Europe’s Bank Money Blues

Faced with intense regulatory pressures, banks in Europe have been deleveraging big time

BY STEVE HANKE

Well, it’s official, the economic talking head establishment has declared war on Germany. The opening shots in this battle were fired by none other than the United States Treasury Department, which had the audacity to blame Germany for a weak Eurozone recovery in its semi-annual foreign exchange report. The Treasury’s criticisms were echoed by IMF First Deputy Managing Director David Lipton, in a recent speech in Berlin — a speech so incendiary that the IMF opted to post the “original draft,” rather than his actual comments, on its website. Things were kicked into a full blitzkrieg when Paul Krugman penned his latest German-bashing New York Times column.

The claims being leveled against Germany revolve around nebulous terms like “imbalances” and “deflationary biases.” But, what’s really going on here? The primary complaint being leveled is that Germany’s exports are too strong, and domestic consumption is too weak. In short, the country is producing more than it consumes. Critics argue that “excess” German exports are making it harder for other countries (including the U.S.) to recover in the aftermath of the financial crisis.

While a review of international trade statistics is all well and good, the ire against Germany actually comes down to one thing: austerity. Despite Germany’s relatively strong recovery, the international economic establishment is none too happy about the country’s tight fiscal ship. If only Germany would crank up government spending, then Germans would buy more goods, and all would be right in the Eurozone, and around the world - the argument goes.

Yes, the anti-austerity crowd has found a convenient way to both slam austerity and scapegoat one of the few countries to successfully rebound from the crisis. I would add that it is hardly a coincidence that this line of argument fits nicely into the fiscalist message of Germany’s Social Democratic party, with whom Chancellor Angela Merkel is currently trying to arrange a governing coalition.

Meet the miserabilists who think Filipinos bred themselves into disaster

We have to shoot down the storm of Malthusian and modernity-bashing bullshit that now follows every natural disaster that takes place

By PATRICK HAYES

All environmental problems become harder, and ultimately impossible, to solve with ever more people.’ So said Sir David Attenborough, the highest profile patron of Population Matters (PM), formerly the Optimum Population Trust, the campaigning organisation dedicated to curbing population growth. The Attenborough outlook infuses all of PM’s propaganda. Everything PM pumps out contains the same brutally reductive message: that people’s fecundity, all their casual breeding, makes everything from natural disasters to poverty worse than it needs to be.

Malnutrition in the Yemen? ‘A root cause is too many people’, says PM. Famine in Ethiopia? ‘The underlying cause is population growth.’ Drought in England? ‘Too many people for the water available.’

So no prizes for guessing what PM believes was a major contributor to the destruction caused by Typhoon Haiyan in the Philippines last week. Yep, too many bloody Filipinos. Under the headline, ‘Big families and typhoons’, PM tells us: ‘The sheer numbers of people mean that more suffer when storms… strike.’ It’s classic victim-blaming – you are suffering because you had too many children and allowed your towns and cities to swarm with human beings.

According to PM, the suffering in the Philippines was exacerbated by a condition that afflicts more than 80 per cent of Filipinos: Catholicism. ‘While family planning is now legal [in the Philippines]’, says PM, ‘decades of rearguard action by the conservative local Catholic hierarchy means that access and use is limited’. The result is that the average birth rate remains at ‘around three per woman’, causing the nightmarish scenario (in PM’s view anyway) of a fivefold increase in the Filipino population since 1950, from 19 million back then to nearly 100 million today. And this is what made Haiyan so destructive, apparently – the massive numbers of Catholic-lectured people having more and more babies put ‘pressure on space and resources’, making the nation more ‘vulnerable to storms’. In a nutshell: these poor Catholic baby machines have bred themselves into disaster.

But how true is it that the Philippines has peculiar ‘pressures on space’, with loads of people crammed into small places? It’s actually the fortieth most population-dense country in the world, with 329 people per square kilometre. There are many far more densely populated countries that do not suffer the same problems as the Philippines, even when big natural disasters occur. Belgium, for example, has 366 per sq km. Holland has almost 500. Hong Kong has 6,516. Which rather puts paid to PM’s claim that numbers of people and amount of space necessarily make natural disasters worse when they hit. What people in the Philippines need is not ‘help [to] manage their family size’, as PM proposes, but rather industry, development, more economic growth; if the Philippines were more like Hong Kong, it would be better prepared to deal with natural problems that arise.

Left and Right

When E.F. Hutton Talks

BY W BEN HUNT PHD

The concept of utility is the most fundamental concept in economics. It gets wrapped up in impressive sounding terms like “exogenous preference functions”, and written in all sorts of arcane runes and formulas, but all utility means is that you like something more than something else. The assumptions that economic theory makes about utility are really pretty simple and mostly about consistency — if you like vanilla ice cream more than chocolate ice cream, and chocolate more than strawberry, then economic theory assumes you also like vanilla more than strawberry — and continuity — if you like one scoop of vanilla ice cream, then you like two scoops even more. But as far as what you like, what your tastesor preferences are in ice cream or music — or health insurance plans — economic theory is intentionally silent. Economics is all about making rational decisions given some set of likes and dislikes. It doesn’t presume to tell you what you should like or dislike, and it assumes that you do in fact know what you like or dislike.

Or at least that’s what economic theory used to proclaim. Today economic theory is used as the intellectual foundation for a political stratagem that goes something like this: you do not know what you truly like, and in particular you do not know your economic self-interest, but luckily for you we are here to fix that. This is the common strand between QE and Obamacare. The former says that you are wrong to prefer safety to risk in your investments, and so we will fix that misconception of yours by making it extremely painful for you not to take greater investment risks than you would otherwise prefer. The latter says that you are wrong to prefer no health insurance or a certain type of health insurance to another type of health insurance, and so we will make it illegal for you to do anything but purchase a policy that we are certain you would prefer if only you were thinking more clearly about all this.

Secrets And Lies

Fiat Truth is the currency of power

Every credit has its debit, every positive its negative. So for every secret there must be a lie, and every lie must be kept secret.

We are not allowed to have any secrets any more.  And yet those who insist they must know the truth about us, who spy upon us to extract our secrets, tell us. in return, only lies.

It is a dangerous, corroding imbalance of power, because lies, like debts, compound.

Living the lie

We all know the famous Goebbels quote,

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it.

From Sadam’s weapons of mass destruction and missiles that could hit us in just 40 minutes of sexed up bullshit, to the stress tests that show us every bank is perfectly solvent and however many billions they launder they are never guilty and no one goes to goal because they are too big to fail and too connected to even question.

The eye of providence looks out and approves of what is done – Annuit cœptis.

But who does the all seeing eye, that sits atop  the pyramid of power on the mighty dollar bill, work for now? Is it really you and me?  That is what we are told to believe. But is it true? I think there are too many secrets but few of them are yours and mine.

The private dealings of the ordinary citizen are considered suspect and must, we are told, be rooted out. The secrets and outright lies of the corporate and governmental worlds, however – they are confidential. They are protected – behind razor-wire threats of  legal action and closed door tribunals of hand picked experts.

A few weeks ago I sat and listened to the former leader of the Conservative party, now an elder statesman of British politics, Michael Howard, tell an audience that governments need to lie. He is a clever man. He quoted Goebbels and then gave this carefully chosen example.

Imagine, he said, that a Chancellor knew that he was going to have to devalue the currency. The evening before the appointed hour, he is asked by a journalist if he is going to devalue. If he tells the truth and says yes, there will be a run on the currency and great damage will be done. So he lies. “No”, he says, “I have absolutely no plans to devalue at all.” And then next morning he devalues as he had planned.

Mankind’s brilliant victories over nature’s whims

The dignity and excellence of man

By Brendan O’Neill

How’s this for heartening: the number of people in Europe dying from heart disease has more than halved since the 1980s. Halved. In almost every EU country there has been a ‘dramatic drop’ in death by cardiovascular disease, said a study published last week in the European Heart Journal. Among both women and men (yes, even among blokes, those apparently health-unaware ticking timebombs of physical malaise), and among every age group, including the over-65s, there has been a ‘large and significant decrease in death rates from heart disease’, said the study. If anything deserves a ‘Wow’, it’s these findings.

In a nutshell: in the space of one generation, in the time it took for Madonna to go from singing ‘Holiday’ to adopting black babies from Africa, mankind has won some massive, tide-turning battles in the war on heart disease. Which is really a war on nature, of course - on capricious nature’s failure to provide us with hearts that can withstand all the crap we throw at them, from physical exertion to fatty foods to emotional stress.

Even in the US, which some Europeans have a sniffy tendency to look upon as a land of elephantine eating habits and corresponding bodily rot, heart disease is in retreat from humanity’s scalpel-waving charge: there’s been ‘a substantial, persistent and remarkable decline in deaths from heart disease’ in the US, as one study puts it. In every year since 1968, heart-disease death rates in the US have fallen. In 2012, around 600,000 Americans died from heart disease; sad, yes – but if the death rate had remained at its 1968 levels, closer to 1.5million would have died.

Mankind’s creeping victory over heart disease is, ultimately, a story of targeted human endeavour, of scientific and technological discoveries conspiring to do away with one of the major ailments that prevents people from living full, long lives. Anti-smoking moral entrepreneurs, adept at hogging the headlines, insist heart-disease death rates are falling because people are giving up cigarettes. In truth, it’s a combination of medical and technological breakthroughs – from the development of various heart-fortifying drugs to the invention of machines that keep pumping blood around the body during surgery on the heart – that has led to such a dramatic diminution in heart suffering. Consider heart bypass surgery, developed in the 1960s, where veins from one part of a person’s body are grafted on to his sick heart in order to ‘bypass’ its narrowed veins. ‘Bypass’ – I love that word, for this intricate surgery, like all human technological endeavour, is really a bypassing of nature and its whims and idiocies.

The Exit on the Road to Tyranny?

The state will continue to grow relentlessly if people are convinced that at the very least it is a necessary evil

By George F. Smith

One of my favorite quotes from the quotable Thomas Paine is a mere footnote in his treatise, Rights of Man, Part Second, in which he wrote:

It is scarcely possible to touch on any subject, that will not suggest an allusion to some corruption in governments.

Paine was referring to “the splendor of the throne,” which he said “is no other than the corruption of the state.  It is made up of a band of parasites, living in luxurious indolence, out of the public taxes.”  He thought the U.S. federal government, newly created by the Constitution, provided hope against political corruption because of the limitations it imposed on the government.  Paine was in England at the time and had no idea that the new government, whose intellectual leader was Alexander Hamilton, was busy interpreting those limitations out of existence.

Paine also didn’t know the Constitutional Convention of 1787 was in fact a coup d'état.  The participants had been authorized only to amend the Articles of Confederation, but the nationalists, at least, wanted to replace the Articles with a new government that would be more “energetic.”  Knowing that Washington’s presence at the convention would be critical to its success, Henry Knox told the retired general that he would be given the president’s chair, and moreover, that he would not be presiding over some middling conference of officials tinkering with the “present defective confederation,” but instead would lead a prestigious body of men as they created an “energetic and judicious system,” one which would “doubly” entitle him to be called The Father of His Country.

In a previous note Knox had awakened Washington’s interest by lying about the meaning of Shays’s Rebellion.  According to Knox, former Revolutionary War officer Daniel Shays had organized the riffraff of Western Massachusetts to shut down the courts to avoid paying their taxes.  They were levelers, Knox said, who sought to annihilate all debts through “the weakness of government.”  Washington, who owned some 60,000 acres in the Virginia backcountry, thought that such people were “a wretched lot, not to be trusted, and certainly not to be the bone and sinew of a great nation.”

In truth, as historian Leonard L. Richards has shown, Shays’s Rebellion was not an uprising of poor indebted farmers, but a protest against the Massachusetts state government and its attempt to enrich the few at the expense of the many through a regressive tax system. The rebellion began as peaceful petitioning and escalated into violence only after the state repeatedly ignored the petitions.  Though they were described in various disparaging terms, the rebels saw themselves as regulators whose purpose was “the suppressing of tyrannical government in the Massachusetts State.”  They drew their inspiration from the Declaration of Independence that said people should throw off any government that is destructive of their rights.

But the rebellion was finally crushed and has since been interpreted as proof that a stronger central government was necessary.  Following ratification, “We the people” were headed down the long road to serfdom at an accelerated pace.

Punish Criminals for their Actions, not their Thoughts

Hate crime laws have made the punishment of thoughtcrime a reality

By JON HOLBROOK

In recent years, a new class of criminal offence has come to the fore in the UK: hate crime. This is a crime defined not by what the offender does but by his beliefs and thoughts while doing it.

Until recently, hate crimes were limited to the intentional stirring up of racial hatred, a crime dating back to the Race Relations Act 1965. But since 2001, more characteristics have been protected by the criminal law: religion in 2001, sexual orientation and disability in 2003, and transgender in 2012. So there are now five characteristics recognised and protected by the law.

Each act of parliament recognising a new characteristic is met with a claim for recognition of another characteristic. Comedian Rowan Atkinson even jokingly suggested that future legislation could be extended to outlaw hatred directed at ‘people with big ears’. Still, a serious case could be made for protecting women, the elderly and fat people, or sub-cultures like Goths. In 2003, Viscount Colville proposed an amendment in the House of Lords that would protect persons who were targeted on the basis of race, religion or ‘other identifiable characteristics’.

These claims for further protections are merely direction-of-travel arguments. And here’s the problem: the criminal law has been travelling in the wrong direction for too long. The hate-crime reforms over the years have seen one pragmatic but erroneous exception to principle after another, each one justified by the previous ones. If race, why not religion?  And if race and religion, why not race, religion and sexual orientation? The principle upon which hate-crime legislation is based remains stubbornly unquestioned.

So it ought to come as good news that the body charged with keeping the law under review, the Law Commission, has opened a consultation about hate crime.  Yet what should be an opportunity for people to question the current direction of travel is no such thing. The government has required the Law Commission to avoid all questions of principle. The thrust of the consultation is simply: if race, religion and sexual orientation, then why not race, religion, sexual orientation and disability and transgender?

The consultation is concerned with the detail of existing hate crime, and in particular, its three-level application: specific hate crimes; crimes that are aggravated by hate; and enhanced sentencing on the basis of an offender’s hate.

Radical Environmentalists, Criminal Pseudo-Scientists, and the Fatal Cult of Antihumanism

Robert Zubrin's Merchants Of Despair Reveals Racism And Genocide Cloaked In Green Camouflage

From Charles Darwin to Margaret Sanger to Adolf Hitler: Zubrin connects the dots in Merchants of Despair 

By Larry Bell

Robert Zubrin’s “Merchants of Despair” chronicles huge and devastating influences of radical environmentalists along with associated criminal pseudo-scientists and a fatal cult of anti-humanism upon global events and society which continue today. Examples include profound ideological influences that resulted in large and long population “cleansing” campaigns through mass sterilization, abortion, and racial/ethnic genocide.

Much of the background material in this article (and some that will follow) draws upon information provided in Zubrin’s extensively-sourced research, along with supplementary information compiled through my own investigations. Here the intent is not to condemn the entire green movement or the great many extremely dedicated people who care deeply about our shared planet and ecosystems. Rather, it is to reveal how even the loftiest, best- sounding interests can be manipulated by extremely misguided ideological zealots and fully-evil and powerful propagandists who prey upon ignorance and emotion. I will mention some of them, along with horrific consequences they have wrought.

The Ugly Malthusian Legacy  

If there is one person to be attributed the title “Father of Manipulated Gloom and Doom Environmental Fright”, it must be Thomas Robert Malthus, a political economy professor at the British East India Company’s East India College who lived from 1766-1834.  His “zero-sum-gain” population and resource theories have had tremendous influence on global agendas, policies and travesties which continue unabated today.

Malthus initiated an alarmist international movement with an unsigned pamphlet titled “An Essay on the Principle of Population”  that first appeared in London bookstores in 1798. The publication forecast a terrifying world future whereby the population would increase geometrically while agriculture necessary to sustain it would increase only arithmetically.

Malthus proclaimed as “incontrovertible truths” that because of the “fixity of land”, growing families would overwhelm means to feed them. This circumstance would lead to “misery or vice”-some combination of disease, famine, foregone marriage, barbarianism and war that reduced population to a sustainable subsistence level. This, he argued, would be 

“decisive against the existence of a society, all the members of which should live in ease, happiness, and comparative leisure.”

The remedies Malthus proposed to ensure lives of “ease, happiness and comparative leisure” were draconian to say the least. For example, he argued to condemn doctors who find cures in order to reduce population …even encouraged efforts to keep wages low:

“We are bound in justice and honor to disclaim the right of the poor to support…[W]e should facilitate, instead of foolishly and vainly endeavouring to impede, the operations of nature in producing mortality; and if we dread the too frequent visitation of the horrid form of famine, we should sedulously encourage the other forms of destruction, which compel nature to use. Instead of recommending cleanliness to the poor, we should encourage contrary habits.”

Malthus went on to propose: 

Due Process and the Death Penalty

Utilitarian arguments and contradictions

by Theodore Dalrymple        

No one would contradict me, I suspect, if I were to assert that human beings are not always wholly consistent. Indeed, those who are much more consistent than average are apt to excite our fear or condemnation rather than our admiration. To be faithful to a bad principle is worse than having no principle at all. And, as Emerson said, consistency is the hobgoblin of little minds.

Yet by what other law than that of non-contradiction are we supposed to argue? Argumentation cannot just be a cacophony of incommensurable assertion, with the one who shouts loudest, speaks longest or employs the best phrases, taking the honors. And this is so even if Gödel was correct, and there is no entirely consistent system of logic without necessity to assume, without proof, the truth of some of its suppositions.

Yet there are contradictions and contradictions. I mention this because I am going to write about the death penalty, a subject about which almost everyone is contradictory, including me. I am against it though I am not a complete pacifist and do not believe that it is always wrong to kill, and though I happen also to believe that it, the death penalty, works – as a deterrent. I found unexpected evidence of this in the British historical experience, which I cannot here divulge because I confided it to a colleague who wants to use it in a book he is writing. To reveal it now would be to spoil its effect in his book.

My main objection to the death penalty is that, even in the most scrupulous of jurisdictions, mistakes are sometimes made, and for the law to put someone to death wrongly is an injustice so monstrous as to undermine trust in law itself. I once used this argument in company in which someone claimed to be able to refute me easily; for it was a fact, he said, that more people had been murdered by murderers who had not been executed than who had been wrongfully executed.

Granting for a moment his empirical premise, though I was not absolutely sure that it was factually correct, I replied that his argument was valid only if one accepted a very narrow interpretation of utilitarianism: and since I knew him to be not that kind of utilitarian, he was guilty of self-contradiction. My problem was that, on occasion and if need be, I resort to precisely the same kind of utilitarian argument myself; and therefore I was guilty myself of the very philosophical inconsistency of which I accused him. My interlocutor had the grace not to mention it.

Hyperinflation could become an irresistible force

Hyperinflation Is the Necessary, Proper, Patriotic, and Ethical Thing to Do

by Patrick Barron 
Hyperinflation is the complete breakdown in the demand for a currency, which means simply that no one wishes to hold it. Everyone wants to get rid of that kind of money as fast as possible. Prices, denominated in the hyper-inflated currency, suddenly and dramatically go through the roof. The most famous examples, although there are many others, are Germany in the early 1920′s and Zimbabwe just a few years ago. German Reichsmarks and Zim dollars were printed in million and even trillion unit denominations.

We may scoff at such insanity and assume that America could never suffer from such an event. We are modern. We know too much. Our monetary leaders are wise and have unprecedented power to prevent such an awful outcome.

Think again.

Our monetary leaders do not understand the true nature of money and banking; thus, they advocate monetary expansion as the cure for every economic ill. The multiple quantitative easing programs perfectly illustrate this mindset. Furthermore, our monetary leaders actually advocate a steady increase in the price level, what is popularly known as inflation. Any perceived reduction in the inflation rate is seen as a potentially dangerous deflationary trend, which must be countered by an increase in the money supply, a reduction in interest rates, and/or quantitative easing. So an increase in inflation will be viewed as success, which must be built upon to ensure that it continues. This mindset will prevail even when inflation runs at extremely high rates.

Wealth, Poverty And Ignorance

Favored myths and popular lies

by George Handlery

There are developments that do not fit your anticipations if you are socialized by Western values. Reality and our cultural assumptions can clash. Several postulates that are said to be mankind’s goals only express local cultural preferences. Their summary would be a sentence about “liberty”, the “pursuit of happiness” and “self-evident”. 

True, the order that produced these concepts has been sufficiently successful to justify emulation. However, it does not follow that the way of the achievers is predestined to become a guideline for all of mankind. We may add that, the worldwide differences in wealth and rights reflect this. The rejection of the values that advanced societies hold to be universal explains global differences in achievement. The attitude expressed through this rebuff reveals why much of mankind remains unfree, badly governed, and poor. 

The inequality that is a result as well as the cause of this condition, proves to be resistant. Blaming “unequal distribution” is only a superficial explanation. The well sounding phrase is more a symptom of past and future failures than a revelation of causes. The term “distribution” brings to mind a traditional remedy of the Left. It has healed little but developed a tradition of failure that is enshrined as a sign of moral superiority. That the misled masses that are the victims of the credo fail to see through the slogan does not invalidate the judgment. 

Redistribution does not overcome the condition of those that missed modernization. In fact, the underachieving tend to misunderstand the roots of poverty and wealth. Also, they like to believe that success is a reflection of luck or of theft by the powerful. The equation of power and wealth explains why popular movements arise to replace a bad dictatorship with a good one – one that will be generous to its subjects. Being in the dark regarding wealth’s origins causes a misunderstanding. That concerns the implications of receiving aid in response to penury that is supplied involuntarily by those that are said not to need what they contribute. The beneficiaries overlook that the precondition - a shakedown of the better off - demotivates unwilling donors. Ultimately, the results will shrink the cake out of which the handouts come. With the resulting downward tending equality, sapping motivation to produce will diminish what politics can give away.

Neither nature, nor luck creates whatever is rated as “wealth”. Wealth is the product of attitudes and their application to potentialities. We all compete, and we compete with our cultures. This explains why richly endowed countries are poor and why countries that are by nature poor can be rich. Those who, in the service of distorting ideologies hide this do a disservice to mankind. Their approach creates firewood for envy-fed conflicts and prevents accomplishments by dismissing success strategies.

The Charms of Deferred Cost

Deferred cost: the old gain. The young lose even more.

By Anthony de Jasay

There are two main ways of buying a new car. One is to save up the cost little by little and get the new car when the money is all there. The other is to get the car now and defer paying the cost by resorting to some arrangement that permits us to do so and then save the money and pay the cost some time in the future. If the arrangement were not expensive, everybody would rather have the car now than later. We call this "time preference". It seems to be a very basic human trait. If instead of time preference we had "time indifference," while money we saved brought a return in interest, rent and dividend, we would all starve to death, for we would by definition always prefer to save the marginal dollar and earn a return of a few cents on it than earn no return at all and spend the dollar on present consumption that we did not prefer to future consumption.

However, saving is not governed only by time preference and the return on the capital we accumulate by saving. Its major determinant is income itself. Subsistence level incomes permit only little saving or none at all. At the other end of our social order, astronomically high incomes are almost wholly saved for obvious physical reasons. The top 1 per cent of American households have an average annual income of roughly $15 million. Even if such a household were to spend all of it, the part of actual consumption in its spending would almost certainly be infinitesimal. Housing, food and drink, domestic and other personal services and everything else billionaires really appropriate from the national product and imports, however lavish and luxurious they may be, can hardly absorb more than a single-digit percentage of billionaire incomes. If the rest is all spent on million-dollar stamp collections, old masters canvasses or the endowment of university chairs, no part of the nation's product is used up thereby. It all adds up to saving, though its flow to industrial investment may pass through circuitous transfers.

Saving is determined not only by income, but also by changes in income. There is some evidence that consumption is geared to past income, so that when income rises sharply, people consume less and save more from it than they would if their current income had been as high in the past as it is now. This seems to explain the extraordinarily high savings generated by the Asian "tigers", such as Taiwan, China or South Korean during their period of double-digit annual growth in the 1980s and '90s—precisely the period when they needed high saving the most.

Other than time preference that reduces it and income that makes it grow, saving is determined by the contingencies of life. People strive to provide against incapacity in old age and for their children's education. They also wish to leave something for them after they are gone, for giving children an easier start in life than one's own had been is a fairly universal ambition. Despite all the progress we have been achieving, this ambition is now turning out to be very difficult to fulfill.

Is there an entity called "society"?

Ever since World War II, when European governments, starting with the English, went to work building welfare states, the incentives individuals had to save were progressively weakened or even wiped out. This was done for incontestably well-meaning reasons by having individuals' cares about the contingencies life taken off their shoulders and looked after collectively by society. Individual provision against ill health, unemployment, and old age became less pressingly necessary. Society stood in as the willing protector.

Taming the state and putting “good” folks in charge is the equivalent of squaring a circle

The State's Dumb Strength

by James E. Miller

Many commentators expressed astonishment when thugs from the U.K. government recently ordered the destruction of hardware containing leaked government secrets belonging to the Guardian news outlet. Shortly before the deed went down, one of the shakedown artists was quoted as telling editor Alan Rusbridger “You’ve had your fun. Now we want the stuff back.” Amusing enough, that statement, as mercilessly honest as it was, disproves the whole foolish understanding that “government is us.” If that premise were true, all state secrets would already be known by the public and the whole idea would exist only as a poor contradiction.

To the Guardian extortion, the always-thoughtful Conor Friedersdorf averred “the U.S. and Britain, government authorities are undermining their own legitimacy without realizing what a precious commodity that is.” Astute journalist Glenn Greenwald, who writes for the Guardian and reports on government misdoings, described the bully tactic as “ inane as it was thuggish.” Just days prior, Greenwald’s partner (the politically-correct term for “boyfriend”) was detained by the same merry ole’ authorities under suspicion that he was transporting terroristic data.

This plain and unapologetic intimidation has rightfully drawn anguish from some of the more liberty-minded writers. Yet, many of these thinkers still seek democratic solutions to the coercion, spying, and overall domination put forth by the political class. Basically, their faith in representative government has not been shaken. There is still hope the masses will wake up from their apathetic slumber and put fine, upstanding people in office who will perform as genuine statesmen that defend both freedom and security.

Color me a shade of less-optimistic black.

Whenever the state decides to remove the mask of decency and show its true, violent self, there is a positive outcome to the predation. Many finally catch a glimpse of the true force that backs monopoly government. Very few will allow this image to change their preconceived notions of the viability of institutionalized mass representation. As much as I respect the work of Greenwald and Friedersdorf, their scorn means little if they do not recognize the origin of the disease.

The targeted harassment of dissenters is indicative of the state’s brash reaction to all challenges. Monopoly compulsion is naturally in a molasses state, slow to move but powerful when striking. The crude form of economic calculation government enforcers must utilize acts as an albatross on efficiency. So what government lacks in dynamism, it makes up for in brute, unthinking strength. Some of the less-witted among us cheer the brutality on. Others ignore it, happy to collect welfare checks on the first of every month.

No matter the atrocities carried out, there is still persistent talk of making the state more competent and compassionate in its ever-increasing role in social life. As American children are preparing to go back to their tax-funded penitentiaries for another school year, they will soon be greeted with a slew of newly-hired armed guards. The increased presence of protective sentries is a reaction to last winter’s shooting at Sandy Hook elementary. The best way to fight the prospect of a gun-toting maniac willing to inflict harm on students is to force those same students to go about their business under the watchful eye of gun-toting, more subdued maniacs – or so that’s the game plan.

North American Union: From NAFTA to the NAU

Denials and Duplicity

by  Charles Scaliger

On January 2, 1988, leaders of the United States and Canada met to sign the first major agreement in decades designed to comprehensively lower trade barriers between the two countries. Since the 1850s, American and Canadian politicians had striven to lower or eliminate trade barriers between the two countries, with uneven success; the first such agreement, the Elgin-Marcy Treaty of 1854, was torpedoed by the United States only 12 years later in retaliation for British support of the Confederacy during the Civil War, and successive efforts over the years at eliminating various protectionist policies inevitably fell prey to cries of protectionism or favoritism on one side or the other.

But 1988’s Free Trade Agreement (FTA) would be different, leaders in both countries assured their respective citizenries. This time around, trade barriers would be lowered across the board, and protective tariffs and other barriers become a thing of the past. Moreover, Americans and Canadians received glib assurances that the agreement would in nowise jeopardize the sovereignty or independence of either country.

In one respect, American and Canadian leaders were telling their constituents the truth: This trade agreement was different. The FTA — unlike its various abortive predecessors over the previous 130 years — was intended to be but the first step in a process of economic and political integration that would indeed, over the long run, abolish the independence not only of the United States and Canada, but the rest of North America as well.

Despite its significance, the FTA was passed with little fanfare in the United States, where President Reagan presented it to Congress under a “fast-track” procedure that limited debate and disallowed amendments.

As it stood, the FTA was a fairly typical trade accord, but it did not come about in a vacuum. Unnoticed by most lawmakers at the time of its passage was another initiative, under way since 1986, to create a trilateral trade agreement involving not only Canada and the United States, but also Mexico. This agreement, which was to become the North American Free Trade Agreement (NAFTA) only a few years later, was the real prize; the FTA was supposed to lay the groundwork for, and be superseded by, NAFTA, and was only negotiated because those favoring a more comprehensive trade agreement knew that a Canada-U.S. accord would be much easier to achieve.

NAFTA, which came into force in 1994, was billed as a sort of expanded FTA, but in reality, it was nothing of the sort. Rather, NAFTA was North America’s first foray into transnational government camouflaged as a “free trade agreement,” of the sort that the Europeans had been building on the other side of the Atlantic since the 1950s.

By the 1990s, it was very clear to any careful observer what was afoot in Europe. All rhetoric aside, what had begun in 1951 as an international commission regulating the trade of coal and steel, and had soon morphed into the European Economic Community (informally termed the “Common Market”), was well on its way to becoming a bona fide continent-wide government. The Maastricht Treaty of 1992, which created both the European Union and a continent-wide currency, the euro, established once and for all the real agenda of Europe’s “free trade” movement: the creation of a superstate to govern the formerly independent nations of Europe.

Continent-wide Government

With the creation of the North American Free Trade Agreement, the process of creating continent-wide government began anew, but this time on the other side of the Atlantic. Having had so much success in building a regional government in Europe using free trade as a pretext, the globalists, who have always had international — and eventually global — government as their overarching goal, decided to recycle the formula in the New World.

NAFTA was sold to Congress and the American public as a “free trade agreement.” But instead of creating conditions for free trade (borders transparent to the flow of goods, services, and people), NAFTA set up a complex bureaucracy tasked with managing and controlling North American trade and with adjudicating trade disputes. In other words, NAFTA was not a “free trade” but rather a “managed trade” agreement, in complete conformity with the creed of socialists of every hue that the free market cannot be trusted, and that all mercantile activity must be closely monitored and managed by allegedly benevolent bureaucrats who can determine, better than market forces, how much of a given good to produce, at what price, and up to what standards.

The Habeas Corpus Myth

We need due process because we need to constrain the state, and because of the importance of individual liberty

by Anthony Gregory

We know many things about habeas corpus. We know that it goes back to the Magna Carta and that the U.S. Constitution affirmed this bulwark of Anglo-American liberty. We know that habeas prohibits jailing people without cause, and that it remained healthy throughout U.S. history, except during wartime, until George W. Bush’s 2006 Military Commissions Act. And we also know that in 2008, the Supreme Court guaranteed basic due process rights for Guantánamo’s inmates.

The trouble is that none of these things are true. Five years ago, I believed the conventional civil libertarian narrative and began writing a paper to criticize the Bush administration and its nearly unprecedented violation of this sacred right.

My research revealed that much of what I knew about habeas corpus was wrong, and that many well-intentioned people had a romanticized view of the great writ. I published my findings in my Independent Institute book The Power of Habeas Corpus in America: From the King’s Prerogative to the War on Terror, and I found that as with other idealized state functions, habeas corpus has an uneven history.

Indeed, habeas is a government power — specifically a judge’s power to summon and question a case involving detention — and judges have used it to centralize their own authority. About a century ago, legal scholar Edward Jenks controversially wrote: “the most embarrassing discovery [is that] the more one studies the ancient writs of Habeas corpus ... the more clear grows the conviction, that, whatever may have been its ultimate use, the writ of Habeas corpus was originally intended not to get people out of prison, but to put them in it” [emphasis in the original]. Jenks oversimplifies, but his point certainly complicates the popular understanding.

The writ’s English origins are ambiguous, depending on whether we focus on the functional aspect — the power to oversee detention processes — or the linguistic. Habeas corpus means, “have the body,” and thirteenth century judges used such language to call forth witnesses and juries as well as prisoners. The Magna Carta guarantees against unjust detention, but does not contain the words “habeas corpus.” The common use of such words to defend a prisoner’s liberty came later. Even then, judges utilized the writ to monopolize power over lower jurisdictions.

Price Versus Cost

Politicians have what economists call a zero-elasticity vision of the world

By walter williams

Suppose you buy a gallon of gas for $3. How much did it cost you? You say, “Williams, that’s a silly question. It cost $3.” That’s where you’re mistaken, because there’s a difference between price and cost. To prove that price and cost are not the same, consider the following. Suppose you live and work in New York City and routinely pay $15 for a haircut. Imagine you were told that there’s a barber in Boise, Idaho, who can give you the identical haircut for just $5. Would you start going to the Boise barber? I’m betting you’d answer no because even though the price is cheaper, the cost is greater.

We might think of price as the money that’s actually given in exchange for the transfer of ownership. When you purchased the gallon of gas, you simply transferred your ownership of $3. What the gas cost you is a different matter. One way to determine the cost of a gallon of gas is to ask yourself what sacrifice you had to make in order to have $3 to buy it. Say that your annual salary is $75,000. Your total federal income tax, state income tax, local taxes and Social Security and Medicare taxes come to about 35 percent of your salary. That means that in order to purchase the $3 gallon of gas required that you earned about $4.60 in order to have $3 after taxes. That means a gallon of gas costs you $4.60 worth of sacrifice. But that’s not so costly as it is to a richer person — for example, someone earning a yearly salary of $500,000. He has to earn more than $5 before taxes in order to have $3 after taxes to purchase gas.

The Power of Negative Thinking

Both ancient philosophy and modern psychology suggest that darker thoughts can make us happier

By OLIVER BURKEMAN

The holiday season poses a psychological conundrum. Its defining sentiment, of course, is joy—yet the strenuous effort to be joyous seems to make many of us miserable. It's hard to be happy in overcrowded airport lounges or while you're trying to stay civil for days on end with relatives who stretch your patience.

So to cope with the holidays, magazines and others are advising us to "think positive"—the same advice, in other words, that Norman Vincent Peale, author of "The Power of Positive Thinking," was dispensing six decades ago. (During holidays, Peale once suggested, you should make "a deliberate effort to speak hopefully about everything.") The result all too often mirrors the famously annoying parlor game about trying not to think of a white bear: The harder you try, the more you think about one.

Variations of Peale's positive philosophy run deep in American culture, not just in how we handle holidays and other social situations but in business, politics and beyond. Yet studies suggest that peppy affirmations designed to lift the user's mood through repetition and visualizing future success often achieve the opposite of their intended effect.

Fortunately, both ancient philosophy and contemporary psychology point to an alternative: a counterintuitive approach that might be termed "the negative path to happiness." This approach helps to explain some puzzles, such as the fact that citizens of more economically insecure countries often report greater happiness than citizens of wealthier ones. Or that many successful businesspeople reject the idea of setting firm goals.

One pioneer of the "negative path" was the New York psychotherapist Albert Ellis, who died in 2007. He rediscovered a key insight of the Stoic philosophers of ancient Greece and Rome: that sometimes the best way to address an uncertain future is to focus not on the best-case scenario but on the worst.

Sustainability vs. Local Knowledge

“Sustainability” and Time Preference

by MIKE REID

A young woman came to my door the other day and told me she was raising money to teach farmers in the Philippines about “sustainable agriculture.”  

“Wow,” I replied, “You must be a major expert for Filipinos to reach out halfway across the world and ask you to come teach them.” 

“Oh,” she said, “well, we haven't talked to the Filipinos yet. This is just the money we need to get our organization to the Philippines. Then we'll teach them all about sustainable agriculture.” 

This 20-year-old, wearing her paisley bandanna and her hemp necklace, fabulously rich by global standards, is only one of the many idealistic people the West now exports to manage the lives of the global poor.

The concept of “sustainability” is now ubiquitous in international-development circles. It was most famously defined by the UN potentate and ex-Norwegian Prime Minister Gro Harlem Brundtland. According to her 1987 UN report, sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The international idealists now use this concept broadly to mean combining economic development with environmental preservation. One of the main fears of the advocates of “sustainable agriculture” is that farmers are unwisely degrading the quality of their soil by using chemical pesticides and fertilizers.  

But are outside experts really qualified to determine each Filipino farmer’s proper balance between getting chemically induced high yields now and risking lower yields later?

Each person has his own subjective preferences about how to trade present enjoyment for future enjoyment (and present returns for future returns). Universally, as Ludwig von Mises explained, using the Austrian school’s concept of time preference, we humans are basically impatient. We generally want things now, now, now—instead of someday later. But for each human, the power of this preference depends on his own desires, resources, and judgment. 

In the world of reality, in the living and changing universe, each individual in each of his actions is forced to choose between satisfaction in various periods of time. Some people consume all that they earn, others consume a part of their capital, others save.