Tuesday, December 17, 2013

A Quick Guide To What's Fake: Everything That's Officially Sanctioned

Neofeudal financialization and unproductive State/corporate vested interests have bled the middle class dry 
by Charles Hugh-Smith
Let's cut to the chase and generalize "what's fake": everything that is officially sanctioned: narratives, policies, statistics, you name it--all fake-- massaged, packaged, gamed or manipulated to serve the interests of the ruling Elites.
Anything that might introduce a shadow of skepticism or doubt about the sustainability, fairness and transparency of the status quo (i.e. anything authentic and genuine) is recast or repackaged into a fake that can be substituted for the authentic when everyone's gaze is distracted by the latest fad/media sensation/scandal.
ObamaCare: fake, a simulacrum of insurance and healthcare.
The National Security State: fake, a cover for global Empire.
The Patriot Act: Orwellian cover for state-corporate fascism.
Student loans: parasitic, exploitive loan-sharking enforced by the Central State for often worthless "higher education."
And so on.
Yesterday I explored the peculiar dynamic that motivates us to accept forgeries, fakes and illusions as authentic: What's Real? What's Fake?. If the fake enables our fantasy (of free money, of owning an authentic canvas by a famous artist, that rising wealth inequality is just a side-effect of freewheeling capitalism, etc. etc. etc.), then we want to believe it so badly that we overlook all the evidence of chicanery, forgery, illusion and fakery.
Consider our willingness to accept the conventional narrative about why the Great American Middle Class has been in decline since 1973: rising energy costs, globalization, and the declining purchasing power of the U.S. dollar.
While these trends have certainly undermined middle-class wealth and income, there are five other more politically combustible dynamics at work:

1. The divergence of State/corporate vested interests and the interests of the middle class
2. The emergence of financialization as the key driver of profits and political power
3. The neofeudal “colonization” of the “home market” by ascendant financial Elites
4. The increasing burden of indirect “taxes” as productive enterprises and people involuntarily subsidize unproductive, parasitic, corrupt, but politically dominant vested interests
5. The emergence of crony capitalism as the lowest-risk, highest-profit business model in the U.S. economy
The non-fake narratives are considerably different from the status quo ones. Please consider two: The Neofeudal Colonization of Home Markets and the Happy Marriage of the Parasitic Central State and Crony Capitalist Cartels.
The Neofeudal Colonization of Home Markets
The use of credit to garner outsized profits and political power is well-established in Neoliberal Capitalism.  In what we might call the Neoliberal Colonial Model (NCM) of financialization, credit-poor developing world economies are suddenly offered unlimited credit at very low or even negative interest rates. It is “an offer that’s too good to refuse” and the resultant explosion of private credit feeds what appears to be a “virtuous cycle” of rampant consumption and rapidly rising assets such as equities, land and housing.
Essential to the appeal of this colonialist model is the broad-based access to credit: everyone and his sister can suddenly afford to speculate in housing, stocks, commodities, etc., and to live a consumption-based lifestyle that was once the exclusive preserve of the upper class and State Elites (in developing nations, this is often the same group of people).
In the 19th century colonialist model, the immensely profitable consumables being marketed by global cartels were sugar (rum), tea, coffee, and tobacco—all highly addictive, and all complementary:   tea goes with sugar, and so on.  (For more, please refer to Sidney Mintz’s landmark study, Sweetness and Power: The Place of Sugar in Modern History).
In the Neoliberal Colonial Model, the addictive substance is credit and the speculative consumerist fever it fosters.
In the financialization model, the opportunities to exploit “home markets" were even better than those found abroad, for the simple reason that the U.S. government itself stood ready to guarantee there would be no messy expropriations of capital or repudiation of debt by local authorities who decided to throw off the yokes of credit colonization.
….
Read more at :
http://charleshughsmith.blogspot.gr/2013/12/a-quick-guide-to-whats-fake-everything_16.html

What's Real? What's Fake?

The unemployment rate is obviously fake, but we want to believe the fake is real for a variety of reasons.
by Charles Hugh-Smith
We like to think we know the difference between what's real and what's fake. When we're fooled by a fake Rolex watch purchased for $20 on some humid Asian street corner, we shrug it off: it's no big deal because the fake isn't harming anyone.
And when it's difficult to discern the fake from the legitimate, as in fine art paintings and financial policy, we rely on experts to differentiate between the two.
But what if the "experts" are as clueless as the rest of us? What if they've been corrupted by easy money to authenticate the fake as legitimate? Consider ObamaCare, an extraordinarily complex policy that "experts" assure us is a phenomenal advancement that is "working well."
But what if ObamaCare is a fake? What if it is really not insurance at all, but a giant skimming machine designed to enrich and solidify the power of the state-cartel that operates the sickcare system?
"Experts" (PhDs and Federal Reserve economists) assure us our financial system is the core engine of "growth" in our economy. But what if this assertion is simply a useful illusion, and the reality is that the U.S. financial system is a giant skimming operation that harvests immense profits off the real economy to the benefit of the few, the financial cartels and their lapdogs in the Central State?
"Experts" in the Federal government assure us the unemployment rate is 7%. But if we include the 91.5 million people of working age who could be working (and would be working in a work-fare economy), then the real unemployment rate is double the official rate: 14% or even higher.
Is the unemployment rate real or fake? It is obviously fake, but we want to believe the fake is real for a variety of reasons.
The 1974 Orson Welles documentary (recommended by correspondent K.K.)  F For Fake helps elucidate this peculiar dynamic of human nature.
The master art forger who plays a central role in F For Fake noted (self-servingly, but amusingly so) that his addition of a few fake Modigliani paintings into the world's collections did no damage to Modigliani (long since deceased) or the collectors, who benefited from the opportunity buy a Modigliani masterpiece.
We want to believe the fake unemployment rate of 7% rather than the real rate of 14+% because the officially sanctioned forgery feeds our belief that our bloated, corrupt Empire of Debt is sustainable, fair and working well. To accept that we've been bamboozled, ripped off, taken advantage of and ultimately cheated out of an authentic economy and life by swindlers is too painful.
Read more at:
http://charleshughsmith.blogspot.gr/2013/12/whats-real-whats-fake.html


Philanthropy’s Original Sin

Philanthropic Support for Eugenics
By William A. Schambra
Philanthropy has many wonderful qualities — and never tires of proclaiming them, for one quality it sorely lacks is humility. It regularly thumps itself on the back, for instance, for devoting some $300 billion a year to good causes. And though philanthropic spending on social causes is dwarfed by that of the government, foundations proudly claim that dollar for dollar their spending is in fact more effective than the government’s. While government tends to stick with the safe and the routine, philanthropy regularly and energetically seeks out the next new thing; it claims it is at the cutting edge of social change, being innovative, scientific, and progressive. Philanthropy, as legendary Ford Foundation program officer Paul Ylvisaker once claimed, is society’s “passing gear.”
Indeed, philanthropy increasingly prides itself on its ability to shape and guide government spending, testing out potential solutions for social problems and then aggressively advocating for their replication by government. Any employee of a philanthropic organization can immediately tick off a list of major accomplishments of American foundations, all of which followed this pattern of bold experimentation leading to government adoption. For example, Andrew Carnegie’s library program pledged funding to construct the buildings, if the local municipalities would provide the sites and help pay for the libraries’ operation. The Rockefeller Foundation funded a moderately successful hookworm abatement program in the southern 
United States, which strongly involved local governments. The Ford Foundation’s “gray areas” project in the 1960s experimented with new approaches to urban poverty that then became the basis for the Great Society’s War on Poverty.
And yet, in all this deafening clamor of self-approbation, we rarely hear from these foundations about another undertaking that bears all the strategic hallmarks of American philanthropy’s much-touted successes, with far more significant results: that the first American foundations were deeply immersed in eugenics — the effort to promote the reproduction of the “fit” and to suppress the reproduction of the “unfit.”
Philanthropy vs. Charity
Although some of its animating ideas of course reach much further back into history, modern eugenics began with the mid-nineteenth-century work of Sir Francis Galton, the great English statistician and cousin of Charles Darwin. Galton proposed that talent and high social rank had hereditary origins, and that society could and should give monetary incentives for marriages of and progeny from eminent couples. By the turn of the twentieth century, eugenics was considered a cutting-edge scientific discipline backed up by a growing political and social movement — and therefore a particularly worthy candidate for philanthropists’ attention. It is no surprise, then, that the first major foundations devoted resources not only to the research behind the movement, but also to lobbying for government adoption of eugenic policies: at the federal level, restricting immigration of the “unfit”; at the state level, their mandatory institutionalization and sterilization.
Eugenics was American philanthropy’s first great global success. It inspired and cultivated programs around the world, but nowhere with more consequence than in the nation that sought most ferventlyto imitate America’s eugenic example, Adolf Hitler’s Third Reich.
How did American philanthropy become involved with so reactionary and misanthropic a venture as eugenics? As recent scholarship on eugenics has shown, the movement was not considered reactionary at the time. To the contrary, eugenics was very much an essential feature of the American progressive movement at the beginning of the twentieth century.
America’s first general-purpose philanthropic foundations — Russell Sage (founded 1907), Carnegie (1911), and Rockefeller (1913) — backed eugenics precisely because they considered themselves to be progressive. After all, eugenics had begun to point the way to a bold, hopeful human future through the application of the rapidly advancing natural sciences and the newly forming social sciences to human problems. By investing in the progress and application of these fields, foundations boasted that they could delve down to the very roots of social problems, rather than merely treating their symptoms. Just as tracking physiological diseases back to parasites and microbes had begun to eliminate the sources of many medical ailments, so tracking social pathology — crime, pauperism, dipsomania, and “feeblemindedness,” a catch-all term for intellectual disabilities — back to defective genes would allow us to attack it at its source. As John D. Rockefeller put it, “the best philanthropy is constantly in search of the finalities — a search for cause, an attempt to cure evils at their source.”
In their understanding of themselves, foundations’ determination to reach root causes efficiently and scientifically came to distinguish American philanthropy from mere charity. The old, discredited charitable approach had taken too seriously and had wasted its time addressing the immediate, partial, parochial problems of individuals and small groups. Charity lacked the steely, detached scientific resolve to see through the bewildering, distracting, superficial manifestations of social ailments down to their ultimate sources, which we now had the power to cure once and for all.
Consequently, the first large foundations poured resources into the development and deployment of the natural sciences, as well as promising new social sciences like economics, psychology, sociology, and public administration. Early philanthropists shaped the first major American research universities at Johns Hopkins and Chicago, as well as public policy research institutes like Brookings and the National Bureau of Economic Research, and academic coordinating bodies like the Social Science Research Council.
Alexis de Tocqueville’s idea that America was ennobled by everyday, charitable citizens stepping forward to solve their own problems became less attractive than a new view of social change: objective, nonpartisan professionals and experts could grasp and manage more efficiently and scientifically the complexities of modern industrial life than individuals ever could. Foundation grants would pave the way for this transfer of authority: as one Rockefeller report put it, the foundation’s funding was designed to “increase the body of knowledge which in the hands of competent technicians may be expected in time to result in substantial social control.” Centralized control in the hands of social technicians would require an effort to circumvent and diminish local ethnic, fraternal, and neighborhood groups and charities, which still took their bearings from benighted moral and religious orthodoxies rather than from the new sciences of society.
According to the perspective of philanthropic eugenics, the old practice of charity — that is, simply alleviating human suffering — was not only inefficient and unenlightened; it was downright harmful and immoral. It tended to interfere with the salutary operations of the biological laws of nature, which would weed out the unfit, if only charity, reflecting the antiquated notion of the God-given dignity of each individual, wouldn’t make such a fuss about attending to the “least of these.” Birth-control activist Margaret Sanger, a Rockefeller grantee, included a chapter called “The Cruelty of Charity” in her 1922 book The Pivot of Civilization, arguing that America’s charitable institutions are the “surest signs that our civilization has bred, is breeding and is perpetuating constantly increasing numbers of defectives, delinquents and dependents.” Organizations that treat symptoms permit and even encourage social ills instead of curing them.
Charles B. Davenport, a Harvard-trained biologist, spoke directly to philanthropy’s contempt for charity, along with the former’s yearning to solve problems at their roots. In a booklet published in 1910, Davenport bemoaned the fact that “tens of millions have been given to bolster up the weak and alleviate the suffering of the sick” while “no important means have been provided to enable us to learn how the stream of weak and susceptible protoplasm may be checked.” He insisted that “vastly more effective than ten million dollars to ‘charity’ would be ten millions to Eugenics. He who, by such a gift, should redeem mankind from vice, imbecility and suffering would be the world’s wisest philanthropist.”
Philanthropic Support for Eugenics
Davenport found several wise philanthropists eager to take him up on his proposition to save humanity by funding eugenics. With the help of Mary Harriman, the wealthy widow of railroad magnate E. H. Harriman, Davenport was able to open the Eugenics Record Office (ERO) in 1910, adding it to the Station for Experimental Evolution at Cold Spring Harbor in New York, which had been launched earlier by the Carnegie Institution of Washington. The Rockefeller family and the Carnegie Institution, in turn, added funds to the Eugenics Record Office.
The ERO became a remarkably aggressive and effective institution, skillfully deploying all the available scientific, cultural, and political tools at its disposal to promote its cause. As the top independently funded eugenics institution in the United States, its activities ranged from scientific and policy research, to public education and political advocacy, to training expert field workers whose job it was to track the “stream of weak and susceptible protoplasm” into every nook and cranny of the nation.
Davenport hired Harry H. Laughlin, at the time a teacher of agriculture with an interest in breeding, to manage the ERO. Laughlin became the world’s leading expert on and champion of sterilization. He compiled the authoritative study of its theory and practice; designed a model sterilization statute, variants of which came to be adopted by thirty states; and served as an expert eugenics witnesstestifying before the congressional committee determined to stem the rising tide of new and defective immigrants from southern and eastern Europe, who were deemed biologically inferior to the earlier immigrants from the northern and western parts. In the notorious 1927 Supreme Court caseBuck v. Bell, which upheld the constitutionality of state sterilization laws, Laughlin even provided a deposition confirming Carrie Buck’s feeblemindedness without ever having laid eyes on her.
But philanthropy’s involvement in eugenics went far beyond the success of the ERO. The Rockefeller Foundation helped fund the research institutions in Germany behind the Nazi programs of sterilization and euthanasia. Rockefeller money also supported the work of French surgeon and biologist Alexis Carrel, whose discoveries in vascular suturing earned him the Nobel Prize in 1912. While working at the Rockefeller Institute for Medical Research (today renamed Rockefeller University), Carrel wrote his bestseller Man, the Unknown (1935), which lent his prestige to eugenics, suggested the use of gas to euthanize lawbreakers, and in a later edition endorsed the German “suppression” of “the defective.” The Russell Sage Foundation for two decades employed Hastings H. Hart, a Congregationalist minister-turned-social worker, as a senior official and a consultant; while Hart didn’t support the sterilization of the feebleminded, he was an avid proponent of mandatorily sequestering them.

 Read more at :
http://www.thenewatlantis.com/publications/philanthropys-original-sin

Lessons from Nazi Germany

Starvation and Military Keynesianism
by Julian Adorney
Many Americans, from the Glenview State Bank of Chicago to author Ellen Brown assume that the Nazi economic regime was successful, but closer examination tells a tale of rationing, shortages, and starvation. Learning why their economy failed can teach us how to avoid the same fate.
Background
The myth endures that after Hitler inherited a country ravaged by the Great Depression in 1933, his aggressive policies turned the nation around and created an economic powerhouse. But the truth, as Professor Evans of the University of Cambridge argues in his seminal history The Third Reich Trilogy, is something far different.[1]
Evans, a Marxist sympathetic to Keynes and state intervention, nonetheless tells a story of rationing, shortages, and misery in the Third Reich. The Reich Food Estate, the state-controlled corporation responsible for agricultural production, regularly failed to feed its people. Agricultural output rarely surpassed 1913 levels, in spite of 20 years of technological advancement. Demand outstripped supply by 30 percent in basic foodstuffs like pork, fruit, and fats. That meant that for every ten German workers who stood in line to buy meat from the state-owned supply depots, three went home hungry.[2]
The same story was retold when it came to cars, clothing, and iron. New houses had to be built with wooden plumbing, because iron was so scarce. Nationalized iron depots couldn’t produce enough for the army, let alone civilians. Clothing was rationed. Fuel and rubber shortages led to what one US observer called, “drastic restrictions on the use of motor vehicles.”[3] Of course, because the state dictated which car and truck models could be produced, there weren’t very many motor vehicles to begin with.
The overall tale is one of misery for the average German citizen. So how did the Nazis so hurt their people, and what lessons can we learn?
Lesson 1: Military Keynesianism Produces Austerity
Hitler’s rearmament program was military Keynesianism on a vast scale. Hermann Goering, Hitler’s economic administrator, poured every available resource into making planes, tanks, and guns. In 1933 German military spending was 750 million Reichsmarks. By 1938 it has risen to 17 billion with 21 percent of GDP was taken up by military spending. Government spending all told was 35 percent of Germany’s GDP.
Many liberals, especially Paul Krugman, routinely argue that our stimulus programs in America aren’t big enough, so when they fail it’s not an indictment of Keynesianism. Fair enough. But no-one could say that Hitler’s rearmament program was too small. Economists expected it to create a multiplier effect and jump-start a flagging economy. Instead, it produced military wealth while private citizens starved. Employed on the largest scale ever seen, military Keynesianism created only ruin.
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So many secrets in the East China Sea

The whole drama is far from being just about a few islets and rocks
By Pepe Escobar 
It's been a source of endless fascination to follow the game of geopolitical Go being played since China declared an air defense identification zone (ADIZ) in the East China Sea. 

The spin in the United States is relentless; this was no less than "saber-rattling", a "bellicose" posture and a unilateral "provocation". The meeting last week between Chinese President Xi Jinping and US Vice-President Joe Biden in Beijing may have done nothing to dispel it. 

This is what the White House says Xi and Biden talked about; Beijing did not release a transcript. In the hysteria front, this op-edin the Financial Times - reflecting a warped consensus in the City of London - even managed to crank it up to pre-World War II levels. 

Now compare it with the official Chinese media view, from a more conciliatory take 
in China Daily to a no-holds barred assertion of sovereignty in the in the Global Times

Which brings us to the scenario that the original provocation may have been actually Japanese, and not Chinese. 

Mr Xi, tear down this wall
The whole drama is far from being just about a few islets and rocks that China calls Diaoyu and Japan Senkaku, or the crucial access to the precious waters that surround them, harboring untold riches in oil and natural gas; it concerns no less than the future of China as a sea power rivaling the US. 

Let's start with the facts on the sea. Meiji-era documents prove without a doubt that the Japanese government not only admitted that these islands were Chinese (since at least the 16th century) but was also plotting to grab them; that's exactly what happened in 1895, during the first Sino-Japanese war, a historical juncture when China was extremely vulnerable. 

After the Japanese occupation of China and World War II, Washington was in control of the territory. A document signed by the Japanese promised the return of the islands to China after the war. It was never fulfilled. In 1972, the US handed over their "administration" to Japan - but without pronouncing itself about who owned them. A gentlemen's agreement between Chinese premier Zhou Enlai and Japanese prime minister Kakuei Tanaka was also in effect. It was also ignored. 

Tokyo ended up buying the islands from a private landowner, the Kurihara family, nationalizing them in September 2012 only a day after a summit between then Chinese President Hu Jintao and PM Yoshihiko Noda, and this after Hu had told Noda not to change the status quo. 

Recently, to make matters worse, the Obama administration issued yet one more of its absurd "red lines", affirming it would support Japan in the event of a war revolving around the islands. 

Geostrategically, it's even more complex. Virtually all of China's sea trade flows through choke points whose borders are either controlled by close US allies or nations that are not exactly allied with China. 

Imagine yourself as a Chinese naval strategist. You look at the seascapes around you and all you see is what strategists call the First Island Chain. That virtual arc goes from Japan and the Ryukyu islands and the Korean peninsula, in the north, moving southwards via Taiwan, Philippines and Indonesia towards Australia. It's your ultimate nightmare. Assuming any serious confrontation along this arc, the US Navy will be able to move its aircraft carriers around and seriously compromise China's access to its oil transported via the straits of Malacca.

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Why Is Pope Francis Promoting Sin?

The risks of preaching envy
By Lant Pritchett
Pope Francis recently weighed in on the economics of inequality. As a professional in that field, I could respond by detailing his errors of fact and reasoning. Maybe some other time. For now, I think that if the pope can pronounce on economics, then it’s only fair that I -- a full-time preacher of economics -- should be allowed to opine on his grasp of Christian morality.
By dwelling on inequality, the pope is promoting envy. The Catholic Church, I had always understood, disapproves of envy, deeming it one of the seven deadly sins. I would have expected Francis to urge people to think of themselves in relation to God and to their own fullest potential. Encouraging people to measure themselves against others only leads to grief. Resenting the success of others is a sin in itself.
The first sin outside the Garden of Eden was Cain’s slaying of his younger brother, Abel, out of envy that the Lord had accepted Abel’s offering but not his. God told Cain: “If you act rightly, you will be accepted; but if not, sin lies in wait at the door.” (Genesis 4:7) Worry about your standing with God, not about what others have or don’t have.
The Ten Commandments conclude with: “You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, his male or female slave, his ox or donkey, or anything that belongs to your neighbor.” (Exodus 20:17)
The New Testament reports that the early church “had everything in common” (Acts 4:32), a situation into which two of the deadly sins quickly intruded. Greed first, with Ananias and Sapphira lying to protect their property. (Acts 5:1-11) Then envy, as “the Hellenists complained against the Hebrews because their widows were being neglected in the daily distribution.” (Acts 6:1) What was the response of the apostles? That this petty envy was a problem, but beneath their concern: “It is not right for us to neglect the word of God to serve at table.” (Acts 6:2)
While Jesus repeatedly preached against the love of riches, he was urging people to respond to a call to God and to become “rich to God.” It was not an appeal for people to resent the riches of others and obsess about material inequality. Jesus, when asked to remedy inequality, turned the focus back on envy and greed.
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The Classical Liberal Constitution

Both progressives and conservatives fundamentally misunderstand our most important founding document.
by Richard A. Epstein
This coming week, Harvard University Press will publish my new book, The Classical Liberal Constitution: The Uncertain Quest for Limited Government. This 700-page volume took me over seven years to complete, and it offers a distinctive third approach to constitutional law that helps explain why the current Supreme Court’s conceptual framework is in a state of serious intellectual disrepair on many, but by no means all, issues.
Conventional wisdom divides constitutional judges and scholars into two warring camps: conservative and progressive. The classical liberal offers a third point of view, by explaining how our Constitution secures a system of strong property rights and limited government. It does so by rejecting the deep antitheoretical strand that often guides both conservative and progressive thought, and leads both groups—for somewhat different reasons—to support a highly deferential, if misnamed, “rational basis” test to assess the constitutionality of congressional and legislative action.
The Lochner Syndrome
Conservative thinkers often start their constitutional analysis with neither text nor structure, but with their own view of the proper role of the Supreme Court in a democratic society. In their view, the essential choices about the social and economic structure properly belong to the political branches of government at both the federal and state level.
The view holds that the judiciary should override statutes and executive actions only in exceptional cases. They think no judge should translate his policy objections to particular laws into constitutional terms. Thus, in The Tempting of America, Robert Bork called the Supreme Court’s 1905 decision in Lochner v. New York—which by a five-to-four vote declared New York’s controversial maximum-hours law unconstitutional—an “abomination” that “lives in the law as the symbol, indeed the quintessence of judicial usurpation of power.”
Unlike conservatives, progressives defend these laws. But their judicial attitude is driven by the same skepticism about judicial intervention in economic matters. That is the message of Justice Oliver Wendell Holmes’ famous Lochner dissent: “a constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State or of laissez faire.
So it is that two giants at the opposite ends of the political spectrum make the identical mistake: Neither thinks that it is possible to map onto the U.S. Constitution a substantive theory of government. Holmes makes that mistake when he talks about “a constitution” when the proper frame of reference should be the United States Constitution. Bork decriesLochner as “judicial usurpation” because he denies that there can be an independent textual or structural basis for striking down any economic regulation, no matter how misguided it may be.
What is perverse about both positions is that a constitution (indeed any constitution) is adopted precisely to establish some permanent framework in which laws can be made and validated. An ancient constitution could follow Justinian’s maxim “quod principi placuit legis vigorem habet,” which states, “that which is pleasing unto the prince has the force of law.” However, the U.S. Constitution explicitly rejects this approach by adopting all sorts of measures intended to diffuse the power of public officials: in part through federalism, in part through the division of government power into the Congress, the President and the Courts. These structural protections are augmented by a broad catalogue of individual rights, which checks both federal and the state power. Judicial usurpation is, to be sure, one sin. But to read these broad protections narrowly is the inverse mistake of judicial abnegation.
As applied to Lochner’s maximum hour law, the legislature should be required to justify exactly why, in a free society, it has the right to make a judgment about how many hours individuals should work and under what conditions. That point may not be absolute, but by the same token, ordinary liberty does carry with it the presumptive right to choose employment of one’s choice, with narrow exceptions for military service and jury duty.
Otherwise, surely under our Constitution, no state could order its citizens to accept certain jobs against their will. The same principle against governmental interference with individual liberty also is at work when government seeks to stop people from working in a job of their own choosing. If A uses force to prevent B from working for C, he commits the tort of interference with advantageous relations, and can be enjoined from that behavior. Put government in the role of A, and it is in exactly the same position.
The Police Power Exception
Of course, government prohibits people from engaging in criminal activity and taking advantage of the helpless. Indeed, both of those long-standing social norms have become embedded in the police power, under which federal and state governments may regulate individual activity to protect, as the phrase goes, “the safety, health, morals and general welfare” of the public at large. Inclusive as this list may seem, it does not negate key constitutional guarantees. In particular, the police power rationale does not let government pass overtly paternalist legislation on the one hand or overtly anticompetitive legislation (as in Lochner) on the other.
It is here that the underlying substantive vision matters. Under the classical liberal constitution, maintaining a free and open market for both capital and labor is an essential government function, which resonates in the explicit guarantees with respect to contract, private property, and the freedom of speech and the press. These apparently disparate guarantees are all linked together by the common sentiment that the state must show a serious justification before it can limit their exercise. The class of justifications is not open-ended, and it never includes the anticompetitive and protectionist legislation that is routinely sustained based on a supposed need to correct abuses of the market that are unrelated to duress, fraud, and monopoly.
More specifically, the proper scope of the police power is tied to the two reasons that lead people to join a political compact in the first place. The first reason is to control the use of force and fraud. The second is to allow state taxation and coercion to facilitate gainful interactions among individuals who are unable by themselves to create the much needed public goods—including defending against foreign threats, maintaining domestic order at home, and providing the common infrastructure of roads and other public facilities—because of insuperable transaction costs. The simple but powerful notion that justifies these coercive actions is that all individuals receive just compensation from the state for their tax dollars in the form of a higher level of personal security and economic prosperity.
Making This Work
The willful suppression of private competition does not come within a country mile of serving these objectives. Instead, misguided legislation often spends public dollars to make all private citizens worse off than they would otherwise be, which is not the case when the sensible enforcement of the antitrust laws controls cartels and other anticompetitive activities.
It is just this basic pattern that explains the greatest successes of our constitutional order. When the justices escape their habitual skepticism about the power of legal theory, they can work wonders by making those key judgments needed to implement the classical liberal constitution. When the justices care about outcomes, they become classical liberals in spite of themselves. Here are two examples.

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Breaking The UniParty

So long as the Uniparty exists, mere voters will have no way of affecting what the government does
by Angelo M. Codevilla
Yet again, for the nth time, Republican Congressional leaders and their Democrat counterparts produced a Trillion dollar, multi-thousand-page spending bill that was voted immediately after being unveiled, without having been read. Republican 2012 vice presidential candidate Paul Ryan authored the latest edition along with Democratic Senator Patti Murray. Republican leader John Boehner preempted Democrats by preemptively accusing Republicans who opposed the bill of wanting to shut down the government. He topped off this feat of leadership by declaring political war on the conservatives who had given Republicans the majority that had made him Speaker of the House – a war that Republican leaders cannot sustain.
The Republican Party’s leaders have functioned as junior members of America’s single ruling party, the UniParty. Acting as the proverbial cockboat in the wake of the Democrats’ man-of-war, they have made Democratic priorities their own when the White House and the Congress were in the hands of Republicans as well as in those of Democrats, and when control has been mixed. The UniParty, the party of government, the party of Ins, continues to consist of the same people. The Outs are always the same people too: American conservatives. They don’t have a party.
Whatever differences exist within the Uniparty, between Republican John Boehner and Democrat Nancy Pelosi, between Republican Mitch McConnell and Democrat Harry Reid, get worked out behind closed doors. Those differences are narrow. The latest negotiations were over some $80 billion out of three trillion dollars in spending. The bipartisan negotiators did not let into the room any of the major issues that concern Americans. Not Obamacare, not racial preferences, not religious liberty, not endless no-win wars. The UniParty is unanimous: more of the same!
Hence, so long as the Uniparty exists, mere voters will have no way of affecting what the government does.
Breaking up the Uniparty, means breaking the Democrats’ hold on non- Democrat congressmen and senators. The only way to do that is to break the Republican leadership’s hold on other Republicans and on the Republican label. That in turn requires using the primaries to screen out UniParty people.
Doing this is more possible than ever, providing conservatives learn to hang together before they are hanged separately.
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Charts of the day, world manufacturing output, 2012

Still, not a zero sum game

By Mark J. Perry
The charts above are based on new data from the United Nations on GDP and its components for more than 200 countries, updated through 2012. Here are some highlights of the UN’s data update:
1. The top chart compares the annual manufacturing output from 1970 to 2012 (measured in current US dollars) for the five countries that produced the most manufacturing output last year: China, US, Japan, Germany, and Korea.  As I reported last year, China officially became the world’s largest manufacturer in 2011, with output in 2011 ($2.34 trillion) that was 20.6% higher than the $1.94 trillion (updated) of factory output in the U.S. In 2012, China’s manufacturing output increased by 9.7% to $2.556 trillion, while factory output in the US increased by 2.6% to $1.993 trillion. For the second year in a row, China was the world’s largest manufacturer and out-produced the US by 28.2%. Previously, China’s manufacturing output exceed German’s factory output in 2000, and Japan’s output in 2006.
2. The U.S. is still a world leader in manufacturing and America’s factory output continues to increase, despite the rise of China to the world’s No. 1 manufacturer. The bottom chart above puts the enormous size of the U.S. manufacturing sector into perspective, by comparing America’s manufacturing output in 2012 ($1.993 trillion) to the combined manufacturing output of Germany, Korea, Italy, Russia, Brazil and India, which are the countries that are ranked No. 4 through No. 9 in 2012 for manufacturing output.
3. It’s also important to remember that China’s manufacturing workforce is estimated to be around 100 million and could be as high as 110 million, compared to America’s manufacturing employment of slightly more than 12 million. Therefore, even though China is producing more manufacturing output than the US, the productivity of American factory workers is so high compared to China, that China needs almost ten factory workers for every one American worker to produce 28% more output. On a per worker basis, the average American factory was responsible for $166,000 of output in 2012, while the average Chinese factory was responsible for less than $26,000 of manufacturing output; the productivity of American factory workers was more than six times that of the average worker in China.

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Sunday, December 15, 2013

South Africa’s Dubious Liberation

The lizard-skin-shoe class still prospers in South Africa
by Theodore Dalrymple
The unctuous pseudo-grief in the West after Nelson Mandela’s death at the good age of 95 was to me nauseating in the extreme; it was so overdone that, though I am no Freudian, it raised suspicions in my mind of reaction formation, the psychological defense mechanism against unwanted thoughts described by Freud that leads to exaggerated expressions of precisely opposite thoughts. The Guardian and the Observer, Britain’s two foremost liberal-left newspapers, had between them approximately fifty broadsheet pages devoted to Mandela, many times more than the return and re-crucifixion of Christ would have received. Methinks these newspapers (and many others) did protest too much. 
This is not to say that Mandela was without importance or that he merited no praise. His greatest achievement by far, and an important one, was the avoidance of the interracial violence that had long been predicted as “inevitable” in South Africa and the only way things would ever change there. He did this by his dignity and lack of rancor after his release from prison and during his presidency, the first presidency post-apartheid. For example, his enthusiasm for the South African team in the rugby World Cup, whether genuine or not, was a wise and shrewd way of trying to prove that South African patriotism should transcend racial divides, for of course the team was mostly white. No better way of calming fears symbolically could well have been imagined; Mandela played the part to perfection, and all honor to him for that.
“There is nothing like adversity to produce both swine and admirable people.”
But we should not exaggerate, either. The event that saved his historical reputation was not under his control. It was the downfall of the Soviet Union, for it was surely not a coincidence that the un-banning of the African National Congress and the release of Mandela himself happened only after the implosion of the Soviet bloc. Until then the Communist Party of South Africa, both the most Stalinist and the most resolutely pro-Soviet of communist parties anywhere (not always an easy balance to preserve), had what in Soviet langue de bois was called “a leading role” in the ANC.
As it happened I was in South Africa about the time of the great transition, shortly after the ANC was legalized, and I interviewed Joe Slovo, one of the communist leaders of the ANC who had just returned from exile. (His wife, Ruth First, a woman who liked every revolution however disastrous its effects, was murdered by the South African Secret Service by means of a letter bomb.) 
Slovo, who wrote Pravda-style langue de bois fluently, was a pleasant man, but I found him to be not particularly intelligent. When I asked him whether during his many visits to the Soviet Union he had noticed anything about it—for example, the absence of goods in the shops and the lack of freedom—he replied that what I had to understand was that the Soviet Union had always supported the freedom struggle in South Africa and that he was always the honored guest of the Central Committee of the Communist Party, and that therefore he was always driven in limousines from the airport to excellent accommodation where he was very well fed and watered. 
This did not strike me as a particularly impressive answer. I asked him whether he thought it was not a little foolish to recommend an entire socioeconomic system for South Africa on the experiential basis of flattery of his person and the consumption of banquets, and he rather feebly agreed that perhaps it had been.
By then, of course, there was no possibility of South Africa following the Soviet path; by then Russia had neither the means nor the will to support or prop up yet another catastrophically failed state in Africa, this time on a scale far exceeding its previous efforts. Prominent leaders of the ANC whom I met had by then dropped all ideological pretensions of a Soviet hue and had gone over to sharp mohair suits and lizard-skin shoes.

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http://takimag.com/article/south_africas_dubious_liberation_theodore_dalrymple#axzz2nbkKdcmw