Earth Invaded by Metaphor

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When I was a little girl, all the kids in my neighborhood would gather on summer afternoons to play Cowboys and Indians. I had never met an Indian (heck, I had never met a cowboy, either) but I saw them on TV. I knew the Indians were the bad guys because they were different from me. The men had long hair, seldom wore shirts, slept in round tents, and grunted "How" when they talked. The women wrapped in blankets and carried babies on their backs. The cowboys were good because they wore boots and hats and talked in complete sentences. Their women wore eye makeup and beehive hairdos. They were like us.

My kids never played Cowboys and Indians. The game has long fallen out of favor, being considered insensitive to Native Americans. But they did play Aliens. A lot. (They still do, in fact, mostly on Xbox.) Space is the new frontier where we can still hold onto our prejudices — the ones that assert, "My kind are good; the other kind are bad." I realize that we never were fighting against Indians, really. We were fighting against "other," that unknown quality of beings that are different from us. We called them "Indians," but they were really just "aliens" all along.

So the only surprise about the film Cowboys and Aliens that opened this weekend is that no one thought of it any sooner. I awaited it eagerly, knowing that it would be laden with metaphor and ripe for a review.

Director Jon Favreau makes the point about aliens quickly and clearly. Daniel Craig plays Jake Lonergan, an amnesiac drifter with a mean right hook; and Harrison Ford is Woodrow Dolarhyde, a rancher who's mean and rich (his name says it all). Initially the setting is populated by groups of people who don't like each other: city folk who don't like ranchers, bandits who don't like city folk, and Indians who don't like anyone white. Interestingly, however, on a personal level there is a lot of interracial connection in this movie — the white innkeeper is married to a Mexican woman, for example, and the rancher has a close relationship with the Indian who watches over his son.

When space aliens appear on the scene and begin kidnapping local residents, all the groups band together to fight the aliens. The message is clear. It has been used by government leaders (and tyrants) for centuries: to establish local harmony, simply unite the masses against a common enemy.

The "western" part of this western works well. It begins as a classic western would — with a sweeping panorama of the desert, complete with sage brush and sandy cliffs. The story is character driven, and as we learn the characters’ back stories we discover why children behave the way they do when they become adults. Favreau's point seems to be that the more we know about why people act as they do, the more we will come to understand and accept them. This point is made with special effect in the case of Woodrow Dolarhyde, whose personality warms throughout the film. Through Dolarhyde we also learn the true meaning of fatherhood, as we see his maturing relationship with three young men: his son, Percy (Paul Dano); the Indian hand (Adam Beach) who looks out for Percy; and Emmett (Noah Ringer), an orphan boy whom Dolarhyde takes on. It's a little heavy handed, but an important value nonetheless.

The casting is excellent. One of the standouts is Paul Dano as Percy, Dolarhyde's spoiled, juvenile delinquent son who shoots up the town with impunity, knowing that Daddy will fix things for him later. Another is Clancy Brown as Meacham, the local minister who spouts aphorisms while toting a gun. He's a practical kind of preacher, and I liked his philosophy, which offers such wisdom as "It's not who you were, it's who you are," and "Whether you go to heaven or hell isn't God's plan but your choice." Sam Rockwell is endearing as Doc, the innkeeper who must learn how to shoot a gun and "be a man." And 12-year-old Noah Ringer is marvelous as Emmett, the boy who also learns to be a man during the quest to destroy the aliens. My only complaint is Ella (Olivia Wilde), the obligatory girl who comes along for the ride. Her role eventually deepens, but for half the film she is simply a drain on the landscape.

However, as much as I loved the idea of this film, the manifestation of the idea doesn't quite work. The alien part of the movie is simply too alien for a western. For one thing, westerns are slow-paced and character-driven; space aliens have no character. The two simply don't mix. Moreover, the metaphor is so heavy-handed that the aliens never really enter the story. The humans never even question who the aliens are, where they came from, or how they are able to fly through the sky. We're just supposed to know what they represent — invaders seeking to plunder the minerals under the soil and turn them into fuel. Sound familiar?

This is the second "alien encounter" film produced by Steven Spielberg this summer, but oddly, although the aliens in both films look nearly the same, the message of the two films couldn't be more different. In Super 8 the message is "An alien is just a friend you haven't met." Here, the alien gets caught on earth while he's just passing through, and the nasty government scientists kidnap him. In Cowboys and Aliens the beings from outer space are plundering invaders and the message is "kick their asses back where they came from."

It was nice seeing the Indians, townies, ranchers, and even bandits becoming friends. I especially liked seeing the development of Dolarhyde's character. But I'm not sure I like the idea that we can only become friends by uniting against an enemy. The film tries hard to please, but the metaphor overpowers the story and collapses from its own weight.


Editor's Note: Review of "Cowboys and Aliens," directed by Jon Favreau. Universal Pictures, 2011, 118 minutes.



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“What’s in Your Wallet?!”

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We like to laugh at those Capital One commercials. The Vikings are always doing funny, dear things like impersonating Elvis in Las Vegas or taking their pet goat to Disney World. Of course, Madison Avenue has better sense than to portray them realistically. The behavior of real Vikings wasn’t so dear.

A thousand years before the age of Victorian gentility, my Norse ancestors prowled the European coastline in dragon-headed ships. Those fanged and snarling mastheads crept out of the mist like something from a nightmare, and the nightmare was all too real. No one’s property was safe, not even that of the Church, which the pagan marauders hated with a special passion, viewing gospel gentleness with the disdain they reserved for the weak. They plundered sanctuaries, raped nuns, slaughtered priests, and took orphaned children as slaves.

Fast forward through the age of gentility, and we reach our present day. Our sophisticated and enlightened government, brimming with postmodern compassion, never fails to ask us the same question we hear from those Sea World-visiting Vikings: “What’s in your wallet?!”

The government knows exactly what’s in our wallets, of course, because it has ways of watching us that the barbarian hordes never dreamed of. They don’t need Thor, Odin, or even the Christian God. They’ve got computer technology powerful enough to track our bank balance down to the cent. And they think every cent is theirs for the taking.

This is different, they assure us. They act in the name of the people, from whom they claim to derive their consent. And most of us believe this. After all, we’re a “democracy,” are we not?

That is exactly what frightens me. What has the allure of our neighbor’s loot done to We the People? If the cause can be made to sound high-minded enough, our latter-day Erik the Reds can get us to cheer their every raid. Big government has made barbarians of us all.

How is it they get to decide who keeps their money and who doesn’t? What is it, besides the swords in their belts and the monster faces on their long ships, that gives them such authority? The Norse people of old, mostly peaceable farmers in their own lands, sent forth the marauders with their blessing. They didn’t have a democracy, but they knew all that plundered gold and silver, all those cattle and slaves, would be split with them. When the stamp of the government — even the approval of the gods — is given them, there is no end to what people will cheer for.

We must reduce our argument for property rights to the basics. Those who wantonly take whatever they want from others are barbarians. This is as true when they’re wearing Brooks Brothers suits as it was when they wore iron mail and wolf masks. It has become open season on the money and property of those who cannot gather hordes large enough to defend it. In our disregard for the very concept of private property, we are sliding back toward the Dark Ages.

No cause, however noble, can trump an individual’s right to keep the fruit of his or her own toil. To allow this to happen is to endorse slavery. If we fall prey to arguments to the contrary, we have surrendered civilized society to marauders. After that, we have nothing to look forward to except being carried off in chains.




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Anthem: The Libertarian Film Festival

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Anthem may not be the first libertarian film festival, but after the success it enjoyed at FreedomFest this month, it may well become the most lasting. With 30 outstanding films by rising artists and ten provocative and entertaining panels, Anthem was called by many FreedomFest attendees "the best new idea you've had in years."

Full disclosure: by "you" they meant the management of FreedomFest, but where Anthem was concerned, they meant especially me, since the film festival was my baby. I might debate the "in years" part of that statement — the producers of FreedomFest have added great new programs every year — but I enjoyed the compliment, nonetheless.

FreedomFest is a big conference: 150 speakers, panels, and debates, and ten events going on simultaneously during breakout sessions throughout the three-day event in Las Vegas. Why add a film festival?

First, I love movies. I love entering another world, getting caught up in a conflict, and seeing how the conflict is resolved. I love being surprised. I even love being outraged. Storytelling provides a powerful way to reveal the truth, even when the story itself is fiction. Ayn Rand was well aware of this power. It's the reason she chose to devote most of her writing to fiction (including the novel Anthem) and scriptwriting.

Second, I want to encourage more filmmakers to produce works with libertarian themes, and a film festival is a good way to do that. In recent years film festivals have blossomed around the country, with thousands of small ones focusing on specific niche audiences. These festivals give low-budget filmmakers a following and a distribution chain. Libertarianism is one of those niches. A hefty grand prize offered by our co-sponsor, the Pacific Research Institute, provides still more motivation for films that fit the theme.

Third, the FreedomFest umbrella offers something most festivals struggle to provide: a convenient location and a ready audience. Most of our costs, and our risks, can be absorbed by the larger organization. It's a great way to start small and grow.

I have to admit, however, that my greatest asset in producing the Anthem Libertarian Film Festival was withoutabox.com. What a great company for festivals and filmmakers alike! Withoutabox acts as a meeting place for filmmakers and festival producers. Filmmakers receive notices every week about festivals and everything having to do with them, including themes, locations, deadlines, and requirements. I asked some of my filmmakers how they found Anthem, and most of them told me they looked through the withoutabox listings regularly. The name "Anthem" caught their attention as potentially Randian, and the details listed on my withoutabox account confirmed their expectations. A look at my website (anthemfilmfestival.com) suggested to them that it was a high-quality, professionally organized festival, and my submission fee ($15 for early bird registrations, up to $60 for last-minute submissions) was low enough to be worth a risk.

It was capitalism in action: efficient, smart, convenient.

For festival organizers, withoutabox offers even more advantages. They handle all the paperwork involved with accepting submissions — the application forms, legal releases, submission fees, and even the advertising, all for a startup fee of $500 and a graduated advertising program. Because I wanted to start small, I opted for the least expensive advertising option: four group ads to be sent out two weeks before each of my four deadlines. The people at withoutabox processed all my fees and sent me a check, keeping a small percentage for themselves. It was capitalism in action: efficient, smart, convenient. I was happy to pay them their percentage, in exchange for not having to hire someone else to do the work.

I received 60 film submissions from sources I would never have known without withoutabox. It was thrilling to discover young filmmakers with libertarian leanings who had never heard of Liberty Magazine, or Reason or Cato or Atlas for that matter. They simply understand instinctively the principles of liberty and want to express these ideals through their art. One of the best parts of the festival was getting to know these young filmmakers and encouraging them to continue making films with libertarian themes. All of them expressed a desire to come back to FreedomFest next year, with or without a new film, just to hear the speakers.

Of those 60 films, I selected 30 to present at Anthem. Our movies focused on issues of individual freedom, personal responsibility, and self-reliance, as well as the problems of government intrusion and overregulation. Many were satirical, some outrageously so. But these movies were not preachy or didactic. They were entertaining, moving, and motivating. They were movies first, and libertarian movies second. I think that's important—storytelling must touch the emotions first, and guide the listener or viewer to experience a truth. The new media available today offer great new venues for presenting a message in this way.

As might be expected in a festival like ours, we had more documentaries than feature length films. Several of our documentaries focused on education, including Indoctrinate U, about the loss of free speech on college campuses in the wake of political correctness; Zero Percent, about the remarkable education program at Sing Sing Correctional Facility that is entirely funded through private donations and inmate tuition payments; and The Cartel, about the plight of public education and how to fix it. This film, directed by Bob Bowdon, was awarded the PRI Prize for Excellence in Presenting Libertarian Ideals.

We also had documentaries about public policy issues such as the environment (Cool It), international finance and economics (Overdose: The Next Financial Crisis and Free or Equal), and the justice system (A Remarkable Man). Each of these films was followed by a panel discussion, with speakers from all over the world participating in lively and stimulating conversation. Bjorn Lomborg, who wrote The Skeptical Environmentalist and is the featured narrator in Cool It, flew in from Sweden for the festival,and Bob Bowdon of The Cartel moderated two panels, one on education and the other on how to use the new media. We even had a panel called, “What’s Wrong with Selling Sex?” that preceded Lady Magdalene’s, a narrative feature set in a Nevada brothel that stars Nichelle Nichols, the original Lt. Uhura of Star Trek.

The film judged Best Narrative feature was "alleged," starring Brian Dennehy and Fred Thompson in a fresh look at the famous Scopes “monkey trial” that challenged the teaching of evolution in schools. The film focuses primarily on the role of the press in shaping people’s opinions. Journalist H.L. Mencken, a darling of many libertarians, comes off as devious and mean-spirited — which shows that libertarian films aren't going to follow a party line. The film was especially timely in the wake of the high-profile Casey Anthony trial.

Marathon is a poignant true story about poet William Meredith and his partner, Richard Harteis, who faced the difficult decision of what to do when Meredith suffered a debilitating stroke. It has a particularly libertarian theme, because the two men don’t pity themselves or turn to government or other institutions for help. Harteis takes care of Meredith himself. The title refers to the fact that they were both marathon runners, but it’s also a metaphor for going the distance when life gets hard. Harteis produced the film and was on hand to discuss it, and the work won the jury prize for Excellence in Filmmaking.

I was particularly impressed with the short films, most of which were made by novice up-and-coming filmmakers. Usually they were five to 15 minutes long, and all of them focused on libertarian issues. Some were serious short dramas set in dystopian futures, demonstrating what might happen to individual liberties if governments continue down their intrusive paths. Others were satirical comedies using humor to make the same point. Final Census, which won the prize for Best Short Comedy, was so outrageous that I had to soothe a sweet old lady who didn't quite see the humor of a census taker who calmly determines the social value of the people he is hired to count, but I laughed out loud when I saw it the first time.

Bright, the film that won the jury award for Best Short Drama and the Audience Choice award for Best Short Film, is reviewed separately below. Its production values, from the quality of the acting to the music and lighting, were remarkable, especially for a film festival, where movies are generally made on a shoestring budget. Bright was made for $10,000, for example, and Final Census for a mere $150. Next year we will have a panel called "Fiscally Responsible Filmmaking" to showcase their feats of funding magic. For a complete list of the films we screened this year and the awards they earned, go to anthemfilmfestival.com.

One of the most difficult problems with starting a film festival is, of course, that of attracting audiences. Even though we had a ready audience of 2,400 people attending FreedomFest, each film still had to compete with ten speakers — and one other film, as a filmmaker emphasized with a hint of disgruntlement at my decision to screen two films at a time. This year our screening rooms were located in the Skyview Rooms on the 26th floor of Bally's, a long walk down the hall and up the elevators from the main action in the Event Center. Potential viewers had to be fully committed before coming to the films — they couldn't just poke their heads in and then decide whether to stay. Our late submissions deadlines also made it nearly impossible to promote specific films in advance.

But these are simple problems, easily rectified before next year's festival. In 2012, I will, for example, probably select fewer films and show them more than once, since word of mouth grew throughout the conference, and many people were disappointed to learn that a great film they heard about wasn't playing again.

The Anthem Libertarian Film Festival will definitely be back at FreedomFest next year with a new batch of long and short films expressing libertarian ideals. I can't wait to see them, and to meet the filmmakers who will produce them. I hope Liberty's readers will be there too.

But now, let me introduce you to Bright.

Describing the essential requirements of a "skillful literary artist," Edgar Allan Poe wrote in a review of Nathaniel Hawthorne's Tales from an Old Manse: "The unity of effect or impression is a point of great importance . . . Without a certain continuity of effort — without a certain duration or repetition of purpose — the soul is never deeply moved." Every moment, Poe said, must be "conceived, with deliberate care, [to create] a certain unique or single effect."

These movies were not preachy or didactic. They were entertaining, moving, and motivating. They were movies first, and libertarian movies second.

Director Benjamin Busch has created such a work of art with his short film Bright. It's about Troy (Eric Nenninger), a young man who must overcome a paralyzing fear in order to move forward with his life. Every moment in the film is skillfully and deliberately planned to create a particular effect in the viewer. From its opening moments on, the film establishes a rich atmosphere, filled with symbolic imagery, especially the imagery of light. Troy is raised by a blind adoptive father, Irwin (Robert Wisdom), who represents the iconic blind sage of mythology and guides Troy on what turns out to be a spiritual journey. Irwin is blind, but he can "see"; Troy is sighted, but his back is always toward the light.

In this dystopian future, Troy works as a restorationist, helping people regain a sense of continuity with their past by finding old-style original light bulbs for their homes. This spinoff from the current light bulb controversy is, of course, a metaphor for the conflict between what is natural and what is artificial, what is light and what is dark, in the search for courage and meaning in life.

The pacing is deliberately slow, filmed at "the pace of real thought," according to director Busch, who wants viewers to have time to hear the dialogue. Viewers are able to contemplate the film's philosophically provocative lines: "There's danger in all this safety" . . . "Someone who never sees, never knows" . . . "I miss the light but I can remember it" . . . "I loved and I lost, and I'm glad that I loved" . . . "How much would you pay to be happy?"

Bright is a film to be seen with friends, and discussed in long, leisurely conversations afterward. As Poe said of Hawthorne's Tales, "withal is a calm astonishment that ideas so apparently obvious have never occurred or been presented [like this] before." I think Poe would have been pleased with Bright.


Editor's Note: Review of "Bright," directed by Benjamin Busch. 2011, 40 minutes. Anthem Film Festival Best Short Drama and Audience Choice Award.



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Theory and Practice

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How to Enjoy the Debt Ceiling Fight

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I am enjoying the fight in Washington, D.C., over the debt ceiling — from afar.

If you want the inside dope on what’s happening right now, I don’t have it. I am 3,000 miles away from it, and I have work to do. To me the fight in Washington has mainly been background noise.

In the cocoon of left-liberalism in which I live, the echo is that the “right-wing fanatics in Congress” have gone berserk. That’s what Paul Krugman said in the New York Times, and he is such a smart man. And here is E.J. Dionne of the Washington Post, July 21:

“The tea party lives in an intellectual bubble where the answers to every problem lie in books by F.A. Hayek, Glenn Beck or Ayn Rand. Rand's anti-government writings, regarded by her followers as modern-day scripture — Rand, an atheist, would have bridled at that comparison — are particularly instructive.

“When the hero of Rand's breakthrough novel ‘The Fountainhead’ doesn’t get what he wants, he blows up a building. Rand’s followers see that as gallant. So perhaps it shouldn’t surprise us that blowing up our government doesn’t seem to be a big deal to some of the new radical individualists in our House of Representatives.”

I turn to the No. 1 radical-individualist web page, and see a denunciation of the Tea Party from another place. Here is Brian Wilson on LewRockwell.com, July 23, claming that the Republicans are really progressives:

“When you assume the Republicans are shills for progressivism, the actions make sense and are easily predictable. If the Republicans won the Debt Debate, government spending would really be cut. Which of course, they don’t want. So they had to throw the fight. Unfortunately, like TV wrestling, it becomes more and more obvious the game is rigged. It's as if the rulers in Washington don't even care if we believe their staged fight. It's just a kabuki ritual they have to perform before stealing more of our Freedom.”

Some folks are never satisfied. Being unsatisfied is part of who they are. Not I; some things I find very satisfying. I tend to agree with George Will, who said on July 22 that the Tea Party is “the most welcome political development since the Goldwater insurgency in 1964.”

These are our people. They are for smaller government. They are against the spending and debt. They are for the constitution. I should be on their side because they are on my side.

It pains some libertarians to identify with the Tea Party. Libertarians see themselves as intellectuals, and as political movements go, the Tea Party is middlebrow tending toward lowbrow. Its people listen to Sarah Palin, B.A., Communications, University of Idaho, and Glenn Beck, whose most advanced degree is from Sehome High School, Bellingham, Wash. These Tea Party people know nothing of Lysander Spooner, the Austrian theory of the trade cycle, or the legal doctrine of substantive due process. I recall the comment by Jeffrey Friedman, Ph.D., Yale, and the editor of Critical Review (a publication I can follow only about a quarter of the time) that the Tea Party had trashed the image of libertarianism on university campuses.

Probably so. Still, the Tea Party kicks butt. In 2010, it got a cadre of rabble-rousers elected to Congress. In this debt-ceiling fight, the new Republicans provoke the furious denunciations of the Krugmans, Dionnes, and other stalwarts of the welfare state. You wouldn’t be seeing these fulminations, including Dionne’s furious blast at a novel published nine years before he was born, if the Tea Party weren’t threatening the left-liberal project.

I love it.

How it’s going to work out, I don’t know. I doubt the Left’s hysteria about a worldwide economic crisis that will flush Americans’ 401(l) money down the drain — if this were so, I think, the stock market would have fallen 20% by now — but I don’t know. The market is not all-knowing, and sometimes it comes down with a thump. I wonder whether the promises offered by President Obama and the Senate Democrats to cut two or three trillions in spending are any good. I don’t know that, either, but even if they break their promises, it seems far better to extract those promises now and pin them to their shirts.

Get while the getting’s good, my daddy used to say.

Will the people turn against the Republicans as they did in 1995? Maybe. Or will a large, vague, unenforceable deal work to Obama’s advantage, allowing him to run as a moderate, beat the Republican nominee in 2012, and save the welfare state? That’s the thesis of George Will, who urges the Republicans not to fall for it. I don’t know how they should play their cards, and unlike Will, I am not going to instruct them. I assume they know what they’re doing, and if they don’t, there is nothing I can do about it.

I hear a muted noise from 3,000 miles away, and note that the fight is still on.

I cheer my side.




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The Master of the Internet

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Federal Communications Commission Chairman Julius Genachowski is a political hack, a personification of statist mendacity. He’s a danger to individual liberties and free markets — not because of any clear intention to do wrong, but because he’s a man of gilded academic credentials yet little evident wisdom or insight.

Like the president he serves, Genachowski was educated and has spent his adult life in an echo chamber of small-minded conformists. And, like the president, Genachowski struggles to describe grand ambitions with the vocabulary of a clerk.

During the 2008 presidential campaign, Barack Obama made a big deal about “net neutrality” — a term that meant different things to different people. To traditional left-wing partisans, it meant government-funded high-speed internet service for the usual laundry list of aggrieved minority groups. To Silicon Valley tech firms, it meant cracking down on big internet service providers (ISPs) who wanted to charge heavy users of bandwidth more than light users.

“Net neutrality” was (and is) poorly-defined and is therefore likely to disappoint some or all interested parties whenever it is implemented. As public policy, it is an inherently cynical proposition. The Federal Communications Commission is the regulatory agency best positioned to give shape and force to the vague term; so Obama needed someone to run the agency who wouldn’t mind facing the inevitable disappointment that would come from fulfilling a cynically-made promise. He needed someone with enough career ambition to want the job — but not enough insight to recognize what a bad hand it would be.

Like the president, Genachowski struggles to describe grand ambitions with the vocabulary of a clerk.

Genachowski’s curriculum vitae reads much like the president’s: Columbia undergraduate, Harvard Law School. Of course, a lesser Ivy, followed by Harvard Law, doesn’t mean so much — a few geniuses and many middling mediocrities have followed that path.

According to his official biography, the FCC Chairman has spent his whole career “active at the intersection of social responsibility and the marketplace.” But what does that mean? “Social responsibility” — like “social justice” and “public interest” — is a code word that careerist tools use to camouflage their unmerited self-regard.

After Harvard, Genachowski clerked for Supreme Court Justices David Souter and William Brennan. A promising start. Later, he clerked for Abner Mikva on the D.C. Circuit Court of Appeals. This might seem like a step backward to the uninitiated; but Mikva is a lion among the establishment Left. The step, however, did establish Genachowski as more a politico than a great legal mind. It was followed by stints working for Charles Schumer and a couple of House committees — which confirmed Genachowski's drift into the ranks of partisan political hacks.

When the Democrats lost control of the House in 1994, Schumer found Genachowski a spot working for FCC Chairman Reed Hundt. Hundt did some good during his time at the FCC. He continued his predecessor’s efforts to lower regulatory barriers and, therefore, costs related to international telephone service; and he didn’t stand in the way of ownership consolidation that was going on at the time in the terrestrial radio business. But generally he did the statist bidding of the Clinton administration.

In a 2010 talk at Columbia University, Hundt admitted that “his” FCC had used its oversight powers to pick winners in the telecommunications market. It crafted regulations to “favor the Internet over broadcast” as the common medium of the country because right-wing talk radio “had become a threat to democracy.” And he bragged that he’d made policies “to allow the computers to use the telephone network to connect to the Internet . . . and to do it for free. In other words we stole the value of the telephone network . . . and gave it to society.” According to the Los Angeles Times, he called the highlight of his FCC tenure “state-sanctioned theft.”

Genachowski unintentionally highlights the moral emptiness of the administration he serves. And the moral emptiness of the American “progressive” movement in general.

Hundt seems to have been an inspiration to the careerist Genachowski — proof that a man with Ivy League credentials but no particular qualities could rise to levels of high esteem in the nation’s capital. The elite among these hacks parlay this esteem into lucrative post-government employment with rent seekers such as McKinsey and Co. and the Blackstone Group. In 1997, Genachowski left the FCC and went to work as a sort of bar-admitted personal valet to Barry Diller at IAC/InterActiveCorp, a New York-based conglomerate of internet commerce companies whose crown jewel is the widely-reviled Ticketmaster. This episode is Genachowski’s main claim to business experience. His resume entries while at IAC — “Chief of Business Operations” and “General Counsel” — sound impressive, until you realize that Diller runs the firm as a sort of personality cult and doesn’t suffer strong (or, some say, even competent) subordinates.

Genachowski’s resume also includes short stops at a couple of minor venture capital funds. But his track record doesn’t suggest any particular vision for technology or business. He seems to have been an access-peddler brought in to provide political contacts. And he didn’t last long in any of those gigs. He was just biding his time until he could pass back through the revolving political door.

Genachowski unintentionally highlights the moral emptiness of the administration he serves. And the moral emptiness of the American “progressive” movement in general. Two speeches that he gave December 2010 set a framework for examining his circular logic, slipshod ethics, and tired rhetoric.

On December 1, 2010, he gave a talk with the Orwellian title, “Remarks on Preserving Internet Freedom and Openness” to FCC staffers. As we’ll see, his definition of “openness” is perverse — and it may be the key to understanding the Obama brand of knee-jerk statism.

“After months of hard work at the FCC,” he said, “and after receiving more than 100,000 comments from citizens across America, we have reached an important milestone in our effort to protect Internet freedom and openness.”

This theme of “hard work” recurs in Genachowski’s rhetoric. It’s not clear exactly what he thinks is “hard” about the work of dictating how internet service providers can operate. The approach of his FCC has been to meet separately with various “stakeholders” in telecommunications regulatory policy — and then to issue edicts influenced, if not drafted, by a handful of leftwing thinktanks.

In any event, congratulating himself and his staff for doing “hard work” is reminiscent of government bureaucrats who call their offices “shops.” They’re contemptuous of real shops and actual hard work.

“Yesterday, I circulated to my colleagues draft rules of the road to preserve the freedom and openness of the Internet.”

This is almost too easy. Who but a hard-charging statist, blind to simple logic or common sense, would believe that such “rules” preserve “freedom and openness?”

“This framework . . . would advance a set of core goals: It would ensure that the Internet remains a powerful platform for innovation and job creation; it would empower consumers and entrepreneurs; it would protect free expression; it would increase certainty in the marketplace, and spur investment both at the edge and in the core of our broadband networks. . . . The proposed rules of the road are rooted in ideas first articulated by Republican Chairmen Michael Powell and Kevin Martin, and endorsed in a unanimous FCC policy statement in 2005. Similar proposals have been supported in Congress on a bipartisan basis. And they are consistent with President Obama’s commitment to ‘keep the Internet as it should be — open and free.’ ”

There are two points worth noting in the section above.

One, Genachowski often presses the point that his edicts are consistent with those of the GOP appointees who’ve preceded him. In his worldview, that which is “bipartisan” is inherently good. He doesn’t seem to understand that both parties are deluded in believing that their central planning will make the market for communications services operate more efficiently.

If government agencies get to define and things like the levelness of playing fields and the unreasonableness of “discrimination,” there will be no free market of ideas.

Two, Obama and his minions are being cagey when they claim “openness” as a goal of their market rules. “Openness” is a term of little fixed definition in economics circles — or almost anywhere else. It sounds like a free-market value — but statists can use it as a Trojan horse for bringing central-planning policies into effect. The main policy hiding in this horse is “net neutrality,” a regulatory concept that means . . . whatever the Feds want it to mean.

“This openness is a quality — a generative power — that must be preserved and protected. And . . . there are real risks to the Internet’s continued freedom and openness. Broadband providers have natural business incentives to leverage their position as gatekeepers to the Internet. Even after the Commission announced open Internet principles in 2005, we have seen clear deviations from the Internet’s openness — instances when broadband providers have prevented consumers from using the applications of their choice without disclosing what they [the providers] were doing.”

In this opaque discussion of “openness,” Genachowki seems to be referring to the 2010 federal appeals court decision in Comcast Corp. v.FCC. It came as the result of a legal dispute between the FCC and the telecom giant that dates back several years. Comcast — one of the biggest ISPs in the United States — has made a practice of slowing some customers’ internet connections when they use BitTorrent, a bandwidth-hogging file-sharing service used primarily to trade digital versions of TV shows and films. (Many film and TV studios also complain that BitTorrent encourages piracy of copyrighted content.)

The FCC has maintained that this selective tightening of specific uses of the internet pipeline violates its policies of “openness” and “net neutrality,” providing an opportunity for the Feds to dictate corporate action to the likes of Comcast. Comcast has maintained that the FCC’s statements about internet openness are just industry guidelines, not legally enforceable.

The two sides have spent a lot of time in federal court, debating these points. In 2008, a trial judge ruled for the FCC and said it could wrap just about any edict it wished within the policy cloaks of “openness” and “net neutrality.” But in April 2010, a federal appeals court overruled the trial court and found that the FCC does not have the authority to sanction Comcast for restricting access to BitTorrent.

Internet access is not a right; it’s a consumer service. High-speed internet access is a luxury service, and even less a right.

During oral arguments, D.C. Circuit Judge Raymond Randolph told the FCC’s lawyers, “You can’t get an unbridled, roving commission to go about doing good.” In his written decision a few months later, Randolph wrote: “Policy statements are just that — statements of policy. They are not delegations of regulatory authority.”

Randolph’s ruling is a big win for liberty — and the prevention of regulatory creep. But it’s a big problem for Genachowski. Playing bureaucratic games with the “net neutrality rulemaking process” accomplishes nothing; it’s all just talk, without any statutory basis. Until Congress passes a law codifying net neutrality, Comcast can tell the FCC to sod off. And keep tightening the pipe for BitTorrent.

Back to Genachowski’s hackery:

“Protecting Internet freedom will drive the Internet job creation engine. . . . [C]onsumers and innovators have a right to know basic information about broadband service, like how networks are being managed. The proposed framework therefore starts with a meaningful transparency obligation, so that consumers and innovators have the information they need to make smart choices about subscribing to or using a broadband network. . . . [C]onsumers and innovators have a right to send and receive lawful Internet traffic — to go where they want and say what they want online, and to use the devices of their choice. Thus, the proposed framework would prohibit the blocking of lawful content, apps, services, and the connection of non-harmful devices to the network. . . . [C]onsumers and innovators have a right to a level playing field. No central authority, public or private, should have the power to pick which ideas or companies win or lose on the Internet; that’s the role of the market and the marketplace of ideas. And so the proposed framework includes a bar on unreasonable discrimination in transmitting lawful network traffic.”

Genachowski must have had trouble in Constitutional Law — even at Harvard. And introductory logic at Columbia — if he ever took it. Reread that last paragraph. The man conflates a “right to a level playing field” with eyewash about a free “marketplace of ideas.” Those two things are mutually exclusive. If government agencies get to define and dictate (or, sometimes, dictate first and define later) things like the levelness of playing fields and the unreasonableness of “discrimination,” there will be no free market of ideas. Or anything else.

Another point: Genachowski’s broad strokes, pitting “consumers and innovators” against evil ISPs, are so crude as to be meaningless. In many cases, the ISPs are the innovators and content-owners on the internet. And, as he proceeds to explain, his notion of “consumer” less resembles any person than it does a grievance mechanism concocted by some leftwing think tank.

“Universal high-speed Internet access is a vital national goal that will require very substantial private sector investment in our 21st century digital infrastructure. For our global competitiveness, and to harness the opportunities of broadband for all Americans, we want world-leading broadband networks in the United States that are both the freest and the fastest in the world.”

The grubby materialism of statist political philosophy usually leads to farcical conclusions. Thus, Genachowski’s talk of “vital national goals” includes the right to a “level playing field” in terms of high-speed internet access. But why stop there? Why not add a right to a level playing field in terms of high-speed cars? High-definition TVs? Brushed-aluminum appliances?

Internet access is not a right; it’s a consumer service. High-speed internet access is a luxury service, and even less a right.

“. . . Accordingly, the [FCC’s current] proposal takes important but measured steps in this area — including transparency and a basic no blocking rule. Under the framework, the FCC would closely monitor the development of the mobile broadband market and be prepared to step in to further address anti-competitive or anti-consumer conduct as appropriate. . . . The Commission itself has a duty and an obligation to fulfill — a duty to address important open proceedings based on the record, and an obligation to be a cop on the beat to protect broadband consumers and foster innovation, investment, and competition.”

Any Beltway bureaucrat who doesn’t carry a gun but talks about being a “cop on the beat” should be summarily thrown in the Anacostia River.

This last bit is very important. There’s little foundation in either statute or legal precedent for the FCC to have regulatory authority over the “mobile broadband market.” But mobile devices are the fastest-growing segment of the consumer electronics marketplace, and the Feds want control of what appears and how it appears on all those smartphones and tablets.

And beware: any Beltway bureaucrat who doesn’t carry a gun but talks about being a “cop on the beat” should be summarily thrown in the Anacostia River, especially if he thinks that a “cop on the beat” is supposed to go around fostering things. Genachowski uses the phrase repeatedly — so he’ll require multiple immersions.

On December 15, Officer Genachowski gave another speech — this one at the National Press Club in Washington, entitled “Response to Communications Workers of America’s ‘Speed Matters’ Report.” It finished the work that his earlier comments had begun:

“CWA was one of the very first organizations to question whether America’s broadband networks are where they need to be if we hope to realize the full potential of this transformational technology. . . . Slowly but surely, others have come to recognize the strategic importance of having world-leading broadband networks, but, as today’s report makes clear, we still have a lot of work to do. The FCC has been working hard to address the key challenges CWA has spotlighted in this report.”

This is a typical approach for Obama Administration apparatchiks: they allow labor unions to define regulatory policy. CWA leaders encourage partisan “activism” and compare political opponents to Nazis (need proof? Google “Christopher Sheldon,” vice president of a New Jersey CWA local). That an obsequious FCC chairman allows the leaders of this union to set policy priorities is just bad.

“The economy and jobs are at the core of our work. We’re focused on seizing the opportunities of communications technologies to catalyze private investment, foster job creation, compete globally, and create broad opportunity in the United States. . . .

"I agree with CWA that the great infrastructure challenge of our generation is high-speed broadband Internet. Robust broadband networks create all kinds of jobs, all across the country — everything from construction jobs, to urban planners and architects, engineers and scientists, sales people and IT professionals.”

Internet access doesn’t make people employable. Employable people tend to be early adapters of technology.

Here’s another example of the Obama administration’s folly. A central plank of its political philosophy is that the purpose of business is to create jobs. Of course, that is false. Jobs are a side-effect of business, the purpose of which is to make profits. But high-speed internet access as an engine of job creation is something of fetish for Genachowski. In a separate speech, he said:

“[E]very billion dollars spent on infrastructure will create 20,000 to 40,000 jobs — jobs that can’t be outsourced. . . . These includes all kinds of jobs — construction jobs, urban planners and architects, engineers and scientists, sales people and IT professionals.”

In yet another speech — to Jesse Jackson’s corporate shakedown organization, the Rainbow PUSH Coalition — Genachowski blathered: “If we want the United States to be the world’s leading market for the innovative new products and services that drive economic growth and job creation, we need all Americans to be online. . . . [Question: Even convicts? Even four-year-olds?] Broadband is essential to economic opportunity. Job listings are moving exclusively online. Increasingly, if you’re not connected you can’t find a job.”

This is a classic example of a dull-witted statist confusing correlation with causality. Internet access doesn’t make people employable. Employable people tend to be early adapters of technology.

But back to his National Press Club screed:

“[I]f we want the job-creating Internet services and applications of the future developed in America, we are going to have to do better. That’s why our National Broadband Plan sets a goal of 100 megabits per second broadband to 100 million homes. This would make the U.S. the world’s largest market for very high-speed broadband services and applications — unleashing American ingenuity and ensuring that businesses and jobs are created here, and stay here. . . . Because speed matters, we set a goal of at least 1 gigabit-per-second service to at least one anchor institution in every community in the country. These ultra-fast testbeds will help ensure that America has the infrastructure to host the boldest innovations that can be imagined.”

This is old-fashioned, institutionally-decadent pork. And it has the same rotten smell as the various high-speed rail projects Obama likes mentioning. There’s no evidence that Americans want or need the “testbeds” (what a word) that Genachowski describes. But, using nothing more than circular logic, he promises big-government boondoggles designed . . . to generate the CWA dues that allow people like Christopher Sheldon to avoid honest work.

“In September, the Commission approved an order giving schools and libraries the flexibility to buy low-cost fiber through our Universal Service Fund, moving us one step closer to achieving this goal. And, as the National Broadband Plan recommends, we’re also working with the military to make military bases one-gig centers.”

You have to give Genachowski credit for unearthing old bureaucratic technology. The United Service Fund is an obsolete program, originally intended to encourage telephone service to poor rural areas. There’s no objective evidence that it needs to remodeled into some sort of open-ended subsidy for “schools and libraries” (as if libraries, of all things, were cutting-edge, job-creating agents of innovation). The fact that the FCC is trying to do this is yet another example of how government programs never go away.

Maybe, behind all the bullshit, Genachowski doesn’t even understand what “regulate” means.

As far as military tech goes, the whole Bradley Manning-Wikileaks episode suggests that generals need to get better control of the carbon-based links in their computer chain before asking for screaming fast internet connections.

“As CWA’s report states, to spur innovation, the Internet must not only be fast, it must remain open. That’s why the FCC is also moving to preserve the freedom and openness of the Internet. . . . It’s a vital part of what we need to do unleash innovation and protect free speech, to foster broadband investment and promote a vibrant economy — to create jobs in the United States. And that’s why it’s essential that we move forward next week with our strong and balanced proposal to adopt the first enforceable rules of the road to protect Internet freedom.”

Again, there’s cognitive dissonance among these hacks. Nothing the FCC or any other government agency does creates jobs. Even if the FCC’s budget were increased fivefold and its offices crammed with more bureaucratic inmates, the sovereign debt or tax revenue required to fund such folly would quash actual jobs in the private sector, by removing the money to pay for them.

“As the Speed Matters report emphasizes, two key challenges facing the U.S. are broadband availability and adoption. . . . Up to 24 million Americans couldn’t even get broadband if they wanted it. And even where broadband is available, too many Americans are not adopting. Roughly 1 in 3 Americans has not adopted broadband, nearly 100 million people. The adoption rate is even lower among certain communities — low-income Americans, rural areas, minorities, people with disabilities.”

You can hear the echoes of Obamacare’s coverage mandate. If “too many Americans” don't have something, or don't even want something, then the government should enable them to have it — or force them to have it.

“We’ve got out work cut out for us, but with the help of the organizations here, I’m confident we’ll get the job done.”

What job? Forcing high-speed internet access on people who haven’t asked for it . . . and may not be able to afford it, or want to afford it, instead of other things? Arranging big-ticket boondoggles that will make work for self-interested groups like the CWA? Flouting the appeals court decision and dictating terms of operation to ISPs — while hiding behind anodyne jargon such as “rules of the road”?

Whatever the answer, Genachowksi’s “job” seems to make a mockery of his statement in a February 2010 interview with The Wall Street Journal, in which he said, for once in plain language, “We’re not going to regulate the Internet.” Maybe, behind all the bullshit, he doesn’t even understand what “regulate” means.

The most difficult part of reading through the scores of speeches and press releases of Chairman Genachowski is enduring the constant repetition of the same tired rhetoric, the same meaningless cliches. It’s easy to see why statists — and all politicians — become cynical. Repeating the same stupid phrases over and over again must rob any promise, even any concept, of meaning. And this is “work.” This is a "job."

A quick bit of history. The FCC was created in 1934 to allocate and regulate the use of the radio spectrum — which was a scarce commodity at the time, though essential to a cutting-edge technology — and broadcast signals. That was, arguably, a defensible regulatory role. But, since those early days, FCC bureaucrats (including most of the agency’s chairmen) have been pushing at every edge to expand their role. And they have usually been itchy to regulate the content that broadcasters send across the airwaves. This constant urge to regulate content negates the more humble, technology-focused purpose that the FCC is supposed to serve.

Just a few days after dishing out gross flattery to the CWA, Genachowksi did his master’s bidding and vomited up an Executive Order establishing “basic rules of the road to preserve the open Internet as a platform for innovation, investment, competition, and free expression.”

When he first took the FCC Chair, he had described “net neutrality” as a set of rules that would prohibit ISPs from tightening access for applications — such as BitTorrent — that they found undesirable. And his scheme seemed to apply to both wired and wireless networks. But the Comcast decision threw a wrench into those grand plans, so Genachowski claimed unconvincingly to have reconsidered his position and become a moderate dealmaker with a light regulatory touch.

If the FCC regulates ISPs under Title II as telecommunications infrastructure, the internet would become in effect a public utility.

His story isn’t supported by reality. The FCC’s December 2010 Order prohibits ISPs from blocking content, requires them to disclose how they filter traffic, and bans them from “unreasonable” discrimination against applications and web sites. And the FCC gets to make up what’s reasonable and unreasonable as it goes along. (Wireless Internet service providers are completely exempt from the Order.)

So ISPs may own the hardware of the Internet, but the FCC controls how that hardware is used. And the present FCC Chairman favors application suppliers — such as BitTorrent. And Google. And the sites run by IAC/InterActiveCorp. This couldn't give the FCC any power to control free expression or free innovation, could it?

The Order — which, like agency policies before it, does not have the weight of law — passed on a 3-to-2 vote among the FCC commissioners. It was a party-line vote, with the two commissioners appointed by Republican presidents voting against and the three appointed by Democrats for. Commissioner Robert McDowell, who voted against the Order, predicted that it would result in an “era of regulatory arbitrage.”

Other critics said that Genachowski’s Order gives the FCC a tool to regulate content and, echoing the Comcast decision, pointed out that the agency has no legal authority over the internet in the first place. One critic aptly compared Genachowski’s Order to a rule forcing FedEx and UPS to treat all packages in the same way the Postal Service does.

In response to these criticisms, the FCC organized faint praise from leftwing thinktanks that had supplied Genachowski with many of his talking points. Harold Feld, a talking head from a thinktank called Public Knowledge said:

“[The Order is] hardly more than an incremental step beyond the Internet Policy Statement adopted by the previous Republican FCC. After such an enormous build up and tumultuous process, it is unsurprising that supporters of an open Internet are bitterly disappointed — particularly given the uncertainty over how the rules will be enforced.”

Comments like this were supposed to support Genachowski’s claim that he was acting as an honest broker trying to work out a compromise — just as Obama had tried to position himself regarding the Patient Protection and Affordable Care Act. In both cases, the claims were false; the “compromises” split trivial differences between similar visions of corporate welfare. In the case of net neutrality, Democrats said that Republicans were protecting the interests of the cable and phone companies that are the main providers of broadband internet service to American households. Republicans said that Democrats were protecting application companies such as Google, Netflix, and BitTorrent, which have become successful in an era of unregulated internet and want to raise barriers against potential competitors.

Genachowski’s Order drew the attention of Congress. And not in a good way. In April 2011, the House of Representatives approved House Joint Measure 37 — which prohibits the FCC from regulating how internet service providers manage their broadband networks. This action was aimed squarely at thwarting Genachowski’s power grab. Rep. Greg Walden — Measure 37’s author — told theNew York Times:

“Congress has not authorized the Federal Communications Commission to regulate the Internet. [Genachowski’s Order] could open the Internet to regulation from all 50 states.”

Walden went on to say that, in his opinion, the Order was an Obama administration attempt to use the regulatory process “to make an end run around” the Court of Appeals ruling in Comcast.

At about the same time, a separate congressional inquiry forced Genachowski to answer questions about whether White House officials had improperly influenced the net neutrality rules. Rep. Darrell Issa — chairman of the House Oversight Committee — pointed to media reports that suggested “Obama administration officials had knowledge of and potentially contributed to [the] crafting of” the FCC’s rules in this area. Issa also noted that Genachowski and Obama had made suspiciously similar remarks about the rules in separate speeches made during the fall of 2009. And he asked pointedly whether former White House economic adviser Larry Summers had been the conduit with the FCC, planning Genachowski’s net neutrality Order.

Genachowski took a sleazy, legalistic tone in evading Issa’s questions. He whined that the Communications Act of 1934 “does not prohibit communications between commissioners and commission staff and members of the administration.” He said that the FCC’s rules requiring disclosure of such communications did not take effect until the release of a “Notice of Proposed Rulemaking.” Since the Notice of Proposed Rulemaking on net neutrality was issued in October 2009, he claimed that he didn’t have to explain any meetings that had taken place before that date. And finally — sounding like a minor-league version of Bill Clinton playing games with verb tenses — Genachowski said that the FCC’s “Office of General Counsel is not aware of any potential violations of the ex parte rules in connection with the subject matter.”

According to committee staffers, Issa didn’t expect candid or complete answers from Genachowski. The purpose of his questions was to show the FCC that Congress was aware of its attempted power-grab. But Genachowski ignored that message. He’s still grasping at more regulatory power.

Free Press, a leftwing thinktank that has an extremely close and influential relationship with Genachowski’s FCC, has suggested that the agency should try to move broadband service into the same regulatory category as telephone lines. Rather than regulating broadband providers as information services under Title I of the Communications Act, Free Press says the FCC should regulate them under Title II as telecommunications infrastructure.

If the FCC does this, the internet would become in effect a public utility. This is a troubling — and exhausting — proposition. The United States doesn’t need yet another whole category of consumer services wrapped in the obscuring cloak of “public utility.” Public utilities are bad for many reasons, not least the fact that bureaucrats like Julius Genachowski consider them tools of social engineering.

Of course, Genachowski is neither wise enough nor honest enough to acknowledge any of this. And that shouldn’t come as a surprise. His grasping careerism is the reason he was chosen for the job.




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No, Size Doesn’t Matter

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With teacher unions now in full battle mode, prepared to fight for even more money and even less accountability, coast to coast, a timely article in the always outstanding City Journal is worth noting.

The piece, by Larry Sand, current president of the California Teachers Empowerment Network, addresses the common claim by teachers' unions that if only class sizes were smaller — which, of course, would require that taxes go higher — educational quality would improve. This is a common ploy of these covens of rapacious rentseekers, whenever parents complain about the wretched education served up at the average American public school. But Sand’s piece reminds us anew of what an asinine myth it is.

He notes that from the point of view of teachers, small classes are great — fewer kids to deal with, fewer papers to grade, and fewer parents to placate. And certainly American taxpayers have been accommodating: since the 1950s, while the number of students nationwide has risen by 60%, the number of school employees — teachers, administrators, and staff — has metastasized by 300%. Yes, that’s right: the number of highly-paid, impossible to fire, union-dues-paying educrats has risen at five times the rate of the rise in new children. (Remember: every new hire represents another $600 per year in union dues).

Nationally, there were 26.9 public school students for every teacher in 1955, 22.3 per teacher in 1970, and 15.5 per teacher in 2007 (the last year for which there are stats). But average student achievement scores remained essentially flat during the past 40 years.

Students in countries that have much higher student-teacher ratios than ours (such as Japan and Korea) routinely outscore American students by a large margin. Ironically, as Sand notes, research (conducted by economist Eric Hanushek) shows that firing the worst 5% of teachers, without replacing them, would only slightly increase the average size of classes, but it would increase student outcomes to roughly those of high-scoring countries such as Canada or even Finland.




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The E-Trade Baby Blues

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When I was in college I learned about a theory called “the cultural contradiction of capitalism,” which claims that capitalism calls upon the public to assume two conflicting personas. As producers, people must be rational and responsible; but as consumers, they need to be irrational, carefree, and gluttonous, so they will buy as much as possible.

I recently recalled this theory while watching one of the incredibly annoying “E-Trade baby” commercials on television. The E-Trade baby’s message is that investing is fun and easy and, by implication, even a toddler could handle it. Although I am an aspiring lawyer, I do have some degree of background on investment advising, and I consider this message absolutely irresponsible. Investing is difficult. To beat the averages and outperform the indexes (which is the only sensible goal for day-trader-type, individually managed investing accounts such as E-Trade sells), an investor needs brilliance, discipline, and a ton of luck.

Investing without understanding how to research stocks is like gambling your life savings at a casino. A rational strategy for saving for retirement would include buying index mutual funds and highly rated bonds with gold or gold-related stocks as a hedge against inflation. Picking individual stocks (even supposedly “safe” or large-cap stocks such as IBM or Microsoft) is too risky for someone investing retirement savings. It is mathematically impossible to predict future stock prices accurately enough to eliminate the risk that your portfolio will be wiped out by bad luck or short-term swings on precisely the day when you need to dip into your savings. Stock-picking is not suitable for any investor unless you spend several hours each day researching your stocks. But actively managed investing for mainstream America is what the E-Trade baby sells.

Many Americans learned the dangers of Wall Street investment when the recent recession ate their portfolios. And Wall Street is a symbol of capitalism for the American public; when retirement accounts go down, Main Street always blames Wall Street. This happened in 1929, when the stock market crash started the chain of events that led to the Great Depression and the New Deal. It happened recently when the so-called Great Recession instigated the Dodd-Frank Wall Street Reform Act.

My own opinion is that a fool and his money are soon parted. The American investing public believed that stock prices and real estate values could never go down, and that the principle of “more reward requires more risk” did not apply. The public got what it deserved. But although I blame the investors, it is undeniable that Wall Street, from Goldman Sachs to Jim Cramer to E-Trade, promoted itself as an easy, riskless way for mainstream families to make money and save for retirement. The investing public’s “irrational exuberance,” to quote Alan Greenspan, can only help Wall Street to make money. Vast fortunes are made by investment banks when stock market bubbles inflate. Wall Street is partially to blame.

What I am trying to get at here is that even though libertarians love capitalism, we do not have to love everything that results from the profit motive. My favorite movies are the original Star Wars trilogy. But George Lucas, desiring to milk as much money from his franchise as possible, has produced several re-edited versions, each more atrocious than the last, and also filmed the pathetic “prequels.” Similar stupidity was behind the decision to film “Harry Potter and the Deathly Hallows” as two separate movies instead of one, dooming the two movies to artistic ineptitude. Generally, whenever a novelist or movie studio produces something good that people like, sequel after sequel follow, for no other reason than to make easy money and feed off the brilliance of the original.

Even though libertarians love capitalism, we do not have to love everything that results from the profit motive.

From a different angle, consider the widespread use of “intro rates” to persuade people to buy cellphone or cable TV services or six-month intro rates on credit cards. Are consumers so stupid that they don’t plan more than six months ahead? Ads full of colorful sights and sounds and subliminal associations but empty of facts and information about why their product is superior are the rule on television, not the exception. The stupidity of the public makes advertising easier. It is easier to sell car insurance by building a brand image around a jingle or a cartoon character than to produce a product that can be objectively demonstrated through scientific testing to be better than its competitors. Ads paid for by businessmen are a huge part of what shapes American culture and the American media — which helps explain why American culture is so strongly slanted in favor of shallowness, stupidity, and irrationality (though this is not a complete explanation, but merely one piece of the puzzle). America is full of instances in which businessmen appeal to consumers not on the basis of reason and logic but through gimmicks and psychological manipulations. Judging by the widespread success of ads like the E-Trade baby, many members of the public make some horribly irrational choices, in their consumer goods no less than their political beliefs.

You can’t blame capitalism for the fact that people make bad choices. Consumer irrationality is not a valid excuse to strip people of their freedom to choose. Wall Street gives us a far higher standard of living than any of the Soviet states ever achieved, and capitalism is the only system with a proven track record of prosperity and progress.

Nevertheless, the moral of this story is that the profit motive has a dark side. I know that some would say that the desire to make easy money by appealing to irrationality is not actually in any businessman’s long-term rational self-interest. I completely agree. Yet it is natural for people to seek to make money as easily as possible, and we see what results. Instead of blindly insisting that the profit motive can do no wrong, we should take the more refined approach and recognize that the fault lies with the people themselves, not with freedom as an economic system.

So I support the profit motive — but supporting the profit motive does not mean supporting everything that results from the profit motive.




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EVs: Not So Green After All

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The Australian has reported the results of a fascinating British study. It turns out that electric cars (EVs), those holy icons of the Green religion, may actually produce more atmosphere-destroying emissions over their lifetimes than regular, gasoline fueled cars — when you do the commonsense thing and factor in the energy it takes to produce the necessary batteries.

To be precise, the study (which was funded by the Low Carbon Vehicle Partnership, a group that is, in turn, supported by both the British government and the British car industry) showed that the average EV would have to be driven over 80,000 miles for it to produce a net savings in carbon dioxide over the standard internal combustion engine. Considering that EVs have limited ranges (they average about 90 miles per charge), it is not clear that many EVs will last that long.

This study was the first to look at the whole lifecycle emissions of EVs, including their manufacturing, driving, and — please note — the tricky matter of disposal of their used batteries. These batteries are the culprits. They contain metals that are expensive to produce, and they have to be replaced every few years.

The study found that a mid-size EV produces about 23.1 tons of carbon dioxide during its lifetime, scarcely less than the 24 tons produced by a regular, gasoline powered car. This is in part because the emissions from manufacturing EVs are about 50% higher than those from manufacturing regular cars.

What the British Department for Transport will make of the report it called for is anyone’s guess. The Department is currently lavishing $7,700 grants on people who buy the damn things.




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Toward Prohibition’s End

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Marijuana prohibition is coming to an end. I see it in my neighborhood, as a storefront is vacated by an architect and occupied by a purveyor of medical cannabis. I see it politically. Legalization is coming, though exactly when and how is not yet clear.

Washington, my home state, is one of 16 medical-marijuana states (and one of the five that have allowed it since the 1990s, the others being California, Oregon, Alaska, and Maine). That leaves 34 non-medical-marijuana states. Still, the list of medical-marijuana states keeps growing: Arizona in 2010, as well as the District of Columbia, and Delaware in 2011.

The opponents of medical marijuana argue that it is a step toward full legalization, and they are right. Politically it is. But the next step is a tricky one.

The problem is the federal law. When California legalized medical cannabis in 1996, it set up a conflict of federalism. Under the Constitution, particularly the Ninth and Tenth Amendments, there ought not to be any federal law about marijuana, but there is. The Controlled Substances Act exists, and the courts uphold it.

In 2005, the US Supreme Court ruled on the federal claim of power over marijuana as medicine. That was the Raich case. A prominent libertarian legal theorist, Randy Barnett, argued at the high court against the federal position, and he had a fine argument. But he lost. There were sharp dissents by justices Sandra Day O’Connor and Clarence Thomas, but the court sided with the government.

Having pushed aside the Constitution, however, the Bush administration failed to press its advantage in the field — at least, not for a decisive victory. Then, in 2009 came the Obama administration. In October of that year, the Justice Department said there would be no federal prosecutions of doctors or patients who were following their state’s medical-cannabis laws.

That was taken as more of a favorable signal than it was. In California, storefront dispensaries were opened with big images of marijuana leaves and green crosses in their windows. But the memo had not made any promises to suppliers of marijuana. By 2011 dispensaries had opened in several states, and US attorneys drew the line. They sent letters warning that any business in marijuana would not be tolerated.

I can report what happened in Washington state. It had one of the earliest medical marijuana laws, but it was a law with holes in it. Some of the holes favored the users. For example, the law allowed a provider to serve only one patient. Dispensaries had opened, some of them serving hundreds of patients, on the bold assertion that they were serving one patient at a time. The state law was just vague enough to make this plausible.

No matter what the Obama people privately believe about marijuana, their priority is his reelection, which means not being branded as the Dope Smokers’ President.

The law had another hole that was dangerous for users. It allowed them to raise a medical defense at trial but said nothing about protection from arrest. There was a case about this: State v.Fry. In Colville, a small town in the state’s rural northeastern corner, the cops had come to the door of one Jason Fry, a man who had been kicked in the head three times by a horse. Fry had anxiety attacks and smoked marijuana to calm himself. The cops had heard about it, and at his doorstep they could smell it. Fry showed them his doctor’s letter giving him permission to use it, but they phoned a judge, got a warrant, searched his home, and busted him for having more plants than the state Department of Health allowed.

At the Washington Supreme Court, the question was whether the judge had probable cause to issue the warrant. Only one justice — libertarian Richard Sanders — sided with Fry, arguing that arrest protection was implicit in the measure passed by voters. The other eight sided with the state.

Under the regime of the past few years, in the liberal parts of Washington, particularly around Seattle, medical users have been mostly OK, and in rural counties they have had to take their chances.

The state senator from my Seattle district, one of the most liberal districts in the state, offered a bill to make sense of all this. It would have set up state licensing and regulation of growers, processors, and dispensers of medical marijuana, bringing them into the open. It also called for a voluntary state registry for medical users, to give them protection from arrest. The Democrat-controlled legislature passed the bill and sent to Democratic Gov. Christine Gregoire. Then the US attorneys in Seattle and Spokane, both of them long-time Democrats, wrote to the governor, warning that under federal law any state employee who licensed a marijuana business would be liable to federal prosecution.

Nowhere had the federal government prosecuted state employees for following state medical-marijuana law. It was possible, but it would be a direct federal-state confrontation. Was the Obama administration ready for that? The press noted that the governor, who previously was the state’s attorney general, might have a personal motive to comply with the Justice Department’s request: she is in her second term, is set to leave office at the end of 2012, and might like a law-related job in a second Obama administration. Whatever her motive, she cited the threat and vetoed the parts of the bill for licensing of marijuana suppliers.

After her veto, the US attorney in Spokane ordered all dispensaries closed, and joined with Spokane Police to raid the ones that defied him. As I write, he has not yet charged anyone with a crime. In liberal Seattle, where voters in 2003 had made simple possession of marijuana the lowest priority for police, the US attorney has so far stood aside while the Democratic city attorney and the Republican county prosecutor — both of them elected officials — work to keep the dispensaries open.

Parallel to the push for medical cannabis has been a drive for general legalization. It has begun in the early medical-marijuana states, and using the same tool as was used in those states: the voter initiative.

The voters of California, who were the first to approve medical marijuana by public vote, had another such vote in 2010. It was Proposition 19, a measure to allow people over 21 to cultivate, transport, and possess marijuana for personal use, and to allow cities to license commercial grows and dispensaries. Prop 19 garnered 46.5% of the vote. It failed, but not by much: a switch by fewer than 4% of the voters would have put it over the top.

What will state and local politicians do if their constituents vote for legalization and the feds oppose them?

In any complicated measure such as Prop 19, there are many arguments to convince people to vote no. There was the argument about protecting kids, though marijuana is available on the black market now and the measure wouldn’t have legalized it for them. Always there is the argument that the measure is flawed, whether the principle is right or not. In California, Mothers Against Drunk Driving opposed the measure on the ground that it didn’t define an illegal THC threshold for drivers. In California, several arguments were made by recipients of federal money. A school superintendent argued that legal marijuana would prevent the schools from meeting the requirements for federal grants. Business interests argued that they would lose federal contracts because they could no longer guarantee drug-free workplaces. Thus federal contracts and grants become weapons in political campaigns.

In any case it was close, and in the matter of social change, it is common to fail the first time. If you want to win, you try again.

Washington state was behind California, but not by much.

In 2010, two marijuana defense attorneys wrote a voter initiative that would have repealed all state marijuana law for adults over 18. The measure had no regulations in it. The organizers explained that if it had regulations in it, the federal government could challenge them in the courts under the doctrine of federal preemption, and have the regulations and the repeal thrown out. But a simple repeal would leave nothing for the feds to challenge.

One of the attorneys, Douglas Hiatt, said that was how New York and some other states had undermined liquor prohibition. It had worked, and the smart thing was to do it that way again.

The strategy made sense legally, but politically it didn’t work. The American Civil Liberties Union of Washington, which favors legalization, refused to back it because it included no regulations. The pro-legalization forces split. No prominent politicians stood up for the measure, the backers couldn’t raise any money to pay signature gatherers, and they fell short on signatures.

Also in 2010, a state representative from my district introduced a bill in the legislature to legalize and regulate marijuana. It died without a hearing.

In 2011, the two defense attorneys collected signatures for their initiative again, with the same result: they had too little money and fell short. My representative ran her bill again; this time it was endorsed by the state’s largest newspaper, the Seattle Times, which came out for full legalization. The bill failed once more, but it got a hearing, some respectable people testified in its favor, and they were covered in the press.

At the end of the legislative session, a well-connected group, including ACLU-WA, travel entrepreneur Rick Steves, and the former Republican US attorney in Seattle, John McKay, announced a legalization initiative aimed at the state ballot in November 2012. It has regulations in it, including a tight limit on THC in the bloodstream of drivers. But it is legalization for adults over 21 — and backing it are the names to attract money, and to assure wavering voters that it is OK to vote yes.

So it is in Washington state. According to NORML (National Organization for the Reform of Marijuana Laws), it appears that legalization measures will be on the ballot in 2012 in California and Colorado, and perhaps Oregon, Ohio, and Massachusetts.

These efforts are not welcomed by the Obama government. In the matter of civil liberties Obama has not led a liberal administration, and medical marijuana, or any marijuana, is not an issue he cares about. And no matter what the Obama people privately believe about marijuana, their priority is his reelection, which means not being branded as the Dope Smokers’ President.

So far, major politicians have mostly not supported legalization. California’s two Democratic senators, Dianne Feinstein and Barbara Boxer, opposed legalization, as did Republican Gov. Arnold Schwarzenegger and the Democrat who replaced him, Jerry Brown. Washington state’s two liberal Democratic senators, Maria Cantwell and Patty Murray, have given no support to legalization, nor has its Democratic governor. But what will politicians like this do if their people vote for legalization and the feds oppose them?

The smart ones will support their constituents. And that will start having an effect in Washington, D.C., where the endgame will play out.

This is now looking more and more likely. Voters in some state are going to pass a bill of legalization. And before that, the fight may come over state licensing of growers and dispensers of medical cannabis. Already the federal government is challenged by the dispensaries, and already it fights back, but cautiously and opportunistically. In the medical marijuana states it has been reluctant to haul in the proprietor of a storefront clinic, charge him with the federal crime of trafficking in forbidden drugs, and ask a jury to convict him and a judge to imprison him. If it is to win this battle, it will have to do that and make it the rule.

Generally the feds have acted where they have support from local politicians. But in some places, including where I live, they no longer have politicians’ support because they no longer have the public’s support. And where medical cannabis is legalized and used, support for prohibition erodes. It is gone among the young, and cannabis for people with cancer and back pain now erodes it among the old.

Expect fireworks ahead.




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