Quick Roundup 375

Brian Simpson on Gold

Over at Capitalism Magazine, there's a column by Brian Simpson on the origins of the financial crisis and the need for a gold standard:

The first thing that [Alan] Greenspan and most other commentators on the crisis must do to understand why the crisis occurred is to learn that the free market did not cause the crisis because the U.S. is not even close to being a free-market economy. Massive government interventions in the market in the form of myriad regulations and financial irresponsibility on the part of the government are really to blame. This makes the "solution" being imposed doubly absurd: more government controls, borrowing, and spending to solve the problems created by government controls, borrowing, and spending.

The best thing about this column is that Simpson does not just stop at refuting Alan Greenspan's ludicrous claim that capitalism caused the crisis. He swats Greenspan aside like a gnat and directly goes on the offensive!

This isn't just intellectual activism. It's leading by example.

Lincoln Quote

Amit Ghate quotes Abraham Lincoln on fighting the good fight uphill:

I have not allowed myself to forget that the abolition of the Slave-trade by Great Britain, was agitated a hundred years before it was a final success; that the measure had its open fire-eating opponents; its stealthy "don't care" opponents; its dollar and cent opponents; its inferior race opponents; its negro equality opponents; and its religion and good order opponents; that all these opponents got offices, and the adversaries none. But I have also remembered that though they blazed, like tallow-candles for a century, at last they flickered in the socket, died out, and were remembered no more, even by the smell. [bold added]

The fight against slavery is an inspiring and informative precedent indeed.

Barney Frank, Octopus

Galileo, on the heels of an excellent post about Alan Greenspan's pragmatism, notes that Barney Frank, as a new part-owner of our banks, wants to dictate executive compensation:

The real price of the $250 billion partial nationalization of America's leading financial firms will be much larger than just this dollar amount. We are only seeing the first signs of it now. Barney Frank and his minions are just fashioning the bibs to their bellies. Their feasting on America's leading banks and investment banks -- starting with Goldman Sachs, Morgan Stanley, JP Morgan, and Citibank -- has just begun.

Allow me to make an easy prediction: Our new, self-appointed "captains" of industry will very quickly live up to all the tired old stereotypes about businessmen the left has foisted on America for ages. Hell, Frank is already being chintzy with pay to workers whose initiative is vital to the work of the companies he's trying to run!

Every stereotype has an element of truth to it somewhere. In this case, the element of truth comes from the fact that the stereotype exists in the minds of people engaging in psychological projection.

Bass Ackwards!

Rational Jenn has a couple of very amusing posts up. One starts out with, "The other day, Ryan asked me how to spell 'ass.' Okay, let me back up."

The other is also funny, but got extra points because it contained the word "hobbit", reminding me of my hobbit-like wife, whom I really miss right now.

Two Roundups

Adam Cooke hosts the 68th Objectivist Roundup (scroll down), and C. August an Alan Greenspan roundup.

-- CAV

The Anti-Mind Stench of myBO

If you're tired of having a full head of hair, mosey on over to this -- oh, how shall I refer to it? -- this youth mobilization page of the Barack Obama Campaign and watch the video. If there's anything more annoying than clueless, indoctrinated children sanctimoniously parroting bromides about "educating" their parents on politics, I don't know what that is.

But I am a little concerned that we'll find out soon enough if their Pied Piper has his way. Be that as it may, the kid threatening to withhold future help with text messaging from his grandparents if he doesn't get his way takes the cake, but I really had to gut it out to get that far.

This page, about what the Obama Campaign calls "The Talk", is worth taking a look at as an example of just how low Obama is willing to stoop to get elected, not to mention how little confidence he must have in the merits of his positions as seen by the eyes of well-educated adults with some life experience under their belts. It should tell you something that he has this much contempt for your opinion, and this much determination to get elected anyway.

(Having said that, one could just as well say the same thing about John McCain, given his contempt for freedom of speech.)

At the same time, the advice of the Obama Campaign on how children can help him get elected is actually rather clever. And there's more of that on yet another youth mobilization page, "Kids for Obama". The kid's kit practically invites ridicule by having children set up "myBO" pages. But I'm obviously mean-spirited for pointing that out. Maybe that's part of the point.

It also gives me pause to consider that this is likely yet another taste of how Obama intends to govern. There will be no debate, but we will be hounded day in and day out about how "important" his agenda is. And Obama will be manipulating the guilt-strings from afar, equating his left-wing agenda with what our kids (or the disadvantaged) need by means of the widespread acceptance of altruism in our culture.

It is amazing to me how quickly some people turn their rational minds off after the first hint that their considered disagreement might be selfish! Obama clearly knows this and intends to use it. Too bad that selfishness is virtuous. America will need lots of it to survive the next few years regardless of who wins the Presidency.

On that score, these little political reeducation ambushes remind me of the following passage from We the Living, in which Irina considers why the communists constantly call on ordinary people to attend political meeting after political meeting:

Do you know what I believe? I believe they're doing it deliberately. They don't want us to think. That's why we have to work as we do. And because there's still time left after we've worked all day and stood in a few lines, we have the social activities to attend, and then the newspapers. Do you know that I almost got fired from the Club, last week? I was asked about the new oil wells near Baku and I didn't know a damn thing about them. Why should I know about the oil wells near Baku if I want to earn my millet drawing rotten posters? Why do I have to memorize newspapers like poems? Sure, I need the kerosene for the Primus. But does it mean that in order to have kerosene in order to cook millet, I have to know the name of every stinking worker in every stinking well where the kerosene comes from? Two hours a day of reading news of state construction for fifteen minutes of cooking on the Primus? (313) [bold added]

Obama may or may not hope to reeducate America in the same way that the communists ran Russia, or, God forbid, that Bill Ayers' Weather Underground has discussed (HT: Andy Clarkson and HBL), but he shares the same fundamental contempt for rational debate. The only questions, should he be elected, will be whether he will follow the implications of his statist philosophy that far, and, if so, whether he thinks he can get away with it.

Those of us who don't need spine transplants will have to fight hard and constantly to keep our next President in check. This is true no matter who wins, but it is easier to grasp with Obama.

-- CAV

Quick Roundup 374

Visualizing Bureaucracy

HBLer David Hayes recently went to the Law Library of the Library of Congress to do some research on the scope of government regulations -- with ruler and camera in hand:

The Code of Federal Regulation (abbreviated CFR) is the collection of regulations passed by Federal agencies in the United States.

...

Viewers of a John Stossel television program on the ABC broadcast network on October 17, 2008, saw Stossel demonstrate that the pages in a single title, when removed from the binding and then attached end to end, rolled out the whole length of a football field and then halfway back again. (Read story, view video) The present web page demonstrates just how much shelf space the regulations occupy when the pages are in their binding and on shelves.

The CFR is spread across ten shelves at the Library of Congress. ...

Be sure to stop by for photos and measurements. Hayes then tackles the United States Code, the laws actually passed by Congress.

All told, the USC of year 2000 occupies 73 inches of shelf lineage. ... When the laws of the United States were codified as the United States Code in 1925, all of the titles combined occupied a single volume.

The next time someone tries to pull a Greenspan, remember these pictures. We are a far cry from capitalism.

More on This from Reisman

In a lengthy post, economist George Reisman provides even more evidence that we do not live under capitalism. As a recent commenter pointed out, he has one of the best quotes regarding the Walter Duranty Alan Greenspan Media's coverage of the financial crisis:

It seems that so long as anyone manages to move or even breathe without being under the control of the government, laissez faire allegedly continues to exist, which serves to make necessary yet still more government controls.

Indeed.

A Nation of Obama, Not Laws?

A friend recently told me about this 2001 video (edited transcript) of Obama, a law professor, denigrating our Constitution for not prescribing "what the federal government or the state government must do on your behalf."

Obama may soon be sworn to uphold the Constitution, but here he is -- through ignorance of the nature of individual rights or treachery -- decrying it as a "charter of negative liberties". Too bad that the only way for the government to help one man (aside from defending his individual rights) is to violate the individual rights -- that is, to harm -- another.

Meanwhile, Myrhaf gives us a preview of what life may be like under an Obama regime:

The most benevolent and revered One has been embarrassed recently by Joe the Plumber and the broadcast journalist Barbara West. Both people had the poor judgment to ask Obama or Biden tough questions. Now Joe the Plumber and Barbara West's husband are being investigated. This is what life under Obama will be -- anyone who does not toe the line will find himself subject to intimidation and character smears.

I would add only that past history has already shown us that his supporters had better hope it is convenient for him to pretend to be grateful.

-- CAV

Updates

Today: Added link to David Hayes. (HT: Bill Brown)

Pragmatism vs. Cultural Change

Glenn Reynolds pens a column in Forbes on the current presidential contest between Tweedledee and Tweedledum. Its title will strike a familiar chord this election year: "Is This The Best We Can Do?" Fellow Objectivists who skim through it as I did on first encountering it will then see familiar-sounding words:

There have been a lot of structural suggestions: Term limits, a ban on senators running for president (which would probably do more for the Senate than for the White House, really) and various campaign-finance schemes that look pretty iffy in light of recent experience. Term limits might shake up our gerrymandered Congress a bit and bring in some new blood, but would they bring in the right kind of new blood? That's less clear.

Yes. These kinds of suggestions are, as I have often said, attempts to treat symptoms rather than the disease. This is starting to sound interesting! If you're on the same page with me, you might begin to perk up a little bit.

So while I remain open to suggestions for structural reform, I think that we may need a change in the culture.

Yes! Finally! Could it be that a prominent non-Objectivist out there has finally become hip to the ideas that (a) the broader culture drives supply in electoral politics via demand, (b) the problems we are having with pandering and vote-purchasing in politics will not go away until something about our culture changes for the better, and (c) it is time to challenge the dominant approach of blind pragmatism (with an unquestioning acceptance of altruism's guiding hand)?

Well, at least you didn't have to wait too long for the other shoe to drop!

It's no surprise that a lot of our best political leaders distinguished themselves outside of politics before they ran for office. Perhaps we need to be encouraging an ethic of public service among our most successful, in the hopes that we'll get more people with real-world experience and proven ability at doing something besides raising money and looking good on TV. Could we do better? We're unlikely to do worse. [bold added]

As he might put this himself: I mean no disrespect towards Professor Reynolds, but has he been paying any attention to this year's candidates or to the popular culture?

From sportscasts attempting to make "role models" of athletes not because of their discipline, but because they "give back" to the community, through calls by both presidential candidates for some form of mandatory national servitude, all the way to Alan Greenspan laying the blame of the financial crisis on capitalism, our culture is not just saturated with calls for an "ethic of public service". It's drowning in them.

We'll be lucky after four years of whichever flavor of statist wins not to have our best and brightest forced into politics. Reynolds will then have his wish answered, but our politics will still be a mess. Simply getting better people into government will not get us out of our current mess.

How do I know this? The clues come from several other points Reynolds makes earlier on to the effect that we ought to have better candidates running for office, perhaps even than we did at America's founding: We have a much larger talent pool from which to draw candidates. Our populace is better-educated, on the whole. (For the moment, let's accept this point for the sake of argument.) Politics is a low-paying, high-pressure job with huge time demands and, as such, it drives away the talented. It has become expensive to win office, and one has to be charismatic to do so.

It is certainly true that all these things would conspire to give us mediocrities running for office year in and year out, but what kind of person would want a career in politics anyway? And what kind of person would we want, instead?

To answer those questions, one must do something Reynolds never does in his piece: consider the nature of the job. Elected officials are serving in our government. Perhaps we should spend some time -- as did our Founders, who mysteriously had better officials and government -- considering the proper purpose and function of government.

What is government? What is it for? What does it do? How does it do it? Not one of these questions comes up, and yet we're carrying on a discussion of how to get a better field of candidates as if we were all on a corporate search committee. Except that the government doesn't pay too well. And for some reason, the United States hasn't restructured or spun off a few states to become more manageable. And it has a Constitution, at least for the moment. Why?

These unusual properties of the job of a government official all relate to the nature of the government as it is today, although one needs to know further whether we have a proper government in order to know whether any given aspect of the job would normally be a factor -- or whether there are other factors or qualifications we ought to consider, but haven't.

I am not going to discuss the proper nature of government at length here, today. (Ayn Rand has done that already, and far better than I could, anyway.) I will note that the government is the only social institution that can legally wield physical force -- the delegated retaliatory force of self-defense of the citizens -- and its only proper purpose is the protection of individual rights.

In contrast to the electorate at the time of America's founding, an astounding percentage of the population today does not grasp the nature or purpose of government. This means that, as voters, they will demand -- and get -- candidates committed to misusing government force for other purposes at the expense of the protection of our freedom. The Founders were aware that such a day could come and deliberately made it difficult for the government to actively do things beyond its proper function. They called it "checks and balances".

In that light, the very idea of calling for a more "competent" government officialdom should cause the spine of anyone who values his freedom to tingle. Competent? To do what? Make the trains run on time? Even if they can make you board those trains to somewhere you don't want to go? Our problems are not because our government is run by incompetents, but because it is frequently doing the wrong thing, although not, so far, to the degree of running trains to an Auschwitz.

In addition to calls for "better" officials putting the cart before the horse, it is worth noting that, due to government meddling in the economy, there is a vast misconception -- shared by Reynolds -- that our government officials need to be Renaissance men.

Why? Their proper job description is actually rather simple.

This argument has surface plausibility due to the unnecessary complexity of the mixed economy. (Thus, it is also related to the notion I elaborated on earlier that voters need to be near-omniscient to make good electoral choices) But this argument is wrong, and often reflects an inability by those who hold it to think in terms of principles. As I said before:

Heinlein has it half-right that figuring out how to vote requires an "enormous" amount of time. It does take time, it is true, to master the principles on which our nation was founded. However, once one does this, these principles greatly simplify how one approaches any subsequent election, even in today's context of massive government intrusion. Anyone who thinks that each election requires enormous amounts of study before one can vote intelligently does not understand the cognitive role of principles. [bold added]

"Protect my individual rights, and do not violate them," is the basic principle by which I would want a government official to act. Yes, he would have to have some idea of what individual rights are, but it would not matter one jot whether he were a Creationist, a global warming hysteric, an animist, a Moslem, or (usually) uncomfortable thinking about scientific concepts, so long as what he did in office was guided by that principle. And, under a proper government, his power to adversely affect my life would be greatly diminished compared to what it is today.

We do need cultural change, but what Reynolds calls cultural "change" is just more of the same. What needs to change about our culture is for more people to understand the nature of individual rights and the proper role of the government. Each, incidentally, entails a discovery of proper ethical principles -- which, incidentally, actually run counter to the altruism Reynolds prescribes.

Until that happens, we will remain in an inherently unstable mixed economy that will alternately drift and lurch towards totalitarianism. The government will increasingly attempt the impossible: replace the minds of millions of individuals with bureaucrats and inflexible rules in order to run an economy for 300 million plus. This will cause problems, which the government will expand to attempt to "fix" ad infinitum.

The government can not run the economy and should not try. There is no such thing as a government official competent for that job, and that is a job I frankly want to remain undone because I have work of my own to do and want politicians out of my way. And there is nothing wrong with me wanting to live my own life as I see fit. In fact, that is good.

-- CAV

PS: I highly recommend Tara Smith's "The Menace of Pragmatism" from the latest issue of The Objective Standard. You may read its first paragraphs for free here, with the option of purchasing the article. She discusses many issue I either briefly alluded to here or simply did not have time to discuss at all.

Quick Roundup 373

Audacity, yes. Hope, no.

This article at Daily Kos tells us a lot more about its author's ignorance of economics and the requirements for human life than anything else.

In the midst of a long rant against a caricature of capitalism inspired by Alan Greenspan's final sell-out of Ayn Rand, "Devilstower" -- why would one stow a devil? -- reveals an understanding of Objectivism that rivals in sophistication the tank top pictured in the next section of this roundup:

Chief Disciple Greenspan carried this torch for the next half-century and beyond. Pro-business conservatives (not surprisingly) found great comfort in a philosophy that said squeezing every dime out of the system was not only fair, but the only moral solution. Not long after the publication of his essays in Rand's book, Greenspan was invited to become an advisor to the Nixon administration. When Ford replaced Nixon, Greenspan became the chair of the Council of Economic Advisors. And when Reagan took power, Greenspan was no longer the voice crying in the wilderness, he was the very center of the establishment. Objectivism and Conservatism had united in Market Fundamentalism, and that force was on a jihad against regulation of any kind.

"Chief disciple": If you have any firm convictions -- Greenspan doesn't, but we'll get to that -- you must be a mindless religious zealot. Reason can't lead to certainty. I know beyond a shadow of a doubt that I'm rational and that I am certain about nothing!

"Squeezing every dime out of the system": If material wealth isn't a fixed quantity, its production does not require anything besides brute muscle, and businessmen are just useless parasites, even if customers keep voluntarily rewarding the most efficient ones by trading with them. What makes "the system" work? Orders from government bureaucrats!

"Jihad against regulation": Never mind the fact that Greenspan -- a government regulator -- was attempting to exercise some control over the economy, we need much more regulation than we had, even under him.

If any decent analogy between religion and Greenspan's actions deserves to be drawn, it is that Greenspan was a hypocrite and Devilstower a true believer. But even that analogy is flawed since altruism, the religious morality, basically requires its proponents to violate it in order to survive.

The most remarkable thing to me about this whole tawdry affair is that Greenspan was cheating on a moral code that actually promotes life when practiced because, apparently, the approval of the masses is more important to him even than his own life!

If ever there was a gift horse that needed looking in the mouth, Greenspan's betrayal of Rand to the left is that horse. But the left is committed to the code that Greenspan was actually following, so that won't happen.

Devilstower saves his most egregious blunder for the end: "John Galt is dead. We can only hope he stays buried." To bring up a point of Ayn Rand's philosophy Devilstower conveniently ignores, if he has heard of it at all: In order to live, one must be free to engage in productive work, actually do that work, and enjoy the fruits of that work. A major point Rand made in Atlas Shrugged (It's a book.) is precisely that man must have freedom to benefit from living in a society with other men. Government regulation -- even from an alleged proponent of this idea -- abridges that freedom.

But Devilstower hasn't time for books. "John Galt -- farmer, miller, baker, shopkeeper -- stay dead, while I step over your corpse. I smell that pie Alan told me about!"

The Left's jihad against economic freedom will deliver us to a world where their mistaken vision of economics will become true: There will be only a limited "pie" available for everyone to eat, and we will have to fight tooth and nail over it -- or beg for it from a government official, as long as he isn't Greenspan.

That's what they call "hope" over on the Left.

Redneck Fashion

Some kinds of "creativity" deserve ridicule. This is one of them.

If someone hasn't told this woman about Goodwill by now, it might be because of a fear of ending up with even fewer teeth in his head than she doubtless has! (HT: the older of my brothers)

Honesty from the Left!

Well, okay. I'm calling a cup with a drop in it half-full.

In a sarcasm-laden blurb, The Village Voice does at least note that Yaron Brook of The Ayn Rand Center for Individual Rights denounced Alan Greenspan, and even provides a link to the story.

However, among other things, the blurb accuses Brook and his fellow Objectivists of being cultists. Coming from the left, that's easy to discount as psychological projection. How many readers will actually click through, much less read, much less critically evaluate the denunciation? The author obviously didn't!

In fact, stripped of the insults, the blurb actually has a decent summary of why Greenspan's words weren't even worth the paper they were printed on. And yet, it still attacks Greenspan, Brook, and capitalism. Why?

This blurb is an inadvertent confession. Just as we saw a Kossack confess that he equates certainty with dogmatism above, we also see a major liberal media outlet admit that the left does not care about the truth, specifically about its implications. Most glaringly, we have a leftist outlet saying, "We know that there is reason to believe that Greenspan was not an advocate of laissez-faire since he has basically just been called "King of the Regulators". But we want more regulation anyway."

And what did that just get us?

Now that I think about it, this is honesty about a journalistic fact being used to distract from dishonesty on a much larger scale. I'm sure that even Alan Greenspan would tell you, when asked, that the sky is blue.

-- CAV

Gus Van Horn Turns Four!

Four years on, I still enjoy blogging!

My move to Boston and plans to begin writing columns regularly will require that I make some changes to the way I blog, but there have been so many tremendous upsides to this activity that I plan to continue here in some form for the foreseeable future.

Although I am at the point as a writer that it is time to take things up a notch, I have gained so much value from the give-and-take here with my readers that it is plain to me I should continue.

On that note, I take a moment now to thank my readers, many of whom have offered me news tips, constructive criticism, needed corrections, and encouragement over the years. I have had the pleasure of meeting many of you, and even with some, the honor of your friendship. Of the many things I have gotten out of blogging, this has been the best and this is a big part of why I will go on.

Once again, thank you!

-- CAV

PS: Due to a glitch in the way the Blogger comment system notifies me of new comments to moderate, I was unaware of three comments to yesterday's post until this morning. So, if you were wondering what happened, that's what it was.

Alan Greenspan, Coward and Traitor

Yesterday, I got wind through several people, including a commenter here, of some testimony by Alan Greenspan, who once, decades ago, was an Objectivist, but has long since demonstrated through his words and deeds that he is not now and has not been for quite some time.

Regarding his status as an alleged advocate for capitalism: Most glaringly, the very acceptance of a job with the Federal Reserve years ago would cast doubt on the firmness of his grasp of the nature of capitalism or of his sincerity as an "advocate" of capitalism or Ayn Rand's ideas.

Consider what Ayn Rand herself said about capitalism:

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control. ("What Is Capitalism?" Capitalism: The Unknown Ideal, 19.)

And now consider what Greenspan himself said of the importance of having a gold standard -- rather than the fiat money, the value of which he took charge of manipulating. As you read this, recall that he never advocated for a return to the gold standard while he was in office:

Gold and economic freedom are inseparable, . . . the gold standard is an instrument of laissez-faire and . . . each implies and requires the other.

...

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold . . . .

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. (Alan Greenspan, "Gold and Economic Freedom," Capitalism: The Unknown Ideal, 96.) [bold added]

And yet, the news media portray Greenspan as an advocate of capitalism and a "disciple" of Rand every chance it gets, as the San Francisco Chronicle, for example, did yesterday even as Greenspan removed all doubt that he is anything but a capitalist:

Fed watchers said they were stunned by Greenspan's mea culpa. For his whole adult life, the former Fed chairman has been a devotee of the philosophy of Ayn Rand, who celebrated free-market capitalism as the world's most moral economic order and advocated a strict laissez-faire approach to government regulation of the marketplace.

This is completely wrong. Let's rephrase it:

Fed watchers claimed to be stunned by Greenspan's mea culpa. For his whole adult life, the former central banker and one-time advocate of the gold standard has been regarded, largely due to his former association with Ayn Rand, as an advocate of capitalism. Although he never publicly broke with Rand, his career has benefited from the association even though it has required him to do things greatly at odds with his earlier published views from that period.

Or, not to put too fine a point on this: "Greenspan is a pragmatist coward who hides behind Ayn Rand's skirt when it suits his purposes, and sells her out when it suits his purposes." Obviously, he would rather the United States continue racing towards statism than admit that he played a big part, through keeping interest rates very low for many years, in precipitating the current financial crisis.

And the fact that he is getting away with it so easily -- where are the bloodhounds? -- was explained very eloquently by a remarkable J'accuse recently written against the media's coverage of the financial crisis by one of their own, Orson Scott Card (HT: Dismuke):

This [crisis] was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of congressmen who support increasing their budget.) [bold added]

Incredibly, Card notes that Greenspan was among those who warned against the loose lending practices that helped cause the crisis. And yet now, he has changed his tune:

Asked by committee Chairman Henry Waxman, D-Los Angeles, whether his free-market convictions pushed him to make wrong decisions, especially his failure to rein in unsafe mortgage lending practices, Greenspan replied that indeed he had found a flaw in his ideology, one that left him very distressed. "In other words, you found that your view of the world, your ideology was not right?" Waxman asked.

"Absolutely, precisely," replied Greenspan, who stepped down as Fed chief in 2006 after more than 18 years as chairman. "That's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence it was working exceptionally well." [bold added]

Perhaps Greenspan needs to be reminded of the title of the book in which his defense of the gold standard appeared: Capitalism: The Unknown Ideal. Or perhaps Greenspan, realizing that most people are unaware that a central bank is incompatible with capitalism, took advantage of the convenient fact named by that title, while betraying the inconvenient one.

Re-read that last excerpt, and remember it the next time the media calls Greenspan a capitalist. He is not. And he has finally admitted it himself!

-- CAV

Updates

Today: Corrected typos.

Some Pre-Election Humor

No matter which candidate floats to the top on or after Election Day, we're inaugurating a real stinker in January.

Anyone who cares about America and understands the danger each candidate presents knows that there is a herculean task of cultural activism ahead. Before we will see an election cycle that includes candidates offering real progress towards greater freedom, many, many Americans will have to be taught or reminded of the nature and importance of individual rights. I won't belabor this point further today.

The bright side is that we know what the baseline is and what needs to be done. We also aren't, like so many Republicans in the (septic?) tank for McCain -- or kids deluded by the O-bomb -- emotionally invested in any way whatsoever in the fortunes of either political candidate. This means that, as a small fringe benefit, we can enjoy all of the political humor out there, excepting the two jokes that have somehow made it onto the top of the ballot, of course.

A couple of items came to my attention this morning. One of them is a column over at RealClear Politics by Steven Stark titled, "Long National Nightmare", but bylined by RCP as, "What If All the Pundits Are (Gasp!) Wrong?.

There was Wilson over Hughes. And, of course, Truman over Dewey. But there's never been a surprise in presidential politics like the one that awaited Americans this morning, who woke up to discover that, somehow, John McCain had been elected president over Barack Obama.

...

Meanwhile, the tsunami of youth support for Obama never materialized. Instead, it was the over-65 crowd who turned out as if the election were a five-o'clock dinner special, and who voted in record numbers for their fellow senior citizen.

"It was fear of the known versus fear of the unknown -- and fear won out," quipped one McCain aide.

Be sure to read all the way to the punchline, and remember it if truth turns out to be stranger than fiction come the day after Election Day!

And then we have a short video at YouTube that I learned about through HBL.

Look! It's two Democrats on an Escalator!

The challenge I pose to my readers today is this: Can you top these?

-- CAV

Quick Roundup 372

Can I Abstain from Endorsing?

Myrhaf recently endorsed abstaining during the next presidential election. Diana Hsieh and Craig Biddle also recommend abstention.

My position was probably closest to Diana's until a few days ago. As she put it, "McCain is particularly revolting. So if I vote for anyone, I'll vote for Obama. He's beyond awful, but I have some reason to hope that he'll be ineffectual."

But the more I learn about Obama, particularly with the prospect of his party gaining an iron grip on Congress, the more frightening that prospect looks to me. In particular, I'm hearing more and more about the possibility that the "Fairness" Doctrine will be reimposed.

Now we have two candidates who have demonstrated hostility to freedom of speech, the original reason I said I could not vote for McCain. There remains the matter of it being better to have an actual socialist (rather than a professed or assumed pro-capitalist) being the one to impose such laws, so I can see there being an argument to vote for Obama, but it increasingly looks like my freedom will be at the tender mercies of chance no matter who wins. I am losing sleep over what the next few years might bring. Everything I love is going to be under active attack after Bush, who has started things early with his "bailout", leaves office.

The prospect of voting for either man is extremely revolting to me.

I walked past a line full of ne'er-do-wells the other day at the grocery store and noticed that they were there for early voting. (And I just now recall several odd encounters with people trying to strike up conversations with me out of the blue over high food prices during previous trips to the same store. Suddenly, all this makes sense to me now.) Leftists whine all the time about people too lazy to show up to vote being "disenfranchised". At the risk of sounding like one of them, it is I who have been disenfranchised this time around.

Thus the struggle to restore individual rights begins against the ironic backdrop of a line that includes many black voters who will be casting ballots for a black Presidential candidate -- who wants to impose slavery on everyone.

I am beginning to wonder whether the very act of voting in this election risks lending moral sanction to an obscene pretense.

The Problem with Licensing

Brian Phillips has posted an interesting piece against state-mandated licensing over at Houston Property Rights Live Oaks:

[L]icensing is nothing more than legalized thuggery. Coercion is used to prevent entry into a profession and impose higher costs on consumers. If a contractor beat up a competitor at the paint store he would be charged with battery. If he took money from a customer he would be charged with theft. The nature of his actions do not change simply because he uses government coercion in the form of licensing as his proxy.

This is in addition to the fact that it fails to achieve its alleged purpose, the protection of consumers from incompetents.

Licensing may have affected me personally, as the spouse of a physician. Because my wife, a medical resident, spent time performing basic research between licensing exams, she would have faced review due to the amount of time between her exams by a board for one of the residencies she had been looking at.

There was no way to have this decision made before she started her residency. Since an unfavorable decision could have potentially ended up causing her to be arbitrarily kicked out of her residency, she had to take this threat to her career into account when she ranked the schools she interviewed. One could argue that in our case, (assuming she would have ranked this program higher than her current one) licensing caused our cost of living to be dramatically higher for the next several years than it might otherwise have been.

A Viral Phenomenon

Some time ago, after several fruitless hunts at airports for wireless Internet connections, I googled "free public wi-fi" and found the following very interesting article:

While on vacation last month, I kept spotting "Free Public WiFi" ad-hoc nodes wherever I went, particularly in airports.

Finally, my wife mentioned that she was in her office building the other, opened her notebook looking for connectivity and saw "Free Public WiFi". She connected to it, but was unable to get anywhere.

So what are these things? In doing a search, I found some references in security-related discussion groups to the phenomenon, and lots of instances of people spotting these, even on airplanes. But didn't see what I was afraid I'd find -- that this is some kind of virus or spyware that sets up an ad hoc network as a trap.

It appears to be a manifestation of a feature of Windows that I wrote about earlier this year. When Windows connects to a network, it retains that network's name, or SSID, then broadcasts its as an ad hoc network, essentially inviting a connection. You can find more details here. Microsoft has said it will fix this in the next XP service pack; it's unclear if Windows Vista behaves this way.

So why do you see so many of these? My theory: It's viral, but not a virus!

I once even spotted one of these nodes during a flight....

-- CAV

Updates

Today: Corrected name of Brian Phillips' blog, which he renamed today. (It will remain Houston Property Rights in the sidebar until the next time I do a batch of template edits.)

Individualist at Last?

Via Arts and Letters Daily is a remarkable article by economist Glenn C. Loury in which he recounts a failure from an earlier episode of his life that has caused him much anguish over the decades since. In the midst of fighting for civil rights, he betrayed a friend at a meeting of the Black Panther Party.

So there we were, at this boisterous, angry political rally. A critical moment came when Woody, seized by some idea, enthusiastically raised his voice above the murmur to be heard. He was cut short in mid-sentence by one of the dashiki-clad brothers-in-charge, who demanded to know how a white boy got the authority to have an opinion on what black people should be doing. A silence then fell over the room. "Who can vouch for this white boy?" asked the brother indignantly. More excruciating silence ensued. Now was my time to act. Woody turned plaintively toward me, but I would not meet his eyes. To my eternal shame, I failed to speak up for my friend, and he was forced to leave the meeting without a word having been uttered in his defense.

Loury's friend had grown up with him in his neighborhood, and was of fractional black African descent, but did not have dark skin or African features. He had, however, like many such people at the time, decided to openly declare himself as black.

As with many other attempts to break free from tyranny, the struggle by American blacks to achieve equality under the law has been a mixed bag, as I have discussed at some length here before. Many things blurred the essential nature of this struggle, but I think a major factor was the fact that it was a war fought on two fronts:

At the beginning of the Civil Rights Era, blacks in America faced two major problems. One problem was moral in scope, and that was racism on the part of most whites, particularly in the South. The other problem was legal: Poor treatment of blacks was legally codified into what are known as Jim Crow Laws.

And, on top of that, American society at large has always been massively confused if not wrong outright about what constitutes a proper morality, and increasingly confused about the proper role of government. It is one thing to fight for the legal protection of the individual rights of blacks. It is quite another to impose a sort of retaliatory Jim Crow on everyone else to "make up for" past injustice.

This article gives a snapshot of how rife with ethical confusion the civil rights movement has been and remains. Are we individuals or parts of racial collectives? I have long thought that an underappreciated hangover of white racism has been that blacks never got to become accustomed to being treated as, or thinking of themselves as individuals at all times.

This lingering effect, along with common misconceptions about ethics and politics was already making this just rebellion a blind one. Loury now sees the irony of that moment, when, in the name of civil rights, his friend was being subjected to a race test:

The indignant brother who challenged Woody's right to speak was not merely imposing a racial test (only blacks are welcome here), he was mainly applying a loyalty test (you are either with us or against us), and this was a test that anyone present could fail through a lack of conformity with the collectively enforced political norm. I now know that denying one's genuine convictions for the sake of social acceptance is a price society often demands of the individual, and all too often we willingly pay it.

Given Loury's context then, he should have vouched for his friend, but the proper response would have been for both to leave. There were many legitimate reasons the for people like Woody to openly identify as black then, but promoting supremacy of a different color was not one of them.

I don't agree with everything Loury says as he grapples with his past failure, but he makes some very good points that desperately need to become common in any discussion of civil rights today:

Growing into intellectual maturity has been, for me, largely a process of becoming free of the need to have my choices validated by the brothers. After many years I have come to understand that, until I became willing to risk the derision of the crowd, I had no chance to discover the most important truths about myself or about life -- to know my calling, to perceive my deepest value commitments, and to recognize the goals most worth striving toward.

The most important challenges and opportunities that confront any of us derive not from our cultural or sexual identities, not from our ethnic or racial conditions, but from our common human condition. I am a husband, a father, a son, a teacher, an intellectual, a citizen. In none of these roles is my race irrelevant, but neither can identity alone provide much guidance for my quest to adequately discharge these responsibilities. The particular features of one’s social condition, the external givens, merely set the stage of one's life. They do not provide a script. That script must be internally generated; it must be a product of a reflective deliberation about the meaning of this existence for which no political program or ethnic category could ever substitute. [bold added]

Or, as Ayn Rand once put it so perfectly: "The smallest minority on earth is the individual. Those who deny individual rights, cannot claim to be defenders of minorities."

In writing this article, which I am sure will draw him some flak, Dr. Loury is finally doing what I submit he really should have done at the time. He has left that meeting of bigots and joined America as an individual man. As a fellow individual, I thank him and welcome him.

-- CAV

Quick Roundup 371

Blogworthy things seem to have come in pairs today....

Two Roundups

Last week, Rational Jenn posted the 66th Objectivist Roundup and Mike N posted a weekend roundup of his own.

Two from Amit Ghate

Amit Ghate has recently posted a couple of the kinds of short, sweet examples that can come in handy during conversations about politics.

First, he links to "Barstool Economics", which very nicely demonstrates all at once: (1) the disproportionate burden our progressive tax code places on the rich, (2) the degree of dependence the welfare state has on this demonized demographic , and (3) how much of the population is freeloading on the rich through income redistribution. Although this doesn't directly address the fundamental problem of taxation -- that it violates individual rights -- the enterprising interlocutor should have no trouble steering things that way! (Also, through his link, I was reminded of the existence of Doug Reich's blog, The Rational Capitalist, which is now listed in the sidebar.)

Second, he does his best imitation of Virgil in Dante's Inferno, showing us a nearly perfect example straight from the the hell of Lew Rockwell of Libertarians being merely anti-government, rather than pro-individual rights. The title says it all: "The Enemy is Always the State". Too bad we need the state -- a proper government, to be precise -- to protect the individual rights on which our lives in a society depend.

Two Issues Sites

I have mentioned Diana Hsieh's Coalition for Secular Government here before and I link to its blog, Politics without God, on the sidebar, but until today, I hadn't listed the main site on my resources page. Now it's there, under "National Organizations" on the right hand side.

Also, thanks to her blog, I have learned about Tony Donadio's micro-site, Repeal the Bailout, and have also added it to the resources page.

Two Veterans Come in off the Bench

Martin Lindeskog, whose blog loads a little more quickly these days, reports that Cox and Forkum recently posted a cartoon about the bailout on their web site. Quoth Allen Forkum:

In defense of this socialist expansion, Bush gives us a classic A-is-non-A denial of reality: "These measures are not intended to take over the free market but to preserve it." Clearly the man doesn't even know what the "free" in "free market" means. And unfortunately neither do McCain and Obama.

After seeing a headline this weekend in which Bush reportedly urged something to the effect that we should keep our economies free, my initial reaction was, "Too late!" This was followed swiftly by, "This man clearly doesn't know what the hell he is talking about."

Two Blegs

1. I remain swamped by the Eternal Cross-Country Relocation from Hell, but want to do some blog upkeep soon. If anyone has noticed any hyperlinks that no longer work or whose sites are no longer being maintained, particularly on the Resources page, I'd be grateful for the time a heads-up would save me.

2. Are there any Kung Fu movie aficionados out there? I'm not really the action movie type, but I have the urge to watch one, and I don't know diddly about this genre. Fortunately, I've had pretty good luck soliciting advice here before....

Being There II?

And speaking of movies, the following recent comment about Barack Obama by Myrhaf caused me to become curious enough about the Peter Sellers movie, Being There to rent it.

It becomes theatre of the absurd when you consider what Obama did during the bailout. He did what always does: nothing. The guy is like the Peter Sellers character in Being There.

He certainly hit that one on the head! The movie, at least, was hilarious. Its real-life sequel, if the election gives us one in an Obama Presidency, will, like most sequels, disappoint.

-- CAV

Law Promotes Discrimination

Yesterday morning, I spotted a story on complaints and legal actions taken by various Moslems for the sake of ending "discrimination" by employers who do not accommodate their frequent (and constantly changing) schedule of five daily prayers.

Requests by Muslims to pray at work have led to clashes with employers who say they cannot accommodate the strictly scheduled prayers.

The conflicts raise questions about religious rights on the job. Muslims say they are being discriminated against and are taking their complaints to the courts and the federal government. Employers say the time out for prayer can burden other workers and disrupt operations. [bold added]

Except for a badly-titled comparison of the number of such complaints by religious group, the article is even-handed in tone. It presents what an average person would see as both sides of the issue, that of the offended Moslems and that of the businessmen. The second excerpted paragraph is a good example. Few would read the article and complain of media bias, or at least that the reporting was compromised by any kind of political agenda.

Unfortunately, in spite of what appears to be an honest effort to tell the story, this article completely fails to cover the story correctly because it accepts an old, widespread, and gravely mistaken premise in modern American politcs: Namely that the violation of property rights is justifiable for the purpose of ending racial, ethic, or religious bigotry on the part of some individuals.

This is nothing new. I have written about this problem at length before, and will not belabor it again now, although my main point bears repeating:

I abhor racism, but I must respectfully disagree. Forbidding behavior that is immoral, but does not violate the rights of someone else, is far from being "a good idea". The purpose of government is to protect the rights of individuals from being violated by the initiation of force (or the threat thereof) from other individuals. Nothing more. Nothing less.

To apply this to the topic at hand, whether an employer allows religious considerations to affect his personnel decisions is of no concern to a proper government. His business is his property, and if he wants to not employ someone just because he is Moslem (or just because he isn't), that's his right -- and his problem, if that employee is best for the job.

And no one is entitled to employment under a proper government. One striking thing about the kinds of cases in this story is that one can easily imagine how having an employee who drops everything to pray at multiple times a day (that vary over the year) can render that employee (and others) less productive. News bulletin: Employers hire people to do things. Praying is usually not one of them.

But there's something else here that I find interesting. The law under which these incidents are being brought to court will have the paradoxical effect of making it even harder to decide to hire Moslem employees! Consider the combative attitude of entitlement expresseed by one attorney:

"They shouldn't be forced to choose between their job and their religion," says Rima Kapitan, an attorney who represents Muslim workers in Grand Island.

Pardon me, but nobody "forced" anyone to make such a choice here. A Moslem who can't pray at Company A is perfectly free to seek employment at Company B. What is really happening here is that some Moslems are working to force employers, through nonobjecive law, to make hiring decisions that conflict with their very livelihoods!

Moslems already make the largest number of complaints about religious discrimination in the workplace. The increased likelihood that employers of Moslems will be sued or have to make who knows what accommodations any time a follower of that religion claims to be "offended" (which the cartoon riots show can be over almost anything), will make any employer with a grain of sense not want to touch a Moslem, no matter how qualified, with a ten foot pole.

If Moslems were truly concerned about their employability, they would support the full government protection of property rights. But some clearly do not, and place other considerations above the requirements for their life on earth (which include the protection of individual rights), as a famous series of atrocities in September 2001 eloquently illustrated.

If a Moslem wants to damage or end his life by appeasing Allah, that is his right -- and his problem. We should repeal all laws that violate individual rights -- such as federal anti-discrimination law -- that are harmful enough to begin with, and that can be commandeered through legal jihad to force us to obey Allah's alleged commands.

-- CAV

Lining up for History

As some might have guessed from my initial comments on yesterday's post, the in-laws have sent us to that vast playground in Central Florida, Disney World. It's Mrs. Van Horn's favorite place on earth.

I've never been, but I've heard something about standing in line, and even if that's not as bad as I think it will be, there is also the matter of how I can occupy my mind in the mornings and on the flight home.

I do have on hand the latest issue of The Objective Standard and, thanks to John Lewis's review in a past issue of TOS, Sun-tzu's Art of War. I got that at the book store in the airport when I realized that I hadn't fully grasped just how much time we might be standing in line. (Too bad I hadn't thought of that at home! I have quite a backlog of good reading there!)

And too bad Scott Powell's last installment of his First History for Adults series has just started! That means I will have only one lecture from the Ancient History course -- the first -- loaded onto my iPod. Here's a description of the course:

The Ancient Background is the final installment of the A First History for Adults program, designed to help adults learn history. It is a 20 lecture course on the history of the Ancient world, which focuses on four key stories: Ancient Egypt, Mesopotamia & Persia, Greece, and Rome. The course begins with a discussion of the birth of Egyptology, and the incredible advances in our knowledge of the distant past over the past 200 years. The cyclical pattern of Ancient Egyptian history over nearly 3000 years is then examined. The relatively stable pattern of life in the land that Herodotus called "the gift of the Nile" is contrasted with the volatile developments in Babylonia over the same period. The forms of writing, architecture, religion are all compared. Then the story turns to Greece, where the progress of the various city-states (especially Athens and Sparta) is tracked, and we witness the birth of science, philosophy, and democracy. The Greco-Persian Wars are next, followed by the Peloponnesian Wars, and meteoric career of Alexander the Great. Greece, however, ultimately gives way to Rome--the ascendant power of the Western Mediterranean. The story of Rome's rise is attended by the struggle to maintain its unique government while expanding. And expand it does...at the expense of first Carthage and Greece, then Egypt, Britain, and still more people, until it encompasses the Mediterranean and much of Europe. As Rome shifts from republic to empire, its culture declines, however, rendering it susceptible to penetration by the ideas of Christianity and by barbarian hordes. The story ends with the "Fall of the Roman Empire," but also the promise of a new development. [minor edits]

Powell recently blogged about Napoleon's role in helping along the scientific study of Egyptian history, the period he starts with in this course.

As far as Napoleon is concerned, many would rather dismiss his contribution. Some interpret the scholarly dimension of his expedition as nothing more than a ploy to sway public opinion or a device for gaining political advantage. But history is not primarily concerned with moral judgment. Historical value-jugdment is an act of weighing the importance–not the goodness–of an individual or group's contribution to the fate of mankind. In this regard, one must attribute to Napoleon a unique place as a conqueror, lawgiver, transmitter of ideas–and irreplaceable contributor to a vast expansion of human knowledge.

Awhile back, I enjoyed Powell's course in European History, which I followed in a similar way: By storing the lectures on my iPod and listening to them during the dead periods of some lab work I was doing in the evenings. This time, with all the back and forth travel I will be doing between Houston and Boston, I'll often be taking this course while on the plane or in the airport.

Probably far more than most, I benefit from the flexibility that the mp3 recordings of Powell's courses afford, but another benefit that you can enjoy is this: Although his class started October 8, it is not too late to join and catch up! I recommend his course, and note that he has recently added the further flexibility of payment plans to his customers.

-- CAV

PS: If I am not mistaken, Lecture Two was last night. Good! If I'm right, that'll help me use all that line time tomorrow. Powell usually makes his recordings available pretty quickly.

Update: Regarding the lecture schedule, Kyle Haight writes in:

The schedule is every other week, with a few exceptions.

The bad news is that if you're Gus, you won't have as much cool stuff to listen to while standing in line. The good news is that if you aren't Gus, and aren't already taking Powell's course, you have even more time to sign up without missing anything else!

As you can see, I'm catching up myself!

Updates

10-17-08: Corrected PS.

Quick Roundup 370

Possible Light Blogging

As a medical resident, my wife hasn't much say in when her vacation occurs. One of her three week-long breaks of the year is this week. She really deserves and needs the break, and we really are enjoying being together. We're headed off to Florida for a few days for a trip her parents are giving her to celebrate her finishing medical school.

If we even have an Internet connection, I may not have time to post as usual on Thursday and Friday. But I will be back Monday.

A Silver Lining

Paul Hsieh notes a possible silver lining to the financial crisis: It may grant us a temporary reprieve, due to cost, from socialized medicine and economy-sapping environmentalist legislation. He also notes, however, that at least one columnist has argued that the current crisis might be used as a pretext for hastening those things along.

I could see this shaking out either way. To the extent that a culture abandons the principle of individual rights, it is at the mercy of chance and the whims of its would-be slavemasters.

Some Aren't Waiting for Obama

Check your credit card statements! Some of Obama's supporters aren't just sitting on their haunches and waiting for him to "spread the wealth around" after he takes office and starts stealing from the productive: They're sitting on their haunches and committing credit card fraud instead.

Steve and Rachel Larman say a strange credit card charge appeared on their statement this month -- a $2300 donation to Barack Obama's presidential campaign.

The story doesn't comment on how the theft occurred, but it reminds me of a new, low-tech method I learned about through a security alert at work recently. It's called "shaving".

Your Mileage May Vary

Through Lifehacker, I learned of a web site that can make bearable slow Internet connections -- or web pages that take minutes to load even over broadband due to misuse of JavaScript. It's called Finch, and nominally, you can just plug in the URL of interest to see a stripped-down, text-only version of the page.

In my hands, Finch has functioned very inconsistently with blogs, though. Tests of this blog result in anything from snappy performance to strange error messages, including that the blog was "not found".

If you're willing and able to install a text-only browser, you can get more consistent results (as one commenter at the above post notes) with a text-only browser like Lynx or w3m, which I prefer.

When Finch does work, I like the results, and it's nice to have a way to strip down bulky web pages when I am not using a computer that already has a text-only browser.

Fascism Comes to Banking

The more I learn about the recent moves by the government to "rescue" the economy, the worse things sound. A commenter to yesterday's post pointed out the following passage from a news story:

Some of the big banks had to be pressured to participate in the program by Paulson, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with banks getting bailouts.

In other words, so that nobody looks bad, even (all?) healthy banks are going to get "bailed out", too. I'm sure this will come with the same reduction in executive benefits and "oversight" from the architects of the current crisis.

I guess an integral element of the "bailout" is that the consumer be denied the opportunity to seek out a bank with strong fundamentals. Instead of us having the opportunity to do business with the best bankers we can find, we will all have to suffer from government mismanagement.

Some bailout!

-- CAV

The Power of Fiat Money

Once again, all I need do is head to the main page of the New York Times to find a headline that reads like the punchline of a bad joke. This time it's, "U.S. Investing $250 Billion in Banks". Unfortunately, this is no joke, this is where it starts, and things quickly go even further downhill from there.

Before we take a look at this travesty, let's briefly consider how loans and investments are supposed to work. Jim has what he thinks is a great idea. It could be that he feels financially secure enough to buy a house. It could be that he has an invention he'd like to mass produce and sell. Whatever. Jim's problem is that in order to put this plan into action, he needs more money now than he actually has.

Ned, on the other hand, has lots of extra money sitting around that he has no immediate need for. Ideally, Jim and Ned are free men. Jim can dream and invent to his heart's delight, and Ned can wallow in his pile of money all he wants, so long as neither threatens, robs, or harms the other. Jim can't just take Ned's money, and Ned can't compel Jim to come up with something useful to do with his capital, the extra cash.

But they can trade to mutual benefit. Jim can offer to pay Ned a portion of his later profits in exchange for borrowing his capital now and paying it back later. That's interest. If Ned lends Jim the money, both will be richer at the end of the day because Jim will now own something he did not have the means to obtain on his own and Ned will have even more money sitting around.

But remember: Both men are free. Ned can decide that Jim isn't yet financially secure enough to own a house -- or that his idea for a new whirligig won't sell very well. Ned can turn him down, causing him to seek another lender or delay or abandon his plan. Or Ned can agree with Jim that he's ready for that house, or that there is a vast, untapped demand out there for whirligigs. If both are wrong, Ned loses his money.

That last sentence encapsulates the visible downside to lending, and it is this easily graspable fact that, like Frederic Bastiat's broken window, is getting all the attention. The invisible upside that is being ignored is that the only person losing his shirt here is Ned. Tom, Dick, and Harry all saw what Ned didn't, turned Jim down, and still have their cash. And that's the way it should be. In a free society, that's also the way it is. Whether they decide to lend Ned a hand after he makes a mistake is their decision to make.

In a free society, the consequences for one man's failure are his, and his alone to bear. That's not the way it is now.

Now, we have Slow George and Payola Hank who -- after encouraging countless Neds to make loans for houses to countless Jims and predictably causing more bad loans to be made than there would have otherwise -- coming onto the scene promising to bail everyone out!

This money will ultimately either be taken from Tom, Dick, and Harry through taxation or inflation. And all the Neds and Jims out there who made bad decisions will have learned nothing but that they have a "backstop". Now, when someone makes a bad investment decision, everyone loses! That's bad enough.

Now, let's look at the story. It's worse.

"The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it," Mr. Paulson said, who offered some details of the plan along with the Federal Reserve chairman, Ben S. Bernanke, and the chairman of the Federal Deposit Insurance Corporation, Sheila C. Bair.[links dropped]

This is bad, but nothing new yet.

But the power of fiat currency to remove rational judgement from the economy is apparently boundless. Look at what happens when all the nations in a global economy can screw around with monetary units!

After ticking off a list of new government measures to "stabilize" the economy, the article informs us that the government is going to start buying shares of major banks who will, naturally, accept greater government control as part of the "bargain" and that we are in a race with Europe to see whose government will start attempting to manage the whole financial sector first!

On Monday, big banks agreed to take investments totaling about $125 billion. Citigroup and JPMorgan Chase will receive $25 billion each. Bank of America, which is acquiring Merrill Lynch, and Wells Fargo, which is acquiring the Wachovia Corporation, will receive $25 billion. Goldman Sachs and Morgan Stanley will receive $10 billion each. And Bank of New York Mellon and State Street will get $2 billion to $3 billion.

Another $125 billion is allocated for thousands of small and midsize banks. They will be eligible for government investments reflecting a similar proportion of their assets.

On Tuesday, Mr. Paulson said that in return for the investment, the government would receive preferred shares and warrants for common stock. In addition, he said, the government would expect a reasonable return.

And he said, "Institutions that sell shares to the government will accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes during the period that Treasury holds equity issued through this program." [links droped, bold added]

How paying top executives less will attract or keep good personnel Paulson never explains. Later on, Paulson admits that he will tell banks to stay away from "exotic" financial activities. Great: We'll have less private brainpower and more central planning in our banking system!

But this is what really grabs me:

The Treasury's plan would help the United States catch up to Europe in what has become a footrace between countries to reassure investors that their banks will not default or that other countries will not one-up their rescue plans and, in so doing, siphon off bank deposits or investment capital. [bold added]

Note the irony. Fiat currency was originally adopted because governments wanted to be able to evade the fact that that you can neither make something out of nothing nor avoid redistributing wealth in order to have loot -- like apparent guarantees for bank deposits -- to pass around. So instead of dealing effectively with knowable, predictable, metaphysical facts, we get to flounder about in a sea of unpredictable man-made crises and their unforeseeable consequences.

Words cannot trump reality. Our government's attempt to repeal reality has deprived it of power to such an extent that we're now aping socialist Europe, and not because we feel like it.

-- CAV

Quick Roundup 369

Why the Right to Property Keeps Popping Up

Brian Phillips, who specializes in issues relating to property rights, makes the following interesting observation about blogging:

I sometimes struggle when choosing a topic for this blog. The problem isn't the lack of topics, the problem is the absolutely overwhelming number of potential topics. Any political or economic issue in the news is worthy of comment, because all of them involve a property rights issue in one form or another.

He then provides numerous supporting examples, and concludes with a quote from Ayn Rand explaining why this is the case.

Property rights must be protected so that each individual can effectively tie together thought and action.

No less interesting than the centrality of property rights as a political issue are its implications. I have noted numerous times here that government infringements on property rights result not just in more of the same (often as a "corrective"), but also in infringements on other rights, and vice versa.

The nature of rights is not generally understood, but most people seem to appreciate them on some level, although if I had to pick the least-appreciated one, it would be the right to property. It is no coincidence that this is perhaps the right most routinely and grossly infringed upon by our government today, and the problem feeds upon itself. People are used to the government claiming large amounts of their money through taxation and telling them how to dispose of their property. This in turn leads to people having less and less of a gut feel that they are entitled to their own property and that causes them to feel (wrongly) like the issue isn't really a big deal.

Other rights will inevitably follow unless more people in the public are made aware of what a right is (and why rights are important) generally and what the right to property is in particular.

Read the whole thing. Also, in the comments is a succinct reply to someone who attempted to equate the "pro-life" position on abortion with support for property rights.

A Few New Links

Despite being so busy I barely have time to follow blogs (let alone write one!), I have somehow managed to learn about four more of them over the past few weeks.

Of the four, I have recently noted comments by two of their authors at locations other than their blogs, which in both cases, I was unaware of. The first of these is Sylvia Bokor, whose recent comments on a "hearing" about socialized medicine I attended were spot-on. The second is Mark V. Kormes, who recently appeared at Principles in Practice. They blog at Sylvia Bokor Comments and Rational Passion, respectively.

The two remaining bloggers are Eric Clayton, who hosts Atlantis is Real, and Renee Katz, whose comics and commentary can be found at Adventures in Existence.

You can now visit them any time from the sidebar.

The Cost of Ignorance ...

... for everyone includes the fact that savages can manage to look reasonable to the ignorant:

Muslims should take advantage of the global financial crisis to build an economic system compatible with Islamic principles, influential Sunni cleric Sheikh Yusuf al-Qaradawi said on Sunday.

"The collapse of the capitalist system based on usury and paper and not on goods traded on the market is proof that it is in crisis and shows that Islamic economic philosophy is holding up," said the Egyptian-born, Qatar-based cleric.

Notice how the financial turmoil caused by fiat currency and government intervention in a mixed economy is dishonestly and intentionally equated by this witch doctor with capitalism. This permits him to look reasonable while he indiscriminately attacks both virtues (e.g., charging interest on loans) and flaws (e.g., fiat currency) of the current economy and proposes his medieval philosophy as the only alternative.

Oh yeah, and if, as Sheik what's-his-name asserts, "riches are ours", it is only because the West has foolishly handed them over to Islamic kleptocrats after producing them.

In better days of the past and in better days that can come, this man would be a a laughingstock, if anyone knew who he was at all. He would not be able to get away with damning the system that makes oil valuable, makes it possible for millions to live in the desert, and makes me able to hear of his silly utterances within hours. (Hell, even the mixed economy of the West as it is now, has, thanks to its free-market elements, managed to do all this!)

People in the past at least appreciated the ample evidence that filled their daily lives that a free economy can produce great wealth. And, if I have anything to say about it, more will learn what capitalism is:

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control. ("What Is Capitalism?" Capitalism: The Unknown Ideal, 19.) [bold added]

In a society where this is understood, there will be no media market for foolishness like the sheik's, no paper money, no economy-wide collapses, and probably no need to concern ourselves much with what the flea-bitten tribesmen outside the fences of our oil facilities think their imaginary friend wants them to do. That would be their funeral, and theirs alone, as it should be.

Government Causing (Even More) Panic

This article is very flawed, but it names just a few concrete ways that the government's massive bailout effort can very quickly cause new market distortions. This isn't exactly what I had in mind when I spoke of this the other day, but it still illustrates my point.

-- CAV

Updates

10-14-08: Corrected a typo.

Repeal McCain-Feingold Now

Awhile back, I blogged about a lawsuit made possible in no small part by the efforts of John McCain to "clean up" political campaigns. And earlier this week, I pointed to an article in which he stated his position on the issue, which is immoral and dangerous to individual rights. His position? "I would rather have a clean government than one where quote 'First Amendment rights' are being respected that has become corrupt."

In case you are curious about what this sense of priorities would mean in your daily life, I direct you to the blog of Becky Clark. Clark is one of a group of individuals I mentioned who opposed the annexation of their neighborhood by a nearby town and thus did what anyone else would do: Express that opposition by the means at their disposal.

Clark, who is scheduled to appear on 20/20 next week, provides a blow-by-blow account of her travails, from when she first learned she was being sued under the "private enforcement provisions" of campaign finance law, to her (partial) legal victory two years and mountains of difficult paperwork later.

Before I go on, let me say that if you think the excerpts I am about to provide are harrowing, read her whole account! This could be you later on today.

First, campaign finance reform empowers exactly the kind of people one would hope to geld in any attempt at genuine government reform: "little dictators".

These people live within a block or two of everyone they sued. I was baffled as to why they couldn't just ring my doorbell, send me an email, pick up the phone, tape a note to my front door -- whatever -- to tell me they think we're not in compliance with the laws. They could even send us a letter. After all, they'd sent letters to the entire neighborhood about the annexation -- why not send one about campaign finance rules?

And then it hit me. They wanted to shut us up. The litigation was clearly an attempt to intimidate us.

We had no choice but to file as an issue committee despite the fact we didn't think we were a committee, nor did we think this qualified as a "ballot issue" since it wasn't on any ballot. [bold added]

Clark's having to file as an issue committee -- which she had to do in addition to facing a lawsuit -- was hardly a picnic, nor even a mere trip to the DMV. It was, according to over two hundred adults who tried it, worse than filing taxes, and guess what it will discourage in the name of providing "clean government"!

A recent study by campaign finance expert Dr. Jeffrey Milyo of the University of Kansas School of Business asked 255 people to fill out the required registration and reporting forms, and not one participant managed to do so correctly. Each person would have been subject to fines and penalties in real life, just like I was. Like me, participants found the required forms "Worse than the IRS!" and said it would make them less likely to get involved in politics." [bold added]

The effect of this law is plainly to make criminals of anyone it doesn't silence outright. In her famous novel, Atlas Shrugged, Ayn Rand, through the words of villain Floyd Ferris, explains what such laws mean to power-lusters. This is something that Clark's neighbors seem to intuit -- and John McCain (like his opponent) is either too dim-witted to grasp or too dishonest to admit:

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against -- then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted -- and you create a nation of law-breakers -- and then you cash in on guilt. Now that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with." (406) [bold added]

How can a government even be "of the people, by the people, for the people" when the very people are hindered from participating in it?

Sadly, our judiciary seems in this case to have not gone far enough in its ruling in favor of the anti-annexation residents of the neighborhood in Colorado (or been able to -- see Note below):

The federal judge said we should not have been sued for our speech opposing the annexation, BUT the ruling did nothing to stop future abuses of campaign finance laws in Colorado or elsewhere. The decision also lets stand the burdensome red tape required under Colorado law for grassroots groups that simply want to speak out about issues on the ballot.

The judge recognized that the two vindictive neighbors who sued us used Colorado's campaign finance laws to intimidate us: "There can be no doubt that they used the private enforcement provisions to attempt to silence the plaintiffs by the filing of the complaint." [bold added]

Regardless of why the private enforcement provision was allowed to stand, two things are clear:

First, campaign finance reform laws must be repealed as the threat to the rights of freedom of speech and property that they are.

Second, if this story grows legs, the very real danger is that those who favor campaign finance reform -- be it out of ignorance, naivete, antipathy to freedom, or whatever other reason -- will be able to look at this fiasco and say something like, "See! Those people in Colorado didn't get into any trouble," and lull the American public back to sleep -- if it ever starts to stir.

(Remember: You could be next.)

I am happy for these good people that they did not get into more trouble than they did, but they have only dodged a bullet. The gun-toting madman is alive and well. He remains on the loose. His gun is still loaded. He is from the government and says he is here to help us.

The only way to begin to stop him is for Americans to demand incessantly for the government to repeal McCain-Feingold as soon as possible. The only proper purpose of government is to protect individual rights. McCain-Feingold makes this objective impossible to attain, and delivers us into the hands of dictators. This law is inherently broken. Do not try to "fix" it. Scrap it. Now.

What good does wiping down the blade of the guillotine do for the average citizen if his head is about to be placed there for the crime of living his life by his own best judgement? A "clean" government is not necessarily a proper government. Let's work on getting the latter.

-- CAV

Note: It would appear that the case hinged on what amounted to a technicality:

The judge said these rules cannot kick in for annexation elections until the issue is put on the ballot. We had been sued and forced to become an issue committee several months before that. The judge held that to turn groups of citizens into "issue committees" before the ballot is set violates our First Amendment rights to free speech and association. [bold added]

The danger posed by campaign finance reform remains. [back]