Sunday, September 30, 2007

The Nation's Most Pressing Problem

..isn't the war in Iraq
..isn't some guy with a turban
..isn't some 3rd world nation that might develop one nuclear weapon

It's the nation's road to bankruptcy.
Every single empire in history has ended by going bankrupt:
book: Empire of Debt

I posted earlier that the debt per man, woman and child was $160,000, and the Compound Interest Paradox:

The US Government's Top Accountant, David Walker of the General Accountability Office, has been doing the lecture circuit to make more people aware of the issue. He has given up on trying to convince government on the magnitude of the problem, and has started talking to businesspeople and the academe.

The government fiscal burden per full-time worker, is $375,000! That is on top of one's personal debt (mortgage, car, etc). He explains that it is like having a $375,000 mortgage with no house.

Here is a segment from 60 Minutes about him and his message. It is 11 minutes long and pretty well done:

Here is his video presentation in 2 parts:

Why is the Federal government continually spending more and more, way beyond tax collections? Why is the Federal government borrowing more and more from the Federal Government, and from China, and getting deeper and deeper in debt? Why is the Federal government promising more and more in future entitlements that it can't afford? Why is the Federal government borrowing more and more, against our future earnings, and our children's future earnings? How can it possibly be sustainable?

How is it that few people even realize the magnitude of the problem?

Saturday, September 29, 2007

The Left vs. Right Illusion

I've written about this many times, most recently in my last blog post:

Here is an article I enjoyed very much:
A more detailed article on the same topic is here:
The above, a PDF file, is a very interesting read, highly recommended.
It's by G. Edward Griffin, an author I've mentioned earlier.

Excerpt from the first link:
"Would you rather be a Neoconservative or a Progressive? That is a trick question. The trick is in the fact that, although there may be differences between the rhetoric and short-term agendas of these groups, their long-term goals actually are the same."

The illusion of opposites has been a dominant part of the world's political landscape for over a century and it has been the primary reason for the advance of collectivism during that time.

In today's debate, the illusion of opposites has become a myth of gigantic proportions.

.. if there is any doubt of the similarity between the collectivism of Marx and the collectivism of Hitler, all one has to do is read Das Kapital, The Communist Manifesto, and Mein Kampf. The point is that, when the labels are peeled off and the underlying ideologies are examined, we come inexorably to the conclusion that every one of them is built upon the foundation of collectivism.

What are the elements of collectivism that are common to all of these seemingly opposite forces? Collectivists on the so-called Left and Right agree that:

1. Rights are derived from the state; (comment: i.e. not inherent in individuals and simply protected by the state)
2. The group is more important than the individual;
3. Coercion is the preferred method to bring about reform;
4. Laws should be applied differently to different classes;
5. Providing benefits (redistributing wealth) is the proper role of government.
It is sad that intelligent people with knowledge of this history still cling to the myth that they are opposites when it is so clear they are merely different manifestations of the same ideology.

Both “Left and Right” are ready to sacrifice freedom for the furtherance of their agendas. Both camps are willing to grant freedom to those who accept their political and social mores but do not hesitate to withhold it from those who oppose them.

Friday, September 28, 2007

The Reps and Dems are pushing an Authoritarian, Socialist agenda

In a previous blog post, I pointed out that the USA has features of both a Fascist and Communist state:
The USA is turning into an Authoritarian, Socialist state. A socialist state where most people are below middle class, overworked, with limited freedoms, controlled by the super-rich with their corporations' lobbyists writing laws.

In another post, I wrote that the Republicans and the Democrats are playing the role of Good Cop, Bad Cop:

I believe The Plan is that the public will be so angry at the Republicans (Neoconservatives, actually), that they'll elect a Democrat, and think "thank goodness we now have a Democrat". And then, said Democratic president will NOT undo the authoritarian EO's that Bush put in place, and then proceed to get away with, and screw the nation, with more socialist policies.

The Republicans are pushing the Authoritarian agenda.
The Democrats are pushing the Socialist agenda.

They are both pushing for more taxes, bigger government, more regulation, more war, more power for themselves, and less freedom for you and me.

Do you think Homeland Security was put in place as a reaction to 9-11? Think again, the first draft of the Homeland Security Act was written in 1998, during Bill Clinton's presidency.
"The proposal for a Homeland Security Department originated in 1998 with the launching of the so-called Hart-Rudman Commission, .."

"Finally, the Homeland Security Act was structured on the recommendations of a special commission that was closely connected to, if not derived from, the Council on Foreign Relations (CFR), which one author notes "has had its hand in every major twentieth century conflict. .. Of the "twelve" Hart-Rudman commissioners, Jasper writes, nine were members of the Council of Foreign Relations (CFR or "the Council"), which Jasper calls "the semi-secret, private organization that serves as the most visible element of the Internationalist Power Elite."
In case you missed the short explanation about the CFR in my previous post...

Here's a good summary

And here again is an excerpt from Carroll Quigley's book "Tragedy and Hope":
"The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to the doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can "throw the rascals out" at any election without leading to any profound or extreme shifts in policy. {p. 1247}"
"There does exist and has existed for a generation, an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for 20 years and was permitted for two years, in the early 1960s, to examine its papers and secret record. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments.. my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known."

"In addition to these pragmatic goals, the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. The growth of financial capitalism made possible a centralization of world economic control and use of this power for the direct benefit of financiers and the indirect injury of all other economic groups.''
pp. 950 and 324
Carrol Quigley was the professor thanked by Bill Clinton in a public speech, for "guiding" him. Bill Clinton was a member of the CFR.

Many, many prominent people in government are members. At the bottom of this page is a list of members of the CFR:

Tuesday, September 25, 2007

Reader comments #3, on Group Rights

Comments on "I Have the Right to a Toilet"


"The problem here is that (Ayn Rand) talks of 'rights' being given by governments. Where do these rights come from? Who says they are 'rights'? And if a similar group in a different context says no such rights exist does that make them true and authoritative?"

My reply:

Rights aren't "given" by governments. In the case of the US Constitution, government is supposed to _protect_ these rights which are "God given", or inherent in humans. If an individual doesn't agree with this, they're welcome to move to a country that is more aligned with their beliefs.


"Also who says that all individuals ought to pursue happiness as a life goal? Some German philosophers for instance have argued that suffering and pain are necessary for people like Wagner and Goethe to emerge and unleash their greatness. Do all people want happiness?"

My reply:

If one were to argue that "suffering makes some people 'happy'", and to expand "pursuit of happiness" to also mean "to do what you want", then people who want to 'suffer', as a means to achieve enlightenment or whatever, are free to do what they want in the USA. For example, if one wants to sleep on a stiff board, or to practice masochism, in the privacy of their home, as long as they don't trample on others' rights, they are free to do so.

Monday, September 24, 2007

Reader comments #2: on Gov't Regulation and Big Business

Comments on The History of Government Regulation and Big Business

Anonymous said

"I have read somewhere too that too much competition can lead to monopoly. Price undercutting and even selling some items at a loss, just to attract the customer to buy the higher valued products as well at the same time. This is because competitors will be driven to the wall, until one or a few firms dominate the market. I know you are saying that this is unlikely in a pure free market where there is no state, to intervene or create an elite. But the process described above is possible in such a situation is it not?"

My reply:

If a corporation drops prices, let's say until it sells an item at a loss, in order to block a newcomer from making a profit, the consumer benefits from the reduced prices. If said corporation does this in order to maintain a monopoly, then I think the corporation "deserves" that monopoly, because it is able to drop prices lower than all other competitors. Consumer wins. If this corporation starts becoming fat and happy, then competitors will be able to undercut the first corporation, by having lower costs.

As for the case of "selling some items at a loss" in order to "sell other higher valued items", and the consumer ends up paying more, then it's the consumer's fault for not going elsewhere for the higher valued item. If the consumer likes to have a one stop shop, then it's still a win-win.

Here is another link I found on Government Regulation:
Most of the harmful effects of deregulation are caused by incomplete deregulation — in particular, by deregulating X while neglecting to deprive X of special governmental privileges that consist of regulations or taxes on everybody else. Three examples leap to mind: First, there are cases in which governments, invoking "free market" values, have "deregulated" (i.e., permitted a broader range of pricing and other options to) industries that are either monopolies (e.g., power companies with a legal guarantee from competition) or near-monopolies (e.g., industries dominated by powerful corporations who are insulated from competition through regulations and tax codes that make it more difficult for newcomers to enter the market).

Second, there is the notorious S & L scandal, when the Reagan Administration gave Savings and Loans greater freedom to make decisions with depositors' money, while at the same time retaining federal deposit insurance and so ensuring that the taxpayers, rather than the lenders, would bear the costs of the lenders' mistakes.

Third — in an example that shows that big government is no friend to the environment — politicians have given loggers greater freedom to log on federal lands, at a fraction of the cost that a private landholder would demand. In all these examples, partial deregulation amounts in fact to a fascist grant of quasi-governmental privilege, without accountability, to private entities — a practice that can only lead to skewed incentives and abuse of power. (Governments are socialist to the extent that they seek to exercise direct control over the economy, and fascist to the extent that they delegate this task to the powerful "private" beneficiaries of state privileges and protection. Socialism means rule by bureaucrats; fascism means rule by plutocrats. The current American system seems to be a mixture of the two.) Those who complain of the harmful effects of deregulation are quite correct, if they are referring to what passes for "deregulation" under a statist rĂ©gime. (The statists have similarly appropriated the term "privatization" to refer to the fascist process of "contracting out," i.e., of granting to private companies an exclusive monopoly to perform services usually monopolized by government directly — as opposed to the original libertarian meaning of "privatization," which was that such services were to be turned over to the competitive market free and clear.)

Reader comments #1

On "I Have the Right to a Toilet.",

Anonymous said...

I like the racist = collectivist theme.But from a purely genetic point of view, is it not true that people from within particular racial, and or social or geographic groups display some form of collective trait (it could be greed, generosity, kindness or whatever)?

People who have lived in small geographically 'isolated' areas have similar attitudes.

My reply:

I have not read any research that talks about certain collective traits being genetic or racial. At this point I believe tendency toward traits are CULTURAL.

For example, people who grow up in very poor, crime-ridden neighborhoods, have the "Pie is not big enough" mentality and tend to become criminals themselves.

See my post regarding "the pie is not big enough":

If one has had the experience of meeting several [insert group here] people who all were [insert trait here], then one cannot be faulted for assuming when meeting new people of the same group, that there is a good chance that the person is [trait]. That in my mind is not racism. Some may call it stereotyping.

However, if one then over extrapolates that and assumes that all members of the [group] are [trait], rather than giving the person that they meet for the first time the benefit of the doubt, that in my mind is racism. (And illogical) The worst kind obviously is when it becomes hatred. Hatred at certain minorities, again comes from the belief that "The Pie isn't Big Enough". e.g. "these immigrants are taking our jobs".

Remember, the smallest minority is the individual. We are all individuals.

Scoots wrote:
I have a story for you. My brother and I were at a movie several years ago (Falling Down) and during the long opening scene when there is no dialog we could hear someone narrating everything on the screen right behind us (we were in the front row) "It's a traffic jam. It's a hot day. Michael Douglas has a buzz cut and is sweating in his car. There is a schoolbus of kids making noise." and so on. My brother, always one to nip such behavior in the bud, stood up, turned around and said "DO YOU MIND NOT TALKING DURING THE MOVIE" to which he recieved the following stunning replay "HEY, JUST BECAUSE WE'RE BLIND DOESN'T MEAN WE DON'T HAVE THE RIGHT TO SEE A MOVIE!" To which my brother replied "YOU ARE BLIND. YOU CAN'T SEEEEEE A MOVIE" He got applause and the blind people left.

The difference between Fascism and Communism

.. is not much!

A few days ago, I posted that the USA is both Fascist and Communist.

Article talks about several of my points

In this blog, I've posted about the mainstream media (MSM) and educational system dumbing us down, the Federal Reserve, bureacracies, the Corporatocracy, the fascist state, welfare, wars, "group rights" as weapons. This article talks about all of them at once; he even specifically mentions Britney and Lindsay:

Saturday, September 22, 2007

The USA is both Fascist and Communist

Let's start with the statement "The USA is Fascist".

Bear in mind that Benito Mussolini,originator of fascist state, said
Fascism should more appropriately be called Corporatism because it is the merger of state and corporate interests.”
I pointed this out in my post Laws Benefit Corporations.

I found 2 really good links.

14 points of Fascism:

Fascist America in 10 easy steps by Naomi Wolf:,,2064157,00.html

In the first link, one of the steps is:
"Identification of Enemies/Scapegoats as a Unifying Cause"

In the second link, the same step is called
"Invoke a terrifying internal and external enemy"

I pointed this out in my post, "Mass Media: Ministry of Fear".

Check out this pic:

Of course, Giuliani is one of the "media anointed'. The mass media is making a short list of whom they approve for the presidency. At the very beginning of the campaign, they anoint who the "top tier candidates" are, instead of just letting them all be equal "candidates", and letting the public choose who the "top tier" are. The media is choosing our president for us.

Now let's look at the statement "The USA is Communist".

FSK wrote "The Communist Manifesto's Succesful Implementation in the USA"

He shows that the USA has implemented many of the 10 Planks of Communism. The most damning are:
  • A heavy progressive or graduated income tax.
  • Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
  • Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production.
The 2nd point, refers to the Federal Reserve.

The 3rd point, regarding combining education with industrial production, I touched on in another post, Dumbed down by the Educational System, part 2. In it I pasted a link that shows that the educational system turns people into good worker bees and good consumers.

Tuesday, September 18, 2007

The Pie Is As Big As We Want It To Be

In a reader comment to my earlier post
"The History of Government Regulation and Big Business":

Anonymous said...
Good post. Lets say you live in a mythical place where people are encouraged to trade, produce and make their own things which they take to market. Lets say competition is encouraged but not beyond some prices (because too much competition results in monopoly, oligopoly), and also individuals themselves follow a religion which tells them to be generous in trade, to even aid competitors if they are in trouble (because there is plenty for everyone and everyone is guaranteed a pre-determined livelihood by God who is the Most Generous). would this be a good society in your opinion?

I can see some people may be lazy because "God provides", but they are taught that God provides for those who help themselves and who work.

For instance I have heard cases of shop traders in Egypt refusing to serve a customer and asking them to go to a neighboring 'competitor' shop to buy the item 'because he has not had allot of business today'.

He may have missed my point, in that history shows that true free-market competition PREVENTS cartelization. There is no such thing as "too much competition". Cartels happen when government imposes regulation; history says that regulation was pushed by the giant corporations themselves (through lobbyists and bribes to government officials), to help shut out competition from startups.

His 2nd point, about people (such as ancient Egyptians) or a religion that encourages people to help their competitors when they are in serious trouble, reminds me of 2 things.

First is that this is the philosophy, if I recall correctly, of Plato, that "The Pie is Big Enough", or better yet, "We Can Make the Pie as Big as we Want it to be", as opposed to "The Pie isn't Big Enough for Everyone", or "Life is a Zero Sum Game".

In the former, the essence is that knowledge is wealth, and more knowledge begets more wealth. Technology has the power to make everyone wealthy. Witness how technology has enriched our lives.

In the Middle Ages only Kings could travel 500 miles in relative comfort, and they would die a slow death if they contracted Amoebic Dysentery. Today I'd wager that flying 500 miles in coach on JetBlue or Southwest is more comfortable than said Middle Age King's journey, and even the lower middle class in a 3rd world country can afford the pills to cure Amoebiasis.

In the latter, (Zero Sum Game) the belief is "I need to steal somebody else's piece of the pie in order for me to have a bigger slice". This mindset is at work when some riffraff breaks into your car (thinking "I'm poor, this guy is rich, he can afford a new stereo"); when people do day trading on the stock market; or the big leveraged buyout firms make money; or when the WTO/NAFTA/IMF/WB force rules and monetary and tax law changes on 3rd world countries, which effectively force them to remain poor, for the benefit of transnational corporations. It is also true when nations go to war over oil. All of it is wealth re-distribution (and wealth destruction, in the case of wars and breaking in cars).

Socialism is the same. Socialists think "Look at these poor people, let's take money from the productive middle class, and give it to the poor". (Wealth re-distribution, zero sum game) .

A better way is to think "How can we stimulate the economy, or make the economy more sound and more fair, so that jobs can be created, so these poor people can make a decent living?" Make the pie bigger. The saying of teaching a man to fish, instead of giving him a fish, comes to mind. And no, I'm not talking about government mandated minimum wages. The minimum wage does NOT create more jobs...

The 2nd thing the comment reminds me of, is morality. An Egyptian shopkeeper sending customers to a competitor in trouble, is altruism. It's a separate topic than free-market competition. The two are not mutually exclusive. This is why during the 80s, the "Decade of Greed", that charitable contributions reached an all-time high. (From the book "The Politically Incorrect Guide to American History")

In the book "The Science of Good and Evil", the author Michael Shermer argues that altruism is hardwired into the brains of our species (as well as in primates). Altruism helps propagate the species. The book goes on to explain why people do evil things, despite that.

I will argue that everything that drives man, is for selfish purposes (as Ayn Rand says), including altruistic deeds. When someone does something altruistic, he or she feels good, which is what drives the deed in the first place.

My writing this blog is also a selfish deed. The direction that the nation and the world is going, makes me sad and angry. Writing this blog is my therapy. A second selfish reason for writing this blog, is the hope that it will make the world a better for most everyone, including myself.

It's just really neat that the mechanism of true free-market economics harnesses the power of selfishness to create wealth for everyone.

Saturday, September 15, 2007

The USA is not a Democracy (and isn't even supposed to be one)

How many times have you heard "we're a democracy" and "we're spreading democracy"?

The U.S.A. is NOT EVEN SUPPOSED to be a democracy. It's supposed to be a Constitutional Republic. The word "democracy" is NOT mentioned ONCE in the Constitution. The Founding Fathers wanted a nation built on the principles of individual freedom and limited government.

Here is a good explanation of the difference between a democracy and a Constitutional Republic:

" pure Democracy is nothing more than "mob rule" with no provisions for the rights of the individual. The Founding Fathers saw this as one of the worst forms of government and in their wisdom provided a framework to secure the rights of the individual, ie., a Constitution and a Bill of Rights with separation of powers subject to Judicial Review which is the "Rule of Law" we live under.

True that we do elect our head of state and representatives by a Democratic system, ie., majority popular vote. (Although with the Electoral College and the Florida debacle that's even in question), but that aside, once our head of state and representatives are elected democratically they are bound by their oath of office to "uphold, obey and defend the Constitution, so help them God" thus a Constitutional Republic.

A constitutional republic is a state where the head of state and other officials are elected as representatives of the people and must govern according to existing constitutional law that limits the government's power over citizens. In a constitutional republic, executive, legislative, and judicial powers are separated into distinct branches and the will of the majority of the population is checked by protections for individual rights so that no individual or group has absolute power. The fact that a constitution exists that limits the government's power, makes the state constitutional. That the head(s) of state and other officials are chosen by election, rather than inheriting their positions, and that their decisions are subject to judicial review makes a state republican."

I believe the spreading of the lie that the USA is supposed to be a democracy makes it easier for the media to manipulate the public and sway opinion.

If the media declares "51% of survey respondents support a ban on pork rinds", then Joe Public will then think "oh well it's a democracy, and if the majority want it banned then so be it", instead of "Hey, I have the right to life, liberty, and the pursuit of pork rinds, as long as my eating pork rinds doesn't violate someone else's rights", as the Founding Fathers would advocate.

Even if the USA were supposed to be a democracy, it is far from one. Instead, it's a Corporatocracy and a carefully concealed oligarchy:

" the two-party system is the true cancer eating away at the heart of this republic. The notion that both sides have a grasp on absolute truth, politically and morally is one of the greatest lies perpetrated against the American people."

Restore the Republic!

"I Have the Right to a Toilet."

How many times have you heard someone say "I have the right to..."? Despite the fact that it impinges on someone else's rights?

Pedestrians who cross the street sometimes step in front of a moving vehicle, just because they have the right of way. As if they were thinking "I have the right of way, it gives me the right to step in front of your car, and make you wait 15 seconds while I take my sweet time ambling across the road". Never mind that they expect your car to defy the laws of physics and stop in time; never mind that the laws of physics trump human laws every time.

New York City tried to install coin-operated toilets on the sidewalks to address the odor you often smell around the city. However, a disabled-group activist sued the city to force them to use large, wheelchair accessible toilets. You see, the "physically challenged", have the "right" to be "treated like normal people". NYC ran a trial, using both types of toilets. They found that the regular toilets were heavily used, while the wheelchair friendly toilets were barely used; they were much more expensive, would be out of the City's budget, as they could not charge a fee to help it pay for itself. In court, the city tried to make their case. In the end, neither the court nor the wheelchair activist budged, and the city then decided not to install any toilets at all. I don't see the score as "disabled people 1, regular people 0", rather, it's "0-0" Would it really be a "point against the disabled", if he had let the city install regular toilets? toilets? Why does he think that life is a zero sum game? That if the "other side gets ahead" it means "I lost"?

The wheelchair activist felt he exercised his group's rights. I will turn it around and ask.. "What about the 'right' of normal people to have a city that doesn't smell of urine? What about the 'right' of normal people to have toilets around"?

This horror story, and many more, are chronicled in the book "The Death of Common Sense". Author Philip K. Howard discusses how Group Rights came about:

The last section of Howard's book explores the "rights revolution," where government has become "like your rich uncle under your personal control" and everyone now gets to be a part of a legally-mandated, discriminated-against minority. As rights weaken the lines of authority in our society, the walls of responsibility - such as how a teacher manages a classroom - have begun to crumble. We want government to solve social ills, but distrust it to do so. Congress has resolved this dilemma by using rights to transfer governmental powers to special interest groups. The result has not been bringing excluded groups into society, but rather has become the means of getting ahead in society. Howard makes the distinction that, "The rights that are the foundation of this country are rights against law. In James Madison's words, the Constitution provides for 'protection of individual rights against all government encroachments, particularly by the legislature.' Rights - freedom of speech, property rights, freedom of association - were to be the antidote against any new law that impinged on those freedoms."

In this way, Howard finds that we have confused power with freedom. These new legislative rights aren't rights at all, no matter how righteous they sound. "They are blunt powers masquerading under the name of rights." He says we need to consider how these new rights impinge on what others consider to be their own freedoms. The flip side of the coinage of the new rights regime is called coercion.

In the paper recently, I read about a Black comedian who came up with a comedy routine along the lines of "What it means to be Black". This was a result of some other Black celebrity or writer accusing him of "not being a real Black", because the comedian had said in an interview that he didn't like rap music nor "large SUV's with chrome rims".

Like the comedian, I find the accusation laughable. It however, is a symptom of a society that likes to label or box people.

Am I [insert race here], or a [insert profession here], or [insert sexual orientation here], or [Liberal/Conservative], or [Republican/Democrat] ? I find the question "Are you a Republican or a Democrat" the most absurd of all.

I personally like to make friends, and identify with, people that share the same interests and hobbies as me, and have the same mindset and attitude.

Ayn Rand has said that the smallest minority is the individual. The Constitution guarantees the individual's rights to "Life, Liberty". Nothing about conferring additional, or new rights, to groups or subgroups.

Ron Paul has said,
"Racism is simply an ugly form of collectivism, the mindset that views humans strictly as members of groups rather than individuals. Racists believe that all individuals who share superficial physical characteristics are alike: as collectivists, racists think only in terms of groups. By encouraging Americans to adopt a group mentality, the advocates of so-called "diversity" actually perpetuate racism. Their obsession with racial group identity is inherently racist."


"All initiation of force is a violation of someone else's rights, whether initiated by an individual or the state, for the benefit of an individual or group of individuals, even if it's supposed to be for the benefit of another individual or group of individuals."

The Constitution protects the individual's rights to "Life, liberty", and "the pursuit of happiness". The latter, as long as it doesn't impinge on others' rights to life and liberty. And arguably, the right to enjoy the fruits of one's labor (e.g. wages with no taxation). It does NOT give the individual the right to a job, a home, a car, health care, nor a toilet if one is "physically challenged".

"There Oughtta be a Law"

In the papers, there are often public outcries about "more laws to prevent X crime from happening again". Never mind that numerous laws were broken in the occurrence of said crime, the enforcement of which would have prevented it. People somehow want more and more specialized laws to prevent every possible permutation of a crime.

If an uninsured octogenarian with poor eyesight had mowed down 5 schoolchildren at a school crossing while sipping a latte, there would be cries to create laws making it illegal for uninsured 80 year olds who fail the DMV eye test to drive near schools while holding coffee. Never mind that the eye test is supposed to ensure that drivers have adequate eyesight, and that it's already illegal to drive without insurance. You get my point.

OSHA (Occupational Safety and Health Administration), will fine businesses and require them to redo railing if they're an inch too short, or if there is flaking paint within 30 feet of food handlers. But the one thing they DON'T do is review a company's actual safety records and compare them against other companies in the same industry.

In the books "The Death of Common Sense: How Law is Suffocating America", and "The Collapse of the Common Good: How America's Lawsuit Culture Undermines Our Freedom, author Philip K. Howard writes a scathing indictment of excessive government bureaucracy.

From Amazon:
New York City laws forbidding Mother Theresa from opening a two-story homeless shelter unless she installs an elevator. A 33 page manual describing the qualifications and uses of a hammer. Contract bidding procedures that unintentionally but blatantly encourage corruption. To Howard, an attorney practicing in New York City, this is but one of many examples of the law's suffocating Americans by extensive decrees on what may and may not be done.

Philip Howard's insights help us understand why government appears arbitrary, almost never able to deal with real-life problems in a way which reflects an understanding of the situation. .. absurd regulatory inflexibility and the lack of the use of judgment, Howard's book reveals that we have concocted a system of regulation that "goes too far while it does too little."

Our old system of common law recognized the particular situation and invited the application of common sense. ... But in this century statutes have largely replaced common law, and in recent decades regulations have come to dominate the legal landscape. Howard observes that the Interstate Highway System (still the nation's largest public works program) was authorized in 1956 with a 28-page statute. Now, we attempt to cover every situation explicitly; (witness the 200 page contracts for home sales)

Howard traces the growth of this regulatory "rationalism" from Max Weber - the German sociologist at the turn of the century who said that "Bureaucracy develops the more perfectly, the more it is `dehumanized'" - to Theodore Lowi - who in The End of Liberalism in 1979 saw greater regulatory specificity to be the antidote to special interest groups. But in truth, Howard shows us, the more precise we try to make the law, the more loopholes are created.

Centralized rules have caused us to cast away our common sense.

Furthermore, "Coercion by government, the main fear of our founding fathers, is now its common attribute. .. The idea of a rule detailing everything has had the effect of reversing the rule of law. We now have a government of laws against men."

The second section of Howard's book explains how the ritualization of bureaucratic process has brought us to the point where people argue, not about right and wrong, but about whether something was done the right way.

In this maze of centralized, detailed regulation - a system designed to discourage individual responsibility - many have lost sight of what government is supposed to be doing. .. He tells us that responsibility, not process, is the key ingredient to action. If responsibility is shared widely, then like the extreme where property is shared widely, it is like there being no responsibility at all.

and noting the damage predatory litigation has done to the communal fabric of the United States: "Social relations in America, far from steadied by law's sure hand, are a tangle of frayed legal nerves." He tells how seesaws have started to vanish from playgrounds, how teachers are banned from touching students, and how emergency-room staff are blocked from attending to patients off hospital grounds--even if they can see them bleeding to death just 30 feet away.

Some points from above:
  • centralized rules make us cast away our commone sense
  • bureaucracy is dehumanizing
  • it discourages personal responsibility
  • coercion by goverment the main fear of the Founding Fathers, is its main attribute

I think this is part of the dumbing down of the populace that I posted about earlier. And excessive government regulation, wrote Caroll Quigley, Bill Clinton's mentor, in his book "Tragedy and Hope", is one of the ways to "squeeze the middle class", which he loathed. I posted about this.

I like what my friend Scott M said, that every law on the books, that hasn't needed to be enforced in a long time, adds inefficiency to the system; its very presence is counter-productive.

Recently in the local newspaper, there was an article with "experts" on both sides of an argument, arguing whether or not it was legal to turn right without stopping, at certain types of intersections. The experts, a columnist specializing in roads and traffic, and a traffic cop, disagreed on the interpretation of the laws. The traffic cop said that he and his buddies had written hundreds of tickets for "violators" who did not stop.

It was surreal, because if something as insignificant as coming to a full stop or not, could get the "experts" to disagree, then it's obviously useless to have to come to a complete stop. Clearly one should err to the side of common sense - that the motorist in question would have the experience to decide whether he could see enough in all direction to warrant stopping or not. The purpose of traffic laws is to improve safety and keep traffic flowing. Neither "expert" brought it up. The discussion was all about what the law meant. The absurdity of coming to a stop was never questioned. Coming to a full stop when turning right, would be unnecessary if a motorist slows down and can adequately check that there are no pedestrians, and can see that he can merge in without disrupting flow. The cops were simply enforcing laws for the sake of enforcing them, as opposed to using common sense and actually improving safety and traffic flow. But then of course, there is also much incentive for traffic cops to write tickets, as they are told to do so, and the revenue stream is attractive for cities, PD's, and courts.

Ayn Rand once stated that the hallmark of authoritarian systems is the creation of innumerable, indecipherable laws.

The History of Government Regulation and Big Business

The "Progressive Movement" aka the History of Big Business getting in Bed with Big Government

Murray Rothbard (an economic historian) et al, have shown that the "Progressive" movement of 1890-1920, the beginning of big government regulation of big business, was influenced by big business themselves. This is from his book "The Case Against The Fed".

He said that the so-called government regulation was lobbied for by the giant corporations of the time, in order to make entry more difficult for startup competition. The classic case is Meat- Packing regulation:

From --
Today's history books credit muckraking novelist Upton Sinclair with the reforms in meatpacking. Sinclair, however, deflected the praise. "The Federal inspection of meat was, historically, established at the packers' request," he wrote in a 1906 magazine article. "It is maintained and paid for by the people of the United States for the benefit of the packers."

Gabriel Kolko, historian of the era, concurs. "The reality of the matter, of course, is that the big packers were warm friends of regulation, especially when it primarily affected their innumerable small competitors." Sure enough, Thomas E. Wilson, speaking for the same big packers Sinclair had targeted, testified to a congressional committee that summer, "We are now and have always been in favor of the extension of the inspection, also of the adoption of the sanitary regulations that will insure the very best possible conditions." Small packers, it turned out, would feel the regulatory burden more than large packers would.

Consider the story of one of the most famous "trusts" in American folklore: U.S. Steel.
In the 1880s and 1890s, rapid steel mergers created the mammoth U.S. Steel out of what had been 138 steel companies. In the early years of the new century, however, U.S. Steel saw its profits falling. That insecurity brought about a momentous meeting.
On November 21, 1907, in New York's posh Waldorf-Astoria, 49 chiefs of the leading steel companies met for dinner. The host was U.S. Steel chairman Judge Elbert Gary. The gathering, the first of the "Gary Dinners," hoped to yield "gentlemen's agreements" against cutting steel prices. At the second meeting, a few weeks later, "every manufacturer present gave the opinion that no necessity or reason exists for the reduction of prices at the present time," Gary reported.

The big guys were meeting openly— with Teddy Roosevelt's Justice Department officials present, in fact—to set prices.

But it did not work. "By May, 1908," Kolko writes, "breaks again began appearing in the united steel front." Some manufacturers were undercutting the agreement by dropping prices. "After June, 1908, the Gary agreement was nominal rather than real. Smaller steel companies began cutting prices." U.S. Steel lost market share during this time, which Kolko blames on "its technological conservatism and its lack of flexible leadership." In fact, according to Kolko, "U.S. Steel never had any particular technological advantage, as was often true of the largest firm in other industries."

In this way, the free market acts as an equalizer. While economies of scale allow corporate giants more flexible financing and can drive down costs, massive size usually also creates inertia and inflexibility. U.S. Steel saw itself as a vulnerable giant threatened by the boisterous free market, and Gary's failed efforts at rationalizing the industry left only one line of defense. "Having failed in the realm of economics," Kolko writes, "the efforts of the United States Steel group were to be shifted to politics."

Sure enough, on February 15, 1909, steel magnate Andrew Carnegie wrote a letter to the New York Times favoring "government control" of the steel industry. Two years later, Gary echoed this sentiment before a congressional committee: "I believe we must come to enforced publicity and governmental control . . . even as to prices."

When it came to railroad regulation by the Interstate Commerce Commission, the railroads themselves were among the leading advocates. The editors of the Wall Street Journal wondered at this development and editorialized on December 28, 1904:

Nothing is more noteworthy than the fact that President Roosevelt's recommendation recommendation in favor of government regulation of railroad rates and[Corporation] Commissioner [James R.] Garfield's recommendation in favor of federal control of interstate companies have met with so much favor among managers of railroad and industrial companies.

Once again, big business favored government "curbs" on business...

In his book "The Case Against The Fed", Murray Rothbard showed that the Federal Reserve Act of 1913 (which created the Federal Reserve), resulted in cartelization of the banking industry, the same way the regulation of the steel and the meat industries produced cartels in their respective industries.

And of course, it gets much worse than that - the worst thing about it is the Compound Interest Paradox.

The Founding Fathers were hostile towards corporations - they could be dissolved by the state; in the late 1800s there was a landmark court "precedent" that declared corporations as having "the rights of a person" that got around this:

Every time there is perceived "corporate malfeasance", the public cries out for more regulation.

One other thing the public doesn't realize, is that whenever there is some kind of "boom industry" due to artificially low interest rates, there is malinvestment, and a subsequent bust.

Again FSK has touched on this. A Good Explanation of the Housing Bubble:
When the newly printed money starts accumulating in one part of the economy, prices skyrocket. Newspapers and television tout it as being the new "hot investment area". Eventually, everyone is investing in this "hot area". At this point, the Federal Reserve is concerned about inflation and jacks up interest rates, causing a crash. The insiders start buying at the start of the bubble, and sell before the crash. You don't know how long the boom cycle or bust cycle will last, because you don't know what the Federal Reserve is going to do.
What he didn't mention in this post, is the subsequent government bailout, at taxpayers' expense, and the predictable reaction of "We need more government regulation to prevent this from happening again".

He did touch on the bailout phenomenon: Distributed Costs and Concentrated Benefits

Today's housing bubble and subprime mortgage meltdown was caused by 2 things: The Federal Reserve kept interest rates artificially too low for too long, creating artificial demand for homes due to cheap loans, and the 1977 Community Reinvestment Act (CRA). I can't summarize it in 2 sentences so here's the link:

The Government-Created Subprime Meltdown:

It seems whenever the government sticks its fingers in the free market, it's either to benefit Big Business, and/or it creates undesireable unintended consequences.

It's been suggested that Benito Mussolini said, "Fascism should more properly be called corporatism because it is the merger of state and corporate power."

Laws Benefit Corporations

In a previous post, I mentioned that Steven LaTullipe wrote that the nation is a "carefully concealed oligarchy".

Laws have continually been enacted, to benefit large corporations, and to "encourage" citizens to be good little taxpaying corporate employees.

FSK has written on a related phenomenon, "It's hard to start a Business":
One of the things he said is that many of the costs of running a business associated with government regulation, penalize the small business owner or a small corporation, more than a large corporation.

Below I will list a few examples of laws and acts that benefit large corporations.

The 401k
The 401k was not created to benefit employees. It originally benefited company executives, until the IRS ruled it could apply to ordinary employees in 1979. 401k's are more expensive to administer for smaller companies and small business.

From the PBS website:

And from Wikipedia:
A primary reason for the explosion of 401(k) plans is that such plans are cheaper for employers to maintain than a pension a pension for every retired worker.

The HMOs (and the HMO Act of 1973)
Here's a good history of the HMOs and managed health care:

A result of the HMO Act of 1973, was the illogical coupling of employment with "discounted" health care. Just try to get the same coverage as your employer can get you, and it will cost you twice as much. It's an incentive to work for a large corporation.

I've heard the argument to this as "if you join an HMO with 100 fellow employees, you are pooling your risk with the 100, and so the risk as seen by the HMO is smaller than if you join by yourself". This is completely illogical; and it's another argument for you to work for a corporation. This would be true if you were the first, or the first 100 customers of the HMO.

If an HMO had 1 million existing customers, and you then join them by yourself, you ARE POOLING RISK WITH THEIR 1 MILLION OTHER CUSTOMERS. If you joined at the same time as 100 fellow employees, the difference in the pool of risk is statistically insignificant, as you are still pooling risk with thier 1 million other customers.

Regarding Health Care...

Why should it make financial sense to me to buy health care that pays for every little doctor's visit, yet doesn't cover catastrophic events such as requiring an organ transplant?

Would you like to buy car insurance that covers routine maintenance but which doesn't cover being totalled by a drunk driver? "Oh sorry, you're not covered because you didn't disclose a pre-existing condition that your neighbor is a habitual drunk driver"

It makes WAY more financial sense to be covered for events UNLIKELY but FINANCIALLY CATASTROPHIC. That is exactly what insurance is supposed to be for.

I would like to buy some health care program that covers say, the first 6 family doctor visits (for prevention, which saves money) a year and then only covers anything over say, $5,000 per year. $5,000 of expense in a year would sting, but wouldn't bankrupt me. A $200k operation, on the other hand, would.

As far as I know, such a product doesn't exist; it ceased to exist after the HMO Act of 1973.

Lastly, there has not been much talk about addressing the spiralling cost of health care. You can't have ANY kind of sensible health coverage IF the costs are out of control. (This is another topic altogether)

The Sarbanes-Oxley Act
The Sarbanes-Oxley Act was a backlash against the Enron scandal. (It's a bunch
of new accounting rules). People think it's to reign in "corporate malfeasance".

  • It wouldn't have prevented what happened at Enron, because the accounting firm and Enron colluded, and the new rules wouldn't have done anything about it
  • What happened at Enron already broke a lot of existing laws
  • Enforcement of existing laws would have prevented Enron
  • The new rules make preparing accounting statements for companies hugely more expensive, giving much, much more business to accounting firms (THERE's the beneficiary of the act)
  • The new rules were drafted by, guess what - accountants
  • The additional costs to companies, don't scale with size - they are much more punitive to small companies than large ones.
It's a classic case of government regulation again favoring the giant corporations (and a special interest group).

The Patent System
The Patent system was originally intended as a means of rewarding inventors. Today getting a patent is expensive for an inventor working by himself. Not just that; a patent is only worth it if you can afford to defend it. Defending a patent means filing a patent infringement lawsuit, which is hugely expensive, even for corporations.

The patent system has been perverted. One company (typically a larger one), sues another for infringement, and the punitive damages go way beyond what a fair or typical licensing agreement would have cost. It is often used as a weapon to kill competitors. And of course, larger companies can more easily afford lawsuits than smaller ones. Sometimes the lawsuit is for infringing a patent that a smaller company is unknowingly violating, that is unrelated to their core product. Despite this, damages are huge enough to bankrupt the victim.

Sometimes a patent holder will seem to wait for a company to start making some serious money, then pounce with a lawsuit, instead of seeking out a royalty agreement early on. By waiting, the victim will have more money to confiscate.

Withholding tax
The law that says you get taxed before you get your paycheck, of course, means that if you work for a corporation, you will be a good little taxpaying citizen. Not to mention, most people overpay their tax, and get a "refund", which makes some people happy. What a joke. You just loaned your money to the IRS interest free. And if you underpay and have to pay a balance by April 15, you will likely have to pay a fine, and interest.

Can you imagine what would happen today, if instead of being taxed automatically, people had to write a check every month to the IRS? They would probably suddenly realize just how much the government takes in taxes and there would be a taxpayer revolt.

I'm not saying corporations should be dissolved - they have their place. Witness the technology that's been developed by corporations - such as the Hard Disk Drive, the improvements in Digital Cameras, Microprocessors, and Solid State Memory.

But, this relentless march toward Corporatism must be stopped. Laws being passed that favor corporations at the expense of the consumers and the middle class, must be stopped.

Wednesday, September 5, 2007

Ghost in the Machine

Here's an excellent blog post I found that agrees with my stand that the Republican and Democratic parties are TWO FACES OF THE SAME EVIL, and that the media dumbs down the populace with inane articles about Lindsay Lohan:

" the two-party system is the true cancer eating away at the heart of this republic. The notion that both sides have a grasp on absolute truth, politically and morally is one of the greatest lies perpetrated against the American people."