Some Fairness Toward Ayn Rand, From an Unlikely Source

The liberal Huffington Post, of all places, has published a relatively fair-minded piece on Ayn Rand, entitled The Real Rogue Warrior: Ayn Rand, Not Sarah Palin, by Michael Shermer. Here are a few excerpts:

"Despite the media frenzy surrounding Sarah Palin's autobiographical Going Rogue, the real rogue warrior making a political conservative comeback today is not Palin, but the Russian immigrant turned champion of American conservative principles, Ayn Rand.

"You can no more understand the right without Rand than you can understand it without Buckley, Goldwater, and Reagan. The dismissal of Rand by both the left and the right as mind candy for college kids is fatuous. It may be true that many of us (myself included) were first introduced to Rand in college, but that's when most of us are introduced to most of the philosophical and literary figures in history. So what?

"What are Rand's principles and which of her books should you read to understand the modern conservative movement? Start with Atlas Shrugged. According to a survey conducted by the Library of Congress and the Book-of-the-Month club, readers ranked it #2 behind the Bible as the most influential book they had ever read. It is a murder mystery, not about the murder of a human body, but of the murder of the human spirit."

I addressed, in my comments below, Mr. Shermer's erroneous (in my view) contention that modern conservatism is a good surrogate for Ayn Rand's ideas. Though he did his best, Mr. Shermer doesn't seem to have a firm grasp of the many fundamental differences between Objectivism and conservatism. There are, too be sure, many areas of agreement, as well, especially in economics (although few, if any, conservatives would embrace full laissez-faire capitalism, or the separation of state and economics). That she is decribed as making a "political conservative comeback" is an indication of how much must still be learned about her.

There are some other errors in this piece, such as this quote from Burns:

"Rand intended her books to be a sort of scripture, and for all her emphasis on reason it is the emotional and psychological sides of her novels that make them timeless."

"Scripture" is an odd, and utterly wrong, description of a philosophy that has as a prime fundamental tenet to think for yourself.

Her books do have powerful emotional appeal, but if that is mainly what one gets out of her writing, then you're likely to ... as they say ... "outgrow Ayn Rand".

All in all, though, this is a decent piece that captures the the reason for Ayn Rand's enduring relevance.

Here are my brief comments:

Thank you, Mr. Shermer, for a pretty good article, although the appropriate term to describe Ayn Rand is not rogue, but radical. You make a crucial point all too often forgotten: “Criticism of the founder of a theory does not, by itself, constitute a negation of any part of the theory.” I agree that Sarah Palin (who I am not a fan of) cannot hold a candle to Ayn Rand.

It should be pointed out that many people of various political persuasions in what today passes for the American "Right" - from conservative to libertarian to Republican to "Tea Partyers" - cherry-pick aspects of Rand’s ideas for their own purposes, while ignoring the rich depth of her comprehensive philosophy. Also, a large swath of American Conservatism abhors Ayn Rand for her secularism, social “liberalism”, and the challenge she hurls at Judeo-Christian morality through her ethics of rational self-interest.

You’ll learn little about Objectivism (Rand’s philosophy) by listening to conservatives. So, take some advice from an Objectivist husband, father, and grandfather who never “outgrew” Ayn Rand. If you’re seriously interested in understanding Rand’s enduring appeal, you’ll just have to study her works yourself, and exercise a cardinal virtue of the Objectivist ethics – your own independent judgement.

E. J. Dionne on the "Win for Government"

On Election Day, a win for government, by E.J. Dionne.

Monday, November 9, 2009

Excerpts:

Here's a story you may have missed because it flies in the face of the dreary conventional wisdom: When advocates of public programs take on the right-wing anti-government crowd directly, the government-haters lose.

This is what happened in two statewide referendums last week that got buried under all of the attention paid to the governor's races in Virginia and New Jersey. In Maine, voters rejected a tax-limitation measure by a walloping 60 percent to 40 percent. In Washington state, a similar measure went down, 57 percent to 43 percent.

They lost in part because opponents of the so-called Taxpayer Bill of Rights measures (known as TABOR) did something that happens too rarely in the national debate: They made a case for what government does, why it's important and why cutbacks in public services can be harmful to citizens and the common good.

In Maine, one ad featured several taxpayers warning about what less government would mean in practice: "Our school budgets have already been cut. This would mean even less money for our classrooms. . . . Community health centers could be cut. People rely on them, especially now." A sympathetic-looking man then appeared on the screen to add: "My wife relies on our home nurse visits. What will we do?"

Here are my comments:

Zemack wrote:

One of the gimmicks statists use to promote their authoritarian agenda is to frame the important issue of the role of government as ... for or against. Thus we get catch phrases such as “the right-wing anti-government crowd”.

Of course, what today passes for the “Right” is a diverse array of frequently antagonistic elements such as Conservatives, Libertarians, and Religious Rightists. But that aside, the purpose of painting anyone who advocates any rollbacks or even restrictions on the further expansion of government power as “anti-government” is to obliterate any acknowledgement of the proper purpose and limits of government. So let’s get some clarification here.

A government is a unique institution. It and it alone possesses a monopoly on the legal use of physical force. This is as it should and must be. The apprehension and prosecution of domestic criminals and the protection of the nation from foreign military aggressors is the job of government (among certain other functions relating to human association), and that requires the organized use of force. No civilized society can exist without a government. Without government, society would quickly degenerate into mob rule and chaos. Government is a necessary good.

At the same time, government’s status as a vehicle of physical coercion also makes it the gravest threat to its citizens. To alleviate that potential threat, a government must be strictly contained, or limited. What standard defines the nature of those limits? The principle of inalienable individual rights. What is the method for implementing those limits? A constitution. This is the original American system. Rights, it should be remembered, are a guarantee and a sanction for freedom of action within the context of social organization (such as the right to freedom of speech, religious practice, and the earning and use of property). Rights are not an automatic entitlement to “home nurse visits” or any other product or service that must be provided by others.

So the choice is not, as Mr. Dionne suggests, between pro- and anti-government positions; or between a government of unlimited powers and anarchy. The choice is between a government limited to the protection of the rights of its citizens and a predatory government that is a tool of any political party, special interest pressure group, or voting block to be used to extract economic privileges at the expense of the rights and property of others.

The “win for government” is a loss for the revolutionary American system. Our nation - which was founded upon the principles of individual rights and limited, rights-protecting government – has degenerated into a chaotic political free-for-all of power-seekers competing for temporary control of the reigns of government’s unique powers of legalized coercion. The winner is any one or group laying temporary claim to the title of representative of that mystical historical siren song of all those who seek forcible domination over the lives, property, and productive work of others … the common good.

Today, the role of our government is being progressively inverted. Instead of protecting our lives, freedom, and property, it has become a major violator of our rights. Instead of protecting us from criminals, it is increasingly using its unique powers for what amounts to legalized criminal activities. I submit into evidence the former Bush Administration and the current runaway statism of the Obama Administration – especially the 2000 page House blueprint for totalitarian control of American medicine.

Growing government power and the consequent loss of individual liberty is a trend that has been going on for more than a century in America. Today, our government is breaking free of all constraints of the constitution and the rule of objective law. If not reversed, the consequences will be dire. Americans desperately need to rediscover the principles of individual rights and the proper role of government.

Where's the "Milestone"? Where's the "Change".

The New Jersey Star-Ledger has lauded the House of Representatives for its passage of the 1990 page health care "reform" bill, HR3962. They're calling it a Health care reform milestone!

It's no such thing. Here are my comments:


We’ve all heard the story of the fireman who starts fires, so that he can be the first on the scene to “save” lives and property. Well, in regard to American health care, the government is that fireman.

For the past 75 years, ever-increasing government interference into health care has led to a steady escalation of problems. The solution to the problems has always been more government interference. This has been mainly led by the openly socialist Democrats, but too often supported by Republicans (ex. – the HMO Act of 1973, SCHIP in 1997, and Bush’s Medicare prescription drug benefit).

The Editors themselves cite several examples of government-created problems. But once again, they don’t draw the obvious conclusions.

“When crisis hits, they land in emergency rooms, where steep costs drive up the health bill for all of us.”

Why do people who are unwilling or unable to pay their own way “drive up the health bill for all of us”? Because the government forces hospitals and doctors to treat all comers even if they can’t or won’t pay, whether the hospitals want to provide charitable care or not. This forces them to raise rates elsewhere, and causes states to tax the rest of us to subsidize the hospitals.

“For millions of middle-class families, the loss of a job has meant a loss in coverage.”

And exactly who created this absurd situation? The government did, by creating the third-party-payer health insurance system through its tax and regulatory policies, tying our insurance to our jobs.

“[The current bill] also ends the most obnoxious games that insurers play, like banning people with pre-existing conditions and imposing lifetime spending limits.”

“Pre-existing conditions” is a government-created condition, thanks to the aforementioned third-party-payer system, which forces you to find another insurer when you lose or change jobs – a situation that would not exist in a free market in which the patient/consumer actually owns his own policy. Did you ever wonder why you never hear of people losing their life insurance coverage because they contracted a life threatening illness or lost a job? It’s because people own their own policies, and they are guaranteed renewable. By contractual agreement, which is enforceable by the courts, the insurer cannot drop you as long as you pay your premiums (which is your responsibility, not your neighbor’s or other taxpayers).

Terms of contracts - such as “lifetime spending limits”, if any – are a matter between the insurance company and the customer. In our current system, the third party makes those decisions. Insurance companies can’t “impose” anything, at least not in a free market where there is real contractual freedom and competition (which, by the way, the government now forbids). They can only offer products for sale, which the consumers (which should be individuals spending their own earnings) are free to reject or accept. The most successful insurers in a free market would be those that are best at tailoring their products according to the needs and pocket books of the customers they seek.

Of course, if you don’t protect yourself and get sick, you must pay for your care out of pocket. You have no right to expect others to pay for it through government mandates on pre-existing conditions. But first, we need the freedom to take responsibility for our own lives, which only a free market can provide.

We need to get rid of the kinds of draconian government coercion that is crippling health care in this country, and restore the freedom of patients, providers, consumers, and insurers to contract directly and voluntarily with each other. Government has no right to dictate the contractual terms. Individual rights and personal responsibility are two sides of the same coin.

A true debate would begin with an examination of how we got to where we are today. Instead, we get an insane 2000 page blueprint for coercion to “fix” the problems created by government itself, and which is designed to ultimately fail, paving the way for a single-payer health care dictatorship.

The mawkish concern for the uninsured and the janitors and the “children [who] don't get the preventive care” is just a cover. The architects of this bill, and their supporters, are after power, and nothing else.

There’s no “milestone” here. There’s no “change”. There’s just another marker on the road to totalitarian government control of American medicine

Ayn Rand Misrepresentations @ Wake Forest

A sophomore at Wake Forest University has published an article in the campus newspaper entitled Objectivism conflicts with humanitarian spirit. The author, Matt Moran, dives headlong into a criticism which conflicts with the truth about Objectivism. He then engages in a lengthy dialogue with correspondents in the comments section, though he ignores mine. He repeats every conceivable argument for socialism and tyranny one can think of.

Mr. Moran is clearly a Marxist and a collectivist. He makes many false claims about what Ayn Rand allegedly stood for, such as that she “exhibits a worship of … corporations”, “envisions, unregulated corporate capitalism” (as opposed to laissez-faire capitalism), and “glorif[ies] the wealthy and show[s] contempt for the poor”.

Politically, Mr. Moran is an unabashed statist. He advocates pure tyranny, in the form of democracy: “I consider a moral social system to be a system which benefits the majority.” If the majority benefits from the enslavement of a racial minority, as in the pre-Civil War south, that presumably is all right.

At one point, he declares that the “government (i.e. not a dictatorship) as the tool of a society, reserves the right to tax people to fulfill other social needs and goals.” The contradictions in that statement are obvious.

On what basis does government have a “right” to redistribute anyone’s property and earnings to others? What about the rights of the individual victims of government confiscation? It’s either/or. Either individuals possess rights that are protected by government, or the government has the “right” to do whatever “society” pleases, at the behest of whatever voting block happens to seize control of the “tool” of state. Either a country is free, it is a dictatorship, or it is an unstable mixture of freedom and dictatorship (a mixed economy).

And in another comment: “If you don’t (sic) want welfare to exist, …the poor will either die or work bad jobs for bad money.” In other words, the “poor” are incapable of improving their own lives in a social setting of individual freedom. So, they must be enslaved to a benevolent socialist dictatorship “where survival and basic goods are guaranteed [by whom?]" so they can achieve “the maximization of creative potential[!]”. This society of slaves, slave masters, and profiteers on slavery represents freedom, and humanitarian concern for the poor! One cannot imagine a more contemptible example of “contempt for the poor”.

Mr. Moran’s comments are full of moral equivocations and relativism, floating abstractions (ideas disconnected from reality), rebellions against nature, anti-concepts, context-dropping, etc., etc., etc. I’ve given just a few examples. Other correspondents have called him on many of his absurdities.

Objectivism, of course, is the only intellectual force that defends both the political and moral rights of the individual to his own life, liberty, property, and pursuit of his own goals, values, and happiness from all human predators.

And this conflicts with the humanitarian spirit! Freedom is Slavery!


Here is my commentary, taking Matt Moran to task on one of his points:

Mike Zemack October 11, 2009 5:19 pm

By focusing in on Ragnar Danneskjold, the pirate character in Atlas Shrugged, Matt Moran reveals himself to be less than honest. He writes:

“Among the more impactful quotes in Atlas is the manifesto of a pirate named Ragner Danneskjold.

“This Dane steals from government ships in order to refund the taxes of wealthy individuals and states.

“Somewhere in one of Rand’s many sanctimonious speeches, Danneskjold steals from the undeserving poor and gives to the deserving rich’ in a sick twist of the Robin Hood story. This is, I kid you not, an action that Objectivism celebrates. Normally I would find it refreshing to listen to someone who thinks Americans are not selfish enough.

“However, I consider Objectivism and other philosophies that glorify the wealthy and show contempt for the poor to be sufficiently dangerous to warrant constant opposition.”

Mr. Moran is getting sloppy here. The encounter between Danneskjold and Reardon takes up some 13 pages (572-584, 11th printing, 1957 addition), and nowhere do the words he quotes appear. If he actually read the book (which is doubtful) and wanted to accurately report on the meaning of Danneskjold’s character and purpose, he would have stated the exact quote and the context and full meaning of it. Here is the passage to which he probably refers, which appears “somewhere” on page 576, along with further selected excerpts from Danneskjold’s statement for context and understanding.

“I’m the man … who robs the thieving poor and gives back to the productive rich.

“I have never robbed a private ship and never taken private property. Nor have I ever robbed a military vessel – because the purpose of a military fleet is to protect from violence the citizens who paid for it, which is the proper function of a government. But I have seized every loot-carrier that came within range of my guns, every government relief ship, subsidy ship, loan ship, gift ship, every vessel with a cargo of goods taken by force from some men for the unpaid, unearned benefit of others…

“It is said that [Robin Hood] fought against the looting rulers and returned the loot to those who had been robbed, but that is not the meaning of the legend which has survived. He is remembered, not as a champion of property, but as a champion of need, not as a defender of the robbed, but as a provider of the poor. He is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own, by giving away goods which he had not produced, by making others pay for the luxury of his pity. He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don’t have to produce, only to want, that the earned does not belong to us, but the unearned does. He became the justification … for that foulest of creatures – the double-parasite who lives on the sores of the poor and the blood of the rich – whom men have come to regard as a moral ideal.”

If Mr. Moran were to present an accurate portrayal, he would realize that Rand is here upholding justice – that you deserve what you earned but not what you haven’t. Rand condemns not the poor, but the “thieving” poor who exist off of a lifetime of government handouts; not the rich but the productive rich. A full understanding makes it plain that – and this is one of the clear messages of the book – Rand is defending the property of any human being, on any economic level, who earns his own keep – and condemning all moochers, rich as well as poor, such as the wealthy parasites who are the villains in AS.

Rand also does not condemn charity as such, but coercive charity and the phonies – the “double-parasites” – who seek the unearned prestige of practicing “humanitarianism” with other peoples tax money under the “halo of virtue” called altruism. Altruism, as Rand has proven for anyone with the courage and independence to question the accepted “wisdom” of the ages, does not mean benevolence, good will, or true compassion. Instead, it is a moral code that enshrines the unearned as a moral absolute, thus fostering envy, the entitlement mentality, resentment of achievement, and predatory collectivism – cancers that are slowly consuming this country.

Mr. Moran’s article is riddled with inaccuracies and irrelevancies, belying his statement that “I have, to date, tortured my eyes with Atlas Shrugged, the Fountainhead, Anthem, Capitalism: The Unknown Ideal and The Virtue of Selfishness.” I have addressed one of them. There’s nothing wrong with criticism, of course. Unfortunately, his criticism of Rand comes at us not from a standpoint of understanding, but from a somewhat Marxist narrative.

Objectivism stands up for every individual person’s right to his own life (rational selfishness), not the right to prey on others for his own ends. It is, first and foremost, a comprehensive set of philosophical principles to guide the individual in his personal endeavors and in his relationships with others. As such, Objectivism provides a moral defense of individualism, capitalism, and America’s founding ideals as laid down in the Declaration of Independence. Ayn Rand is, I firmly believe, America’s last Founding Father because of her philosophic achievement. I urge everyone to study Objectivism and decide for himself. I’m confident that he will learn that Objectivism is a truly humanitarian philosophy.

Lessons of 1929

The New Jersey Star-Ledger has posted an editorial on 10/29/09, entitled Stock market crash anniversary: Lessons unlearned. They wrote:

"In the years that followed [1929], economists, politicians and Wall Street’s overpaid optimists assured one and all they’d learned from the orgy of greed and excess. It wouldn’t happen again. The Feds had saved the system and put new regulations in place to prevent a repeat. Trust us, they said. And in our ignorance, we did.

"Over time, the lessons of 1929 were made to seem irrelevant and outdated, especially in the go-go economic climate of the 1980s. Layer by layer, 1930s regulations were stripped away. Under pressure from Wall Street, free-market fundamentalists and their acolytes in the press, deregulation was promoted and accepted — by Democrats as well as Republicans — as vital in the emerging global economy.

"The 1929-2009 parallels don’t end there. Post-1929 Wall Street’s leaders fought regulation fiercely; likewise their current-day descendants. Whether it’s regulation of derivatives (the value of which few buyers or sellers understood), higher bank capital requirements, or protection for consumers, Wall Street’s current captains of capitalism are against it.

"Will they win Congress to their side? When have they not? There’s much talk of the need to tighten the reins on Wall Street, especially the trading of billlions [sic] in securities backed by such uncertain assets as mortgages and credit card debt. But legislation remains stalled.

"In this country, Paul Volker has sounded the "too-big" warning. And he’s called for reinstating Glass-Steagall. Volker’s the guy who broke the 1980-81 inflationary recession and set the stage for a generation-long economic expansion.

"Maybe we should listen. Beats laying another egg."

Here is my commentary:

Posted by zemack
October 29, 2009, 8:09PM

Substitute the words “Wall Street” with the name of any ethnic group, and the injustice and bigotry implied in the use of that scapegoat become obvious. Throw in the undefinablely vague bogeymen “greed and excess”, and you’ve got the classic one-two punch beloved of all statists. That’s all they need to whitewash the real causes of the litany of economic catastrophes listed by the Editors.

The Fed’s excess money and credit expansion and then contraction fueled the stock market bubble and crash of the late 1920s. The crash, however, did not cause the depression. The market began to recover almost immediately, just like after the much larger 1987 crash. But unlike 1987, the rally ensued until mid-1930 when the Smoot-Hawley tariff act, the first of a series of disastrous government attempts to “save” the economy, was enacted. As the farm economy subsequently contracted, bank after bank collapsed under the weight of anti-branching, anti-diversification rules and other incompetent banking regulations. The Fed-engineered 30% shrinking of the money supply, massive “public works” projects that further drained capital from the economy, massive tax hikes, etc., etc., etc, crushed the economy. The Hoover-Roosevelt Depression was on. The power-hungry, mad economic scientists of the FDR administration, building on the policy foundation of the statist Herbert Hoover, then embarked upon a crippling array of actions that stretched the depression right through the end of WW II. If ever there could be proof of the failure of government economic intervention, this period of American history is the poster child.

But as the Editors say, we haven’t learned much. The S&L fiasco was brought on by the grossly misnamed Federal Deposit “Insurance” Corporation, a socialist-like scheme that promotes risky bank lending while draining responsible banks, their depositors, and taxpayers who bail them out (the so-called privatization of profits and the socialization of losses).

The current crisis is unequivocally “made in Washington”. Deregulation? Who controls money, the raw material of the banking industry? Who sets reserve requirements, interest rates, accounting standards, and every other conceivable aspect of finance? Exactly what regulatory authority did the government rescind during the alleged “deregulation” wave of the past quarter century? Repeal of Glass-Steagall is the only thing the Editors can point to, and it was not even culpable in the meltdown. Regulation actually increased on the banks (remember Sarbanes-Oxley?).

“Captains of capitalism”? Where does anyone see capitalism? The financial sector is the most heavily regulated American industry, operating under the thumb of a central bank money monopoly. The fed, in fact, is once again the prime culprit. Led by a central planning statist masquerading as a “free market fundamentalist”, the Fed pursued extraordinarily easy money policies without which the basic cause of the recession, the housing bubble, couldn’t have happened. As always, excessive risk-taking is merely a consequence of incompetent Federal Reserve policy. Fannie & Freddie, the FDIC, the CRA, the government’s very own “Too big to fail” policies, and the Clinton/Bush affordable housing crusades, among other things, did the rest.

As to Paul Volcker, I disagree on reinstatement of Glass-Steagall. The diversification enabled by its repeal fosters stronger institutions. What should be repealed is the government’s bailout addiction, which encourages to big to fail “mastodons of the market [like] JP Morgan Chase and Goldman Sachs…” As to Volcker being “the guy who broke the 1980-81 inflationary recession and set the stage for a generation-long economic expansion”, the Editors conveniently forget that he caved in to election year pressure from the Carter administration in the spring of 1980, abruptly reversing course and setting the stage for an even worse “second dip” in the recession. As BanditGuy points out, it was President Reagan who gave Volcker political cover to return to some semblance of sound monetary policy, at great political cost to himself.

Some vague notions of “Wall Street” and “greed” are all the Star-Ledger editors have to hang their hats on. Everywhere one looks, one sees the hand of government intervention making a mockery of free markets. The real lessons of the past century are a history of catastrophic government policies creating economic havoc, with freedom and capitalism getting the blame, leading to more government controls, and so on. The current Washington assault on individual rights, the constitution, the rule of law, and the remnants of free markets is a continuation of the same disastrous trend, “on steroids”.

Gov. Mark Sanford on Atlas Shrugged

Here is a review of Anne Heller's Ayn Rand and the World She Made, by South Carolina Governor Mark Sanford. Entitled Atlas Hugged, Mr. Sanford's essay attempts to portray Atlas Shrugged positively but he exhibits quite a bit of ignorance in regards to the book and Ayn Rand's philosophy. He also challenges Rand in the area of ethics.

I have taken him to task on a few important points.

My commentary:

Rand’s belief in the “perfectibility” of man is based upon the rejection of the dominant moral code of history, and the discovery of the proper ethics consistent with man’s nature and the metaphysical facts of reality. Altruism enshrines the unearned, both in matter and in spirit, as a moral absolute. As long as self-sacrifice was held to be the ideal, man was destined to be seen as flawed and possessing original sin, because the code of self-sacrifice is inimical to life that must constantly be broken if one is to flourish. Rand did not believe men are infallible, but capable nonetheless of heroic accomplishments on any level of ability. She posited rational self-interest as the proper code to live by, thus freeing people to pursue a life of personal achievement, fulfillment, and happiness, within the context of mutual respect for each other and a peaceful and benevolent coexistence. What the past 10,000 years has proven is that mankind’s “flaw” was in his predatory moral code, not in his nature. This is an essential ethical message in Rand’s novels, which Mr. Sanford misses or ignores.

Galt's hidden valley is not “a perfect society”, but a private, voluntary association of people. It in no way means an advocacy of anarchy. Rand considered government to be a vital institution and a necessary good, without which brutality would reign, provided that it is constitutionally limited to the protection of individual rights.

Objectivism is primarily a philosophy of reason, and so naturally rejects faith (defined as the acceptance of ideas or beliefs without any evidence). But as a long time admirer and student of Ayn Rand - and as an Objectivist husband, father, and grandfather who lives by that philosophy – I can most emphatically say that in no way does Objectivism preclude grace, love or (voluntary) social compact. When people are free – and only when people are free – these values do not conflict with the individual’s pursuit of happiness, and are in fact a part of it.

These are just a few of the errors in this review. Though Mr. Sanford gets some things right, he does not seem very knowledgeable about Ayn Rand or Objectivism. I don’t know what this says about the books that he is reviewing here, since I have not read them myself. But I’d suggest that anyone interested in learning should read and study her novels and non-fiction works and judge for himself (which requires independent thinking, a cardinal virtue in the Objectivist ethical system).

Star-Ledger: Rein in Big Business

The NJ Star-Ledger's 10/20/09 editorial, Wall Street: Rein in Big Business, is mostly a rehash of the usual myths about the finacial crisi, with an interesting twist which I called them on. For a related article, click here

Comment by others:

"None of the investment scams could have occurred without the explicit lies made by Stand & Poors, Fitch and Moody's. The overvalued EVERYTHING for payola...lots of loot.

These ratings agencies have gotten off scotfree and still value investment instruments, perhaps honestly now, who knows? Both Bush and Obama have looked the other way, setting the stage for a repeat scam at every tranche level."

My response to this correspondent:

Posted by zemack
October 20, 2009, 5:03PM

Golumba;

The three rating agencies are a government-protected cartel, licensed by the SEC, and essentially protected from competition. In addition, many of their customers are delivered to them by government coercion, in the form of requirements that banks, insurance companies, money market funds, and other financial firms get ratings for their debt securities only from ... you guessed it ... SEC licensed rating companies.

Everywhere one looks, one sees the hand of government intervention behind the financial crisis.


My commentary to the Editorial:

Posted by zemack

October 20, 2009, 8:50PM
The Editors claim that:


“Washington has been steadily stripping the system of any real regulation for the last 25 years..."


Just two paragraphs later, they state that:


“The argument that more government involvement is a step toward socialism ludicrously ignores the fact that we’re already more than half way there…”


The Editors apparently think that nobody pays attention to what they say and that they can get away with so blatant a contradiction. The first statement is utterly false. Apart from some minor tinkering with certain rules, exactly what regulatory powers did government actually relinquish? Glass-Steagall was not a regulatory rule, but a bad law whose repeal had nothing to do with the meltdown, which was caused by the Fed-Fannie/Freddie-FDIC-CRA induced subprime mortgage and housing bubbles. Government regulation actually expanded over the past 25 years, as witness Sarbanes-Oxley, the massive 2002 expansion of government interference that punished the thousands of innocent companies that didn’t cook the books, in retaliation for the few that did (and which were prosecuted under previously existing laws). Accounting rules spawned by Sarbanes-Oxley (so-called “mark-to-market”) were another in a series of government culprits. The repeal of Glass-Steagall was a positive that helped several firms weather the crisis by allowing for diversification.


The second statement is all-too-true. But the Editors don’t draw the obvious conclusion. Instead, they clamor for more government control to rectify the damage caused by government itself. This is the pattern by which totalitarian socialism is being smuggled into a once-free America. This road is being paved by the alleged goal of “protecting” the “consumer”, a privileged class that somehow exists separate and apart from producers and being incapable of entering freely into voluntary contractual agreements with the sellers of financial products. And this “protection” is being financed by the “generosity” of another distinct group called “taxpayers”, who are being forced to fund the steady destruction of their own freedom.

No, Washington is not “Moscow in 1917” and Lenin has not “just pulled into Union Station”. But the direction in which this country is headed is no less ominous. The Washington attacks on the health insurers, major news networks, and “Wall Street” fit a familiar pattern. Every advancing dictatorship seeks to shield its power-grabbing designs by demonizing some group of private citizens as enemies of the state (a term not in use, yet). In Russia, the enemy was the bourgeoisie. In Germany it was the Jews. In America today, it is businessmen, whose legitimate lobbying efforts, a normal activity in a mixed economy, are termed “sabotage”.




What must be “reined in” is government power. We must stop rewarding the mounting failures of the regulatory state with still more regulatory powers. The “failure in the current crisis” of the Federal Reserve, the Federal Trade Commission, and the grossly misnamed Federal Deposit “Insurance” Corp. does not, as the Editors claim, “only strengthen the case for tougher regulation”. These failures argue instead for their abolition, and a systematic return to individual rights, limited rights-protecting republican government, and their corollary free market capitalism, before it is too late.