to enforcing the results always fail for the reasons explained above.
After educating comes disincentivizing. Bad ideas will not be replaced by good ideas unless the latter are actually shown to be superior to the former. The second-hand dealers in ideas can make this happen. We can voluntarily put pressure on talk show hosts, newspaper columnists, bloggers, restaurant and store owners, and other important members of society to reject violence and oppression as a way of life. For example, a person who is passionate about ridding the world of burqas can openly refuse to watch any television show which depicts a burqa-clad character in a positive light. If this is demonstrated to be a good philosophy, the cultural free market will adapt. Moreover, due to the purely voluntary nature of the pressure applied, those who resist have no moral ground on which to stand. Remember when some bigoted Muslim extremists claimed that a comical and negative depiction of the prophet Muhammad was grounds for violent opposition? Yeah, they became the laughing stock of the whole world, triggering a voluntary reaction called Everybody Draw Muhammad Day. Had the artists who initially sketched Muhammad taken violent actions, and had the Muslim response been peaceful but firm, the results might have been quite different. By choosing to take the higher ground – to avoid engaging in threats of violence and instead protest peacefully – freedom-lovers and all of Western civilization won a huge victory.
Thousands of years of cultural custom cannot be overcome by a sudden decision on the part of the government, or you, or anyone, to punish a certain action, even if that action truly is a violent crime. Spontaneous decisions to attempt to effect social change quickly and forcefully usually trigger a backlash that is much larger, much more severe, and much longer-lasting than the proponents of change ever anticipate. Effective laws develop slowly out of long-observed traditions of peaceful behavior. Just as the United States suffered for its decision to invade the Confederacy and was ultimately powerless to prevent a century of violent oppression of blacks until the South’s very culture naturally changed, so the other Western nations will pay dearly if they attempt to push laws onto Muslim communities where they will not be respected. To fight for the betterment of society requires long-term thinking and peaceful methods. If you would like to see a world without burqas, my suggestion is to start by writing a book.
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Dangerous anarchists undermine the social order in my local community.
Hi friends. I’m going to experiment with taking a more casual attitude towards the Worst-Case Scenario for a while. This means that the blog posts will not be as in-depth or researched as usual, and will mostly contain comments on the world as I think them up. However, the positive side to this is that, hopefully, I’ll be able to post more often, perhaps even as much as once a day. To kick off that theme, I’d like to tell you a story about a very terrifying event I witnessed yesterday. A gang of shameless anarchists disrupted the social order and broke a number of very important and long-established laws, including committing multiple severe felonies, without the slightest regard for the damage they were doing to their community. Here’s how it happened.
I was walking back to my house from Golden Isles Coins and Collectibles after purchasing a Krugerrand when I spotted the first anarchist. He was a small Latino boy of between five and seven years, sitting at the end of his driveway under a sign defiantly declaring, “Lemonade 50C” [sic]. The stand did not display any health and safety rating, so I was forced to conclude the local health inspector was unaware of the foodstuffs being sold. What’s more, the child clearly was not old enough to be working even a part-time job under child labor laws. Now, this is not necessarily damning. After all, he may not have been technically employed, since he was personally running all of the trade. Yet that in itself raises another question – where was this young man’s business license? Clearly, he wasn’t filing any 1099 forms or reporting any of his gross income to the Internal Revenue Service. Finally, he had no understanding of the need to tax prepared foodstuffs at a rate higher than the state-wide sales tax, as is the law in North Carolina. Indeed, and the crime was widespread: A few feet away I saw another person, an older Latina woman who was no doubt complicit in the illicit business being advertised. She was chatting absent-mindedly with a neighbor in Spanish as a deliberate affront to American values.
This experience was disturbing enough, but what I saw about fifteen minutes later was much worse. As I drew near to my house, I spotted a young black man of at least eighteen standing on the sidewalk, with no intention of using it for its appropriate public purpose, and waving a cardboard sign that said, “Car Wash $5.” I couldn’t believe my eyes – two blatantly illegal business operations in one walk from the gold store. I stared across the street to where the man was pointing, and sure enough there was a full gang of laborers washing a car in a parking lot. There was no one present above college age, and they did not appear to be reporting to any manager or supervisor. A single individual among them collected the payment from cars that drove in, but as far as I could tell she was not in a position of authority so much as in a flimsy trusteeship with the rest of the laborers. Essentially, it was mayhem.
As far as what laws these hooligans were breaking, it’s hard to even know where to begin. As I said, they weren’t funneling their money through any particular business head, so there was no accounting and no clear legal personality should their company be sued for poor service. Worse than that, though, was the complete absence of any government guarantee of good service in the first place. They lacked the required North Carolina car wash license which is used to ensure that gullible car owners aren’t victimized by devious car washing services such as this one. I seriously doubt that they even had a North Carolina business license, what with no manager and all. Of course, just like with the lemonade black market, none of this income was being reported, and the sales of the services were not taxed. But that’s not even the worst part. No, I didn’t see the true horror of all this anti-social behavior until I had observed their process for some time.
After much consideration, I found the utterly horrifying bottom line is that, from my best estimates based on the number of participants and the rate of five dollars per car, these laborers were not even making the federal minimum wage. The repercussions of this kind of exploitation are extraordinary. If they had a business owner, he would lose his business license and possibly go to jail for his heartless exploitation of them. Unfortunately the business had no owner since it was just an impromptu anarchist cartel, so I’m not sure whom I ought to excoriate, revile, and despise for the fact that these laborers were being savagely exploited. I think I will try blaming the customers for giving money to the poor slaves without educating them on the damage that is done by sub-minimum wage work. I may even have to send an email to the local car wash workers’ union, who will hopefully be able to help them by requiring them not to sell their services anymore. It takes a lot of activism and effort to effect positive social change, but rest assured, loyal readers, I will do whatever it takes to ensure that these oppressed laborers are empowered and their seditious violation of social order is corrected.
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Top Five Songs of Freedom
I have often heard complaints from true patriots and freedom advocates about the difficulty of finding pleasant, powerful, and lyrically compelling music that examines the world from a libertarian or even just individualist perspective. Indeed, statism is rampant in contemporary songs on the radio, despite shallow claims by many artists that they are anti-authority. Celebrities are notoriously leftist, and their idea of being anti-authority typically has more to do with spewing hatred for nameless cultural enemies than addressing the real, coercive institution of politics. The only genre of music that has remained largely immune to leftist childishness is country, but that has all its own problems. Very few country singers dare to confront the authority of the state for what it truly is. Moreover, a sizable portion of them happily and fiercely wave the flag of imperialism for Uncle Sam whenever he calls upon them to denounce war skeptics as anti-patriotic and anti-freedom. Indeed, for those of us who can envision a truly voluntary society and understand that freedom does not come from preemptive violence and collectivist class warfare, appropriate entertainment options are limited.
What’s particularly bothersome, though, is that there doesn’t appear to be any good reason why this is so. The power of individual choice and the beautiful achievements of free people are among the most awe-inspiring of potential song topics. The oppressive instruments used by the state and its sympathizers to obstruct individual creativity and prosperity are angering in the extreme – and they affect everyone! Libertarian music ought to invoke at least as much emotional response as any class warfare or false patriotism. Why, then, is there frustratingly little of it?
I don’t know, but I’m not willing to give this one to the Man. So in the interest of promoting the great, if few, artists of our time who have taken a stand for freedom in their music, I’ve compiled a list of five of my favorite contemporary songs that portray a mature and explicit pro-freedom message, along with links to lyrics and recordings.
1. Twisted Sister – We’re Not Gonna Take It
This song is a classic among anti-state and anti-authority types across the board due to its motivating, revolutionary tone. Poetically, it was released in 1984 (haha) and goes a step beyond the played-out and dull expression of teen angst about controlling parents and controlling schools and controlling what-have-you. From the start, the use of the phrase “right to choose” reveals that Twisted Sister is concerned specifically with political freedom. The enemy whose abuses “we’re not gonna take” appears to be governmental, not cultural. Then, in a second verse that sounds suspiciously like a rejection of cradle-to-grave nanny-statism, the song accuses authority figures: “You’re so condescending; your gall is never-ending; we don’t want nothing, not a thing from you.” That might still be open to a little interpretation, but the deal is sealed immediately afterward when the enemy’s “life” is called “confiscated.” It’s hard to imagine that refers to anything except the state, whose existence is based on confiscating from others only to give (less) back again.
Twisted Sister’s not-so-subtle rebuking of abusive state control worked, too. At least, it made the statists angry and scared enough that one year later the United States Senate called the lead vocalist, Dee Snider, in to testify on behalf of heavy metal and explain why it shouldn’t be banned from America. That was a mistake, as this video shows. Snider harshly criticized the Senate for its attempts at censorship and even said a few beautifully derisive words about Al Gore’s wife when the Senator himself accused metal music of harming her poor, sensitive mind.
2. Linkin Park – No More Sorrow
Released in the anti-war fury of the late Bush administration, “No More Sorrow” is among the most vicious attacks on statism I’ve heard. After a musical opening with a clear marching beat reminiscent of revolutionary soldiers preparing for battle, the song’s incendiary lyrics denounce all aspects of the rise of fascism in America. Every single word is intensely political, from identifying the Terror Wars with, “your crusade’s a disguise,” to summarily rejecting the whole administration as “liars and thieves,” and the sentiment to which we can perhaps most directly relate, “I’ve paid for your mistakes.” Linkin Park promises that “you will pay for what you’ve done” and chants “thieves and hypocrites” in a shouting tone that is angry to the point of being disturbing. In spite of its obvious connections to George Bush, the message of the song is essentially timeless. As long as there is a state, it will consist of liars and thieves who will wage false crusades at the people’s expense. The solution is clearly stated at the end: “Your time has come to be erased.”
3. Hank Williams, Jr. – A Country Boy Can Survive
Well, what to say? This country classic is just basically one of my favorite songs of all time. Written and performed by Hank Williams, Jr., it shows a truly independent country spirit – not blind, flag-waving nationalism, but simple, individualistic Americanism. Hank opens by describing a national crisis – a decline in the economy which has resulted in rising crime rates and civil unrest. But Hank is not too worried, because he has “a shotgun, rifle, and a four-wheel drive, and a country boy can survive.” He goes on to describe the pragmatic independence which allows him to live apart from industrialism and the larger national economy – eating, of course, good old “organic” food as the environmentalists tell us is proper.
Then, Hank tells a story about his friend from New York, whom he clearly respects, being killed on the city streets by a common thief looking for some cash. In a stroke of pure, unadulterated Americanism, Hank says outright, “I’d love to spit some beach nut in that dude’s eye and shoot him with my old .45!” (Wow!) There’s no political correctness to be found here. In fact, there’s no politics at all. There’s only justice, delivered by a concerned and well-armed citizen with no reference whatsoever to any permission from an authority figure. Hank’s simple lack of regard for unnecessary institutions of all forms is rare and refreshing.
4. Econ Stories – Fear the Boom and Bust
If you want explicit libertarianism in a song, this is as good as it gets. Russel Roberts, an economist from the Institute for Humane Studies, worked with media director John Papola to try to bring a knowledge of economics to the general public, and the Ke$ha-endorsed rap “Fear the Boom and Bust” was the result. It tells a fictional story of world-renowned economists John Maynard Keynes, who advocated heavy government interventionism, and Friedrich Hayek, who favored freer markets, meeting in New York city during the financial crisis of 2007-2010. Using real quotations from their most famous books, Roberts constructs an argument between the two over what caused the crisis and how it can be fixed. Topics include the on-going collapse of the American housing market, the worldwide credit crunch which has proven to be immune to quantitative easing, and the chronically depressed aggregate demand by consumers which persists in spite of Keynes’s prescribed stimulus spending. That Hayek wins the argument is as clear as it is inevitable. His ground-up constructed philosophy triumphs over the flawed Keynesian model of aggregate variables and interventionist dogma.
5. System of a Down – Cigaro
I must give fair warning here: By the standards of my blog’s usual content, “Cigaro” is quite obscene, so click the links at your own peril. I’ll avoid commenting too much on the gruesome details in text, but let it suffice to say that this song ridicules the immaturity of state rulers in a most overt way, accusing them of engaging in useless power struggles that harm innocents around them. The video, especially, depicts a group of arrogant buffoons – the governors of the world, of course – trying to force activity in their countries and comparing their relative strengths in a scene reminiscent of the build-up to the World Wars. System of Down condemns this crowd as “cruel regulators” and “the propagators of all genocide,” continuing with the World War theme. An explicit identification of the close historical ties between heavy economic regulation and mass murder is quite rare these days, as public schools have taught us that national socialism is good, but National Socialism is terrible. Perhaps there is hope for the future after all.
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Mandated spending is pushing on thread.
The folks over at Econ Stories made history in January of this year when they released Fear the Boom and Bust, the first popular, Ke$ha-endorsed rap video about economics. The video depicts world-renowned economists John Maynard Keynes and Friedrich August Hayek arguing about how the federal government’s fiscal and monetary policies affect the “Boom and Bust” business cycle, focusing on the parallels between the Great Depression and the housing and lending collapse which began near the end of the Bush administration and has continued throughout the Obama administration.
As with any rap, the main feature of the video is its lyrics, which contain the topic of today’s discussion: “Your focus on spending is pushing on thread.” This line is a rather esoteric reference, by way of clever metaphor, to monetary asymmetry. These are daunting words, but they actually refer to a very intuitive concept which has eluded policy-makers and even many economists for over a century. The aim of this post is to help the average observer understand just what is meant by the phrase “pushing on thread,” as well as to provide a conceptual base for further investigation of how ignorance of economics has had grave consequences for nations around the world.
The best way to discover economic principles is through thought experiments that investigate cause-and-effect relationships. Suppose, for example, that the average individual eats out at restaurants or bars about twice a week. If the government were to impose a law mandating that no person may eat out more than once a week, it would obviously have a negative impact on economic activity. In fact just about everyone can guess this if asked. Unfortunately, not so many of us can really explain precisely what is meant by “economic activity” or how the government’s new rule reduces it. Nevertheless, we understand instinctively that economic activity must be depressed by forbidding people from eating at restaurants.
What actually happens in a situation like this is as follows: Consumers, who at any given time have only a certain amount of liquid assets (money) they can spend, are willing to spend some of their assets at restaurants. However it may be that they decided to eat out twice a week, that’s what they’re willing to do. When the government declares that they may not do this, it prevents economic transactions from occurring. This is “bad” for one simple reason – people wanted those transactions to occur. Specifically, restaurant owners and restaurant customers wanted to make an exchange of money for food. They wanted to do this because each of them valued what the other had more than what they were giving. The customer would rather have a meal, and the owner would rather have cash. If the transaction occurs (the customers eat at the restaurant), everyone feels better off than before. If the government prevents this, economic activity – specifically, the exchange of assets in a beneficial way – is diminished.
Such a law won’t cause all of the consumers’ wealth to go to waste, of course. By preventing people from patronizing restaurants, the government induces them to do something else with their money. However, whatever it is that they decide to do, it is important to remember that it will always be their second choice. They would rather have spent their money on eating at a restaurant than whatever they spend it on instead. Therefore, the value of what they buy with the money they would have used at restaurants will be less to them. They will be worse off. Similarly, the restaurant owners will be worse off, even if they leave the restaurant industry and take up another profession. This is their second choice profession – it was not the most appealing and profitable venture for them. The transactions that people wanted to make to increase their lot in life have been prevented by the government, and whatever is substituted is by definition less beneficial.
Thus it is now clear precisely how a government mandate against eating out more than once per week reduces economic activity, in the sense of forcing a real reduction in beneficial transactions. The concept of pushing on thread enters if the government attempts to employ the reverse idea. Suppose, now, that a law is passed which requires each person to eat out at least three times per week. Remember the assumption that the average individual eats out twice per week. If limiting the amount that people can eat out has the effect of reducing economic activity, perhaps mandating that people eat out more often will increase economic activity. Certainly, restaurant owners might tend to think so. As there will be more transactions in the restaurant industry, revenue will go up for restaurant owners, some of which will be passed on to their employees. Indeed, more restaurants will be built, and that will create jobs in construction, cooking, and waiting. Consumers will have more meals, and probably better ones, too.
It would be great – right? Not at all. Mandating more consumption of products and services does not have the opposite effect as mandating less. If anything, it actually has the same effect, as total per-capita product still declines. This is the essence of the “pushing on thread” metaphor. If the government’s policies impacted the economy in a manner that were so easily manipulable and reversible as, say, a door – pull to open, push to close – then it is doubtful such highly educated experts would be hired to determine the government’s policies. Instead, though, the effects of policy are complicated, and the more they are analyzed, the more depressing the conclusions become. Mandates and regulations pull down, but can not push up, on the health of the economy.
To see how this is so, recall that consumers have only a certain amount of money to spend at a time. They must budget this money somehow; spending infinitely is not an option. Therefore, as people are forced to spend more and more at restaurants, they must by definition make sacrifices elsewhere. Perhaps before a person went out to eat twice a week and went to the theater once. Now he goes out to eat three times, but stops going to the theater to compensate. This, again, is not an even trade-off. He is actually worse than before, because he has stopped doing something he wanted to do – going to the theater – in favor of a second choice option. He didn’t want to spend all that money at a restaurant, so he is by definition worse off if he is required to do so.
Similarly, the business owners also take a hit in productivity. Obviously the owners of pre-existing restaurants will see a rise in profits if a law were passed requiring more visits to restaurants. Yet what is also true is that the owners of theaters must see a decline in profits, as well. As restaurants are built in the weeks and months after the law is passed, so also theaters are closed. Small business owners and their employees will shift industry. People will quit their jobs as theater directors and go to work in food service. Again, this is a second choice. Again, it is by definition worse than what was in place before. The converts from other industries to the food industry are taking jobs they weren’t trained to do in order to satisfy a fabricated demand that doesn’t really exist except that the government requires that it does.
Economists and politicians may preach about the stimulus effects of increased spending in the restaurant business. The newspapers scream headlines about the new jobs created by constructing more restaurants to meet the growing demand. Yet all of this is in the spirit of the broken window fallacy, commenting on the visible benefits of a transaction while ignoring the unseen opportunity costs. The idea put forth is that any economic transaction is by definition a good one, when in fact only a voluntary exchange benefits both parties involved. When praising the activity generated from a mandate to consume, it is necessary to ignore or dismiss the activity which would have occurred in the absence of the mandate – and that activity would have been preferable to both consumers and producers.
One might imagine that policymakers and politicians had by now come to understand the lesson in this simple parable of restaurants. At the very least, they certainly have hired economists and analysts who are too educated to fall for the basic fallacy of pushing on thread – of assuming that the opposite of an action which produces a result will produce the opposite result. Since elected officials tend to be of above average intelligence and education level, and since the federal government has many panels of experts with decades of experience in economics, it is to be expected that, although government policies may not always be perfect, they aren’t as utterly naive as requiring people to eat at restaurants and then declaring an improvement in the economy.
Aren’t they? It seems not, as the past three years have revealed an ever-increasing role of government spending and government-supported consumer spending in the name of “stimulating” the economy, without much consideration for the fact that it is impossible for such policies to increase total productivity at all. Remember the Bush package, when you and your significant other got mailed a check for six hundred dollars in order to stimulate the economy? The stated goal of this policy decision was to prevent an economic collapse and help boost GDP in the face of an expected moderate decline.
Well, it didn’t work at all. GDP ended up dropping far more than predicted, not in spite of the stimulus, but because of it. In fact, Bush’s idea failed so completely that Obama expanded upon it and extended it to affect more people. At every turn, with every new stimulus program, of which there have been about a half dozen since the housing crisis began three years ago, the federal government has sworn that there would be a demonstrable increase in GDP as a result, and every time real GDP (adjusted for inflation) has actually fallen.
This is by no means the extent of the damage – examples of government destruction rationalized as construction abound. It turns out that Barack Obama actually pulled the “mandate that people eat out” trick, only he did so with cars. The infamous Cash for Clunkers program, which one might argue is better termed “the General Motors bailout,” required Americans to buy new cars – with their own money, funneled through the federal government by taxes. Essentially, Obama offered a subsidy, funded out of tax-payer money, for people to scrap old cars and buy new ones. The program was sold on the claim that the act of buying new cars would spur economic growth.
It did not accomplish this, and it could not have under even the most generous interpretation. The philosophy of the program was flawed at its core, because it presumed that the activity generated by purchasing new cars must be good activity – ignoring the fact that, if it were beneficial to buy a new car, people would simply do that on their own. By taking tax dollars, which are of course collected by force, and demanding that they be applied to the purchase of automobiles, the government incentivized allocating resources to one particular sector of the economy, but by definition took resources away from other sectors where consumers would rather have used them. Requiring that people spend their money on a new car is no different from requiring that they spend it at a restaurant, and the damage done is exactly the same. Whatever else people would have spent their money on instead if given the choice, that was better for them than the purchase they were forced into. Ultimately, though, this was lost on policymakers, because they rationalized their decisions by observing the economic activity of buying cars and ignored everything else that money could have been used for.
When the government gets worried by how much of people’s money it is taking to fund purchases they didn’t choose to make, it has another card to play, which is monetary inflation and deficit spending. For a hundred years, Keynesian economists and federal-level politicians have struggled to convince the world – both the people in it and physics itself – that monetary policy allows the government to spend money it doesn’t actually have, if it’s careful enough. All manner of nuanced methods have arisen towards this aim. From the esoteric quantitative easing to tried-and-true manipulation of bonds and printing presses, an academic field and a sector of industry has grown up around selling the notion of the free lunch. The government, it is claimed, can fund programs with other methods besides simply taking money from individuals.
This, unfortunately, is not true. The government cannot create wealth out of thin air, no matter what elaborate practices its banks may employ. Whatever government money is not taken from individuals expressly through taxation is ultimately taken through inflation, the devaluation of savings accounts. When the government bails out banks with trillions of dollars of unofficial spending, this money is taken from the savings accounts of all Americans, especially the middle class, whose combined liquid assets represent the bulk of non-industrial capital. Literally, dollar bills and other written representations of money are created by the government, which the elites call “injecting money into the economy,” and the result is that the value of the dollar declines.
As the dollar is weakened, the ability of savings to buy real products and services decreases proportionally. That means that a person who used to be within a month of having enough money saved up to buy a boat, or who had savings to support his family for a year in case he lost his job, or who was preparing to send his children off to college, is now able to buy less than he otherwise would have with the same amount of dollars. This, then, is the cost of the bailout, and fits the exact same model as the fabled restaurant mandate. The government forces individuals to forgo purchases they otherwise would have made voluntarily in order to pay for a mandated bailout of corporations whose unwanted products and services failed to produce profits – all in the name of stimulating the economy.
The economic crisis has lead to the government fully doubling the monetary base in just a few short years. The long-term consequences of this will be the establishment of recession conditions as the “new normal.” The economy will not improve – it cannot improve – so long as the government continues its policy of mandating spending at levels above what would naturally occur. The American middle class individuals do not want to dig into their savings to bail out enormous banking corporations that have mismanaged their money. They do not want to buy new cars at a time when their income level is uncertain and the bare necessities are of immediate concern. When the government disrespects their decisions in managing their finances, it is only destroying any hope of recovery. Policies that focus on spending are pushing on thread, trying to create a stimulus but ultimately just allocating precious resources where they don’t belong. If Americans want a better future for themselves, the only option is less spending, less mandating, and less government.
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2012 presidential candidate Gary Johnson speaks in Raleigh
Could a libertarian be the next president of the United States of America?
Well, not quite. But if former governor of New Mexico Gary Johnson has his way, libertarians could see their strongest – if admittedly still rather weak – ally in the White House since before the World Wars. Unlike all presidents in recent memory, Mr. Johnson has a real grasp of the damage that the military-industrial complex has done to America through corporate lobbyists working government contracts who provide incentives for leaders to instigate and prolong unnecessary wars. Equally anomalous is his real track record of actually reducing the size of government in his home state by cutting unnecessary bureaucracies and decreasing funding for programs that failed to live up to their promised potential. Gary Johnson supports the legalization of marijuana and a dramatic reduction in federal involvement in policing other drugs, believing that prohibition as a concept cannot succeed due to the inability of government to enforce it without adopting draconian policies and spending enormously on prisons and police. Along the same vein of thought, he opposes the Department of homeland Security’s ever-increasing border patrol operations and supports amnesty for illegal immigrants that would not confer upon them citizenship, but rather the right to work and move freely throughout the country coupled with the obligation to pay the same taxes as citizens. While governor, Mr. Johnson never raised taxes a penny and still managed to improve the financial situation of New Mexico. Add to all that his belief that education can and should be almost entirely privatized and a non-federal issue, and it’s clear he has a real and meaningful history of promoting freedom across a broad spectrum of issues, even in areas where the political climate is especially unfriendly to the libertarian cause.
So what’s in these videos?
Gary Johnson speaks about his political views, personal philosophy, and career as governor of New Mexico in videos 1, 2, and 3. He begins taking questions in video 4, where he takes a question paraphrased from Reddit Libertarians. Questions continue throughout videos 5, 6, and 7. I apologize for the fact that it’s hard to hear some of the questions. If it makes you feel any better, I couldn’t hear half of them when I was physically present. Try putting on headphones; they are usually louder than built-in speakers.
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Candidates speak at Wake GOP kick-off rally
More than a dozen Republican candidates and several hundred supporters gathered last night at Broughton High School on Saint Marys Street to prepare for the height of campaign season. Most candidates, like B.J. Lawson (of the 4th Congressional district), Renee Ellmers (2nd), and Bill Randall (13th) were rallying voters in anticipation of the mid-term elections on November 2nd. However, one special guest who did not speak but conversed with many activists and concerned citizens is former governor of New Mexico Gary Johnson. Mr. Johnson is, in his own words, “laying down the groundwork for a presidential run” in 2012.
After enjoying free sweet tea and ice cream, Republicans settled down to listen to featured speakers. Renee Ellmers discussed her strong personal appreciation for the grassroots support she and other Republican candidates have been receiving throughout 2010. She expressed great confidence in her supporters’ ability to oust the 14-year Democratic incumbent Bob “Who are you?” Etheridge in November.
Ron Paul-endorsed candidate B.J. Lawson chose to focus his time on opposing 14-year Democratic incumbent David Price and his plan for amnesty for illegal immigrants. Lawson excoriated what he considered to be dishonesty on the part of Price and amnesty activists in downtown Durham, whom he accused of purporting to discuss citizenship for immigrants and in fact simply playing party politics. Lawson decried the activists for speaking Spanish at a Durham rally the previous night and mocked Price for saying “Yes” to the promises of immigrants whose speeches he could not even understand. At the immigration rally, Price had claimed that he was not advocating amnesty while simultaneously declaring his intent to give citizenship to illegal immigrants. This prompted Lawson to release a video discussing the issue. Some Lawson supporters criticized him for the speech and video, and there has been talk among the more libertarian wing of his base about whether he may be allowing racial prejudices to dictate policy views.
Finally, Tea Party enthusiast and Congressional candidate Bill Randall cautioned against the GOP becoming over-confident. He explained how many districts of North Carolina have been carefully gerrymandered to favor Democrats for over a century, with some districts having more registered Democrats than Republicans, Libertarians, and independents combined. The best strategy for the GOP, he said, is to focus on key issues where government itself has failed in recent years, such as the continuing economic collapse, and avoid making a big deal out of polarizing issues which are not critical to the election.
Afterward, I had an opportunity to speak in person with Governor Johnson about his views and his upcoming presidential campaign. He explained to me that he would like to see all drugs legalized at the federal level, though he expects that he will only be able to legalize marijuana and “do damage control” on other drugs. Drug use, he said, is a “health issue, not a criminal issue.”
By his own account, he tried very hard (and totally unsuccessfully) to implement a pure voucher system for schooling in New Mexico. As he explained, private schools cost less than public schools to run, so he suggested giving a voucher for three-fourths the current cost of public schooling to stave off the argument that vouchers take money away from public schools. Then, he said, if every single student chose to take the vouchers, public schools would still have 25% of their budget. Thus they could afford to pay bureaucrats to sit in empty buildings for years and do nothing productive whatsoever, “just like the federal department of education.”
The former governor and I encountered a point of substantial disagreement regarding legislation in New Mexico that would have prevented smoking in restaurants. According to his account, he was initially totally against the idea of such legislation on free market principles, believing that customers were fully capable of making their own decisions about whether they wanted to eat in a smoking environment or not. However, he explained that as he mulled the issue over more, he realized that the employees of the restaurant would also be exposed to the smoke, and it might be significantly more difficult for them to quit their jobs than for customers to simply not go out to eat. Ultimately, he said, he remained conflicted on the issue, and never actually had to make the decision to sign such legislation, but still cited workplace safety as an example of a case where he was not ideologically a libertarian.
I countered him by noting that workplace safety can be taken to arbitrary extremes, as there is always a function that describes the value returned by investing in increased safety compared to the value of the initial investment. We could mandate a zero percent risk of contracting health problems associated with work, and then of course it would simply be illegal to work. Somewhere along that infinite spectrum from immediate death to everlasting life is a totally arbitrary cut-off point which the government deems acceptable. I cited my own personal experience working with IBM. As I said to the former governor, “There’s a person whose job it is to take out my trash. I wish they didn’t do that. I wish I would take out my own trash and get a bigger paycheck.”
Mr. Johnson agreed with me that there is not a clear, objective reason for declaring a certain level of workplace safety appropriate, and furthermore displayed a real understanding of economics by agreeing that workplace safety regulations do, in fact, cut into workers’ paychecks. Nevertheless, he still said that he was divided on the issue of smoking bans.
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