Seen and Unseen

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Recently, President Obama stumbled through a poorly conceived bus tour of several states in the Midwest. The object of the junket seems to have been to counter media coverage of the GOP presidential candidates who’d gathered in Ames, Iowa, for the first major straw poll of the 2012 election cycle. Instead, Obama made comments about car- and truck-manufacturing that reminded listeners of his central-planning mindset. He treated a group of Tea Party leaders in a haughty and condescending manner. And, most damning, he stammered through the following self-justification:

“We had reversed the recession, avoided a depression, gotten the economy moving again. But over the last six months, we’ve had a run of bad luck.”

The man is not good at improv. And he’s not well-read. Numerous pundits (not all of them right-leaning) noted that the president’s excuses reflected this famous quote from the great Robert Heinlein:

“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as ‘bad luck.’”

How could Obama, a man who trades on being seen as smart and articulate, make such a boneheaded gaffe?

I think this has to do with the ignorance and insular nature of American statists. They operate under a simplistic notion of politics — call it “Manichean,” if you feel like being generous about their philosophical grounding, “infantile” if you don’t.

Their adversaries are “enemies;” and their enemies are “terrorists,” “extreme” and “crazy.” (The quoted terms in that last sentence are from a few recent articles posted on dailykos.com — but Obama and his underlings have used them, too.)

These mutterings reflect a shallow worldview. American collectivists haven’t read the books that define and expand on free-market philosophy; most justify their ignorance by dismissing Hayek, Mises, Rand et al., as “evil.” Instead, they seem to skim some magazines and websites. Mostly, though, they watch TV. And they focus on the personal manners (and lives) of limited-government advocates, rather than the substance of the positions.

Obama’s supporters focus on (and equate themselves with) the weakest and least rational of the president’s critics — a motley crew of bigots and conspiracy mongers. As a result, Obama’s supporters weaken themselves. They can’t understand that there are rational criticisms of a president who has done so much damage to the philosophical and political foundations of the United States.

They just don’t see.

This blindness has rendered Rep. Ron Paul — the most effective advocate of real limited government among the recognized presidential candidates — something of an invisible man.

Because you read Liberty, you know more about Dr. Paul and his latest campaign for the White House than do most Americans. But, for a moment, put yourself in the shoes of an ordinary salt-of-the-earth citizen or even an impassioned Obama supporter. You’d probably have only the vaguest sense of who Ron Paul is. And you wouldn’t understand how many people share Paul’s perspective and beliefs. When Paul finishes a razor-close second in the aforementioned Iowa straw poll, you’d fall back on your epithets. Or just deny the whole thing.

Rep. Debbie Wasserman Schultz (whose retiree-heavy Florida congressional district gobbles up more than its share of federal benefit dollars) took the first option. Here’s some of the invective she hurled about the Iowa straw poll results, via CNN:

“In previous presidential campaigns, we might have chalked extreme fringe-type candidates like Michele Bachmann and Ron Paul as an anomaly. . . . But we’re looking at the core of the Republican Party now. The heart of the Republican Party is the extreme right wing.”

No surprise. A woman who counts on scaring pensioners to maintain her livelihood is bound to vilify people who talked about benefit cuts. I’d just like, once, to read a quote from the wretched Ms. Wasserman Schultz that didn’t include the word “extreme.”

Most statists, though, have simply chosen to pretend Paul doesn’t exist. He and Rep. Michele Bachmann finished in a near-tie for first place in the Iowa straw poll, separated by less than 1% of all votes cast. Mrs. Bachmann won but, if the vote had been an actual election, many jurisdictions would have called for an automatic recount. The next Sunday, Bachmann appeared on all five of the so-called “major” weekend TV news programs; Paul appeared on none.

Obama’s supporters can’t understand that there are rational criticisms of a president who has done so much damage to the philosophical and political foundations of the United States.

Bachmann — whose public persona strikes some as addled — serves as a stand-in during this election cycle for the absent Sarah Palin. Perhaps that’s why the establishment media revels in making Bachmann look ridiculous, as a recent and unflattering cover picture on Newsweek magazine proved. Media outlets that still favor Obama seem to be following a strategy of portraying Bachmann as “crazy” and, therefore, any Republican challenger to the president as crazy by association.

Paul is included in this scheme. But, mostly, he’s simply ignored. And this isn’t just a left-wing phenomenon. Fox News Channel’s top-rated host Bill O’Reilly, a statist of a nominally “conservative” stripe, goes out his way to ignore Paul. And, when pressed, O’Reilly dismisses Paul’s chances of winning even the GOP nomination as “zero.”

In the days after Bachmann’s media blitz, a slight shaft of light — from an unexpected source — cut through the willful darkness. TV talk show host and topical comedian Jon Stewart ran a humorous segment pointing out the media’s obvious denial of Paul’s presence and popularity. Stewart referred to Paul as “the 13th floor” of the presidential news coverage and took cable TV reporters to task for blatantly ignoring the congressman’s close second-place finish in Iowa.

The New York Times, the Associated Press and U.S. News (yes, it still exists as an online news site . . . but has dropped “and World Report” from its name) followed Stewart’s satire with semi-serious articles that discussed the media’s dismissal of Paul, in Iowa and in general.

The Associated Press piece acknowledged that Paul has raised enough money to stay in the presidential race for a long time. And that his supporters are more dedicated than most. But it concluded:

“Still, Paul finds himself outside the bounds of traditional Republicans. His opposition to the wars in Iraq and Afghanistan defines him as a dove. His skepticism toward the Federal Reserve has spooked Wall Street. And his libertarian views on gay rights draw the ire of social conservatives. He also tweaks Republicans on foreign policy, arguing it isn’t the United States' role to police Iran's nuclear program or to enforce an embargo with Cuba. ‘Iran is not Iceland, Ron,’ former Sen. Rick Santorum told Paul during Thursday's debate.”

An article on presidential politics that quotes Rick Santorum as an authority on anything is suspect, in my opinion.

The U.S. News piece concluded lazily by quoting an establishment media hack to characterize Paul’s candidacy:

“ 'He’s got a very dedicated cadre of people,’ says Larry Sabato, director of the University of Virginia’s Center for Politics. ‘And they're very intense, but they’re relatively few in number . . . It’s ridiculous talking about him getting the nomination.’ ”

Prof. Sabato’s record on political predictions is no more reliable than former Sen. Santorum’s.

I have no idea how well Ron Paul will do in the coming presidential primaries. But I know that he has the money and the organization in place to campaign until the GOP convention. And I know that he’s announced he won’t seek reelection to his seat in congress, so that he can dedicate himself to this presidential run.

I hope he lasts long enough to force more of the establishment media and the GOP powers-that-be to acknowledge he exists. And that his arguments for limited government are as mainstream as anything the rent-seeking Ms. Wasserman Schultz has to say.

Now, if we can only get them to acknowledge Gary Johnson . . .




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The Passing Paradigm

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The latest much-ado-about-nothing crisis passed, with a result that should seem familiar. In 2008, Americans were told that if the TARP bill (a $787 billion taxpayer-funded welfare handout to large banking institutions) wasn’t passed, the stock market would crash and massive unemployment would follow. After an unsuccessful first attempt to pass the bill amid angry opposition from constituents, the bill passed on a second vote. Subsequently, there was a stock market crash followed by massive unemployment.

This time, our political-media cabal told us that if Congress was unable to pass a bill to raise the debt ceiling, the government would not be able to meet its short term obligations, including rolling over short term bonds with new debt. US debt would be downgraded from its AAA status, and a default would be imminent. After the melodrama, Congress passed the bill raising the debt ceiling. Standard and Poor’s subsequently downgraded US Treasury debt anyway, and deep down everyone knows that a default is coming as well, one way or another.

We are seeing the end of a paradigm. Thomas Kuhn argued in The Structure of Scientific Revolutions (1962) that anomalies eventually lead to revolutions in scientific paradigms. His argument holds equally true for political paradigms.

A paradigm is a framework within which a society bases its beliefs. For example, people at one time believed that the forces of nature were the work of a pantheon of gods. Sunlight came from one god, rain from another. The earth was a god, as was the moon. With nothing to disprove the premises of the paradigm, it persisted. People went on believing that sunlight and rain were the work of sunlight and rain gods because there was no compelling reason for them to believe otherwise.

However, within any paradigm there are anomalies. Anomalies are contradictions — phenomena that cannot be explained within the framework of the paradigm. People have a startling capacity to ignore or rationalize away these anomalies. While it may defy logic to continue to believe that rain comes from a rain god even after evaporation and condensation has been discovered and proven, people would rather ignore the anomalies and cling to the paradigm than face the fact that the paradigm is false.

There is at least one thing that will be quite obvious: centralized government is insane.

But once there are too many anomalies, the paradigm fails, and a new one must take its place. This new paradigm renders the old one absurd, even crazy. At some point in the future, people will look back on the political paradigm of the 20th and early 21st centuries. There is at least one thing that will be quite obvious to them: centralized government is insane.

Consider the premises upon which this present paradigm relies: all facets of society must be planned and managed by experts. The judgment of the experts trumps the rights or choices of any individual. The choices made by the experts will result in a more orderly society and greater happiness for the individuals who compose it. There will be better results from one small group of experts controlling everyone than multiple groups of experts controlling smaller subgroups of society.

Of course, libertarians reject every one of these assumptions on its face. A free society does not tolerate “planning” or “management” by anyone. All choices are left to the individual, as any attempt to plan or manage his affairs amounts to either violation of his liberty, looting of his property, or both. However, let’s assume that the first three assumptions of the present paradigm are valid and merely examine the last. Even that does not hold up to scrutiny.

Suppose an entrepreneur starts a business. At first, his market is local. He opens retail outlets that are overseen by store managers. The entrepreneur is the CEO of the company and manages the store managers. Even at this point, the CEO must trust day-to-day decisions to his managers. He has no time to make everyday decisions as he tries to expand his business. The managers do this for him and he concentrates on strategic goals.

His business is successful and soon he begins opening outlets outside of the original market. He now has a need for regional managers to manage the store managers. He manages the regional managers and leaves the details of how they operate within their regions to them.

The business continues to expand. With retail outlets in every state, there are now too many regions for the CEO to manage directly. The CEO appoints executive directors to manage larger regions, each composed of several smaller ones. There is an executive director for the West Coast, another for the Midwest, and another for the East Coast. Of course, the CEO has the assistance of his corporate vice presidents who manage sales, operations, human resources, and other company-wide functions from the corporate office.

Now, suppose that one day the CEO decides to fire the executive directors, the regional managers, and the store managers. He will now have the salespeople, stock clerks, and cashiers for thousands of retail outlets report directly to him and his corporate vice presidents. Would anyone view this decision as anything but insane?

As silly as this proposition sounds, this is a perfect analogy for how we have chosen to organize society for the past century. The paradigm rests on the assumption that every social problem can be better solved if the CEO and his corporate staff manage the cashiers and the salespeople directly. As in all failed paradigms, anomalies are piling up that refute its basic assumptions.

This paradigm assumes that centralized government can provide a comfortable retirement with medical benefits for average Americans, yet Social Security and Medicare are bankrupt. It assumes that a central bank can ensure full employment and a stable currency, yet the value of the dollar is plummeting and unemployment approaches record highs (especially when the same measuring stick is used as when the old records were set). It assumes that the national government’s military establishment can police the world, yet the most powerful military in history cannot even defeat guerrilla fighters in third-world nations. It assumes that the central government can win a war on drugs, yet drug use is higher than at any time in history. It assumes that experts in Washington can regulate commerce, medicine, and industry, yet we get Bernie Madoff, drug recalls, and massive oil spills.

Hundreds of years ago, the prevailing medical science paradigm assumed that illnesses were caused by “bad humors” in the blood. Operating with that assumption, doctors practiced the now-discredited procedure known as “bleeding.” They would cut open a patient’s vein in an attempt to bleed out the bad humors. As we now know, this treatment often killed the patient. Most rational people today view the practice of bleeding as nothing short of lunacy.

Ironically, this is a perfect analogy for the paradigm of centralized government. The very act of a small group of experts attempting to manage all of society drains its lifeblood. It is the uncoerced decisions of millions of individuals that create all the blessings of civilized society. It is the attempt by a small group of people to override those decisions that is killing society before our very eyes. Someday, people will look back on our foolishness and laugh as we do now at the misguided physicians who bled their patients to death. The present paradigm is dying. The revolution has begun.



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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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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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Clowns of Industry

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This June, President Obama began celebrating the success of his auto industry bailout. In a speech at an Ohio Chrysler plant, he bragged that he had saved the industry from collapse. Under a brilliant "tough love" plan engineered by his Auto Industry Task Force (Team Auto), GM and Chrysler are turning a profit, hiring more workers, retooling for a "new age," and paying back TARP money — all at very little cost to taxpayers. Now, they are patting themselves on the back and taking bows before cheering media — for brashly spending over $80 billion in a hamhanded attempt to save two companies whose combined market capitalization was less than $10 billion. I can think of only one profession for which clumsy jokes, tricks, and illusions earn praise.

 The president's claims are hopeful pronouncements and disingenuous statements. GM and Chrysler are not hiring and paying back TARP money on the scale of his victory manifesto. The Washington Post (“The Fact Checker”), usually a staunch supporter of Obama's policies, said of the self-congratulatory speech, "What we found is one of the most misleading collections of assertions we have seen in a short presidential speech." President Obama's boasts of recovered TARP money (e.g., Chrysler has paid back "every dime and more") identify payments on TARP loans made only during his administration, but the reality is that to date only $39.61 billion of the official $80 billion TARP total has been repaid. Much of the rest is unlikely ever to be recouped by taxpayers, especially if GM goes broke awaiting the huge, future demand for green energy cars foreseen undauntedly through the rose-colored glasses of Team Auto. The bailout has been a circus run by elite bureaucrats to rescue unions more than auto companies and nudge us to an imaginary green economy more than to real prosperity. 

And the tinkering may make meaningful success permanently elusive. What is the long-term viability of an industry hastily restructured by a task force with no auto industry experience? What is the so-called new age, and when is it to arrive? Where is the brilliance in concocting what certainly must have been among the costliest and most insidious of bailout solutions?

Charged with overhauling the US auto industry, Team Auto was composed of cabinet members and Obama administration officials with extensive auto industry, well, inexperience and ineptitude. Headed by investment banker Steven Rattner, it included experts in energy, transportation, commerce, environmental protection, climate change, and “economics.” The team's industrial expertise resided in Ron Bloom, a former United Steelworkers Union advisor. According to the Wall Street Journal, team members underwent "a crash course in the myriad woes plaguing the US auto industry" and "spent days trying to understand the complexities of the hundreds of companies that supply the car companies with axles, seats and other parts."

Days! Imagine. No wonder they are patting themselves on the back. They learned in days what thousands from the executive ranks of American industry evidently failed to learn in decades — an extraordinary achievement, even for whiteface clowns. Unfortunately for taxpayers, the crash course didn't include a tutorial on Ford's recent turnaround. Ford not only succeeded, it succeeded with private capital and restructuring costs of less than $12 billion. And it succeeded quickly enough that, two years later, it did not need a bailout. To save GM, anyone but a Team Auto wizard might have chosen a similar approach. Then, by recruiting a CEO such as Ford's Allen Mulally and paying the restructuring costs from the $13.4 billion already allocated by the Bush administration, GM could have been rescued with money left over.

A successful GM bailout using $13.4 billion is barely commendable — after all, Ford did it with less. I would expect a truly qualified team to do it for much less. But with incompetence exceeding that of GM management and intransigence exceeding even that of its labor unions, Team Auto couldn't find a solution under $65 billion, which is $5 billion more than GM's highest market cap of $60 billion, reached back in 1999. Brilliant! And they are bragging about it. Perhaps,in a lapse of frugality, the madcap buffoons rejected even more wasteful, corrupt, and extravagant gags.

The recent ascent of the automobile industry is more a descent into the new "too-big-to-fail" abyss. Team Auto pranksters usurped the normal bankruptcy process, cobbling together daffy, impromptu rules to reward two American auto companies and the UAW for decades of foolery and an Italian auto company for its "valuable technology," while punishing legitimate creditors, private bidders, and taxpayers. The rights of creditors, including holders of secured bonds, were subordinated to those of the UAW. Private bidders for GM or Chrysler could not be found. That is, Team Auto could not find investors who would match its political favors, bankruptcy manipulations, and financial pratfalls. For example, GM was allowed to write off, in future years, up to $45 billion of past losses (an under-the-table write-off worth up to $15 billion), and more than $4 billion of Chrysler's debt was immediately forgiven (also under-the-table). All those years of losing money finally paid off — in a financial sleight of hand amounting to $19 billion, ratcheting the bailout total to $100 billion.

After more than two years of "tough love" spending, nine of the 12 vehicles on Forbes' "The Worst Cars on The Road" list for 2011 were from GM and Chrysler.

Team Auto had no trouble gaining Fiat’s cooperation, regaling the company with managerial control and 20% ownership of Chrysler, along with the ability to increase its share of the property to 51% and beyond. And the largess continued. A call option was granted allowing Fiat to buy up to 16% of Chrysler stock at a reduced price, provided Chrysler paid back at least $3.5 billion of the remaining $7.6 billion owed to the Treasury Department. At the time, private banks were afraid to lend Fiat more money. But audacious Team Auto member Steven Chu (Secretary of Energy) pulled a low-interest Energy Department loan out of his green hat for Fiat to develop fuel-efficient vehicles. Magically, it was just the right amount, $3.5 billion. As a result, Fiat will develop a green economy car for Chrysler. It is expected to get 40 mpg — almost as much as the economy car I bought in 1978. Such was Team Auto's assessment of Fiat's advanced technology. Unfortunately, its opinion of Chrysler automotive designers was lower than the demand for Fiats.

The call option giveaway and the sordid $3.5 billion Energy Department loan to pay the Treasury Department loan enabled Fiat to accumulate a majority stake in Chrysler (up to 57% by the end of 2011). Thus, Team Auto rescued Chrysler, an American company currently worth $5 billion, at a cost of $6.44 billion (the $4 billion cancelled plus the amount owed to the Bush administration) and converted it into an Italian company in the process. More brilliance, more bragging.

Splurging money on companies does not create pressure to build a quality product that people want. After more than two years of "tough love" spending, nine of the 12 vehicles on Forbes' "The Worst Cars on The Road" list for 2011 were from GM and Chrysler. None, it should be noted, were from Ford. This is an indicator of the malfeasance of Team Auto's intervention and is fraught with an irony appreciated, no doubt, by sad clowns everywhere. Equally important, it does not bode well for the sustained profitability needed to repay taxpayers. Nor does GM's market valuation. To recover the remaining GM bailout money, it is estimated that GM's stock price must reach $55 a share. Opening at $33 a share last November in Team Auto's IPO, GM closed at just over $29 a share on the day of president Obama's speech.

That GM and Chrysler have shown recent quarterly profits is clearly a favorable development. Nevertheless, the bailout hatched by Team Auto is an appalling mockery. With $100 billion, a group of professional clowns could have produced a quarter or two of profit after a run of two years, probably doing so without giving Chrysler away to a foreign automaker. But they would have had the decency not to brag about the tax money squandered. When I hear President Obama and Team Auto members boasting of their success, I hear a loud, obnoxious clown horn — much like the one I imagine they used to end each tutorial session and to inaugurate each brilliant idea they came up with in formulating the scam.

Ron Bloom boasts that the bailout will "ensure America wins the future." Steve Rattner is peddling the book he wrote about his experience and crowing, "The bailout was a bargain for taxpayers." Obama is so enthralled by his self-declared success he plans to use it as a centerpiece of his 2012 campaign. I imagine that as the election nears, there will be a highly publicized ceremony awarding Team Auto for its sterling performance. Task force members will arrive at the White House and, one by one, with grotesquely painted faces, ruffled collars and pointed hats, clumsily but endearingly emerge from a single, little green economy car.




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A Stinking Rose Is Just as Sweet

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Families and communities have certain rituals that they enjoy year after year. For my family, the again-upcoming Minnesota Garlic Festival (this year it’s Saturday, August 13, 10 a.m. to 6 p.m.) has become Christmas, Thanksgiving, Easter, and Independence Day, all rolled into one.

For me, as our clan’s cranky libertarian, last year’s fifth annual festival took on new meaning, as I began to understand what it’s all about. It’s a gathering of loved ones, for sure — a chance to reconnect with relatives I’ve loved since the ’60s (some of whom seem almost unchanged since then). But it’s also a symbol of hope: hope not only that my family will go on despite the deaths of our elders and the march of time, but that the America we know and love will do likewise.

My last visit to the Garlic Festival reminded by that, while free enterprise may not be alive in a corporate system propped up by big government, it is thriving in Hutchinson, Minnesota, home of the festival.

Deep in farm country, 57 miles west of Minneapolis-St. Paul, “Hutch,” as it is affectionately known to the locals, is the county seat of McLeod County. It was chosen to host the festival because it is near Howard Lake, where garlic farmers Jerry Ford and Marienne Kreitlow live. They founded the festival. Marienne is my cousin. Jerry is her husband. This was ample reason for me to turn up at the festival this summer. But before talking about that, I want to say a few good words about garlic.

Garlic is grown underground, like potatoes. It grows in bulbs, each of which can produce up to 20 cloves. Each clove also functions as a seed, so a new crop is planted by burying some of the cloves. The U.S. is now the sixth-largest producer of garlic (China is first). We contribute only 1.4% of the global output, but garlic is now a cash crop in every state except Alaska.

For over 4,000 years, people have prized garlic for its supposedly near-miraculous powers. Besides warding off vampires, it has been regarded as everything from an aphrodisiac to a cure for plague. While the claims of medical science are more modest, it now recognizes this pungent herb as a natural antibiotic, as well as a remedy for acne and an aid in the management of high cholesterol. Some people also consider it an effective mosquito repellent.

Whatever the health benefits, I looked forward to last year’s festival more than any thus far — not only for the chance to reconnect with people I love, but also to rejuvenate my hope.

A few days before Christmas, 2008, I was brutally downsized out of my last corporate job, in the annuities department of a life insurance company. No warning was given, and the two versions I was given of the reason I’d been dumped didn’t even match, much less add up to a single plausible explanation. I was probably let go because our department needed no more than three employees, and I had been the fourth one hired.

While free enterprise may not be alive in a corporate system propped up by big government, it is thriving in Hutchinson, Minnesota, home of the Garlic Festival.

I have had enough of the big-corporate rollercoaster. I was laid off by four of the past five companies I worked for, and I resigned from the other because I was certain it was about to lay a bunch of us off (which turned out to be true). You can walk into a solid brick wall only so many times before picking yourself up and heading in a different direction. Taking the last debacle as a sign that better opportunity must await me elsewhere, I am now striking out as a freelance writer. But all I hear from the media is doom and despair — and right now, I need no more tales of woe. That’s how I felt when I came to last year’s Garlic Festival, on the second Saturday in August.

I was at the McLeod County Fairgrounds from ten in the morning to six at night. There was a booth selling garlic ice cream (“The best stinkin’ ice cream in town”). There were pony and wagon rides. There were vendors of squeaky-fresh organic produce, kettle corn, barbecued ribs, handcrafted soaps, lotions, jewelry and clothing, artisan cheeses, a surprisingly large selection of Minnesota wines, and of course garlic of every conceivable form and description.

But those were just the goods and products. There were also people — adults in Mardi Gras masks and costumes, kids making and flying kites, folksingers, Japanese taiko drummers, a bagpiper, belly dancers, beauty queens and magicians. At The Great Scape Café, local chefs served their delicacies to overflowing lines of hungry festival-goers.

I met more kind and friendly people, that one day, than I probably do anywhere else the rest of the year. Several folks remarked to me on the spirit of the event. Like me, they found it personable, hopeful, human in the best sense of the word. It was a jubilant recharging of the batteries, a reinforcement of my faith in the health of the American spirit. Same-sex couples strolled about, mingling with octogenarian farmers and small-town matrons with absolute ease. We were at home in our own skins, proud to call ourselves Americans and grateful to be living in the best country in the world.

As happens every year, I was reminded about how glad I am to have the relatives God gave me. My cousins came from far and wide. My Uncle Willard, the patriarch of our clan, is still as warm and generous as ever in his 88th year. We accept each other unconditionally, and cherish one another even when we disagree. This lesbian libertarian, as always, found no closed minds — only open hearts.

My libertarianism did make some of them nervous, as it seemed to me. They have largely unfavorable ideas about what we believe. Though they are not socialists, by any means, they tend to view capitalism specifically, and free enterprise, in general, with the sort of suspicion earlier generations reserved for the Big Bad Wolf. But I am unable to ignore them, or to see much fun in making fun of them. Even I, until the cataclysms of Bush and Obama, was a very left-of-center progressive, myself.

And that summer, they were all refreshingly nice; that’s simply their nature. But when I began asking them about their participation in the freewheeling free enterprise of the festival, or mentioned I was writing about it all for a libertarian magazine, they looked a tad uncomfortable. They seemed to wonder how a nice gal like me had gotten hooked up with anything so crazy. And at least a few didn’t seem sure they wanted to be thought of as participating in anything as sordid as free enterprise. That’s for wealthy money barons and big business. It is not, to any great degree, what they think of themselves as doing.

But why has free enterprise gotten such poor PR, anyway? Is it the result of a plot laid by communists in some dark and smoke-filled room? Some conservatives are quick to think so. I’m not so sure.

After the recent business bailouts by the taxpayers, and the constant spectacle of high-priced lobbyists courting big-shot politicians, willing to work backstage but never to come out in front of the curtain and defend the capitalist system to the folks in the crowd, it’s not surprising that a good many among the public believe big business deserves its bad reputation. Though welfare-queen corporations are only a small percentage of the total, the baddest of the big boys have often hidden behind the label of “free enterprise” so effectively that, to many Americans, they represent it. A rose by any other name may smell as sweet, but some roses . . . just aren’t.

A couple of the people I talked with brightened visibly when I told them I was writing an essay to offer readers hope. They, too, had heard so much despair of late that they’d almost forgotten what hope felt like. “Yes, do that,” one festival-goer urged me. “I want to read it, too.” Several other visitors and vendors shared similar sentiments.

So let’s talk about some more of the people I met.

Joe and his wife Mary, who sell handcrafted wooden items, fermented foods, and preserves, certainly seemed the hopeful sort. (With names like Joseph and Mary, one would think so.) I asked Joe whether what went on at the Garlic Festival represented real free enterprise, and he readily answered Yes. “One of the reasons we started doing this sort of festival,” he said, “was out of hope.” When I asked if he was hopeful about the future, again he said yes.

I met more kind and friendly people, that one day, than I probably do anywhere else the rest of the year.

But government regulation is a burden that smaller companies feel more painfully than their bigger rivals do. While Joe, who also does landscape maintenance, doesn’t feel overburdened in that end of his business, he noted that “in the food-vending and selling, I feel there’s a little more inappropriate regulation.” A lot of it, he feels, is “based on food fear in America.” The fear is “irrational, but easily manipulated.” To Joe, it makes perfect sense that the “consumer gets mixed up because the [big] corporations and regulations seem to ease their fear.”

Big companies, he appears to suggest, often support the fearmongering that leads to stricter and more stifling laws. I think he regards big corporations as so crafty and powerful that they can simultaneously create a problem and at least appear to solve it. He did not elaborate on how this happens. The festival folks in general appear to regard big business as crafty and dangerous, much as they might an invisible but highly poisonous gas. But government regulation is a burden that smaller companies feel more painfully than their bigger rivals do. A lot of those at the festival hoped to break the corporations' awesome and superhuman power using a means other than big government.

John and Stephanie, beekeepers and sellers of gourmet honey, seemed upbeat. John said that the festival was “a good place for us to feel better about ourselves as humans.” He observed that friendly trade relations build mutual respect — which is precisely what libertarians have been telling state department diplomats for years. When we trade with each other, we find that we need each other in ways we might not have realized.

John remarks that face-to-face connections between buyers and sellers are attracting a growing number of people. They’re a big part of the appeal of festivals, farmers’ markets, and community fairs.

Is this the attraction? Is this why people drive hundreds of miles to an event like the Garlic Festival, even during a severe recession? Perhaps the attraction is quality — not just in products (although they get that, too) but also in the experience of being involved in free enterprise.

This is a consumer desire every bit as legitimate as the desire for convenience or disposability, and arguably more common than any demand for impersonality. It’s a desire that is satisfied by resourceful, hard-working, innovative tradespeople. America is still America, after all — even, or perhaps especially, in “flyover” places.

The people at the Garlic Festival are examples of the larger meanings of free enterprise, and they are helping to change it, visibly and enjoyably, back into what it should be.

“You can tell how successful a festival is by whether the other vendors come by to buy T-shirts,” said Mary Beth Heine, another of my cousins and a festival stalwart since the beginning. Her small but growing company sells antiques and apparel, including hand-knitted items, online and at venues like the Garlic Festival. Each year she sells the event’s official T-shirts, and this summer, the summer of recessions for all and depression for many, everybody seemed to want a souvenir of the happy occasion. Last year, she reports, very few of her fellow vendors had been in the happy-souvenir-buying mood. Now, apparently, they’re reviving. They’ve got their hope back, because they make their hope themselves.

Should libertarians laugh at lefties coming full circle to meet the capitalists? Should we ask them, “What took you so long?” and twist their arms till we get them to admit that they do believe in free enterprise, after all?

I don’t care about making them say “uncle.” If they prefer to call what they’re doing “reconnecting with the community,” “reviving small independents,” or “regaining local control over commerce,” instead of helping free enterprise continue to evolve, then I say more power to them. Again, a rose is a rose. One may smell sweet, another pungent and savory — like garlic.

The people at the Garlic Festival enjoy making money. They also enjoy doing creative, healthful things, things of their own choosing. And who wouldn’t? They are examples of the larger meanings of free enterprise, and they are helping to change it, visibly and enjoyably, back into what it should be.

They are not asking for a handout from anybody. They are not asking for any help from government. They are only asking it to stay out of their way and let them enjoy the fruits of their labors. They’re always brimming with new ideas — things that the big boys would never think of trying, but that, if they prove successful, will someday be imitated. They’ve found some needs, and they are meeting them brilliantly. If that’s not capitalism at its best, then I don’t know what is.

If we are to save business in this country, these are exactly the sort of people who must be persuaded that free enterprise is a noble thing. But we aren’t persuading them; they’re persuading themselves. We don’t all want the same things out of life (and one of the great things about the real America is that we don’t have to), but as long as enough of us want the liberty to pursue our varied visions — to savor our rose, or our garlic clove, if we prefer — then this grand festival we call America will live on and on.




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Electrical Fairy Tales

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The marketing hype behind new electric vehicles (EVs) such as the Chevy Volt and the Nissan Leaf makes me think of the title of the 1901 children's novel by L. Frank Baum, The Master Key. Promotions and testimonials designate the EV as the "master key" to environmental harmony, evoking the vision of a green economy in which zero-carbon-footprint EVs shuttle us to sustainable clean energy jobs as our dependence on foreign oil is whisked away in the contaminant-free breeze. But it's the novel's subtitle, "An Electrical Fairy Tale, Founded Upon the Mysteries of Electricity and the Optimism of Its Devotees,"that I chiefly have in mind. It exquisitely captures the substance of the unfolding EV hoax.

The optimism of EV devotees is manifested by the expectation that simpleton consumers will see the absence of tailpipe fumes as the absence of emissions and pollution; that EVs are worth their exorbitant cost, particularly if they eliminate our reliance on OPEC; and that, in EV-world, we will all live happily ever after.The support of simpleton politicians guarantees fairy tales.

The scientifically illiterate media (also devotees) never mention the pollution and carbon emissions created at electrical power plants when EV batteries are being charged. Odd that these distant plants are now electrical mysteries, when not that long ago shrill environmentalists frequently reminded us that they were mostly coal- and gas-fired monsters, belching forth devastating fumes as they generate 44.46% and 23.21%, respectively, of our electrical power. Apart from toxic particulates, they release a national average of 1.2 lbs of CO2 for each kWh generated.

The Chevy Volt, to cite one example, can travel 35 miles on its fully charged 16 kWhbattery. Thus, charging the battery by means of the average US power plant creates 19.2 pounds of CO2; in effect, 0.55 pounds of CO2 per mile. The EPA rates the Volt's gas-only fuel economy as 37 mpg. Since a gallon of gasoline produces about 19.6 pounds of CO2 , the Volt produces 0.53 pounds of CO2 per mile. Incredibly, the Volt's carbon footprint is 0.02 pounds per mile larger when powered by its battery — another electrical mystery.

An optimistic devotee might argue that carbon footprints can vary. But an average of 0.55 pounds of CO2 per mile is a long way from clean, and fraudulently far from zero. As to footprint variation: charge an EV in a state such as West Virginia, where coal generates 96% of the electrical energy. There, the Volt will emit 0.95 pounds of CO2 per mile. — almost twice the emission of a gasoline engine.

Wherever you live, if you use your EV for anything much more than occasional errands, battery charging will be a big part of your life. It makes one wonder why charging requirements are trivialized, if mentioned at all — unless it's because of the mysterious nature of electrons. Their activity while the battery charges throughout the night is invisible, as is the charging cost, at least until the utility bill arrives. If you drive an EV, say, 700 miles a month, it must be fully charged at least 21 times each month. In a recent thousand-mile Edmunds road test, the Volt averaged 33 miles on a fully charged battery. In the Northeast, where electricity is 16.09 cents per kilowatt hour, the monthly charging cost would be $54.61; in the Southeast (at 9.57 cents per kilowatt hour), it would be $30.24.

Born of political expediency and founded on bad economics and science, the electric vehicle is a colossal burden for taxpayers, an expensive fantasy for buyers, and a cruel joke on planet savers.

According to the Edmunds review, charging an EV battery by using a standard 120V socket "is like filling a swimming pool with a syringe." Optimistic devotees cite charging times of 12 hours. But charging from 0% to 100% (typical of electric mode only drivers) takes about 20 hours. Edmunds expects that most buyers will need the 240V Level II charging stations, which can complete the charge in less than half the time. They are available for $490, with an additional cost of about $1,500 for home installation — in addition to the $33,000 to $109,000 you paid for your electrified transportation pod. But what's another $2,000 or so when you're saving the planet?

Electrical utilities also anticipate Level II chargers, salivating over the revenues they will produce. But they worry because turning one on is equivalent to adding three homes, all with air conditioning, lights, and laundry running at the same time. Two or three of them running simultaneously in a grid sector is likely to burn out the transformer, blacking out service to the entire sector. Ironically, safety experts want EV manufacturers to add a simulated "vroom" sound alerting pedestrians to the presence of EVs on the street. The added cost of bumper-integrated speakers is a small price to pay for the warning. Presumably, there will be no extra charge for the sound of transformers mysteriously popping as they burn out, alerting sleepers to the presence of EV chargers in the neighborhood.

Our taxes pay for a $7,500 credit to entice less optimistic buyers, and huge subsidies to help EV manufacturers stay in business. Lithium battery companies must be salivating as much as electrical utilities. Last year, for example, a Michigan company was awarded $251 million in federal and state stimulus money. Its plant is expected to employ 400 workers, costing taxpayers $625,000 each. And it is owned by a Korean firm. But imagine the graft that American "entrepreneurs" are getting. Companies are also lining up at the trough for EV battery research and development subsidies. Despite over a century of technological advancement, battery performance is economically inadequate for EVs. Maybe battery designers will have better luck in the next 100 years.

President Obama is among the most optimistic of EV devotees. His test drive last July was ominous. Steering a Volt for about 10 feet at about 2 mph appeared to reaffirm his green economy concept and his campaign pledge to put one million EVs on the road by 2015. He is working diligently behind the curtain of political favoritism and crony capitalism to promote the EV as an integral part of his green economy.

But the EV is a hoax. Born of political expediency and founded on bad economics and science, it is a colossal burden for taxpayers, an expensive fantasy for EV buyers (converted, coerced, or bribed), and a cruel joke on planet savers. Everyone will pay higher taxes, EV buyers will pay at least twice the cost of comparable gasoline powered cars, and their electricity bills will, as President Obama has famously said, "necessarily skyrocket." The fact that the EV actually violates the clean-energy justification for its purchase demonstrates the fraudulence of Obama's plan. EVs result in little or no net reduction in pollution or greenhouse gas emissions. This is equally true for a $109,000 Tesla and a $41,000 Volt. And it would be true if there were a $10,000 model.

It would also be true if a million US drivers bought such a car by 2015, or if enough millions more were thereafter coerced to bring us to the day when we could say goodbye to OPEC. The problem is that this would also be the day we would say hello to Chile, Argentina, and Bolivia, the Saudi Arabias of lithium. Will OLEC (the Organization of Lithium Exporters) treat us any better than OPEC has?

President Obama's plan for the EV is unfolding like an electrical fairy tale of unprecedented magnitude. It calls for millions of Americans to buy uncompetitive, exorbitantly priced, high-maintenance EVs that are not meaningfully cleaner than the vehicles they are supposed to replace — all the while paying higher taxes and electricity rates to finance a scheme that, even if wildly successful, would accomplish nothing beyond enriching electrical utilities and battery manufacturers instead of oil companies and refineries and making us dependent on lithium instead of oil.

This plan is a costly, inane indulgence in fantasy. If the curtain were pulled back, it would reveal a fatuous illusionist, feverishly operating the levers of subsidies, tax credits, and regulatory mandates to orchestrate the scam. Did I mention that Baum also wrote The Wizard of Oz? It is an excellent book to read by candlelight, during EV-induced blackouts.




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What Is "Fair"?

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When taxes are under discussion, we often hear a call for rich people to “pay their fair share.” The message is that tax rates on those with higher incomes should be raised to make sure that fairness is achieved. However, if we look at this honestly, as a real-life ethical issue, we will have to conclude that people with higher incomes are already paying more than their fair share. Let’s try a thought experiment.

Suppose we are part of a group of friends from work who decide to go out to dinner together. “We” includes the owner of the business, the new person in the mailroom, and two of us in between. We choose a nice restaurant and enjoy our meal together. For some reason we cannot get separate checks and are given one large bill. What are some fair ways to pay for this meal — and what are some unfair ways?

Normally what happens is this: each person puts money into the kitty based on what he or she ordered. Often after the check goes around the table it isn’t quite enough because people forget to add in enough money to cover the tip or their second drink or the taxes or something. So the check goes around again while everyone refigures the cost and puts in a little more. So each pays based on what each received. That is what we ordinarily regard as fair.

Now suppose the bill isn’t itemized and we can’t find out what each person received and therefore what each person owes. People might try to guess, but generally we feel that one fair way is for each to pay the same amount. If we do that, we recognize that people who ordered a more lavish dinner or an extra bottle of wine will be getting more than their fair share, but still the same amount for each person seems close to fair. So each person paying the same amount without regard to any other criterion looks fair to us. This is equivalent to a per capita or per person tax. But that is not how we do taxes in America. We don’t all pay the same amount or the same amount per person, do we, despite the fact that it’s impossible to construct an itemized list of each taxpayer’s liability for government services received?

So let’s go back to the arrival of the unitemized bill for the group’s dinner. How should we divide it up fairly?

When the check came, the boss could offer to pay for everyone’s dinner. That would be voluntary, private charity. But imagine if, when that happened, the new mail oom guy said, “Wow. This is great. I got this fabulous meal for free. I propose we do this every night! How many people are in favor?” Perhaps most of us who received the boss’ charity would vote to make him give it more often, but that would be clearly unfair.

No one would dream that three people should “vote” to make the fourth person pay for them. Why does it become right when we do it through the government?

The boss would be well within his rights to say, “You guys can do this again if you want, but count me out. I’m not interested in paying for everyone’s meal night after night.” Would it be fair or right to claim that he must do so because it was a “majority vote?” People shouldn’t just be able to vote to oblige others to give them things, should they? In normal, face-to-face interactions, in a small group of four people no one would dream that three people should “vote” to make the fourth person pay for them. Why does it become right when we do it through the government?

Now imagine this. Imagine that someone in the group said, “Let’s take a vote. Who thinks we should base what we pay on how much income each of us has? Wouldn’t that be fair?” Several things come to mind right away. First, it’s extremely rude to require people to tell you what they earn. It is simply not anyone else’s business. But we do it as a country when we make people fill out their income tax returns so that a progressive tax can be levied. We intrude in a way we ordinarily don’t think is right or fair — because we do it through the government. Does that make it fair?

Second, voting on this proposition doesn’t seem right, because the boss makes more than any of the rest of the group, and will always have to pay more, yet he has only one vote. So of course, voting for this proposition is self-serving for everyone else. It is the same as the other case, when the boss was made to pay the whole tab: we are voting to force the boss to subsidize us.

Charity performed voluntarily is one thing. It is common for people who are better off to pay a bit more than their equal share, voluntarily. But where do the lower paid people get the right to vote to force the higher paid person to pay more? Does that strike you as fair? Again, what if we voted to regularize it by law, so that he had to do it every night? Would that make it fair?

This unfair situation is equivalent to the flat income tax that people propose from time to time. The flat tax would have everyone pay the same percentage. If you made more money, you would therefore pay more, whether you received more from the government or not. When we take this down to the personal level in our thought experiment, basing the fair share calculation on someone’s income level is embarrassingly unfair, yet it is criticized as being not fair enough. They aren’t paying their fair share, that’s true. They are paying more than their fair share.

But instead of having a flat tax, which requires people to pay more if they earn more, we have a tax system in which the percentage goes up as they earn more. The harder they work, the more money they make, the higher the percentage of their income is taken. The federal income tax percentage goes up to 35% for some people, while others, with lower incomes, pay 10%, and many pay nothing at all. Yet people are calling for the top tax brackets to go even higher, so that wealthy people will be required to “pay their fair share.”

Well, how will we know when fairness is achieved? How will we establish the “fair share”? We will take a vote, of course — because that’s really the fair way to decide.




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Bowdlerizing Huck

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Professor Alan Gribben, who teaches at Auburn University in Montgomery, has introduced a sanitized version of Mark Twain’s Adventures of Huckleberry Finn. Controversy has gathered around this latest incarnation of the novel because of its substitution of the word “slave” for the “n-word.” Somehow lost in the controversy is the editor’s decision to change “Injun” to “Indian.” At any rate, Gribben’s book has become a media sensation and has resurrected long-buried arguments over the legacy and import of one of American literature’s greatest works.

So much has been made of the words “political correctness” that it is difficult to know just what meaning they retain. If they mean anything, surely they apply to Gribben’s editing, which seeks to satisfy modern taste and decorum at the expense of accurate knowledge about the past. Of course the novel is problematic — American history is problematic — but erasing problems of the past will do little to aid our understanding of history and culture in the present and future. In light of the number of scholars working at the intersection of race and culture, America today hardly risks, as it once did, suffering from historical amnesia. Yet bowdlerizing texts could affect the way we remember racial history.

One thing that Twain probably wanted his novel to do was address the multivalence of racism by viewing it through the eyes of a young boy. Doing so would allow him to critique Southern race relations while avoiding offense. This unfortunate edition undercuts Twain’s critique.

None can challenge the idea that the “n-word” is hurtful and strong. But editing it out of Huck Finn, however understandable and well-meaning the effort may be, simply removes the book from its social and historical context. It is an historical text — not just a delightful work of fiction. It follows that reading the actual text can give us insights into the past.

Twain’s prose mimicked the vernacular of folks in the Mississippi valley. What other word than the n-word would someone in Huck’s time and place have used to refer to black people? Apparently the editor thinks the answer to that question is “slave.” But of course, this is nonsense, as even a cursory acquaintance with contemporary documents will show. Like many if not most of Twain’s contemporaries, the characters in his novel use the n-word casually. Examining its use is more than an exploration of authorial intent. It is studying a way of life in a world in which some people are grappling to overcome the racism that others casually accept. Twain’s book has that overcoming as its goal. Twain’s use of the “n-word” is ironic. He isn’t endorsing the word. He’s criticizing it. The way the n-word is used in Huck Finn shows very clearly Twain himself never would have applauded that word in “real” life.

Of course the novel is problematic — American history is problematic.

If Huck Finn is a narrative seeking out racial understanding — and this is a plausible and common reading — then Gribben’s editing undermines themes of racial and cultural understanding. Jim, a black slave and a principal character in the novel, is a courageous and complex figure. His place in Southern culture — both the fictional culture of the novel and the real one upon which the novel was based — is critically compromised by a whitewashing of the offensive diction that he is forced to confront.

Huck is also a complex character. The n-word may mean one thing to Huck at the beginning of the book, but it means something different to him at the end. At first, Huck never considers what the word might signify to Jim, but as Huck himself develops as a personality, and as his bond with Jim grows stronger, he begins to think, well, differently. Huck decides to “steal Jim out of slavery” despite his belief that he’ll go to hell for doing so (“All right then, I’ll go to hell,” he says). That grave decision seems less morally significant when Huck’s culture becomes, with the sweep of an eraser, less racist than it actually was.

It will not do to pretend that distasteful epithets did not exist in history. Nor will it do to sugarcoat history or historical texts in order to validate one man’s legacy, even if that man is a cultural and literary father figure (Faulkner called Twain the “father of American literature”). Twain hardly needs us to validate his legacy, especially since his sophistication is apparently far beyond that of today’s editors, who seem to miss the irony and criticism with which he loads his words.

I suppose the editor has a point when he claims to want to avoid teaching children that the n-word is OK, because Twain used it. But this little touch up — substituting “slave” for the n-word — risks undoing the racial tension in the novel and in the culture that influenced Twain. The deepest understandings come from investigating tensions. Even Huck learns that, as he challenges racism in subtle and nuanced ways.

We are not products of culture, but we are, all of us, influenced by it. Culture does not excuse our actions or beliefs, but it does help to explain them. Readers of Huck Finn would benefit from understanding the culture of the novel and of the novel’s author. How can we understand the present if we don’t understand the events and attitudes that shaped the present? Rather than altering Twain’s text, we should teach the novel, with all its fraught diction intact, to students who are mature enough to handle it.

The edited version of Huck Finn forces young students to skip over critical thinking about race relations in America. Yet the classroom is the very place where students are supposed to confront harsh realities and to learn from them. Isn't it the point of critical learning to hold social and cultural phenomena under a microscope, so as to understand them better? If students in schools or universities are not allowed to consider harsh truths about the past, even truths about offensive lexica, where will they learn about truths? Contemporary and popular film, television, and music are rarely good sources for learning about the past.

Changing the “n-word” to “slave” does not redeem Twain or Huck Finn — not that they need redeeming — but it does rob students of the opportunity to learn from history. Worse, it robs students of the opportunity to become, like Huck, more racially sensitive as they experience, withHuck, life on and around the Mississippi — as they read, in other words, about Huck’s gradual coming to “terms.”

That’s what this whole debate is about: coming to terms. The particular term at issue is the “n word.” The larger issue is American history. I’m not sure I would say that the bowdlerized novel sets us back, because I’m not convinced we’re moving in the right direction anymore, but I would say that blotting out history never lends itself to social progress.




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Confessions from China

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I must start with a bit of history. Two years back, I drove a van that I later sold for $150, yes, one hundred and fifty dollars. It actually ran very well, and I never saw a reason to sell, until one person I went to pick up in it almost jumped out. Another person never returned my phone calls.

I discovered that I might have the oldest van in downtown Vancouver. Rusted pieces fell off quite frequently. But it never gave me problems during the four years it was mine. I still regret that I sold it. I realized, however, that I had to go for a better car.

By the time I finally did the purchase, the target vehicle was no longer a new car, but a secondhand one bought after much depressing Indian-style negotiation. It is still a swanky gas guzzler. Nevertheless, I bought it not to show off — who cares about showing off to mindless consumerists? — but to irritate environmentalists who like to tell me how I should live.

Then I thought I must buy a nice watch — I owned none until then. I did that on eBay after hard negotiations. I knew that what eBay was offering had the lowest price when I received the eBay version of "f**k off." I still regret wasting money on that watch.

Anyway, I realized that I was cheap, so I made no more large material acquisitions. Why one should buy things is actually beyond me. I haven't bought a suit for 12 years, and I have just one of them. My formal shoes were bought eight years ago.

I also realized that my cheap van had done a lot of self-selecting of friends for me, and I didn't want people to befriend me because of my swanky car. I am indeed an ascetic by instinct. It's a family tradition. Asceticism is important in Jainism, the religion of my family.

Anyway, my expenses did go up quite a bit after I met a couple from St. Kitts, who taught me to buy high-quality, low-carbohydrate, organic food. I haven't eaten those $1.50 pizza slices for a long time now, and I'm not sure whether to thank the couple or blame them about the food. I do thank them for is the many other benefits their friendship has brought to my life.

When I do personal traveling, I always stay in youth hostels, paying $20 or less a night. That doesn't make me hypocritical when I spend $500 a night when I travel on business — I have told my company that I'm happy with cheaper accommodations, but they still put me up in expensive ones. Ironically, I find low value in expensive hotels, because I want to be able to meet people informally.

A couple of years ago my mom gave me a long lecture on budgeting. I started to budget, but soon stopped. I didn't need it. My real problem isn't saving; it's never spending money. I once tried to force myself to spend by putting half my salary into my checking account, but the money remained unspent. Eventually I had to start transferring it back to my trading account.

I am just not made to spend. This week, I realized that the stupid Canadian government spends several times more of my money (on killing Libyans and other projects) than I do myself. Am I an accomplice in murdering people?

Now I am on a trip to China, my third in six months. I will be here for a month.

I'm currently in Beijing. Before I left, I told myself I must start living like a grown-up. I decided that I did not want to stay in a youth hostel this time. So I booked myself a five-star hotel. The problem is that it is hard to get rid of one's cheapness. I looked for a nice hotel on Expedia, but when I finally got here, I realized that by trying to pay too low for my room, I had found a hotel that's in the middle of nowhere, among the ruins of what was recently Olympics frenzy. It is very posh, but I must take a taxi for everything. No one speaks a word of English.

I continue to believe that in the larger scheme of things this over-building is just noise. China's growth is unstoppable, for many future decades.

But in terms of service it is a true Shangri-la. No non-Chinese face exists here. When I go the gym, I get a huge amount of attention from the servers. They all try to speak whatever one or two words of English they know. I get a cup of warm tea, which keeps getting filled up. But I have decided not to explore the hotel thoroughly. Some of the hostesses are dressed like sluts and there is a lot of drinking going on in the club. I feel self-conscious when two of the skimpily dressed girls escort me around. But then I don't know. . . Chinese do over-drink anyway.

Today I saw a lot of government officials, military personnel, etc., arriving in their Audis and limousines. I laugh at the robotic way these military-men and bureaucrats walk, and I wonder why some people get so impressed. Hope they don't know that there is a Misesian snoop staying here.

I have met a lot of people. The only exposure that many tourists have to China (or any other country) is to touts, pimps, and prostitutes in busy touristic places. I go to none of them except briefly. (To digress, I actually like those touts. They are entrepreneurial people and once in a while I even strike up a conversation with them. It is the losers in governments, who have never done a day of honest work, and who disrupt the free market, who convert those entrepreneurial people into touts.) The Chinese I have met in non-touristic places are friendly and helpful. Unlike other visitors, I find genuine honesty and conscientiousness.

I might change that statement tomorrow. . . I met a Chinese couple yesterday. They are taking me out to show me the Great Wall. Are they going to ask me for money? Am I taking too much risk? I will see, but I guess I know how to discern who is good and who is not. And if I have failings in this area, I must pay to learn. That reminds me that I have only once been swindled out of real money — in Zurich, Switzerland, of all places.

During my several trips to China I have seen hundreds of empty buildings, even towns. But I continue to believe that in the larger scheme of things this over-building is just noise. China's growth is unstoppable, for many future decades. There is truly an ethical and cultural revolution taking place, though not the Maoist kind. The new generation is much more enlightened and confident than their parents — as the result of widespread information technology, as I have witnessed in many other developing countries. I don't care about economic numbers (which are fleeting) but about the changes taking place in the character of the people. This is what will give China a sustainable growth rate. I recognise increased snobbishness and consumerism, but this is part of growing up. I intend to make a huge amount of money from Chinese growth.

It's true that by investing in real estate, the Chinese may be wasting resources, but investing in inflated housing is still a trillion times better than consuming inflation-priced perfumes. Also, it is better that a government should build more roads, even if they lead to nowhere, than distribute free money to losers, thus creating a cascading moral problem. China is an economy of savers. Many people whom I have met share a room with six or seven other people. To a modern-day economist this sounds bad. My grand-mom, a much better economist, though uneducated, would have said that it's a recipe for significant future wealth. I follow her teachings and will bet on China and its commodities.

But this is not just the story of one country. In my travels in the developing world, I see many changes happening in real time, and many cultures opening up. The developing world is indeed at a cusp of a revolution.

On Sunday, thanks to Facebook, I will meet a whole bunch of anti-statist American runaways in a Beijing restaurant. Contrary to outsiders' perceptions, this is possible without any major fear. I will let you know if I get arrested, though in my view some of the worst governments are democratic ones. I find Chinese governance very good in many ways, at least for me as a tourist. Policemen stand in a corner like statues, non-intrusively. I'm able to make out a customer satisfaction survey whenever I cross Chinese immigration or interact with a bank teller. That is true capitalism.

I'm very fortunate to be able to visit overseas several times a year without any worry about money or about the time I must take off from work. I work as I travel, and even if my expenses weren't taken care of as well as they are, I wouldn't be inclined to spend much. I've explained that. But I also want to explain that I am thankful to my family, who not only made me cheap but also gave me the super-concept of compound interest. And I'm grateful to the many people (Doug Casey, Rick Rule, Frank Holmes, and others) who influenced me with their speeches and writings.

Now I am off to my gym and then for a walk to the business district to watch rich Chinese women wearing very short skirts and buying junk. Not long ago, Chinese women were wearing Mao jackets, and there wasn't a lot of junk to buy.




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