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Congressional Candidate BJ Lawson is a master of economics, fears censorship of the internet.

July 19, 2010 8 comments

I got a chance to interview BJ Lawson again at the Carrboro Famers’ Market on Tomato Day. He was there to talk to consumers about the value of consuming organic produce instead of industrial and processed foods whose only assurance of “safety” is the FDA. Thanks to the Triangle Conservatives for informing me of this opportunity. I encourage all of you to check out their group for information regarding local politics, even if you don’t agree with their opinions.

Click to watch the video, or scroll down to read the transcript of the interview.

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JC: Do you think you can beat David Price in a policy debate? Can you, you know, show that you’re better than any opposing candidate on serious economic issues? Can you out-talk him? Do you know more economics than he does?

BJ: Well, I do think David Price is limited by what he’s allowed to say, frankly, and I think one of the frustrations most Americans have is that our government is lying to us and continues to lie to us. So … my offer to the voters: an honest conversation on the issues that are affecting us. So for example in economics, it’s clear that we’re in a crisis that was caused by and is caused by too much debt, yet the only solution that Washington wants to give us involves more debt. You can’t cure an alcoholic with another drink, so just to even be honest about recognizing the cause of our economic problems and then talking about how we transition to a freer economy where we create wealth in our communities is a discussion we desperately need to be having. Mr. Price, unfortunately, is limited by what he’s allowed to say and what his Congressional leadership will let him say, so he’s gonna be in a tough position in a policy debate because he’s not allowed to be honest.

JC: All right, so you talk about debt, and I’ve heard you talk about before reducing government spending, so what I want to know is, you’re in a debate, and David Price says this: “All economists agree that it takes money to make money. Capital gets reinvested into new industries and ventures to generate more wealth and turn the world’s motor. However, during a recession, individuals and banks reduce spending, keeping their capital saved rather than invested and lent. While saving has personal prudence, it is macroeconomically unwise. The decreased consumer spending and bank investment causes factories to slow or shut down resulting in unemployment and rising prices. The government can utilize the multiplier effect by taxing income and savings to fund construction and production projects. These projects aren’t always managed perfectly, but they reinvest capital which would otherwise be stored and not producing output. There’s no advantage to having wealth that isn’t being employed, but funding projects generates new jobs and ensures a cyclic flow of wealth. Shouldn’t we build up our projects when capital lies dormant in a recession?”

BJ: Ah yes, the paradox of thrift. So, were David Price to quote the paradox of thrift by Keynes, we’d also have to remind him that Keynes’s other philosophy was, “In the long run, we’re all dead.” And what we’ve reached in our debt – in our economy – is a point of debt saturation where, effectively, if we try to have the government continue to take on more and more debt beyond our ability to service it, we’re compounding the problem. So, at a very real level, what we need is not more capital in government hands to be mal-invested and given out through crony-capitalism, but we need to get more capital that can be put to work in our local communities. That means freeing up the market to create our own jobs, our own businesses, and not relying on the government as a source of debt finance stimulus, which is simply tying more weights to our ankles and ultimately slowing us down.

JC: But what you’ve just given me is a whole bunch of fiscal policy that assumes completely constant monetary policy. You talk about the federal debt, and you ignore the fact that the Federal Reserve has the ability to reduce the real value of the federal debt by modifying the currency. Can’t we fund projects and modify the value of the currency? Yes, it will reduce the value of savings, and I recognize that that’s disadvantageous to the individual, but we are in a recession. There are disadvantages to the individual. Reducing the value of the currency would increase economic flow if combined with a good fiscal policy.

BJ: So here’s the problem with our monetary policy is that we’re reaching the mathematically constrained end-game for our faith-based currency. What we’ve got is a system of debt-based fiat money that, as you know, can be expanded at will by the Federal Reserve and given out through crony-capitalism, as we’ve all experienced. That system, however, is mathematically limited because, when you’ve got a system of money where your money itself is based upon debt, and new money coming into circulation comes with a burden of interest to pay it back, you need, over time, an exponentially-increasing amount of new money to service the existing debt.

JC: What you’re talking about is when the federal debt becomes so large that the real interest, disregarding what the Federal Reserve claims the interest is, the real interest on the federal debt exceeds the maximum power of taxation at the peak of the Laffer Curve. It becomes impossible even if government spending goes to zero to ever pay off the debt because the interest on the debt exceeds the power of taxation.

BJ: Exactly. And I don’t know if David Price understands that.

JC: Do you think we are at that point?

BJ: Well, we’re clearly at the point where we have tipped over into the diminishing marginal utility of debt, where more debt added into the economy is actually reducing our GDP instead of increasing it. That’s the beginning of the end-game. So until we’re willing to have an honest conversation about the reality of dealing with the crisis of too much debt, and the need to purge mal-investments, to get that back into the economy down to a sustainable level, all we’re gonna be doing is stimulating ourselves off a cliff.

JC: All right, you’ve convinced me on your fiscal policy. Then David Price comes back with a statement about monetary policy again. He says: “During a recession, many companies, especially small businesses, experience a reduction in profits. Because they are businesses, they must scale back their operations to compensate. Yet long-standing social custom coupled with union negotiation makes it almost impossible to reduce wages and hours. Thus the only way a company can scale back operations is through layoffs. In layoffs, not only are some individuals punished for lack of productivity out of proportion to their actual decrease in productivity, but there’s a decrease in specialization of labor, which results in higher prices for consumers. This reduces total economic output, creates an unemployment panic, and compounds the recession. But there is another way. The Federal Reserve can inflate the currency, lowering real wages without lowering nominal wages. The recession is still there, but there are fewer layoffs, the burden of lost productivity is shared instead of focused in certain individuals that didn’t necessarily actually have their productivity go to zero even though they became unemployed and their income went to zero, and there’s no unemployment panic. So shouldn’t the Federal Reserve combat sticky wages by loosening the money supply?”

BJ: Theoretically one might be able to make that argument, but again we’ve reached the point where that process no longer works. How can we lower-

JC: But did it work before? I mean- … it works in some cases?

BJ: ¬†Well, I mean it depends on your definition of “work”. If by “work” you mean, “Can we steal from savers and investors and encourage crony-capitalism that benefits the politically well-connected at the expense of everybody?” Yeah, you could argue that it works.

JC: But why does it benefit the politically well-connected at the expense of everybody if I take a real paycut, but everybody in my company stays employed, and a few individuals whose productivity only went down by ten percent don’t lose all their income?

BJ: Right, but people are on the treadmill of trying to compete to maintain a standard of living against a currency that’s declining in purchasing power. The crony-capitalism and the politically-connected gets into who has access to the first dollars off the printing press if you will, the electronic printing press. The people who have access to the money first when it’s created in an easy-money regime – they’re the ones that benefit, because they’re getting the first fruits of the harvest before prices go up. Unfortunately, though, as we’ve talked about, we’re at the point of debt saturation where we’re already seeing interest rates at zero percent. What is left? The Fed is out of bullets, and to say that we can continue to reduce interest rates or be any easier with easy money ignores the fact that there’s too much debt in the system. For every lender, there’s got to be a borrower, and there aren’t a whole lot of credit-worthy borrowers who are interested in levering up in the current environment. So we’re at the point where the tried-and-true forms of Keynesianism, so-called “Keynesianism”, are no longer effective when you reach the point of debt saturation.

JC: Okay, now the federal government is trying to control the internet. Are people like me the target of the federal government’s attempts to control the internet? Are they mad that I don’t have to buy big books to understand what’s happening in the world? And would you fight tooth-and-nail, not just – I don’t want to say, you know, “Vote ‘No’!” on the bill; you can vote ‘No’ on the bill; the bill’s gonna pass anyway. Would you talk to Ron Paul, and talk to Barney Frank if you have to, and stop the federal government from having any – any- regulatory control over the internet.

BJ: It’s a – that is a critical issue. Yes, I will, and you can get a pretty good picture as to how dangerous the current situation is when you consider that the Department of Homeland Security just this past month over the July 4th weekend put out a very short, like fifteen-day request for comment on a proposal for a policy to provide universal internet user identification. So you can see how the screws are going to be clamped down, and it isn’t even going to require additional acts of Congress to happen. The bureaucratic processes are already in motion to start clamping things down, and we need to fight it.

JC: Is it unconstitutional that the Department of Homeland Security even has the authority to make any kind of regulation? Shouldn’t Congress be in charge of all that?

BJ: Indeed, and you get to another important topic which I call the “Write the Laws!” act, where we look at Congress essentially delegating its Constitutional authority to write legislation to unelected bureaucrats and lobbyists. So you end up with regulatory capture and rules that are written by the politically connected with no legislative recourse for we the people, for us the people.

JC: Cool. Thank you.

BJ: Thanks for coming out.

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Building a Better Constitution: How to Combat Tyranny, Bureaucratic Drift, and Deviation from Original Intent

August 13, 2009 6 comments

I have grown very concerned at how far this federal Union of States has strayed from its original purpose, how an alliance of sovereign nations designed to raise an army to defend a continent has become a burgeoning country of its own, how the menace Abraham Lincoln declared martial law on his own citizens and conquered free lands, thus changing patriotic pride from that of “the United States are” to “the United States is”, how the statist tyrants Roosevelt and Johnson demolished the free economy which drives the world’s motor and replaced it with pseudo-socialist muck and bureaucratic tiers of wastefulness, how the federal reserve manipulates the value of real currency, and therefore real labor, thus playing the role of puppeteer to the puppets known as our lives, and how the bloated national system of regulations designed to “ensure our safety” contributes the bulk of all violent crimes every year by oppressing our rights to arms, drugs, and any other possessions we so choose.

None of the laws that made all of these actions possible are permitted under the Constitution of the United States of America. Congress was granted certain specific powers, and it was said very clearly (twice, in fact) that all other powers of regulation were to be left to the sovereign states and localities of the union. So it would be an ineffective strategy at this point to try to stop socialized medicine or interventionist warfare by crying out, “It is unconstitutional!” since we can clearly see that no one cares, and that no one has cared for a very long time, about the Constitution. Instead, we should consider how a constitution could be designed so that people would care, so that they would have to care, even centuries after the founders passed on. It is important to understand how the Union’s Constitution failed at keeping the federal government in line, and what must be done to prevent tyranny and drift from taking over.

It should come as no surprise to the rational-minded reader that the first step towards preventing drift is to remove the incentive for it to occur. In the United States of America, this incentive comes in the form of elections. To paraphrase Rush Limbaugh, “No one who wants to be president should be allowed to do so.” This is because there are only two reasons why a person would want to run for any high political office. One is that the candidate wishes to gain money or fame by becoming a political figure, enjoying the spotlight in the news media and public eye and reaping the fruits of excessive salaries and protection services. The other is that the candidate hopes to improve the lives of citizens or strengthen the nation by implementing reform policies that he believes will be beneficial. Both of these are terrible for the Union. Clearly a desire for money or fame will lead a president, legislator, or governor to take actions which are attention-seeking and destructive, not to mention the simple fact that a nation being led around by a bunch of greedy low-lifes is reprehensible in itself. But even more horrifying (and much more common) is the reformist complex, the president who thinks he can help people by implementing policies and changing the structure of the government. These people are passionate about morals, which means that they have a vision in their minds for how the world ‘ought to work’, and they will invariably use their political position to impose on individual liberties to achieve that end. Every enthusiastic, passionate leader with ideals has a concept of a better world, a way that people ought to do things, a system that ought to be in place. The problem is the government has no right to be implementing systems. The means of production, the types of communication, the forms of religion and spirituality, the allocation of resources, these are all things that people with ‘a vision’ try to alter when they get into the government, and that is why a person who wants political power must never be given it.

The vastly preferable alternative to elections is one that has been proposed only rarely by even the most daring extremists, and has never been tried on any large scale in history. Federal offices must be filled by random compulsory assignment. Each county must compile a list of names of all able-bodied, adult non-felons in its area, and randomly choose a name for each position that opens in the federal government (legislators, executives, and judiciaries alike). All of these names must then be sent to Washington so that one person may be randomly selected for each office. The citizens selected must then be forced under penalty of execution to fulfill their respective terms of service to the Union.

The responsibilities of these citizens would be exactly as stated in the Constitution, namely, to uphold and administer the law of the land. Since these are not people who campaigned on some virtuous crusade for reform, they would be able to function much like a jury in a criminal trial, coming to approximately objective decisions based on the letter of the law, not their personal values or ideals about how other people should behave. By having a large legislature composed of totally random choices, a fair representation of actual American people is much easier to achieve. No more would we be plagued by elitist Congressman whose salaries prior to becoming politicians were already five times our own. No more would the president always be a neo-religious figurehead with ‘a vision’ and no sympathy for reality. Would there be idiots in Congress? Yes. But they would be idiots in proper proportion with the total population (about 10%) as opposed to our current proportion (about 95%).

Under a system of compulsory random assignment, no one would have any incentive to appeal to the public eye, there would be no bias towards selecting wealthy and visionary leaders, there would be no ‘middle-aged middle class heterosexual Christian white male who loves his daughter and drives a Chevy’ bonus for Congressmen, and there would be almost no chance of serving a second term. They would simply be ordinary people, obligated by chance to fulfill what ought to be relatively simple administrative tasks. But then that leads to our next point, making government jobs performable by every man.

The federal government rightly serves only to maintain and command an army and occasionally mediate inter-state disputes, as might occur if a felon in one state escapes to another. The only task of the appointed bureaucrats, then, would be to hire the appropriate personnel, namely generals, and raise and allocate funding as the international threat level demands. The perfect constitution must somehow protect against the Congress attempting to undertake any tasks not directly relevant to the aforementioned functions. The way to do this is by explicitly stressing certain very key aspects of legislature:

All bills involving spending must have an explicit purpose. That is to say, the legislature cannot constitutionally approve any allocation of funds via any piece of legislation that does not at its outset specify the project to which funds will be directed and the intent of that project. Then all allocation therein must directly and demonstrably pertain to that project. Legislators who introduce bills which are determined by the courts to obscure the goals of their funding would be decommissioned and have their salaries retroactively revoked. For as long as any law remains in effect, its allocation of funding would be liable to be charged at any time if reason is found to believe that the funding does not actually direct serve the project outlined at the beginning of the bill.

All bills of any kind must have a particular objective outlined in a clause no longer than eighty words. Bills must consist entirely of this objective clause and pages of definitions and administrative procedures. All text that is not included in the eighty words must be defining terms or processes; no mandate or regulation may be present in any bill except in the first eighty words. In this way, we avoid bills that have dubious functions, or that are simply too long to read and understand.

All bureaucrats must be allowed to be charged at any time with violation of their duty to uphold the Constitution, specifically and directly, if it is discovered that they have attempted to obscure the purpose of a bill, alter the original intent of the Constitution, or otherwise avoid transparency in the legal process. If they are convicted of intentionally corrupting transparency, they must be decommissioned and have their salaries retroactively revoked. To prevent people from trying to get decommissioned to avoid serving their terms, an additional penalty of a year in jail should be appended to those who are convicted within the first year of their terms.

All taxes must be collected in the form of gold. Yes, gold. Money must not be drawn from our incomes before we see it. It must not be silently stolen away in sales taxes. The federal government, whenever it needs funding for a program, must send a bill to each American household with a specific weight of gold. That bill must include the name of the act for which it is allocated, and must include the eighty-word objective clause on the back side of the page. That way, every American will know exactly what his money is being spent on.

The bottom line here is pretty simple. Eliminate elections, eliminate the bias towards corrupt government. Make budgeting transparent, and make taxation explicit. Hold Congressmen responsible for trying to conceal their motives. When this happens, people will be able to serve their rightful function as watchdogs and maintain freedom and Constitutionality in these United States of America.

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