Kate’s Law: Smoke and Mirrors

Politicians are nothing if not predictable. Whenever a tragedy occurs they are all too eager to pronounce how their proposed law will ensure such things never happen again. Unfortunately this is never the case. Whatever “law” they have proposed, were it in place at the time of the tragedy, actually would have done nothing to prevent it. For example in the wake of the Newtown Connecticut shootings there were calls to ban “assault rifles” and increase waiting periods. Even if one is inclined to believe such measures can reduce violence they have to admit it would have done nothing to have stopped that particular shooting: no “assault” rifles were used and the perpetrator used the legally acquired weapons owned by mother (whom he killed to get at them). Perhaps a law that makes it illegal to kill someone and take their guns could have prevented that tragedy. Why has no one thought of that yet!

Another recent tragedy has sparked yet another wave of legislative inanity. The tragic death of Kate Steinle this past July in San Francisco by an illegal immigrant (an apparent accidental shooting) has prompted several new proposed laws in Congress, the most prominent one being “Kate’s Law” (of interest: no gun laws are proposed because the weapon used was stolen from a federal agent’s car and subsequently found in the trash by the shooter). This law seeks to increase jail time to a minimum of 5 years for illegal immigrants who re-enter after deportation. The suspect in the case (Juan Francisco Lopez-Sanchez) is a 5 time deportee. He has been described as a “convicted felon” but the only “felonies” committed are entering the US illegally after being deported as well as some low level non-violent drug offenses. A model citizen he is not, but he’s hardly Tony Montana.

People believe a 5-year sentence would have prevented this tragedy because he was released in March 2015 after having served 4 years for re-entering the US after being deported. So yes, I suppose technically had the 5-year minimum been in place this tragic shooting would not have occurred. But this is just playing games on the margins. Who’s to say had he been released 1 year later that the same thing would not have occurred then? People would be beating their chests for mandatory 6-year sentences! Yes, that will solve it. If extending jail time is an effective method to prevent violent deaths then why not also argue that all convicted felons (irrespective of immigration/citizenship status) have a year added to their sentence? Or two? Or ten? Or perhaps life in jail? There is no logical divide between “Kate’s Law” and a proposal for perpetual jail time as a method to prevent crime.

The real problem here is not the length of the prison sentence but rather a disconnect between the duties of local law enforcement and federal immigration enforcement (ICE: Immigration and Customs Enforcement). Legally Francisco should have been deported after his sentence was up, however San Francisco County denied the request to turn him over and he was released. This is where cities like San Francisco get the moniker of “sanctuary cities.” Unsurprisingly such simple labels do not tell the whole story. “Sanctuary cities” as such do not exist (in that they harbor actual violent criminals). Whenever a case involves an actual violent felon all such cities have complied with ICE requests for detention. But violent convicted felons who are also illegal immigrants are quite rare. Most immigrants who find themselves temporarily locked up are guilty of low-level misdemeanors or less. Local authorities simply do not have the manpower, resources or money to cooperate with ICE on every single arrest of someone who may possibly have a questionable immigration status. ICE basically expects local agencies to feed, house, and manage every single person they arrest who might possibly be an illegal immigrant while providing zero monetary compensation for such efforts. This is what is known as an “unfunded mandate.” And if the city does hold someone for ICE for days on end and they turn out to not be an illegal then quite often the city gets sued. Do you think ICE is there to help them defend against that suit? There’s no free lunch. If the Feds want help in enforcing immigration laws they need to pay for that help.

The irony here is that the Federal government poisoned our neighbor’s well and now feigns outrage when those neighbors come here to use our well. The US created this immigration “crisis” through their policies of agricultural subsidies that allow US farmers to dump cheap goods into Latin America. This destroyed those agricultural markets, put their farmers out of work, and ultimately leads to the unemployed looking for work in the US. Interventionism, whether domestic (subsidies) or international, always results in unintended outcomes (blowback). The solution is not more interventionism but to undo the original intervention.

July 28 / 2015
Author Greg Morin
Comments No Comments

I Don’t Hope

I have a confession to make. I play the lottery. Yes, I understand math implies I have a better chance of being struck by lightning than of winning the jackpot, but it’s only a couple of bucks a week and ultimately somebody has to win, so who knows. I reveal this dark secret in order to set the stage for a demonstration of the ineptitude of government agency running a business: The Georgia Lottery Commission. Although to be fair it would appear the Georgia Legislature had an equal hand in the stupidity I am about to reveal.

A few years ago the GLC actually did something beneficial for their customers, they added the ability to buy lottery tickets on line. You can buy nearly everything else on line, why not lottery tickets? The process itself was a bit convoluted, you couldn’t just pay with a credit card or Paypal, you had to open a pseudo-Discover debit card called the “iHope Card” that you had to first fund from a bank account before you could play. However the card acted like a debit card so you could in theory get at your money whenever you needed it. More on that later.

In the beginning the process worked well. Every 3 months I’d buy 26 draws of the same number and then not think about it for another 3 months. Click and forget, very easy. Occasionally if jackpots got huge I might pick up a few more tickets from the comfort of home. Unfortunately that has all ended. In the past few months either a new law was passed or the GLC simply got around to enforcing an existing law. The upshot is that one must now be physically located in the state of Georgia to buy a Georgia lottery ticket. This is where we enter the Twilight Zone. Only government would craft its business model around the ideal of striving toward FEWER sales and LESS revenue by artificially restricting its customer base. I thought the revenue raised by the lottery was for funding in-state education. If people in other states want to send money to Georgia voluntarily to help educate children here, exactly what is the problem with that?

In any event, in order to ensure this asinine edict is upheld the GLC implemented a new software check that attempts to determine one’s computer location based on a combination of IP address and local Wi-Fi networks. Sounds simple enough to the uninitiated, but for those who work in IT like myself it is evident that such an approach will be fraught with false negatives. I know because I was caught up in their net and became intimately familiar with the methods they are using. One must have two (or possibly many more, they really don’t know) Wi-Fi networks nearby (this cuts out anyone not living in a dense urban environment). Likewise, one can’t be running the Mac OS because the GLC software mistakes a core function of OS X (Remote Management) as something that might interfere in location determination (it can’t). The GLC even laughably suggests one buy a Wi-Fi extender to find more networks – that’s like suggesting one buy stronger binoculars to see better in the dark. GLC’s new motto: It is better that a thousand Georgians be inconvenienced than for one Alabaman near the border to buy a lotto ticket. Brilliant.

The second act in this drama gets even more interesting (all lawyers pay close attention to this one). Seeing as how I could not use my account to buy tickets on line anymore, I opted to transfer funds back to my bank account and close the iHope account. Alas, I soon discovered you are only allowed to transfer WINNINGS out of an iHope account to a bank account (this fact confirmed by calling support when I was unable to transfer all funds). Any money that you originally transferred to it from a bank account cannot subsequently be transferred back. So what’s the problem? Well, first, that is an idiotic artificial limitation, but secondly, that information is not disclosed anywhere. I scoured the account agreement (where it should have been) and do not see any mention of this fact. Astoundingly enough their website FAQ clearly contradicts their policy by stating that

 

“CAN I TRANSFER MY WINNINGS FROM MY IHOPECARD ACCOUNT TO MY BANK ACCOUNT? Yes. Transfer your winnings, or any funds originating from your bank account, to your registered bank account.”

 

Repeated attempts to inform their tech support their FAQ was wrong resulted only them parroting the FAQ back to me. I would characterize this blatant omission and ongoing contradiction of a material fact regarding how the iHope account functions as fraud. Any interested class action attorneys – I will leave you to it.

July 24 / 2015

Symbols

Shortly after the horrific Charleston church shooting an arrest was made of the execrable Dylann Roof. The media quickly set about digging into his social media resumé (as it were) and soon discovered photos where he is either posing with a Confederate flag or paying homage to the former flag of apartheid era South Africa. This man-child monster was a hater. He posed with things that (in his mind) were a reflection of hatred. Upon tasting something vile or bitter you immediately spit it out; that was the same reaction society had to everything (well, not Gold’s Gym) associated pictographically with this person (and I use the term “person” loosely).

There not being any strong historical connection in the American psyche with apartheid era flags attention naturally turned to the Confederate flag (or more properly the Confederate “battle flag”  – the actual national flag of the Confederacy resembled America’s revolutionary flag). For simplicity I will refer to it as “the flag.” This flag (until recently) flew in numerous places all across the American south, from both government property and private property. National attention quickly turned focus on this fact and demands were made that these flags be removed — permanently. If ever proof were needed that this flag was a symbol of hate we certainly had it now given Dylan Roof’s deployment of it as a backdrop to his angry-white-trash-loner memes.

As a white man with no cultural connection to the American south (as close as one can get to neutrality on this issue) I’ll offer my perspective. On the one hand, I have friends who I believe are truly sincere when they say for them the flag is not a symbol of hate, that it is a reminder of their heritage, in the same way immigrants might cleave to cultural symbology of “the old country”. For others it is a way to honor their direct ancestors who sacrificed their lives to protect their family from attack. These people are not closet racists just looking for a pretext to trot out passive-aggressive symbols of racism. But – I can see where the other side is coming from. After all, this flag WAS the battle emblem of a nation founded upon the principal that it is perfectly acceptable for one man to own another. Yes, secession was the result of many differences between the south and the Federal government but that doesn’t change the fact that the Confederate States of America’s constitution explicitly protected the practice of slavery. Saying the CSA was about much more than slavery, it was about a way of life, about state’s rights, etc. is all well and good, but that’s like a progressive/socialist arguing that the swastika should not offend anyone because Nazi Germany was about much more than just killing Jews… it was about deploying state programs to put people to work, swelling national pride behind a unified purpose of German greatness, and keeping people safe by outlawing private gun ownership – if but for the Holocaust that Hitler guy wasn’t so bad! (for the tone-deaf, this is sarcasm to make a point)

So to my southern friends I say this: yes, you have the right to display any symbol of your heritage you want, but you can’t feign ignorance about why some people might be offended or upset by it – the CSA’s pro-slavery stance has pooped in the punch bowl that is serving up symbols of your heritage. Sorry – feel free to commiserate with Hindus or Buddhists who had their beloved swastika ruined by the Nazi’s.

To all those that clamored, petitioned, and finally achieved the removal of the flag from state government grounds – congratulations. But now please stop. You’ve won. The movement is now getting ridiculous. People are calling for buildings, roads, and other public spaces to be renamed because they are named after someone who was openly racist, or who might have been racist, or who watched something racist on TV. People are even calling to have the corpses of former Confederate generals and soldiers dug up and removed from state-run grounds. People are also calling for the removal of the Jefferson Memorial because Jefferson owned slaves. Thomas Jefferson! They have a term for this: cultural genocide.

If the general rule used for honoring the dead is that that person never did or said anything bad or that might offend the sensibilities of someone in the future, well then I guess only saints need apply. Who shall cast the first stone? I dare say everyone who has done something memorable or praiseworthy also has had their share of dark moments. Let sleeping dogs lie and move on. You can’t change the past. It is equally important to recall the bad and the good in people – as the saying goes, if we do not learn from history, we are doomed to repeat it.

July 13 / 2015
Author Greg Morin
Comments No Comments

I’ll Gladly Pay You Tuesday – Not!

Jimmy enjoyed life. To more fully enjoy it Jimmy needed some money. Jimmy could have worked and saved and worked and saved – but that takes too long. Jimmy wanted to enjoy life NOW. So Jimmy borrowed money from Bob and promised to repay it later – he was a young man; he had plenty of time to pay it back. But Jimmy quickly burned through that loan and was unwilling to suffer the indignation of giving up his carefree lifestyle. So he asked to borrow some more – and he was given more, but at a higher interest rate that reflected Bob’s growing uncertainty about Jimmy’s ability to pay him back. This cycle continued for a while until the interest rate got high enough that Jimmy started to borrow less and less. Then came along Jimmy’s wealthier, older brother Timmy who agreed to co-sign all future loans with Jimmy. Knowing how wealthy Timmy was, Bob felt a lot better about his prospects for getting repaid, so he agreed to a lower interest rate. With this new found credit-worthiness Jimmy went on a binge of borrowing that vastly exceeded what he had done up to that point. This cycle of new Timmy-guaranteed loans continued until one day Timmy said “no more.” To help his brother out Timmy convinced Bob (owing to their strong business relationship) to take a “haircut” on the outstanding loans (that is, write down the amount owed) if Jimmy promised to get his financial affairs in order. Jimmy agreed and Bob complied. But after only a few years Jimmy was back to his old borrow and spend ways and Timmy and Bob had had enough. No more loans until Jimmy paid his loans on time. Jimmy was capable of doing this, but only by drastically cutting back his expenditures. Predictably Jimmy balked. He insisted he would not pay back anything unless Bob once again took a “haircut” and gave him more time to repay. The moral of the story? Don’t live beyond your means by borrowing from tomorrow to pay for today’s luxuries. Also, don’t lend money to those that obviously are unable or unwilling to repay it. This advice applies equally to individuals as well as to countries.

For those unfamiliar with the details of the current Greek debt crisis this little tale above illustrates in the abstract how Greece has behaved over the years. All the details are true, only the names have been changed to protect the innocent. Jimmy is Greece (Jimmy the Greek, get it?), Bob represents all those banks that have lent money to the Greek government over the years, first by buying Drachma based bonds and now EU-based Greek debt, and lastly, Timmy represents the EU itself. After the Euro was fully adopted in 2002 in the EU all member nations retired their national currency in favor of the Euro. The economically more productive countries imbued the Euro with a fiscal resilience that the economically weaker countries (such as Greece) have exploited. Like a reckless teenager using daddy’s credit card, under the Euro regime Greece has been able to borrow more and at a better rate than they ever could have under their Drachma.

Some have suggested if only the EU were more like the US Greece would not be in this bind. In the US the wealthy states subsidize the poorer states via federalized tax transfers (Social Security, welfare, infrastructure projects etc) without the poorer states “owing” anything. That, however, is in invalid comparison. Those are federal programs forced upon all the states. Greece is not in financial straights because of EU mandates. Greece is in trouble because of its own internal government spending. A more apt comparison would be the looming pension crisis in US states (e.g. California, Illinois, New Jersey, etc) where the governments of those states made promises to public worker retirees that are impossible to keep. Citizens of Georgia will be no more interested in bailing out Californian public sector pensioners than are citizens of Germany interested in bailing out a similarly profligate Greece. The pattern is universal in democracy: a gullible public showers with the most votes those politicians who promises them financial security with one hand by robbing their children’s piggy bank with the other.

Although we rubbernecking Americans may feel secure atop the perch of our SUV-sized economy while we idle past the spectacle of Keynesian-influenced deficit spending and Socialism that is Greece, our time is coming. When debt is measured in relation to a country’s tax revenue (that is, the ability to repay it) the US comes in third  – right behind Japan… and Greece. Be afraid. Be very afraid.

July 06 / 2015

Supreme Kool-Aid

The Supreme Court rendered two landmark decisions this past week. For those short on time I will parse them in the simplest of terms. In King v. Burwell (the “Obamacare” case) the Court decided that “established by the States” can mean exactly the same thing as “not established by the States.” This ranks right up there with Bill Clinton’s inability to parse the meaning of the word “is.” This linguistic pretzel betrays the court’s predilection to save Congress from themselves. The court regards Congress as a parent would a child who keeps getting into trouble: “aw, shucks silly rabbit, you mean you didn’t anticipate that a poison pill clause aimed at punishing the citizens of recalcitrant states might blow up in your face if those states remained recalcitrant? – well, don’t you worry, old Uncle Roberts will fix that right up for you with his magical judicial word-redefiner.”

In the next decision, Obergefell v. Hodges (the “gay marriage” case) the Court affirmed the principle that we should heap accolades upon our wise overlords when they deign to stop interfering in our lives. Apparently we need the state to stop other states from doing bad things – but who will protect us when the federal state does bad things? State regulation of marriage makes about as much sense as state regulation of healthcare.

Right about now the left is feeling pretty smug and self-satisfied with these decisions. But the right has had their day, and they will once again. That’s just how our system works – the lives of 300 million people must conform to the opinion of nine random people in black robes while each side cheers for their “team.” Both sides trumpet the merits of democracy – until their side loses. When that happens they are both all too happy to jettison the “democratic” results and substitute it with the opinion of 9 monarchs.

The fact that so many wait in eager anticipation for a sign of white or black smoke wafting from the judicial chimney of the Supreme Palace betrays something rather sinister. Nearly all of us are part of a cult: the cult of the State. The figurative “kool-aid” of state-love is doled out year after year at, gasp!, state run schools. There is nearly no defense against this mountain of propaganda. We grow up believing our rights come from government and therefore when the wise sages of that august institution speak, we must pay heed.

Consider a different perspective: The US Government is the functional equivalent of a private corporation that has monopolized certain segments of the economy. It maintains its market dominance and its customer base (us) through a combination of brainwashing during childhood, the illusion of control in adulthood (voting), and the for those that would rebel against paying for products it forces upon us, the overt threat of violence from a massive military complex. Cast in that light we should see that the internal policy making procedures of this company should have as much relevance to one’s life as would the operational policy decisions made at Apple, Walmart or Payless Shoe Stores. Who cares what 9 random people think? How is it that we not only allow – we welcome – other people, (the President, Congress, or the Supreme Court) telling us how to run our lives? If you want to participate in a socialized insurance system called “Obamacare” fine, be my guest. That has as much relevance to my life as does your decision to buy car insurance from Progressive and not State Farm. However, I choose to not purchase the products of U.S. Government, Inc – Social Security, Medicare, Obamacare. I also see no need to ask permission from one of its wholly owned subsidiaries (Georgia, Inc.) to get married, get a job, start a business or educate my children.

Now some might argue that I have a “social responsibility” to purchase some products (“public goods”) and that gosh-darn someone must force me to do so if I won’t. In reality, there is no such thing as “public goods” – this is simply a name that emerges from sloppy and lazy thinking from those that can’t fathom how anything other than violence could bring such products to market. And for those inclined to cite “the roads” please bear in mind it only constitutes about 1% of government spending.

I will close with this one tidbit of irony. The determination of the constitutionality of laws by the Supreme Court (“judicial review”) is itself unconstitutional. You can scour the Constitution but you will not find the authority for the court to engage in this practice.  This notion of “judicial review” was born out of the court’s ruling in Marbury v. Madison in 1803 as a matter of expediency and we’ve suffered the consequences ever since. That the dictum “the ends justify the means” guides this court’s decision should come as no surprise considering its power to render these decisions flowed from the same principle.

June 30 / 2015

Pope Francis: Lapdog of the Ruling Regime

The climate crusaders gained a “useful idiot” (look it up) in their cause this past week in one Pope Francis with the publication of his encyclical “Laudato Si’, On the Care of Our Common Home.”  Apparently the “settled science” and endless “climate shaming” over our “carbon-footprint” has been insufficient to motivate action (that is violence) at a global level – time to bring in the big guns: God. If people won’t listen to reason then let’s appeal to their sense of morality. And if that doesn’t work let’s just bombard them with vacuous nostrums that would embarrass even Deepak Chopra . Writing in his encyclical the Pope states, “There can be no renewal of our relationship with nature without a renewal of humanity itself.” Flowery prose about a collective (“our”) that exists only as metaphor underscores how our “leaders” perennially view humanity not as individuals but rather as mere clay to be pushed, prodded — and trimmed — as needed in order to reshape the world according to their vision.

As a Catholic myself (this statement now giving me a pass on the anti-Catholic label) I am dismayed by this Pope’s proclivity to not only issue papal pronouncements on issues he is ignorant of (e.g. economics, the climate) but to deliver those messages wrapped in an unabashedly pro-state and curiously un-biblical package. This Pope (and Vatican) have spewed a mountain of anti-capitalist rhetoric over the past few years that entirely misses the mark as to the cause of rising wealth inequality. It is entirely the result of big government and central banks colluding together to inflate the money supply and not, as he says, by “ideologies which uphold the absolute autonomy of markets and financial speculation.”  This is no mere pontificating on the dangers to the soul of single-minded pursuit of wealth, no, this is full on promotion of Marxist redistribution of wealth. For example from the above quote he further endorses, “…the right of control [of financial resources] to States…”. When he spoke to the UN last year he invoked the parable of Zaccheus as a way to justify the use of “political agents” that can force the “legitimate redistribution of economic benefits.” Wow. I wonder if he wears a Che Guevara t-shirt under that robe.

The Vatican even promotes the concept that evading taxes is equivalent to “stealing” from the state and the poor (because of course it’s all the state’s to begin with and their sole job is to help the poor).  I’m not sure which version of the Bible Pope Francis is reading, but in my version Zaccheus (the selfish tax collector) VOLUNTARILY chose to give to the poor. Jesus didn’t say “do this or else I’ll send the Roman guards after you”.

To underscore this Pope’s preference for state action, his new encyclical distills the fight against climate change down to a simple message: governments everywhere have a moral duty to fight climate change. Yes, you read that correctly. Fighting climate change is now a moral imperative for all mankind. The unique thing about this new flavor of “morality” is its ambiguity. Traditional moral issues (murder, rape, theft) are pretty straightforward: don’t do them. As long as I don’t murder someone, I have upheld that moral edict. But “fighting climate change”? How do I uphold that? What exactly am I supposed to do? If I drive a car that gets 30 mpg am I violating a moral tenet but not violating if it gets 40 mpg? Shall I get rid of my air conditioner (as Pope Francis has actually suggested!) in order to get in God’s good graces? Or should I just follow like a good little subject the climate edicts of my government… which may change with the prevailing winds of the latest computer model. This ambiguity should be more than sufficient to indict its moral status.

The Pope should indeed be promoting ideas of charity, peace, forgiveness, tolerance, and good stewardship. But to then endorse the authority of the state to impose these virtues upon the population is to utterly reject God’s message of salvation via the gift of free will. He gave us free will in order to allow the individual to make his or her own choices (choices which may or may not eventually lead to salvation). Apparently this Pope’s message is, “Do the right thing, but if you don’t, that guy over there (the state) will make sure you do.”

It is absolutely astounding that a Pope would make not just one but two gross theological blunders. First to cloak an ambiguous political issue in the vestments of morality and second to endorse the sacrifice of God’s gift of free will upon the altar of state sponsored utilitarianism. I don’t know whether to laugh at his brazenly sycophantic parroting of regime talking points or to cry for the untold billions that will die in the coming decades due to artificial constraints on energy production and economic output if the chicken little doomsayers like the Pope get their way.

June 24 / 2015

Too Much Choice

Bernie Sanders, the (self-described) socialist Senator from Vermont recently quipped in a CNBC interview that “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country.” The absurdity of this remark should be self-evident, but for those that think perhaps he has a point I thought it might be instructive to deconstruct the remark so as to reveal the base ignorance of economics and markets that lead to such thinking.

The first flaw is purely a logical one. He engages in what is known as a ‘non-sequitur’ fallacy. A true claim is made (that numerous choices exist in the market) followed by another claim (children are hungry) that supposedly is a causal result of the obviously true condition already stated (too many market choices causes children to be hungry). To more clearly illustrate the absurdity of this remark, let’s modify it slightly while retaining the spirit of his rhetoric: “You don’t necessarily need a choice of 23 types of cereal or of 18 different vegetables when children are hungry in this country.”

Marxist romanticists like Sanders still pine for a past that never was in order to justify a future we should all fear.

This notion of wasteful duplication is unabashed Marxism. It has been thoroughly debunked by over one hundred years of empirical evidence. To make this claim today is tantamount to pondering if perhaps we shouldn’t rethink this whole “earth goes around the sun” thing again. Market based economies that “allow” their citizens to pursue their own independent ends in bringing goods to the market have vastly outpaced centrally controlled command-driven economies (Russia, Cuba, North Korea, former Eastern block countries) in terms of growth, overall standard of living, and reductions in poverty. But Marxist romanticists like Sanders still pine for a past that never was in order to justify a future we should all fear.

Why do some persist in subscribing to this fantasy, that if only a wise overseer could have the final say on economic activity we would have Utopia on earth? Because on an emotional level (that is, non-thinking) it feels superficially plausible. It certainly does seem like a lot of wasteful duplicative effort for many people to all make the same good in slightly different ways and then try to sell that good to the same people. Indeed when companies merge they can become more efficient by eliminating such duplication. What Sanders is actually implying (unwittingly?) is that all businesses ultimately should be merged into a single entity so as to remove all such inefficiencies. Of course this single entity would be run by the state. That hasn’t worked out so well in the past. But hey, maybe this time they’ll get it right.

In reality, we already have a centrally planned economy; every business is individually centrally planned by those running that business. It is also true that any business that directed all employees to perform the exact same task would quickly fail. So if central planning without effort duplication works at the small scale (individual business), why would it not work at the large scale, as Mr. Sanders imagines? Scaling effects and limits on human cognition. A business with 100 employees is more than ten times complex than one with 10 employees. At some point it is simply impossibly for the human mind to manage such a complicated system. We are simply incapable of processing that amount of data and making any sort of useful decisions with it. Indeed that is the biggest challenge for any growing businesses; effective management that ensures all parts runs smoothly and work together as a cohesive whole. It is far easier to manage 5 employees than 5 million. At least in the market if a large business is poorly run (and is not bailed out by the state) losses each year will tell them they are doing something wrong. In a state run economy there is no profit/loss test to tell the state they are doing it wrong; it will just merrily go about walking straight off a cliff

The amazing thing about the market is that all of these smaller parts work together in a cohesive whole without any market level central planning – it’s simply not needed. What some view as wasteful duplication is in fact a discovery process. Bernie might as well complain about all those drug researchers wasting time with experiments that go nowhere. Why don’t they just invent the drug that works from the beginning? The market operates like a science experiment. No one person can know ahead of time what is the best computer, cell phone, deodorant, or toothpaste. Many experiment with variations and then subject those experiments to the market test. A positive result equates with profit and a negative result equates with losses. The system is a self-reinforcing feedback loop that retains what we want and removes what we don’t.

So yes Bernie, we do need those choices. We all have the right both to offer whatever we want to the market and to vote with our dollars on what we will consume from that same market. Seeing as how you are not an omnipotent being, you and the state have no right to restrict those choices in any way.

Red Card!

This past week one of my neighbors was arrested by our Homeowners Association for accepting cash in exchange for allowing mere acquaintances of their son to attend his birthday parties. The HOA felt that this base corruption might reflect poorly on the neighborhood. Oh, wait, that didn’t happen. I got that confused with the fact that the U.S. government had several officials from FIFA (an international body governing soccer (or football in the rest of the world)) arrested for apparently being “corrupt” and accepting bribes because on occasion the bribe payments happened to transit U.S.territory. The parallels are uncanny. A member of a private group violated an understood trust relationship established amongst members of that group. An outside third party then felt it was incumbent upon them to throw that violator into a cage because, well, I don’t know why – it’s really none of their business in either scenario.

The FIFA members are accused of committing “crimes” that either have no victim (money laundering) or which are entirely internal conduct matters (bribery). Murder, rape, and theft – sure, feel free to get involved. But I fail to see how simple misconduct or boorish behavior rises to the level of a compelling state interest. The flip side to this corruption scandal that has so far gone unnoticed is that for every corruptor there is a corrupted. That is to say, aren’t the high ranking government officials who paid the bribes out to these FIFA officials just as culpable? That is precisely the area a state body should investigating; the corruption of its own members.

Corruption is not a crime. Corruption is a contract violation, or more specifically, a trust violation. Party A entered into a contract with Party B whereby Party B is to act in the interests of Party A. Trust violations typically occur when there is no unobtrusive way to ensure Party B is always acting in the interests of Party A. For example, if the electorate puts a politician in office to further the interests of the community but instead that politician accepts bribes and acts contrary to said interests, this would be corruption. Should that be illegal? Should that politician be locked in a cage? Or is it not a better solution for the electorate to “fire” them immediately and take back whatever gains he may have acquired? Likewise there can be corruption in a private organization such as a business, club, church or any other similar group. If an employee takes bribes to swing business toward some particular vendor, then the employer-employee trust compact has been violated. That is a dispute between the employer and the employee. If a CEO takes bribes in order to drive business in a certain way, that is a violation of trust between him and the board of directors and ultimately the shareholders. These are all strictly private matters.

The apparent open secret of widespread corruption by top FIFA officials is certainly nothing to cheer about – but it is not a crime. It is a violation of trust that harms the name of FIFA and thus by extension all who are members of FIFA. It is these members that should be pursuing their corrupt brethren, not the US Government. Some might believe that cities that lost out on World Cup hosting bids due to corruption are victims as well, but that is not the case. Such cities are no more a “victim” than is the loser of several men competing for the affections of a single women because the “winner” lavished the women with extravagant gifts. The recourse of a losing city is the same as the recourse you or I have when we discover someone does not deal fairly – refusal to associate. If a friend, associate, or business lies to us, then we can cut them out of our lives. Good riddance.

It is in the interests of FIFA to clean up its act. They may soon find that many cities will no longer trust them and will simply refuse to participate in future FIFA events. This will erode their market dominance and thus the price they can command for participating. If they don’t reform themselves quickly then this corruption will open the door to a new, and better run, organization that can take over FIFA’s role. However, the fact that this corruption has apparently been going on for well over 20 years suggests that perhaps a mountain is being made out of a molehill. We shall see.

In any event, the arrests this week should serve as a reminder of the overpowering arrogance of the U.S.government. They have in many respects taken on the mantra of the One World Government. It exerts its dominance globally both militarily and legally. It can establish whatever arbitrary rules it wishes and then enforce such rules with virtual impunity upon any person, anywhere on the planet at any time. Let freedom ring.

June 02 / 2015

Restore Our Freedom

This Memorial Day weekend we are once again drowning in a sea of reminders of what this holiday is truly about; honoring those servicemen and women who have sacrificed their lives in pursuit of protecting our “freedom”. Memorial Day has become the secular state’s equivalent of Easter in the de facto state religion: the Church of the State. In this new religion we worship icons (the flag), we beatify the saints (former presidents) but above all we worship those in the military who involuntarily (the draft) or voluntarily sacrificed their lives upon the altar of the state. They, like Jesus through his death, gave us a gift – in this case it is the gift of “freedom” rather than salvation. Unfortunately the myth of that gift is a lie. This lie allows the political class to maintain their hold on power by simultaneously convincing the noble to serve and the gullible to vote.

Now don’t get me wrong, those who have given their lives are indeed worthy of remembrance and respect. It is the rare individual who will sacrifice not for just his own kin, but for strangers he has never met. Such men and women are true heroes. What I am addressing is the monstrous lie our own government deploys every time they send these brave souls into harms way. To those in government, the citizenry is but mere fodder, to be disposed of with as much regard as one has for Kleenex when blowing one’s nose. Ever since the draft ended (and we stopped forcing young men to kill others at gunpoint) a false narrative has been spun in order to convince those of noble hearts that they are participating in something grand, something larger than themselves, that they are securing “freedom” for their fellow man.

Although superficially plausible (the military protects our freedom) ask yourself, when is the last time this country engaged militarily with anybody that was actually threatening to encroach upon our “freedom” as it were? Was North Vietnam preparing to invade Florida? Was Saddam Hussein ready to roll into Delaware? Yes, I see you there in the back of the class with your hand up going “ooh, ooh, ooh” just busting to remind us all of Hitler or Pearl Harbor. Surely those are example wherein our military protected our “freedom”. Pearl Harbor falls into the same category as 9/11; situations where the passive-aggressive interference of the US (e.g. economic sanctions against Japan, US troops in the middle east) were the direct and proximate cause of these supposed “first strikes” that were in fact counterattacks. That is not “blaming America” to recognize this fact – but it is indeed blaming our politicians who provoked these events. Their recklessness resulted in events that caused us to sacrifice so many needlessly. But seriously, does anyone think Germany or Japan could have invaded and taken over the entire continental United States? Please.

Every military situation this country has been involved in owes its genesis to some initial act by our own government. Even the rise of Hitler is directly traceable to US involvement in World War I (thank you Woodrow Wilson!) insofar as our strong hand during armistice negotiations table made the onerous treaty of Versailles possible. This lopsided treaty punished Germany so harshly it set the stage for Hitler’s rise; absent that treaty Hitler would have remained a bitter nobody.

If we truly wish to honor those troops that have given their lives, we too must fight. We must fight to elect those that promise to pull our military back to our shores and end our ceaseless meddling in the internal affairs of other countries. The biggest threat to our freedom is not from some foreign invader but rather from our own government. We are fast on our way to becoming a 100% permission based society. Consider what freedoms we have already lost and then consider the irony of thanking veterans for protecting these dwindling “freedom”: we must ask for permission from government to get a job, take a drug, start a business, pay an employee, sell alcohol, cut hair, sell any product, teach our children, by a gun, carry a gun, buy health insurance, board a plane, leave the country, enter the country, get married, or leave belongings to loved ones when we die. Likewise no permission is needed from us if the state wishes to enter our homes, cars or persons, guns drawn, looking for “something”. “Papers please!” cannot be too far behind.

So I say to the troops, if you really want to protect my freedom, don’t do it rolling around in a Humvee in some dessert somewhere. Do it by getting yourself elected and being part of the turning of the tide on government trespasses against our freedoms.

Boulders in the Stream

The surety of the law of unintended consequences proceeding from state legislation is as steadfast as the law of gravity. Emblematic of this axiom is the massive drop  off (down 40-60%) in book sales in Israel this past year after the passage of a law intended to bolster book sales, protect small book sellers from “big chains” and of course guarantee a “living wage” to authors.  To those ignorant of basic economics and human behavior the terms of this law might appear reasonable. It guaranteed authors 8% of the sales of the first 6,000 books sold and 10% of all books thereafter while simultaneously criminalizing the discounting of books during their first 18 months of sales. Supposedly this would help the underdogs: small booksellers and new authors. Ironically it does the exact opposite. It is the unknown author that has the greatest incentive to discount heavily in order to entice someone unfamiliar with their work. It is small book sellers that are most likely to haggle or “make a deal” when someone makes a substantial purchase.

Sadly Israel is not alone in this sort of book market meddling. Quite a number of other countries (mainly in Europe) have what are known as “fixed book price agreements” type laws. These are “resale price maintenance agreements”, commonly used in the US on a voluntary basis between vendor and customer, codified into law and backed by the state. In the US if company A wants Vendors B-Z to sell a widget for $1 and Vendor D sells it for less, then the solution is simple: company A just stops selling to vendor D. But in countries where such agreements are enforced by the state, vendor D can be fined or jailed. Let that sink in: jail time for selling goods “too low.” What monsters.

The usual defense of these laws is the same tired protectionist propaganda deployed whenever an entrenched business model is threatened by a new competitor: we need the state to protect us from “unfair” competition. “Unfair” being code for “somehow these people figured out how to sell the product I’m selling for a lot less and I can’t figure out what they are doing or I’m unwilling to change my business model to compete”. For example France has a “Lang Law” which permits book publishers to set the price of the book and then forbid anyone from selling it for less than 95% off the cover price. Fast forward to 2014 and a tweak was added to this law that was targeted at Amazon.com who was both discounting their books 5% and offering free shipping. Apparently selling books into the French market for the exact same price as French bookstores is considered “unfair” if the seller is a ‘foreign’ company.

So what we have here is a real world economics experiment, akin to raising the minimum wage to $50/hour. Israel has, in effect, dialed in the $50 option on book price fixing laws. While many countries have such economic interventionist type protectionism only Israel elevated theirs to stratospherically inane levels. From this we saw quick and clear signs of damage (just as we would if the minimum wage were raised to $50/hour). However, just as with the minimum wage laws, there still exist damaging effects in those countries with more “moderate” protectionist schemes such as France. It is perhaps apropos that a French economist (Bastiat, 19th century) speaks of the “unseen” damage wrought by market interventions.

If the demand for books is inelastic then to the extent book sellers earn more, the sellers of other goods earn less, while on net the public receives fewer goods for money spent. If the demand is elastic then book sellers earn less and other vendors earn more but the public still receives fewer goods. Indeed, the Israeli example demonstrated the elasticity of book demand. After their law went into affect, book sales went down and toy sales went up (as parents passed over high priced books for more affordable toys).

The fatal conceit of the politician is the belief that they can control nature (man) by dictate: people want they want and laws are like boulders in a stream  – it may slow, but it will not stop the flow of water.

%d bloggers like this: