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If Face Masks Are Mandatory, Then It’s Time to End Mask Patents

If Face Masks Are Mandatory, Then It’s Time to End Mask Patents

President Trump is convening with governors to reopen the economy, which will likely mean some sort of compulsory face mask order. Now is the time to seriously consider scrapping the patents on masks such as the N95.

Government at all levels has severely overreacted to the COVID-19 pandemic, but at long last there is political will to at least pretend as though there should be some return to normalcy. That, of course, doesn’t mean partisan politics is being set aside.

The governors of Connecticut, Delaware, New Jersey, New York, Pennsylvania, and Rhode Island, all Democrats, have announced that they are forming a “regional advisory council” to come up with a plan to reopen their economies. The same thing is being tried by West Coast Democratic governors in California, Oregon, and Washington.

However, the ultimate action taken will be a centralized one, Trump assures us, tweeting, “a decision…will be made shortly!”

The clampdown on economic and civil liberties will be restructured, almost certainly with more relief to the former than the latter. One likely compromise that any new national or regional policy will adopt is the condition that increased commerce requires mandatory mask wearing.

New York governor Andrew Cuomo, who polls evenly with Joe Biden as Democrats’ top presidential pick, has ordered employers of operating businesses to supply employees with masks.

Such a policy across the nation would have to look more like how Los Angeles is doing it, sacrificing quality for quantity in masks. There, shoppers must don face coverings in order to enter stores, but pulling a shirt up over the mouth and nose suffices.

If masks are so important to public health, as some studies and Asian countries indicate, then the government ought to knock down every obstacle in the way of people buying and selling the best masks possible.

Patent law would be a good place to start.

Deterring innovation, it puts manufacturers at risk of litigation if they produce face masks that infringe on one of more than one thousand US patents that cover the N95, 3M’s medical mask and the most prized respirator on the market, IndustryWeek reported.

“I don’t want to be the jerk saying people shouldn’t do things to save people’s lives,” but potential contractors “should have eyes wide open,” Washington lawyer Ranga Sudarshan of Covington & Burling, who argues intellectual property cases in the US Court of Federal Claims, told IndustryWeek.

Even as 3M admits that it can’t supply enough N95 masks at the current demand, the company has yet to release its patents royalty-free, even temporarily, to other market producers. Effectively, the multinational conglomerate stands behind the force of government to protect its monopoly.

As Rothbard wrote in Man, Economy, and State, “Patents prevent a man from using his invention even though all the property is his and he has not stolen the invention, either explicitly or implicitly, from the first inventor. Patents, therefore, are grants of exclusive monopoly privilege by the State and are invasive of property rights on the market.”

Federal law may ostensibly protect against patent “hoarding” when it’s the government demanding that a protected item be produced for its purposes, but patent owners still can reap royalty payments from the contractors, according to IndustryWeek.

Now, removing the patent or its protections, just for a time, may not even be considered by those who put politics first.

It’s one thing when the TSA rolls back its ban on large bottles of hand sanitizer, or when governors relax border restrictions on nursing licenses. Such welcome changes offer unaccountable bureaucracies to save face.

Undoing patents is far too costly to those benefiting from monopolistic control on the market.

Consumers might begin to wonder, as did the late legal theorist Butler Shaffer, “Were Leonardo’s or Gutenberg’s inventions, or the Egyptian pyramids, or the Roman aqueducts, rewarded by state-issued patents?”

Are patents as we know them, government issued, necessary at all?

Shaffer noted, “Patents and copyrights inhibit the creative process by discouraging the exchange of information,” adding that the patenting process is so prohibitively costly that it leaves the little inventor at the mercy of the big corporation, which will keep the patent power in exchange for the invention.

It is unknowable how much further 3M or another innovator may have taken the N95 idea were it not for the patent monopoly.

As intellectual property expert Stephan Kinsella puts it, “It is possible that companies would have an even greater incentive to innovate if they could not rely on a near twenty-year monopoly.”

In the meantime, seamsters are turning to GoFundMe to support their homemade mask donations, such as these or these. Crafty hobby sites such as SewCanShe.com and FaveCrafts.com are providing free DIY guidelines that will come in handy for those unable to find good masks in stores.

Entrepreneurship remains alive and well in America, but as demand grows or government mandates expand, the patent monopoly will inhibit what public policy ostensibly seeks: a healthy people and a healthy economy.

Nick Hankoff lives in Fort Wayne, Indiana, with his wife Alice Salles Affonso Hankoff and their two children, soon to be three. His website nickhankoff.com is where you can find all of his recent writings and a forthcoming return of the fugacious Nick Hankoff Show. This article was originally published at Mises.org and is reprinted with permission.

We Don’t Need a Cure to Reopen

We Don’t Need a Cure to Reopen

Back on March 19th, 2020, I pointed to this piece by Pierre-Olivier Gourinchas at my blog – Coordination Problem — where he states very clearly the reality constraint in public policy deliberations in the current coronavirus crisis. Without committing one way or another on the debate over the epidemiology models being used, I thought, and still think, this way of putting it could serve as a very useful point of departure for serious conversations about trade-offs, short-run/long-run, and public policy in a liberal society. By now you have seen these graphs numerous times, but they are still useful to draw your attention to the issue at hand.

Public Health in Pandemic

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Economic Policy During Pandemic

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My sincere hope was that by framing the public discourse in a discussion concerning trade-offs, we would be able to deliberate our way to a rational consensus that will reduce regime uncertainty, and free up the creative powers of our civilization to both address our public health crisis and make sure the economic future is bright. That was perhaps a foolish hope given the reality of politics and the state of our intellectual culture, especially the divisiveness and mood affiliation attractors of social media and much of cable news coverage.

When I wrote Why Perestroika Failed: The Politics and Economics of Socialist Transformation (1993) the public conversation was different inside and outside of the former Soviet Union and East and Central Europe. The problem with the communist economies was a feature of those systems, and thus the policy conversation focused on changing those features as quickly and clearly as possible. I discuss this in chapter 7 of the book.

That created its own set of serious difficulties, and the subsequent history has no doubt revealed the consequences those difficulties presented. But there really is no debate that structural change of the system was required. The situation was also different at the time of the Global Financial Crisis of 2008-09, which again identified deep structural weaknesses in the system that resulted from misaligned incentives and the distorted signals caused by monetary mischief as Steve Horwitz and I argue in our monograph The House That Uncle Sam Built (2009).

The problems revealed in 2008 were a feature, not a bug, and thus required changing those features as quickly and clearly as possible if the economic vulnerabilities were going to be addressed. Again, doing the sort of structural change required has its own difficulties, and subsequent history again reveals the consequences of failing to overcome those difficulties.

But, in my opinion, this crisis is different not in degree but in kind from those previous shocks. It is literally and figuratively a bug in the system. Our current crisis was not endogenously created, though no doubt significant vulnerabilities of key sectors are being exposed (e.g., my own industry of higher education). Those vulnerabilities will need to be addressed, but it is important to stress that they were not caused by the coronavirus; they were revealed by the policy choices made in attempting to fight that coronavirus.

And, those vulnerabilities are a function of policy choices that were made over the years — in particular since 9/11 and 2008, but more generally dating back decades (consider, e.g., the third-party payer problem in health care). These vulnerabilities must be addressed because they exacerbate the negative consequences of this shock, and many of the policy “mental models” that politicians and intellectuals propose only will augment the negative, rather than ameliorate the problem in health, education, inequality, and economic volatility.

This public debate must take place, and sound economics must once again be stressed if we are to have any hope in sustaining a liberal society of peace and prosperity. However, while never far from our minds, that debate must wait in line as we first have to see ourselves out of this morass.

The current situation is a result of an exogenous shock and the policy responses to that exogenous shock that have in effect shut down significant sectors of the economy. In tackling the trade-offs, we need to think hard about how to meet the challenge and unleash the creative power to simultaneously reduce human suffering and restore economic prosperity and peaceful social cooperation. The administration has released a plan that comes in 3 phases. The primary criteria for moving from Phase 1 to 2 and finally to 3 will be public health indicators.

As Doctor Anthony Fauci put it at the press conference last Thursday.

But we feel confident that sooner or later we will get to the point, hopefully sooner with safety as the most important thing, to a point where we can be–get back to some form of normality.

The one thing I liked about it that Dr. Birx said so well is that, no matter what phase you’re in, there are certain fundamental things that we’ve done that are not like it was in September and October. You want to call it the new normal, you can call it whatever you want. But even if you are in phase 1, 2, 3, it’s not okay, game over. It’s not.

At that same conference, it was made clear that the US with its large land mass and its 330 million population will still pay lip service to federalism, and the authority rests with the state governors to decide when and how to re-open their respective economies. Some of the governors have formed regional agreements with each other.

Those of us who look to Hayek as an inspiration for their research program view economics as a coordination problem, and we see entrepreneurship as the solution to that problem. We study entrepreneurship in the public, private and independent sector to see how a variety of coordination problems are in fact solved or at least ameliorated by creative and clever human actors.

These acts of entrepreneurial alertness and creativity are never trivial acts ex ante but are often acts of bold courage; of voyages into an unknown and uncertain world. But unless these acts are taken, the coordination problem persists and opportunities for gains from trade and gains from innovation are unrealized.

In short, absent the productive specialization and peaceful social cooperation that is realized when coordination problems are solved improvements in the human condition are lost. This is not exclusively a loss of material progress, but a loss of all the things that lead to human betterment that material progress delivers for us.

Within the set of serious coordination problems to be addressed we must include macro volatility problems associated with the manipulation of money and credit, and the corresponding misallocation of capital and labor. In short, a standard boom-and-bust story in the Austrian Theory of the Business Cycle. But not all macro volatility problems are money- induced distortions and corrections.

The Real Business Cycle focused attention on exogenous shocks to the system – be they from non-monetary policy changes or random events. These exogenous shocks can be, and often are, compounded by errors in the policy responses to them. When we were conducting the Katrina project at Mercatus, one of the issues we focused on repeatedly was how to try to avoid “compounding the fury of nature with the folly of mankind.” Unfortunately, that problem is almost as difficult to manage as the consequences of the external shock itself.

But collective action will be required. The great economists Thomas Schelling put his finger on this in an interview in the LA Times back in 2005. As he put it:

“There is no market solution to New Orleans,” said Thomas C. Schelling of the University of Maryland, who won this year’s Nobel Memorial Prize in Economic Sciences for his analysis of the complicated bargaining behavior that underpins everything from simple sales to nuclear confrontations.

“It essentially is a problem of coordinating expectations,” Schelling said of the task that Vignaud and her neighbors must grapple with. “If we all expect each other to come back, we will. If we don’t, we won’t.

“But achieving this coordination in the circumstances of New Orleans,” he said, “seems impossible.”

But Schelling was too pessimistic; private, public and independent sector entrepreneurs figured creative and clever ways to serve as focal points of orientation for individuals to come back and rebuild in New Orleans. The task was daunting, but it was not impossible. They solved the coordination problem through ingenuity, grit and determination, and once their bold and courageous acts were taken, others found hope.

I have written here already about the trade-offs, and about expectations, and the plans to reopen the economic system following public health guidelines. These all must be studied carefully and dispassionately — without over-optimism or over-pessimism. But one thing is clear in my mind; we will need to solve once again a problem similar to what Schelling identified for New Orleans. If we don’t, expectations will guide actors away from moving in the desired direction.

One of the key issues to stress, which I don’t see stressed enough, is that we do not need a cure to get back to a semblance of a functioning economy. All that is needed is credible assurances that effective treatments have been developed, and hospital capacity is not exhausted. Ben Powell recently reminded everyone that the original intent of the policy path chosen was not to eradicate the virus, but to buy time for the hospital system to be able to function properly rather than be overwhelmed by patients.

Our hospitals must have the capability of servicing patients that have become infected, and also conduct their normal operations of caring for those who are acutely ill, who suffer from accidents, develop chronic illnesses, or are victims of violence. In other words, the medical system has to be able to function. Solve these two issues – treatments that ease us through the illness and adequate hospital care if needed — and the coordination problem of getting back to work will go a long way toward being solved. Or, at least solved enough that we can all start to get back to our lives.

Which by the way is not just our jobs, but our relationships and our plans to spend quality time with loved ones, to celebrate the joys of reunion, to find comfort in each other as we struggle with the trials and troubles of living. Our commercial lives are not limited to our professional lives, but are intimately interwoven with our personal and communal lives.

A society of free and responsible individuals who can participate and benefit from the market economy and who live in caring communities with family, friends and neighbors; that is what the liberalism of Tocqueville as well as the libertarianism of Nozick promised. We shouldn’t forget that vision of a free society, and we should not let critics try to use this occasion to slander liberalism and libertarianism with being either ill-equipped or lacking in compassion in moments of public crisis like this. We must demonstrate in theory and in our deeds that true radical liberalism provides the robust answer to these turbulent times.

Again, it is not a cure we must wait for; we just need credible assurance from entrepreneurs in the public, private and independent sector that treatments and medical capacity are such that our own risk preferences and risk management strategies can take over.

There are other serious steps that can be taken. We do not need a selfless and saintly super brain to achieve any of these, just ordinary human actors who are alert to opportunities they are presented with. One of the most important realities is that while it is true that the spreading of a virus represents a classic negative externality, and coordinating a response represents a classic public goods problem, as we have learned repeatedly throughout the judicious study of economic theory and history, the ultimate resource is the human imagination and clever and creative individuals that will test out, discover, and create a variety of solutions to externality and public goods problems, and in so doing often transform them into non-problems.

This results from slight changes of behavior on the relevant margins, or from seismic change due to introduction of novel technologies, products, or services. Today’s inefficiency is tomorrow’s profit for the entrepreneur that is able to internalize the externality, or exclude free riders of the public good in question.

Right at this very moment, not just in government-sponsored labs, there are individuals looking for solutions to our current problem. And, not just experiments with potential vaccines, but new products that will help us reduce our risk. Individuals desperate for a return to their normal life are eagerly figuring out practices that will provide a modicum of relief from the current anxiety. A free people is not a helpless people. We adjust, we adapt, and we take on the responsibility of being architects of our own fate.

The obvious public focal point that many point to would be wide scale testing and antibody determinations. This would be fantastic, but if we could get credible assurances that effective treatment options and medical capacity is there I believe that despite whatever calm analysis of the numbers tells us, folks will begin to believe that they are relatively safe to enter social spaces once again. And, it is this entering back into social spaces that will get us over the coordination problem that Schelling identified in the context of Katrina.

The existing pressure on the medical system has to be reduced by ingenuity and innovation, not I would argue, by improvements in command and control management. This includes alternative supplies of needed equipment and personnel being guided to most urgent areas, by scientists working hard to discover effective treatment options by repurposing drugs or through creative combinatorial thinking. Again, the coordination problems we are facing will be addressed by creative and clever entrepreneurs (who are also erring but always striving to correct) in the private, public and independent sector.

When these entrepreneurial acts produce results that can serve as a focal point to others that it is within the reasonable calculations to return to social space in which we work, play, and live with one another, then additional work will be required to clean up the mess that the folly of mankind has created in the wake of the tragic fury of nature. When we embarked upon our study of Katrina back in 2005, we found hope in a classic statement from the great classical economist J. S. Mill’s Principles of Political Economy:

what has so often excited wonder, the great rapidity with which countries recover from a state of devastation; the disappearance, in a short time, of all traces of the mischiefs done by earthquakes, floods, hurricanes, and the ravages of war. An enemy lays waste a country by fire and sword, and destroys or carries away nearly all the moveable wealth existing in it: all the inhabitants are ruined, and yet in a few years after, everything is much as it was before.

Just in the 20th century economic history of the US, calm resolve may be provided in these difficult times by looking at the economic consequences of 1918-1919; 1952; 1957. Horrendous toll and tragedy befell so many families and yet economies recover, grow and develop due to expansion of the opportunity for gains from trade and gains from innovation. This doesn’t diminish the tragic suffering.

Social systems should be judged both by how well they minimize human suffering, and maximize the opportunities for human flourishing — that is what striving for a “good society” is ultimately all about.

I hope someday soon we will once again be having very rational yet vigorous discussions about the fundamental issues related to the liberal principles of justice and political economy, and we can point to the resiliency and ingenuity of a free people even in the face of adversity as one of the main arguments in favor of true liberal radicalism.

Peter J. Boettke is a University Professor of Economics and Philosophy at George Mason University, as well as the Director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics, and BB&T Professor for the Study of Capitalism at the Mercatus Center at George Mason University. Boettke is a former Fulbright Fellow at the University of Economics in Prague, a National Fellow at Stanford University, a Senior Fellow with the American Institute for Economic Research, and a Hayek Visiting Fellow at the London School of Economics. This article was originally featured at the American Institute for Economic Research.

Essential, Yet Illegal?

Essential, Yet Illegal?

The U.S. federal government does a bunch of things that mystify me. They cannot discriminate in conferring benefits based on race, oh, unless it is affirmative action. Government agents cannot search you or your home without first earning a warrant, unless they think they should. I’ve even accepted there is alternative truths: you can keep your doctor, and Bill didn’t inhale. But, in the last few days, it seems they overwhelmed by imagination.

In these days of coronavirus lockdown, mine are spent in cell #107 at the federal prison at Terre Haute, Indiana. I am serving a sentence of life imprisonment, without the possibility of parole. In 2002, I was convicted of conspiring to distribute marijuana. I ponder that one quarter mile from here, in Illinois, marijuana distributors are not restrained by the lockdown orders. Instead, they are “essential businesses.” My indictment reads: “The People of the United States of America versus Craig Cesal,” agreed or confederated to distribute marijuana. The final judgment reads life imprisonment. Who got it wrong—the People of the United States or Craig Cesal? The rules governing that review are quickly evolving.

The thirty-three states that consider marijuana marketing an essential business, they carry on without any intervention by the U.S. government, or even by the people of the United States. How can I accept this from my vantage point of being locked in a seven feet by eleven feet prison cell?

While the marijuana purveyors carry on in their marijuana stores, the local county jails are busy identifying prisoners they can release if they determine they are not a danger to the community. Local jails are working to reduce jail populations to staunch the spread of coronavirus. All but violent offenders, including marijuana slingers, are being released, since they are not a threat to anyone. If marijuana proprietors are not a threat to the community, a community made up of the people of the United States, why are taxpayers spending over $50,000 per year to keep me in this box?

A guy recently left here. He had been caught dumping his “Honey Wagon,” a tanker truck that sucks out septic tanks, along a dirt road in Kentucky. Wouldn’t you know it, that road was next to a dried up creek bed, and therefore a federal waterway. The U.S. court sent him here for 30 months. Okay, the people of the United States don’t want 10,000 pounds of poop lying next to their road. I get that.

Next, a guy down the corridor from me was playing with his new laser pointer one night and pointed it at a helicopter. He later learned it was a Homeland Security helicopter, and the fancy night vision equipment within recorded him standing in his backyard doing it. He’ll be here for the next 40 months. Even though the folks don’t want a pile of poop along their road, others don’t want a flash-blinded helicopter pilot over their houses. In contrast, though, depositing roadside excrement and illuminating helicopters are not essential businesses.

I’m not surprised that all these things are being done or by what the media says about it. Instead, I am befuddled over what is not asked. Thousands of prisoners awaiting trial have now been released from jails because they are of no threat. The truant query is why were taxpayers shelling out hard earned cash to hold them there in the first place? Indeed, if they are no danger to the county, why is so much effort being expended to send them to prison?

A sober peek at who is being held in our jails has resulted in thousands being released. Okay, some will commit new crimes upon being freed, but not the bulk of them. If they never really needed to be held in jail, why were they there? As a prisoner, I know most were jailed simply to keep them from having too much access to resources to prepare a vibrant, and too often poignant defense. Jail is a weapon wielded by the government. Until last month, by and large, the people of the United States weren’t allowed oversight as to who is held in jail and why. The outside attention and review has resulted in massive changes to the U.S. jail population.

The same who, what, and why questions should be cut and pasted atop the prison inmate population. About half of the 174,000 federal prisoners are drug offenders, and 17% of those are serving sentences related to marijuana distribution. Those 24,000 inmates conducted essential business—even if they didn’t have the opportunity to pay the requisite tax. This 60-year-old marijuana offender has consumed over $50,000 per year worth of housing, food, insulin, medical care, and more for over eighteen years. Aggregate the cost of prosecution and the people of the United States have spent over a million dollars of their tax payments to keep this essential businessman in prison and away from his family and his tax-paying job.

When the people of the United States are done scouring the jails for people better off released, I suggest they look closely at the 24,000 essential business people in federal prison.

Craig Cesal is serving a sentence of life without the possibility of parole in Indiana’s Terre Haute prison for marijuana-related offenses. He co-owned a towing company that recovered and repaired trucks for a rental company, some of which were used by smugglers to transport marijuana. He graduated from Montini High School in Lombard, Illinois in 1977. His daughter, Lauren, has obtained more than 300,000 signatures on a petition calling for clemency. 

Big Tech Firmly Embedded in the War State, DoD Report Shows

Big Tech Firmly Embedded in the War State, DoD Report Shows

The Department of Defense inspector general has released a damning report on the DoD’s massive “JEDI” cloud computing project, exposing a revolving door between Amazon and the Pentagon.

The DoD’s September 2017 announcement of JEDI (a catchy acronym for Joint Enterprise Defense Infrastructure) sparked a frenzy in the US tech sector, with the country’s largest companies vying for the access, power, and prestige that would accompany the $10 billion prize. Government awarded Microsoft the contract last October, but Amazon is disputing the decision in court, and allegations of corruption continue to fly.

Thus far, the press has largely focused on the most salacious aspect of the controversy: allegations by former defense secretary James “Mad Dog” Mattis that Donald Trump told him to “screw Amazon” out of the JEDI contract. According to Mattis, Trump wanted to take revenge on Amazon CEO Jeff Bezos for the negative coverage he’s received from the Bezos-owned Washington Post.

However, the IG report released last week shows that the corruption surrounding JEDI runs far deeper than the WWE-like feud Trump has with Mattis, Bezos, and the Post. Though the IG did not conclude that the procurement process was rigged one way or the other, the report shows that Big Tech is firmly embedded in the national security state.

The IG investigated seven current or former DoD officials – including Mattis – finding that four had ties with Amazon before, after or in some cases during their time with the DoD.

The smokiest gun in the IG report relates to former DoD official Deap Ubhi, who worked as a cloud technician at Amazon Web Services (AWS) from 2014 to 2016 before joining the Defense Department as a digital services expert. The report says Ubhi worked on the JEDI project in late 2017, even taking a one-on-one meeting with Microsoft to learn about the company’s cloud products – at the same time he was negotiating with Amazon to return there!

Ubhi accepted a job with Amazon in October 2017 while still working on the JEDI project, according to the IG report. A Twitter account in Ubhi’s name says that he still works at Amazon.

The IG found that Ubhi failed to disclose information or lied – yes, the IG report uses the word “lied” – at least three times in an effort to conceal his ties with Amazon. Despite this egregious misconduct, the IG only recommended that the DoD review Ubhi’s security clearances. His case was referred to a federal prosecutor, who did not pursue the matter further and declined to comment on the case.

Ubhi may be the most glaring red flag in the IG report, but is certainly not the only one.

Turn to Sally Donnelly, who left the DoD in 2012 to start the DC lobbying shop SBD Advisors – described by Politico as a “stealth” consulting firm. According to the IG report, Amazon hired Donnelly’s SBD Advisors in 2015 to “help AWS understand better how the DoD worked.”

After consulting for Amazon about the inner workings of the DoD, Donnelly returned to government as a special advisor to Mattis in January 2017. With her came former SBD Advisors director Tony DeMartino.

Donnelly and DeMartino worked on the JEDI project in 2017 before leaving again to form their own consulting firm, Pallas Advisors. Another person involved in the JEDI project, Robert Daigle, also left the DoD in 2017 to join Donnelly and DeMartino at Pallas, the report says.

Yet another former DoD official, Victor Gavin, also took part in the JEDI procurement process even though he had already accepted employment with Amazon. Here, the Inspector General did not flag any ethics violations because Gavin disclosed his ties with Amazon, only sat in one meeting about JEDI, and was not heavily involved in the project.

Lest readers think the IG only investigated the Amazon-Trump controversy, the report also scolds DoD official Stacy Cummings for taking part in the JEDI procurement process while owning between $15,001-50,000 of Microsoft stock. The report notes that Cummings disclosed her Microsoft stock, but made the mistake of participating in the JEDI project anyways – stopping only when a DoD ethics attorney flagged the violation. The Inspector General recommended that Cummings undergo counseling and training.

So what about the Mad Dog himself?

The IG report does not identify any financial ties between Mattis and Amazon, but it certainly seems like the former Defense Secretary had his heart set on the tech giant from the beginning.

After discussing cloud technology with his buddies in the CIA – which uses Amazon as its cloud provider – in December 2016, the report says Mattis came to the conclusion that a comprehensive cloud may be the best fit for the DoD’s data storage needs. Mattis then had an “off-the-record” meeting at a charity dinner in the UK with Amazon executive Teresa Carlson in March 2017, before meeting Bezos at least twice over the next 10 months.

The last meeting was a January 2018 private dinner in DC with Mattis, Donnelly, Bezos and Carlson, who discussed “leadership,” security, China and global trends, space technologies, and “Mr. Bezos’ offer to help support the DoD,” according to the IG report.

By this point, Amazon’s relationship with the Pentagon was starting to draw attention from the media.

In March 2018, an unnamed non-profit organization ran a full-page ad in the New York Post, the first line reading: “President Trump: Your Defense Department is set to award a no-bid, ten-year contract for all its IT infrastructure to Administration-enemy Jeff Bezos’ Amazon.” The ad, which has been removed from the Post’s website, featured a prominent picture of Mattis walking and speaking with Bezos, according to the IG report.

The same month, Bloomberg News and Business Insider also published articles reporting that Oracle CEO Safra Catz was in Trump’s ear about how the JEDI procurement process was being rigged for Amazon. Bloomberg later reported that it had obtained a copy of a 33-page dossier that portrayed “a web of conflicts to cast doubt on the integrity of the cloud procurement,” with allegations that “Defense Department officials participated in shady activities, all of which gave Amazon an edge.”

The media reports and Oracle’s protests apparently succeeded, as Trump started lobbing Twitter insults towards Amazon and Bezos while allegedly exerting influence on the JEDI procurement process behind the scenes throughout 2018. The abovementioned DoD officials departed government from late 2017 to late 2018 – Ubhi and Gavin to work for Amazon; Donnelly, DeMartino and Daigle to start a new lobbying shop; and Mattis, ostensibly to protest Trump’s Syria “withdrawal.”

If one views this through MAGA-tinted glasses, it might seem like Trump was following through his promise to Drain the Swamp by cutting the DoD from its ties to Amazon.

But when one takes into account that Oracle CEO Catz was a member of Trump’s transition team and had dinner with the president in April 2018 to discuss JEDI, it seems far more likely that Mattis was telling the truth when he said Trump wanted to “screw Amazon” – either as revenge on Bezos, a favor to Catz, or a combination of the two. As Thomas Knapp argued in an article published on antiwar.com last December, Trump should have squashed the entire JEDI project altogether if he really wanted to reduce government waste and malfeasance.

There are no good guys in these power struggles – just various factions vying for money and control, all at the public’s expense.

Pandemic Hospital Layoffs Reveal the Prevalence of Wasteful Healthcare Spending

Pandemic Hospital Layoffs Reveal the Prevalence of Wasteful Healthcare Spending

Aside from a few hotspots like New York City or Detroit, hospitals across the country are at such low capacities that many are laying off staff and seeing their bottom lines threatened during the current coronavirus pandemic.

For instance, in my home state of North Carolina it was reported “After hospitals and doctor’s offices across North Carolina canceled nonessential procedures and in-person appointments because of the coronavirus pandemic, many nurses and medical staff were laid off or had their hours reduced.”

“It’s definitely not the situation you might think would happen during a pandemic,” said North Carolina Nurses Association CEO Tina Gordon.

According to an April 14 article in The Guardian, “43,000 healthcare jobs were lost in March 2020” throughout the U.S, and “the HealthLandscape and American Academy of Family Physicians issued a report estimating by June 2020, 60,000 family medical practices will close or scale back, affecting 800,000 workers.”

An April 1 McClatchy article reported that hospitals “are now losing 40% to 50% of their revenue.” Meanwhile, the American Hospital Association, according to the Business Insider, “has sounded the alarm about the industry’s financial difficulties and said that quickly distributing funding from the CARES Act would help facilities keep their doors open.”

It is of course welcome news that hospitals have not been universally overwhelmed during the pandemic.

Some of the downturn in hospital finances is attributable to routine visits being cancelled amid stay-at-home orders along with delays in non-emergent procedures like hip or knee replacement.

The current situation does, however, help underscore a little-discussed cause of the nation’s rise in healthcare costs: unnecessary treatment.

Unnecessary procedures make up one-fourth of healthcare spending

According to the Institute of Medicine, “unnecessary tests, prescription drugs and medication, and extraneous procedures are one of the drivers of healthcare price inflation.”

Just how significant of a factor is unnecessary procedures and testing in the healthcare industry?

More than you may think.

According to a February 2018 report by ProPublica, “The waste is widespread – estimated at $765 billion a year by the National Academy of Medicine, about a fourth of all the money spent each year on health care.”

ProPublica described the waste as “one of the intractable financial boondoggles of the U.S. health care system,” in which tons of patients “get lots and lots of tests and procedures that they don’t need.”

“Women still get annual cervical cancer testing even when it’s recommended every three to five years for most women. Healthy patients are subjected to slates of unnecessary lab work before elective procedures. Doctors routinely order annual electrocardiograms and other heart tests for people who don’t need them,” the article continued.

The ProPublica report referenced a study by the Washington Health Alliance, a nonprofit dedicated to making care safer and more affordable, which found “almost half the care examined was wasteful.”

Shockingly, as reported in this Greenimaging.net article, “85 percent of doctors admitted calling for too many tests, 97 percent agreed to personally ordering unnecessary tests.”

Of the unnecessary procedures, the American healthcare system wastes $200 billion per year on unnecessary medical tests alone, according to the Lown Institute.

The Washington Health Alliance study further noted that much of the waste “comprised the sort of low-cost, ubiquitous tests and treatments that don’t garner a second look.”  But as Susie Dade, deputy director of the alliance and primary author of the report noted “little things add up. It’s easy for a single doctor and patient to say, ‘Why not do this test? What difference does it make?'”

Indeed, this question helps inform us why unneeded procedures and tests are so prevalent.

Rise of third-party payments

To the patient, such unnecessary tests and procedures typically make little or no difference financially.

Steadily rising government intervention into the healthcare industry over the past several decades has created a system in which roughly 90 cents of every healthcare dollar is paid for by a third party.

As noted in this 2017 study by the Mercatus Center at George Mason University, “In 1960, patients controlled how almost 50 cents of each dollar spent on health care was paid. That number is now down to just over 10 cents, with the rest controlled by third-party payers.”

Third-party payers include Medicare, Medicaid and private insurance coverage. Government programs of course require little to nothing financially from enrollees. Meanwhile, government mandates requiring health insurance plans cover an ever-expanding list of providers and procedures drives up premiums while driving down the cost to patients at the point of care. Patients come to view their insurance as a sort of pre-paid medical card. If I am paying $1,000 a month on premiums, I want to get my money’s worth from my doctor. If additional unnecessary procedures and tests cost very little or nothing on the margin, why not go ahead with it?

Moreover, because health insurance benefits are tax exempt for employers, the majority of people receive their health insurance through their job. Rather than individuals negotiating the benefits and premiums of their insurance coverage with their provider, employees are covered by plans negotiated between their company’s HR department and the insurance provider.

As a result of government intervention, patients are largely insulated from bearing any cost for wasteful unnecessary procedures and tests. At most, their out-of-pocket charge will be a nominal co-pay, while many procedures – especially if covered by Medicare or Medicaid – will cost them nothing at all.

And such a situation rises above a simple “better safe than sorry” type scenario, where the unnecessary procedures can provide peace of mind with no downside. As the unnecessary procedures inflate healthcare costs, more people are priced out of the insurance market while others forego more urgent care out of fear of unaffordable bills.

Conclusion

The third-party payer system incentivizes mass amounts of wasteful and unnecessary healthcare spending. It costs the patient very little or nothing, while the doctors and hospitals can help pad their bottom lines by billing the government programs or insurance providers.

The current pandemic has put a halt to much of these unnecessary procedures as hospitals focus on coronavirus preparedness. And now hospitals are seeing their finances suffer significantly, revealing just how substantial a factor unnecessary procedures are to the rising costs of healthcare. The best way to significantly reduce such wasteful spending is to peel back the layers of government intervention that encourage it.

Joint Law Enforcement Task Forces are Creating a National Police State

Joint Law Enforcement Task Forces are Creating a National Police State

Through the proliferation of joint law enforcement task forces, the federal government is creating a national police force that operates in a legal twilight zone with little or no oversight.

Law enforcement officers from various state, local and federal law enforcement agencies make up these joint task forces. The concept evolved out of the unconstitutional “War on Drugs” launched by President Richard Nixon. The first multi-jurisdictional task forces were put together in the 1970s.

Dan Baum chronicled the evolution of these multi-jurisdictional police forces in his book, Smoke and Mirrors: The War on Drugs and the Politics of Failure. Radley Balko summarized Baum’s description of the origins of these task forces in a Washington Post article writing, “Nixon wanted ‘strike forces’ that could kick down doors and put the fear of God into drug offenders without burdensome hurdles like the Fourth Amendment or the separation of powers.”

Initially, many local law enforcement agencies weren’t interested in getting in bed with federal cops and were wary of the aggressive tactics employed by the joint task forces. But the feds used federal grants and asset forfeiture money to bribe reticent departments and incentivize participation. The number of joint task forces grew exponentially in the 1980s and 1990s. The deployment of these task forces also expended beyond the “war on drugs.”

Today, you will find hundreds of joint state-federal task forces across the U.S. Just consider this list of task forces in the Pittsburgh area alone.

  • Anti-Terrorism Advisory Council (ATAC)
  • Crimes Against Children Task Force
  • FBI Opioid Task Force
  • Greater Pittsburgh Safe Streets Task Force
  • J-CODE (Joint Criminal Opioid DarkNet Enforcement Team)
  • Opioid Fraud and Abuse Detection Unit
  • Pittsburgh Financial Crimes and Electronics Task Force
  • Western Pennsylvania Fugitive Task Force
  • Western Pennsylvania Violent Crimes Task Force

As of 2016, the DEA oversaw or participated in 271 anti-drug task forces across the U.S. Through a program called Project Safe Neighborhood, the Department of Justice ran another 86 taskforces as of 2018. The FBI administers 160 violent gang task forces.

The U.S. Marshalls run 60 Fugitive Task Forces. The ATF oversees the National Explosives Task Force and forms task forces for specific investigations. According to Balko, the U.S. Attorney General runs 18 task forces through the Organized Crime Drug Enforcement Task Force program. And then there are the countless temporary joint task forces created every year for special investigations and law enforcement initiatives.

Due to their nature, joint task forces operate in a legal twilight zone that gives them wide latitude. As Balko explained, they often go about their business with little or no oversight. Often, it’s impossible to identify any local officials overseeing their work. And even when somebody is technically in charge of the task force, they often give it free rein.

With little oversight, they have a record of overstepping and misdeeds, from excessive force to shootings, to mistaken raids, to straight-up corruption.”

This jurisdictional neverland also allows members of these task forces to escape accountability or punishment when they use excessive force, destroy property, or simply engage in sloppy police work. Balko’s article chronicles the story of a man who was beaten senseless after undercover members of a joint task force mistook him for a wanted individual. The state and federal law enforcement officers both dodged prosecution by playing ping-pong with state and federal jurisdictions. As Balko illustrates, In practice, joint task forces can “pick whichever laws — state or federal — afforded them the most power and the least accountability.”

Ironically, the Obama administration couldn’t even conduct a cost-benefit study on joint police task forces because records were almost nonexistent. According to those conducting the study, “Not only were data insufficient to estimate what task forces accomplished, data were inadequate to even tell what the task forces did as routine work.”

There are other pernicious consequences resulting from the rise of joint police task forces.

Local police can circumvent strict state asset forfeiture laws by claiming cases are federal in nature due to the participation in a joint task force. Under these arrangements, state officials simply hand cases over to a federal agency, participate in the case, and then receive up to 80 percent of the proceeds.

And the money and power that comes when local cops partner up with the feds incentives local police to focus on “national” priorities such as the war on drugs, federal gun control and “anti-terrorism” efforts instead of prioritizing more routine local policing such as murder, rape and property crime.

We also see the influence of these task forces in the state legislative process. Police lobbyists often oppose warrant requirements, limits on state and local cooperation with federal surveillance, prohibitions on the state enforcement of unconstitutional federal gun control, asset forfeiture reform, and other laws blocking state enforcement of unconstitutional federal laws because they don’t want to jeopardize “our federal partnerships.” In other words, their relationships with their “federal partners” trumps the Constitution.

The federal government was never intended to exercise “police powers” in the first place. The Constitution only defines four federal crimes – treason, piracies and felonies committed on the high Seas, counterfeiting, and crimes against the law of nations. The federal government also has criminal jurisdiction within Washington D.C. and its other enclaves.

The creation of every other federal crime violates the Constitution.

In other words, virtually the entire federal law enforcement apparatus is unconstitutional.

Nevertheless, the federal government is developing a national police force that operates outside of any jurisdictional, legal or constitutional boundaries. Joint task forces are a threat to liberty. States should simply withdraw.

Reprinted with permission from the Tenth Amendment Center.

TGIF: Is Self-reliance a Libertarian Ideal?

TGIF: Is Self-reliance a Libertarian Ideal?

An Associated Press article published a few days ago reported on disagreements among libertarians over what, if anything, the government may properly do about the coronavirus pandemic. My purpose here is not to comment on the quotes from the various libertarians. I prefer to focus on just one sentence by the author, Hillel Italie.

It’s this one: “Libertarian principles of self-reliance and minimal government have been around for centuries.”

Only the part I emphasized — the reference to self-reliance — interests me today.

At first, that term may seen unexceptional — even to many libertarians — in an article about libertarianism. A term like self-reliance (along with rugged individualism) is often associated with the libertarian philosophy, again, even by many libertarians. But is that term really pertinent? Or is it misleading and subversive of public understanding? I say the latter.

It’s certainly true that libertarians believe that people should not rely on the government because government is force (to recall the quote erroneously attributed to George Washington). But by what reasoning does one equate eschewing reliance on the state with self-reliance? Is there nothing else but the self to rely on? Society perhaps? It’s hardly a novel idea. It’s especially not novel among libertarians.

Are libertarians against insurance for their lives, homes, automobiles, and medical needs? I don’t think so. What’s insurance? It’s a large number of people, mostly strangers, pooling their resources in case of a long-shot catastrophic event that would bankrupt any one of the individuals. Insurance is the opposite of self-reliance, but it’s perfectly libertarian.

Are libertarians against voluntary associations for fellowship and other nonmaterial values? I don’t think so.

Is the symbol of libertarianism the hermit, Randy Weaver, or Ted Kaczynski sans letter bombs? Again, I don’t think so.

Can advocates of a political philosophy who spend so much time, ink, and electrons praising free markets, global free trade, specialization, and the division of labor hold self-reliance as a core aspiration? Can the people often described by their opponents as “Adam Smith fundamentalists” be regarded as worshipers of self-reliance. No way! The Wealth of Nations is a paean to social cooperation. Libertarian hero Ludwig von Mises, author of Human Action, nearly called his magnum opus Social Cooperation. That’s the second-most-used phrase in the very long book. What’s the most-used phrase? Division of labor, another way to say “social cooperation.”

I suspect that the term self-reliance actually works as a subtle smear of libertarians. It’s a way to portray them as churlish, “selfish,” antisocial. But as we can see, no grounds exist for that portrayal. When Simon and Garfunkel sang, “I am a rock; I am an island,” they were singing no libertarian anthem — not by a long shot. (Sorry, Neil Diamond, neither was “Solitary Man.”)

Libertarians are in no way advocates of — gotta love this one — atomistic individualism. Rather, they are, as I suggested long ago, better described as champions of molecular individualism. They form associations for all kinds of reasons. (Alexis Tocqueville noticed this feature of early America’s rather libertarian masses.)  Even the non-Aristotelians among libertarians agree that human beings are social animals, which means that the individual’s best shot at flourishing is in a society — as a long as it’s a free society, of course.

When libertarians themselves are confused about this matter, they undercut their own case. I have often heard libertarians condemn the welfare state because it discourages self-reliance. I’ve even heard libertarians demonize people who accept food stamps and Medicaid or Social Security benefits.

But that’s not the problem with the welfare state, or the social safety net. The problem is with the armed tax collector, not the recipients.

There’s nothing wrong with wanting a social safety net. It’s telling that when people are free to do so, they set up their own voluntary safety nets.

Before the growth of the national welfare state in the United States, working-class and middle-class Americans hedged against the risky, uncertain future by joining mutual-aid societies, also know as fraternal societies, lodges, and in England, friendly societies. These were not only sources of fellowship; they were also voluntary welfare organizations built on the insurance principle. (They were mostly member-owned societies, rather than for-profit companies.)

In the 19th century and the first few decades of the 20th century, working men and women joined these societies, among other reasons, to obtain various insurance benefits. They paid in when they were healthy and working, and drew benefits when they were not. Societies also paid funeral benefits so that families were not left with large debts when the breadwinner died. Some organizations even kept doctors under contract to provide affordable primary care to their members and families. (The state-linked medical societies did not like this “unfair” competition that lowered their incomes.)

Importantly, the societies were competitive and often part of nationwide networks: they boasted of their superior benefits in order to attract and retain members. Moreover, blacks and other minorities responded to racial and ethnic discrimination by forming their own — successful — societies. (See David Beito’s history, From Mutual Aid to Welfare State: Fraternal Societies and Social Services, 1890-1967. Also see my video.)

The libertarian case against the welfare state, then, is not that it undermines self-reliance. It’s that the state is 1) coercive and 2) bound to provide an inferior product because it’s a monopoly with captive customers (taxpayers).

Quite possibly, a libertarian may say he has something else in mind by the term self-reliance. He might mean that he thinks for himself. Fair enough. People ought to think for themselves, though even here we must issue a caveat. F. A. Hayek taught us that even someone who thinks for himself benefits by relying on knowledge that other people possess. Society — the market specifically — extends our intellects by enabling us to act on knowledge of which we would otherwise be ignorant. (Prices are carriers of such knowledge.) Yes, we each must sift through what we learn from others, but we could not flourish without that input.

Going back further than Hayek, Aristotle noted that much of what we can reasonably be said to know includes second-hand “reputable beliefs” picked up from society. I’m comfortable in saying I know the earth is spherical, but I could not confirm that personally. To be sure, which of these beliefs are accepted as reasonable is up to each individual; the proof of the pudding will be in the acting. (See Roderick T. Long’s liberating Reason and Value: Aristotle versus Rand.)

Thus for a variety of reasons, self-reliance is no part of the libertarian vision. It’s time we corrected the record.

Central Banks around the World Embrace Unprecedented ‘Quantitative Easing’

Central Banks around the World Embrace Unprecedented ‘Quantitative Easing’

It feels like it’s been months, but it’s only been a few weeks since the world’s central banks started forcing down their key interest rates to historical lows around the world. In those places where rates weren’t reduced, the central banks have adopted vast quantitative easing plans. In some places, central banks have both reduced rates and adopted new QE.

Some central banks acted earlier than others. Both the European Central Bank (ECB) and the US’s Federal Reserve knew that this already weak economy was further weakening back in late summer 2019. The Fed reduced the key rate from 2.5 to 1.75 percent from June to October. The ECB reduced its negative rate of -0.4 percent even further to –0.5 percent in September.

Rates began to collapse in March, however. The Fed met twice in March, reducing rates first to 1.25 percent, and then down to 0.25 percent shortly after that. Also in March, the Bank of Canada and the Bank of Australia reduced their key rates to 0.25 percent. The Bank of England reduced its key target rate to 0.1 percent.

The Bank of Japan announced its key rate would remain unchanged at –0.1 percent.

target

New Quantitative Easing

While Japan is holding its target rate steady, there will also be plenty of new QE. The Wall Street Journal reports:

The BOJ maintained its target for short-term interest rates at minus 0.1% and its target for the 10-year Japanese government bond yield at around zero….The BOJ has been purchasing exchange-traded stock funds at an annual pace of ¥6 trillion, or about $56 billion, and it said Monday it would double that target to ¥12 trillion for now. It also introduced a new program to help banks lend to companies hit by the virus and expanded purchases of commercial paper.

Meanwhile, the Bank of England isn’t even bothering to use the euphemism “quantitative easing.” The B of E is now straight up handing over new money to the Treasury to fill its massive budget shortfall:

The UK has become the first country to embrace the monetary financing of government to fund the immediate cost of fighting coronavirus, with the Bank of England agreeing to a Treasury demand to directly finance the state’s spending needs on a temporary basis. The move allows the government to bypass the bond market until the Covid-19 pandemic subsides, financing unexpected costs such as the job retention scheme where bills will fall due at the end of April. Although BoE governor Andrew Bailey opposed monetary financing earlier this week, Treasury officials felt it was best to have the insurance of the central bank willing to finance its operations in the short term.

In Europe, the ECB on March 18 announced a new €50 billion “emergency purchase programme.”

With the ECB, we might to some extent describe this as “more of the same,” since Europe appears to have have been the least inclined of the West’s big central banks to scale back its QE programs even at the height of this past decade’s (tepid) boom. Back in 2012, then ECB president Mario Draghi famously declared that the ECB would do “whatever it takes” to save the eurozone. The ECB hasn’t ever given much reason to doubt that it will at least attempt this. But this latest round is not quite more of the same, since this new round of purchases will not be constrained as the QE of the past was. Bloomberg reports:

Government bonds rallied across the euro area after the ECB released a legal document that said the issue limits, which constrained sovereign bond-buying to a third of each of its member state’s debt, “should not apply” to its new program.

Eurozone member states are now free to pile on even more debt than before. In Europe, the political stakes are very high, since Italy never really recovered from the last recession and has had a banking system teetering on the brink for years. Italy has been propped up by the ECB in a variety of ways, and with its economy now in virtual free fall, Europeans in other parts of the the eurozone (especially Germans) will have to take a big hit to their savings to keep it solvent. The political fallout may be significant.

Canada (a nation with a population and economy about the size of California’s (and with a budget of about $350 billion)), began its own new round of QE two weeks ago. In late March, the Bank of Canada announced that the “Bank will begin acquiring Government of Canada securities in the secondary market. Purchases will begin with a minimum of $5 billion per week, across the yield curve.”

As the National Post notes,

It’s a moderate start to what some analysts are predicting will be hundreds of billions of dollars in purchases of Canadian government bonds in coming months as part of the central bank’s efforts to ease strains in the financial system and keep money cheap for borrowers. The Bank of Canada hasn’t set a limit on purchases.

In Australia (where the population and economy is about the size of Texas), the Reserve Bank of Australia has announced:

“Really nothing is off the table,” RBA Governor Philip Lowe said in Sydney after giving a speech on the newly announced measures.

“We are in extraordinary times and we’re prepared to do whatever is necessary to make sure funding costs in Australia are low and the supply of credit is there for Australian businesses and households.”

The Australian approach appears to be less centered on the central bank. The Australian state has expressed plans for a wide variety of plans for fiscal stimulus and, “in a separate statement, the government said it would buy A$15 billion of residential mortgage-backed securities and other asset backed securities over the next 12 months.”

Of course, if the Australian government must turn to deficit financing for these purchases, the central bank will end up supplying the needed cash.

A World without Savings

We’re quickly finding out what a world without savings looks like. All those claims we heard from central bankers for years about how a “savings glut” was forcing down interest rates are less convincing than ever. It is increasingly clear that central banks are among the only institutions out there with an appetite for buying assets. This, of course, is because central banks can create money from nothing, while much the world is on the edge of insolvency. Those institutions that appeared to be profitable were really only making ends meet because of past bailouts and continuing low-intensity QE programs. They were “zombies.”

After decades of ultralow rates coming out of governments and central banks obsessed with maximizing consumer spending, we find ourselves with debt loads that far outstrip savings. Without central banks, there would be massive global deflation. This would hurt many financial institutions, of course, but it would also lead to a decline in stock prices, real estate, and prices for other assets that have been propped up—to the benefit of bankers, hedge fund managers, and billionaires—for decades. This would mean greater affordability for many and a badly needed restructuring of the global economy.

The only way out is to allow freedom to interest rates and to allow the financial sector to take the hit. If interest rates were allowed to reflect market demand, they would quickly increase and real savings would quickly increase as people with the means to save would have finally an incentive to put their money somewhere other than the stock market and other industries that survive primarily due to the assumption that governments and central banks will always bail them out. Resources would then begin to flow again toward assets involved directly in production of goods and services. Real production would increase, easing the supply shock.

[RELATED: “What If the Fed Did Nothing?,” by Noah Bonn]

As it is, central banks will instead focus on helping the financial sector. But the financial sector has little incentive to make loans to households and institutions in the real economy.  So long as the economy is in a high-risk zone—whole central banks are simultaneously propping up demand for stocks, bonds, and a handful of other assets—it makes more sense for the financial sector to sit on the same safe assets that it has been accumulating for years. Why lend to a small business when the Fed will make sure your mortgage-backed securities are a safer alternative? So long as global trade can pave the way for more affordable goods and services, a limited escape hatch is possible. But given the current supply problems, that escape hatch may be unreachable for a long while. The pain in the meantime will be extensive for many. But don’t worry—many billionaires’ portfolios will be fine. Central banks will make sure of it.

banks
Lock Out Below! Lockdown Economy Plunging

Lock Out Below! Lockdown Economy Plunging

Mike Shedlock crystallized the Lockdown Nation catastrophe at hand by focusing on the unemployment claims numbers for Michigan Wednesday morning. And it doesn’t get any more transparent than a staggering 25% of the state’s work force already having filed unemployment insurance claims under the existing Federal/State UI program—only to have its computers crash and burn when the normally uninsured gig workers and self-employed tried to file this week for the new Federal $600 per week Covid benefit:

More than 1 million people — over a quarter of Michigan’s workforce — have filed for unemployment during the COVID-19 pandemic, the state’s top labor official said Monday.

Last week, Michigan reported more than 828,800 unemployment claims filed in the state from March 8 to April 4. Michigan’s pre-coronavirus record for new unemployment claims occurred during the Great Recession in January 2009, when there were 77,000 claims in a week.

In an embarrassing twist Monday morning, Michigan’s unemployment website crashed — again — but this time just as the head of the state labor department was expected to outline how the state would apply benefits for self-employed workers.

Just hours earlier, the unemployment website announced “self-employed workers, gig workers, 1099-independent contractors and low-wage workers can now apply for federal benefits online,” but, when attempting to file, an error message popped up: “This site can’t be reached.”

Likewise, the stunning collapse of the Empire State survey this AM left nothing to the imagination. The negative 78 reading for April was orders of magnitude worse than readings during the Great Recession and the post-dotcom crash.

https://www.zerohedge.com/s3/files/inline-images/empire%20fed%204.15.jpg?itok=x2GXzBgC

Likewise, the cliff dive embedded in this morning’s report on March retail sales was way off the charts—with the 8.7% m/m drop posting at more than double the worst reading during the Great Recession.

Moreover, March was only a warm-up: The April numbers will be 2X-3X worse.

 

In fact, when you look at even the March numbers at the product level, the plunge is even more dramatic. Food and beverage and general merchandise sales were actually up smartly owing to the fact the grocery delivery services, Amazon warehouses and home-cooked meals are out of necessity booming.

But when you look at discretionary and Lockdown items sold in the public facility based retail categories the sales crash in March was already in the negative 20-30% range, and, again, the results for April will be far worse.

Even then, March readings like these have never before been recorded on a month/month basis:

  • Electronics and appliances:-15.1%;
  • Gasoline stations: -17.2%;
  • Sporting goods and hobby stores: -23.3%;
  • Motor vehicles and parts: -25.6%;
  • Food services and drinking places: -26.5%;
  • Furniture and home furnishings stores: -26.8%;
  • Clothing and accessory stores: 50.5%

Not only are these double digit plunges severe in absolute terms, but relative to history they are literally coming from another economic planet. For instance, the Lockdown of bars and restaurants resulted in a -26.5% m/m change, which compares to the worst ever previously reported figure of -1.5% during the dark economic bottom in February 2009.

We will address the disaster that will ensue from the halting, baby-step “re-opening” of the economy being demanded by the infectious disease lobby and the Dem governors and mayors below. But here’s the point: All the upstream supply chains which deliver food and liquor, consumable supplies and equipment to  the restaurant and bar business have never previously suffered a measurable recessionary downturn as shown below. This time, however, they will suffer massive loss of sales owning to the near total shutdown of their customers.

In the case of the 50% plunge in sales at clothing and accessory stores, the cliff-diving numbers are even more fantastic. The chart below is not a rate of change measure. It represents actual sales dollars and means that in a single month, 25 years of sales growth was wiped-out.

Accordingly, the $11.1 billion of sales posted by these retail units for March was the lowest sales level since May 1995—–and these are nominal sales that give no account for the 40% increase in the general price level that has occurred in the interim.

The same story pertains with regards to furniture and home furnishings stores.

During the last 27 years, monthly sales have never dropped more than 5%, but in March sales collapsed by nearly 28%. Within two months, sales from these venues will easily by off by 50% or more for January 2020 levels.

 

Likewise, auto sales were down by 27.2% in March, and based on current industry information, are likely to be off by 50 to 60% during April.

This magnitude of instant collapse literally has no precedent since the collapse of sales in what was still the infant auto industry during the 1930s.  The low point in the Great Recession, for example,  was a 10.6% drop in October 2008 while the 15% drop in September of 2009 was a government instigated calendar aberration which occurred when Washington’s cash-for-clunkers boondoggle came to and end.

 

Needless to say, the collapse of retail sales is rapidly passing through to the production end of the economy—-with the March industrial production numbers published this AM providing merely a hint of the disaster to come later this spring.

Manufacturing output was already down by 6.3% in March, which is more than double the trough decline of 3.5% in December 2008 and the 2.5% drop in at the bottom of the 1982 recession.  Again, however, by April and May the plunging bars on the right margin of the chart will be down by 20-30%, at minimum.

Obviously, one reason 25% of the Michigan work force has already applied for unemployment is the auto assembly lines are tanking like they did in the winter of 2008-2009. Then, of course, both Chrysler and GM were already in bankruptcy and the Fed still had a massive trove of dry powder.

 

So the question recurs. How long can the Lockdown madness continue when it is self-evident that the US economy is going into cardiac arrest?

And They’re Gone! Lockdown Nation Wiped Out 10 Years Of Jobs Recovery In Four Weeks

And they’re gone!

We are referring to the 22 million jobs the BLS says were created since the Great Recession. But with today’s report of 5.2 million new unemployment claims, the four week total now stands at, well, 22 million jobs lost.

https://www.zerohedge.com/s3/files/inline-images/2020-04-16_5-30-49.jpg?itok=IuKYdKyD

So let’s just cut to the chase. There are two death watches underway in America, and the above chart tells you all you need to know.

The  morbid, sensationalized CNN/Cuomo Brothers/MSM/infectious disease lobby’s Covid Death Watch has spawned a hysteria among officialdom and much of the broad public that is literally killing economic function and rationality.

For example, the odds of the chart below happening from a normal business cycle downturn or even a so-called exogenous shock like the 1973 oil embargo or the 9/11 national security shock or the worst hurricanes or earthquakes of the last 53 years is virtually nil. The exploding red line on the right margin is government-made and hysteria born.

After all, each the above referenced economic blows, including 7 recessions, did actually happen during the period encompassed by unemployment claims chart below. But relative to the eruption of the last four weeks, they caused nearly invisible squiggles, rounding errors in the last half century of economic history.

Indeed, the 22 million claims over the last four weeks are 10X the size of the worst 4-week period during the Great Recession, and the latter was thought to herald the risk of the 1930s all over again, according to the Bernank himself.

Needless to say, this savage, government-inflicted blow to normal economic life would be one thing if the nation were actually confronted by a deathly Black Plague style pandemic or even an invasion by little green men from Mars.

But no matter how many times the out-of-control politicians, government-funded disease “experts” and the mendacious mavens of the 24/7 cable TV Death March deny it, the Covid-19 is just a highly contagious and somewhat virulent flu that mortally threatens only a very small share of the population — namely, the elderly who already have multiple life threatening diseases and conditions or what are called co-morbidities.

Today’s economy crushing Lockdowns, therefore, are a combination of blunderbuss and a one-size-fits all mantra gone haywire. And it’s happening because the so-called infectious disease experts around the CDC, WHO and Dr. Fauci’s Institute for Allergy and Infectious Diseases gave government officials the utterly wrong answer: To wit, they explained how to 100% stone-cold stop the spread of a virus that in today’s world can’t be stopped and needn’t be.

If politicians had any functioning gray matter between their ears they would have asked this question, instead: When the Covid-19 virus makes its inexorable trip through the population pool, who is most at risk of serious illness or even death, and what are the most efficacious and quickest methods to protect those people who will bear the brunt?

Yes, Covid-19 is a new strain, but its a corona virus variant that epidemiologists and other medical experts know a lot about, having studied SARS, MERS and H1N1 and their variants for the better part of two decades now. Accordingly, had they been asked to do their proper job — recommend how to protect the vulnerable and likely most serious victims — rather than how to extinguish the inextinguishable, they would have based it on the following crystal clear realities about the disease.

To wit, here are the risk-of-death ratios for the Covid epicenter population of New York state. These would not have been a mystery to the experts who have studied these kinds of flu-based viruses, yet among the 12,192 reported corona deaths through April 16, the mortality rates were:

  • 0-29 years: 60 deaths and 0.8 per 100,000;
  • 30-49 years: 653 deaths and 13 per 100,000;
  • 50-69 years: 3585 deaths and 73 per 100,000;
  • 70-79 years: 3253 deaths and 258 per 100,000;
  • 80 years & over: 4641 deaths and 1,214 per 100,000.

For crying out loud. You do not need to be a PhD epidemiologist or credentialed health policy expert to understand that when the risk of death for octogenarians is 1500X higher than for the under 30 population, then you do not have a one-size-fits all general public health emergency.

What you actually have is a radically skewed adverse response among the elderly to a common virus circulating among the entire population. And it bears fatally almost exclusively upon those who are already suffering from serious and even life threatening illnesses, and who are also overwhelmingly known to the health care system and doctors who are treating them.

Yet for want of doubt, let us repeat that among the 4,641 WITH Coronavirus deaths among those 80 and older reported by New York state, there were more than 9,000 (2 per deceased) cases of the top 10 co-morbidities including:

  • Hypertension: 2,809 (61%);
  • Diabetes: 1,418 (31%);
  • Hperlipidemia: 955 (21%);
  • Dementia: 936 (20%);
  • Coronary artery disease: 679 (15%)
  • Five others: 2,243 (48%)

Nor is this some kind of aberration unique to the New York cases. A nationwide analysis of hospitalized Covid-19 patients for the month of March shows pretty much the same condition of extensive co-morbidities.

Hospitals Try Glucose Monitors to Reduce Contact With Covid-19 ...

As for the under 50 population, even when you average in the slightly higher mortality rate for New York’s 30-49 years population, the total mortality rate for the under 50 population is still just 5.5 per 100,000.

Is that a rounding error and reducible to the absolutely unavoidable risks of human life?

Yes, it is. In fact, it’s just one-seventh of the normal rate for auto fatalities, other accidents and suicides (34 per 100,000) among this demographic, and only 6% of the normal mortality rate (91 per 100,000) due to all causes for this 67% share of the state’s population.

So what Lockdown Cuomo is really doing is putting the 13.05 million under 50 years population under house arrest not for their own good, but, apparently, in order to protect the 382,000 octogenarian population that is bearing the brunt of the serious illness and death or, more broadly, the total 1.64 million population 70 years and older.

Stated differently, this group accounts for 8% of the New York population but has suffered 65% of the deaths WITH Coronavirus reported to date.

Yet it is not evident at all that quarantining the healthy under 50 years population has done anything at all to protect the vulnerable elderly; at this stage the game, the morbidly ill elderly shouldn’t have been, and wouldn’t have been, going to bars, restaurants, hair salons, pet stores and retail emporiums, anyway.

The truth is, America’s across-the-board Lockdown is on its face irrational — especially when there is a far more deft, targeted alternative. To wit, New York data suggests that nearly 75% of the 12,192 deaths reported in the state to date are Medicare beneficiaries.

That’s right. Their names, addresses, social security numbers, Medicare treatment records, attending physicians etc are known to the government — meaning that they could have been systematically traced, contacted, isolated, assisted and treated by the medical care system and health agencies from the get-go.

Indeed, when it comes to practicality and rational trade-offs, the entire Medicare eligible population could have been targeted for assistance, protection and treatment for a tiny fraction of the $3-5 trillion that the fools on Capitol Hill are fixing to pump into the economy to off-set the massive losses of income and cash flow owing to the Lockdowns.

In the case of New York state, for instance, we have the very epicenter of the world’s Corona epicenter in the form of its roughly 3.6 million Medicare beneficiaries. This 1% share of the US population accounts for upwards of 36% of all WITH corona deaths in the US to date.

Would that the virologists, epidemiologists and other government health agencies have pointed Governor Cuomo in the direction of tracing, isolating and aiding Medicare’s medically vulnerable beneficiaries in lieu of savaging the state’s economy, and, ironically, his own state budget.

Needless to say, the old “but for” argument just doesn’t wash. That is, the specious claim that “but for” the Lockdowns the toll of illnesses and deaths would have been far worse.

We’d suggest that Japan proves just the opposite—even though its population is far older than that of New York.

As it happens, Japan has had no sweeping Lockdowns and even Prime Minister Abe’s so-called emergency decrees have been toothless gestures, possibly designed to provide cover for the $1,000 per head helicopter money he wants to pass out to the nation’s entire population in order to revive his sagging political fortunes.

But whatever Mr. Abe’s motivation, the facts could not be more dispositive. Japan’s restaurants, bars, shops, trains and other public venues are still largely open. But to date it has reported just 8,626 infected cases and 178 deaths.

We have often characterized Japan as a dying old age home heading for bankruptcy owing to its insane monetary and fiscal policies. But at the moment it still has a population of 126.5 million, which means that its reported cases amount to just 6.5 per 100,000, and its Covid-19 mortality rate as of April 15 was just 0.14 per 100,000.

That’s right. Sitting cheek-by-jowl with China, it has suffered one-seventh of a death per 100,000 population during the three months since Covid-19 became a thing.

For purposes of comparison, the rates for Locked-Down New York states are in a different planet:

  • New York’s reported cases amount to 1,100 per 100,000 population or 169X higher than the rate reported by Japan;
  • New York’s total WITH Covid death rate is 63 per 100,000 population or 450X that of Japan.

At the end of the day, the great H.L. Mencken got the essence of the matter right when he observed nearly a century ago that,

“The aim of politics is to keep the populace alarmed by menacing it with an endless series of hobgoblins, all of them imaginary.”

That is to say, the Covid-19 is real but it’s not remotely the kind of deathly pandemic that warrants trashing America’s entire economic and social life.

Recently, the Donald was making noises that are a reminder that even a blind squirrel occasionally finds an acorn:

“WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF.”

So just maybe the Donald will actually come through on the urgent need to “re-open” because at the moment that imperative outweighs everything else.

Reform Title IX Now

Reform Title IX Now

The Department of Education’s (DOE) reform of Title IX — the law that bans discrimination based on sex at federally-funded schools — has been a long time coming. For three Senators, it has not been long enough. They strenuously object to the impact on how colleges handle accusations of sexual misconduct. No longer will an accused be presumed guilty until proven innocent. Instead, he will be accorded due process.

On March 31, Patty Murray — the leading Democrat on the Senate education committee — Elizabeth Warren, and Kirsten Gillibrand sent a letter to Education Secretary Betsy DeVos to express their opposition to finalizing the reform. “We urge you not to release the final Title IX rule at this time,” they argued, “and instead to focus on helping schools navigate the urgent issues arising from the COVID-19 pandemic.”

This is an odd argument. Now seems to be the perfect time for colleges to work on policy and administrative matters. Campuses are empty. No sexual misconduct hearings will be interrupted; students will be spared the confusion of a mid-semester policy change; administrators can implement regulations before the new academic year.

Colleges are hardly caught off guard. The reform began on September 22, 2017 when the DOE withdrew the controversial Dear Colleague Letter (2011) that governed the treatment of sexual misconduct accusations on campus. The Obama-era Letter was widely criticized for mandating a low standard of proof for findings of guilt and encouraging the denial of due process, such as a defendant’s right to a lawyer. The DOE’s replacement guideline was officially made public on November 29, 2018 when the Federal Register published “Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance.”

The proposed reform received vast attention and backlash in this time of #MeToo that demands automatic belief of women’s accusations. in January 2018, three national public interest organizations, including the highly influential National Women’s Law Center (NWLC), sued DeVos and the DOE to block the Title IX reform. The lawsuit claimed that the “new and extreme Title IX policy…was issued unlawfully and based on discriminatory beliefs about women and girls as survivors of sexual violence, in violation of the Constitution.” The lawsuit was eventually dismissed.

Senator Murray has also attacked the Title IX proposals. A news release from her office reported on Murray’s statements at a Senate hearing on campus sexual assault. “I stand with you [accusers] and I’m going to keep fighting to stop what happened to you.” Murray accused the DOE of being “callous” and ignoring “the experiences of survivors,” which would “discourage students from coming forward after being sexually assaulted.” Gillibrand has decried DeVos as favoring “predators over survivors.” Warren has stated, “There’s no greater example of how we’re failing students and teachers than Betsy DeVos, the worst Secretary of Education we’ve seen.” These statements do not argue for the delay but for the derailment of DOE’s plans.

Liberals view the new rules as a shift to the right and an abandonment of Obama-era policies. Consider two definitions of a key term, “sexual harassment.” According to the Dear Colleague Letter, “Sexual harassment is unwelcome conduct of a sexual nature. It includes unwelcome sexual advances, requests for sexual favors, and other verbal, nonverbal, or physical conduct of a sexual nature.” This broad characterization includes bad jokes and leering glances. By contrast, DeVos uses the reigning Supreme Court definition of “unwelcome conduct on the basis of sex that is so severe, pervasive and objectively offensive that it denies a person access to the school’s education program or activity.” This is a far more limited definition.

Why, then, are the 3 Senators calling for delay rather than dismantlement? The coronavirus is unlikely to disappear as an issue before the 2020 election. And, if Joe Biden wins, he has promised the reform would be withdrawn. This process would be be easier, however, if policy changes were not already implemented.

Stalling the DOE reform seems to be a conscious strategy of its opponents. According to Tulane University Title IX coordinator, Meredith Smith, the NWLC orchestrated a sequence of delays with various victims rights groups. Smith stated, “So there was this delay strategy happening. We would hear that the Department of Education was about to release the regulations and then the National Women’s Law Center and all these other groups would parachute in and get more and more meetings on the calendar which push [the release date] back.” They requested a long series of meetings with the Office of Management and Budget (OMB), for example. During the final public commentary on a regulation, individuals can meet in person or over the phone with OMB officials to share concerns; this process usually takes a couple of days, With the DOE regulation, the first meeting was November 13, 2019, and the process ended on March 27, 2020. It stretched over 4 months.

A recent article in the National Review, entitled “Coronavirus Is No Excuse to Delay the Education Department’s New Title IX Regulations,” declared, “Those making this argument [for postponement] are taking advantage of a crisis to try to keep due process out of college campuses.” They are gaming the system.

The DOE reform returns due process to campuses. It also offers relief to lawsuit-prone schools that now function as police, judge and jury in handling students and faculty accused of sexual misconduct. Increasingly, colleges are sued in federal court by those who were found guilty without a fair hearing. As a headline in the Detroit Free Press stated. “Courts ruling on side of students accused of sexual assault. Here’s why.” The “why” is the violation of their due process rights.

Justice delayed is justice denied. And Justice must not be further denied.

How Agorism Evolves Past The State

How Agorism Evolves Past The State

Agorism, in all its various forms, promotes self-reliance and independent entrepreneurial ventures. It is a process that is evolving past the State and making it obsolete.

We cannot disregard the State completely; we have no illusions about this. But evolving past the State is very much in our power. Today agorism is rapidly growing and evolving in countless manifestations…it is all around us. But what is agorism?

In its most specific form, agorism is an explicitly adopted lifestyle of purely voluntary exchanges. But in a general sense, agorism is essentially the sum of all human interactions that are consensual and voluntary. The common factor is this: since the State is a coercive institution, its role in human affairs is absent, or strictly minimized.

Lifestyle Agorism

An agorist lifestyle could be as simple as the bartering of goods such as home-grown produce, meat, baked goods, and beverages; as well as the bartering of services such as household or car repairs, babysitting and so on. It also involves normal buying and selling with money, but favoring interactions with fellow agorists.

Those who adopt this lifestyle will typically identify as agorists, and seek community with the like-minded. Agorists typically do not participate in politics. In general, and to the extent possible, agorists bypass and disregard the State. They continually strive for the goals of living free of State coercion, and minimizing the resources they make available to the State. Moreover, their lifestyle helps delegitimize the State: they provide clear proof that in the absence of government, there is flourishing of happiness, peace and progress.

Informal Agorism

Human interactions can be agorist, without people formally adopting the lifestyle. As we know, virtually all human activities are voluntary. This means that, insofar as they bypass or minimize involvement with the State, most actions are essentially agorist. When we consider some examples of voluntary, mutually beneficial arrangements, we realize how dynamic and pervasive the principle of agorism is.

Traditional agorist examples

In all these examples, and more, the State derives little or no revenue benefit, and regulation is minimized (if present at all)…

  • Private tutoring and homeschooling
  • Gardening services
  • Farmer’s markets
  • Local community protection services

Additionally, we are all familiar with contemporary examples of services that bring buyers and sellers directly together…

Airbnb

Private housing accommodations are a great example of agorism in action. Temporary living arrangements are certainly nothing new; we are quite familiar with hotels, rental properties and boarding houses. But these traditional examples come with varying degrees of State intervention such as taxes and zoning regulations.

The Airbnb model simplifies temporary housing transactions and makes them readily available to both property owner and renter. Although the State is attempting to find ways to intervene, it is much harder to regulate since transactions are person-to-person.

Uber and Lyft

The impact of these new private, individualized transportation modes is immeasurable. State versions of public transportation are clearly falling behind, with each passing year. But these new services are dynamic, flexible and affordable in ways that are impossible with buses, taxis and mass transit.

Internet for-sale websites

Sites such as Craigslist and eBay generate an enormous volume of trade between private parties. There is no central physical marketplace for the State to identify. Its ability to regulate and tax these marketplaces is virtually non-existent.

Big-picture technological agorism

The awesome power of modern technology has changed agorism itself. Evolving from its traditional roots in simple bartering, the information age brings agorism into the 21st century.

Alternative currencies

Electronic forms of currency have emerged in just the last decade. Still in their infancy, they are quickly evolving methods of true financial privacy. Although the State will impose temporary impediments, it will not be able to keep pace with the speed of innovation.

The State utterly depends on its monopoly over money. It is conceivable that in our lifetimes we will witness an evolution of currencies and financial methods that leave the State helpless. Alternative currencies present the single-most immediate prospect for the success of liberty. There is no need for an attack on the dollar; no need to advocate abolishing government agencies. Private trading methods using cryptocurrencies will simply evolve, and then dominate. The steady progress of technology will help relegate the State to the dustbin of history.

Education and Life Skills

Homeschooling and un-schooling continue to grow, producing well-adjusted, bright, confident and capable young people. More and more are emerging from their formative years without the impediment of State indoctrination. Meantime, public schools continue to excel only at producing prison-like environments and a cult-like worship of the State.

For young and old alike, the Internet is making possible the flow of knowledge in every imaginable field, allowing people to educate themselves and gain productive skills, on any subject of their choosing. The State remains a clueless bystander to this evolution.

Health

The stranglehold that the State has over the medical field is enormous. It is presently more difficult to see or imagine the positive potentials that agorism will bring to health. Yet the glimmers of hope are there. Mobile apps are making health research and monitoring more readily available. Alternatives are emerging to heavily regulated insurance: medical groups offering group-oriented health coverage, concierge medical services, to name a few.

The fields of Alternative Medicine and supplements are less regulated, and thus offer greater choices. And this goes hand-in-hand with the Voluntaryist principle of taking personal responsibility, both as producer and consumer.

And then, there’s politics

Political participants tend to make all the noise and get all the coverage; non-participants are silent. It is true that most non-participants do not identify as Voluntaryists or agorists. But whatever specific reason they have for not voting, it can be generalized to this: it is not worth their time.

We may not appreciate the importance of this compelling fact: a majority of the public does not vote. Which means they do not consider the State important enough to motivate them to participate in politics.

Agorists did not have to make that happen. The State did that all on its own…simply by making itself irrelevant to the people at large. As our life options continue to expand, the trend away from politics is likely to continue.

The wonderful results of agorism

Two amazing results emerge from agorism: one psychological, one strategic.

Those who are explicitly agorist tend to experience the psychological sense of inner freedom and true self-ownership, as the State is absent from their interactions.

But the strategic result brings benefits to everyone: agorism, in all its forms, draws resources away from the State, and reaffirms the irrelevancy of the State.

Conclusion

The State offers nothing of value. It produces only one thing: coercive force, with its resulting ugliness and misery. And like any bully, that is all it has. That is its natural limit.

But free people have everything to offer. Agorism can be a formally adopted lifestyle, or merely the natural inclination to interact voluntarily with others in peace. Either way, we create and build; we cooperate; we sing, dance, and love. We educate and grow. And we get better at it all the time.

We evolve. The State doesn’t. The future is indeed bright.

 

Reposted from https://how-agorism-evolves-past-the-state-19.webself.net/

Finding Accountability for Captain Crozier

Finding Accountability for Captain Crozier

There is a sickness in the United States Navy, and it goes beyond the coronavirus pandemic. It’s a disorder of irresponsible political leadership, and a high command more focused on expediency than maintaining the confidence of the sailors in their care. 

The latest symptom of this disease was the abrupt dismissal of Captain Brett Crozier, formerly of the USS Theodore Roosevelt. When members of his crew became infected with COVID-19, Crozier sent a four-page memo explaining his disagreements with current containment strategy and recommending a more aggressive plan of action. The memo, which was sent using an unclassified email, was published by the press immediately. Two days later he was relieved of command by Acting Secretary of the Navy Thomas Modly, whose subsequent nastiness and incongruous standards of behavior resulted in his own resignation.

Opinion has become divided over whether Captain Crozier should have been relieved for impulsively breaking chain-of-command (among other accusations) or whether the punishment was unjustified due to his selfless motivation on behalf of his crew. No matter which side is correct, there is only one appropriate answer: it was wrong to relieve Crozer of command without a proper inquiry. 

Crozier possessed the awesome power of commanding a nuclear-powered aircraft carrier, one of the mightiest weapons in the world. And with that privilege comes responsibility. “On the sea there is a tradition older even than the traditions of the country itself and wiser in its age than this new custom. It is the tradition that with responsibility goes authority and with them goes accountability,” wrote Vermont Royster in a 1952 Wall Street Journal editorial that has become a dogma among career seamen. Every error, purposeful or not, falls on a captain’s shoulders. “No matter what, he cannot escape.”

But while Royster wrote of reviews, debates, inquiries, probes, and committees, Crozier received none of them. He was given no fair hearing, nor the benefit of the doubt that the situation mandated. Only an official inquiry can determine if Crozier should have been removed for cause. 

To give perspective on the events of the past two weeks, a retired U.S. admiral spoke to the Libertarian Institute in an exclusive interview. “Should he have been removed for [breaking chain-of-command] before the inquiry? No,” said the three-star, who preferred to remain anonymous. “I think that if he decided that he had tried to get across that time was of essence, it [the virus] was spreading…and there was no change in that strategy that he said was ineffective, then I would have to say he did what was accountable—outside of war—to the welfare of his men and women, knowing (and he should have known this) that his career would be harmed by it.”

The admiral compared Crozier’s situation to being under incoming fire, a situation that necessitates decisive action. “I think if this man did speak up, and they weren’t listening, then he felt he did the right thing and that’s what a commanding officer is called to do: step outside the chain of command if he has to, at times, to save his crew.”

An inquiry prior to any kind of reprimand is typical Navy procedure, and was the route favored by both Chairman of the Joint Chiefs of Staff Mark Milley and Chief of Naval Operations Michael Gilday. But both men relented and chose to publicly support the acting navy secretary’s decision to dismiss Crozier immediately.

And how did Acting Secretary Modly arrive at this conclusion? He told The Washington Post that President Donald Trump’s opinion weighed heavily in his thought process, explicitly because his secretarial predecessor, Richard Spencer, had been dismissed because he found himself at odds with Trump over the Eddie Gallagher case

“I thought it was terrible what he did. To write a letter. This isn’t a class on literature. This is a captain of a massive ship that’s nuclear powered,” Trump chided after the fact. While the president said he had not made the determination to dismiss Crozier, his displeasure with the captain’s negative appraisal being made public was obvious to Modly.

“I think the immediacy with which he was removed had to do with the public disclosure and embarrassment,” speculated the retired admiral. “And that’s a shame.”

Modly’s resentment of the embarrassment didn’t stop there. The Acting Secretary proceeded to fly 8,000 miles so he could board the USS Theodore Roosevelt and address the five thousand sailors who had cheered their former commanding officer as he departed. Modly excoriated the crew for voicing support for Crozier and described their former captain as either “too naïve or too stupid to be commanding officer of a ship like this.” His excursion, where he was onboard the ship for thirty minutes, cost the taxpayer $243,000.

Crozier emailed his memo to twenty people—including members of his staff, but excluding his immediate superior, Rear Admiral Stuart Baker, and Acting Secretary Modly—and it was subsequently leaked to the press within twenty-four hours. Modly gave a “private,” adversarial address to thousands of men, audio portions of which were uploaded to the internet within thirty minutes. He must have realized his behavior was at least as reckless as Crozier’s (if not more so) and for a lesser cause, because he resigned within a day—but not before doubling down on his comments, and then retracting them.

“It was beyond the pale,” the retired admiral said, regarding Modly’s stunt. “His resignation was correct. You must have respect down the chain of command if you expect it up the chain of command.”

Chief of Naval Operations Gilday has said he’s begun an official investigation into the circumstances of the memo and the dismissal, with a conclusion to be made public as early as this week. The possibility of returning Crozier to command has not been taken off the table. 

As the grandson of two Navy veterans, and the nephew of two more, it is imperative that the high command move forward with transparency and make accountable any wrongs that were committed. That is the only cure for regaining the lost trust of their sailors and their loved ones.

Hunter DeRensis is senior reporter for The National Interest and a regular contributor to the Libertarian Institute. You can follow him on Twitter @HunterDeRensis

New Lawsuit Asks Whether State Agents Can Trespass and Place Cameras on Private Land in Tennessee

New Lawsuit Asks Whether State Agents Can Trespass and Place Cameras on Private Land in Tennessee

Camden, Tenn.—Terry Rainwaters lives, farms and hunts on the 136 acres he owns along the Big Sandy River in rural Tennessee. It’s clear that the farm is private property, with a “no trespassing” sign on the gate. Yet agents of the Tennessee Wildlife Resources Agency (TWRA) ignored that warning, entering his property to set up and retrieve cameras that they used to watch for hunting violations. Now, Terry and another property owner, Hunter Hollingsworth, are teaming up with the Institute for Justice (IJ) to sue the TWRA, asking the court to protect their right—and the rights of all Tennesseans—not to be subject to warrantless searches.

“In America, private land is not open to public officers,” said IJ attorney Joshua Windham. “That’s especially true under the Tennessee Constitution, which requires state officers in every corner of the state, from the city to the country, to get a warrant before searching private property.”

In December 2017, Terry discovered two cameras set up on his farm, one overlooking his field and another pointed toward the back of a house Terry rents out to a long-time tenant. Terry left the cameras in place, and a few days later they were gone. And Terry isn’t the only local landowner to find that they were being watched. His neighbor Hunter similarly discovered cameras and has also encountered a TWRA agent on his land.

“It’s deeply disturbing that I never know whether a state game officer is walking around my land or watching my private activities,” said Terry. “If the state can put cameras on my farm whenever they want, that really destroys the notion that this land is private. And having unannounced visitors walking around our farm during hunting season isn’t just intrusive, it’s dangerous.”

While most Americans would think law enforcement needs a warrant to conduct surveillance, the U.S. Supreme Court held nearly a century ago that the Fourth Amendment does not apply to “open fields.” This misguided doctrine ignores a fundamental point of the Fourth Amendment: to ensure that Americans are secure on their properties. Fortunately, the Tennessee Constitution provides greater protection from unreasonable searches of private property than the Supreme Court says applies under the U.S. Constitution, and the Tennessee Supreme Court has rejected the “open fields” doctrine several times. That’s a good thing, because otherwise most of the private land in Tennessee would receive zero protection from warrantless searches.

“‘No trespassing signs apply to the government too,” said IJ attorney Jaba Tsitsuashvili. “Nobody thinks it’s okay for government agents to set up a tent on your property and watch you day and night. How is installing a camera on your property to do the same thing any different?”

The Institute for Justice is the nation’s leading advocate for property rights. This case is the latest in IJ’s nationwide initiative to secure property owners’ rights against unconstitutional searches. IJ is currently litigating on behalf of property owners and tenants facing unconstitutional home inspections in IllinoisWashington StatePennsylvania, and Indiana. And in New York, IJ is challenging law enforcement’s coercion of individuals’ waivers of their rights to be free from unconstitutional searches.

Reprinted from the Institute for Justice.

FDR, Demagogue Champion of Leviathan and War

FDR, Demagogue Champion of Leviathan and War

Sunday was the 75th anniversary of the death of Franklin Roosevelt.  Roosevelt was sainted by the media even before he died in 1945. CNN last week trumpeted FDR as “the wartime president who Trump should learn from.” A 2019 survey of historians ranked FDR as the third greatest president. President George H.W. Bush praised him for having “brilliantly enunciated the 20th-century vision of our Founding Fathers’ commitment to individual liberty.”

Roosevelt did often invoke freedom, but almost always as a pretext to increase government power. FDR proclaimed in 1933: “We have all suffered in the past from individualism run wild.” Naturally, the corrective was to allow government to run wild.

FDR declared in his first inaugural address: “We now realize… that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership can become effective.” The military metaphors, which practically called for the entire populace to march in lockstep, were similar to rhetoric used by European dictators at the time.

Roosevelt declared in a 1934 fireside chat: “I am not for a return of that definition of liberty under which for many years a free people were being gradually regimented into the service of the privileged few.” Politicians like FDR began by telling people that control of their own lives was a mirage; thus, they lost nothing when government took over. In his re-nomination acceptance speech at the 1936 Democratic Party convention, Roosevelt declared that “the privileged princes of these new economic dynasties . . . created a new despotism. . . . The hours men and women worked, the wages they received, the conditions of their labor—these had passed beyond the control of the people, and were imposed by this new industrial dictatorship.” But if wages were completely dictated by the “industrial dictatorship”—why were pay rates higher in the United States than anywhere else in the world, and why had pay rates increased rapidly in the decades before 1929? FDR never considered limiting government intervention to safeguarding individual choice; instead, he multiplied “government-knows-best” dictates on work hours, wages, and contracts.

On January 6, 1941, Roosevelt gave his famous “Four Freedoms” speech, promising citizens freedom of speech, freedom of worship—and then he got creative: “The third [freedom] is freedom from want… everywhere in the world. The fourth is freedom from fear . . . anywhere in the world.” Proclaiming a goal of freedom from fear meant that the government henceforth must fill the role in daily life previously filled by God and religion. FDR’s list was clearly intended as a “replacement set” of freedoms, since otherwise there would have been no reason to mention freedom of speech and worship, already guaranteed by the First Amendment.

Roosevelt’s new freedoms liberated government while making a pretense of liberating the citizen. FDR’s list offered citizens no security from the State, since it completely ignored the rights guaranteed by the Second Amendment (to keep and bear firearms), the Fourth Amendment (freedom from unreasonable search and seizure), the Fifth Amendment (due process, property rights, the right against self-incrimination), the Sixth Amendment (the right to a speedy and public trial by an impartial jury), the Eighth Amendment (protection against excessive bail, excessive fines, and cruel and unusual punishments).

FDR perennially glorified government as the great liberator of the common man. In a 1936 message to Congress, he denounced his critics: “They realize that in 34 months we have built up new instruments of public power. In the hands of a people’s government this power is wholesome and proper. But in the hands of political puppets of an economic autocracy such power would provide shackles for the liberties of the people.” Because FDR proclaimed that the federal government was a “people’s government,” good citizens had no excuse for fearing an increase in government power. The question of liberty became totally divorced from the amount of government power—and instead depended solely on politicians’ intent toward the governed. The mere fact that the power was in the hands of benevolent politicians was the only safeguard needed.

Roosevelt sometimes practically portrayed the State as a god. In his 1936 acceptance speech at the Democratic National Convention, he declared, “In the place of the palace of privilege we seek to build a temple out of faith and hope and charity.” In 1937, he praised the members of political parties for respecting “as sacred all branches of their government.” In the same speech, Roosevelt assured listeners, in practically Orwellian terms, “Your government knows your mind, and you know your government’s mind.” For Roosevelt, faith in the State was simply faith in his own wisdom and benevolence. Roosevelt’s concept of the State is important because he radically expanded the federal government— and most of the programs he created survive to this day.

FDR declared in 1938, “Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a President and senators and congressmen and government officials, but the voters of this country.” Did  Japanese-Americans round themselves up for concentration camps in 1942, or what?  Did the people who owned the gold that FDR forcibly confiscated in 1933 secretly will that they be stripped of any defense against the inflation that FDR intentionally ignited?

FDR’s perpetual deceits on domestic policy are grudgingly recognized by some scholars but his brazen lying on foreign policy has not received its due. in 1940, in one of his final speeches of the presidential campaign, Roosevelt assured voters, “Your president says this country is not going to war.”  But FDR was working around-the-clock to pull the United States into World War Two. Once the U.S. was engaged in fighting both Germany and Japan, FDR was determined to demand unconditional surrender from both nations. That demand severely undercut German generals who were reaching out to strike a deal with the Allies that would have toppled Hitler much earlier than April 1945. Thomas Fleming’s The New Dealers War vividly explains how FDR’s war demands perpetuated the fighting and cost the lives of far more Americans, Germans, and others.

Two months before he died, FDR met Stalin and Churchill for the infamous Yalta conference.  Roosevelt had previously praised Soviet Russia as one of the “freedom-loving Nations” and stressed that Stalin is “thoroughly conversant with the provisions of our Constitution.” FDR agreed with Stalin at Yalta to move the border of the Soviet Union far to the west—thereby effectively conscripting 11 million Poles into Soviet citizenship.

Poland was “compensated” with a huge swath of Germany, a simple cartographic change that spurred vast human carnage. As author R.M. Douglas noted in his 2012 book Orderly and Humane: The Expulsion of the Germans After the Second World War, the result was “the largest episode of forced migration… in human history. Between 12 million and 14 million German-speaking civilians – the overwhelming majority of whom were women, old people, and children under 16 -were forcibly ejected from their places of birth in Czechoslovakia, Hungary, Romania, Yugoslavia, and what are today the western districts of Poland.” At least half a million died as a result. George Orwell denounced the “relocation” as an “enormous crime” that was “equivalent to transplanting the entire population of Australia.” Philosopher Bertrand Russell protested: “Are mass deportations crimes when committed by our enemies during war and justifiable measures of social adjustment when carried out by our allies in time of peace?”

In a private conversation at Yalta, FDR assured Stalin that he was feeling “more bloodthirsty” than when they’d previously met. Immediately after the Yalta conference concluded, the British and American air forces turned Dresden into an inferno, killing up to 50,000 civilians. The Associated Press reported that “Allied air bosses” had engaged in the “deliberate terror bombing of great German population centers as ruthless expedient to hasten Hitler’s doom.” Ravaging Dresden was intended to “‘add immeasurably’ to FDR’s strength in negotiating with the Russians at the postwar peace table,” as historian Thomas Fleming noted.

Almost all the tributes to FDR this month have omitted his dictatorial tendencies or his bloodthirsty warring. There were good reasons why Friedrich Hayek labeled FDR as “the greatest of modern demagogues.” The canonization of Franklin Roosevelt is a reminder to Americans to beware of any “lessons of history” touted by an establishment media that is vested in the perpetuation of Leviathan and all its prerogatives.

That Didn’t Take Long: U.S. National Debt Exceeds $24 Trillion

That Didn’t Take Long: U.S. National Debt Exceeds $24 Trillion

The U.S. national debt pushed above $24 trillion on Tuesday.

The U.S. government was already running massive budget deficits long before the coronavirus pandemic and the debt was piling up at a dizzying pace. Response to the outbreak has put spending and debt in hyperdrive.

The Trump administration has added $1 trillion to the national debt in just six months.

It’s easy to just brush off the spending spree. Virtually everybody agrees the stimulus is necessary to deal with the economic impacts of coronavirus. But the Trump administration was stimulating long before this emergency. Uncle Sam was already on pace for a trillion-dollar shortfall long before the pandemic. That’s the kind of budget deficit one would expect to see during a major economic downturn.

The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. The fifth trillion-dollar deficit was coming down the pike in fiscal 2020, despite what Trump kept calling “the greatest economy in the history of America.”

To put the growth of the national debt into perspective, the debt was at $19.95 trillion when President Trump took office in January 2017. It topped $22 trillion in February 2019.  That represented a $2.06 trillion increase in the debt in just over two years. By November 2019, the debt had eclipsed $23 trillion. Now, less than six months later, we’re at $24 trillion, with much of the coronavirus stimulus still in the pipeline. That’s a $4 trillion increase in the debt since Trump took office.

As Peter Schiff pointed out in a tweet, the president will add more debt in four years than President George W. Bush did in eight. If re-elected, he will add more debt in eight years than Bush and Obama did in 16.

Instead of draining the swamp, he is draining the nation.”

Ironically, there is bipartisan support for the massive coronavirus spending-spree and virtually no concern about the increasing debt. I say ironically because Republicans had a much different response when Obama pushed his stimulus plan through in response to the 2008 financial crisis. The GOP grassroots pitched a fit and the Tea Party was born. Today, many of the people who marched in those Tea Party rallies against the Obama spending are eagerly planning how to spend their MAGA-Bucks.

Trump supporters often claim the debt isn’t the president’s fault and the blame should fall on Congress. The legislative branch does bear its share of responsibility, but the White House has significant input into the budgeting process and the president has never once submitted a budget that cut overall spending.

In reality, the borrow and spend policies today are every bit as problematic as they were in the Tea Party days. In effect, we have the world’s biggest debtor trying to guarantee everybody else’s debt.

The massive debt raises a number of questions few people seem to be asking. For instance, how will all of this government borrowing impact the bond market?

Investors poured into U.S. Treasuries as a safe-haven as the coronavirus crisis grew. Interest rates plunged, with the yield on the 10-year Treasury dipping to record lows below 0.5 percent. At some point, the demand for bonds will ebb, but the supply certainly won’t. The  U.S. Treasury Department is going to have to sell a massive amount of bonds to fund all of this deficit spending.

The Federal Reserve has stepped in to backstop the borrowing. The central bank is set up and primed to monetize all of this debt through QE Infinity.

Through quantitative easing programs, the Fed buys U.S. Treasury bonds on the open market with money it creates out of thin air. Ostensibly, by creating artificial demand for Treasuries, the Fed can soak up excess supply and hold interest rates down. It has no choice but to intervene in the market because rising interest rates would be the death knell for this debt-riddled, overleveraged economy.

But the central bank will create trillions of dollars out of thin air and inject it into the economy in order to run this debt monetization scheme. That raises the specter of inflation. This is one reason Schiff recently said hyperinflation has gone from the worst-case scenario to the most likely scenario.

The Fed got away with this once. We didn’t see the type of price inflation one would expect with the three rounds of QE in the wake of the 2008 financial crisis. The inflation went into the stock market and other asset bubbles. That could conceivably happen again. But the last time around, then-Federal Reserve Chairman Ben Bernanke swore the QE wasn’t debt monetization. He promised it was a temporary expansion of the balance sheet. He insisted there was an exit strategy.

There was no exit.

And today, nobody is even talking about an exit strategy. Will investors actually believe this is going to be temporary? It seems unlikely.

I also see little concern about how all of this government debt will impact economic growth.

The CBO warned before the coronavirus pandemic that the growing “debt would dampen economic output over time.” In fact, studies have shown that GDP growth decreases by an average of about 30 percent when government debt exceeds 90 percent of an economy. U.S. debt already stood at around 106.9 percent of GDP before coronavirus. Ever since the U.S. national debt exceeded 90 percent of GDP in 2010, inflation-adjusted average GDP growth has been 33 percent below the average from 1960–2009, a period that included eight recessions.

Europe’s spending binge serves as a prime example of the impact of debt on economic growth.

Most people seem to believe the president will snap his fingers in the near future and the economy will snap back to normal. But the economy was broken before coronavirus. Now the government and the central banks are doubling down on the policies that broke it to begin with. There aren’t a lot of scenarios where this ends well.

Reprinted from The Tenth Amendment Center.

The Biggest Heist in Human History

The Biggest Heist in Human History

As he valiantly tried to get a recorded vote on House passage of the $2.2 trillion coronavirus bill (the CARE Act), Rep. Thomas Massie learned once again last month the chief difference between the members of Congress and the inmates of a maximum security prison: Supermax prison inmates have better character than members of Congress. 

He should have known this already, since few inmates of a maximum security prisons would say that the ongoing drone-killing of children and warring on al-Qaida’s behalf is morally necessary, as the majority of congressmen did

In this instance, however, the congressional moral turpitude was financial. It’s unimaginable to think of prisoners bragging about how their actions just swindled a gaggle of plumbers, waitresses and department store clerks out of their homes, but if you listened to the speeches of congressmen passing the bill, you’d think those clerks who will lose their homes should be grateful.   

Sure, lots of prisoners have been incarcerated for robbery, but they almost always rob from the rich. Congress used this bill to rob from the poor and working people in order to subsidize mega-corporations and banks from the tips of waitresses. “Some will rob you with a six-gun, and some with a fountain pen,” Woodie Guthrie once sang, but “as through your life you roam, you will never see an outlaw drive a family from their home.”  

The bill admittedly contained $300 billion in cash payments to citizens, but – thanks in part to a $454 billion accordion program through the Federal Reserve Bank – more than ten times that amount will go in the form of cash subsidies and discount loans to big banks and giant corporations. The bill is not really a $2.2 trillion bill, but is instead a $6 trillion bill, the overwhelming majority of which will go to politically-connected corporations and banks.

$454 billion into $4 trillion

The New York Times explained how the Fed can get $454 billion and turn it into $4 trillion: “Legally, the Fed is not allowed to buy debt that is not backed by the government. To achieve a degree of separation, it sets up a special purpose vehicle and then lends into it — which is why all of these programs are called ’emergency lending.’ The vehicle then snaps up bonds or makes loans to the private sector.” 

This, of course, is pretty much the definition of how money-laundering works. 

 The $1,200 “bailout” payment amounts to food money for the working stiffs about to lose their houses to the taxpayer-funded top 1% and bankers (but I repeat myself), who will take working people’s homes when assets are most depreciated and at fire-sale prices. It is, as Thomas Massie has repeatedly said, “the cheese in the trap.”

But the food money is necessary. Why? Because, as any shepherd knows, you can’t kill a sheep you want to keep fleecing.

The few leftists who comprehend economics understand how this will work. “It’s an abomination beyond all comprehension,” Dylan Ratigan explained on the March 26 Jimmy Dore podcast. “This is a further consolidation of wealth among the super-rich by giving only the super-rich money at a time when asset prices are down and everything is depressed so that the super-rich can take the taxpayer’s money and buy more of all the assets to increase their stranglehold and hammerlock on America.” 

Ratigan is a leftist, at odds with free market principles. But he’s not wrong. 

Ratigan even offered an interesting thought-experiment as an analogy: “Imagine, again, if I bankrupt everybody in Los Angeles, but only give a small group of people that are politically connected a bunch of money to go buy all the assets afterwards, who do you think is going to own all the businesses in Los Angeles a year from now?”

If you don’t think the financial sector is really psyched about the shutdown and their upcoming subsidies, you haven’t been paying attention. They’re laughing at the plebes over on K Street and Wall Street. And this has happened before.

The amount of crony-capitalism in this bill dwarfs the 2008 TARP bailout program, but even government’s actions during the 2008-09 crisis turned many major cities from home-owning cities to renting cities. It also turned the American people from, on average, employees of small businesses to employees of big businesses

Matt Taibbi of Rolling Stone magazine noted in his podcast “Useful Idiots” April 3 that: 

“The main thing that people will have to understand that what happened with this rescue package is that it commits the government to an unprecedented amount of support of Wall Street in particular. In the same way we saw in post-2008 all sorts of crazy profiteering and opportunities for banks and financial companies to make basically risk-free money, that stuff is completely baked into this rescue package that passed unanimously. 

“And just to take one small example for people to think about: One of the new forms of assistance that was different in this bill from 2008 is that the Fed and the Treasury are now going to be buying corporate bonds. So last time around the government basically spent a lot to prop up the mortgage markets. They bought mortgage-backed securities; they took bad mortgage assets off the books of the banks. That was one of the big things they did. This time they are expanding that activity to buying the debt of companies and supporting the bond market, which is a whole new galaxy of support.” 

Taibbi noted that financial giant Blackrock has been hired to disperse the loans, in many cases it’s likely the loans will go to companies whose debts they already manage. “It’s hard for people to even wrap their heads around the opportunities for profiteering and manipulation,” the exasperated Taibbi explained.

And that’s only one part of the bailout bill. There are other programs the Federal Reserve Bank has initiated to support banks that aren’t even part of the bill. The Fed has announced the availability of $1 trillion for overnight loans to banks, in addition to $1 trillion in 14-day loans it already announced, and at near-zero interest rates. Plus, they’ve eliminated the requirement for banks to have any reserves in their vaults to cover consumer and business deposits, an historical first. Because the Fed has lowered banks’ reserve requirements to zero, banks can loan out unlimited amounts of money to their wealthy friends, regardless of the amount of deposits in their vaults. So banks can issue debt out of thin air for nothing and with nothing. In effect, every member bank has become an inflationary Federal Reserve Bank, buying up depreciated assets the unemployed plebes can’t afford to keep any more. 

And just in case you think the corporate media will tell the American people the truth about what’s going on, when the Federal Reserve announced an additional $2.5 trillion corporate bailout program, CNBC went to a Blackrock official to get its “unbiased” opinion for its story. The corporate press “watchdog” is an obedient and highly trained lapdog of the establishment.

The establishment does this kind of bailout and corporate media cover-up every time there’s a recession. Whenever a certain set of rich, politically-connected cronies seem to be at risk of losing some of their money, the American public is informed “the whole economy” is going to collapse, and the taxpayer – particularly working people – need to pony up billions or trillions to the rich to buy up devalued assets during a recession. It has almost become an American tradition, like road rage, morbid obesity and undeclared wars against countries citizens can’t find on a map.

At least in the wake of the 2008 financial crisis, when nearly 10 million people were thrown out of their homes, a significant proportion of the homeowners bore the blame. With the NINA loans (no income, no assets), there were a lot of people buying houses who should never have expected to keep them. In the wake of the coronavirus shutdown, the majority of homeowners who lose their homes had stable incomes, if not for the panic-induced government-mandated economic shutdown. 

Nobody can blame homeowners today for buying homes just before the government tells them they aren’t allowed earn a living any more. But now the heavily taxed tips of waitresses will fund mega-banks to buy up the houses of those same waitresses who have recently become unemployed. Even if the waitresses are not actively paying taxes any more, the newly created money – through the mechanism of currency inflation – will crowd out the value of what remains of the working class’ homes and other hard assets. 

And congressmen will no doubt expect a thank-you for the food money they’ll give the proles back so they can survive … until the next fleecing. It’s important to stress that the CARE Act passed the Senate unanimously, with only Rand Paul (who was sick with coronavirus) and three other Republicans not voting. Sen. Bernie Sanders, that great class warrior and supposed enemy of the 1%, voted in favor of it, as did Sen. Elizabeth “Billionaire Tears” Warren. And even though he railed against the pork in the bill earlier in the week, Sen. Ted “Grandstand” Cruz voted in favor of the bill. 

There are some bright spots of good news, however miniscule. I suppose I should be grateful to appreciate small favors, to wit, that the Commonwealth of Massachusetts where I live views liquor store clerks as “essential workers.” But I’m also just cynical enough to think that it’s only because the government wants to keep us fat, drunk and stupid enough to accept unquestioningly the zombie quaranqueen shutdown propaganda.

It’s also good news that not all of the job losses will be permanent. As soon as the government-mandated shutdown ends, there will be a jobs “snap-back” and a lot of people will be re-hired to their old jobs, along with the reopening of a lot of shuttered businesses. 

The bad news is that the end of the shutdown will be too late, economically speaking, for many. And so long as the shutdown continues, the economic crisis will worsen. We know that of the average five million people who are losing their jobs per week during the shutdown, a proportion of them won’t be re-hired. We know it won’t be 100%, but it’s also not 0%. Nor is it a static number; it’s a rising percentage. The longer shuttered businesses accumulate fixed costs with no revenue, the more likely they are to close permanently. 

Moreover, huge downstream job losses are being created by this shutdown. The shutdown will kill the domestic economy of tens of millions of Americans, who will not be buying products they otherwise would have purchased later this year, leading to layoffs in every manufacturing and raw material industry from automobiles to zinc mines. And because the shutdown contagion is not only an American affliction, businesses relying on global trade will also find themselves during the global recession cutting back on both production and employment. 

Some free market economists like David Stockman and Gene Epstein are convinced that our private sector is dynamic and will snap back from the shutdown insanity. A few others (notably Peter Schiff) are more bearish because they are convinced that coronavirus simply pricked the bubble that had been forming anyway, and there’s no putting Humpty Dumpty back together again. 

They both have a point. Schiff is right that we were due for a recession anyway, though I doubt it would have been as severe as he was predicting, and this is largely because Stockman and Epstein are right about the market economy being dynamic. However, just because the private sector is dynamic doesn’t mean we’ll snap back to anything like full employment for many years. The market is dynamic but the government is not; look to the 2008-09 recovery as an example. Government “stimulus” intervention kept the recovery from snapping back a decade ago, as it had during the Great Depression of the 1930s. It took almost 10 years to recover from the 2008-09 financial crisis. It’s wishful thinking the markets will not have to navigate a minefield of government “assistance” once the recovery begins. 

Fiscally speaking, the $2.2 trillion COVID-19 bailout bill, combined with massive government shutdowns that will result in a sharp reduction in tax revenue, is more evidence that Trump is running the federal government like his casino – which filed for bankruptcy four times. The federal government will probably run a deficit close to $3 trillion for fiscal 2020.

In the past, America had politicians who only thought ahead to the next election. The coronavirus shutdown shows that today politicians only think as far in advance as the daily press conference. 

Of course, it’s the perfect storm for the politicians, since nobody can protest within our national leper colony right now because most of the nation under the equivalent of house arrest. It’s hard to gather in groups to protest the robbery of the working poor and middle classes when healthy people are supposed to be ringing a bell and yelling out “Unclean, unclean!” anytime we leave the house. 

If you want a specimen of how corporate media is definitely not on the side of liberty, consider this story from CNN on April 10, with the headline “Sweden challenges Trump – and scientific mainstream – by refusing to lock down.” The claim that the whole “scientific mainstream” is behind the economic shutdown is not based upon any real scientific experiments – you know, using the scientific method. No nation has ever in history even attempted a complete economic shutdown; there’s nothing they could study. Nor is it based upon polling actual scientists about their views. The whole “scientific mainstream” referred to in the article is about the “establishment political mainstream” supported by corporate media satraps. 

Sweden is not engaging in a reckless experiment; it’s doing what nations have always done in the face of pandemics: isolating the sick and those exposed to the sick and taking prudent measures to limit large crowds and protect the vulnerable. It’s the US, which copied Italy (run by “Stupid Mussolini,” who made the trains not run), China and most of Europe that are running the reckless experiment that’s trying to – economically speaking – turn the globe into a Thanos-post-snap world.

Indeed, nations that tracked both those with the disease and those exposed to the sick and didn’t shut down their whole economy – for example, South Korea, Taiwan and Singapore – have had better results controlling COVID-19 than the advanced nations which committed economic hari-kari by turning themselves into a leper colony archipelago. 

The reality is that panicked Karen government officials engaged in an insane experiment of national economic shutdown without any understanding of the science of what would happen. The government officials were never asked by the corporate media any of the following questions: 

1. If the “flatten the curve” strategy isn’t part of the federal government’s official strategy (and it’s NOT even mentioned in official documents), how can it work nationally?

2. How long do you think you can keep the shutdown going before food riots begin? How much of a new Great Depression are you willing to create in order to keep this shutdown going?

3. Do you expect your shutdown/“social distancing” campaign to abolish the virus completely?

4. At what point do you return to people working? How many infections – domestically and internationally – is the minimum number that keeps the shutdown going?

5. Do you really think Bangladesh, South Sudan and Haiti will “flatten the curve” by shutting down their economies to fight coronavirus? What do you do when poor countries understandably don’t follow our lead because they don’t want famine?

6. What do you do after the shutdown ends and that virus comes back out of control, either in the US domestically or internationally? If internationally, do you impose a blockade and create a famine in poor nations with tens of millions of dead? Bomb them into submission?

7. Do you think the disease will become less contagious once the shutdowns end? How can you guarantee we won’t have to re-impose a shutdown?

8. How do you re-impose a shutdown while we’re already in a depression with 20% unemployment and a bankrupt government? How do you think workers will take a new shutdown when Washington has no more money to dole out?

But government officials still need to be made to answer these questions, and should have before they imposed the shutdown. Americans need to grab a pair of Rowdy “Roddy” Piper’s glasses from “Them,” wake up the zombie quaranqueens, and demand answers to these questions along with an end to the economic shutdown to limit the accumulating damage. 

Then, they need to put a stop to the greatest heist in the history of the world. The $2 trillion in bailouts for Wall Street is only the beginning. Unfortunately, more is coming unless the people demand it stop.

Risk? We don’t Need No Stinking Risk!

Risk? We don’t Need No Stinking Risk!

We’ve crossed the monetary Rubicon. There is no going back to the way things were. With the creation of a series of Special Purpose Vehicles (SPV) the Treasury Dept. and the Federal Reserve have fundamentally altered the financial landscape of the United States.

We are no longer a country that tolerates the risk of capitalism. To be honest, we haven’t been that country for a very long time. Steadily over the course of my life (I was born in 1968 the year the London Gold Pool failed), the global monetary system has cut tie after tie to the discipline of the free market in money.

With the U.S. at the center of the system, it was inevitable that we would reach the point of no return once there was no other way to reflate the system.

And it has been in the service of arrogating the power of money creation, and by extension the power that confers to the printers, to a global oligarchy I’m fond of calling The Davos Crowd.

My last post was an open letter to these folks letting them know that no matter how much they try to scare us into accepting a world where they have total control over our lives their chances of success are limited because we can see them and what they are planning.

The response I’ve received from people to that post confirm my view on this. Few things I have written have generated the kind of passion I’ve seen from folks.

And this Davos Crowd is the most risk averse of any crowd there is. Because near unlimited power makes you both paranoid and stupid. Paranoid that the power will slip from your grasp and stupid because you believe yourself immune to the consequences of your actions.

They use that insane power of the printing press to erect walls around competition and ensure nothing but one-way trades where no matter what ‘risks’ they take, someone else pays the price for their failure.

Their failures are nearly complete today. Because when you divorce money creation from the discipline imposed by the proper pricing of risk you divorce the application of that money towards sustainable and productive activity.

These people were always monetary Marxists. And the Austrian economists of the last century accurately called them out on their methodological errors while ruthlessly applying their reason to predict exactly why it would all eventually fail.

Because mispricing risk by mucking with interest rates alters the structure of production to misallocate capital from where it is actually demanded in a free market for money to what they want to use it for: global governance, endless wars and the subjugation of humanity.

Money flows into projects which wouldn’t be funded otherwise and at the end of the business cycle reveals them to be uneconomic. This is why we’re staring at a world today that only needs 70-75 million barrels of oil per day versus the 100+ million we needed just last month.

This is why we’re staring at a world of endless strife and conflict and not one where the biggest thieves are brought to account for their actions but seeminingly rewarded for it.

And with each intervention to prop up asset prices, by keeping interest rates at or below zero, all that happens is the uneconomic businesses stay functioning far longer than they should have, ensuring that the next time the cycle turns against them, the needed intervention will be even bigger.

This is why every time there is a crisis the numbers get bigger, the responses more ludicrous and the effects on the real economy ever more brutal.

And guess who always bears the brunt of the collapse? Those that caused it with their profligacy and thievery? No.

You do. I do. And our children do.

When government creates a risk-free trade in one area of the economy it forces inordinate risk onto another area. It turns everyone into speculators and not builders of wealth. The money they print raises the demand for those commodities which they value while retarding the demand for the ones we value.

This is why the Quantity Theory of Money fails. It’s why the CPI and GDP are poor metrics to set in opposition to justify more money printing, more government intervention and bigger bailouts.

It only looks at the supply of money but ignores the demand for it. And right now, thanks to a biblical short position against the U.S. dollar demand for money is still insanely high.

It will allow them to ‘get away with this’ for another period of time.

Mises laid all of this out in The Theory of Money and Credit in 1912. The basics are all there in chapter one. And it’s why we’ve reached the end of the fiction of a debt-based monetary system here in the U.S.

But once the demand subsides, the money is still there. The latent inflation that doesn’t show up in the CPI is still there. There is no calling this money back in without deflating asset prices and causing the exact situation they are avoiding today.

We’ve reached the end of laying off risk onto a greater fool. There is no one else to sell the next round of debt to to finance the bailouts. So, now the Fed and the Treasury have merged, as Jim Bianco pointed out two weeks ago, to ensure the free flow of money completely unmoored from risk.

This is the Rubicon I said we crossed at the beginning of the article.

This allows the U.S. government to complete its transformation into an entity wholly indistinguishable at this level from China with state ownership of strategically and systemically important businesses.

From my latest piece at Money and Markets:

This, folks, is pure MMT — Modern Monetary Theory. The Fed is creating money out of thin air having bought the debt they never intend to sell from the Treasury so that it can buy whatever it wants and will have Blackrock (NYSE: BLK) be the fund manager, to make the whole thing quasi-legal.

The only functional difference between this and Lincoln’s Greenbacks of the Civil War year (1861-63) is the accounting fiction of the asset (U.S. Treasurys) on the Fed’s balance sheet.  Functionally, there is zero difference.

And the funny part about this is that it was done by the so-called fiscally responsible Republican president. Now Trump is happy with his Federal Reserve Chairman, Jerome Powell. In order to save the stock market, the frackers, the municipalities, the 16 million people who have lost their jobs in the past three weeks (and possibly the stink bugs hounding my blueberry bushes), they will print whatever money is needed to forestall the cure for what ails the world — deflation.

They will buy whatever assets they feel they have to (or just want to) to save their skins and maintain the power amassed to this point. The moral hazard will be as biblical as the short position against the dollar. The outright thievery of good businesses ruined by this bust will happen right alongside the bailout of of the crappy ones.

And they will expect us to thank them for it.

Risk isn’t just something for the other guy to worry about. It is the nature of life itself. They can avoid it for another phase of the cycle but they can’t avoid it forever.

Because the real risk on the table today is the risk of us no longer believing that funny money holds any value at all. When we’re sitting at home, out of work and destitute and prices for the things we need to stay alive rise above our ability to pay for them, that’s when things get real.


Follow Tom Luongo at Gold Goats ‘N Guns

Why Central Planning by Medical Experts Will Lead to Disaster

Why Central Planning by Medical Experts Will Lead to Disaster

A great deal of the coverage of the COVID-19 crisis has been apocalyptic. That is partly because “if it bleeds, it leads.” But it is also because some of the medical experts with media megaphones have put forward potentially catastrophic scenarios and drastic plans to deal with them, reinforced by assertions that the rest of us should “listen to the experts,” because only they know enough to determine policy. Unfortunately, those experts don’t know enough to determine appropriate policies.

Doctors, infectious disease specialists, epidemiologists, etc. know more things about diseases, their courses, what increases or decreases their rate of spread, and so on than most. But the most crucial of that information has been browbeaten into the rest of us by now. Limited and imperfect testing also means that the available statistics may be very misleading (e.g., is an uptick in reported cases real or the result of an increasing rate of, or more accuracy in, testing, which is crucial to determining the likely future course COVID-19?). Further, to the extent that the virus’s characteristics are unique, no one knows exactly what will happen. All of that makes “shut up and listen” advice less compelling.

More important, however, may be that in making recommendations to address COVID-19, those with detailed knowledge of the disease (the experts we have been told to obey) do not have sufficient knowledge of the consequences of their “solutions” for the economy and society to know what the costs will be. That means that they don’t know enough to accurately compare the benefits to the costs. In particular, because of their relative unawareness of the many margins at which effects will be felt, the medical experts we are being told to follow will likely underestimate those costs. When combined with their natural desire to solve the medical problem, however severe it might get, this can lead to overly draconian proposals.

This issue has been brought to the fore by the increasing number of people who have begun questioning the likelihood of the apocalyptic scenarios driving the “OMG! We need to do everything that might help” tweetstorms, on the one hand, and those who are emphasizing that “shutting down the economy” is far more costly than planners recognized, on the other.

Those who have brought up such issues (how long before they are called “COVID deniers”?) have been pilloried for it. Exhibit A is the vilification of President Trump for “ignoring the scientists,” such as the New York Time’s claim that “Trump thinks he knows better than the doctors” after he tweeted that “We cannot let the cure be worse than the problem itself.”

One major problem with such attacks is the substantial literature documenting the adverse health effects of worsening economic conditions. For just one example, an analysis of the 2008 economic meltdown in The Lancet estimated that it “was associated with over 260,000 excess cancer deaths in the OECD alone, between 2008–2010.” That is a massive “detail” to ignore in forming policy.

In other words, the tradeoff is not just a matter of lives lost versus money, as it is often portrayed as being (e.g., New York governor Cuomo’s assertion that “we’re not going to put a dollar figure on human life”). It is a tradeoff between lives lost due to COVID and lives that will be lost due to the policies adopted to reduce COVID deaths.

Larry O’Connor put this well at Townhall when he wrote:

Why should the scientific analysis of doctors solely focusing on the spread of the coronavirus carry more weight than the very real scientific analysis of the deadly health ramifications of shutting down our economy? Doesn’t the totality of the data make the argument for a balanced approach to this crisis?

This issue reminds me of a classic discussion of specialists and planning in chapter 4 of F.A. Hayek’s The Road to Serfdom. “The Inevitability of Planning” is well worth noting today:

Almost every one of the technical ideals of our experts could be realized…if to achieve them were made the sole aim of humanity.

We all find it difficult to bear to see things left undone which everybody must admit are both desirable and possible. That these things cannot all be done at the same time, that any one of them can be achieved only at the sacrifice of others, can be seen only by taking into account factors which fall outside any specialism…[which] forces us to see against a wider background the objects to which most of our labors are directed.

Every one of the many things which, considered in isolation, it would be possible to achieve…creates enthusiasts for planning who feel confident…[of] the value of the particular objective…But it is…foolish to quote such instances of technical excellence in particular fields as evidence of the general superiority of planning.

The hopes they place in planning…are the result not of a comprehensive view of society but rather of a very limited view and often the result of a great exaggeration of the importance of the ends they place foremost…it would make the very men who are most anxious to plan society the most dangerous if they were allowed to do so—and the most intolerant of the planning of others…there could hardly be a more unbearable—and much more irrational—world than one in which the most eminent specialists in each field were allowed to proceed unchecked with the realization of their ideals.

Panic has seldom improved the rationality of decision-making (beyond the “fight or flight” reaction to facing a “man-eater,” when to stop and think means certain death). However, much of media coverage has fed panic. But the illogical and intemperate media attacks against those questioning the rationality of draconian “solutions” drown out, rather than enable, objective discussion of real tradeoffs. And if “Democracy dies in darkness,” as the Washington Post proclaims, we should remember that it does not require total darkness. The same conclusion follows when people are kept in the dark about major aspects of the reality they face.

Reprinted from the Independent Institute.

Timothy McVeigh, Suspects, Visit Strip Club in Weeks Before Bombing

Timothy McVeigh, Suspects, Visit Strip Club in Weeks Before Bombing

Saturday, April 8th, 1995, Timothy McVeigh and two other men paid a visit to a Tulsa strip club called Lady Godiva’s. The three men were reportedly there for several hours, from around 8 or 9 until around midnight. 

The club’s owners were Floyd Radcliffe and his wife, Julie. They had an audio/video security system in the dancer’s prep room and the surveillance system captured a cocktail waitress, Tara, talking to a dancer about her encounter with Timothy McVeigh that very night.

On video, Tara can be overheard telling the dancer all about it:

One of them said, ‘I’m a very smart man.’ I said’ You are?’ and he goes ‘Yes, I am. And on April 19, 1995, you’ll remember me for the rest of your life!’ I said ‘Oh really?’ and he says ‘Yes, you will.’

Owner Floyd Radcliffe, upon discovering the footage, phoned the FBI who showed up a week or two later and confiscated the film. Oklahoma investigative reporter J.D. Cash had begun his investigation of the event before the FBI arrived. Cash made a copy of the security tape before the FBI got it, knowing that once the FBI got their hands on it, it would probably disappear.

Cash provided the tape to Canadian Broadcasting Corporation’s news program ‘The Fifth Estate,’ and together they carried out an investigation, interviewing staff at at the club.

The dancers identified Timothy McVeigh from a photo spread as the tallest of the three men, the one who boasted to the cocktail waitress about April 19th.

One of the other men with McVeigh was identified from a photo spread as Andreas Strassmeir. Strassmeir was described as quiet, but easily identifiable due to his buck teeth and German accent. Owner Julie Radcliffe told journalist Jon Ronson that all “the girls identified Strassmeir. They all did identify that gentleman.”  Strassmeir has denied he was ever at the club, but the witnesses are certain of it: after all, it isn’t every day in Tulsa, Oklahoma that a stripper talks to a man with a German accent. One could say that’s a rarity, and something that might stand out in ones’ memory.

Likewise, the other man with McVeigh was also identified. He was described as the man paying for the drinks that night, flashing a wad of $100 bills and talking a lot to the girls. That man, described as 5’8 – 5’9, 170-180 pounds, muscular, dark hair, brown eyes, tan complexion, in many ways fit the description of the FBI’s ‘John Doe #2’ suspect. One dancer, stage name ‘Cassie’, told Washington Post reporter Peter Carlson that the man looked like the John Doe #2 sketch. Upon seeing the sketch she said “I recognize him; he’s the one who was sitting in a back booth, talking with other girls.” He too was identified out of a photo spread, described by the dancers as “very good looking, but full of himself.” The dancers all picked out a photograph of Michael Brescia, identifying him as the third man, the one who did the most talking.

At the time, Brescia was Andreas Strassmeir’s roommate and a member of a domestic terrorist organization called ‘The Aryan Republican Army’ which had enriched themselves through a spree of 22 midwestern bank robberies from 1994 to 1996–perhaps explaining the unemployed Brescia’s wad of $100 bills.

As of April of 1995, the FBI had not caught on to the group, and none of the members had yet to be arrested for the series of bank robberies that they carried out across the midwest. These robberies were later cited by law enforcement sources in news reports as having possibly financed the April 19th, 1995 Oklahoma City bombing. What’s more, an FBI document unearthed later described the domestic terrorist group, to which Brescia belonged, in interesting terms: the gang was referred to by the FBI as ‘McVeigh and his associates.‘ 

What’s more, Dale Culpepper, the club’s bouncer, remembers spotting a faded older model Ryder truck in the parking lot with its logo painted over. This was before McVeigh had rented the ‘bomb truck’ (on April 17th) but it aligns with other witness sightings who spotted an older, faded yellow truck at Geary Lake between the 10th and the 13th–later that very week–and again at the Dreamland motel on the 14th, 15th, and Easter Sunday the 16th — all before McVeigh rented the larger 20-foot Ryder truck from Elliott’s body shop on Monday the 17th.

Based on numerous witness sightings, it becomes apparent that more than one Ryder truck was used by the bombing’s perpetrators, although what became of the second truck isn’t clear. What is clear, is that people saw it, and it stood out.  Just like the three men at the club stood out that Saturday in April.

J.D. Cash published a piece about this story on September 15th, 1996, and the CBC aired the results of their investigation on the CBC news program ‘The Fifth Estate’ in the fall of 1996. By that time, one of the dancers who had identified McVeigh had been found dead in her apartment. Dancer Shawntelle Farrens was found dead in Tulsa the week Cash had begun his investigation, her death ruled a suicide by accidental or intentional drug overdose. The other dancers and cocktail waitresses, however, had gone on record: the men seen with Timothy McVeigh that night were Andreas Strassmeir, and his roommate, Michael Brescia.

Both men would later become central figures in investigative reporters’ efforts to track down just who McVeigh’s accomplices might have been. This encounter, just over a week before the bombing, fits into that puzzle and may shed light on who at least two of those accomplices were.

In the 25 years since the bombing, Andreas Strassmeir has fled the country, moving back to Germany. He’s denied knowing McVeigh, or having visited the strip club, but those denials stand in stark contrast to the memories of the witnesses at the club that night. The most Strassmeir is willing to admit is that he once met McVeigh at a gun show. As evidence of this encounter, Strassmeir produced Timothy McVeigh’s Desert Storm uniform. He bought it from McVeigh for a few bucks. The uniform still had the name-patch on it: “MCVEIGH” in bold letters across the chest pocket.

So too has Michael Brescia slipped away. He was arrested in 1997 for his role in the Aryan Republican Army bank robberies.  Brescia cooperated with authorities and was given a comparatively light sentence, serving only five years in prison.

The other members of the bank robbery gang, described by the FBI as ‘McVeigh and his associates’ in an internal memorandum, weren’t so lucky.  One man, Richard Guthrie, was found dead in his prison cell the day after telling reporters he was going to write a book about the gang and speak to a grand jury about it’s activities. Another member of the gang, Pete Langan, is serving a life sentence for his role in the robberies.

If anything, the encounter at Lady Godiva’s serves to illustrate a distinct link between Timothy McVeigh and some rather unsavory characters who deserve scrutiny. 

Just what was Timothy McVeigh doing with Michael Brescia and Andreas Strassmeir in April of 1995?

Sources:

* Cash, J.D. “Is A Videotape From A Tulsa Topless Bar The “Smoking Gun” In Oklahoma Bombing?” McCurtain Daily Gazette [Idabel, OK], 25 September 1996. Print.

* Cash, J.D. “Canadians Air Club Film” McCurtain Daily Gazette [Idabel, OK], 23 Oct 1996. Print.

* Ronson, John. “Conspirators.” The Guardian, 4 May 2001. Web. 13 Feb 2013.

* “The Company They Keep.” The Fifth Estate. The Canadian Broadcasting Company. 22 October 1996. Television.

* Carlson, Peter. “The Shadow – Did He Ever Really Exist?” Washington Post Magazine. 23 March 1997. Print.

* Jason Van Vleet. “Terror From Within.” MGA Films, 28 August 2002. Television documentary, VHS.

* Evans-Pritchard, Ambrose. The Secret Life of Bill Clinton: The Unreported Stories. Washington, D.C.: Regnery Publishing, 1997. pp 87-88

Re: Strassmeir and Brescia w/ McVeigh:

“they also picked out Michael Brescia and Andreas Strassmeir from a montage of photos” … “Brescia, they recalled, was very good looking, but full of himself. He was the one paying for the drinks and flashing hundred dollar bills.”

* Ridgeway, James. “Beyond McVeigh: What the Feds Won’t Tell You About Oklahoma City.” The Village Voice, 15 May 2001. Print

* Fritz, Sara and David Savage. “FBI Turns Focus to Unsolved Bank Heists.” LA Times, 28 April 1995. Print.

* “Sister Ties McVeigh to Bank Robbery.” Tucson Citizen, 19 July 1995. Print & Digital.

* “Separatist Admits Role in Robberies.” The Philadelphia Enquirer, 21 May 1997. Print.

* “Ex-Eagle Scout Sentenced in Hate Group Bank Heists.”  The Philadelphia Enquirer, 14 March 1998. Print.

* FBI memo describing the Aryan Republican Army as ‘McVeigh and his associates’: FBI Insert E-4206 04 May 1995

https://www.youtube.com/watch?v=6vnAW_875aA

Week Before The OKC Bombing, 3 Suspects Visited Club

Evil Blossoms Where Conscience Shrinks: The Unforgivable Tragedy of Bush’s Iraq War II

Evil Blossoms Where Conscience Shrinks: The Unforgivable Tragedy of Bush’s Iraq War II

During Iraq War II (2003–2011), in addition to thousands of American soldiers and contractors who died, more than 100,000 Iraq civilians were killed. This number is consistent with independent counts as well as leaked Pentagon data (sources available at Wikipedia). However, more sophisticated studies which combined data sets and methodologies from multiple independent efforts have produced a total estimate of deaths (from 2003-2018) of 1.5-3.4 million people. This does not count the combatants who died fighting against what many consider to have been a foreign invader conducting an illegal occupation (or those fighting in unavoidable civil conflict caused by the invasion).

There’s no question about this war being a massive human tragedy, a catastrophe of choice, a milestone of unholy slaughter in the early history of the 21st century. This slaughter is intimately associated with the leader who started it: George W. Bush. The question remains, how could one man be so evil?

Bush’s guilt can be evaluated by examining his motives. Why did he do it? Did he really believe that WMDs were in Iraq? Did he want to avenge his daddy? There is in fact a clear answer to this question.

The purpose of the Iraq war was to flex American muscle. The neoconservative vision of American hegemony seeks to use American military power to enforce its desired policies abroad. Neocons believe that if the military is never used in pursuit of American policy objectives then it’s a waste of money and a sign of weakness that would invite predators of their ilk from other powers to prey on the so-called free world. In the post-Cold War environment where America had emerged as the world’s sole superpower, Iraq was the ideal opportunity to show the world that America means business. This rationale is cold, cynical and indifferent; neoconservatism is a policy position, possessing a realist morality that washes its hands of any concern for common people.

According to neoconservatism, the harm caused to common people by military intervention is morally unimportant. Neoconservatives believe that people who live in geopolitical problem areas would face moral deprivations from their own bad governments anyway. They believe that it doesn’t matter – really – whether one dies by Saddam Hussein’s secret police, or by an American bomb. To neoconservatives, the world is a better place when America is in charge. With a single rationalization, neocons willfully exclude concern for common people from their policy formulations.

The cynical moral view of Neoconservatism is consistent with Hannah Arendt’s notion of, “The banality of evil.” This phrase comes from a book Arendt wrote about the Jerusalem crimes against humanity trial of Holocaust facilitator Adolf Eichmann, an SS officer who coordinated the logistics of moving populations of Jews into eastern camps. In the book, she points out how average Eichmann was. He did not possess high intelligence and lived his life as a joiner. He was not particularly anti-Semitic, showed no signs of psychopathy and generally got along well with other people. He had carried out his role in the Holocaust purely out of a quiet commitment to his bureaucratic duty in the larger society in which he took part. Arendt calls evil banal because it is, in this case, neither a product of psychopathic or hateful intent nor can the mild-mannered conduct of Eichmann be remotely morally justified. In the end, Arendt claims that Eichmann’s evil is connected to his profound moral stupidity.

Hannah Arendt’s analysis of Eichmann’s moral status provides insight into George W. Bush’s moral guilt.

With perhaps over a million innocents dead because of a policy-driven, unnecessary war, Bush has the status of a moral monster. Yet, Bush’s evil is particularly banal. This kind of evil would not be recognized by its vicious fangs or wicked scowl. It is an evil that is unassuming, bungling even. Preventing this kind of person from having power requires special attention to what makes them so evil.

In 2013, Ron Fournier penned an article in The Atlantic arguing that George W. Bush was a good man. During a 2002 press conference, Mr. Fournier and a colleague stood to mark Bush’s entrance to the room, while other journalists and foreign press remained seated in smug protest. Bush handwrote a note to each man, thanking them for at least honoring the dignity of the office of the Presidency. Bush was known for small gestures of respect, from punctuality, to requiring a simple dress code for the Oval Office. Fournier argues that Bush had a sense of decency, not wanting to interrupt Fournier’s family time for an interview, for example, and also taking time to visit with the families of slain soldiers.

It seems incredible that a man guilty of such crimes against humanity could be perceived as decent. This represents a clue to understanding banal evil. The gestures to which Ron Fournier refer hardly absolve George W. Bush of his status as a possible moral monster, but they do hint at the possibility that Bush has some sort of moral compass. What’s the relationship between Bush’s crimes and that compass? If Bush truly has any sense of decency, how could he have launched the Iraq War? Philosophy can provide an answer.

Stanford University’s philosophy department runs an online encyclopedia of philosophical definitions. One entry discusses the conscience, or moral compass.

Through our individual conscience, we become aware of our deeply held moral principles, we are motivated to act upon them, and we assess our character, our behavior and ultimately our self against those principles.

Conscience involves one’s own self-awareness of one’s deeply held principles. Being aware of some moral principles does not imply that one would be aware of all possible moral principles. Everyone has a unique moral self-identity, a sense of what’s right and good, and a sense of where one stands on the spectrum of good and evil. Conscience is a connective tissue. It relates the moral principles in which one believes, to one’s perception of one’s own identity. Through conscience, one constructs a sense of identity out of chose moral principles. A moral compass serve not only to guide choices, it also is a tool for self-reflection.

Our moral beliefs also contribute to how we perceive others. We judge others based on where we believe they stand on the spectrum of good and evil, and in some cases we use our perception of others to reflect back on our own sense of moral identity.

More recent psychological studies have suggested that people tend to link the identity of others not so much to their memories, as traditionally believed, but to their morals: it is the loss of one’s moral character and moral beliefs, rather than of one’s memory, that leads us to say that a certain individual is not the same person anymore (Strohminger and Nichols 2015). These findings provide empirical support to the idea that conscience is essential to one’s sense of personal identity and to attributions of personal identity.

According to the psychological research discussed above, one’s sense of identity can have less to do with actual actions, and more to do with one’s chosen moral beliefs. If someone could associate their own identity with the identity of others holding a particular moral worldview, then one could calibrate their moral compass to reflect differently on their own life. If you tie your identity to those you morally admire, you can partially absolve yourself of a degree of moral accountability. You concede moral responsibility to a larger group, which also means conceding moral reasoning – including feelings of guilt or accountability – to that group. When confronted with the guilt of your particular actions, you simply defend the tribe’s power, and ignore morality.

In recent years, George W. Bush has taken up painting at a hobby. This past autumn, some of Bush’s paintings were displayed at an exhibit at the Kennedy Center. These painting featured scenes of America’s military veterans, including many wounded warriors. This Portraits of Courage exhibit demonstrates Bush’s quiet obsession with the men and women wounded in wars, many of whom he sent off to fight.

Command Sergeant Major Brian Flom was wounded in the face by a rocket attack in Iraq in 2007.

“‘That was the easy part,’ he said, standing beside a painting in which he appears with fellow military personnel, one of dozens of works on display at the Kennedy Center in Washington, DC.

“‘The challenging part was the TBI [traumatic brain injury] and the post-traumatic stress that accompanied a lot of time spent in a combat zone.’

“Recovery is ‘still going on – it’s an everyday process, right, and some days are better than others.’

“Flom was selected to go on a mountain bike ride with Bush in 2015 and has now met him ‘many times,’ including dinner at the former president’s house.

“Bush ‘decided one day to paint people that he had a connection with and meant something to him, and here I am.’

Bush is spending his retirement connecting to the people who were wounded in wars. This connection is interesting, because it relates to the perceived moral identity of these people. These paintings are a way for Bush to tie his identity to the moral status of veterans.

Bush’s painting hobby began much earlier. Infamous among leaked images of the former president’s early paintings are bizarre self-portraits of the man in the bathtub and shower. The images portrayed are toes sticking up from the water, and also one in which the back of his head is shown, his face barely appearing in a mirror. These paintings show a sense of detachment, unclear identity, and a desire to wash away something unclean.

It’s possible that ‘W’ himself has been facing a small crisis of conscience, and uncertainty about his own moral identity, spurred by a sense of moral guilt. The paintings might have been a therapy, to concretize the feelings. As he developed the hobby, Bush sought to relate to the moral identity of the soldiers he admired. 

By connecting to the moral values of those who sacrificed themselves in war, Bush heals his own guilt. Bush is guilty of crimes against decency, by ordering a war – he is a warmonger. However, wounded veterans have a different perceived moral relationship to war. War provides veterans with honor through valor. Their sacrifices are interpreted as a form of service to the greater society. By connecting to an identity that valorizes war, Bush can reframe the relationship of his own identity to war.

Starting a war made Bush into a monster, so he seeks to heal his conscience by surrounding himself with those his war has made into heroes.

It’s pathetic that a man who held as much power as George W. Bush would attempt to free ride off of the moral status of those his wars has harmed, all to make himself feel a little better about himself. Showing some love to a few veterans couldn’t hardly make up for the pain Bush caused. Yet, all that matters in this case is Bush’s own sense of identity in the context of his own moral values. Evil doesn’t usually take the form of a comic book villain. A person can have a sense of decency, a moral compass, commit acts of compassion, possess empathy, and still be evil. To diagnose Bush’s evil, one has to first examine the history of his moral self-identity.

During the campaign for the 2000 Presidential Election, the Washington Post ran an article exploring Bush’s youth, his past and his values. George W. Bush’s simple and idealistic view of his own father, George Herbert Walker, seems to have been the anchor of his worldview.

Today, of course, Bush has embarked on trying to duplicate his father’s greatest accomplishment – becoming president of the United States. Relationships between fathers and sons are never simple, but the close parallels between their two careers, Bush’s fierce loyalty to his father and his thin skin whenever his father is criticized suggest something particularly complex.

Bush 41 was a paragon of moral rectitude to 43. 43’s sense of right and wrong was entirely received from his father, with very little personal effort devoted to developing his own independent view of the world.

One of the things that Bush often talked about was his family, especially his father. Several of the Bonesmen said Bush described him in ‘almost God-like’ terms.

“‘I can remember one instance of him using his Dad as an example of resilience, saying my father had a great disappointment in not winning the Senate seat, but this is what you do, you bounce back. So you’re down, you just get back up. His attitude was you gave it your best shot. And he used his dad to show this,’ recalled Robert McCallum, now an Atlanta lawyer.”

Even Bush Sr.’s position on war was uncontroversial, simply correct to Jr.

“‘He believed that his father’s position was correct – we’re involved, so we should support the national effort rather than protest it,’ recalled Robert J. Dieter, a Yale roommate for four years who is now a clinical professor of law at the University of Colorado.

George W. Bush was a social creature, but he didn’t seem to be a boundary pusher. His time at Andover private school showed him to be extroverted.

Within months of his arrival, Bush was seen as a campus mover, not on the strength his intellect or his athletic achievements, but by sheer force of personality. Bush was nicknamed ‘Lip’ because he had an opinion on everything – and sometimes a tongue sharper than necessary.”

At Yale, he partied, but not too hard.

“‘George was a fraternity guy, but he wasn’t Belushi in ‘Animal House,’’ recalled Calvin Hill, who was in DKE with Bush and went on to play professional football. ‘He went through that stage in his life with a lot of joy, but I don’t remember George as a chronic drunk. He was a good-time guy. But he wasn’t the guy hugging the commode at the end of the day.’” 

Bush was known to think of others, and act according to an internal sense of dignity.

Like his father, Bush could display good breeding along with his rough Texas edges. Several former classmates recall him going door to door with a sympathy card for a classmate from the West Indies – one of the few blacks on campus – who had lost his mother. Another classmate who hailed from a public school said he was struck by Bush’s efforts to reach out beyond his social circle.”

Bush, a famous Skull and Bones member, was a joiner.

“‘George moved seamlessly among all the different groups,’ recalled Ken Cohen, today a dentist in Georgia. At the same time, Cohen noted, ‘he was a Bush and he had a sense of who he was … his family tradition. He was not a rebel.’”

During the chaotic years of the Vietnam War protests, Bush seemed unphased. His attitude was conventional and maybe even disinterested.

In a recent interview, Bush said he has no recollection of any anti-war activity on campus during his undergraduate years – an extraordinary statement considering that [Reverend] Coffin was by then a leader of the national anti-war movement and was arrested for aiding and abetting draft resistance during Bush’s senior year.

Altogether, the portrait of George W. Bush painted by his history is very clear. He was a relatively simple man, uninterested in the depths of political thought. He respected his father and upheld him as the quintessential example of what respectable thought and behavior looked like, but he himself never deeply considered what that meant. He was a social guy, a clear extrovert, but hardly a remarkable social presence.

Bush was a boring guy. Friendly, social, possessing a mild sense of dignity, but ultimately having a forgettable character. He held a belief that morality and respectability were important, because of his father, but he never deeply examined the question beyond this conviction.

As a regular man, Bush was not a monster, but neither was he a giant. He was kind of a chump, a man who does have a conscience, but one about which nothing special can be said. He took all of his moral cues from his social superiors. Bush is a lot like Adolf Eichmann.

Eichmann was described as a profoundly average man of profoundly average intelligence. His intellectual conception of the world relied on clichés and official bromides. He deferred his moral thinking in all things to the system and his superiors. He had no particular interest in these questions himself and no real ability to generate his own personal insights about them. He was a joiner and liked to belong to groups where others could feed him a sense of identity and meaning. When he noticed his social betters endorsing seemingly evil plans, he consoled himself that as a lesser man this surely absolved him personally of any guilt. Consequently, he hardly had any guilt. Eichmann even bragged about what he did, oversold his own role, valuing notoriety and his sense of belonging — to Nazi social circles which no longer existed. He was able to live in the moral worldview of those he admired, unwilling to exercise any meaningful personal conscientiousness. He believed that conceding moral responsibility to others was a good enough excuse to absolve himself of personal moral accountability.

George W. Bush does possess a sense of guilt, or at least a little regret. He has at least some moral injury and seems to seek to heal it. As a simple person, his paintings and meetings with soldiers seem sufficient as therapy. Bush’s moral worldview permits him to feel guilt, just not in proportion to the great evil he has perpetrated. Bush’s evil lies with the fact that he is a man who is capable of guilt and regret, who is not a psychopath, but who is simultaneously able to remain completely unconcerned or uninterested in the trauma his choices have caused in millions of innocent lives.

Bush’s guilt recalls the fictional Colonel in Apocalypse Now who burned down a village in order to go surfing. Despite the monstrosity of the act, this colonel goes out of his way to provide water and empathetic comfort to a mortally wounded Viet Cong soldier. While the Colonel here is no Eichmann level mental midget, the literary metaphor refers to selective morality driven by contrived moral self-identity. It is an absurdist take on evil, but banal evil is somewhat absurd.

Bush’s evil is not the product of a person with a wicked heart. Rather, like Eichmann, Bush’s evil is a product of his stupidity. As a profoundly average man, a joiner who never questions much and concedes all moral and intellectual accountability to his social superiors, Bush simply allowed evil to happen. He is accountable for this, he is deeply guilty. However, his moral self-identity will never process that guilt. He is capable of understanding that his war has harmed brave soldiers whose lives he values, but because the world of his social and intellectual superiors – his father, the writers at National Review – does not care about Iraqi lives, neither does Bush. Make no mistake, this is profoundly evil, a profound moral lapse. Yet, the cause is Bush’s profoundly average nature. 

Bush is worse than a monster, he is middling.

Altogether, George W. Bush’s conscience stands as a refutation of the Great Man or chieftain theory of national leadership. Conscience is a powerful force within humans. However, conscience is not built to bear the guilt of a nation. Conscience doesn’t process the magnitude of suffering caused by war. There’s a reason why it is said that one death is a tragedy, but one million deaths is a statistic.

Gut instinct, the heart and the individual conscience alone are not sufficient tools to evaluate the propriety of a given war. Humans are not qualified to make moral judgments of this magnitude. It’s making Sophie’s Choice a million times over for people we’ll never know. It is above our pay grade. 

Instead, we humans should seek to avoid war, and pour our wealth and energy into actions which serve as alternatives to war. We should never trust human authority figures to have the moral capacity to make reasonable, good judgments about when to go to war or not.

In my opinion, Eichmann’s banal evil is actually a prototype for all evil. Men like Eichmann and Bush exemplify evil in its purest form. Humans are moral beings, and the concession of moral responsibility to others is the greatest form of surrender of which a human soul is capable. The social superiors who created the monstrous policy in which Bush and Eichmann merely operated — they may be smarter, more psychopathic — nevertheless are guilty of the same banality. They all hold a middling moral self-identity, and their moral world view is held deliberately narrow. 

Cheney, Rumsfeld, Wolfowitz all. They all have a little Bush in them. Joiners, team members. The idea that sweet cool ninja spec-ops teams will solve world social problems is stupidity. The idea that you can start a little war, make some oil bucks in Iraq, then just move on is willful ignorance of the condition of and dynamics affecting other people. Thinking that a mere purple-fingered election will make immediate, deep changes to a centuries-old culture — more stupidity, on its face!

I’d be inclined to think that the truly wicked — the real psychopaths — tend to fit into the world with the rest of us much better than the idiots. They’re usually smart enough to know the limits, to understand that you have to pretend to be good around most people most of the time to get by in life. This type will order quiet assassinations, wipe villages off of maps in ways such that no one would notice. They’re the types that quietly execute the Salvador Option, and for better or worse restore stable conditions without history noticing. They’re evil too, they’re insidious, but their impact is less.

The truly evil who kill millions are always bungling idiots. Bush, the tantrum throwing Hitler types, the self-satisfied Roosevelts of history, joiner Truman, bone-brained Mao — all a bunch of morons, smug Idi Amins, who caused immense damage every time they were allowed to set policy direction in lieu of their subordinates. These subordinates, evil psychopaths like Curtis LeMay, or Reinhard Heydrich, they never started any wars, they didn’t appoint themselves, they didn’t carry out their own orders. Psychopathy limits itself. The stupid idiots, the banal evil, is what gives license to psychopathy.

Hitler was a self-aggrandizing, bungling chump. Eichmann was a midget of a man. Heydrich was evil, but his evil needed Hitler and Eichmann. LeMay bombed 1 million Japanese to death, but he needed Truman and the naïve, ever unrepentant farm-boy pilots on both sides of his psychopathy. Psychopathy is the seed of evil, but stupidity is the fertile ground in which it grows.

In Bush’s mind, he did the best job he could as president of an America which he views as an always good country, which has to fight wars sometimes. In his heart, he regrets that people he respects faced harm. He surrounds himself with people that are in all ways better than him, the soldiers he sacrificed. He feeds off of their valor to heal his moral injury. Yet, there seems to be very little concern in his heart for the true victims of his wars – the hundreds of thousands of dead innocents from foreign lands. Bush is an average man whose conscience is not equipped to conceive of that guilt. He is profoundly evil, because he is stupid.

The only justice Bush will ever face must come from the lessons we learn from him. One lesson stands out. Only idiots start wars. Another is that evil blossoms where conscience shrinks and shirks.

Why Do We Trust Politicians to Run Our Lives?

Why Do We Trust Politicians to Run Our Lives?

I became a journalist because I love to write.

In fact, most people tend to pursue career paths related to things that interest them if they have any choice in the matter. A person who likes to bake might become a baker. A person who likes numbers might become an accountant. A person who loves animals and biology might become a veterinarian.

So, what does a person who likes to control other people do?

Become a politician. read more…

Anarchism and Pandemics

Anarchism and Pandemics

Anarchists face the question: Without nations and states wouldn’t a free society be especially ravaged by pandemics? Who would enforce quarantines without rebuilding a centralized institution of violence?

It’s a fair question.

Anarchism isn’t about a finite goal, but an unending vector pointed towards increasing liberation. We’re not in the habit of “good enough” compromises, we want everything. However it’s always worth talking about prescriptive or aspirational visions to shake out what is and isn’t possible with freedom. “How might we solve this without depending upon the state or relationships of domination?” is always a useful question.

And anarchists should take pause and consider the situation with fearless honesty. While freedom solves many problems very well, there is no law of the universe that it will inherently solve every conceivable problem better than alternatives.

No ideology or society will do everything with perfect efficiency. There is no reason to suspect, for instance, that an anarchistic society would be great at industrialized genocide. It is also possible that there are some legitimate issues that a state would solve quicker than a free society. Organized and centralized violence is a blunt and destructive tool — but there occasionally problems for which blunt and destructive means excel.

As anti-statists it is our assertion that the inherent downsides to the existence of a state vastly outweigh any such positives. These downsides are manifold and many of them are inclined to make a pandemic situation worse.

The nationstate is founded on the twin evils of hierarchy and separation. Nationstates slice up the world’s population into separate prisons and impose hierarchies within them.

  • This division is self-reinforcing and creates inefficiencies. The nationstate system disincentivizes global collaboration, instead encouraging rivalry as power loci see each other as threats. Nations are disinclined to communicate the entire truth quickly to one another, they are also game theoretically incentivized to exploit many situations of relative weakness. Unlike individual humans who have opportunities for reflective and adaptive agency, states are ossified masses built upon the suppression of human agency –an institution inherently dependent upon selfish domination is far less capable of defecting from that strategy and truly selflessly collaborating. While some small privileged nationstates relatively removed from fierce geopolitical pressures as well as some larger nationstates attempting to build soft power may donate some resources to other nations, there are harsh limits to overall collaboration.
  • States must secure the continued existence of their constituent power structures against their own populations. This means lying to their populations and coercing them in ways that prioritizes the maintenance of power over the best interests of the population. These interests partially coincide — a state entirely devoid of population ceases to be — but in no sense do they perfectly overlap. States and their attendant ecosystem of reinforcing power structures frequently have interests that conflict with minimizing the net life lost. Further, even if a state’s long-run survival is entangled with the survival of its population, the desperate psychology of domination bends towards short-term and limited thinking. Rulers are inclined to strategies — thanks to their struggle for power, remove from more rounded experience, and the precarity of the structures they depend upon — that are otherwise out of step with collective survival. And states tend to secure their existence by shaping a broader hierarchical society that pushes this kind of thinking on all scales — eg precarious wage laborers are conditioned into short-term and zero-sum thinking.
  • Since a state has a local monopoly on violence it must also calculate overall solutions and impose them sweepingly without a lot of nuance or attentiveness. To maintain its own existence a state cannot fully decentralize many tasks related to the collecting and processing of information. This leaves states relatively disconnected and sluggish. And because states actively work to suppress internal competition there aren’t robust ecologies of social projects and protocols by which a population can pick up the slack. The state atrophies civil society and constrains or enslaves what organizations are allowed.

To summarize: States are sluggish and hamfisted, their hierarchies inherently create incentive structures where power (whether a politician, ruling party, ruling class, or geopolitical contra other nations) interferes with most efficiently saving the population.

Conversely it’s worth noting freedom is quite good at communication, adaptation, and resiliency — societal virtues of significant value in a pandemic.

  • The mistake that became Twitter aside, Anarchists are good at building communication networks. In the absence of centralized coercive institutions, societies fall back on more decentralized bottom-up means of networking and reporting. Social freedom inherently implies freedom of information, not just through the absence of censors but via emergent network topologies that avoid centralized logjams. And thus different social mores, norms, habits, associations, and protocols are forced to emerge to fluidly handle news, tracking, alerts, etc. This means critical information doesn’t flow through state monitors or media institutions, but eventually becomes much more natively handled in a decentralized and specifics-attentive way that robustly filters out deception. Rather than relying on dishonest states, or tentatively trying to figure things out in their shadow, a truly decentralized society routes critical information more efficiently.
  • Beyond communicating the details of the crisis, anarchists use information instead of violence wherever possible to solve social problems. We don’t brutally imprison dangerous people — we collaborate in watching them and alerting other community members to the risk they pose. This sousveillence is facilitated by information technologies, but it is a continuation of the shame and reputation dynamics that stateless Indigenous societies have long used. “Dave was in contact with someone who tested positive” is a crucial bit of information to relay to the mutual friend who would otherwise have invited him over. Decentralized communication is a matter of granting informed agency to individuals, and it’s also the most natural way to apply social pressures towards net positive ends. Where a purely selfish individual might otherwise defect in everyday prisoners dilemmas, the old lady watching him go out in the pandemic from her kitchen window and shouting down that she knows his mom and friends is far more effective at instilling prosocial, positive-sum results and less brutal than a truncheoned gang of pigs beating random joggers.
  • Our present society is suffering severe epistemic breakdown. The centralized hierarchical institutions imposed upon us that once held a tight monopoly on claims to knowledge and expertise are clearly rotten, but these zombified dinosaurs continue lumbering even as the flesh falls from their bones. A chaos of conspiracies, grifters, and bubbles of delusion have proliferated because robust antibodies and verification systems haven’t had time to grow from the bottom up. But the other half of this is on academia and how it has withdrawn and signed pacts with the existing rulers. When scientific experts aren’t captured servants of power — marginal in number, socially isolated, and subverted by the needs of power — more people begin to listen to them. To be truly free science needs to not just be open in the sense of technically operating in the public domain, it must be accessible, rather than walled off in expensive academic ponzi schemes.
  • Economic, technological, and infrastructural adaptation is relatively quite hard in a divided, hierarchical and centralized society. To serve the need for control much is ossified into rigid forms and traditions, as well as capturing oversight and twisting it towards the interests of those with power. The freer the people the quicker the processes of discovery, invention, and implementation.

There will always be exceptions. What we are talking about is inclinations to behavior. A free society — particularly a young one with insufficiently developed liberatory infrastructure or habits of organization — might seize up unproductively. A state — particularly one relatively insulated by happenstance from the vicissitudes of its power — might act quickly, openly, and largely for the sake of human life.

In the face of COVID-19 there have been a wide array of responses. A rebel network under siege in Chiapas may not be able to rapidly produce their own ventilators. A technocratic quasi client state like South Korea may see institutional alignment with quick and honest mass testing. These are however statistical exceptions to easily trackable general tendencies.

On the whole COVID-19 has been a dark parable of the dysfunction of power structures and the advantages of freedom.

In a free society the experts issuing initial warnings wouldn’t be silenced and suppressed.

In a free society tracking the movement of the infected wouldn’t be left to impossibly disconnected and overwhelmed central authorities.

In a free society the production changes needed to quickly build things like testing kits, ventilators, and respirators wouldn’t be impaired by closed borders, intellectual property law, as well as rigid and centralized production chains, to give just a few examples.

In a free society the research needed to cure diseases wouldn’t be impaired by intellectual property and national secrecy.

In a free society robust bottom-up community safety nets and general economic fluidity would make disruptions easier to weather.

In a free society experts wouldn’t be widely distrusted because they wouldn’t be systematically enslaved under the boot of self-interested authorities.

In a free society where people are used to the responsibility of personal decisionmaking and have grown accustomed to evaluating risks, experts wouldn’t feel the need to transparently lie about things like masks “for the greater good” — nor would people be barred from participating in trials and experimentation.

In a free society enforcement of social distancing wouldn’t be arbitrarily and brutally handled by state planners and police, but instead use social pressure via shame and reputation.

Freedom of association isn’t just a matter of the fluidity and breadth of our connections, it means having agency in who we associate with, it means taking responsibility, rather than having those hard choices taken from us.

Reactionaries like Ben Shapiro think that borders are magic blankets that protect from everything. In response to COVID-19 Shapiro wrote “if we had no countries, we’d all be dead today or in the very near future. Every major country has shut its borders.” Similar absurd proclamations are without end in reactionary circles. The state, the nation, are seen as comforting simplicities that inherently wipe away all complexity and danger. If only we had stronger states/borders there’d be no bad things to fear.

Much could be written about this psychology of mewling bootlicking, but I want to focus on the broad notion that borders protect us from pandemics.

It’s worth emphasizing from the start that strong borders are a relatively recent invention. No state in history has had non-pourus borders. Even massive constructions like Hadrian’s Wall and the Great Walls of China were geared towards impeding armies, not absolutely stopping the movement of individuals. While walls are used by states to better enslave their own captive populations, no political border in history has prevented the eventual transmission of pandemics. Absolutist “strong borders” like the USSR tried in vain to completely erect are a science fiction concept, an abstract aspiration — at least as much as anarchist prescriptions. People and materials always slip through. (And we’ll always help them.)

Borders at best buy a given nation a little longer to watch a pandemic overwhelm their neighbors before it overwhelms them. With new surveillance and militarization technologies it may well be possible to establish “strong borders” capable of entirely and permanently sealing out a pandemic (that’s not air or water borne), but the costs are immense authoritarianism as well as the societal suffering and dysfunction that comes from such. Borders infringe upon freedom to untold degrees and inflict catastrophic social dysfunction.

One might protest “isn’t the whole point supposed to be slowing the spread of the virus?” But productive slowing isn’t measured in relation to the solar rotations, but in relation to the creation of infrastructure, treatments, and cures. It does you no good to slow the arrival of a plague a few months if you don’t get anywhere developing and deploying what you need in that time.

The critical processes are scientific and economic, and anything that slows them effectively speeds up the transmission rate. Nothing else matters besides the race between those processes.

Borders impede both economic and scientific processes.

A large nation like the US has a large border — and thus a particularly porous border that is very expensive to seal. But in the other direction — as you approach the fascist dream of a patchwork of micronations — you have less economic and scientific capacity on your own. In particular sealing a small nation’s borders means curtailing the very same trade necessary for a flourishing and dynamic economy.

Self-sufficiency, internally closed supply chains, localized production, etc, do have benefits for resiliency, but they have serious consequences for efficiency. On the far end of this, if we follow certain contemporary fascists’ suggestions and retreat to closed ethnotribes of around 150 people, not only is that tribe not going to have full hospital facilities when a pandemic eventually strikes — it’s not going to have hospital facilities at all, for anything. Such inefficiencies end up killing a hell of a lot more in the long run than a pandemic.

There’s an inherent tradeoff here: the more trade a nation tolerates the faster it’s possible to mobilize and coordinate rapid production of the equipment, facilities, materials, etc necessary to save lives. But also the faster it will be infected. And once a nation gets breached by infection the growth rate internally is going to be the same global growth rate we’d otherwise see.

The wider our networks of collaboration the more shock absorbent we have overall AND the greater resources we can muster AND the faster we can do it.

The other thing to note is that borders actually provide very minimal and arbitrary prunings of the social graph that don’t necessarily line up with what would actually be needed in a given situation to curtail a pandemic.

The connectivity you want severed in a pandemic is not clumsy aggregate clusters but personal interactions. This is where tracing points of contact, carriers, etc, becomes vitally important. Setting up military roadblocks around a city — while cinematic — isn’t anywhere near as useful as getting everyone inside that city to temporarily limit their interactions and tracing vectors. Borders-style approaches create arbitrary and capricious kill zones, guaranteeing that regional resources will be overwhelmed, not an efficient reduction of harm.

The reality is that no pandemic in history has looked like zombie films and yet conservatives rush to the comforting reactionary simplicity of the zombie premise. Pandemics are complicated messy things that take expertise and collaboration; nationalism and war promise simple straightforward conflicts with straightforward prescriptions. This is why such infest our media narratives. We like clean, reassuring stories filled with quick “commonsense” fixes. It’s easier to imagine a pandemic in war terms with familiar, conventional war solutions.

This is not to say that violence is never justified. Violence may in fact be justified to save net lives in a pandemic. For example using force to stop likely carriers from irresponsibly entering dense populations makes sense, especially early on when containment is still plausible. Many people are not, by default, altruistic. And the mere abolition of nations and states would not be the victory of anarchism. A significant percentage of the population are selfish pricks, pickled in the zero-sum perspective of power. In a pandemic one asshole can kill thousands. Violence can clearly be justified to curtail such actions. But when and if such situations arise in a free society it is unlikely to look anything like the violence of the state.

Reactionaries facilitate slaughter and then present their own slaughter as the only safety. And people who are afraid, who are made precarious, start longing for stability and simplicity at any price.

As with so many things, so it is with pandemics: the state creates problems and then, having demolished or forbidden all other solutions, embraces the few things it actually is good at. The state breaks your legs and then offers you shoddy crutches. It impoverishes you and then provides foodstamps. But that doesn’t necessarily mean you should reject foodstamps. A prisoner’s first obligation is to escape, and sometimes that means accepting the warden’s poisoned meals. There may be pandemic situations while the state still reigns where brutal quarantines are the lesser evil, even while we must acknowledge the longterm poison they represent.

Benjamin Tucker said it a century ago, “The State is said by some to be a ‘necessary evil’; it must be made unnecessary.”

Fighting to save lives inevitably obliges fighting to destroy the state, and we must be mindful that we don’t make that longterm task harder. But strategy is complex, triage is complex. There are no simple pat answers, the state is always our enemy, but it is not always our worst enemy. We mustn’t lose sight of how it created and worsened this situation, but that doesn’t mean always prioritizing resisting it rather than a virus.

Reactionaries isolate into prisons and fixed traditions. Anarchists build connections and possibility. They have the benefit of one path, we have the burden of having to evaluate many.

That’s why so many of them didn’t see this coming. And it’s why they won’t see us coming.

Reprinted from the Center for a Stateless Society.

How the CARES Act Will Delay Economic Recovery

How the CARES Act Will Delay Economic Recovery

The economic fallout of the government’s shutdown in response to the coronavirus pandemic has been unprecedented.

Nearly ten million people have filed for unemployment benefits in just two weeks. The 6.6 million claims from the last week of March doubled the previous week, and both weeks smashed the previous one-week record of 700,000 claims in 1982.

To mitigate the damage of this mass level of unemployment, the federal “stimulus” bill, called the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), includes two key provisions that will serve to prolong the negative economic impact of the shutdown: bailouts to big businesses and the $600 a week in unemployment benefits in addition to state level benefits for eligible recipients.

The bailout payments to big businesses, like the airlines, not only rewards risky behavior but will just delay the inevitable restructuring that will need to take place.

For instance, American Airlines and Boeing, rather than building up cash reserves during the past ten years of flush economic times, instead leveraged low-interest rates (courtesy of mad Fed money printing) to engage in billions of dollars worth of stock buybacks to benefit from the stock market bubble. Now, rather than selling their stocks to raise liquidity as the prices tumble, they will rely again on a taxpayer-funded bailout.  

Furthermore, the bailouts will largely just enable big businesses to stay afloat during the remainder of the shutdown, delaying layoffs that will likely be necessary as the travel industry will be slow to recover due to a public remaining uncertain about the health risks of travel. 

So at a time when the economy is attempting to “re-open,” the businesses that had been propped up during the shutdown will need to engage in another round of layoffs, prolonging any recovery efforts. 

Also damaging to the labor market as the economy attempts to re-start will be the enhanced unemployment benefits. 

 “The $600 weekly unemployment compensation boost included in the CARES Act will provide valuable support to American workers and their families during this challenging time,” said Secretary of Labor Eugene Scalia.

Indeed, the financial support will be critical for those laid off through no fault of their own.

Such benefits, however, will significantly hamper any effort to “re-open” the economy once the pandemic fears erode, and may prove to be very difficult to eliminate.

A cursory look at the data shows that many of those out of work will be getting paid more not to work than they did to work.

Examining Bureau of Labor Statistics data, this article in The Street found “the median income for a full-time wage or salary worker on a weekly basis was $936. For a 40-hour work week, this translates to a yearly income of approximately $48,672.”

Comparatively, a 2019 USA Today article evaluating 2018 state unemployment benefits data reported the average national weekly unemployment payout of $347 a week. Add to this the $600 a week from the CARES act, and that comes to $947 per week, or $49,244 on an annualized basis.

In other words, the average unemployed person receiving benefits due to the coronavirus shutdown would be receiving more income than the national median income from working. Granted, these figures are broad aggregates, but still illustrate the point that many will be receiving more income being unemployed than they would if they chose to return to work.

The federal supplements are currently scheduled to last four months – roughly to the end of July.

Now imagine, using an optimistic scenario, most of the nation begins to wind down their economic shutdowns by mid-May or early June, meaning many workers would still have four to six weeks of eligibility to receive the generous unemployment benefits.

Of those businesses seeking to re-hire workers to help ramp up production and services to customers, many will find it difficult to do so. Unemployed workers who can receive more income staying at home instead of returning to work will choose to stay at home as long as the unemployment checks continue to roll in. Most states have waived the requirement to be seeking work to receive unemployment benefits, so there would be no pressure to do so. 

Returning to work for many would make them financially worse off. Some employers would also offer benefits like health insurance, but many jobs in the hospitality industry – where the majority of jobs have been lost – do not. While many would be eager to return to work to regain a sense of purpose, many others would make the economically-rational choice to continue receiving the higher level of income while avoiding the disutility of work. 

And this effect would reach beyond more than just those that could receive more income staying at home. For some, even the opportunity to earn more money working rather than remaining unemployed would not be deemed to be worth it, once we take the marginal benefits and costs into consideration.

Say someone receiving $947 per week in unemployment benefits has an opportunity to return to a job paying $1,000 a week. Obvious choice, right?

Maybe not.

The choice isn’t simply between receiving $947 a week versus $1,000 a week, but also working 40 hours a week versus zero hours. On the margin, this person would be receiving $53 more a week, but having to work 40 hours to earn that marginal benefit. On the margin, returning to work would yield this person about $1.33 per hour. Many would find this unappealing.

The federal government’s paying out of these additional benefits will surely provide a much-needed financial lifeline to millions forced out of work. But it’s also important to acknowledge how they will make it far more difficult to get the economy going again. Many businesses will find it difficult to once again staff their operations while the benefits continue. 

The notion of generous unemployment benefits discouraging work is not some right-wing, or free market ideological talking point. Even the New York Times resident left-wing economist Paul Krugman acknowledges that extended unemployment benefits will likewise extend higher levels of unemployment. In his 2010 economics textbook, Krugman stated “Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect.” He explains that granting more generous benefits “reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of ‘Eurosclerosis,’ the persistent high unemployment that affects a number of European countries.”

Moreover, these benefits will likely prove to be very politically difficult to end. Indeed, before the first checks have even been cut, Nancy Pelosi has been promoting the idea of extending the benefits through September. 

Imagine if unemployment remains high, perhaps in or near double digits, and Congress finds itself debating whether or not to cut millions of out of work American off from these federal benefits just two months before a national election.

Any guesses how that turns out?

The government has shut down the economy, forcing millions out of work. It’s understandable for them to also take measures to cushion the financial blow dealt to those made unemployed because of their decision.

What’s also important is to understand that these actions will most likely prolong any desired “re-start” of the economy, and these supposedly temporary unemployment benefits will prove to be very difficult to eliminate in an election year. 

Crisis Exposes Devastating Consequences of Fed Policy: Americans Have No Savings

Crisis Exposes Devastating Consequences of Fed Policy: Americans Have No Savings

Two weeks ago, during a March 17 address to the nation in response to the COVID-19 outbreak, President Donald Trump asked that Americans work from home, postpone unnecessary travel, and limit social gatherings to no more than 10 people.

And last week, on March 27, Trump signed a stimulus package of over $2 trillion dollars to provide relief to an economy on the precipice of collapse.

The aid package includes handouts and loans to individuals, small businesses, and other distressed industries.

Despite Trump’s “having created the greatest Economy in the history of our Country,” when the markets tanked, massive and immediate government intervention was the only thing left to forestall a total collapse.

So why can’t greatest economy in the world can’t handle a temporary shock without needing trillions of dollars injected to stay afloat?

The Federal Reserve and its vicious and ongoing war on savers are to blame.

Using the Federal Reserve Note – commonly (but incorrectly) referred to as the dollar – introduces a dilemma. Because of inflationary monetary policy, Americans have long been forced to select among three undesirable options:

  1. A) Save. Hold Federal Reserve Notes and be guaranteed to lose at least 2% in purchasing power every single year.
  2. B) Consume. Spend Federal Reserve Notes on immediate goods and services to get the most out of current purchasing power.
  3. C) Speculate. Try to beat the Fed’s deliberate inflation, seeking a higher return by investing in complicated and unstable asset markets.

With businesses and Americans defaulting on their rent and other obligations only days into the collapse, the problem is clear: Few have any savings… and why should they when saving their money at negative real rates of return has been a sucker’s game?

Lack of sound money, or money that doesn’t maintain its purchasing power over time, has discouraged savings while encouraging debt-financed consumption.

American businesses and individuals are so over-leveraged that once their income goes away, even briefly, they are too often left with nothing.

Fiat money is especially pernicious in the way it harms its users. To some, small 2% losses can go easily unnoticed, year to year. Over 100 years, the loss has been well over 97%.

And who can save for emergencies when you’re being forced to work and spend more – simply to maintain the same quality of life?

Over 100 years, the Federal Reserve has destroyed more than 97% of our currency’s purchasing power.

With the Fed slashing short-term rates to zero, the US Federal Reserve Note has been further destroyed as a method of preserving savings. (And negative nominal interest rates could be coming next.)

Inflationary economic policy, absent the guardrails of sound money, has created a situation with an obvious and deadly conclusion: that many Americans lack savings to protect themselves against downturns.

This situation isn’t necessarily the fault of the people, but rather the fault of a system in which discouraging and punishing savers is a crucial tenet of the entire framework.

The Federal Reserve, the U.S. Treasury, and the White House are trying to reassure the public that everything is “under control,” that “the U.S. economy’s fundamentals are still strong,” and that the economy will skyrocket once COVID-19 is taken care of. What if they’re wrong?

Maybe the greatest monetary experiment in history is coming to an end. Maybe sound money can still save the day, but we must not waste any more time in restoring it.

News Roundup

News Roundup 6/2/20

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