Stop the Pork Stampede!

Here is a web site that will take you on a tour of the "stimulus" package that is now before the US Senate. Please visit it and look for the "stimulus" projects are requested for your town. See if it is not the most colossal waste of wealth in the history of the planet.

Here in Madison Wisconsin, one of the projects is the repaving of University Avenue, a six lane street that as far as I can see is in perfectly adequate repair already. If the repaving makes any difference at all, it will only mean that people on University Avenue will be driving even faster than before. I think they are already driving too damn fast.

Look at these projects and remind yourself: you will be paying for them, and paying dearly. Given that they are determined not to raise taxes (yet) there are only two ways to enable this stampede of pork. On the one hand, the government may go even further in to debt, a debt that you and your children and grandchildren will pay, and with interest. The only alternative is to inflate the currency, thus taking a bigger and bigger bite out of the value of every dollar you earn. Given that Chinese investors are understandably growing tired of loaning us money, the latter alternative is looking more and more likely.

I urge you to email your senators today, and beg them to reject this disgraceful piece of legislation. The now-discredited TARP was bad enough. It consisted merely in the banking industry using the federal government to rob the rest of us. It made sense, in a criminal sort of way. This plan is a matter of every Tom, Dick, and Harry robbing every Harry, Dick, and Tom -- and themselves. This makes no kind of sense at all.

Oh, and by the way, it won't work.
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On a somewhat lighter note, here is a prediction as to where America will be by Christmas, given the way things are going now. And here are some alternatives to the "stimulus" heist.

And here is Peter Schiff explaining it all:



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Update: For the moment, the stimulus package is stalled in Congress. Let us see what it morphs into next. When I recall that, after TARP stalled momentarily, it turned into the ghastly pork-festooned Christmas Tree from Hell, I am not optimistic.

The Lesser of Two Evils is Still Evil

Some libertarians and conservatives have endorsed Obama, giving as their reason that, bad as he is, at least he's not the other guy. Others have endorsed McCain for exactly the same reason. (A rather curious example is Anne Applebaum's, which might be called an endorsement of not-McCain.) Of two candidates who admittedly will commit unjust actions, which is the lesser of the two evils?

Does it make sense to choose the lesser of two evils?* Ryan McMacken, writing on the LewRockwell blog, poses the question this way:

You have been captured by a band of criminals. In a room stands you, two criminals, and 11 children. Criminal A hands you a gun and tells you to shoot one of the children in the head or the other 10 will be murdered by criminal B who has a machine gun. [Suppose there is some reason you can't shoot the criminals -- which of course would obviously be the optimal choice.] What do you do?

Faced with such a choice of two evils, he says, the proper response is to say, "I chose neither. I will not cooperate in committing evil." Speaking from a Catholic perspective, he gives three reasons for this position, which I reproduce here with my comments and emendations:

1. 10 children are not worth more than 1 child. Each human person is infinitely valuable, and for you to cooperate in the murder of one of them, no matter what your motivation, is to be a murderer, and no less a murderer than the one who murders 10. Humans cannot be reduced to math equations in Christian morality.

2. If criminal B proceeds to murder 10 children, you are not morally culpable. The murderers are the criminals, not you. You have a responsibility to not damn yourself and to not cooperate in evil.

3. You cannot predict the future [with certainty -- not, at any rate, future human behavior]. You don't know that if you shoot the one child that the criminals will keep their words and spare the children. It could be that you will all be murdered no matter what, and all that you have accomplished is to become a murderer yourself. You also don't know that if you spare the one, that the criminals won't spare all of you for some other reason.

The only point here that I would want to amend in some major way is (1), which rests on the idea that all persons have "infinite value." I admit that this notion does make my heart beat faster, but I could never in good conscience say that it is true, for the simple reason that I can't coherently explain what sort of "value" this is. Nor have I ever seen anyone else give a coherent explanation of it. Obviously, it doesn't refer to the person's contribution to the economy -- ie., the value involved is not market value. Nor does it consist in one's fitness for some job or position or role. Nor is it virtue or worthiness for admiration. What is it? I can't say, and so far as I know, neither can anyone else.

But I do have an alternative idea, one that amounts to the same thing in practice. It is that persons have rights, and that these rights are moral constraints on your behavior. Constraints do have exceptions, but where no exceptions apply, you may not infringe them.

What you do not do is the count the number of violations and minimize them. Numbers don't count. Quantitative considerations do not apply here. That is part of the difference between a constraint and concepts like "value." What you do with value is you maximize it. With a constraint what you do is you don't violate it. In practice, this means acting as if ten children are not worth more than one.
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* The following discussion, I should admit, is only relevant to voting if we assume that voting for doing A rather than B has the same moral status (guilt or innocence, etc.) as choosing to do A rather than B. This of course can be denied.

Obama Wins at Reason Magazine

Here is a very interesting article in Reason Magazine, which undoubtedly is the best known libertarian publication. They asked various people who have appeared in their pages some questions about how they plan to vote this time around and these are their answers. They are often very interesting indeed.

These are the bottom line results for each:

Peter Bagge: Barr; Obama if close
Ronald Bailey: Obama
Radley Balko: Barr
Gregory Benford: Barr
David Brin: Obama
Drew Carey: "Anybody but McCain/Palin"
Tim Cavanaugh: Obama
Steve Chapman: Obama
Shikha Dalmia: Nobody
Brian Doherty: Never votes
Nick Gillespie: Barr, if he votes
David Harsanyi: Not saying
Rob Kampia: Barr
Katherine Mangu-Ward: Never votes
Michael McMenamin: Undecided
Michael Moynihan: Won't vote
Craig Newmark: Obama
Grover Norquist: McCain
Charles Oliver: Won't vote
Steven Pinker: Obama
Bob Poole: McCain
Damon Root: Probably nobody, maybe Barr
Ryan Sager: Obama
Julian Sanchez: Obama
John Scalzi: Obama
Jack Shafer: Barr
Michael Shermer: ?? (Answer amusing but ambiguous)
RU Sirius: Obama
Tim Slagle: McCain
Doug Stanhope: Obama
Bill Steigerwald: No one
Roger Stone: McCain
Jacob Sullum: Barr
Jesse Walker: Barr
David Weigel: Obama
Matt Welch: Probably Barr
Cathy Young: Probably Barr

Which I add up thus:

Obama 13
Barr 10
McCain 4
Nobody 7

I find this fascinating for several reasons. I've been connected with Reason in various ways since I helped Marilyn Walther Machan assemble and staple pages fresh from the printer for an issue circa 1971. In those days, it looked home-made (see above) -- and it was! I also wrote for it long before it was fashionable to do so.

But there is also a non-egocentric reason to find this interesting -- Obama wins! Even if you subtract the three authors who are obviously not libertarians (Newmark, Sirius, and Pinker) he still ties with the Libertarian candidate. The reason for this is very clear in the answers almost half of the libertarian writers give. These people want to see the Republicans punished, punished painfully, publicly, humiliatingly. And then punished some more.

As Boaz and Kirby point out, studies find that between 10 and 20 per cent of voters are neither liberal nor conservative but libertarian, where this means "tending to agree with conservatives on economic issues and with liberals on personal freedom." By the standards of these voters, the Bush administration has clearly been very bad. If you add that most libertarians favor a military policy that is limited to national self-defense against imminent attack, the picture becomes many, many times worse. For these voters (and I speak as one of them) six years of united Republican rule was pure screaming horror.

As for me, I've already given my endorsement. I would like to add that, though rage against the Republican machine is perfectly understandable, I think voting on the basis of emotion alone is an irresponsible thing to do. My mother once told me that she voted for Governor Reagan because she loved his movies. Voting for one major party because you are mad at the other makes about as much rational sense as what Mom did.

By the way, I'm voting for the only candidate who wears a moustache.
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Later: Hey, Alex Cockburn swiped my idea! Just kidding of course. It's really one of those great-minds-think-alike things.

Obama a Socialist?

If we are talking about the Joe the Plumber issue, the more accurate term is of course "redistributionist," someone who believes the state using its power to tax in order to spread the wealth. That means taking wealth, not merely from the venal and corrupt rich, but from the hard-w0rking and successful as well, simply in order to give it to the less successful.

Some people have argued that The One is not advocating redistribution at all, on the grounds that he is merely going to raise taxes on the top 5% in order to cut taxes for the bottom 95%.

This seems like sophistry to me. After all, it is admitted that the state would be coercively taking from someone who has more for the sole purpose of benefitting someone who has less. The act of taking is what raises all the moral and economic issues. If we are indeed taking from Peter in order to give to Paul, the taking from Peter is the part that looks an awful lot like Robin Hood robbery. No one has any ethical objections to the other part -- the giving to Paul. Giving something away, if we bracket the issue of where it came from, is generally a nice thing to do. Also, it is the taking from Peter -- and thus raising the taxes on productivity -- that lowers the incentive to produce. So who cares whether the actual, physical dollars we are taking from Peter end up in Paul's pocket, or whether they are going into the government's coffers in order to increase Paul's wealth in some other way? All the issues are the same. [Of course, all this is based on the absurdly charitable assumption that Obama's policies will be carried out in exactly the way he promises.]

Greg Mankiw links to an interesting story reporting a poll done recently on whether the government should use its power to tax to spread the wealth. The results:

Americans are evenly divided on the idea: 45 percent think it is a good idea and 46 percent a bad idea to use some of the money government collects in taxes to "spread the wealth" to others who are less well off. Most Democrats think spreading the wealth is a good idea (66 percent) and most Republicans think it is a bad idea (72 percent).

In another poll

57 percent of undecided voters said they disagreed [with redistributionism] and 24 percent said they agreed. Nearly 20 percent were not sure. Among independents, 52 percent disagreed and 39 percent agreed.

Obviously, so far McCain has failed utterly to pick up all the anti-redistributionist votes. By all accounts, the American people are about to elect a President who represents a position that they do not support. I wonder what could account for that?

Greenspan's Betrayal

A commenter points out that Bill Moyers has said that Allan Greenspan's contribution to the recent crash and the coming depression/recession can be blamed on the fact that he was once an friend and follower of Ayn Rand.

This is almost the exact opposite of the truth. Greenspan's conduct as Fed Chair was a betrayal of his earlier expressed views, a betrayal that libertarians and Randians have complained about many, many times over the decades.

The truth has been explained very by Richard Spencer here. In the early sixties, Greenspan wrote an excellent essay, believe it or not, defending the gold standard, on the grounds that it would prevent precisely those policies that he did pursue years later, after he had become our monetary dictator.

In that essay, he criticized a fateful move on the part of the Fed in 1927, when it decided

to assist Great Britain, who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain’s gold loss and avoid the political embarrassment of having to raise interest rates.

The ‘Fed’ succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market—triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed.

Greenspan's essay is still in print and still well worth reading.

What I find seriously spooky about it is that in it he is quite explicitly saying that policies substantially similar to the ones he later enacted eventually lead to speculative booms, crashes, and depressions. As Spencer points out, after Fed interest rates reached an all-time high of 19 % under Greenspan's predecessor, he eventually hammered them down to as low as 1 %. This is just the sort of speculation-triggering inflationism he warned about back when he was a Randian. Of course he was right the first time. These policies have indeed lead to disaster, and will continue to do so.

Moyers' comments are one more example of the often-repeated myth that these events were caused by laissez-faire caplitalism, whereas they were caused by government intervention. In fact, critics of interventionism predicted it would do so, including even the Arch Intervener himself, in a earlier lifetime.

(Notice that the people who were suprised when the catastrophe struck were proponents of intervention, like Ben Stein and Paul Krugman. We on the other side had been warning it was coming for a while now, and were in large part well prepared for it.)

The story of Allan Greenspan is a very sad one and a very old one. Once upon a time he believed in freedom and the market, and in the principle that working and saving are virtues. Then one day Ronald Reagan offered him absolute power over the US money supply, and it corrupted him. He went over to the great Keynesian transvaluation, in which working and saving are less virtuous than consuming and spending.

As Ellsworth Toohey, villain of The Fountainhead, says to one of his victims, "Ever read Faust, Peter?" Political power is indeed a deal with the Devil.
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Added Later: On related themes see Harvard (!?) economist Jeffrey Miron. Also see the always-excellent George Reisman. Also check out this audio of Ron Paul commenting on the Greenspan betrayal. Finally, my friend the estimable Richard Epstein has weighed in.

Greenspan's Paltry Mea Culpa

Of all the public sector people who bear responsibility for the recent wave of failing financial institutions, and of course the coming depression, Allan Greenspan two days ago became the first one to admit some responsibility. (Among the many others who owe us an apology is Barack Obama, but don't hold your breath while waiting to hear it.)

As Ron Paul points out in this video, Greenspan is confessing to the wrong sin. Instead of saying that he should not have spent decades pumping money into the economy, fueling illusory pricing booms in the the stock market and housing market -- he says he should have proposed a regulation or two that would have enabled this system to go on forever.

Greenspan's regulatory proposal is to require institutions that repackage mortgages for sale to others to retain some of these mortgages themselves, giving them a little more incentive to know the level of risk these instruments involve. Don't the people to whom they sell these mortgages already have incentives to do that?

This sounds to me like putting a bandaid on a compound fracture. And the Democrats are no better. Their attitude is: You fool! You fool! The patient needs ten bandaids!! What the patient needs is surgery. The problem is -- and this is where we libertarians start sounding like Marxists -- that the system is fundamentally flawed. As long as the doctor is only going to reach for another bandaid, the patient is doomed.

The theory all these doctors agree on is this: We in the public sector create incentive structures that push the private sector to go where we want it to go. If that doesn't work, it's because some bad people in the private sector failed to make our structure work. At most, we are only responsible for not slapping on some new rules to stop them from failing to do the right things. Or maybe, worse yet, we took off some of these magic rules. Mea maxima culpa!

This is the mindset that says that the cause of all our troubles was deregulation. The last deregulation we did in this country was the Gramm Leach Bliley Act of 1999, which allowed the mortgage repackaging that Greenspan was talking about. That must have caused the banking crisis! It was all due to the guys who ripped off one of the bandaids!

If you think so, consider this: Ron Paul voted against that bill. Joe Biden and John McCain voted for it. That's the difference between someone who sees the system as a system, and people who are thinking about bandaids.

Proof that the Bailout Was a Swindle

Today (Wednesday) a paper was released from three economists at the Minneapolis Fed that ought to have everyone hopping mad. It appears to show conclusively that four statements that were made to justify the recent massive Wall Street bailout are, quite simply, false:

1. Bank lending to non-financial corporations and individuals has declined sharply.

2. Interbank lending is essentially nonexistent.

3. Commercial paper (ie., bond) issuance by non-financial corporations has declined sharply and rates have risen to unprecedented levels.

4. Banks play a large role in channeling funds from savers to borrowers.

This is the measure that the Republican administration proposed and the Democrats in the Congress enthusiastically made their own -- the one supported by both McCain and Obama.

It looks like we have been played for suckers, to the tune of over a trillion bucks. What really gets me is that all four of these claims were repeatedly made during the awful week in which our masters were screaming at us to accept this thing -- and never a shred of evidence, that I ever saw, was ever offered for any of them. Why did we fall for it?*

By the way, do you think they are going to give us our trillion back? Will they back off from nationalizing banks? Well sure, just like Bush called off the war when the WMDs failed to materialize.
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* Etienne de la Boetie wrote a book about it: Discourse on Voluntary Servitude: "I should like merely to understand how it happens that so many men, so many villages, so many cities, so many nations, sometimes suffer under a single tyrant who has no other power than the power they give him; who is able to harm them only to the extent to which they have the willingness to bear with him; who could do them absolutely no injury unless they preferred to put up with him rather than contradict him?"