Redrawing Democracy Again

The earliest posts on this blog are a series I had written on an even earlier blog (my old xoom.com site which no longer exists) on a blueprint for an entirely new kind of government. Nearly a decade has passed since I originally wrote these essays, and I've continued to put a lot of thought into the subject over that decade.

That original plan suffered from severe complexity issues. I've also learned a lot more about economics, delving deeply into both Austrian economics and Geoist political economy. Finally, I have, in the interim, pretty much completely lost my faith in what many of the founders (United States) referred to as "parchment barriers" (bills of rights, lists of enumerated powers, etc.) to contain the abuses of government... but I've also been finding other methods. Over the past month or so, my thoughts on the subject have begun to gel into something coherent.

This, over the next few months, I will be posting to this blog again. I will try to keep the articles short and purely descriptive, leaving the theory behind it and my predicted outcomes for a longer work I intend to publish at some point in the future.

Can the President order assassinations?

While I am displeased by the spinelessness of the Judicial branch when faced with a matter of "national security" these days, ironically enough I do believe it is possible for the President to indirectly authorize the assassination of any person he pleases... without any violation of the Constitution. I'm not saying he SHOULD do this... merely that he can. The political fallout would be what it would be, and Congress could use it's constitutional power to impeach every bit as arbitrarily if they chose to do so... but while it may be politically unsafe for the President, it can be safe for the trigger man.

Here's how it works:

1. The President secretly confers with the trigger man. At this point, the President steps out of matters entirely for the time being.

2. The trigger man does the deed, committing an act that, legally speaking, is murder.

3. Someone charges the man with murder, and he is tried, convicted, and sentenced.

4. The President issues a pardon.

Now, I'm not complaining that Anwar Al-Aulaqi is dead; the fact is, the man most likely needed killing. I'm also not necessarily complaining that the President is getting away with it. However, I am very disappointed with the courts for refusing even to hear the case, basically saying that it is legal for the President to have anybody killed that he wants. They ought to have convicted the people involved in what should be interpreted as an illegal order, forcing the President to use his power to pardon for the exact purpose Alexander Hamilton suggested it should be used years ago. Congress can then sort out whether they think it was appropriately immediately, or the electorate can do so next year.

Silver and Gold

I keep reading "silver is the sleeping commodity!". "Silver has the potential to rise x percent!" "Buy silver, you won't regret it!" Always this is predicated on the fact that the ratio of prices of silver to gold are at a historic low. And this is true. But does it necessarily matter?

I'm thinking "no." The problem is that gold and silver are used differently than they were historically. Prior to the twentieth century both were money: silver for the average person, gold for people moving larger quantities of value. During the early twentieth century, silver was not money per se, but coins were still made from silver, though they were valued at a considerably higher rate relative to the dollar (in gold) than they were worth on the open market. Once the dollar was decoupled from gold, of course the silver price had to rise relative to the ever expanding dollar, and ultimately had to be abandoned as the material of choice for coinage.

Today, silver is not money. People still use gold as a store of value. Central banks still use gold as a store of value. In the face of a changing world monetary system, in which the U.S. Dollar can no longer be relied upon as a reserve currency, central banks and individuals are using gold as a store of value more than in the recent past, and this trend will probably continue. But silver? In an era when even paper money is giving way to electronically transmitted credits, I sincerely doubt silver will return to a monetary role, not to any appreciable degree, anyway. I believe the prior advantage of silver was that it could be used for smaller transactions than gold, and had many of the advantages of gold to a lesser degree. Paper and electronic credits have completely replaced silver in the "small transactions" world, even in places that completely lack a government, like Somalia. Of course, this could easily change were the world's political system to collapse in a violent and lasting fashion and paper and credits became unreliable in the chaos that followed... but if this happens I sincerely doubt the lack of silver would be the greatest of one's problems.

That isn't to say I don't believe people that don't own any silver shouldn't buy any. It's probably a good idea to keep some small amount around "just in case". But while gold retains a monetary function and will likely continue to do so, I don't see silver doing so. I believe the historic lows in the silver-to-gold ratio is not the result of sleeping investors. I believe it is the result of fundamental changes in demand for the two metals. Gold retains a monetary demand in addition to its industrial and luxury demand. Silver does not.

Animal Spirits Pt. 4: Conclusion

Having finished this book, I can say I do like what I've read. Certainly I don't agree with every conclusion they've reached, nor do I agree with every analysis. But their approach is certainly more valid than the approach made by even the standard economics stories I'm familiar with. In a way, by acknowledging the fact that individual and cultural variations make most dry quantitative approaches to economic study less than helpful, their approach has more in common with the approach promoted by Ludwig Von Mises than that of those labeled Kensian and Monetarist.

That's not to say they are the same. Where Mises described a discipline that stuck to exploring the structure of logic that can be built upon certain basic, knowable facts (including the fact that human motivations are infinite and complex), Akerlof and Shiller explore the impact of specific psychological and cultural information on economic analysis. Indeed, were one to engage in a multidisciplinary approach that deliberately combined Misesian praxeology with psychology and cultural studies, it would likely look something like this (assuming the reader can accept that "Misesian" and "Rothbardian" are not necessarily the same, and that two people can attempt the same approach and, thanks to the role "understanding" plays in the comprehension of complex phenomena, can come to different conclusions). I can only hope their ideas have some effect on the overall profession.

So this book is a starting point, though I suspect there is a hurdle the authors are not anticipating. They speak of the role of "animal spirits" (and yes, they are using the term in the fashion I had hoped when I wrote Part 1) in shaping the overall economic and driving economic events. They say government regulation is an appropriate remedy to the excesses that can be caused by these "animal spirits". The question then becomes: how do we get appropriate policy out of the government? For it is not only the overall economy in which "animal spirits" plays a role; it is also in politics, and administration, that human motivation plays an important role.

In other words, would would be the result of applying "animal spirits" theory to public choice theory? For the government isn't a machine that inputs information and outputs policy: it, too, is made up of human beings with diverse motives. It, too, suffers from the effects of a confidence cycle, corruption, notions of fairness that may or may not be good for the overall output, changing stories, and other things identified as "animal spirits." Any policy recommendation resulting from an analysis must take this into account as surely as the original analysis must.

Animal Spirits Pt. 3: Natural Wage Theory, Money Illusion, and Wages

I just finished reading Chapter 9 of Animal Spirits. Now I see the point of criticizing Natural Rate Theory. I mentioned in an earlier installment that I suspect that, over the long time, wages will tend to track inflation, but lag behind. Akerlof and Shiller appear to be saying that this is precisely the point. Steady inflation holds wages at a lower level, one which allows a lower level of unemployment. Employers can grant employees raises for the financial purpose of keeping it in line with the purchasing power of money, while still giving the employee the feeling that they are being rewarded for their efforts. In the absence of inflation, the employer can't afford to give so many raises, the employee feels he's not being treated fairly, and worker productivity falters. So, in their analysis, because of money illusion and fairness, a certain level of inflation is required to keep productivity up.

Outside factors they failed to take into account (which I will get into below), I can find no fault with their analysis. Particularly in a world in which people have, over multiple generations, come to regard raises as a regular obligation, perceived unfairness (that very phrase is redundant, given all fairness is subjective) could well result in productivity losses in the absence of inflation-motivated raises.

Of course, this likely leads to the recommendation that a level of inflation should be maintained at all times. Further, it makes something like a commodity money seem untenable. However, there is something else to put into the analysis: the credit cycle. Wages are downwardly rigid, therefore deflation can damage employment levels, as falls in wages fail to keep pace with falls in other prices. But what if "fractional reserve" banking were abolished, and therefore the bank created inflation that ultimately leads to deflation never occurred in the first place? The downward rigidity of wages could become irrelevant, in this scenario. But then, it could also lead to an extended (possibly multigenerational, meaning it would be politically unsustainable in reality) period of adjustment, until people finally realized psychological satisfaction is not going to come from making the numbers bigger.

It's a big hurdle to get over. From a strictly logical standpoint, wages generally rising over time, but lagging behind prices is not as good for workers as wages falling slowly but lagging behind prices. But falling prices, though it is good for a person whose wages have not yet fallen, is an impersonal phenomenon. Rising wages, though, feel like a personal reward, even if the employer is only keeping the wage in line with rising prices, and even lagging behind. The gradual price drops of a stable money supply may be better for workers materially, but rising wages, even insufficient to cover rising prices, are more emotionally satisfying.

Were it not for the dangers inherent in a fiat token-based (whether paper or digital) currency (which we are seeing today, as the results of bad monetary policy hit the economy like a hurricane), a fiat currency would definitely be better... IF the money supply expanded evenly. Unfortunately for fiat money supporters, it does not. Industries grow beyond what they should because of investment bubbles, and then people lose their savings, workers lose time building knowledge and experience in bad industries (not to mention their jobs for no good reason), people lose confidence (which the authors just spent a chapter talking about). I'm presently convinced the negatives of fiat money and an inflationary policy outweigh the negatives.

That, and I have moral difficulties with the idea of a monetary elite making things better by deliberately deceiving laborers.

Worst Case Scenario

It occurs to me the world could actually end (or rather, begin to unravel) in 2012. This has little to do with Mayan calendars and what not, and more to do with the potential consequences of the unraveling of the final bubble, the bond market. In the late nineties bubble money fled from the stock market on the wake of the tech boom, into the real estate market. Real estate collapsed, and bubble money has fled into gold and bonds. What will happen when the bond market collapses? Will the gold market collapse?

2012, the bond market collapses. Many, many businesses find themselves unable to roll over their debts, and aside from those businesses politically connected enough to receive the next round of bail-outs, many businesses fail, and unemployment doubles, at least. The government rolls its own debt into a much higher interest rate, and debt-servicing beings to swallow a majority of government revenues. Those who continue to work pay out ever more taxes to finance the debt as services are reduced.

The tug-of-war over public funds intensifies to something more like a real war, as those with wealth held in treasuries pour enormous amounts of money into the political system to ensure that the idea of repudiating even a portion of the debt never sees the light of day. This further corrupts the two-party system, as increasing numbers of Americans come to realize they simply are not represented, and find any efforts to change this thwarted by the rigidity of the two parties, in the thrall of all this political money.

Riots break out at various places and time over the government's increasing inability to pay out social security, medicare, and other welfare "entitlements", the political system mostly denied to them. The democratic system begins to break down. Radical cutting of military spending results in a combination of large numbers of unemployed, militarily trained young men and resentful elements of the former military-industrial complex. Brigandry and the necessary government response (which brings many military suppliers back into the money stream) result.

This occurring all over the world, the largest country without debt problems, China, begins the process of establishing hegemony over most of Asia, and carving out sizeable spheres of influence in Africa. Most of the mainland countries fall into China's orbit without complaint. Russia and China maintain a low level of conflict over spheres of influence in the central asian countries between them. Violence erputs in Taiwan between pro-Washington and pro-Beijing forces, and China moves in to forcibly re-establish order. Either this, or a war between China and Japan, trigger war between the United States and China. The war is brief, and the US leaves just as quickly as it entered, as the American economy finally collapses completely under the strain, governments collapse with it, law and order collapses, all vestiges of civil society collapse, plunging most of the Western world into a new dark age. This assumes nuclear weapons are not a factor.

Even without them, the total break-down of the division of labor in the Western world results in a severe drop in the efficiency of the use of natural resources... resulting in unmitigated environmental disaster as people desperately try to survive in the absence of a functioning market, concerning themselves more with day-to-day survival than long-term viability.

All of this begins with the collapse of the bond market bubble. Stocks can collapse, and we're okay. Real estate can collapse, and still we're fine. But when the bond market collapses, it will affect the ability of the government, itself, to meet its own obligations.

Animal Spirits Pt. 2: Money Illusion

I am unfamiliar with the term "money illusion", but from what I'm gathering from this chapter as I read it, this refers to the failure by many people to account for changes in the purchasing power of money in their financial planning. In short, the term "money illusion" is kind of like the inverse of another term I am familiar with, "Neutrality of money". Most economists operation under the assumption that money is a neutral medium of exchange. Akerlof and Shiller, in advocating a return to the idea of "money illusion", appear to be saying something similar to what is said in Misesian circles: that money is not neutral.

As evidence of this money illusion, the authors point out that the vast majority of labor contracts fail to include wage increases to account for cost-of-living increases. In other words, in the vast majority of cases, workers bargain in monetary terms, not in "real" terms. But, there is another explanation other than "money illusion". It could be that both sides are simply less concerned with future prices than they were with current prices. The workers want to get as much as they can right now, gambling that future negotiations will enable them to keep up with the costs of living. The employers want to avoid built-in cost increases, and gamble that future negotiations will enable them to avoid excessive wage increases. Since nobody can truly predict the future, neither side can effectively negotiate in terms of future wages.

Then again, that whole argument could be the same thing as "money illusion". I'm still not sure what it means, exactly.

Still, if it is true that, as Akerlof and Shiller assert, conventional economists (I suspect they are referring to monetarists here) actually make the assumption that people see through the veil of inflation naturally... I weep for the profession. I suspect, however, that there is more to it than this.

In the sort term, of course many people are going to fail to account for inflation. People differ in their degree of financial savvy. Furthermore, people who maintain minimal savings have little to lose from inflation (aside from wage erosion, but those are not entirely under their control in the first place), and thus have little incentive or opportunity to think in terms of inflation. So if monetarists, when they say people behave "rationally" and "see past" inflation (in the authors' words), actually mean people are smart and know about inflation... obviously they fail. Hard.

However, though wages for unskilled labor will always tend to lag behind inflation, they will also tend to track inflation, quite in spite of the worker's lack of knowledge about inflation. For workers are not aiming at a specific level of "real wages". They are simply trying to get as much value out of their jobs as possible (including money, but also including such intangibles as job satisfaction, job security, risk aversion both physical and psychological, etc.). Likewise, their employers are not trying to maintain some specific "real value" in their wage rates, but are rather, day to day, simply trying to get as much value out of as little money as they can. Inflation is entirely irrelevant in this calculation, so long as both parties are dependent on that third, unassailable economic force: the consumer, who is simply trying to get as much value for as little money as possible, also. (Most labor contracts I am familiar with that include COLAs are those of government workers, such as teachers, who are not dependent on the consumer, but rather the taxpayer and the voter; entirely different incentives apply.)

So as workers move from job to job, they will tend to go with the highest bidder, regardless of who that is. Someone who fails to get a raise he thinks he deserves may attempt to move to a different company. A company that finds its wages too high and finds themselves unable to lower those wages will tend to look for excuses to fire overpaid workers outright, replacing them with new workers with whom they can negotiate lower wages. Whether either party will be successful is ultimately not up to either the employers and the workers, regardless of whether or not they "understand" inflation, but to market conditions as dictated by the consumers.

However, "money illusion" will still tend to skew the economy. Downward wage rigidity is part of this. Consumer resistance to price rises is another. The "wealth effect", in which people tend to spend more when the monetary value of their assets rises despite the unchanged form of those assets, is another. All these forms of resistance will ultimately crumble in the long term, as market realities force reassessments; however, these "money illusion" phenomena do tend to transform what should be gradual changes over time into sudden and traumatic lurches, which skew perceptions and beliefs even more.

At this point in the book, the authors have failed to point out the source of money illusion. Some changes in prices simply reflect changes in consumer disposition: a price for one thing drops because consumers value it less today than they did yesterday, or because costs in producing this good have dropped; a price for another thing rises, because consumers value it more today than they did yesterday, or because production costs have risen. However, when ALL prices rise, it can only be because consumers value the money, itself, less today than they did yesterday, OR because the supply of money itself has risen. And there is only one entity with the power to increase the money supply to the degree it has over the twentieth century: the State. This "illusion" is not a natural phenomenon: it is man made. I hope to see Akerlof and Shiller point out this fact later in the book.

Animal Spirits

A friend of mine and I occasionally discuss questions of politics and economics. He recently read George A. Akerlof's and Robert J. Shiller's Animal Spirits. At his recommendation, I am also reading it. Of course, I can't help but read it from the Misesian perspective I've been absorbing as I read through Von Mises's Human Action. I'll be using this space to comment as I read through.

I just finished the introduction. So far, I have only two problems with the text. The first is the implication that the Classical model of economics (which Akerlof and Shiller are calling "traditional economics") was somehow the last word in economics before the entire profession was awakened by first the Great Depression and, today, this recent series of closely followed crashes. This is not true, as in both cases there were those who successfully predicted the events (and were at the time universally derided for it). Ludwig von Mises, for example, successfully predicted the Great Depression as the inevitable result of Federal Reserve policy during the "Roaring Twenties." More recently, Peter Schiff, a follower of the same set of ideas, called this recent recession several years before it materialized.

There are similarities between the Misesian approach to economics, and the approach proposed by Akerlof and Shiller in this book, which brings me to the second problem I have: the terminology the authors chose to employ. For while "Animal Spirits" may have good book-selling shock value, the term is highly misleading in that it has both a surface meaning (the new-agey ideas about totems and ghosts and stuff the average reader would get from it) and the more archaic meaning the authors are using, which simply refers to the fact that human beings make their own decisions according to the world as they see it, rather than the world as it actually is (or rather, I dearly hope this is what they are getting at).

This is similar to Von Mises' approach, which he termed methodological dualism. Von Mises, in Human Action, briefly alludes to the philosophical debate about whether or not human beings have "souls" or "spirits", whether or not people have free will or are slaves to a chain of cause and effect going back billions of years that determines what we do. He then dismisses these questions as being outside the scope of economics and without satisfactory answer as of the writing (and even as of today, so far as I can tell). According to Mises, to be correct, the economist must theorize as if people have the ability to decide upon action independently of this chain of cause and effect the strict materialist believes determines our actions, since economics has no way of following this chain beyond the confines of the human mind (the way I always put it is that, from the perspective of economics, the mind is a black box), and psychology, as yet, cannot follow it reliably. Thus the term methodological dualism. The term "dualism" refers to the idea that there are two sources of "cause" in the universe: the physical chain of cause and effect that can be analyzed and predicted by the physical sciences, and the actions of human beings which cannot. The term "methodological" refers to the fact that the economist is laying no claim to the the truth of the idea of human free will... merely that this assumption is a requirement for economic analysis under the current scientific conditions.

In other words, these ideas are hardly new... they simply have never been taken seriously in the context of mainstream economics (whether neoclassical or Keynsian). I'm looking forward to getting to the meat of this book and seeing where the authors go with this.

Chinese Monetary Manipulation

Or "the pot calls the kettle black".

Unless you've just not been following the news at all lately, you might have noticed that there is some controversy between the governments of the United States and China over Chinese policy with regard to the value of their Renminbi against the US Dollar. It is said that, by devaluing their currency, the Chinese government is impairing the ability of US manufacturers to compete with Chinese manufacturers, making their own export goods cheaper than US manufactured goods. To those who attempt to directly compete with Chinese manufacturers, this is a bad thing.

Rarely mentioned, due to certain parties' never-ending quest to confuse the intended results with actual policy, is the question of HOW the Chinese government goes about devaluing their currency against the US Dollar. The answer is simple: they buy US Dollars with newly issued Renminbi. This added demand for US Dollars raises the price of the Dollar in terms of the Renminbi. It also increases the price of the Dollar in terms of other things, as well.

This increase in the price of the Dollar influences Federal Reserve policy with regard to inflation. The tendency for prices to increase due to Fed policy is counterbalanced (to a degree) by the tendency for prices to fall due to Chinese central bank policy. In other words, the Fed happily supplies more dollars to meet Chinese central bank demand. Chinese monetary expansion is piggybacked on, and therefore dependent on, US monetary expansion.

This would not be a problem if China had nothing more to do with these dollars than to spend it on goods from the United States. Once they'd gained cash holdings of a certain size, it would no longer make sense for the Chinese bank to keep acquiring more. They'd have to start spending it on something, and this would begin the process of sending US Dollars back to the US, a new demand on US exports.

However, they do not do this. Instead, they buy Treasury bonds. This would result in the private holders of treasury bonds having additional cash to buy US goods, were it not for the fact that Congress gladly meets Chinese demand for treasury bonds by issuing more than they could otherwise get away with. In other words, Chinese monetary policy is also dependent upon Congressional fiscal policy.

In other words, in the absence of an irresponsible US monetary and fiscal policy, the Chinese could not continue their policy of devaluing the Renminbi relative to the Dollar indefinitely. It is US policy, not Chinese policy, that is to blame for the situation.

Letter to Rand Paul

During the primary season, I had a decision with regard to which libertarian Senate candidate to put my limited financial support towards, Rand Paul or Peter Schiff. I decided on Schiff. Schiff is a successful investor, a well educated Austrian economist with a track record of successfully predicting market movements. All I knew about Paul was that he his his father's son... though I had no idea how close or far this particular apple fell from the tree.

I hope I am wrong about this, but some of his recent comments suggest the apple is not so close as one might have hoped. His stumbling and backpedaling on the question of the Civil Rights Act show he lacks his father's political acumen. And his seemingly reflexively pro-Business (with a deliberately capital "B") stance on the BP oil spill show him to be unreflective, at the very least. This isn't to say I wouldn't vote for him were I a Kentuckian... just that he recent performance is underwhelming.

The following is a letter I sent via the contact form on his website.

I just wanted to say I was disappointed by your handling of questions regarding the appropriate reaction to the BP oil spill. The comments you've been reported as making on this subject suggest, I think, that you are less the complete Libertarian your father has managed to portray himself as.

The case of the BP oil spill is, IMO, a case where the two feuding branches of the Liberal family tree (Libertarianism and modern "liberalism") should be able to agree on the appropriate outcome, and quibble only over the means. Indeed, the libertarian response to BP's spill should be even more radical than the Progressive response.

Yes, "accidents happen", but responsible people cop to it and do whatever they must to make it right. And if government has any purpose, it is to (via tort law) force those who impose costs on others, for whatever reason, to compensate injured parties for that damage. It's the same, IMO, whether some drunk accidentally rams his car into the side of my house, some kid sprays paint over the side of my house, some burgler removes objects from inside my house, some power company dusts the siding with soot on a continual basis, or some oil company drenches my house in oil.

And the damage from this spill is going to be enormous, quite possible enough to bankrupt BP altogether if they were made to pay for it all... and that's just the property recognized by The State. When one considers the effects on the "commons" of the gulf region in general, and the people who live and work there, the number is staggering (and beyond my ability to calculate). One may not be hearing about BP not paying... but they don't have to say anything about it. Congress has already capped their liability.

I honestly don't really care why it happened, though some do, and I wasn't even remotely surprised, having worked in a number of corporate environments lead by overreaching, short-term thinkers, to hear that BP has a record of a cavilar attitude toward safety and preventative maintenance. And it's not surprising that any company in that industry would have this kind of problem, given Congress' consistent record of subsidizing unsafe practices by capping liability in such cases. It's starting to become a cliche, but we really do need to stop socializing risk.

And even if BP did everything "right", perhaps the decision to drill as deep as they did with the particular technology they used was too great a risk. I don't have a problem with people taking risks, but I do have a problem with people taking risks, collecting the proceeds when they win, but making their neighbors pay for it when they lose.

Your response should have been something along the lines of "I don't think we should disallow drilling at any depth or in any place outright... but I do think we should remove (not merely raise it as Bill Nelson proposed) the liability cap established under the 1992 law. The oil companies themselves are in a better position than anyone else to judge whether the practice can be done safely, and holding them accountable for the entire consequences of taking this risk (something not done today) would give them a clear incentive to do so only if it could be done safely." In other words, yes, the oil spill is a tragedy and BP needs to dig as deeply as it can, up to and including bankruptcy, to restore the property of those harmed by this tragedy, The solution is not more bureaucracy, as a progressive would have it, but rather plain old justice, holding people accountable for their mistakes.

Your father seemed to understand this while he was writing The Revolution: A Mainfesto. You don't seem to, or at least you weren't able to think of it while under the harsh spotlight you really should have seen coming.

Island Tales

Imagine an island. Imagine there are a hundred people living on it. Imagine ten of these people are free men, and the other ninety are slaves. Does this sound like a free society?

Now imagine a different island. On this island, all 100 are free men, but ten of them own all the land on the island. The other ninety have to somehow satisfy one of the ten to earn the privilege of existing on this island, let alone making their living off it... or learn to swim. Does this sound like a free society? How much different does it sound from the first example?

Let us imagine another. On this island, the Ten own 50% of the land on the island. Another twenty own another 30%. 20% of the land is unclaimed... for a reason. The other seventy must either eke out a living on the 20% margin, or satisfy one of the Twenty and Ten in order to make use of the good locations. Does this sound like a free society?

What do you suppose would happen to the lifestyles of the bottom seventy were twenty more people to shipwreck on the island? How about the lifestyles of the top ten?

Imagine the second island, but the Ten have been overthrown. The people of this island now fearfully cut down anyone who is more productive than normal for fear he may become a new Tenner. Does this sound like a free society?

Now imagine another island. On this island, 100% of the land is regarded as being owned by all in collective. People can claim and put to use unclaimed land at will. When multiple people wish to make use of the same land, a fifty-year lease is sold to one of the parties at auction, with the proceeds distributed to the other 99. Otherwise, people only get out what they put in... what they produce or receive from others willingly (either in trade or as a gift). Does this sound like a free society?

British Petroleum

Just some thoughts I had as I listened to the various radio stories on the big British Petroleum oil spill in the Gulf of Mexico.

There are a number of questions being asked in the media about this spill. Was it preventable? If so, whose fault was it? Does BP generally have a corporate culture that doesn't do preventative maintenance, a "fix it as it breaks" culture as one investigator in an earlier spill in Alaska put it? Is it the fault of bean counters at the top discouraging "unnecessary" maintenance? Is it the fault of lazy people closer to the problem? Is it BP's fault, or that of the subcontractor that operates the rig... or that of the manufacturer that made some crucial part? Or is it nobody's fault, they did everything they could, and it was really just an accident? Is deep water drilling just too risky? Should it even be allowed?

In my opinion, while the answers to all these questions are interesting, they are also irrelevant to anyone who is not in the business of offshore oil drilling. For no matter what the human contributions to the situation are, the solution is the same, in my opinion: make BP pay for ALL the damages caused by the incident, and for ALL cleanup efforts they are not directly engaged in, and if that bankrupts them, so be it.

If the spill is genuinely their fault, this is a no-brainer. Clearly, an organization responsible for a deep water oil rig takes on an enormous trust, and if they violated that trust by not doing everything they could to prevent such a spill, I think losing the business is getting off light, considering the magnitude of the disaster. A bankruptcy sale would result in the transfer of many such operations out of the hands of an organization that, in the event they're just not doing proper maintenance, clearly cannot be trusted at that level, and into the hands of other organizations that deserve a chance to prove themselves in exchange for some help reimbursing those affected by the incident.

Of course, if they can actually afford to pay out and continue doing business, and choose to continue offshore drilling in spite of the payout, clearly the value of the oil is greater than the risks involved.

If it's the fault of a contractor, BP is still the responsible party. If any part of the blame needs to be shifted off to the contractor, BP can do that themselves by suing the contractor, and getting some of the money from them that needs to be paid out to the various wronged parties. BP should not be able to wriggle out of its responsibilities by offering up the contractor as a scapegoat, able to go bankrupt with minimal damage to BP. For even if BP did EVERYTHING "right" from the perspective of the industry...

That only proves that there was one initial decision that turned out to be a very, very bad decision: the decision to drill at that location in the first place. I honestly don't care what the government has to say about it. Just because it's legal, it doesn't make it right, and people, even ginormous multinational corporations, should take responsibility for the consequences of their actions, even the unforeseen ones, even the unforeseeable ones... and if others are caught in those consequences and the responsible party attempts to dodge that responsibility--well, if that isn't a reason for having courts and governments, I don't know what is. We'd be genuinely better off without one, otherwise.

In the end, the bankruptcy of BP would send precisely the message to drillers and potential drillers that needs to be sent. For it is the companies involved in drilling and pumping who have the most direct interest in consulting scientists, engineers, and technicians, along with their accountants and lawyers, to figure out what the actual risks of drilling are relative to potential profits. Are the profits great enough to fund an insurance policy designed to handle just such a possibility while still being genuinely profitable? Was BP just a bad company, or are the risks simply too great, as revealed by this incident? The spill itself changes the information that goes into such considerations. And when justice is done, and done consistently, the consequences to the bottom line and the consequences to society become nearly synonymous... and the firms who will do the business become the most trustworthy assessors of risk.

Either way, the consequences to BP will be evaluated by BP, and by other companies according to the actual knowable facts. If companies don't believe they can get away with taking enormous risks (and this goes for drilling, the financial industry... everything, really), if they can't expect their pet politicians to shield them from the consequences, they WON'T take those risks. Mark my words: the Gulf oil spill and the recent financial crises are directly related to a common root cause.

Because the alternative is to let the politicians make the decision on this. They might consult scientists, engineers and technicians, but regardless of the answers they get from them, they will also be consulting pollsters and campaign strategists. The answer they will come up with will ultimately balance not risks to society (measured in financial risk to the firm in an environment where the courts can be expected to require reinbursement of wronged parties) against benefits to society (measured by how much more than production and risk management consumers are willing and able to pay for their product... demand), but rather which hurts their chances at the polls least: allowing drilling and therefore risking the ire of the environmental movement and the people affected, directly or indirectly; or banning it and losing the rather large financial contributions to their political campaigns oil companies provide.

Most likely (almost definitely, barring a deafening roar from the electorate), they'll try a third option: engage in some ineffective rhetoric, create a new bureaucracy or some new rules that fool people into thinking they are doing something about the problem but don't actually address the problem, and go home laughing.

Honestly, if that's all the government is good for, I'd rather live in a world where there's nobody to stop a more direct form of reprisal by the wronged parties.

The Constitution?

I was thinking tonight about Ron Paul's candidacy for the Republican Nomination this last presidential election cycle. One thing that has stuck in my mind is the support afforded him by certain prominent racists, and the controversy that generated in the pro-freedom community. It's a strange phenomenon, one most people don't even question: that movement, and those individuals most single-mindedly devoted to that movement, are frequently associated with racism, slavery, and such. William Buckley, though otherwise committed to liberty and not personally a racist, opposed attempts to use federal power to compel the recognition of the rights of black people. Ron Paul, though not himself a racist by any means (he refers to racism as "a particularly ugly form of collectivism"), was publicly supported by certain prominent racists. The old Democratic Party, which stood stalwart against Federalist, Whig, and ultimately Republican attempts to expand federal power, was also the party of slavery and racism. What's the deal?

I think it can be traced back to the Constitution. The Constitution has a number of unfortunate features which has facilitated this seemingly schizophrenic divide in the liberty community. The main problem, the one I will address here, is the role it has come to play in the fight to preserve liberty in this country: Strict Constructionism, or "constitutionalism", is the legal philosophy most commonly supported by non-Anarchist libertarians and non-Neo conservatives. The idea is that the constitution granted the federal government only specific powers; anything beyond that is unlawful. This is a comforting philosophy for those of us who prefer a more limited government: theoretically, we have the law on our side.

The problem is that while the Constitution did not grant the authority to do things like create welfare programs, a central bank, roads and rails and other things, it also placed no limitation on the States, even in the matters addressed in the Bill of Rights. It wasn't until after the Civil War when it was declared that, because of the Fourteenth Amendment, the Bill of Rights could be applied to the States. It also gave the Federal Government no authority to compel the States to recognize the rights of all its citizens; Slavery, Jim Crow, and such were well protected under the Constitution.

In the drive the prevent the Federal Government from expanding its power, the proponents of Liberty have repeatedly found themselves on the wrong side of what I think can be called America's "Negro Question." When it became a question of the States continuing slavery or the Federal Government outlawing it, many liberals allied with the slavers to keep the Feds from overstepping their Constitutional authority. When it became a question of protecting State-granted White privilege, or allowing the Feds to compel states to recognize the rights of Blacks, many liberals, such as William Buckley (I refer not to the quasi-socialist progressives who assumed the name under the previous generation, but the genuine liberals who found both the Democratic and Republican parties an uneasy home), opposed this use of Federal power on the same grounds they opposed every use of Federal power.

This alliance has been consistent enough that, even today, the most unrepentant of racists still consider the libertarian movement, with men like Ron Paul, to be the best hope they have of being able to turn the page of history back to their own era. I do not believe this association is correct: while a commitment to freedom of association would allow employers to go back to (openly) declining people employment on account of their race, stores and restaurants to (openly) decline to allow certain kinds of people to enter their establishments, and so on... I sincerely doubt such establishments would today serve much more than a fringe pariah community. And racists would find no allies among libertarians at either the federal level OR the state house... aside from the fact that if they somehow managed to get a state government to attempt to differentiate the legal statuses of whites and others, they could count on libertarians to block attempts to oppose this from the Federal level... because of the Constitution.

I think we should set the record straight: The Constitution should no longer be allowed, in the pro-freedom community, to serve as an excuse for condoning assaults on the liberties of people different from ourselves. An assault on liberty is repugnant, whether it comes from the federal, state, local, or individual level. True law, in my opinion, is not words on a piece of paper written by the agents of The State, but rather the principles these words properly, but do not always, reflect. If "the law" says we must permit some of our fellow men to oppress some others of our fellow men, then, I believe, "the law" is not in accord with The Law, and is therefore wrong. This isn't to say we should abandon the Rule of Law completely, but rather that if we consistently find that some legal principle is is conflict with our moral principles, then it should be considered that this legal principle could be wrong.

The Civil War is a perfect example of this. Though I do not believe bloodshed was necessary on the scale it occurred, the fact remains that it was the South, at ever turn, who started the conflict. For the conflict began well before the fighting began... indeed, before the South attempted to secede from the Union. There were repeated, rather successful attempts to use Constitutional principle not only to preserve slavery in those states where it was practiced, but also to impose a "right" of slaveholding upon the peoples of both states and territories who had (or perhaps would at some future date) declared, via their state and territorial legislatures, slavery to be illegal.

The principle was this: The Constitution declared that people could not be deprived of their property except for certain public uses and without just compensation (eminent domain), and that states had to recognize the decisions of other states. Certain people were property, and property being protected, these people could not be freed except by their owner's consent anywhere on US soil, even if the area happened to be under the jurisdiction of a "free state". Indeed, the Dredd Scott decision brought the very notion of "free states" under question. And many so-called liberal Democrats solemnly nodded their heads and declared this reasoning to be sound.

Many of the most anarchist of libertarians like to point out the essentially illegal nature of Lincolns war to prevent the secession of the states that made up the Confederacy. But what of the South's initial encroachments on American liberty via the machinery of the State? Is it any more right, just because men in black robes declare it to be so? Since when does the Anarchist care about the pronouncements of the State, except in exposing hypocrisy? And why should we expend rhetoric in defense of such pronouncements, on behalf of men whose aim was the preservation of potentially the most illiberal of institutions? If we are to choose a side in a conflict with no clear moral victors... why choose the side of racists and slavers?

Land Justice: Yet Another Model

Lately, I've been thinking about the models I've promoted in the past: a periodic disbursement of rents to the public on a per capita basis, whether by the government via taxes on rents (land values, electromagnetic spectrum, etc.) and a partial or complete citizen's dividend, or via a regular stock dividend from a separate corporation that acquires rental opportunities on behalf of the public over time. It occurs to me that one advantage to the way things are now is that, for the most part, people have to work. It is theoretically possible that, under public distribution of rents, you might end up with more people who choose not to work than are unemployed under the current model, and while that looks neat if you'd rather not work, it may have a significantly negative impact on overall productivity. If you consider society standing by itself, this isn't necessarily a bad thing... but one society never stands alone. More productive societies sometimes overcome less productive societies, wiping out such models.

I find myself returning to the model presented in Leviticus 25: 8-17, wherein the distribution of the land is reset every fifty years. It occurs to me that, even in the absence of "ancestral lands", there is a way to implement a similar model in our own society. In this case, I'm not considering how one would get from here to there... though the slow accumulation of land by a foundation established for this purpose could perhaps implement this as well as my earlier model. Simply put, rather than collecting and disbursing land rents yearly, it would be done every fifty years.

The advantage of this is that it while still freeing people from the mistakes of earlier generations, it would do less to protect people from the consequences of their own actions... which is a desirable outcome, in my opinion. This corporation, jointly owned by every inhabitant of a country, would lease the land (and other rent collecting opportunities) to individuals on a fourty-nine year contract. In the fiftieth year, the lease would expire, and everyone would have to renew their leases, from the owner of a small city plot to the owners of large tracts of agricultural land to the owners of rights of way for privately owned infrastructure. The proceeds would then be disbursed to the shareholders (the People) on a per family or per capita basis.

I believe that fifty years is a short enough period for every generation to get access to these proceeds at least once (and in many cases twice) during their lifetimes. It's also long enough that I suspect that, if someone is in danger of losing their lease to a higher bidder, replacement of capital improvements on a different site could be built into a business plan (everything needs to be tore down and rebuilt every now and then, after all). In the case where this isn't feasible, if the activity is productive, I suspect the current occupant would value that location higher than any other... and thus not be outbid.

These funds, once received, would do much to alleviate the disadvantages of those whose opportunities are restricted by the mistakes of the previous generation. Such funds could be used to educate oneself or one's children, take advantage of investment opportunities (including starting businesses of their own), move to more advantageous locations, and, yes, it could be blown in a few years on a licentious binge. The advantage of doing this semicentenially is that those who chose to spend the money foolishly would rather quickly end up having to work for a living again... returning to the ranks of the productive. Doing it annually runs the risk of creating a class of men who are chronically unemployed by choice.

Beyond Money?

Lately I've been playing a good amount of Star Trek Online; this has me thinking about Star Trek stuff. I've also started reading The Bible fairly regularly again (okay, just for two nights now, but still). I've also had a good amount of time alone with my thoughts on crawlspace jobs, wood treatment with Timbor, hanging insulation, etc. I'm also listening to J-Pop right now; actually, that has nothing do do with this. At any rate, I ended up thinking about precisely what various individuals in the Star Trek universe (particularly Jean Luc Picard, but I think there may have been others, as well) meant when they said that the humans of the Federation had advanced “beyond money.”

One scripture that has been foremost in my thoughts as I've worked on this job is something from one of the letters—Paul's, I think (this is one reason I've gone back to reading... I kind of want to rediscover where I first read many of rhe pasages that float about in my head, and whether I recall them correctly)—in which the writer exhorts his readers to do anything they do as if they were doing it for God himself. I try to worry only about my own performance, and not about whether I might be being taken advantage of, whether I'm being paid enough for the effort I'm putting out, whether I am working reasonably or above and beyond, whether or not my current employer can be expected to recognize my efforts, etc. I've also been thinking about some of the spiritual effects—in this lifetime—of keeping up a regular tithe and such (whether officially, to a Church or some such organization, or just personally, setting aside a percentage of one's gross earnings for donation to various worthy causes).

One conclusion I've come to is that, despite the potential financial costs of both “working for God” (in the sense of potentially reducing leisure and “giving too much” for too little) and some form of tithe (direct financial cost, of course), one thing it does do is keep one working harder than one otherwise would. “Working for God” has its obvious effect, but a regular tithe is of particular interest to me. I know savings make me lazy; if I've got a sizable amount saved up and accessible, I have a tendency to be very lazy about looking for another job. A tithe, on the other hand, particularly if it cuts deeply enough into my cash flow to force me to economize and keeps me on my toes in terms of labor, it provides me with a cash flow that's normally not accessed by me, but can still be tapped in the event of a financial emergency. If it's acceptable for not-yet-King David to eat the bread normally reserved for priests when he and his men are on the march and hungry, and its acceptable to rescue an animal on the Sabbath (Jesus said both were okay), then it is acceptable to tap one's tithe one pay period if absolutely necessary.

The effect of all this is that in the process of working harder than one would naturally, one develops endurance, skill, confidence, and other intangible personal qualities faster, and to a greater degree, than one ordinarily would. When one has these things, one doesn't need to worry so much about money; one's personal qualities ensure that opportunities will be found and utilized easier, with jobs more easily landed, and so on Indeed, I ran across Jesus' direct statement in a similar direction last night (Matthew 6:25-34). Which leads me back to Star Trek: I believe it was Jake Sisko who informed the Ferrengi Nog that the humans of that era were more interested in personal improvement than in money—in accumulating intangible personal qualities rather than physical goods.

For certainly, the world of Star Trek is not a post-scarcity economy. One of the missions of the first Enterprise was the discovery and securing of sources of various minerals, particularly dilithium crystals. I believe it was Ben Sisko who spoke of spending all his transporter credits visiting his father's restaurant (or something like that) when he was in the Academy. The idea of using credits for rationing things like holodeck privileges was not a foreign concept to the Voyager crew when they found themselves far beyond their supply lines. But a central (particularly a centrally managed) currency seems to be largely absent from the Federation's economy. So how do they coordinate production and set priorities of we're prepared to reject the “communist paradise” paradigm? Perhaps they use some kind of high tech barter system instead of a single central currency? ;)

But I digress. The point I am trying to make is that personal improvement is more important than the accumulation of things. Things can be taken; things can be lost. I just heard a story on NPR about some woman who lost her life savings to Bernie Madoff's scheme and suffered a renewing of old fears of becoming a bag lady as a result. But personal qualities, barring a major head injury (and even then, relationships serve better than wealth to keep one secure), cannot be lost or taken. “Do not store up treasures for yourselves on earth, where moth and woodworm destroy them and thieves can break in and steal. But store up treasures for yourselves in heaven, where neither moth nor woodworm destroys them and thieves cannot break in and steal. For wherever your treasure is, there your heart there will your heart be too” (Matthew 6:19-21, New Jerusalem Bible).

Labor/Capital Mix and Pest Control

One thing I've noticed in my chosen profession is that there is a tension between the interest in doing a thorough, professional job, and an interest in keeping costs down. I'm in the Pest Control industry.

I go to these educational meetings and learn all these things our technicians are supposed to be doing for their customers: taking time to talk with the customer, dusting voids, inspecting for harborages, moisture conditions, and other conducive conditions. We're supposed to use our chemical solutions (hereafter referred to as "products") sparingly, only in those places where it is deemed necessary. Doing this takes time.

But then you've got these bean counters who are less interested in getting the job done right and more interested in how many accounts they get to bill relative to how much labor they're having to pay for. These people either don't know much about how pest control is supposed to be done, or they just don't care. Finally, these bean counters wield considerable power in this, as every every industry. Yes, even the Pest Control Industry could serve as inspiration for Dilbert comics. So the technician who takes his time to get the job done right gets a talking to, and is actively compared to those technicians who are able to do fifteen to twenty jobs a day. That's no more than a half hour per job, including drive time. That's barely enough time to quickly spray the perimeter. So that's all that ever gets done, unless the customer actively demands more.

It got me thinking, as I woke up this morning, about decisions businesspeople make with regard to labor/capital mix. The accountants in the industry, given the choice between more labor less capital (taking the time while reducing product use), and more capital less labor (general broadcast treatments that use more product but take less time), the outcome of the wrangling over time and professionalism is a preference for more capital. This may be because it is more efficient. But I also note that the government taxes labor (income and payroll taxes) at a higher rate than they do capital (capital gains, sales, etc.). This will definitely have some effect on the decisions people make with regard to the use of man hours vs. the use of materials.

So the solution to me seems simple: tax labor and capital at the same rate... preferably zero. This removes the government's stimulus to prefer capital use over labor, making a great number of industries less consumptive (without penalizing the many, many cases where more capital actually means more productivity). And I'm not saying no taxes at all: this is just another strike in favor of the Single Tax, which I have discussed at great length in other entries. Tax labor and people tend to use less labor, resulting in unemployment. Tax capital and people tend to use less capital, resulting in lower labor productivity and reducing opportunities in capital goods producing industries. Tax land, and people tend to use less land... and since land is the one thing people can't just make more of, that's the only way to make more land available for more uses, thus actually improving productivity.

Conflict Within, Harmony Between

I've been reading Samuel P. Huntington's The Clash of Civilizations and the Remaking of the World Order. Huntington noted something he considered peculiar about American society in regard to "goodness" or "badness" in international relations: an assumption that friendly international relations are always desirable, and that hostile relations are always undesirable. He contrasted this with the American commitment to competition within American society, that Americans "endorse competition in American society between opinions, groups, parties, branches of government, businesses." (Huntington pg. 221) He wonders why Americans believe conflict within our society is good, but conflict between societies is bad, and speculates that nobody has seriously studied the question.

Off the top of my head it occurs to me that when conflict occurs within established forums or mediums for conflict, the conflict tends to shake out the best ideas and solutions to problems, while resulting in minimal collateral damage. Conflict between competing businesses encourages both businesses to do their best work, while the framework of law prevents destructive forms of conflict. Conflict between ideas occurs as debate and stimulates a vigorous exploration of the ideas under question, while laws and norms prevent the conflict from becoming physically destructive. Conflict between branches of government prevents any one of them from becoming overly powerful, restricting government action to only those things the involved parties can agree are necessary, desirable, or lawful. Even warfare within a cultural group has rules of engagement, ensuring that there is still something left when the victor wins the war.

Between cultural groups, however, laws and norms are not yet developed. As a result, conflict is much more likely to degenerate into total warfare. Tactics which are acceptable to one group are offensive to another group, provoking an equally offensive response. Neither side understands the other's rules of engagement. In debate one man's rebuttal is another man's personal insult. In business one man's clever strategem is another man's unfair practice. And in warfare one man's fair engagement is another man's unforgivable atrocity or abomination.

Conflict that occurs within a cultural paradigm is more likely to be a striving in good works. Conflict that occurs between cultural paradigms is more likely to be nothing but destruction and death. As such, what Huntington describe's as the American preference for conflict within nations, and harmony between nations, makes sense to me.

Read The Bills Act

The following is just a little something I sent to my representative and senators via Downsize DC's Read The Bills Act Campaign. This is basically Downsize DC's "signature" campaign, the primary issue they'd like to get addressed.

Congress needs to start reading the laws it passes. Please introduce DownsizeDC.org's "Read the Bills Act." I know you have the power to introduce this legislation on your own, without waiting for anyone else. I urge you to do so. This is a much-needed, common sense reform. I can see no justification for not introducing it. I'm telling my friends about it, and I look forward to hearing that you've introduced it. You can find the text of the legislation here: http://www.downsizedc.org/rtba_legislation.shtml

An analogy: How limiting the flow can actually induce better results.

I have a friend who works in the intelligence community. We are all aware of the controversy over attempts by the previous administration to cast an unconstitutionally wide information gathering net. One might think this is done to make the intelligence community's job easier. But what I hear from the professionals, both those publishing articles on the subject as well as my friend, is that a bloat of untargeted information actually makes their job harder, absorbing resources to analyze all this extra, often irrelevant data that could be used analyzing more important data. Constitutional procedure that limits their ability to collect information, forcing them to prioritize and improving the quality of the information acquired.

In a similar fashion, the "Read The Bills Act" could end up forcing leadership and committees to prioritize in the introduction of legislation. It would definitely encourage brevity of language, making it more difficult to hide abuses of the process by special interest groups. By slowing the process by which bills come to the floor and get voted, it could actually make your job considerably easier. I can think of no reason why the RTBA could be a bad idea.

If We Audit the Fed, What Next?

I just wrote a letter to my Congressional representatives (Representative Ruppersberger and Senators Mikulski and Cardin) I thought I'd share with you. I had just read an article by Scott Lanman over at Bloomburg.com (Lewrockwell.com linked it) about the progress of Ron Paul's "Audit the Fed" act. Reported were concerns of the bill's opponents about the impact such a bill would have on the political independence of the Federal Reserve, and that on the public's confidence in the Dollar. I thought this a good time to write a letter via Downsize DC's "End the Inflation Tax" campaign. The following is what I wrote:

In the last Congress Rep. Ron Paul introduced three bills that would conquer inflation. Please do all you can to wrap the "Honest Money Act," the "Free Competition in Currency Act," and the "Tax-Free Gold Act," into one bill, and get it introduced.

I just read an article on Bloomburg.com by Scott Lanman, "Fed Audit Shield Takes Blow After Ron Paul Proposal Advances", which reminded me of the need to indicate that should Ron Paul's "Audit the Fed" actually pass (yes, I would like to see that), neither that, nor reaction to the revelations about the Fed's role in promoting inflation on behalf of wealthy interests, should be construed as a desire for political control over the money supply. I do agree, that if there is a central bank, that central bank should be politically independent. However, I also believe that a central bank is both undesirable and unnecessary: central banking controls inflation not to eliminate it, but rather to limit it to a controlled fleecing of the public. It is a tax, but it is a highly regressive tax.

That's not to say that ending the Fed outright, as some in the community I associate myself with would have it, is the end goal here. A money issuing agency is a necessary component of a modern economy; having every store have their own assayer for gold and silver would probably be sufficiently inefficient as to drive down productivity. No, the Fed should stay... but they should also have competition. Competition could come in the form of foreign currencies held as a hedge against inflation and occasionally circulated in some places (such as border and seaboard areas), or privately issued company scrip, or privately produced circulable gold and silver coin, or anything else a group of people could find themselves using as a medium of exchange. Some of these things are already done to a limited degree, but most of these things, particularly circulation of gold and silver coin of ANY design (this is not a counterfeiting issue), are technically illegal, and therefore cannot currently serve a competitive role.

I doubt these things could knock down the Dollar's role even as international reserve currency, let alone domestic unit of account, any more than Federal Express and others were able to replace the United States Postal Service. But marginal, niche based competition provides a greater impetus for discipline than all the political oversight committees in the world. The Fed already competes with foreign currencies, gold and silver on an international stage. I think domestic competition could strengthen the dollar even more, making its role on the world stage, extremely important to the long term value of the dollar, virtually unassailable.

Laman's article stressed the role of perception in monetary strength. This is, of course, true in the short term. But all the lies in the world cannot overturn the underlying fundamentals in the long term; market discovery processes can be slowed, but not stopped. A well perceived currency with bad fundamentals will fall in the long run, betraying the trust of those who believed in the image presented. A poorly perceived currency with good fundamentals will perform well in the long run, rewarding those who were able to look past the hype and see the truth of the matter. Shall our monetary system be a duper of fools? Or shall it reward the prudent? If this is anything more than a rhetorical question for you... well, that's about what I'd expect from a politician. So surprise me.

Just thought I'd share.

The "Read the Bills" Debate

For those of you who don't know, there is currently a debate going about whether or not Congressmen should be expected to have read and understood the bills they vote in favor of. One argument against is the notion that government would "come to a standstill" if such a requirement were made.

Why? It is my understanding that the day-to-day functioning of government, the execution of the government's duties, is carried out by the executive branch. That is to say, the President, not Congress. The job of Congress is to tell the President precisely what his job is. In the absence of input from Congress, the executive branch is perfectly capable of continuing to do its job according to the most recent input. The only possible shutdown of government could occur if the money runs out, and Congress does not authorize appropriations... but this is an extreme example, and while Congress likes to make budgets complex in order to micromanage the job of the executive branch (and is perfectly within their rights to do so), if they find that no agreement can be reached in Congress over a complex budget, a simple budget, or simply a repeat of the previous year until further instructions are sent, could easily suffice.

What about emergencies? Once again, that is the province of the executive branch. The President already has, in the Constitution itself, the authority to respond to emergencies of a military nature without the leave of Congress (though Congress must ratify his actions by providing the funding to continue once they are able to do so).

Legislation and execution are not the same thing, and the two functions are wisely separated. Can someone describe to me exactly how a slowing of the legislative process would bring government to a halt? Can someone give me an example of how an extremely lengthy bill might need to be passed before it can be read?