Saturday, July 16, 2011

Public Works on Steroids

Tibor R. Machan

What the Obama administration and its cheerleaders call “the stimulus” is by all sensible accounts the macroeconomic version of steroids. And you can get quite addicted to these--just as some athletes can to their versions.

Now there are lots of things wrong with these artificial public works projects although sometimes they look benign enough. Many folks will not objects to having extra upgrades and improvements on their roads and highways. After all, nearly everything suffers from some measure of wear and tear. And who can tell without considerable expertise when it is time for justified improvements on the infrastructure. Usually such matters are decided upon by individuals in their particular lives--like when should their cars be washed, when should they get an oil change, when is it time to visit the dentist again. Or when is it time to get a complete medical check up! Or get one’s pants cleaned or shirts laundered. These are individual matters and highly contingent on personal and family factors, such as needs and budgets.

When it comes to roads and highways the local public work departments make these kinds of decisions based on the advice of the road engineers and on the budget bureaucrats. Some kind of rationale is arrived at, although with public works there is always the problem of some version of the tragedy of the commons. Too much attention to the parks may get in the way of enough attention to the recreation facilities or city pools. But when one adds the artificial stimuli provided by politics that’s guided by the fantasy of Keynesian economics--you know, the multiplier and such--no rationale is possible. It is nearly all guesswork. Unless one has roads with gaping pot holes that just cannot accommodate traffic anymore, the time to spend funds on upgrades and fixes turns out to be arbitrary. Kind of like how many steroids should a body builder use--it is an artificial aid and no one can tell just how much if any of it is the right amount.

In my region of the country, Orange County, California, ever since I moved here about 12 years ago there’s always been some road construction afoot. But not so much as to cause too many delays and detours. After years of experience with the local needs, those responsible manage to figure reasonably accurately just when the work is needed. But the stimulus funds arrived, which enabled the local authorities to spend on all kinds of projects whether any real need exists, it becomes a spectacle of arbitrary public works. Dozens of roads get shut down out of the blue. Thousands and more commuters need to stand and wait in long lines so the work can get done. Gasoline is wasted, not to mention people’s time--life, actually--and who knows what other unintended harmful consequences result.

Never even mind for now the fact that the stimulus consists of loot extorted from citizens who are imposed and encroached upon with all kinds of cost that no one can tell buys anything worthwhile. I am certainly unable to tell if that shovel-ready road job that is keeping me from getting to work on time is required or invented by Keynes-inspired magical economics. I cannot judge whether the gasoline used standing idly by at innumerable road blocs is being wasted or not. No one can, I bet. We are all simply informed to put up and shut up--these are, after all, public works and interference from ordinary citizens can land one in jail!

It is bad enough that people are so much at the mercy of the decisions that are made about public works and, more generally, public affairs and not unless they vote out the team is there a chance of changing the guard. But when the policy if injecting funny money into the system is carried out, nothing resembling a rational system can be expected.

I believe it was my very first scholarly paper in a philosophy journal, titled “Justice and the Welfare State,” that laid out the case showing that under the welfare state simple justice is impossible. Causes and results cannot be linked, responsibilities are vague and defuse.

The current policy with stimulus-driven public works is just another case in point.
Ignorance Amidst Erudition

Tibor R. Machan

Stanley Kauffmann is the film reviewer of The New Republic and his work in this area is worth the time it takes to read it, at least for me. He is what I would consider an erudite film critic, drawing on a vast familiarity with the history of cinema. Indeed, while the magazine has been turning more and more statist--in it early days it was actually an interesting ideological hybrid, guided by old or classical as well as new or modern liberal values--most of its good stuff comes from the back of the book, namely, the reviews it publishes. And from Kauffmann’s comments on films.

So I was taken aback when in a recent review of the movie Too Big to Fail by Curtis Hanson translation of Andrew Ross Sorkin’s book on the recent financial fiasco, Kauffmann opines that “The economy requires radical political intervention and we ducked that.” Just goes to show you that being knowledgeable and smart about movies can go hand in hand with utter ignorance of economic theory and history.

One need not be what Paul Kurgmann and even President Obama likes to refer to, disdainfully, as a market fundamentalist--i.e., someone who holds that as a general policy it is better to rely on free market processes than to trust the bureaucrats--to see that Kauffmann is way out of his depth. For starters, political intervention has been part of the norm in the American economic system from the beginning, with but very few lulls in that approach. (I once ran across a book published in the 1840s in which the author severely criticizes government involvement in the American economy and for its thwarting of free trade on innumerable fronts!) Alexander Hamilton, one of the prominent founders, had supported many measures that run against the principles of a free market economy and involve extensive and “radical political invention” in the economy. What is it that Kauffmann refers to when he states that “we ducked” such intervention? Does he mean the country never did opt for out and out socialism? On that score he is correct but such a remark assumes that financial and other economic messes are avoidable under a socialist economy. Yeah? Tell that to the former Soviet Union and its colonies and to the many European near-socialist governments that have been struggling with such problems.

Of course, Kauffmann’s idea is rather routine among intellectuals who take their economic education from the likes of the late Paul Samuelson (whose introductory text, Principles of Economics, was the main source of readings in college economics course for decades). While there have been some free market economists whose influence has been felt throughout higher education--and this is true now as well--the majority of students who take econ courses get mostly lessons in the wisdom of the mixed economy, the kind we see in most of Europe, North America, New Zealand and Australia. Such systems are riddled with political intervention!

The idea that such intervention is what an economic system needs so as to be functional itself rests on the myth that some people--politicians and bureaucrats--have special talents for guiding the economic conduct of others. This is quite literally a fascist conviction! It is diluted by mixing in democratic and capitalist and other features in the system--that’s why it is called a mixed economy--and it seems Kauffmann does not hesitate to embrace it.

Now mind you, what is really off in Kauffmann’s remark is the association with political intervention with radicalism. In fact it is the free market system that has brought to the fore a radical economic idea given that political intervention has been around from time immemorial. Mercantilism, which was the dominant economic doctrine prior to Adam Smith’s writings, especially his The Wealth of Nations (1776), is a thoroughly politicized economic system! Feudalism and nearly all the economic ideas and policies of the old order were nothing if not completely political.

So it seems that Mr. Kauffmann, who must be at least as old as I am by now, needs to go back to night school and take a good course in economic history. He would then perhaps admit that his comments about what the economy needs could at least use serious revision.

Thursday, July 14, 2011

What’s With Social Security?

Tibor R. Machan

When shortly after I arrived on these shores I got my first job as an usher in a cinema in Philadelphia, back in the fall of 1956, I asked about the deduction from my paycheck that went to social security. I had no agenda, just curiosity.

My employer said those funds are taken by the federal government and put aside so that when I get old I would have a nice little bundle instead of spending it now and being left with nothing for old age. I recall asking but why not just rely on my own worries about my old age, worries that would surely prompt me to put away something for my old age. My employer had no answer to this. But he did try to assure me that I should relax because at least there will be this stash awaiting me when I get old and won’t be making much money anymore.

Well, I never bought the paternalism of this policy but neither did I have the savvy and know-how to resist paying the feds. They are clever in how they make employers do the dirty work so that if you resist they don’t need to deal with it but leave it to their unwilling subjects to handle the matter. (I guess when it comes to extortion, the feds like to farm it out rather than deal with it directly.)

At this point in my life, having reached the age a while back when the feds allow me to get back some of the funds taken for me for my own good, I hear noises from the President of the United States of America that unless the debt ceiling is increased now, it may lead the feds to stop paying social security to those legally entitle to it. How’s that? Wasn’t the money that was taken from my paycheck put into a fund from which I would later be able to get some support, support I was told I couldn’t arrange for on my own, only with the intervention of the feds? If that is what they did with my funds, namely put it away for me for my old age, how could it be that they will have to stop paying it out to me? What on earth did they do with those funds? I was never asked about this, no one appealed to me for permission to raid them instead of holding them for me what I became old. Had I had the option of putting the funds aside, I would most likely have invested it so that these funds would have gained a good deal of interest or made me prosper some other way. But no, the feds claimed they know better how to provide me with financial security in my old age than I do! And yet now the president tells me that the feds need to borrow money so as to make sure I get my money back?

What’s curious, also, is that no one appears to have noticed this funny accounting by the feds and called the president on the carpet for putting social security payers in a bind. He keeps warning about the good faith and credit of the feds but right here, up front, this good faith and credit appears to have been betrayed already. And even though I read a bunch of Op Ed pieces in the major papers, especially The New York Times, no one seems to be aware of this; certainly no one is throwing a fuss, pointing an accusing finger at Washington for having betrayed all social security payers like this. Why not? Why is everyone so silent about this dirty deal? Is there some kind of secret pact here that no one wishes to make public?

And this is the organization that millions of Americans, especially prominent and influential ones, want to entrust with our health insurance? And with taking care of us in innumerable other areas of our lives like guarding us against financial mismanagement and pharmaceutical malpractice?

Isn’t that a joke? Why are people so gullible? Sure, they don’t mean to be stupid but stupidity isn’t something people consciously intend to cultivate. No, stupidity is mostly a function of gross negligence and when it comes to light people usually say, “But I didn’t mean it.” Yeah, well but you didn’t bother to think about it either. The result is malfeasance and imprudence galore, usually with other people’s resources.
Tea Party Confusion

Tibor R. Machan

The idea that politicians should sign a pledge to promote personal morality is contrary to the avowed Tea Party commitment to small government. If you want the government to have a restricted scope, you should stick to the US Declaration as your guide: Government is instituted so as to secure our rights! It is not instituted, at least in the American political tradition, so as to be our moral police!

This is the kind of inconsistency that will bode very ill for the Tea Party and the Republicans. IT is just like the liberals’ inconsistency of preaching choice in the abortion debate but loving to take it from us in nearly everything else. Obama care comes to mind which commands people to buy health insurance and is, thus, anything but pro choice. And what about coercing us all to buy green light bulbs?

Who are these people, imposing their standards of right conduct on the rest? Both sides of the political spectrum are still wedded to their tyrannical ways. No wonder so few people vote.

Here is the pledge Tea Party Republican Rep. Michell Bachmann wants candidates to sign:
“Therefore, in any elected or appointed capacity by which I may have the honor of serving our fellow citizens in these United States, I the undersigned do hereby solemnly vow* to honor and to cherish, to defend and to uphold, the Institution of Marriage as only between one man and one woman. I vow* to do so through my:
Personal fidelity to my spouse.
Respect for the marital bonds of others.
Official fidelity to the U.S. Constitution, supporting the elevation of none but faithful constitutionalists as judges or justices.
Vigorous opposition to any redefinition of the Institution of Marriage – faithful monogamy between one man and one woman – through statutory-, bureaucratic-, or court-imposed recognition of intimate unions which are bigamous, polygamous, polyandrous, same-sex, etc.
Recognition of the overwhelming statistical evidence that married people enjoy better health, better sex, longer lives, greater financial stability, and that children raised by a mother and a father together experience better learning, less addiction, less legal trouble, and less extramarital pregnancy.
Support for prompt reform of uneconomic, anti-marriage aspects of welfare policy, tax policy, and marital/divorce law, and extended “second chance” or “cooling-off” periods for those seeking a “quickie divorce.”
Earnest, bona fide legal advocacy for the Defense of Marriage Act (DOMA) at the federal and state levels.
Steadfast embrace of a federal Marriage Amendment to the U.S. Constitution which protects the definition of marriage as between one man and one woman in all of the United States.
Humane protection of women and the innocent fruit of conjugal intimacy – our next generation of American children – from human trafficking, sexual slavery, seduction into promiscuity, and all forms of pornography and prostitution, infanticide, abortion and other types of coercion or stolen innocence.
Support for the enactment of safeguards for all married and unmarried U.S. Military and National Guard personnel, especially our combat troops, from inappropriate same-gender or opposite-gender sexual harassment, adultery or intrusively intimate commingling among attracteds (restrooms, showers, barracks, tents, etc.); plus prompt termination of military policymakers who would expose American wives and daughters to rape or sexual harassment, torture, enslavement or sexual leveraging by the enemy in forward combat roles.
Rejection of Sharia Islam and all other anti-woman, anti-human rights forms of totalitarian control.
Recognition that robust childbearing and reproduction is beneficial to U.S. demographic, economic, strategic and actuarial health and security.
Commitment to downsizing government and the enormous burden upon American families of the USA‟s $14.3 trillion public debt, its $77 trillion in unfunded liabilities, its $1.5 trillion federal deficit, and its $3.5 trillion federal budget.
Fierce defense of the First Amendment‟s rights of Religious Liberty and Freedom of Speech, especially against the intolerance of any who would undermine law-abiding American citizens and institutions of faith and conscience for their adherence to, and defense of, faithful heterosexual monogamy.”

Some of this is of course redundant--anyone who takes the oath to defend the US Constitution has made many of these pledges, namely, those that involve protection of individual rights. But many of them are meddling pieces of political posturing as the citizenry’s moral guide, as our nannies, just as Al Gore wants to be our moral guide vis-a-vis global warming or other environmental issues.

Sunday, July 10, 2011

Live and Let Live: not in Silverado

Tibor R. Machan

Where I live quite a few neighbors are what are affectionately called Tree Huggers. What such neighbors, by no means even the majority, have in common is that they oppose anything that remotely resembles development (e.g., including a tiny wine tasting structure one of their neighbors wants to erect). But of course their main targets are any new homes that might be built, not to mention any groups of homes someone might build on his or her rightly owned land. It makes no difference at all that the members of the Tree Huggers do not own the land on which the development might occur. No sir. They don’t mean to actually purchase such places, to put their money where there mouths are, only to prevent those who own them to make use of it, especially built any homes there.

It has been a long fight around the globe to establish the institution of private property rights. In most previous eras monarchs owned the realm and ordinary people were sometimes privileged to live and work on it. Private property rights, while always discussed by some political theorists and economists, had for centuries been denied to the bulk of the population. Only select folks could own land and built on it as they deemed desirable. The rest were, essentially, serfs or at least men and women without their rights acknowledged and protected in the law.

Then such developments as the establishment of the United States of America changed things somewhat. The doctrine of individual natural rights was worked out and implemented on the American continent and a few other places, although the assignment of private property had always been controversial. Still, the idea that ordinary citizens could own property--from a shack all the way to a huge ranch or factory--caught on. And when this occurred the liberty of millions became more secure then ever before. On your own land you can do as you will and if the law backs this up, you can be secure in what you choose to do. It is this realm of individual choice--applied to single individuals or voluntary groups of them--that served as a basic liberator. Churches, businesses, homes, recreation facilities, communes, kibbutzes, farms, ranches, and so forth could all exist with substantial legal protection--that, at least, was the idea even if not consistently and fully implemented. But it gained respect and that itself was a big leap forward in the realization of human liberty and independence, not to mention productivity and prosperity.

But this idea never quite became widespread enough public policy. Even the U. S. Constitution mostly assumed it, although it is mentioned in the 5th amendment. And many state constitutions make explicit mention of it and its protection in the law.

Yet, the idea and its institution met with much resistance from those who believe that they may run roughshod over other people and what belongs to them, just as the monarchs did all along when they wouldn’t recognized the private property and other rights of the people who lived in the realms they often brutally ruled. Fancy arguments had been invented and deployed to rationalize the ongoing violation of private property rights. For socialists like Karl Marx and Frederick Engels the denial or abolition of private property rights was a necessary step toward their ideal collectivist system, one in which a few people get to plan how everyone else is to live, work, create, etc.

In our era, at least in the West, it is under the guise of caring for the environment that many eagerly violate individual private property rights. In Silverado, a canyon community in Orange County, California, the Tree Huggers carry on this crusade to plan the lives of others, never mind that they have no proper authority to do so, only sometimes the legal power they have immoral obtained. In protest of this, I have placed a bumper sticker on my car that reads: “Share the Canyons,” indicating that it would be right and proper not to interfere with people who want to come to live here and make use of their land and other property in peaceful ways.

Many of my neighbors have stopped to comment on and quite interestingly approve the idea on that bumper sticker. As long as one doesn’t use one’s property to invade someone else’s or injure another person, there is every reason to uphold and respect private property rights--for everyone. Everyone has a right to liberty and without private property no liberty can flourish, only permissions and privileges granted to people by their more powerful neighbors.

Recently I was picking up my mail at the tiny post office in Silverado and as I was getting back into my vehicle someone from behind shouted out asking what my bumper sticker meant. I told him that it means that whoever can obtain, via free exchange or any other voluntary means, a piece of property in the canyon ought to be at liberty and welcome to do so. Upon having said this the person who posed the question started to shout at me, angrily voicing the idea that he doesn’t want anyone to come into his canyon and do stuff he doesn’t welcome. I don’t recall exactly the sentences he shouted at me but I do recall that he kept repeating the phrase “my canyon” over and over again. It was amazing, actually, since there were a few other canyon residents standing by, observing this, not to mention me who lives there as well. But evidently with no self-awareness whatsoever this person kept shouting as if the canyon community belonged only to him.

Just like the old monarchs, who believed they ruled the realm. Right here in the United States of America, a country founded on the abolition of monarchical rule! Go figure!