Wednesday, July 28, 2010

Another Empty Slap at Ayn Rand

In an otherwise interesting analysis of the evolving Tea Party Movement, Doyle McManus throws out this cheap shot:

"Tea party candidates Sharron Angle in Nevada and Rand Paul in Kentucky have both derided the unemployed as victims of their own laziness, a position that doesn't play well beyond the Ayn Rand right."

The utter disregard for the truth readily on display by the Anti-Ayn Rand Cult is tiresome, but I fired off this rebuttal anyway:

MikeZemack wrote on 07/28/2010 07:54:45 PM:

Where is the evidence that Ayn Rand ever endorsed a shallow, generalized viewpoint that “derided the unemployed as victims of their own laziness”? As a committed Objectivist, I could tell you that there isn’t any. It looks like a bit of guilt by association going on here. While laziness might be true of some of today’s unemployed, including the idle rich whom she disdained, Ayn Rand would have rightly viewed most as victims of disastrous government policies, although she would not hold them totally blameless if they supported the policies that led to their unemployment. She was a true champion of the middle class, which she viewed as “a country’s motor and lifeblood”.

As to “the Ayn Rand right”, there isn’t any. Today’s American right is dominated by the Christian conservatives and to a lessor extent the libertarians, both of whom stand philosophically opposed to Objectivism’s most important metaphysical, epistemological, and ethical essentials. It’s true that many on the right will wave the Ayn Rand banner when it suits them, cherry picking isolated out-of-context bits and pieces of her idea system. But you will learn little about her thinking by paying attention to Angle or Paul.

As to Mr. McManus and his ilk, ad hominem and straw man tactics are common methods of attacking Ayn Rand, because they dare not confront her ideas openly and honestly. This sort of empty, backhand slap at Ayn Rand is typical of those who simply can’t refute her ideas.

Tuesday, July 20, 2010

Economists Call for More Demand Stimulus

In an open letter entitled, GET AMERICA BACK TO WORK, 16 prominent economists called on the federal government to enact yet another "stimulus" package to spur "demand". This is supposed to make up for the lost purchasing power of the unemployed.

"The urgent need is for government to replace the lost purchasing power of the unemployed and their families and to employ other tax-cut and spending programs to boost demand. Making deficit reduction the first target, without addressing the chronic underlying deficiency of demand, is exactly the error of the 1930", they said, forgetting the lessons of the Great Depression - the crippling activist policies of the Hoover and FDR Administrations.

I've left the following comments:

4:32 pm, Jul 20, 2010


I have a better idea. Instead of another government stimulus package, why not just legalize theft. Everyone can then be free to rob his neighbors, as long as he spends the loot. That would create plenty of "demand", be more efficient because it would cut out the bureaucratic middleman, and be more honest and straightforward than having our politicians do it for us.

Of course, that wouldn't work any better than government spending, for the same reason. Legitimate, private sector demand has a fundamentally different origin than "public demand".

As any honest consumer knows, you need to earn some money before you go to the store. Money must be made, before it can be spent. "Consumer spending" is really a trade between two producers - the buyer who earned the money, and the seller of goods and services. Private consumers add to the pie, before they take a slice.

Politicians who promote stimulus programs ignore or evade the first part of the trade that makes consumer spending possible - the earning part. This fact exposes the crucial difference between consumer spending and government (or government-induced) spending.

Every time the federal government creates another program to stimulate demand (or consumption), it does so - like a thief - by seizing the earnings and savings of the nation's productive citizens through taxation, deficit spending, or inflationary printing press money. Posturing politicians seek to make us more prosperous, through policies paid for out of our own money and financial nest eggs. Unlike private consumers, the government doesn't "earn" its money.

Stimulus always fails, for this very reason. Private consumers work for the money they spend, thus producing their own demand. Stimulus politicians - from liberals like Obama to psuedo-conservatives like Bush - do not create demand. They simply steal it.

The source of consumer spending is productive work. The source of government demand-side stimulus policies is economic plunder.

Of course, understanding this requires logic, or at least basic common sense. Keynes ignored both under his creation - macroeconomics, the field that studies economic activity without focussing on actual human beings - because he was fundamentally a statist. Politicians ignore both, and follow Keynes, because it satisfies their powerlust and craving for a pat on the back for "doing something". The economy gets damaged long term, but Keynes had the famous answer, the height of immoral irresponsibility: "In the long run, we are all dead."

Thursday, July 1, 2010

"Consumer" Spending vs. Government Spending

Dublin's economy could teach U.S.

That's the Title of the NJ Star-Ledger's July 1, 2010 editorial imploring us to learn the lessons of the Irish government's attempt to pull that nation out of a recession. The Editorial Board writes:

"The Irish didn’t hesitate. In a let’s-get-this-over-with-quickly move, they slashed public spending and raised taxes, the standard recovery recipe of deficit hawks at the International Monetary Fund. The result? Even worse economic shrinkage."

Who knows what the complexities of the Irish economy are. Since the SL is in agreement with the Irish that taxes should go up, they've narrowed down the differences between the two countries to one of government spending. Now, there is no doubt that, when government spending consumes a quarter to a third (or more) of the nations economic output, changes in its budget expendatures are bound to have an effect on the economy. The Editors believe more government spending is the answer, because:

"[S]timulating the economy is the immediate problem and, inevitably, a key to dealing with the debt and deficits. Macroeconomists can lecture learnedly on the depressed housing and industrial real estate markets as a drag on the economy, but the heart of the economy is consumer spending — two-thirds of the economy in fact."

But, whatever the short-term economic effects of government spending cuts vs. juiced-up "stimulus" spending, the fact remains that human beings must produce the things they consume. Look around your house, or the local department of grocery store, and ask yourself if those thousands upon thousands of shelf items just materialize out of nothing. No, they didn't. Human beings produced them. Another fact is that government, by its very nature, produces nothing.

So-called government "stimulus packages" have never worked, and in fact hurt the economy. I've left the following comments, to briefly explain why that is and necessarily has to be the case.

zemack July 01, 2010 at 4:20PM

Rather than the Editors of the Star-Ledger, who believe you can spend and consume your way to prosperity, I’d rather turn to some true economic experts to understand what’s needed to generate economic growth.

Gilligan … the Skipper too … the millionaire, and his wife … the movie star … the professor and Mary Ann: Remember them? They all knew better. When the SS Minnow ship-wrecked on that uninhabited island off of Hawaii in 1964, I don’t recall the hapless crew’s first thoughts being: Let’s see, how can we create food and shelter out of nothing, without any effort on our part?

I don’t recall the wealthy passenger Thurston B. Howell, III passing out stimulus checks to his fellow travelers so that they could rush out and spend their way to a vibrant Gilligan’s Island economy.

They understood that before consumption, you must have production. They understood that to have production, you need real people doing real thinking and real labor. And, that’s what they did. That silly little 1960s sitcom that as a teenager I loved so much was way to serious a show to allow the writers to run an episode that portrayed Mr. Howell assuming the role of banker, and telling everyone: “Stand still, and watch my millions shower you with prosperity!” It would have failed after one episode.

They did pretty well on that island, that rag tag group of economic experts. They worked. They had to. But suppose, in one episode, a looting gang of primitive savages invaded the island and began seizing their clothes, food, building materials, hunting weapons, etc., as well as their seed corn (their savings) that was set aside to plant the next harvest? Suppose those savages simply began consuming the stuff created by the ingenuity and hard work of the Gilligan Islanders? Would that have left the shipwrecked crew and passengers more prosperous, or poorer? Now you know why all attempts to stimulate “demand” through government spending always must fail, if prosperity rather than central planning is the goal. Those savages would have created plenty of “demand”, just like our president wants to do with government money.

What the stimulus champions ignore is the crucial difference between private and government “demand”. They stare blankly at statistics that allegedly show that “the heart of the economy is consumer spending”. But all they see is spending – money changing hands at the cash register. They gape at mid-stream, and miss the linkage between money and work. Consumer spending is not a transaction between a consumer and a producer. It is a trade between two producers.

As any honest “consumer” knows, you need to earn some money before you go to the store. Money must be made, before it can be spent. Every time the federal government creates another program to stimulate demand, it does so – like the savage - by seizing the earnings and savings of the nation’s productive through taxation, deficit spending, or printing press money. Private consumers work for the money they spend, thus creating their own demand. Politicians – from liberals like Obama and to conservatives like Bush – simply steal it. The source of consumer spending is productive work. The source of government spending is economic plunder.

Gilligan’s Island is a monument to economic common sense compared with much of what comes out of Washington and the academic ivory towers today. The best advice I can give to the Editors is, watch some Gilligan’s Island reruns. What’s needed is production, if “consumer demand” is the goal. Rein in the imperial bureaucracy (cut regulations), and liberate producers with massive spending and tax cuts. In other words, get the looting savages off of the island!

Oh, and one more thing. That looting band of savages that invaded Gilligan’s Island? Their leader had a name. You might recognize it. His name was Chief John Maynard Keynes.

There's more to it that I could go into. For a more in depth study of this subject, see George Reisman, Economic Recovery Requires Capital Accumulation, Not Government "Stimulus Packages" and Production versus Consumption

Tuesday, June 29, 2010

The Coming Rental Housing Crisis

In a 6/26/10 editorial, Stop dreaming: Home ownership is not for everyone, the Wall Street-bashing NJ Star-Ledger acknowledged that government policies brought about the financial crisis. They wrote:

"Owning your own home has been part of the American Dream for decades. But what if home ownership isn’t for everyone?

"Sheila Bair, president of the FDIC, had the guts to raise exactly that question recently before a group of nonprofit housing developers. Gutsy, and long overdue. As we’ve witnessed over the past few years, helping people buy homes they could not afford did them no favor and helped bring on our financial crisis."

I left the following comments:

zemack June 26, 2010 at 11:42AM

So, the Star-Ledger wants us to “stop dreaming”. OK, then. Are American liberals ready to let go of their utopian dream of central economic planning?

The federal government’s affordable housing crusade began under FDR with the creation of agencies such as Fannie Mae, which killed off the originate-and-hold bank mortgage lending model in favor of originate-and-sell. Over the decades, through regulations, tax policies, government guarantees, political pressure, Federal Reserve monetary policies, and so on, layers upon layers of government interference was built up in the housing and mortgage markets. The purpose, as the Editors point out, was to expand homeownership.

The financial crisis we’re still not out of was the culmination of these government policies. I’m glad to see that acknowledged here. Never mind the irresponsible lenders and borrowers. They are culpable, but they are minor “moving parts” and are just convenient scapegoats. The private players represent merely the consequential face of this crisis. The fundamental cause was yet another failure of central economic planning. Without the government's housing and monetary policies, this crisis simply could not have happened.

I never cease to be astounded by how often the Star-ledger correctly identifies a problem, and then misses the obvious conclusion. The lessons of 150 years of central planning’s failures continues to multiply. So, do we get a call for an end to the government market interventions that the Editors finally admit was the cause of our problems? No, we get vastly expanded government control under the cover of “financial regulatory reform”. And do we get a call for an end to the homeownership crusade? No, trhe market distortions remain, and we get a call to make the same policy mistakes in the rental housing market!

To fix the problems the government itself caused, we reward the government with more power. The entire financial system right down to the consumer ATM transaction will be forced into a bureaucratic straightjacket under a powerful new central planning maze. The financial industry will be private in name only, as is typical under fascism. Then our brand new affordable rental housing crusade will establish the groundwork for yet another crisis that will not be allowed to go to waste. Then we will see de facto nationalization turn into outright nationalization, the final step and ultimate goal of the socialists.

The Editors dream on, and the nightmare approaches.

Monday, June 28, 2010

Dionne Defends the Concentration of Political Power

In this article, Whose Supreme Court is it?, EJ Dionne Jr. demonstrates the vital importance of understanding the diametrically opposed natures of economic and political power.

My commentary:

Zemack wrote:

To understand the sinister purpose behind those that attack the “concentration of economic power”, one must first understand the difference between economic and political power.

Economic power derives from the ability of a person or organization of persons (a corporation) to produce economic values. It is benign and benevolent, in and of itself. The economic power of a business, no matter how big, is granted only by the voluntary consent of those who buy its products, fill its job positions, or buy its shares. Economic power is non-coercive, but only in a free market.

Political power is the power of physical force, because government alone has the power of law. It can force you, literally at the point of a gun. The concentration of political power is the danger, and the only danger. That is why a constitution is needed to restrict government to use its monopoly on physical force - its power of the gun – to protect the individual rights of its citizens. All of them, including those “regular, average” folks associated with corporations. When government steps outside of those restrictions, it becomes the tool of special interests seeking the power of the gun – political power.

When “private corporations … dominate the state” and “buy government”, it is not economic power that is at work. It is political power. That alleged “concentration of economic power” is made possible by the very power progressives love, the alleged “right” of “our government's elected branches to legislate and regulate” at the behest of the special interests with the most political clout of the moment, which progressives call “the public interest”. To the progressives, corporations are not “the public interest”. Unions and wealthy individuals like George Soros are.

Since political domination of the economy is the goal of progressives, individuals who assert their First Amendment rights through corporations become the enemies of the state. When progressives seek to empower “the political system to protect itself against corruption” and attack “corporations virtually unlimited rights to spend money to influence elections”, it is seeking to protect the political elite from accountability to the people, the ones who disagree with them, and consolidate the concentration of political power.

This article is classic postmodernism, or the use of language as a weapon to cloud the issues to advance a statist agenda. Progressives seek to rein in the “concentration of economic power” in order to increase their own concentration of political power over “regular” people. The only system that can prevent benign economic power from being converted into malignant political power is laissez-faire capitalism (the separation of economics and state). The alternative is totalitarianism. That is the ultimate choice we face. It’s economic power and freedom, or political power and tyranny. Take your pick.

Upholding Objective Law

The US Supreme Court has just struck a blow for "limited government" by a surprising 9-0 vote. Bob Braun of the NJ Star-Ledger analyzed the decision in an article entitled U.S. Supreme Court removes 'bite' from law used against corrupt N.J. officials. His wrote:

Antonin Scalia went far beyond the progressive Ginsburg in wanting to strip the so-called "honest services" statute of its bite. He did it simply and clearly:

"It fails to define the conduct it prohibits," Scalia wrote in a concurring opinion.

That’s ground zero in constitutional law. The law must say what is illegal. The core of due process of law. Otherwise, anyone can be accused of anything and, if the prosecution is persuasive, anyone can be convicted, particularly by a jury prone to believe all officials are corrupt.

[N]othing beats Scalia’s analysis. "The statute," he wrote, "does not answer the question, `What is the criterion of guilt?’"

It’s got to be something other than election to public office.

I left the following supportive comments:

zemack June 28, 2010 at 4:52PM

Great article. It’s so refreshing to see a concrete issue analyzed in relation to fundamental ideas, an all too rare occurrence. In this case, both Mr. Braun and the US Supreme Court stood up for objective law.

When I heard prosecutors complain that this Court decision stripped them of their “flexibility”, I knew instinctively that the right decision was made, even before I familiarized myself with it. Lack of “flexibility” in prosecurorial matters by government officials is precisely what the American doctrine of “a government of laws and not of men” is intended to enshrine. Non-objective law means arbitrary government power, a basic tenet of a dictatorship.

Just as I cheered the court’s recent decision that removed restrictions on corporate and union campaign spending because it upheld the First Amendment, so I cheer this one. Both uphold critical fundamental principles vital to a free society.

Bob Braun has done a good job here presenting the essential aspects of the issue clearly and concisely.

Saturday, June 26, 2010

More on NJ's Municipal Welfare

Trenton crowd's constitutionally incapable of property-tax reform, by Paul Mulshine

In this article Paul Mulshine discusses the idea of a property tax cap in NJ, and touches on the nature of Trenton's redistributionist state aid scheme.

I've left the following comments:

zemack June 23, 2010 at 8:53PM

The core issue is much bigger than quibbling over which towns get how much state aid. The issue is the validity of state aid to municipalities as such, or what I call municipal welfare. On the face of it, it makes no sense to send income tax dollars to Trenton, in order to get it back in state aid checks. Of course, the real purpose is wealth redistribution.

Municipal welfare is wrong for the same reason any government-imposed redistributionist scheme is wrong. It is immoral, unconstitutional, and a violation of individual rights and the proper function of government. In addition, like all socialist schemes, it doesn’t work. The current incarnation of the municipal state aid scheme started in the 1970s with the court-pressured imposition of the income tax. Since then, income tax rates have soared, state budgets sank increasingly into the red, aid-fed municipal budgets swelled, and all the while, property taxes soared. And what are we left with? – Abbott districts that are so bad that even many liberals support letting parents get their kids out of Abbott schools via vouchers under the Opportunity Scholarship Act. Only socialism could pull that off.

"It’s not fair," [Assemblywoman Allison Littell McHose of Sussex County] said. "I think people finally understand that they are paying for their own school and they are paying for these Abbott districts on top of it."

No, it is not fair. The whole purpose of municipal welfare is just that. So, why not see that the Emperor has no clothes? Why not adopt a GOP platform plank to repeal municipal state aid, which now consumes more than half the state budget, along with the income tax that funds it? Come to think of it, if forcing people in one town to pay for the education of children in the next town is unfair, then why isn’t it just as unfair to force them to pay for the education of children on the next block?

But that would be another topic – free market capitalism. Republicans and conservatives just can’t seem to let go of socialism when it comes to education.

Wednesday, June 23, 2010

Robinson on Joe Barton Apology

A GOP chorus of Joe Bartons on the BP oil spill
The BP apologist is mainstream among conservative Republicans.
- By Eugene Robinson

Select quote:

"A group constituting roughly two-thirds of all Republicans in the House takes the position that President Obama was wrong to demand that BP set aside money to guarantee that those whose livelihoods are being ruined by the oil spill will be compensated. In other words, it's more important to kneel at the altar of radical conservative ideology than to feel any sense of compassion for one's fellow Americans. This, ladies and gentlemen, is how today's GOP rolls."

My commentary:

6/23/2010 5:08:21 PM

The whole point of having a civil court system is to establish an objective venue to settle damage claims. This is the best rights-protection the victims of BP’s well failure, and individuals generally, have. All sides get a hearing, and the facts dictate the outcome. In politics, political connections reign supreme over any facts. Whether the $20 billion represents a shakedown of BP or a protective shady deal cut between Obama and one of his campaign donors is beside the point. The real issue is the Executive Branch’s usurpation of the judicial system.

We are in dangerous territory, if justice is the goal. Considering the assault on the rule of law by this powerlust-driven administration, it is shamefully trivial for Obama Democrats and their supporters to babble about the GOP “favoring” oil companies. They claim to be the voice of “average” Americans, whom they derogatorily call “the little people”. Yet, they have no problem stripping them of their right to their day in court, and replacing that objective venue by throwing them into the world of political calculations.

Plenty of Gulf oil spill victims are going to be shafted if this deal leads to government officials doling out the cash, rather than judges and juries, which it probably will. And plenty of non-victims will be rolling in BP loot. In a court of law, each individual stands tall, win or lose. When power politics trumps justice, the un-politically connected become “the little people”. Mr. Robinson worries about ideas, or “radical conservative ideology”, which he doesn’t bother to name and refute. Meanwhile, he protects the real threat - arbitrary government power. He sees nothing wrong or un-American about a King – excuse me, a president – having the power to force a private company to hand over its money, oblivious to the danger that that precedent poses to all private companies into the future. So much for a government that protects our rights!

Today’s Left-Wing Washington rulers are throwing their fellow Americans under the bus, that they may gain a photo-op handing a check to favored victims. And then Mr. Robinson accuses Republicans, who at least have some semblance of respect for the constitutional separation of powers that protects us from the growth of tyranny, of having no “sense of compassion for one's fellow Americans.”

This, ladies and gentlemen, is how today's Democratic Left rolls.

Monday, June 14, 2010

Menendez: Rein in Wall Street

In this article, entitled It's time to protect consumers, rein in Wall Street, NJ Senator Robert Menendez touts the financial "reform" bill now before congress. On the premise that NJ residents are stupid and unthinking, he pins the blame for the financial crisis on a few Wall Street firms.

I've left the following comments:

In Senator Menendez's statist Emerald City fantasy world, the great and powerful Oz, exemplified by "Wall Street", has wreaked economic havoc. Nowhere is the role of government interference examined. Mr. Menendez wants us to pay no attention to that man behind the curtain – the government’s political and bureaucratic wizards who pull the levers that control the financial industry and manipulate the markets through such mechanisms as Fannie and Freddie, the FDIC, mark-to-market accounting rules, explicit and implicit mortgage guarantees, the government licensed and competition-protected rating agency cartel, the CRA, the FHA, affordable housing crusades, overt and covert pressures on banks to increase low-income lending by lowering loan standards, too-big-to-fail taxpayer bailout policies, the perverse inversion of normal market incentives through socialization-of-losses policies, and that mother of all culprits – that funny money machine called the Federal Reserve.

The politicians rig the system to get people who can't afford homes into homes. Under the government's bipartisan "affordable housing" crusades, a conveyor belt of sub-prime mortgages runs overtime from the Fed to Fannie and Freddie. Wreckless lenders and borrowers flourish, to the delight of politicians who tout rising homeownership rates. Fannie and Freddie spread toxic mortgages throughout the system via securitization. Quick buck artists overwhelm prudent heads on Wall Street, cashing in on the game the men behind the curtain created. The system collapses. Derivatives and "Wall Street" get scapegoated. The politicians move for de facto nationalization of the financial system to "protect" that mystical entity - consumers.

How do you bring socialism to a country that would never explicitly vote it in? We've seen this pattern before. It's brought in through the back door of fascism. In finance, energy, healthcare, and education, to name a few areas, totalitarian powers are being accrued to Washington. The government creates crisis after crisis, which are never allowed to go to waste. In the not to distant future, we will wake up to find that our major industries are private in name only. Every area of our lives will be controlled by a small clique of all-powerful wizards, who manipulate the levers that run the shell corporations that used to be our great industries.

The fascist wolf has been creeping toward our American house for decades. Under the Bush Administration, the wolf reached the door. Under the Obama Administration, the wolf has crashed through the door.

Menendez, Obama, and their ilk are selling us a bill if goods, and down the river to tyranny. It's time to pay attention to that man behind the curtain

Thursday, June 10, 2010

BP and Environmentalism

From Erosophia: Environmentalism is Responsible for the Gulf Oil Spill, by Jason Stotts

My Commentary:

June 10, 2010 at 5:24 PM
Another major contributing factor is the government’s paltry $75 million liability limit on behalf of deep water oil drillers. This was to manipulate insurance rates lower after oil companies complained that high rates made most drilling unfeasible.

This had the predictable result. Incentives to pursue innovative tecnologies to make drilling safer were stifled, as was the need to be prepared for worst case scenarios (as BP obviously was not). The insurance industry is the economic bulwark against excessive risk. Insurance companies’ make judgements based on economic, technological, and environmental realies, and price their rates accordingly. If oil companies find insurance rates too high, then they can abandon deep water drilling, or they could find better and safer ways to operate to satisfy the insurers and reduce rates.

Sen. Robert Menendez (D-N.J.) has sponsored a bill to raise that limit to $10 billion, believing that the $75 million cap encouraged ecological gambling, because it was so low. Yes, so why then should oil companies be shielded at all? Artificially capping liability is the very kind of market manipulation that causes problems, by short-circuiting the normal risk management incentives inherent in a free market.

Yes, BP must clean up the mess, and compensate the victims, even if it bankrupts them. If BP engaged in fraud to get the permits, prosecute the company. And, NO BAILOUTS. It is BP’s well, after all.

But, just as with the financial crises, the government rigs the system to encourage excessive risk and reduce personal responsibility, and wonders why disasters happen.

And in similar fashion, we’re seeing the usual demands for more regulation, with blame being placed on a non-existent “free market”. This is perverse. BP is the proximate cause, but government regulation is the ultimate cause. We need less regulation, and more economic laissez-faire.

Catalina has left these two comments:

June 13, 2010 at 3:55 AM

OK, suppose that it _were_ legal to drill close to the shoreline. What do you think BP and Mobile Exxon would do when the oil runs out, like it has in Texas?

It would only have postponed the inevitable.

June 13, 2010 at 5:22 AM
Oh, I forgot to say, I suppose the environmentalists are responsible for THIS, too ?

The article Catalina references is entitled Nigeria's agony dwarfs the Gulf oil spill. The US and Europe ignore it, by John Vidal. The subtitle reads:

"The Deepwater Horizon disaster caused headlines around the world, yet the people who live in the Niger delta have had to live with environmental catastrophes for decades"

Mr. Vidal reports on the mess supposedly created by the oil companies in Nigeria. It's really a saga of government running amuck, and business taking the blame. Jason Stotts answers her, as do I. Here is my response to Catalina:

June 13, 2010 at 11:18 AM

What BP or Exxon or any other energy producer would do “when the oil runs out” depends in large part on the level of governmental restrictions – environmental being perhaps the biggest.

But, let’s say for the sake of your argument that deep water drilling is where they wanted to go. In that case, the best protection against a BP-type disaster is to keep government out of the market’s hair, and let its dynamics play out (See my comment above). In the BP disaster, the government’s hands are all over this spill.

I am not excusing BP completely. Cap or no cap, there is a moral responsibility to be respectful of other people’s property, and be prepared to compensate others for damages caused. At the same time, as even Sen. Robert Menendez (D-N.J.), whom I rarely agree with, acknowledges, the government’s artificial liability cap is a prime culprit. There was nothing inevitable about the BP blowout.

But, as Jason Stotts argues, environmentalism is the cause of causes for the BP spill. In the name of protecting “environmentally sensitive areas” where it is technologically and environmentally much safer to drill, such as ANWAR and other coastal areas, we now have the worst environmental mess in US history. Environmentalism’s hands are at least as oily as anyone’s, because of its obsession with “pristine” nature and its disregard for man’s need to exploit nature to survive and thrive.

Remove all environmental restrictions (except where consistent with the protection of private property rights), abolish market interventions such as liability caps, and leave energy producers free to go where they may go. Then we’ll find the answer to the question: “What do you think BP and Mobile Exxon would do when the oil runs out”? – if it runs out.

PS – The Nigerian government, according to that article, is a “partner” with the oil companies, and “Oil spills and the dumping of oil into waterways … have become common due to the lack of laws and enforcement measures within the existing political regime.” In other words, that government is avoiding its proper function to protect private property rights. Instead, it’s running the show and collecting protection money, while private industry gets the blame for “blocking progressive legislation”. That article is a very good argument for the separation of economics and state – i.e., laissez-faire capitalism.

Wednesday, May 12, 2010

NJ Dems Answer Christie in Typical Fashion

New Jersey's redistributionist state government is in crisis, and the Democrats who control the legislature have the answer - more redistribution of wealth!

Two top Democrats revealed there budget plan in a Star-Ledger piece entitled Helping NJ senior citizens with true 'shared sacrifice'. They write:

"The Democratic plan to protect New Jersey’s most vulnerable residents calls for a one-year income tax surcharge on the 16,000 New Jerseyans with taxable incomes of at least $1 million. The surcharge would raise about $630 million and eliminate Christie’s plans to force senior citizens to pay higher prescription drug costs and property taxes.

"This is a compassionate approach that allows the shared sacrifice of our most fortunate 16,000 residents to help more than 600,000 senior and disabled citizens who struggle to pay for medication and keep their homes. This plan spreads the pain and protects our most vulnerable."

I've left the following comments:

Posted by zemack
May 12, 2010, 7:18PM

No armed street thug with a gun would have the gall, or the dishonesty, to claim that he is “compassionately” “allowing” his victim to “sacrifice” his wallet to pay for his needs.

No street thug would be so brazen as to claim that his gun does not represent force, but taking responsibility for paying his own way, does.

Oh, but Senator Sweeney and Speaker Oliver don’t want the tax loot for themselves. They only want to funnel that dough to “New Jersey’s most vulnerable residents”, who may or may not like the idea of being made parasites. Apparently, the 16,000 victims of their scheme of legalized armed robbery are not “vulnerable”. There’s one minority group the Dems don’t care much about. Like all humanitarian types, what these politicians seek is the phony prestige of practicing charity with other people’s tax money.

But the “most fortunate” deserve it, right? After all, it’s “the multimillionaire corporate titans, bankers and hedge-fund traders whose actions led to the recent recession.” It could not possibly be the government’s affordable housing crusades enforced through a massive interlocking network of agencies, bureaucracies, loan guarantees, laws, controls, printing-press money and untold market-distorting policies that caused it. It’s all the fault of 16,000 NJ residents, who are indicted, tried, and convicted, without evidence and through guilt by association, of causing the recession – then sentenced to need-based tax penalties. I cannot believe the authors made that statement!

The morality of need worship, which preaches that we are all our brothers’ keepers, will always lead to tyrannical socialist schemes in which the government merely wants to “allow” us or “help” us to be moral and “sacrifice” for others. Under the opposite moral principle, that each of us owns his own life and possesses unalienable individual rights, we are free to engage in voluntary charity to causes and fellow citizens we deem worthy. But there are no predatory politicians or voting blocs looking to sacrifice some to the needs of others through legislative force.

The national financial crisis and NJ’s fiscal calamity are both rooted in the political implementation of the principle that need is an automatic moral claim on the wealth produced by others. Until we recognize that production, individual achievement, personal responsibility, and respect for the rights and property of others, not any kind of sacrifice shared or otherwise, is the moral ideal, we will lurch from crisis to crisis until we go over the edge into the collective abyss.

Monday, April 12, 2010

Farmer Misrepresents Rand

New Jersey Star-Ledger columnist and former Editor John Farmer has taken a few potshots at Ayn Rand, via a favorite whipping boy of the Left, Alan Greenspan. In his article, entitled Alan Greenspan: The oracle who didn't see it coming, Mr. Farmer wrote:

"Greenspan is famously a disciple of Ayn Rand, a libertarian (some dispute that) and would-be philosopher who scorned government and preached the gospel of free market capitalism unfettered by regulation. Greenspan bought it all. He still believes it, if his testimony last week is any measure.

"In fairness to the Fed, it should be noted that under his successor, Ben Bernanke, it did much in 2009 to stem the slide toward a worse recession, perhaps another even another Depression, and appears more agreeable to tougher oversight of the markets. No more Ayn Rand, in other words."

Though it's quite frustrating and even infuriating to see your ideas (or any ideas) misrepresented, especially by means of the drive-by method of Mr. Farmer, it's also an opportunity. Debunking detractors is an effective means of speading the right ideas. Here is My commentary:

Posted by zemack
April 12, 2010, 8:56PM

Others have addressed the Ayn Rand misrepresentations already, so there may be some redundancy here as I clear up the many fallacies presented by John Farmer.

“Greenspan is famously a disciple of Ayn Rand”

Was, not is, is the more accurate word, although Greenspan is undoubtedly still an admirer. No “disciple” would take the job of monetary dictator. Tying Greenspan to Rand is classic guilt by association. Straw man tactics tell you nothing about Ayn Rand’s ideas, or of their relevance to the financial meltdown. They merely provide a means of evasion.

“a libertarian (some dispute that)”

Some don’t dispute that, the facts do. Libertarianism can’t even be meaningfully defined, as it encompasses everything from anarchists to socialists to any form of doing whatever one pleases. Objectivism, Rand’s philosophy, is clear and incisive, and is as far from a sanction of anything goes as one can imagine. Characterizing Rand as a libertarian is a gross falsehood. At least Mr. Farmer acknowledges the existence of another viewpoint.

“and would-be philosopher”

This is a common type of refrain among Rand’s critics. But here are some quick questions. What is the nature of existence and its relationship to human consciousness (metaphysics)? What is the nature and method of human knowledge (epistemology)? What are the proper abstract value principles to guide the individual’s life, and set the standard by which people deal with one another (ethics)? Ayn Rand’s deep and rich philosophy, Objectivism, provides answers validated by evidence and logic. One can disagree, but if Rand is not a philosopher, then the world’s first philosopher does not exist, and neither does the field. I guess, rather than address Rand’s philosophical ideas, it’s easier just to deny that they exist.

“who scorned government”

Just read her essay, The Nature of Government (which I doubt Mr. Farmer did), and you will see that Rand saw government as the only institution capable of protecting individual rights, making it a necessary good for society. What statists hate is that she asked, and answered, the question “Do men need such an institution—and why?”. Like the Founding Fathers, she scorned rights-violating government, not government as such.

“and preached the gospel of free market capitalism unfettered by regulation”

Finally, the truth, as long as you understand the type of “regulation” she opposed. Ex. - laws against and vigorous prosecution of fraud, enforcement of contracts, etc. are consistent with the proper function of government and are good. Controls imposed on all businessmen because of the wrong-doing of the few (ex. – Sabanes-Oxley after Enron) are based upon the unjust, un-American principle, presumption of guilt, and are bad.

“No more Ayn Rand, in other words.”

If by his reference to Ayn Rand, Mr. Farmer means laissez-faire capitalism, where does anyone see it today – particularly in the financial industry, the most heavily regulated of all economic sectors. Other corespondents address this point. The housing meltdown and financial crisis is a failure of the regulatory state and the mixed economy. No objective observer can deny this. Ayn Rand disappeared from American finance nearly a century ago, when she was not yet 10 years old.

Nothing about Ayn Rand’s ideas and her philosophy of Objectivism can be learned by listening to Alan Greenspan or reading the kinds of unsubstantiated assertions Mr. Farmer throws around. Anyone interested in Ayn Rand should cleave to one of Objectivism’s cardinal virtues – independence (i.e., think for yourself). Study what she has to say, consider the evidence, and draw your own conclusions.

Friday, March 12, 2010

Who's Really "Coming Between You and Your Doctor?"

In a recent op-ed posted at RealClearPolitics, Froma Harrop complains about the practices of private health insurance companies ( Coming Between You and Your Doctor). She writes:

"The lights must dim around Google's data-storage centers every time someone does a search for "government bureaucrat coming between you and your doctor." Foes of the Democrats' health-reform proposals have been chanting this on the hour for a year..."

After claiming, with some truth, that private insurance company bureaucrats already do the same thing, she asks:

"But why has the idea of letting the government do what private insurers do to save taxpayers money become such a hysterical hot button?"

The difference between government action and private action is the difference between force and voluntary, uncoerced agreement. But with regard to private health insurance in this country, the issue is muddied considerably by government intervention ... i.e., the introduction of force into the market.

We also see yet another example of an ObamaCare proponent taking the status quo as the given, thus avoiding the necessity of any analysis of how the government's policies have created the very problems "reform" is supposedly designed to fix. This tactic is vital to their case, because any honest look at cause and effect would lead to a greatly diminished government role and more freedom as the logical solution.

Here is my commentary:

Posted by: Mike Zemack Mar 12, 07:26 PM


“The powers in Washington have clearly decided to keep most working Americans in the hands of private insurance companies.”

So laments Ms. Harrop. The statement is true, but off by about seventy years. Decades ago, the Federal government established the third-party-payer, or employer-based, system of health insurance. This created an artificial middleman that disconnected the consumer of healthcare from the provider. Then came thousands of state-imposed insurance mandates across the nation– from community rating to guaranteed issue to benefits – that force insurers to tailor their policies to the demands of political pressure groups rather than market realities … i.e., to the desires and pocketbooks of the consumer, who is perversely not the customer. These same insurers are protected from interstate competition via interstate trade barriers imposed by government.

We’ve all heard the story of the fireman who starts fires, so that he can rush to the scene to “save” lives and property. (We had a real live one of those living in my neighborhood, some years ago.) Well, in regard to America’s health insurance system, the government is that fireman.

The health insurance industry that ObamaCare supporters love to demonize is a scapegoat and a straw man, because it is in fact a political creation. The alleged power of the insurance companies is an extension of government power and would not be possible in a free market. Our fireman now proposes to save us from its own creation! Our “private” health insurance industry is a government controlled and protected series of state-based cartels operating in a government-crippled insurance market. Our “private” health insurance system is in the nature of fascism, or back-door socialism, and is not indicative of a free market.

“Those who care to move this conversation to a more grownup level” start by examining the role that government intervention has played in placing the healthcare of Americans “in the hands of private insurance companies.” They will find that it was the government itself.

The argument for “letting the government do what private insurers do” is a red herring. It is a call for totalitarian centralized control of medicine by government bureaucrats unconstrained by the need to earn a profit … i.e., to satisfy their customers. Insurance company bureaucrats empowered by our government-imposed third-party-payer system are bad enough. Government bureaucrats possessing the legalized power of physical force - i.e., a gun - would end the remaining fragments of freedom to make our own healthcare decisions that we still possess.

The Supreme Court legalized abortion in Rowe v. Wade based on the argument that abortion is a health matter that should be decided solely between a woman and her doctor. Fair enough. The solution to the problems of health insurance rests with the same logic. Remove all government restrictions in the national health insurance market. Restrict government instead – to its proper role of enforcing laws against fraud and breech of contract, mediating legitimate contractual disputes between insurers and insured, and enforcing and protecting contracts and contractual freedom … i.e., to protecting everyone’s individual rights.

Health insurance is solely a matter between the individual and his insurer, and their rights to contract freely to mutual advantage should be protected. The natural incentives of the free market – the consumer seeking the best value for his money from profit-seeking providers seeking to expand sales in an environment of real competition – is the only moral way to “control costs” because people must consume in accordance with what they have earned and providers must price their products to their customers’ budgets. A government that “controls costs” ends up controlling people … i.e., ends up as a dictatorship.

In a free market “no one is going to come between patients and their doctors” because no one can come between patients and their insurers … or their healthcare dollars.

Tuesday, March 9, 2010

Who's Really Peddling "Big Lie"?

The Big Lie is on the prowl in the health care debate. But who is guilty of employing it? According to the NJ Star-Ledger, it's the GOP. In its 3/9/10 editorial, entitled Health care reform scare: 'Takeover' claim is GOP's big lie, the Editors had this to say:

"Republican congressional and party leaders are pedaling as fast as they can to distance themselves from the Republican National Committee plan to drum up fear that the Democrats are driving America toward socialism.

"But in fact the GOP has been running that playbook for over a year now, portraying President Obama’s policies as radically left-wing, socialist — in effect, un-American. The most obvious example is the Big Lie about his health insurance reform plan, that it’s 'a government takeover of one-sixth of our nation’s economy.'

"First of all, the fact that health care is consuming one-sixth of our gross domestic product is a big problem and not an argument for letting things be. But no one remotely connected with the Obama administration is suggesting anything like a government takeover of medical care in America. Yet the defenders of the status quo conjure up a dystopian nightmare of 'Obamacare' with Soviet-style hospitals and drone-like doctors and with faceless bureaucrats deciding who gets care and who does not. (How they would be different from insurance company bureaucrats is a mystery.)"

Here is my commentary setting the record straight:

Posted by zemack
March 09, 2010, 10:03PM

The “Big Lie” is an appropriate topic for the Star-Ledger to editorialize on in regard to healthcare. But it’s not the Republicans that are employing it. It is the ObamaCare minions, including the Editors here, who are employing that tactic to its fullest. The real Big Lie is the claim that the only choice we have is between Obama’s “reform” scheme and the status quo. But “the defenders of the status quo” are not entirely accurate either. ObamaCare, the logical consequence of which really will eventually be “Soviet-style hospitals and drone-like doctors and with faceless bureaucrats deciding who gets care and who does not”, is not an outright takeover of healthcare. It is rather another step in the decades-long, slow-motion advance toward an eventual full takeover.

As I’ve been arguing here and elsewhere, the missing ingredients in the entire Left-framed debate is an examination of the role that the government has played in creating the problems healthcare “reform” is supposed to correct, and the third alternative – reinstitution of a free market in healthcare. Despite its strengths made possible by the remaining free market fragments, all of the problems attributed to American healthcare are consequences of prior government policies. The runaway costs and the problem of pre-existing conditions are government creations. Thanks to our government-imposed third-party-payer (employer-based) system, thousands of state-imposed community rating, guaranteed issue and benefits mandates, and legal trade barriers barring interstate competition, our “private” health insurance industry is actually a government controlled and protected series of state-based cartels which is more in the nature of fascism (back-door socialism) rather than any semblance of a market-based system.

The health insurance industry that ObamaCare supporters love to demonize is a scapegoat and a straw man, because it is in fact a political creation. The alleged power of the insurance companies is an extension of government power and would not be possible in a free market.

Of course, making a government takeover of American healthcare inevitable is what ObamaReform is all about, the Editors’ protestations to the contrary notwithstanding. But the Dems have cleverly avoided concrete specifics in their plan, giving cover for the Editors’ outrageously false claim that “no one remotely connected with the Obama administration is suggesting anything like a government takeover of medical care in America”. No. Instead, their plan contains the theoretical blueprint for future totalitarian control of every aspect of healthcare. What does anyone think a 2000 page document is full of? The trick is that the specifics will come later under powers granted to government officials, in the form of an unending tidal wave of coercive rules and regulations.

In an analysis of only a small part of one version of ObamaCare, the House’s HR3962, Professor John David Lewis cites numerous examples of this in his Objective Standard essay, which can be read in full in the Winter 2009/2010 issue. His conclusion:

“[The plan] will reach deeply into federal and state regulations and laws, on a scale that will require years for experts to interpret. It will establish institutions that will be effectively irreversible. It will grant arbitrary powers to bureaucrats, who will have to interpret and enforce its dictates.

“This legislation empowers the executive branch, namely the Secretary of Health and Human Services and a ‘Health Choices Commissioner,’ to write thousands of pages of regulations, and to force Americans to comply with them. For every line in this bill, many pages of regulations will be written.

“The central meaning of both is the repudiation of individual rights. No longer will Americans have the liberty to preserve their own lives in the way they judge best—from now on, they will have to conform to government controls on the most intimate details of their lives.”

The Big Lie is alive and well, and firmly ensconced in the Obama Whitehouse … and in the offices of the Star-Ledger Editorial Board.

And here are some supporting comments from docforfreedom, whom I drew attention to in my last post:

Posted by docforfreedom
March 10, 2010, 3:40PM

Well said, Zemack.

When trying to decide which is worse-- government or insurance company control of health care-- the answer is BOTH. We need freedom to choose for ourselves-- what health care to access directly and which insurance to buy for ourselves. The free market would keep both of these in line if the government weren't so busy meddling. The government ought not be providing any health care.

We can now access websites that can tell us where to obtain services at what price. Radiology groups are beginning to post cash prices. Why do we need a middleman for the majority of services?

We take our cars to our local auto repairman hoping that he can fix it. If there is something more complicated, he sends us to a specialist. Of course, with health care, the bills can run up very high, but THEN we need insurance-- NOT for the routine. Why involve a costly middleman when face to face cash payments would save everyone a lot?

Tuesday, March 2, 2010

John Farmer's Booby Trap Exposed

The New Jersey Star-Ledger's John Farmer has made the case that Employer-based health care is a thing of the past.

This, I agree with. But there, we part ways. In classic liberal fashion, Mr. Farmer engages in a bout of breathtaking evasion, ignoring the fact that the insurance system we have now is a government creation. Instead, he simply accepts the status quo as an example of a failure of private insurance, because "the private insurance bigwigs' ... chief incentive is to increase profits in their own and their shareholders’ interest."

Of course, those profits are made possible by offering products that are in their customers' interest, a practice that is essentially forbidden under the very system he laments. Rather than remove those government restrictions and leave insurers free to pursue profits by satisfying their customers, he would rather place your healthcare fate in the hands of the government "whose leaders face the wrath of the voters if they get it wrong." In other words, your healthcare fortunes will be at the mercy of the latest ballot box mob, instead of your own judgement!

The Left is desperate to hang on to the statist controls thay have achieved thus far, and to use them as a springboard for further controls on the way to totalitarian socialized medicine.

I've left a detailed response at the Star-Ledger's website, which is published below. But I'd like also to draw attention to the remarks of docforfreedom, who has several comments posted for this article. He seems mostly right in his comments and a strong defender of the individual.

Here is my full commentary:

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. (We had a real live one of those living in my neighborhood, some years ago.) Well, in regard to American health care, the government is that fireman. All of the problems that ObamaCare allegedly addresses are government created. And like that fireman, the politicians - Democrats and many Republicans alike – now rush to fix the problems they created with massive new government interference into healthcare. The health insurance market is at the top of the list of government-created problems.

Today’s health insurance industry is a government created monstrosity. The “power” of the insurance companies derives directly from government interference into the market. Thanks to the tax and regulation-imposed employer-based, or third-party-payer, system, the insurance company works not for the consumer of healthcare, but for some third party. In other words, the consumer is not the customer. But that’s not the only problem. Thousands of state-imposed insurance mandates across the nation– from community rating to guaranteed issue to benefits – force insurers to tailor their policies to the demands of political pressure groups rather than market realities, and force coverages on consumers that they may not want or can afford. These mandates are nothing more than wealth redistribution masquerading as “insurance”. The insurance companies are then protected from competition through interstate trade barriers - imposed by government.

The health insurance industry that ObamaCare supporters love to demonize is a scapegoat and a straw man, because it is in fact a political creation. Our fireman proposes to save us from its own creation! Our “private” health insurance industry is a government controlled and protected series of state-based cartels operating in a government-crippled insurance market. Our employer-based system that Mr. Farmer laments is in the nature of fascism, or back-door socialism, in which the private ownership is more of a mirage than a reality.

The only practical and moral solution is a free market in health insurance. Our current system is as far from a free market as one can imagine short of overt socialized medicine.

A free market is one based on the recognition of individual rights, which means the sanction of freedom of action. This freedom includes the rights of patients, insurers, their customers, doctors, medical products producers, and other healthcare professionals to freely contract with each other through voluntary trade to mutual advantage. The government’s role in a free market is limited but vital – to protect the rights of all concerned, including enforcement of contracts and prosecution of fraud and breech of contract. Otherwise, people should be free of governmental coercion, which is what the “free” in free market means.

Mr. Farmer is right that the employer-based - i.e., third-party-payer - system of health insurance is unraveling. It was inevitable, and a bad idea to begin with. But he misses the obvious: Our deteriorating employer-based health insurance system is a failure of statism, not freedom. Instead, he simply lauds supporters of totalitarian healthcare, - excuse me, ObamaCare in all of its guises – as “those who know something” and writes off opponents as ignorant. But this is only a evasion, and sets the stage for his monumental booby trap – that our only choice is between socialism and fascism:

“Who can we best trust to oversee health insurance? The federal government, with its spotty record for efficiency but whose leaders face the wrath of the voters if they get it wrong? Or the private insurance bigwigs whose chief incentive is to increase profits in their own and their shareholders’ interest?”

The individual citizen who is free to “oversee” his own healthcare and health insurance needs doesn’t even warrant token consideration! Interesting, eh?

Mr. Farmer is dead wrong. The choice is not between government-run healthcare (socialized medicine) and the status quo (quasi government-run healthcare). The choice is between government-run medicine (in all of its incarnations) and a free market.

Sunday, January 24, 2010

Gay Marriage and Individual Rights

In my Introduction to this blog, I wrote:

“[T]he only real guide to understanding human events, their relationships to one another, and where they may lead us, is to discover the fundamental philosophical and moral principles that drive them: hence, the title of my blog. Discovering them is not always an easy task, but with Objectivism as my frame of reference, that is what I aim to do as I analyze and opiniate on today's events.”

Ayn Rand wrote: “Abstractions as such do not exist: they are merely man’s epistemological method of perceiving that which exists—and that which exists is concrete.” Since abstractions as such do not exist but are merely mental tools for understanding reality, they must be logically relative to concrete events and facts. Otherwise, they are merely “floating” … disconnected from reality and thus useless. Since my blog is based on the premise that abstract ideas drive human events, my task is to validate my principles with reference to today’s issues.

Put another way, my blog is about concretizing abstractions. The number one abstract principle that is my driving passion is the concept of individual rights. That abstract reference point is the focus of this post’s analysis of a very controversial subject. It is also a good demonstration of why we need to make full use of our uniquely human conceptual faculty (i.e., our powers of abstraction), and why without abstractions we are essentially “flying blind”.

On January 6, 2010, the Same-Sex Marriage bill went down to a resounding defeat in my rather liberal state of New Jersey. This result should not have happened, and is a case study on the wrong way to advocate for anyone’s rights. On 1/6/10, the New Jersey Star-Ledger foresaw the defeat, pinning the blame on “political missteps”.

For a change, I agree with the Star-Ledger. The Gay Marriage ban should have been lifted in New Jersey. I agree with the Editors’ stand, but not their murky logic … the source of the cause of the defeat.

The failure was not political, but philosophical. A look at the Editors’ logic exposes the cause of the inability of so many politicians to take a firm stand – the “soft supporters [who] may run for cover”. The Editors lament this spectacle and ask: “How did this bill become such a long-shot in a state where most polls show solid support, and where the Democratic governor and leaders of both houses supported it?” It was indeed a long shot. The bill was defeated by a heavily Democratic State senate by a decisive 20-14 margin (with three abstentions). Why? We need to take a look at the Star-Ledger’s own reasoning.

I am sometimes asked a question such as: “Do you support or oppose gay marriage?” This question misses the point. The question is, does anyone have the right to employ the government’s power of legalized physical force to prohibit two people of the same sex to forge a marriage contract? I firmly and unequivocally believe the answer is no. My personal opinions are irrelevant here. Upholding the right to same-sex marriage no more indicates my support for gay marriage than my defense of a woman’s right to her own body indicates support for abortion; or my defense of the First Amendment indicates support for pornography among consenting adults; or my opposition to Affirmative Action indicates support for racial discrimination.

The basic issue is individual rights, the inalienable sanction to take the actions necessary to achieve one’s long-term goals, well-being, and happiness – so long as those actions don’t involve the violation of the same rights of others. Since rights are held equally and at all times by all people, the state’s legal sanction of a marriage contract between any two consenting adults must necessarily include same-sex couples, if the 14th Amendment’s Equal Protection Clause means anything. Of course, a private institution like the Catholic Church has every right to refuse to sanction gay marriage. But it has no right to trample the rights of others who disagree.

My opinions aside, it’s hard to see how a marriage between two gay people violates or presents a threat to the rights of anyone else, as would be the case between, say, the parties in a Mafia hit “contract” or the perpetrators of a fraudulent Ponzi scheme. Since the freedom of contract is derived from the right to life and liberty, the burden of proof is on the anti-gay marriage side to validate its stand. It hasn’t - and in fact cannot, do so.

Yet, it won the day in New Jersey.

When the issue is defined properly, there are no “soft supporters”. Broad abstract principles leave out personal judgements on how one feels about the concrete issue involved. When one declares his allegiance or opposition to an abstract principle, he offers a yardstick by which others can judge his stand on a virtually unlimited number of concrete issues. The principle of individual rights, properly understood, leaves no room for “flirting with both sides”, “winks and nods”, or “hiding”. The Editors demand to “learn where each senator stands on gay marriage”. The proper question is: “Where do you stand on the principle of individual rights?” Each legislator’s answer to that question leads logically to a specific vote on the gay marriage bill, since it is essentially a vote on individual rights. But modern politicians on both sides of the ideological divide recoil against principled stands on any issue.

The idea of individual rights is much broader than any single concrete issue, and it is sometimes not readily apparent how to apply it to some particular concrete issue. Disagreements concerning practical application can and do arise among people who hold, and understand, a given principle. But first, the principle must be clearly identified. By evading it, the debate was focussed narrowly on homosexual marriage. This forced the politicians to declare whether they are for or against “gay marriage” and by implication homosexuality as such. But as I stated above, that is not the issue. It should never have come down to that. The senators should have been obliged to take a firm, either/or stand on the paramount question – Do you support or oppose the number one Founding principle of America, unalienable individual rights?

The debate wasn’t properly framed, so it went down to resounding defeat. The supporters such as the “gay rights” group Garden State Equality are partly to blame here. By basing their argument on the premise that they are fighting for “gay rights” rather than the broader principle of individual rights, they undercut their own case by in effect fighting for what one correspondent called “SPECIAL rights”. Fromexperience wrote:

“Marriage is not a right -- civil or otherwise.
In five state and DC, homosexuals have been legislatively "awarded" SPECIAL rights through SSM. Those civil unions and domestic partnerships available ONLY to ss couples are ALSO special rights.”

Marriage is a right, but it’s true that marriage is not a fundamental right. It is a derivative of the foundation of all rights – the right to life. As long as the issue is gay rights, the supporters are vulnerable to this line of attack. Fromexperience is correct that rights are not “special” or “legislatively awarded” or applicable only to gays. But he evades the fact that they are unalienable … i.e., based upon the provable metaphysical facts of reality and thus inseparable from man qua man, and possessed equally by each and every individual. That includes the right of free association, which includes contractual freedom, including marriage contracts. The government’s role is to enforce those contracts, equally. Defending the SSM bill on this proper basis explodes fromexperience’s argument, because to deny an unalienable right to anyone is to deny the same right to everyone … including the contractual right to heterosexual marriage.

It’s obvious why not only liberals but also conservatives ignore, evade, and refuse to explicitly endorse the principle of unalienable individual rights. The implications for both would expose each side to a withering critique of their entire agenda. Adherence to principle cuts through the fog of pragmatism, and obliterates any chance of having one’s cake and eating it too.

For the liberal, it becomes necessary to explain why gays should have the right to freely contract with each other in marriage but not with their health insurance company. If abortion is a medical procedure that should be decided solely between a woman and her doctor, the basic logic behind Roe v. Wade, then why shouldn’t that same line of reasoning (non-interference by government) apply to all issues regarding healthcare? If the government has no right to force a woman to bear a child or deny gays the right to marry, then why should that woman or that gay person be forced into any government-run “insurance” scheme like Medicare, or forced to buy a policy full of state-mandated coverages or submit to an “individual mandate”, or be denied the right to refuse to pay for emergency room visits by uninsured people?

Likewise, for conservatives, it becomes necessary to explain why international free trade is good with regard to material goods, but not to people (immigration). Why is it wrong to force people to fund the latest liberal welfare scheme, but OK to force them to fund Bush’s Faith-Based Initiatives? And why is it wrong to restrict freedom of speech, except to demand that the FCC crack down on “obscene” material in the media?

The inconsistencies are manifest on both sides, if the principle of individual rights is the yardstick to measure the validity of one’s stand on concrete issues. But the Star-Ledger wants to have it both ways. Thus, the Editors defend the gay marriage bill with vague references to “civil” rights or “gay rights”, as if rights are privileges bestowed by society or possessions specific to some group. By evading the exact nature of rights, the advocates of this bill can uphold Gay rights but not medical rights. I offer into evidence the Star-Ledger’s support for the totalitarian "Affordable Health Care for America Act", or HR3962 (and the Senate’s incarnation of ObamaCare), a massive rights-violating monstrosity that makes a mockery of its support for NJ’s SSM bill. If the Editors were to base their call for passage of the Gay Marriage Act on the proper grounds, they would logically have to oppose those healthcare “reform” bills. Both issues are tethered to the principle of individual rights. But since the Editors don’t really support the actual rights of gays (just “gay rights”) there is no need to reconcile those contradictory positions.

“Unprincipled inconsistency is the hobgoblin of little minds”, to paraphrase Emerson, who got it exactly backwards. Of course, one must be consistent based on the right principles … i.e., ideas consistent with objective, concrete reality. And it’s not always easy and sometimes hard. Loyalty to principles often means defending or advocating that which runs contrary to one’s personal convictions. Think of Voltaire, who once said in defense of free speech: “I do not agree with what you have to say, but I'll defend to the death your right to say it.” The preservation of freedom demands nothing less than that kind of conviction. That’s what’s been in play in my mind, as I grappled with this issue in recent years. I have always thought of marriage as a union between one man and one woman. That hasn’t really changed. But, over the years, I’ve had to rethink my stand on certain political issues in order to bring them into line with my passionate belief in the rights of the individual. Gay marriage is one. I was against its legalization, but eventually came to support NJ’s 2002 domestic partnership law and 2006 civil union legalization.

But as fromexperience notes, those laws represent “special rights” and are thus untenable. This has led me to full support of the legalization of same-sex marriage. It is the only stand consistent with the principle of individual rights and of our constitution.

Regardless of what one personally believes about it, the overriding principle relating to gay marriage points unequivocally to only one conclusion – same-sex couples have the same unalienable rights to contractual freedom as heterosexual couples. The law should recognize that fact.

It’s not always easy acting on principle. It often puts one’s political opinions at odds with one’s personal values and morals. Announcing one’s fundamental beliefs … wearing one’s moral principles on one’s sleeves, so to speak, as I do on this blog … exposes one to the judgement of others by one’s own standards. This is as it should be. One way to avoid that personal responsibility as well as the inevitable (and proper) judgements of others is to simply run from abstract principles, and declare that anything goes on the whim of any moment or issue. That’s the tactic employed by both sides in this debate, including the Star-Ledger Editors. This “pragmatic” approach enables political factions and pressure groups to battle in a domestic civil war, each vowing to grab some political or economic advantage at the expense of others based upon some newly minted group “right”.

But it should be remembered that we owe the very existence of our America to a revolutionary group of men who pledged “our lives, our fortunes and our sacred honor” on a radical set of political principles to forge history’s greatest and most moral country ever. Principles are crucial. That is why the principle of individual rights must be placed at the political center stage. It is the means of stemming the aggression of rights violators who seek to impose their own moral judgements on others. Individual rights are the means of subordinating society to moral law. Put another way, the abstraction “individual rights” is the means of stopping anyone from taking the concrete actions of physically preventing a survivor from inheriting the pension benefits of his same-sex deceased partner or another from visiting his same-sex partner in a hospital … i.e., from signing a concrete marriage contract.

The concrete gay marriage bill failed for lack of a proper defense – the abstract moral concept of individual rights.

Monday, January 4, 2010

What's the Cause of the "Bubble Economy"?

In Forever blowing bubbles: Have we learned anything from market crash?, the New Jersey Star-Ledger laments the bubble economy:

So here’s a question on this first trading day of the new decade: Has the smart money learned from its mistakes and gotten any smarter? Not so you’d notice. The Associated Press reports that some analysts believe new bubbles already are forming. As the Federal Reserve keeps the borrowing costs low — in hopes of reviving investment in job-producing businesses — traders are using the easy credit to bid up prices on stocks, both here and abroad, and on gold.

“They’ve put out the biggest punch bowl in U.S. history and people are guzzling from it,” Haag Sherman, chief investment officer at Salient Partners in Houston, told AP.

The Editors blame "wizards of Wall Street" ... again.

I've left the following rebuttal comments:

So the government’s own Federal Reserve Board is again flooding the economy with fiat money and forcing interest rates down to well below market levels “in hopes of reviving investment in job-producing businesses”. And then we’re supposed to be appalled that the fast-money crowd crawls out of the woodwork to guzzle at the punch bowl. The “smart money” is placed at a competitive disadvantage in the face of the massive paper profits, as sound judgement is eroded and undermined by the perverse Fed-induced market incentives.

Money, especially paper money, is not wealth nor is it the source of wealth creation. The individual human mind is. Productive people must be free to think and act upon their own judgement, to take the risks and its consequences, and reap the rewards of success. That is how a growing economy is established. A sound currency and monetary policy is a requirement of a strong and robust economy. So are economic freedom and free markets. Today we are moving away from both. The Fed can “push on a string” from here to eternity with its inflationary policies, but if actual people of ability and ambition won’t step up and produce actual goods and services, we’re going nowhere.

What we are witnessing today is the inverse of the successful 1980s Reagan policies of “tight money” (i.e., a relatively competently run Fed) coupled with reduced government economic interference. Reaganomics was a far, far cry from laissez-faire capitalism, but the mild regulatory restraint, the sharp income tax rate reductions, and the return of a reasonably sound currency were enough to unleash productive individuals to pursue profit, resulting in tremendous real wealth creation and “investment in job-producing businesses”. The result was a simultaneous downtrend in inflation, interest rates, and unemployment amidst a generation-long economic boom.

Today we have dollar destruction coupled with the Obama Administration’s war on economic success, brought about via a massive expansion of the regulatory state, huge impending tax hikes, demonizing of wide swaths of American industry, the virulent new anti-trust activism, etc. Productiveness is hampered and speculation is encouraged. What result would one logically expect? A bubble economy and falling living standards.

As to the “wizards of Wall Street” building bubbles on top of bubbles, it was the explicit policy of the federal government to expand homeownership at any price that caused the housing boom and bust. The quick-buck “wizards” were simply tagging along for the “easy credit” profits.

The Editors are right to sound the warning bell. We’re heading for an economic calamity that will make the housing meltdown look like a warm-up. Yet, in classic style, the Editors fail to draw the obvious conclusion. Instead, they invert cause and effect, blaming the effect while giving the cause a virtual pass because after all, the Fed is guided by “hopes” – which apparently excuses anything.

The long-term solution is to move in the opposite direction toward free markets, capitalism, individual rights, and limited government. The best place to start is to phase out and abolish the Fed. We’ve had enough of its catastrophic failures.

The Star-Ledger laments the bubble economy, but refuses to see the culprit.