Events

How Members Of ‘Gun Culture’ View The Ahmaud Arbery Killing

How Members Of ‘Gun Culture’ View The Ahmaud Arbery Killing

There has been another controversial shooting of an unarmed man. The Ahmaud Arbery case is currently being litigated on social media by the usual suspects who plan on using this to further their “pet” agenda. Whether it be the “law and order” crowd who have their statistics at the ready to copy and paste, or the “race-baiters” who make their living off incidents like this, they are both champing at the bit to make their point. 

At this point, many libertarian/voluntaryists/anarchists may be confused as how to interpret the incident. Some may have already sided with Arbery, and some may be on “Team McMichael.” When you are trying to interpret an incident that happened within a statist framework, it is easy to get your thinking clouded.  

With all of that being said, the libertarian/anarchist/voluntaryist crowd looks to a future where there is no monopoly on force and violence, one where property rights backed by the non-aggression principle are legitimate as opposed to statutory mandates made by elected officials who suffer no consequences for their actions and mistakes; one where customs and cultural norms would be the status quo rather than diktats handed down from above. 

In the case of people grabbing their guns and hunting down someone they suspect of committing a crime, there already exists a subculture in the United States that has unwritten rules when it comes to such incidences which they follow to the letter. This author’s home state of Georgia has one of the largest gun forums on the internet that includes well over 40,000 members. The members overwhelmingly lean conservative and pro-Trump. Some members would call themselves libertarian. There are even a few who fly the democrat banner proudly, yet are adamantly pro-gun rights (yes, weird).  

Before we get into what this author has witnessed as to gun culture’s take on this situation, it is important to point out that the overwhelming majority of these same people took George Zimmerman’s side in the Trayvon Martin case before, during and after. That is good context for what is mentioned going forward. 

‘An Unwritten Rule’ 

“Don’t pull your gun unless you absolutely have to and only to defend life.”  

The “gun culture” in Georgia is strict about this. A man on the forum mentioned above once bragged that he was in downtown Atlanta when a homeless man approached him to beg for change. He crowed that he pulled his gun and waved it at the homeless man causing him to run off. The braggard was subjected to an onslaught of insults. The majority of them mentioned that he was not in fear for his life and that a gun should never be used to intimidate.  

It’s true that just pulling a gun can make a mugger run away. But in the case of serious gun owners we only pull our gun to protect life. If you pull it because of a robbery, you should be justified in pulling the trigger. Choosing to not pull the trigger is fine, your prerogative, but make sure the event justifies deadly force. 

This rule should be important to people who center their thinking and worldview on the non-aggression principle. Threatening and coercing is what the State does. If it’s not appropriate for a State actor, why is it for the individual? 

What Are These People Saying? 

It’s important here to give examples of how most in this subculture are commenting. This first quote is from a former police officer this author has known for years. Mind you, he left the job because he realized he was doing more harm than good. He explains: 

If there is no more to the story then the two should be prosecuted and jailed for life. The guy was clearly not trying to confront them. He runs miles and miles every day and lived nearby. However, one thing gives me pause is that even The NY Times is hedging somewhat. They stated that the man was seen running from inside a home under partial construction, the home owner called 911. BUT even that wouldn’t constitute the use of deadly force in this case. If this was a LEO shoot, he would have been charged.  

Another commenter: 

The kid wasn’t carrying anything. Those two confronted and went looking for a fight. Definitely not justified in my meaningless opinion. Real sad. 

Again: 

Based on that video, the shooters ought not stand in the sunshine anytime soon. But we know what ‘should’ happen and what does happen aren’t always related. 

Encore:  

Maybe he was takin a leak…? I dunno, this d-bag PI wannabe and his kid sound like some straight up cowbois ta me… “citizens arrest”, and armed pursuit lol… I wouldnta stopped either. 

They keep coming: 

I saw zero justification for use of force in that situation regardless of the jogger’s previous actions. This looks to be some straight up redneck justice profiling bull****. One has to wonder if they’d just shot him in the back had he tried to keep running. 

More: 

I don’t give a damn what the circumstance was. Based on the video those scumbags murdered that young man. 

One last comment: 

I prefer to let relevant and current facts determine the circumstance rather than digging up old articles to try and sling mud to make my predilections justified. The fact he was a high school athlete or attended college or what his specific career aspirations were, are irrelevant to the FACT he was unarmed and shot dead by two redneck wanna be cowboys who thought they had an in on the cover up with one of their former bosses the DA. Their plan sucked, now they get to win stupid prizes. Won’t bring him back but he died pretty quickly. They get to sleep with one eye open for a long, long, time… I’m sure they’ll be well received in a south Georgia prison. 

If you happen to be making excuses for the father and son, and the arguments above are being thrown in your direction, you are probably dealing with someone in a subculture with rules that obviously value safety and justice. As a reminder, these aren’t even big “L” Libertarians for the most part, but run of the mill conservatives and constitutionalists. They just have a set of guidelines that they live by and consider those to be more important that what the actual law is, while at the same time, abiding by it. 

Why is this something that libertarians/anarchists/voluntaryists should care about? Those groups seek a society without a central power. Under this structure customs and unwritten rules backed by the non-aggression principle will be the norm. It is beneficial to look at how subcultures, especially ones that are enforcing the NAP without realizing it, now operate. 

It is readily apparent that while many liberty lovers proclaim their support for gun rights, they are ignorant of what the culture is. A lot of people I know don’t own firearms and It is incumbent upon those of us educated on these customs to communicate them properly. They are not vigilantes who if they believe a thief is in our neighborhood will grab their weapons and go on the hunt. No, that is not how it’s done. The idea that you don’t pull your weapon until you absolutely have to exists for the reasons stated above. They are logical, and NAP consistent. People should look at what the McMichaels did, and ask if it would be acceptable to them in a libertarian social order. The ideas behind NAP-based self-defense already exist and are practiced. It would do many who think they know what those in gun culture are all about to spend some time learning from those living it. Your life and freedom in the current society may depend upon it. 

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.

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

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.

Airline Bailouts Destabilize the Economy and Inflate Asset Prices

Airline Bailouts Destabilize the Economy and Inflate Asset Prices

In the end, after all of the political posturing and all of the speeches and exhortations for Congress to “do something,” a $2 trillion “coronavirus stimulus” bill landed on the president’s desk for The Donald to sign. And sign he did, uttering all of the platitudes and everything else that comes with “historic” spending legislation that never should have seen the light of day. Although COVID-19 has helped expose vast weaknesses in public health systems in the USA, it also has shown that with much of corporate America, the emperor has no clothes.

Although tracking where the money goes is not an easy thing, we do know that the airlines will receive about $50 billion in cash and loans, while Boeing will receive a share of $17 billion earmarked for industries favored by Congress. Another $500 billion will go to cruise lines, hotels, and other firms that have lost business because of travel restrictions and the economic shutdowns.

Politicians of both parties heaped praise upon themselves for their “bipartisan” efforts, which in real life only can mean that Congress cleaned out what was left of the IOUs in the till. Rep. Thomas Massie, a Republican from Kentucky, drew attacks from all sides as he tried to force a roll call vote (as opposed to the voice vote that the members wanted) and announced his opposition to the bailout. President Trump called for his expulsion from the Republican Party while Democrats declared him to be an unsavory ideologue.

There is not much to do but to wait for the results, and they will unfold over time. However, much of this bill’s harm is invisible, the way that termites quietly but surely destroy a house when homeowners fail to detect them. The politicians and the pundits, along with corporate executives, are hailing this infusion of public funds to business as a lifeline to the economic system itself, when, in reality, it will weaken these firms in the long run.

This commentary deals mostly with the airlines, but what we say here applies to any firm receiving rescue funds and loan guarantees. While some of these essentially bankrupt firms gain some relief as taxpayers and consumers pony up to pay the companies’ bills, the temporary cash infusion allows them to kick the financial can down the road and not deal with the underlying problems that they are facing, at least for now.

In a recent New York Times op-ed piece, Tim Wu of Columbia University asks the following: “Are taxpayers rewarding a decade of bad behavior?” If he is asking specifically about US airline firms, the answer is a resounding yes. Wu notes that in recent years the airlines have been very profitable but that instead of building defenses against possible downturns that are not easily predicted (such as the coronavirus crisis), they have used much of their profitability to buy back their own stock.

Obviously, stock buybacks are controversial, and as long as stock prices rise, company officials look like financial geniuses. However, if the markets crash or if bears loom on the horizon, all of that value vanishes very quickly and the companies are left in worse shape than when they began. As a financial strategy, stock buybacks are inherently risky and tie up cash that could go toward capital development or even the “rainy day” fund for the inevitable market downturn. Writes Wu:

During the past decade, flush with cash, most of the companies in line to get taxpayer money did not prepare for a downturn. Instead, they spent enormous sums on stock buybacks, which reward shareholders and increase executive pay. For example, the airline industry, which is prone to booms and busts, collectively spent more than $45 billion on stock buybacks over the past eight years. As recently as March 3 of this year, with the crisis already beginning, the Hilton hotel chain put $2 billion into a stock buyback.

Such behavior is especially galling given that the airlines received a major bailout in the immediate wake of the 2001 September 11 attacks that severely damaged that industry. Likewise, Congress spread out the rescue money in 2008 and 2009 to deal with the infamous housing bubble that the government and the Federal Reserve System created. Yet here are the Usual Suspects once again gathering around Washington, collective hats in hand.

Airlines this time are promising (or at least say they are promising) not to use the newest amount of rescue money to engage in stock buybacks, but that hardly is reassuring. There is a larger problem, and it is not limited just to overvaluing their stock or their inability to learn any lessons from past disasters.

The greater problem of which we speak the Federal Reserve’s ongoing policy of pumping up the system the way that nineteenth-century cattle ranchers would “water” their herds shortly before sales by feeding them salt. The overly thirsty cattle would drink more water than usual, and when they would be weighed during a sale, would seem heavier—and fatter—than they really were.

While Fed pumping (and simultaneous suppression of interest rates) inflates the value of stock—providing a façade of an economy performing better than it really is—it also inflates the capital assets of companies, and airlines are no exception. Because of past bailouts, glorified money printing by the Fed, and corporate practices such as stock buybacks, the nominal values of these firms are substantially higher than they would be in a more free market.

It is not difficult to see the vast network of market misrepresentations that has come with these policies. Wu notes:

The past decade was also an “easy money” decade, thanks to federal monetary policy that favored liquidity and low interest rates. Many of the firms now asking for bailouts took advantage of low interest rates to borrow heavily. For their part, many creditors lent money at rates that did not fully reflect the risks to these industries. The debt loads have created their own fragilities during the economic downturn.

In other words, one set of policies to get around natural market constraints has led to one distortion after another. We now are at the point where airlines—and the banks that have been underwriting them—are hooked on cheap money, inflated stock prices, and overvalued capital assets. If Congress, Trump, and the Fed actually were to step back and let market forces work, the short-term results would be devastating—to current airline management. Yes, the airlines would be bankrupt, but in real terms, they have been bankrupt for a long time and the COVID-19 crisis now has exposed this industry for the financial fraud that it has been.

Given that the various players previously mentioned have decided to keep the fraudulence afloat, what does that mean for the future of the airline industry? One cannot necessarily predict future events and when they will happen, but one can say with utmost certainty that the airlines soon enough will bring a new generation of management to Washington bearing the same tin cups that their forebears carried.

There is no doubt that airlines, along with Boeing and almost certainly Airbus, will find themselves in a future crisis that keeps them at least partially grounded. It could be another pandemic, a terrorist attack, or just awful political leadership, but one can be sure that something will occur to significantly reduce airline ridership. Reduced ridership means reduced funds, and a similar scenario to what we see currently playing out is sure to follow. At some point, however, the financial damage will be so great that not even the Fed will be able to “water” airline stock anymore and the cold water of massive bankruptcies will follow, imperiling the entire financial system.

These bailouts don’t just reward irresponsible business behavior, but they also impose restrictions that will create future problems. Airline firms receiving federal funding are not permitted to cut worker pay or lay off workers until at least September 30, which means that the aid is a glorified welfare check to labor unions representing airline workers. (The bailout rules also forbid stock buybacks and freeze executive pay at 2019 levels.) Bloated union contracts also are part of the problem with airline financial policies, so, in the end, Congress and Trump have managed to reward most, if not all, of the bad actors in this sorry saga.

What is done is done, but at least we can take a look at what would have happened had Congress just said no to the airlines this time. Unlike the current situation, in which we will see the “good” effects first and the “bad” effects down the road, a “solve your own problems” approach to the airlines would result in immediate layoffs, bankruptcies, and at least some airlines would completely go out of business.

Although most politicians and airline executives want us to believe that airlines are an “essential” industry that is the equivalent of the “thin blue line” between prosperity and a depressed economy, the markets see things differently. First, and most important, with the current situation there is no way that airlines can meet their loan payments, issue stock dividends, or even pay all of their employees at current rates (including their executives). Faced with that situation, the healthier companies would most likely come to terms with their creditors and restructure their finances.

The unlucky firms, however, would go into Chapter 7 bankruptcy, with all assets sold to pay off their creditors. That means massive layoffs, fewer flights—and realistic valuation of their assets. If the economic need for airlines really were as great as airline executives and political pundits claim, then whoever has purchased those assets at bargain prices would be able to put them to use in no time. The industry will have had its necessary cold-water bath, and asset values, along with prices of airline tickets, would settle at true market values, not the bloated numbers that pollute current airline balance sheets.

Because the “bad effects” of allowing airlines to go under would result at first in massive layoffs, bankruptcies, and fewer passengers in the air, the media and political classes would be condemning those who voted down the federal largess. “Bad effects,” not surprisingly, are quite visible and the plight of the newly unemployed and of stranded travelers plays well on the news.

The “good effects,” however, are less visible. By the time airline assets were sold at bankruptcy auctions and new companies hit the airport runways with market-priced capital and market-paid employees, the media would be on another crusade and the resurrection of airlines would not receive the coverage it deserved.

By shoveling out cash to the airlines and more promises to the banks whose unsteady solvency always lurks in the background, Congress and Trump have perpetrated a financial fraud greater than much of the mess we saw on Wall Street more than a decade ago. Yes, they will receive praise in the media and votes from those grateful to have taxpayers pay their wages and salaries, but they have solved no problems and have created a generation of new ones. Almost surely we will be covering the next crisis on these pages.

Reprinted from The Mises Institute.

Judicial Engagement & National Emergencies

Judicial Engagement & National Emergencies

A Curious Quote & A Historical Lesson

“We repeat what was stated in Block v. Hirsh, as to the respect due to a declaration of this kind [an emergency] by the Legislature so far as it relates to present facts. But even as to them a Court is not at liberty to shut its eyes to an obvious mistake, when the validity of the law depends upon the truth of what is declared.”

Can you guess which judge made this statement against blind judicial deference to a Congressional determination of an emergency? You are probably thinking Justice Peckham or one of the Four Horsemen, right? Nope! It was none other than the infamous, and in some corners famous, Oliver Wendell Holmes.

This quote comes from a 1924 case in which the Court rejected a rent control law originally passed in 1919. This was the second time in three years the Court addressed a version of this law. The first time, in 1921, Justice Holmes, writing for a 5-4 Court, upheld the rent control law because it was a temporary measure intended to address the housing shortage in Washington D.C. after World War I.

In that 1921 case, Holmes reasoned that the Constitution’s restrictions were loosened during an emergency situation. But in the 1924 case he explained that once the emergency ended, the restrictions snapped back into place. Thus, a law that otherwise violates the Due Process Clause and the Takings Clause of the Fifth Amendment can be upheld during a temporary emergency but not once the emergency ends. Moreover, and surprisingly coming from Justice Holmes, the Court held that there was a role for the judiciary in determining whether an emergency still existed. That is, legislative assertions that go against the facts will not be granted broad, irrefutable deference.

The dissenters in the 1921 case, including Justices Van Devanter and McReynolds, argued that the Constitution’s limitations and restrictions always apply. Even during wars or national emergencies. In other words, the Constitution is absolute.

This dissent is correct both as an originalist matter and a theoretical matter. But as a practical matter, judges rarely argue that the restrictions in the Constitution are absolute. History shows that judges are willing to read a little bend into the Constitution during a true national emergency. However, it is also the case that they are willing to call the government on extending the “emergency” once it is obviously over.

Coronavirus and the Judiciary

An emergency is currently imperiling both the country and the entire world. The pandemic caused by the novel coronavirus has effectively brought most of the world to a stand-still. Sports organizations have cancelled their own seasons, even the 2020 Summer Olympics were postponed, and entire countries have been put on lockdown. Such drastic action by both private actors and government entities is unparalleled in recent memory.

But some people in the United States are clamoring for the federal government, and the President, to adopt even more drastic measure. People are not only demanding action to help stop the spread of the virus, but also that the federal government remedy the societal harms caused by the pandemic.

The main economic harm caused by COVID-19 is rampant and unprecedented unemployment. This level of unemployment means that many individuals, and many corporations for that matter, will be unable to pay their bills, including rent. This has led to pleas for pauses on evictions, and some cities and states have enacted such policies.

Both federal and state governments have enacted many other measures to limit the economic harms. This includes the passage of a 2.2 trillion-dollar stimulus package with direct payments to Americans. The longer this emergency has persisted the more restrictive the actions state governments take. Many have issued stay at home orders and required the shuttering of non-essential business—which has led to debates over whether gun stores or places of worship are “essential.”

There is also a large vocal crowd of people calling on the federal government to issue a national stay at home order. Most constitutional scholars believe such an order is beyond the powers of the federal government. But that has not stopped the calls for such a move. Further, even if the government did issue such an order, would there be courts that stand against it? Looking at history, I doubt it.

The Switch in Time

Now you may be wondering whether courts look at emergency situations differently. That is, whether courts generally hold that constitutional restrictions loosen when the government confronts an emergency—as Justice Holmes did.

Maybe implicitly. But the Supreme Court in A.L.A. Schechter Poultry Company rejected that idea. The Court argued that the 10th Amendment decisively counters the assertion that the federal government has greater authority during a time of emergency. Moreover, the fact that the Constitution specifically allows for the restriction of some rights (like habeas corpus) proves that there is no implied “emergency constitution.” That is, a constitution with lessened restrictions during an emergency.

The Constitution creates a government of enumerated powers against a backdrop of rights and powers reserved by the people and the states. The drafters of the Constitution had recently won a war and the country under the Articles of Confederation was enduring many hardships. But they did not write a release valve into the Constitution that allows the federal government to expand its power in an emergency.

And even if such inherent power is in the Constitution, such a grant would belong to Congress, not to the Executive Branch. But currently, in emergency situations it is the Executive Branch which takes the most drastic actions.

So, while the Court’s opinion in A.L.A. in 1935 was likely correct, it opened the door for much greater deference as a whole due to the later “switch in time that saved nine.” When the Court shifted and began upholding F.D.R’s New Deal programs it did so not based on a doctrine of emergency powers or the theory that the Constitution’s restrictions loosened during an emergency. Instead it simply held that the Constitution allowed for a more powerful federal government in general.

Thus, there was a theory that the Constitution’s restrictions on the federal government waned in times of emergency. The Court rightly rejected that theory, and then the Court changed course and held that the Constitution was not as restrictive as thought.

Whatever its merits, as a practical matter it is interesting to note that we might be better off if the Court had stayed with its smaller incorrect decision that the Constitution’s restrictions loosened during an emergency because some New Deal programs could have approved under that doctrine rather than being approved through a reworked understanding of federal power.

Going Forward:

As IJ’s President and General Counsel Scott Bullock recently stated in response to the DOJ’s request for Congress to suspend the right of habeas corpus: “History demonstrates again and again that governments use a crisis to expand power and violate vital constitutional principles. And when the supposed emergency is over, the expanded powers often become permanent.”

Because of this, the judiciary should be extra vigilant after the emergency ends. The courts have often engaged in blind deference to the “political” branches in many categories of cases since the New Deal Era, especially when it comes to economic and property rights. But the tide is beginning to turn, especially in state courts. This is important because many of the restrictions currently being contemplated deal with economic liberty and property rights. But courts should see this as a special circumstance requiring extra attention because government tends not to act like George Washington (or Cincinnatus) and voluntarily lay down power heaped upon them in an emergency.

Because governments rarely follow the path laid down by these two legendary men, courts should be extra vigilant and ensure that constitutionally dubious actions taken because of a national emergency are not carried forward once the emergency has ended. Moreover, and shocking as it may be for an IJ attorney to say, judges should take a cue from Justice Holmes and see a role for the judiciary in determining whether an emergency is still ongoing—though they shouldn’t look to Holmes for much else.

Reprinted from The Institute for Justice

How Z-pak Could Slay COVID-19

How Z-pak Could Slay COVID-19

Z-Pak, also known as azithromycin or Zithromax, could be a critical tool in preventing and treating COVID-19 coronavirus, according to Professor Michael P. Lisanti, MD-PhD and Chair of Translational Medicine at Salford University in the UK. I recently spoke with Professor Lisanti to unpack his hypothesis and call for immediate clinical trials of Z-pak and other extremely inexpensive, generic antibiotics for COVID-19 patients. 

Watch my detailed interview with Dr. Michael Lisanti on antibiotics for COVID-19 and cancer here:

Individuals may have heard of Professor Lisanti’s work as it relates to groundbreaking experiments targeting cancer stem cells and senescent cells—chronic disease-related cells created by aging. With over 90,000 citations and over 563 published papers, Professor Lisanti is one of the world’s most cited researchers—dead or alive—according to Google Scholar.

New drugs cost a billion dollars and 10-15 years to make it through the FDA approval process. This regulatory hurdle precludes natural substances that cannot be patented from being properly researched and tested for illnesses because companies cannot afford the cost to prove the efficacy of something that any organization would be able to sell afterwards. This top-down monopoly approach to medicine can leave the world on its heels—not enough clinical trials on natural substances and patent-dependent, new FDA-d drugs and vaccines years away—during a pandemic like the one we are in now.

Professor Lisanti has specialized in identifying FDA-approved generic antibiotics like Z-pak and doxycycline that are extremely effective in killing senescent cells at the heart of aging-related diseases. 

As the world is painfully aware, COVID-19 coronavirus is particularly dangerous for the elderly or those with aging-related senescent illnesses like diabetes, cancer, heart disease, and lung disease. As Professor Lisanti said in a statement on his new paper in the journal Aging, “If you look at the host receptors of COVID-19, they are related to senescence. Two proteins have been proposed to be the cellular receptors of COVID-19: one is CD26 – a marker of senescence, and the other, ACE-2, is also associated with senescence. So, older people would be predicted to be more susceptible to COVID-19, exactly as is observed clinically in patients. This could increase their probability of infection, and would explain the increased fatality of COVID-19 infection in older patients. All of this could be related to advanced chronological age and senescent cells.”

Lisanti’s laboratory has previously demonstrated that Z-pak selectively removes 97% of senescent cells. Without those cells acting as host receptors, it may be harder for COVID-19 to take root in the body and cause serious damage. 

Lisanti’s lab goes on, “Clinically, it appears what is leading to fatalities in older [COVID-19] patients is the very strong inflammatory reaction and the resulting fibrosis. Azithromycin inhibits inflammation-induced fibrosis, by targeting and removing senescent cells. The cost would be minimal, as the drug is off-patent, widely available and considered safe.”

Z-pak has made headlines after doctors around the world such as the widely publicized French clinic trials and New York and New Jersey physicians have found promising results on the front-lines of coronavirus using it in combination with another generic drug hydroxychloroquine. President Trump publicly championed the combination as a potential “game-changer” which has created a knee-jerk politically-charged push-back from media outlets. Some have dismissed the notion that an antibiotic like azithromycin could be effective against a virus. Antibiotics treat bacteria not viruses, the common refrain goes. 

But Lisanti’s understanding of the medical literature is compelling. “Azithromycin is known to stop the production of cytokines, a torrent of inflammatory mediators that trigger life-threatening lung inflammation in coronavirus patients. Azithromycin has also been shown to block the production of other viruses, such as the Zika and Ebola viruses.” 

Other FDA-approved generic antibiotics such as doxycycline (which costs around 10 cents per dose) that target senescent cells could also be fruitful to study in clinical trials. Indeed, some doctors are already implementing doxycycline into their protocol. Doxycycline has demonstrated the ability to prevent protein synthesis and IL-6 levels associated with viruses.

America’s greatest moments happen when individuals have the courage to step up and challenge groupthink-confined consensus to solve problems. We need medical groups, philanthropists, and entrepreneurs to support and develop clinical trials using Z-pak and doxycycline to investigate treatment and prevention of COVID-19. If Z-pak or doxycycline alone or in combination can be clinically shown to fight coronavirus, it may be an easier protocol to scale since these antibiotics are extremely inexpensive and are some of the most widely prescribed drugs in the world today. 

For our historic fight with COVID-19, we must take action in pursuing clinical trials for these potentially revolutionary antibiotic therapies right under our noses. 

Less Driving Amid Outbreak is Hurting Red Light Camera Revenue — Which is Great

Less Driving Amid Outbreak is Hurting Red Light Camera Revenue — Which is Great

Since states began locking down in mid-March, unemployment has skyrocketed, businesses have shuttered their doors, and these uncertain times have grown more worrisome by the day. There is one industry that is hurting, however, that shouldn’t bother many of us and that is the Red Light Camera industry.

Anyone whose been self-quarantining over the last few weeks likely knows that their trips to the gas station have been minimal simply because they are driving less. When people drive less, predatory and unconstitutional Red Light Camera companies like Redflex — who stalk unwitting drivers on the roads — make less money. This is a good thing.

As Business Insider points out, fewer drivers on the road is good for everyone: air pollution is falling, crashes are down, and there’s no blood-pressure inducing congestion.

But one industry in particular is feeling the pain in their bottom line. According to the report:

Redflex, an Australian company that operates “traffic safety programs” in roughly 100 US and Canadian cities, warned that less traffic and suspended construction amid the pandemic will be a stress on its balance sheet.

“Approximately 15% of group revenue is dependent on volume-based contracts,” the company said in a regulatory filing Monday first spotted by The Wall Street Journal, hinting at its business line that includes enforcement cameras. “We anticipate our revenue from these contracts will be impacted broadly in line with the reduction in traffic volumes as well as the duration of the disruption.”

Can I get a “Woooohoooo!!!”?

Shares of the unconstitutional predatory company’s stock have been in free fall since the beginning of the year, toppling near 50%. The company’s CEO, Mark Talbot told investors that travel restrictions are hurting plans for future installations and therefore impact the ability of the company to profit off due process-removing red light camera tickets.

“So far, there have been no terminations to contracts,” he said, according to a transcript compiled by Sentieo. “We are, of course, undertaking cost initiatives where possible to mitigate the impact of reductions or risk of delay. In addition, the Board and executive team will be taking a reduction in compensation effective April 1 for the duration of the disruption.”

For those who don’t recall, Talbot’s predecessor, Karen Finley was sent to prison in 2016 after being found guilty of bribing politicians to implement her due process-removing red light cameras.

After her sentencing, Finley described the company perfectly when attempting to deflect blame for her bribery scandal. “Redflex was a toxic and soul-sucking place to work. I worked over ten hours a day, almost every weekend and never saw my family,” she said — completely ignoring the fact that her job as the CEO was probably the largest contributing factor to the ‘soul-sucking place.’

However, the problem goes much deeper than Redflex, it is industry wide.

Take away the political corruption, bribery scandals, increased accidents, and police state issues with Red Light Cameras and we are still left with a system that is rooted in the removal of due process. The good news is that after the corporatist red light camera industry spread through the nation like a cancer for more than a decade, people are finally beginning to realize their inherently despotic nature.

As a result, people have been fighting back.

As the Newspaper reported, a group of three lawyers had filed suit in 2013, arguing that New Miami, Ohio’s automated ticketing ordinance gave vehicle owners no realistic opportunity to defend themselves against the demand for a payment of up to $180 that arrived in the mail. Optotraffic, a private vendor, sent the tickets to motorists passing through the less-than-one-square-mile town on US 127, a major highway that links Cincinnati with points north.

During that period of Optotraffic extortion, the city robbed drivers of $3,066,523.00. After Butler County Court of Common Pleas Judge Michael A. Oster Jr.’s ruling, the city was forced to pay back all of it in 2017.

On top of the unconstitutional nature of Red Light Cameras is the safety factor. These companies and the corrupt and greedy politicians who accept them know that they are about revenue generation — not safety — as these cameras increase the likelihood of an accident or death.

In February, TFTP talked to Stephen Ruth, aka, Red Light Robin Hood, who risked his very freedom to expose this madness..

Ruth was arrested and was facing years in prison for exposing the deaths of several people, including children who were killed as a result of these shortened yellow lights, through disabling the cameras.

In May 2015, sixteen-year-old John Luke was killed crossing the street when an SUV hit him. Less than a year later, a 64-year-old legally blind man named Warren Karstendick was killed in a hit-and-run when an SUV struck him. After visiting the scenes of their deaths and several others, Ruth concluded that these innocent pedestrians were losing their lives due to cars speeding up to avoid red light tickets.

Although the New York City’s Department of Transportation claims that all of its traffic signals provide a minimum of three seconds per yellow light, the AAA of New York released a 2012 report that found every tested traffic camera had a yellow light shorter than three seconds. Despite the fact that governments claim red light cameras are solely used to prevent accidents while modifying driver behavior, the revenue generated from traffic cameras can grow exponentially if yellow lights are shortened. As a result of the government’s greed for red light revenue, the safety of the driver took second priority.

While the Free Thought Project would never celebrate the decline of a legitimate business, the corporatism-rife red light camera industry is anything but legitimate. During at time when Americans are having to choose between paying rent and eating, the fact that a corrupt and unconstitutional company like Redflex is unable to financially prey on them is comforting.

Warren Harding and the Forgotten Depression of 1920

Warren Harding and the Forgotten Depression of 1920

It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so.

Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That’s what Winston Churchill meant when he described the history of the Soviet Union as “unpredictable.”

For this reason, we should not be surprised that our political leaders have made such transparently ideological use of the past in the wake of the financial crisis that hit the United States in late 2007. According to the endlessly repeated conventional wisdom, the Great Depression of the 1930s was the result of capitalism run riot, and only the wise interventions of progressive politicians restored prosperity.

Many of those who concede that the New Deal programs alone did not succeed in lifting the country out of depression nevertheless go on to suggest that the massive government spending during World War II is what did it.1 (Even some nominal free marketeers make the latter claim, which hands the entire theoretical argument to supporters of fiscal stimulus.)

The connection between this version of history and the events of today is obvious enough: once again, it is claimed, wildcat capitalism has created a terrific mess, and once again, only a combination of fiscal and monetary stimulus can save us.

In order to make sure that this version of events sticks, little, if any, public mention is ever made of the depression of 1920–1921. And no wonder — that historical experience deflates the ambitions of those who promise us political solutions to the real imbalances at the heart of economic busts.

The conventional wisdom holds that in the absence of government countercyclical policy, whether fiscal or monetary (or both), we cannot expect economic recovery — at least, not without an intolerably long delay. Yet the very opposite policies were followed during the depression of 1920–1921, and recovery was in fact not long in coming.

The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.

Instead of “fiscal stimulus,” Harding cut the government’s budget nearly in half between 1920 and 1922. The rest of Harding’s approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third.

The Federal Reserve’s activity, moreover, was hardly noticeable. As one economic historian puts it, “Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction.”2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.

It is instructive to compare the American response in this period to that of Japan. In 1920, the Japanese government introduced the fundamentals of a planned economy, with the aim of keeping prices artificially high. According to economist Benjamin Anderson,

The great banks, the concentrated industries, and the government got together, destroyed the freedom of the markets, arrested the decline in commodity prices, and held the Japanese price level high above the receding world level for seven years. During these years Japan endured chronic industrial stagnation and at the end, in 1927, she had a banking crisis of such severity that many great branch bank systems went down, as well as many industries. It was a stupid policy. In the effort to avert losses on inventory representing one year’s production, Japan lost seven years.3

The United States, by contrast, allowed its economy to readjust. “In 1920–21,” writes Anderson,

we took our losses, we readjusted our financial structure, we endured our depression, and in August 1921 we started up again.… The rally in business production and employment that started in August 1921 was soundly based on a drastic cleaning up of credit weakness, a drastic reduction in the costs of production, and on the free play of private enterprise. It was not based on governmental policy designed to make business good.

The federal government did not do what Keynesian economists ever since have urged it to do: run unbalanced budgets and prime the pump through increased expenditures. Rather, there prevailed the old-fashioned view that government should keep taxation and spending low and reduce the public debt.4

Those were the economic themes of Warren Harding’s presidency. Few presidents have been subjected to the degree of outright ridicule that Warren Harding endured during his lifetime and continues to receive long after his death. But the conventional wisdom about Harding is wrong to the point of absurdity: even the alleged “corruption” of his administration was laughably minor compared to the presidential transgressions we have since come to take for granted.

In his 1920 speech accepting the Republican presidential nomination, Harding declared,

We will attempt intelligent and courageous deflation, and strike at government borrowing which enlarges the evil, and we will attack high cost of government with every energy and facility which attend Republican capacity. We promise that relief which will attend the halting of waste and extravagance, and the renewal of the practice of public economy, not alone because it will relieve tax burdens but because it will be an example to stimulate thrift and economy in private life.

Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn’t been a recovery from the waste and abnormalities of war since the story of mankind was first written, except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations.

It is hardly necessary to point out that Harding’s counsel — delivered in the context of a speech to a political convention, no less — is the opposite of what the alleged experts urge upon us today. Inflation, increased government spending, and assaults on private savings combined with calls for consumer profligacy: such is the program for “recovery” in the 21st century.

Not surprisingly, many modern economists who have studied the depression of 1920–1921 have been unable to explain how the recovery could have been so swift and sweeping even though the federal government and the Federal Reserve refrained from employing any of the macroeconomic tools — public works spending, government deficits, and inflationary monetary policy — that conventional wisdom now recommends as the solution to economic slowdowns. The Keynesian economist Robert A. Gordon admitted that “government policy to moderate the depression and speed recovery was minimal. The Federal Reserve authorities were largely passive.… Despite the absence of a stimulative government policy, however, recovery was not long delayed.”5

Another economic historian briskly conceded that “the economy rebounded quickly from the 1920–1921 depression and entered a period of quite vigorous growth” but chose not to comment further on this development.6 “This was 1921,” writes the condescending Kenneth Weiher, “long before the concept of countercyclical policy was accepted or even understood.”7 They may not have “understood” countercyclical policy, but recovery came anyway — and quickly.

One of the most perverse treatments of the subject comes at the hands of two historians of the Harding presidency, who urge that without government confiscation of much of the income of the wealthiest Americans, the American economy will never be stable:

The tax cuts, along with the emphasis on repayment of the national debt and reduced federal expenditures, combined to favor the rich. Many economists came to agree that one of the chief causes of the Great Depression of 1929 was the unequal distribution of wealth, which appeared to accelerate during the 1920s, and which was a result of the return to normalcy. Five percent of the population had more than 33 percent of the nation’s wealth by 1929. This group failed to use its wealth responsibly.… Instead, they fueled unhealthy speculation on the stock market as well as uneven economic growth.8

If this absurd attempt at a theory were correct, the world would be in a constant state of depression. There was nothing at all unusual about the pattern of American wealth in the 1920s. Far greater disparities have existed in countless times and places without any resulting disruption.

In fact, the Great Depression actually came in the midst of a dramatic upward trend in the share of national income devoted to wages and salaries in the United States — and a downward trend in the share going to interest, dividends, and entrepreneurial income.9 We do not in fact need the violent expropriation of any American in order to achieve prosperity, thank goodness.

It is not enough, however, to demonstrate that prosperity happened to follow upon the absence of fiscal or monetary stimulus. We need to understand why this outcome is to be expected — in other words, why the restoration of prosperity in the absence of the remedies urged upon us in more recent times was not an inconsequential curiosity or the result of mere happenstance.

“The central bank is in a war against reality.”

First, we need to consider why the market economy is afflicted by the boom–bust cycle in the first place. The British economist Lionel Robbins asked in his 1934 book The Great Depression why there should be a sudden “cluster of error” among entrepreneurs.

Given that the market, via the profit-and-loss system, weeds out the least competent entrepreneurs, why should the relatively more skilled ones that the market has rewarded with profits and control over additional resources suddenly commit grave errors — and all in the same direction? Could something outside the market economy, rather than anything that inheres in it, account for this phenomenon?

Ludwig von Mises and F.A. Hayek both pointed to artificial credit expansion, normally at the hands of a government-established central bank, as the nonmarket culprit. (Hayek won the Nobel Prize in 1974 for his work on what is known as Austrian business-cycle theory.) When the central bank expands the money supply — for instance, when it buys government securities — it creates the money to do so out of thin air.

This money either goes directly to commercial banks or, if the securities were purchased from an investment bank, very quickly makes its way to the commercial banks when the investment banks deposit the Fed’s checks. In the same way that the price of any good tends to decline with an increase in supply, the influx of new money leads to lower interest rates, since the banks have experienced an increase in loanable funds.

The lower interest rates stimulate investment in long-term projects, which are more interest-rate sensitive than shorter-term ones. (Compare the monthly interest paid on a thirty-year mortgage with the interest paid on a two-year mortgage — a tiny drop in interest rates will have a substantial impact on the former but a negligible impact on the latter.) Additional investment in, say, research and development (R&D), which can take many years to bear fruit, will suddenly seem profitable, whereas it would not have been profitable without the lower financing costs brought about by the lower interest rates.

We describe R&D as belonging to a “higher-order” stage of production than a retail establishment selling hats, for example, since the hats are immediately available to consumers while the commercial results of R&D will not be available for a relatively long time. The closer a stage of production is to the finished consumer good to which it contributes, the lower a stage we describe it as occupying.

On the free market, interest rates coordinate production across time. They ensure that the production structure is configured in a way that conforms to consumer preferences. If consumers want more of existing goods right now, the lower-order stages of production expand. If, on the other hand, they are willing to postpone consumption in the present, interest rates encourage entrepreneurs to use this opportunity to devote factors of production to projects not geared toward satisfying immediate consumer wants, but which, once they come to fruition, will yield a greater supply of consumer goods in the future.

“Popular rhetoric notwithstanding, government cannot be run like a business.”

Had the lower interest rates in our example been the result of voluntary saving by the public instead of central-bank intervention, the relative decrease in consumption spending that is a correlate of such saving would have released resources for use in the higher-order stages of production. In other words, in the case of genuine saving, demand for consumer goods undergoes a relative decline; people are saving more and spending less than they used to.

Consumer-goods industries, in turn, undergo a relative contraction in response to the decrease in demand for consumer goods. Factors of production that these industries once used — trucking services, for instance — are now released for use in more remote stages of the structure of production. Likewise for labor, steel, and other nonspecific inputs.

When the market’s freely established structure of interest rates is tampered with, this coordinating function is disrupted. Increased investment in higher-order stages of production is undertaken at a time when demand for consumer goods has not slackened. The time structure of production is distorted such that it no longer corresponds to the time pattern of consumer demand. Consumers are demanding goods in the present at a time when investment in future production is being disproportionately undertaken.

Thus, when lower interest rates are the result of central bank policy rather than genuine saving, no letup in consumer demand has taken place. (If anything, the lower rates make people even more likely to spend than before.) In this case, resources have not been released for use in the higher-order stages. The economy instead finds itself in a tug-of-war over resources between the higher- and lower-order stages of production.

With resources unexpectedly scarce, the resulting rise in costs threatens the profitability of the higher-order projects. The central bank can artificially expand credit still further in order to bolster the higher-order stages’ position in the tug of war, but it merely postpones the inevitable.

If the public’s freely expressed pattern of saving and consumption will not support the diversion of resources to the higher-order stages, but, in fact, pulls those resources back to those firms dealing directly in finished consumer goods, then the central bank is in a war against reality. It will eventually have to decide whether, in order to validate all the higher-order expansion, it is prepared to expand credit at a galloping rate and risk destroying the currency altogether, or whether instead it must slow or abandon its expansion and let the economy adjust itself to real conditions.

It is important to notice that the problem is not a deficiency of consumption spending, as the popular view would have it. If anything, the trouble comes from too much consumption spending, and as a result too little channeling of funds to other kinds of spending — namely, the expansion of higher-order stages of production that cannot be profitably completed because the necessary resources are being pulled away precisely by the relatively (and unexpectedly) stronger demand for consumer goods. Stimulating consumption spending can only make things worse, by intensifying the strain on the already collapsing profitability of investment in higher-order stages.

“Mises compared an economy under the influence of artificial credit expansion to a master builder commissioned to construct a house that (unbeknownst to him) he lacks sufficient bricks to complete.”

Note also that the precipitating factor of the business cycle is not some phenomenon inherent in the free market. It is intervention into the market that brings about the cycle of unsustainable boom and inevitable bust.10 As business-cycle theorist Roger Garrison succinctly puts it, “Savings gets us genuine growth; credit expansion gets us boom and bust.”11

This phenomenon has preceded all of the major booms and busts in American history, including the 2007 bust and the contraction in 1920–1921. The years preceding 1920 were characterized by a massive increase in the supply of money via the banking system, with reserve requirements having been halved by the Federal Reserve Act of 1913 and then with considerable credit expansion by the banks themselves.

Total bank deposits more than doubled between January 1914, when the Fed opened its doors, and January 1920. Such artificial credit creation sets the boom–bust cycle in motion. The Fed also kept its discount rate (the rate at which it lends directly to banks) low throughout the First World War (1914–1918) and for a brief period thereafter. The Fed began to tighten its stance in late 1919.

Economist Gene Smiley, author of The American Economy in the Twentieth Century, observes that “the most common view is that the Fed’s monetary policy was the main determinant of the end of the expansion and inflation and the beginning of the subsequent contraction and severe deflation.”12 Once credit began to tighten, market actors suddenly began to realize that the structure of production had to be rearranged and that lines of production dependent on easy credit had been erroneously begun and needed to be liquidated.

We are now in a position to evaluate such perennially fashionable proposals as “fiscal stimulus” and its various cousins. Think about the condition of the economy following an artificial boom. It is saddled with imbalances. Too many resources have been employed in higher order stages of production and too few in lower-order stages.

These imbalances must be corrected by entrepreneurs who, enticed by higher rates of profit in the lower-order stages, bid resources away from stages that have expanded too much and allocate them toward lower-order stages where they are more in demand. The absolute freedom of prices and wages to fluctuate is essential to the accomplishment of this task, since wages and prices are indispensable ingredients of entrepreneurial appraisal.

In light of this description of the postboom economy, we can see how unhelpful, even irrelevant, are efforts at fiscal stimulus. The government’s mere act of spending money on arbitrarily chosen projects does nothing to rectify the imbalances that led to the crisis.

It is not a decline in “spending” per se that has caused the problem. It is the mismatch between the kind of production the capital structure has been misled into undertaking on the one hand, and the pattern of consumer demand, which cannot sustain the structure of production as it is, on the other.

And it is not unfair to refer to the recipients of fiscal stimulus as arbitrary projects. Since government lacks a profit-and-loss mechanism and can acquire additional resources through outright expropriation of the public, it has no way of knowing whether it is actually satisfying consumer demand (if it is concerned about this at all) or whether its use of resources is grotesquely wasteful. Popular rhetoric notwithstanding, government cannot be run like a business.13

Monetary stimulus is no help either. To the contrary, it only intensifies the problem. In Human Action, Mises compared an economy under the influence of artificial credit expansion to a master builder commissioned to construct a house that (unbeknownst to him) he lacks sufficient bricks to complete. The sooner he discovers his error the better. The longer he persists in this unsustainable project, the more resources and labor time he will irretrievably squander.

Monetary stimulus merely encourages entrepreneurs to continue along their unsustainable production trajectories; it is as if, instead of alerting the master builder to his error, we merely intoxicated him in order to delay his discovery of the truth. But such measures make the eventual bust no less inevitable — merely more painful.

If the Austrian view is correct — and I believe the theoretical and empirical evidence strongly indicates that it is — then the best approach to recovery would be close to the opposite of these Keynesian strategies. The government budget should be cut, not increased, thereby releasing resources that private actors can use to realign the capital structure.

The money supply should not be increased. Bailouts merely freeze entrepreneurial error in place, instead of allowing the redistribution of resources into the hands of parties better able to provide for consumer demands in light of entrepreneurs’ new understanding of real conditions. Emergency lending to troubled firms perpetuates the misallocation of resources and extends favoritism to firms engaged in unsustainable activities at the expense of sound firms prepared to put those resources to more appropriate uses.

This recipe of government austerity is precisely what Harding called for in his 1921 inaugural address:

We must face the grim necessity, with full knowledge that the task is to be solved, and we must proceed with a full realization that no statute enacted by man can repeal the inexorable laws of nature. Our most dangerous tendency is to expect too much of government, and at the same time do for it too little. We contemplate the immediate task of putting our public household in order. We need a rigid and yet sane economy, combined with fiscal justice, and it must be attended by individual prudence and thrift, which are so essential to this trying hour and reassuring for the future.…

The economic mechanism is intricate and its parts interdependent, and has suffered the shocks and jars incident to abnormal demands, credit inflations, and price upheavals. The normal balances have been impaired, the channels of distribution have been clogged, the relations of labor and management have been strained. We must seek the readjustment with care and courage.… All the penalties will not be light, nor evenly distributed. There is no way of making them so. There is no instant step from disorder to order. We must face a condition of grim reality, charge off our losses and start afresh. It is the oldest lesson of civilization. I would like government to do all it can to mitigate; then, in understanding, in mutuality of interest, in concern for the common good, our tasks will be solved. No altered system will work a miracle. Any wild experiment will only add to the confusion. Our best assurance lies in efficient administration of our proven system.

“We must proceed with a full realization that no statute enacted by man can repeal the inexorable laws of nature.”

– Warren G. Harding

Harding’s inchoate understanding of what was happening to the economy and why grandiose interventionist plans would only delay recovery is an extreme rarity among 20th-century American presidents. That he has been the subject of ceaseless ridicule at the hands of historians, to the point that anyone speaking a word in his favor would be dismissed out of hand, speaks volumes about our historians’ capabilities outside of their own discipline.

The experience of 1920–1921 reinforces the contention of genuine free-market economists that government intervention is a hindrance to economic recovery. It is not in spite of the absence of fiscal and monetary stimulus that the economy recovered from the 1920–1921 depression. It is because those things were avoided that recovery came. The next time we are solemnly warned to recall the lessons of history lest our economy deteriorate still further, we ought to refer to this episode — and observe how hastily our interrogators try to change the subject.

Reprinted from The Mises Institute

Why Demographics is not Destiny

Why Demographics is not Destiny

“Demographics is destiny” is a phrase uttered in some rightwing circles and quietly believed in some leftwing ones. In political terms, the phrase suggests either cultural or genetic determinism, or both—namely, that people of a particular culture, ethnicity, or race will (statistically) vote in a particular way. Although the highly politically incorrect words won’t leave Leftist lips, some of their common narratives can only be true if they also believe that that three-worded devil is, too. For example, in 2019, Sabrina Tavernise of the New York Times wrote that “Once the heart of the confederacy, Virginia is now the land of Indian grocery stores, Korean churches and Diwali festivals…It is also significantly less white.” Beyond Virginia, Tavernise goes on to credit this browning of America for other Democrat victories when she writes, “Democrats took control of the House and elevated Nancy Pelosi to speaker in 2018 because of victories in these fast-changing parts of of America, and both parties are preparing for battle over these voters in 2020.”

Meanwhile, there was recently a civil war in American conservatism, largely surrounding the intersection between demographics, culture, immigration, and voting patterns. Mainstream conservative voices argued that race is irrelevant, illegal immigration should be curbed, and that culture transcends race. The more dissident wing questioned whether or not a freedom-minded American Republic could survive mass legal immigration from third-world countries, since their cultures and genetics lend themselves to voting for larger and larger government.

I sometimes roll my eyes at “both sides are wrong” assertions, especially when their champions are driven by a desire to appear fair-minded and above the fray, rather than by a desire to pursue the truth. Alas, feel free to accuse me of the same, but in this case, it’s true: both the Left and the Right are wrong that demographics is fundamental to the political future of America (or of any other society). Demographics is not destiny.

As I’d said, demographic determinism comes in two forms: biological and cultural. Although the latter is more important, the former is in some ways a more egregious error. Biological determinism—the notion that people’s behavior, actions, or physical characteristics, is determined by their genes—is false. This can seem counterintuitive, since genetic determinism is true for other living creatures. But the defining characteristic of people is that they are capable of creating explanations of the world around them, of creating knowledge that hitherto had not existed. In the words of physicist David Deutsch, who expounded on this concept in his 2011 book, The Beginning of Infinity, people are “universal explainers”. This capacity to explain and understand the world is intimately connected with our corresponding ability to control it. 

And that power is why people are not genetically determined: given adequate wealth and technology, any genetic condition may be compensated for by technological innovation. For example, a child born with no limbs may be equipped with prosthetic ones so indistinguishable that the mutation which caused the condition in the first place is moot. Poor vision is already compensated for by glasses, contacts, and surgery. Even something as seemingly determined as height may in principle be modified, and some individuals have undergone so-called leg-lengthening surgery in recent years. The same logic applies to inborn diseases, susceptibilities, disabilities, and any other problem that Nature may not have solved for us.

One really has an obligation to let the imagination fly here—in general, if a solution to a problem of the human condition is possible in principle, then people can procure it, given only that we create the knowledge of how to do so. 

So physiology poses no fundamental limitations on what people are capable of achieving in the long run. This is a blow against some strands of genetic arguments surrounding immigration, especially with respect to the supposed importance of race. To emphasize: any perceived shortcoming owing to genetics can be compensated by the requisite technology. Even if such an innovation has not yet occurred, it is always discoverable by knowledge-creating people.

“Fair enough,” the determinist says, “but culture still matters, and immigrants who come to America still vote Left.” But culture is merely a set of ideas put into practice, and those are also not set in stone. History alone makes this clear, as the practices of your own ancestors from merely a few generations ago, with whom you share most of your genes, would likely horrify you today. The fact that cultures can improve at all proves that they are not some unstoppable, unchanging force. And, perhaps ironically, while genes propagate in only one direction—from parent to offspring—culture travels every which way imaginable, thus allowing for a plasticity and adaptability of which genes are utterly incapable. 

The fact that people are universal explainers rules out cultural determinism as it did biological determinism—because people are capable of creating ever-more accurate explanations of reality, of resolving errors in their worldview, no culture is ever deterministically linked to any group of people. Just as the unbounded creativity of people renders our own genetics merely a background canvas on which we may paint whatever manmade environment we desire, so too does our creativity lend itself to modifying and, hopefully, improving any cultural milieu in which we find ourselves. 

A salient example of deterministic thinking on questions of immigration is that of Muslim migration into Western nation-states. As Adrian Michaels of The Telegraph wrote in 2009, “Europe’s low white birth rate, coupled with faster multiplying migrants, will change fundamentally what we take to mean by European culture and society…Muslims represent a particular set of issues.” More recently, in 2017, the Pew Research Center published projections of Muslim percentages of European populations over time, under various possible scenarios. The scenarios differ by birthrate and migration levels, implicitly assuming that the number of Muslims in Europe is determined by these variables. 

But ideas don’t travel through the birth canal, nor are they shielded from their environment—Muslims who migrate to Europe are exposed to new ideas, new cultures, new criticisms of their most cherished beliefs, and their European-born children even more so. Muslim immigrants and their children may adopt the new culture in which they find themselves, or they may radicalize, or they may do anything in between—the future patterns of people and their ideas cannot be prophesied.

Having said that, we should not idly sit by and merely hope for cultures to improve themselves from the inside, as it were. Some ideas are better than others, and some cultures lend themselves to progress and error-correction more so than others. Since the memes occupying one’s wetware are not immovably fixed by either gene nor by the culture into which one was born, we have a moral obligation to try to improve them—both our own and others’. And we do so by criticizing them, by explaining their deficiencies, by offering modifications. 

So no, demographics is not destiny. Neither immigrants not those of particular genetics are predetermined to vote in some predictable manner. All people are universal explainers, and as such, are capable of unbounded improvement in thought and action. While it might be comforting to learn that race and other background are not determinative, the other side of the ledger is that since people can improve by acquiring new knowledge, we should not treat anyone with kid gloves. If demographics is not destiny, then the bigotry of low expectations is similarly unacceptable. This is exhilarating, for it means that people are not fundamentally divided by genetics, nor must our cultures be permanently incompatible. Civilizational progress of all kinds will always be, to quote David Deutsch, at the “beginning of infinity”.

Coronavirus Being Used to Scare You Away From Using Cash

Coronavirus Being Used to Scare You Away From Using Cash

Cash has been the target of the banking and financial elites for years. Now, the coronavirus pandemic is being used to frighten the masses into accepting a cashless society. That would mean the death of what’s left of our free society.

CBS NewsCNN, and other mainstream outlets are fearmongering again. Alarmism is nothing new in the media world, but this time, it’s not about triggering panic buying or even pushing a political agenda.

The war on cash is about imposing a new meta-narrative. As economist Joseph Salerno explains, the cashless society forces all payments to be made through the financial system. It doesn’t end with monopoly control over transactions, though.

Being bound to computers for transactions kicks the door wide open to hardcore surveillance of personal activity and location data. Being eternally on the grid means relentless taxation and negative interest rates, which the Federal Reserve is already gearing up for.

None of this bothers the well-heeled boosters of a cashless society or their lackeys in the media. They want Americans reading about the threat of coronavirus cooties on their cash, which is absurd.

Germs, of course, can loiter all over credit and debit cards, smartphones, ATMs, and every other cash alternative device. Too bad implanted microchip technology isn’t further along, the banksters must be thinking.

In another CNN article, readers are practically shamed for withdrawing cash to save during a crisis. Every sentence, every word, every letter of the article is nuts.

It begins by reassuring the reader that their bank account is insured by the Federal Deposit Insurance Corporation (FDIC). There’s no mention of moral hazard from CNN. The fact that the federal government guarantees every bank account up to $250,000 encourages reckless financial and banking behavior. Not worth mentioning, CNN?

Prior to the end of World War II, there were $500, $1,000, and $10,000 bills in wide circulation. This cash was dissolved by the Federal Reserve in the name of fighting organized crime. This same argument is now being made against $50 and $100 bills by Harvard economics professor Kenneth Rogoff.

In the Wall Street Journal, Rogoff also wrote that a cashless society would offer such benefits as “greater flexibility for the Federal Reserve to stimulate the economy when necessary.”

He wrote those words in 2017. And these too:

“The Federal Reserve should be able to implement negative nominal interest rates vastly more effectively in the absence of large bills, which could prove quite important as a stimulative tool in the next financial crisis.”

Prophetic. And indeed, negative interest rates would require the assistance of outlawing cash, so that banking customers don’t cheat by simply drawing out on their accounts.

Pardon the pun, but it’s absolutely sick how COVID-19 is being used now as a launching pad for this cashless agenda. There’s nothing to fear about using cash during this time of social distancing.

Wash your hands after handling cash, but don’t give up your moolah. Preserve your health, your privacy, and your liberty.

Reprinted from The Advocates for Self-Government.

The Crisis Has Exposed the Damage Done By Government Regulations

The Crisis Has Exposed the Damage Done By Government Regulations

As we watch in real-time how governments respond to the novel coronavirus pandemic, some of the most predictable forms of state overreach—from restrictions on the freedom of assembly to the suppression of regular commerce—have been rolled out. Thankfully, there is no unified world government, so there exist various examples of how certain countries are dealing with the crisis that we can closely examine and learn from.

Pessimism and cynicism are generally warranted under the political climate we’re living in. However, there are some silver linings we can take away from America’s response to the coronavirus. In a previous article, I noted that several states have started adopting deregulation on a whole host of issues. With the coronavirus still raging on, now elected officials are slowly beginning to recognize the absurdity of some of America’s regulations.

Despite how much the experts downplay people’s ability to coordinate on a voluntary basis, civil society is stepping up to face the crisis in a heroic manner. However, regulation has largely hamstrung their and state and local governments’ ability to work in a synergistic manner to stem the crisis without the federal government putting its boot on our throats. Americans have caught somewhat of a break now that some elected officials are behaving rationally by reconsidering some of America’s most misguided regulatory policies.

Several reasonable deregulation actions stand out in the last month.

FDA Loosens Up Some Restrictions, Still Has a Lot of Work to Do

The Food and Drug Administration is treated as unassailable by some, and if you dare speak out against it, you clearly want millions to die because of defective products. Well, the real world shows that the FDA’s lengthy approval process—which is consists of three phases of drug trials that can span years—actually puts many lives at risk. In the current coronavirus context, people do not have the luxury of time, so bureaucracy is quite literally killing them when they can’t access restricted treatments or medicine.

Although we’re not seeing the FDA’s budget getting trimmed or a private organization such as Underwriters Laboratories take its place anytime soon, politicians are starting to at least notice that its requirements are patently absurd in certain regards. Cooler heads have prevailed at the FDA, for the time being, as the agency gave a new coronavirus testing kit emergency use authorization (EUA) after weeks of delays.

However, we should not let the FDA completely off the hook. As is to be expected from a government agency, the FDA is taking its sweet time in approving at-home testing kits for the COVID-19 coronavirus. On a similar note, billionaire Elon Musk was able to acquire over one thousand ventilators from China and ship them off to hospitals in California along with other supplies such as respirator masks. But no entrepreneurial story is complete without its section on red tape. Musk initially hit a snag when the masks were held up at Los Angeles International Airport. Fortunately, everyone could breathe a collective sigh of relief after both customs and the FDA cleared the supplies.

Let’s not kid ourselves, though. Close calls like these could be lethal in circumstances where time constraints are even less flexible.

Texas Offers Level-Headed Deregulation Actions

Various states have issued orders to shut down restaurants and bars, which has compelled many businesses to limit their services to takeout. Some governments, such as that of Texas under Governor Greg Abbott, have been reasonable in their approach to dealing with the coronavirus crisis by lifting regulations on alcohol delivery and letting restaurants deliver alcohol along with food purchases, which was previously prohibited.

Additionally, Abbott made sure to waive regulations that would have weakened Texas supply chains in the face of this crisis. Trucks generally confined to delivering alcohol to liquor stores are now able to deliver grocery supplies to supermarkets. This move serves to bolster Texas supply chains during a time of uncertainty. “By waiving these regulations, we are streamlining the process to replenish the shelves in grocery stores across the state,” Abbott declared.

Healthcare systems across the country are under great pressure, which has prompted state legislatures to become more flexible with their otherwise stringent medical regulations. The Lone Star State has fast-tracked temporary licensing for doctors, assistants, and nurses coming from out of state to help Texas health professionals. States such as Maryland and South Carolina have taken similar approaches, recognizing that their medical restrictions may put them in a deadly bind as more coronavirus cases pop up and they don’t have enough staff to handle them. The federal government soon caught up with the states when Vice-President Mike Pence announced a new directive coming from the Department of Health and Human Services (HHS) that now lets healthcare providers treat patients across state lines.

Surprise! Some Reasonableness from the TSA

Quite possibly one of America’s most hated government agencies, the Transportation Security Administration (TSA) showed a shred of human decency by allowing travelers to have twelve-ounce bottles of hand sanitizer in their carry-ons. This well exceeds the 3.4-ounce limit that other liquids are subject to. Talk about an earth-shattering exemption. It’s almost as if the TSA’s security measures are theater at best and only make travelers’ experiences a total headache. But these days, we’ll take what we can get.

Any civil liberties–respecting person should always be skeptical about the role the government plays during a crisis. The ratchet effect is no joke, and any powers that government agencies obtain during this crisis will be maintained and likely expanded after it has subsided. To prevent such abuses of power, the case should not only be made for decentralized approaches to governance, but also for deregulation by showing how there is so much regulation on the books that private actors and civil society are kept from bringing a solution to the many problems mankind must muddle through.

Liberating these actors allows them to cooperate in a symbiotic manner with local and state entities to tackle these crises. If we just concede that the government should have total monopolies over health responses, we make centralization inevitable and let the federal government steamroll state governments, municipalities, and individuals further down the line.

The Moral Case for Deregulation

Politicians’ present-day fetish for regulation subjects hundreds of thousands of Americans to unjust criminal penalties, and further expansion of government overreach will put the country on the road to bureaucratic despotism.

This is a time when free market advocates should go beyond their mundane talking points about tax policy and start talking more about the regulations that make people’s everyday lives a hassle. Deregulation saves lives, and we should use this chance to demonstrate how free people who are allowed to cooperate can find solutions to societal problems.

Organizations such as the Competitive Enterprise Institute have already established that regulations cost the country a significant amount in economic activity—$1.9 trillion to be exact. Imagine what America’s most entrepreneurial citizens could do without those constraints. In terms of human costs, regulations can turn out to be deadly in pandemic scenarios. So we’re not just talking about numbers or abstractions here. Real, flesh-and-blood lives are on the line when we entrust the regulatory state with dominion over our activities.

The road to sound policymaking won’t be smooth, but we can only hope that the coronavirus will be the final pin that pops the regulatory balloon that politicians have recklessly inflated during their time in office. Crises do not have to automatically be associated with power grabs. Instead, they can provide opportunities for us to move forward and correct some of the errors of the past.

Reprinted from The Mises Institute

How Uncle Sam Will Spend $2.3 Trillion on Coronavirus Relief

How Uncle Sam Will Spend $2.3 Trillion on Coronavirus Relief

Before the coronavirus pandemic and the response to it triggered an economic meltdown, the U.S. federal government was planning to spend nearly $4.8 trillion in its 2020 fiscal year. Last week, President Trump signed a $2.3 trillion relief package aimed at mitigating an economic disaster.

How the government will be spending such a gargantuan sum of money via the CARES Act of 2020, and identifying who will benefit from it, are tough to visualize in a meaningful way. Hopefully, the chart below, which builds on analysis provided by the Committee for a Responsible Federal Budget, makes it easier to follow how panicky politicians have chosen to divvy up trillions of borrowed dollars in the largest aid package ever approved by the U.S. Congress.

How the U.S. Government Will Spend $2.3 Trillion for the Coronavirus Relief Package (CARES Act of 2020)

How the U.S. Government Will Spend $2.3 Trillion for the Coronavirus Relief Package (CARES Act of 2020)

Each of the boxes in the chart above contains a lot of details that will take time to unpack, but there is one main takeaway that all Americans should understand about what this spending means. Because all the $2.3 trillion being spent in this bill will be borrowed, which is coming on top of the $1+ trillion deficit the government was already going to run in FY 2020, the tax burden on Americans will be going up and government-provided benefits are going to be reduced.

Moreover, all that will happen much sooner than any politician or bureaucrat in Washington, D.C. will ever acknowledge.

As a case in point, consider that the CARES Act of 2020 was intended to prevent Americans from being laid off from their jobs because of government-mandated business closures aimed at slowing the spread of coronavirus infections. By providing loans and grants for both large and small businesses, as well as federal government-supported entities, the idea was to keep them paying Americans who have been blocked from earning incomes because of the government’s actions.

The bill provided $25 million to the Kennedy Center for the Performing Arts, which hours after President Trump signed the bill containing the provision bailing out the Kennedy Center into law, chose to lay off all the members of the National Symphony Orchestra anyway.

Kennedy Center President Deborah Rutter told the 96 musicians who make up the orchestra on Friday that their last paychecks were coming on April 3 and that they will not be paid again until the center reopens. The Kennedy Center has so far canceled performances through early May.

“This decision, from an organization with an endowment of nearly $100 million, is not only outrageous—coming after the musicians had expressed their willingness to discuss ways to accommodate the Kennedy Center during this challenging time—it is also blatantly illegal under the parties’ collective bargaining agreement,” Ed Malaga, president of the Local 161-710 of the American Federation of Musicians, slammed the move….

The payroll for the National Symphony each week is $400,000. Rutter said the $25 million would go toward “essential personnel to ensure we can reopen the Center.”

The CARES Act of 2020 also provided $260 billion in expanded unemployment insurance benefits for Americans who have been furloughed from their jobs. How likely is it that the bureaucrats of the federal government-supported Kennedy Center’s compared that line item in the spending bill to theirs and thought “we should have been given more” before deciding that since the money is all coming from the same place, they might as well provide their orchestra members the opportunity to collect unemployment benefits? They might also reason, “it’s not like they will be able to get such high paying jobs anywhere else anytime soon.”

With the federal spending spigot now fully open, will the Kennedy Center’s directors have the chutzpah to go back to Congress to demand more money to keep such high cost musicians on its payroll? If they do, will the musicians and their union change their tune and join them in supporting the effort? In the past, it has been hard for politicians to resist such joint efforts, which explains why we came into 2020 expecting to have a trillion dollar deficit.

Emergencies have a way of prioritizing what’s really important in a way that bureaucrats looking after their fiefdoms cannot. The question that must now be asked is whether Americans will be willing to pay higher taxes to pay off the money that’s been borrowed and will continue to be borrowed to support the Kennedy Center? Or might ordinary Americans look at the whole situation and ask, “What do we need a Kennedy Center for Performing Arts for in the first place?”, making it an excellent candidate for the chopping block.

Either way, it comes down to a choice between having to pay higher taxes or having fewer benefits provided by the government. The massive borrowing just unleashed by the coronavirus epidemic ensures those choices will be made.

Outraged at Thomas Massie?  You Shouldn’t Be

Outraged at Thomas Massie? You Shouldn’t Be

Thomas Massie, U.S. House of Representative from Kentucky’s 4th District, took a lot of heat for trying to force a voice vote on the House floor to pass the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.  In a glorious show of bipartisanship, both sides of the aisle poured out their vitriol on the double-degreed MIT graduate. 

Rep. Peter King, (R-N.Y.) said in a tweet Friday morning: “Because of one Member of Congress refusing to allow emergency action entire Congress must be called back to vote in House. Risk of infection and risk of legislation being delayed. Disgraceful. Irresponsible.” 

Rep. Steve Cohen (D-Tenn.) told the NY Post, “It was not cool, not cool at all.  We’ve all got to wait 14 days to see what happens. Hopefully, none of us get ill. If it weren’t for him, we wouldn’t have had to come [back]. He put people in jeopardy, there’s no question about it.”

John Kerry said, “Breaking news: Congressman Massie has tested positive for being an ass*&@#.  He must be quarantined to prevent the spread of his massive stupidity. He’s given new meaning to the term #Masshole.” 

Never one to pass up a Tweet-able moment, President Trump tweeted, “throw Massie out of [the] Republican Party!” Later, he supported, via Twitter, a the Kerry authored tweet aimed at Massive when he said, “Never knew John Kerry had such a good sense of humor! Very impressed!”

For his actions, Massie stands on pretty sure constitutional grounds.  Article 1, Section 5, Clause 1 of the U.S. Constitution says: “Each House shall be the Judge of Elections, Returns, and Qualifications of its own Members, and a Majority of each shall constitute a Quorum to do Business; but a smaller Number may adjourn from day to day, and may be authorized to compel the Attendance of absent Members, in such Manner, and under such Penalties as each House may provide.”  

In defense of his actions Massie said the following on Twitter:

I  swore an oath to uphold the constitution, and I take that oath seriously.  In a few moments I will request a vote on the CARES Act which means members of Congress will vote on it by pushing “yes” or “no” or “present.”

The Constitution requires that a quorum of members be present to conduct business in the House. Right now, millions of essential, working-class Americans are still required to go to work during this pandemic such as manufacturing line workers, healthcare professionals, pilots, grocery clerks, cooks/chefs, delivery drivers, auto mechanics, and janitors (to name just a few). Is it too much to ask that the House do its job, just like the Senate did?

Massie went on to say:

I am not delaying the bill like Nancy Pelosi did last week.  The bill that was worked on in the Senate late last week was much better before Speaker Pelosi showed up to destroy it and add days and days to the process.

This bill should have been voted on much sooner in both the Senate and House and it shouldn’t be stuffed full of Nancy Pelosi’s pork- including $25 million for the Kennedy Center, grants for the National Endowment for the Humanities and Arts, and millions more other measures that have no direct relation to the Coronavirus Pandemic. That $25 million, for example, should go directly to purchasing test kits. The number one priority of this bill should have been to expand testing availability and creation of tests so that every American, not just the wealthy and privileged, have access to testing. We have shut down the world’s economy without adequate data. Everyone, even those with no symptoms, needs immediate access to a test.

This brings us to the crux of the matter and why you, as an American citizen, should direct your outrage at everyone but Rep. Massie.  The CARES act is, on its face, unconstitutional. Where in the U.S. Constitution does it authorize Congress to conjure up $2.2 trillion dollars, then hand it out to the American people?  Notice the response that politicians (or more accurately) statesmen gave in response to calls for aid during an earlier part of the country’s history.  

1794: Congress undertook to appropriate $15,000 ($352,740 in today’s dollars) to assist French refugees.  In response, James Madison, one of this country’s founding fathers, said, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”  

1796: U.S. Representative William Giles of Virginia was not in favor of extending relief to fire victims saying that Congress didn’t have a right to “attend to what generosity and humanity require, but what the Constitution and their duty require.”  

1854: President Franklin Pierce vetoed an appropriation bill to assist the mentally ill saying, “I cannot find any authority in the Constitution for public charity.”  

1887: President Grover Cleveland said, “I find no warrant for such an appropriation in the Constitution, and I do not believe that the power and the duty of the General Government ought to extend to the relief of individual suffering which is in no manner properly related to the public service or benefit.”  Cleveland said this as part of his vetoing of a bill appropriating money to aid farmers in Texas who were suffering from a severe drought.  

What the House and Senate did in passing the CARES Act is bad enough.  President Trump invoked something called the Defense Production Act.  

Today, I signed a Presidential Memorandum directing the Secretary of Health and Human Services to use any and all authority available under the Defense Production Act to require General Motors to accept, perform, and prioritize Federal contracts for ventilators.  Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give-and- take of the contracting process to continue to run its normal course.  GM was wasting time.  Today’s action will help ensure the quick production of ventilators that will save American lives. (emphasis added)

Enacted by the 81st Congress on September 8, 1950 in response to the Korean War, the act was put in place to: establish a system of priorities and allocations for materials and facilities, authorize the requisitioning thereof, provide financial assistance for expansion of productive capacity and supply, provide for price and wage stabilization, provide for the settlement of labor disputes, strengthen controls over credit, and by these measures facilitate the production of goods and services necessary for the national security, and for other purposes.  The act basically gives the president broad and sweeping control of the economy for the purposes of national defense (i.e. during war time). He can compel, with the full force and weight of the federal government, private companies to do as he says (in the name of national defense) in direct violation of said companies’ property rights. And I have yet to mention the fact that the government will need to create trillions of dollars out of thin air and borrow trillions more to fund CARES Act relief. The money creation and government borrowing will ultimately decrease American citizens’ standard of living through ballooning price inflation and a diversion of resources from businessmen and women.

For the umpteenth time, unscrupulous, unprincipled, and downright deceitful politicians managed to manufacture an overreaction to the coronavirus using it to justify harming the country by their passage of unconstitutional legislation.  Our so-called “public servants” truly never let a crisis go to waste.  

As an American citizen you ought to be outraged.  However, your outrage should be directed at Trump, his administration, and Congress, not Thomas Massie.  

The $2 Trillion Stimulus Package Is Funding Your Own Surveillance

The $2 Trillion Stimulus Package Is Funding Your Own Surveillance

From corporate bailouts to endowments for art, the $2 trillion stimulus package signed into law last Friday has been roundly criticized as a smash-and-grab robbery perpetrated by the country’s elite.

And rightly so.

However, there is another provision in the 1,000-plus page legislation that should concern Americans just as much as any of its negative fiscal or economic implications: funding for what seems to be a massive surveillance program.

Tucked away in a section labeled “emergency appropriations for coronavirus health response and agency operations” is a $500 million allocation to the CDC for “public health data surveillance and analytics infrastructure modernization.” There are few details, other than a line saying that the CDC will report to the House and Senate appropriations committees on the development of a “public health surveillance and data collection system for coronavirus” within 30 days of the law’s enactment.

This reporter asked for more details from a press officer at the CDC National Center for Health Statistics, but has not received a response.

Based on the numerous reports, it’s reasonable to assume that the allocation has something to do with collecting geolocation data from smartphones – ostensibly to track the spread of coronavirus, and to make sure all of us good boys and girls are practicing social distancing. Indeed, this is happening in numerous other jurisdictions, including Israel, Australia, and at least four European countries.

Another clue that the system will entail geolocation tracking is the exorbitant price tag, which leads one to believe that the program will be highly technical. At $500 million, the surveillance system is five times what the NSA spent over a three-year period on its failed bulk data collection scheme.

If these assumptions are correct – and to be sure, this is only speculation – we could be looking at the beginning of a government tracking system the likes of which we’ve never seen. 

Either way, it’s hard to fathom how an agency that has failed so miserably in its response to the global pandemic would be rewarded with a $500 million influx – though even Andrew Yang has come to the realization that public bureaucracies are rewarded for failure.

Yes, it’s true that covid-19 tracking in the US is a mess, largely due to a lack of uniform reporting standards amongst the states. Not all states report the number of negative covid-19 test results, which has prevented researchers from estimating contraction rates. And not all report the number of coronavirus carriers that have had to be hospitalized, which would be helpful to know how dangerous this pandemic is.

But this could be addressed by the CDC mandating uniform reporting requirements among the states – low-hanging fruit that should hardly cost anything, let alone the GDP of a small Caribbean island.

And when it comes to tracking geolocation data, there’s no reason why that can’t be left to the private sector. The startup Tectonix Geo, for example, has already wowed Twitter with its demonstration about how a single Fort Lauderdale beach party can lead to the virus spreading around the country.

Many people said they were creeped out by Tectonix Geo’s demonstration, even though the company claims to be complying with privacy laws like Europe’s GDPR and the California Consumer Privacy Act.

If the thought of a private company tracking smartphones is hair-raising, then whatever the CDC plans on doing with that $500 million should be downright terrifying. 

Stimulus Bill Lets Fed Operate in Complete Secrecy

Stimulus Bill Lets Fed Operate in Complete Secrecy

I guess we’re just supposed to have faith that Jerome Powell will do the right thing. I don’t know about you, but I don’t have that kind of faith in anybody when it comes to passing out billions of dollars in cash or creating government policy.

-Mike Maharrey, TAC

Last week, Congress passed a $2 trillion stimulus bill in an effort to offset the economic impacts of the coronavirus. Most people have focused on the $1,200 checks to Americans and bailouts for industries hard-hit by the economic shutdown.

But the 883-page bill does a lot more than that, including empowering the central bankers at the Federal Reserve to hand out billions of dollars to their Wall Street buddies in complete secrecy.

The stimulus bill authorizes the Fed to create $454 billion out of thin air and loan it out. The provision gives the central bankers complete autonomy when it comes to deciding who gets the money.

Not more than the sum of $454,000,000,000…shall be available to make loans and loan guarantees to, and other investments in, programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system….”

The money will allow the Federal Reserve to create what are known as special purpose vehicles (SPVs). An article in CounterPunch explains that an SPV was the same device used by Enron to hide its toxic debt off its balance sheet before it went belly up.

With the taxpayers’ money taking a 10 percent stake in the various Wall Street bailout programs offered by the Fed, structured as SPVs, the Fed can keep these dark pools off its balance sheet while levering them up 10-fold.”

During the 2008 financial crisis, the Fed used SPVs to buy toxic debt from Bear Stearns to facilitate its takeover by JPMorgan Chase and to prop up AIG.

In other words, they are a vehicle for federally-backed corporate bailouts.

The Federal Reserve has already established an SPV in response to the coronavirus meltdown. On March 17, the Fed announced the creation of a Commercial Paper Funding Facility (CPFF) “to support the flow of credit to households and businesses.”

The Treasury will provide $10 billion of credit protection to the Federal Reserve in connection with the CPFF from the Treasury’s Exchange Stabilization Fund (ESF). The Federal Reserve will then provide financing to the SPV under the CPFF. Its loans will be secured by all of the assets of the SPV.”

One could argue that the Fed needs the power to create establish these programs in the midst of a major financial crisis. But does it need to do so in complete secrecy?

A provision of the stimulus bill throws a big shroud over the activities of the central bank. The bill repeals the sunshine law as it relates to Federal Reserve board of governors’ meetings until the end of 2020 or when the president determines the coronavirus crisis has passed, whichever comes first.

SEC. 4009. TEMPORARY GOVERNMENT IN THE SUNSHINE ACT RELIEF. (a) IN GENERAL.—Except as provided in subsection 8 (b), notwithstanding any other provision of law, if the Chairman of the Board of Governors of the Federal Reserve System determines, in writing, that unusual and exigent circumstances exist, the Board may conduct meetings without regard to the requirements of section 552b of title 5, United States Code, during the period beginning on the date of enactment of this Act and ending on the earlier of— (1) the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 20 U.S.C. 1601 et seq.) terminates; or (2) December 31, 2020.”

In other words, Jerome Powell doesn’t have to let you know what the Fed is doing. All he has to do is assert “exigent circumstances” and a veil of secrecy descends over the central bank.

Practically speaking, the new law effectively empowers the Fed to hand out money to whomever it pleases and nobody will ever be able to find out the whos, hows and whys.

I guess we’re just supposed to have faith that Jerome Powell will do the right thing.

I don’t know about you, but I don’t have that kind of faith in anybody when it comes to passing out billions of dollars in cash or creating government policy.

This looks like a recipe for cronyism and corruption on a massive scale. Even is you accept the veracity of central bank bailouts of Wall Street, it’s difficult to understand the benefit of doing so in secret.

Whenever civil libertarians complain about government surveillance, the response is always, “If you have nothing to hide, you have nothing to fear.” So, what is the Fed hiding? And what does it fear?

Police, Military Begin Door to Door Searches to Hunt Down New Yorkers Seeking Refuge

Police, Military Begin Door to Door Searches to Hunt Down New Yorkers Seeking Refuge

Rhode Island — In perhaps the most unprecedented attack on the Constitution on which the Free Thought Project has ever has ever reported, the governor of Rhode Island has announced that the National Guard will begin conducting house-to-house searches to hunt down New Yorkers seeking refuge in their state.

Not only will cops be violating the 4th Amendment rights of citizens in their homes, the governor also announced that Rhode Island cops have already begun puling over every vehicle they see with a New York license plate.

In a move that is reminiscent to that of Nazi Germany, the governor labeled an entire state a threat. Checkpoints have been set up along the interstate and vehicles with New York plates were being stopped without probable cause on Friday.

“Right now we have a pinpointed risk,” Governor Gina Raimondo said. “That risk is called New York City.”

It is no question that New York is the epicenter of the COVID-19 outbreak and their citizens should remain self-quarantined to prevent the spread of the virus. The state has over 46,000 reported cases and 450 deaths reported as of Saturday morning.

However, police officers and the National Guard have no idea if the person they are stopping or searching has been in the state for weeks or days.

As Bloomberg reports:

Rhode Island has just over 200, and it has begun an aggressive campaign to keep the virus out and New Yorkers contained, over objections from civil liberties advocates.

Raimondo, a Democrat, said she had consulted lawyers and said while she couldn’t close the border, she felt confident she could enforce a quarantine.

This draconian police state action comes in spite of the fact that many New Yorkers own summer houses in Rhode Island and have every right to be there. But the governor could not care less. According to Bloomberg, “many New Yorkers have summer houses in Rhode Island, especially in tony Newport, and the governor said the authorities would be checking there.”

“Yesterday I announced and today I reiterated: Anyone coming to Rhode Island in any way from New York must be quarantined,” the governor said. “By order. Will be enforced. Enforceable by law.”

Those caught seeking refuge, even in property that they own, will be subject to hefty fines and even jail time.

National Guard members will be stationed at the T.F. Green airport, Amtrak train stations and at bus stops. The citizen-soldiers will be following up with people at local residences. The maximum penalty for not complying: a fine of $500 and 90 days in prison.

Naturally, this has advocates of civil rights up in arms, and rightfully so. On Friday, the ACLU lambasted the governor’s unconstitutional measure, accurately pointing out that she has no right to “suspend the constitution.”

“While the Governor may have the power to suspend some state laws and regulations to address this medical emergency, she cannot suspend the Constitution,” Rhode Island ACLU executive director Steven Brown said in a statement. “Under the Fourth Amendment, having a New York state license plate simply does not, and cannot, constitute ‘probable cause’ to allow police to stop a car and interrogate the driver, no matter how laudable the goal of the stop may be.”

This move comes after other Orwellian steps by officials across the country. Earlier this week, TFTP reported that cops were raiding sleeping truckers trying to get some shut eye as they delivered essential supplies to those in need.

Because many rest stops are closed across the country, Truckers have been forced to stop on the side of the road to sleep while hauling these supplies. Instead of realizing this, NYPD cops raided the sleeping truckers, issued them fines and impounded their vehicles — for sleeping on the side of the road.

Completely oblivious to the heinous nature of preying on people trying to keep the nation from falling into chaos, the officers who conducted the raid took to Twitter to brag about it.

What’s more, New York and California are deploying drones to spy on their citizens and ensure they are complying with shelter in place orders. Other states have implemented hotlines for citizens to snitch on their neighbor if they think they are violating a shelter in place order.

Make no mistake, the threat of COVID-19 is real and people should take proper measures to protect themselves. However, as states across the country continue to roll out such tyrannical measures, we are inching closer to the idea of creating a cure far worse than the disease itself.

This is not okay.

Reprinted from The Free Thought Project.

Panic Buying, Medical Rationing Underscore Importance of Free Markets

Panic Buying, Medical Rationing Underscore Importance of Free Markets

The recent coronavirus panic has provided a stark reminder about the scarcity of economic goods. From people hoarding and stockpiling common household items like toilet paper and hand sanitizer to the downright morbid reports of doctors in Italy and Spain having to pick and choose who should receive medical care, the issue of resource scarcity has been thrust front and center.

To be clear, when economists refer to scarcity, it doesn’t just refer to empty shelves or a general lack of supply of something. Instead, we mean that goods are objects of choice: its use for one purpose or user precludes it from use for another purpose or user.

A bottle of hand sanitizer is scarce because when one person uses it for his hands, it is not available for another person’s use. Ventilators and hospital beds are also scarce; if Jane is using a bed and ventilator, it is not available for John’s use.

This leads us to conclude a key economic truth: all goods must be rationed. How a society overcomes this issue of scarcity and the method of rationing scarce goods determines that society’s well-being and standard of living.

 When the method of rationing facilitates efficient allocation of resources toward society’s most urgent needs, while encouraging productive behavior, the economy will flourish. If an inefficient means of resource allocation is used, poverty and shortages follow. 

Moreover, the issue of scarcity gives rise to the dilemma of multiple people desiring to lay claim to the same resource. Therefore, the method by which scarce goods are allocated will determine how people compete to obtain that good. 

So, what are some methods by which scarce goods are allocated, and what does the current crisis reveal about each one?

First come, first served: Under this method, whoever is first to claim or physically obtain the good gets to keep it. Time becomes a currency of sorts in this method, as those willing to forego other uses of their time in order to be among the first in line will be rewarded. It may also involve a little luck as well, with those who happen to be closest to some valuable good having the greatest ease of getting to it first. 

We’ve witnessed this method emerge with the panic buying of toilet paper and hand sanitizer because prices have not been not allowed to adjust due to anti-price gouging laws. Those willing and able to get to the front of the line clear out the shelves, leaving nothing for everyone else. 

When freely adjusting prices aren’t allowed to work, and instead a method of first come, first served emerges, the cost to consumers is time. Those willing to pay the highest cost in terms of time (i.e. spend hours waiting for a store to open so they are first in line) acquire the most goods.

Unfortunately, this method does not allow prices to reflect relative demand and scarcity, preventing valuable signals to guide producers to direct goods where they are most urgently needed.  And this method does not encourage productive behavior, as those consumers who spend more time waiting in lines rather than working are rewarded.

Critics claim that allowing prices to rise rapidly during emergencies may price some completely out of the market for a much-needed product during a time of distress. But empty shelves created by shortages also force many to go without. And the only way to bring prices back down without causing shortages and heavy time costs on consumers (via long lines) is to allow for prices to signal to producers to direct current supplies to where they are in most short supply, and incentivize them to produce more of the good in question. Freely adjusting prices can rapidly enable supply to surge and meet demand, and bring prices back down.  

An authority distributes goods based on “need”: Under this method an authority figure decides who gets what, by determining who is in most desperate need. Concentrating so much power over scarce goods into the hands of a single person or committee invites corruption. As such, people are incentivized to bribe or threaten the decision-makers to obtain what they desire. Lobbying becomes more rewarding than investments in productivity.

Moreover, attempting to distribute by “need” subjects distribution to the arbitrary definition of “need” by the authority figure. Potential consumers are incentivized to remain “needy” according to the definition of the authorities in order to gain access to goods and services. Think of the poverty trap created by the welfare state.

This also gives rise to the rationing of medical care we’ve seen emerge in countries like Italy and Spain, where the authorities are determining that young people are more worthy of scarce medical care during the coronavirus pandemic than older people who have fewer quality years of life left. 

This method also removes crucial price signals that would both incentivize increased production of those goods and services in most urgent demand, and the distribution of these goods to where they are most urgently needed. The costs can be fatal.

People have little incentive to be productive out of fear of losing access to goods and services because the authority may not deem them “needy” enough. 

Neither of those options seems like a particularly efficient (or fair) means by which to allocate scarce resources. Which brings us to:

Exchange of private property with freely adjusting prices: Private property implies that goods have an owner, and that owner is the one with just and legal authority to determine how that good is used. The owner can consume it, use it for productive purposes, stockpile it or trade it. One acquires rights over (already owned) property thru voluntary exchange, whether those exchanges involve goods for goods, goods for money, or money for labor.

Under such a system, in order to compete for desired goods, one must offer something of value in exchange, unlike the other previously mentioned methods. This incentivizes greater productivity – the key to improving the standard of living for a society.

Furthermore, not only does this system create a greater abundance of goods and services desired by society, but it more efficiently allocates them to their most urgent uses. 

Price signals provide valuable information and incentives to market participants. High prices of relatively scarce goods incentivize consumers to economize on the more expensive goods, while also encouraging producers to create more of that good in pursuit of higher revenue and profits. Shortages vanish.

Low prices encourage consumers to buy more, while telling producers that their productive resources are more urgently needed elsewhere. Surpluses are eliminated. 

The method society chooses for how scarce resources are allocated will generate very different types of behavior, and results.

The coronavirus panic has revealed that when government interferes with market prices and the exchange of private property, other means of distribution will emerge. These other methods, however, are far less efficient and more unfair. 

A system based on private property rights and free exchange based on freely adjusting prices provides the framework for the most efficient and fair allocation of scarce resources, while also encouraging more productive activity. The result is a more prosperous society, one far better equipped to meet society’s most urgent needs, especially so during times of emergency.

 

Bradley Thomas is creator of the website Erasethestate.com and is a libertarian activist who enjoys researching and writing on the freedom philosophy and Austrian economics.

Follow him on twitter: Bradley Thomas @erasestate

 

 

Amid COVID-19 Outbreak, Arrests Plummet, Departments Close and Chaos Does NOT Ensue

Amid COVID-19 Outbreak, Arrests Plummet, Departments Close and Chaos Does NOT Ensue

As TFTP reported last week, prisons across the country are facing potential massive outbreaks inside their walls and are being forced to make the decision to release non-violent offenders to stave off catastrophe. Thousands of non-violent prisoners have been released and there has not been an uptick in criminal activity. What’s more, according to multiple reports, arrests are plummeting, and a department in Illinois has entirely shut down.

While the typical fearful citizen might read the above actions and lose their mind, thinking it is the end of the world and crime will run rampant, the reality is much different. Crime is in free fall. According to a recent report out of Buffalo, NY, the number of daily arrests before the pandemic typically exceeded 20 a day, including a recent high of 37 on March 6. Arrests since Thursday have ranged from two to eight a day.

The drop in arrests comes as people are told to stay home and businesses are closed. While the crime drop is attributed in part to the stoppage of commerce, police are also changing their roles during this crisis from kicking in doors to arrest people for a plant to patrolling the streets for safety.

What’s more, Buffalo Police department Captain Jeff Rinaldo pointed to the New York State bail reform that went into effect at the beginning of the year. As a result of the reform, police now issue appearance tickets for most minor crimes, resulting in them taking fewer people into custody.

“Because of bail reform and because we have so many people out of custody, they’re able to care for themselves, care for families, be nimble, flexible, respond to this pandemic,” said Kevin Stadelmaier, the chief attorney for Buffalo Legal Aid’s Criminal Defense Unit.

Imagine that!

By allowing people to remain free for committing entirely victimless crimes — instead of ruining their lives through incarceration — the government is able to stave off the potential for future crime, otherwise known as recidivism.

While Buffalo is reducing arrests, other cities, like Blue Island, Il., have disbanded their entire department. After an officer tested positive for COVID-19, Mayor Domingo Vargas made the decision to shut down the department. Naturally, the mayor is receiving backlash from other elected officials.

State Representative Bob Rita criticized Vargas’ action, saying, “At no point did the Mayor’s office contact my office, any member of the City Council or any other local leaders in making this rash decision.”

Despite the backlash, Blue Island has not seen an uptick in crime.

In New York City, crime has fallen as well. According to the NY Daily News, crime dropped 25% in the five boroughs during the coronavirus shutdown last week — with just one person murdered compared to eight the week before, authorities said Monday.

Each of the seven major crimes that determine the overall crime rate — murder, rape, robbery, felony assault, burglary, grand larceny and grand larceny auto — declined compared to the week before, according to NYPD statistics.

This drop in crime was expected given the fact that New Yorkers are on lockdown, but as TFTP has reported before, even when cops simply refused to do make arrests and write tickets when citizens were on the streets, the city did not descend into chaos.

In September, the NYPD threw a temper tantrum after Police Commissioner James O’Neill fired the killer cop who choked the life out of Eric Garner on video in 2014. The temper tantrum resulted in a plunge in arrests, but it did not lead to a spike in crime or violence — illustrating how most of the “policing” done in the US, is little more than revenue generation.

We saw a similar reaction in December 2014 when the NYPD threw their first temper tantrum over the reaction to Eric Garner’s death and simply stopped doing their jobs.

During the work stoppage, the city set a record for the lowest numbers of murders in the history of the NYPD.

As we reported at the time, the numbers were far more drastic than the current slowdown.

Citations for traffic violations fell by 94 percent, from 10,069 to 587, during that time frame.

Summonses for low-level offenses like public drinking and urination also plunged 94 percent — from 4,831 to 300.

Even parking violations are way down, dropping by 92 percent, from 14,699 to 1,241.

Drug arrests by cops assigned to the NYPD’s Organized Crime Control Bureau — which are part of the overall number — dropped by 84 percent, from 382 to 63.

The decline in crime coinciding with the decline in police activity essentially made the case that most policing carried out in the United States is done so for the purpose of revenue collection and not to fight crime.

Drug offenses, parking violations, and traffic citations are not so much crimes, as they are streams of revenue for the city. They are also the reason for the majority of police harassment within particular communities; harassment that is being proven entirely unnecessary as the COVID-19 crisis continues.

Imagine a police force that acted more like firefighters or EMTs. Firefighters don’t have to go door to door looking for fires, in order to be effective. EMTs, just like firefighters wait for a call before reacting and their services are oft proven invaluable contrary to that of police work. Perhaps this recent chaos can be used to channel this notion to the forefront and completely revamp the idea of policing in the land of the free.

Reprinted from The Free Thought Project. 

No Bailouts

No Bailouts

That adroit member of the British Parliament Enoch Powell once said that “the supreme function of statesmanship is to provide against preventable evils.” This duty, incumbent upon politicians endowed with wisdom, is made difficult because “by the very order of things such evils are not demonstrable until they have occurred.” 

Well, the market crash has finally occurred, and laid bare the “evils” of America’s monetary policy. This month saw the worst stock market crash in nearly forty years. The next month will see hundreds of thousands, if not millions, marching into unemployment. Whole industries find themselves on the brink of bankruptcy. 

Those in power, and their court economists, will scapegoat all problems on the coronavirus pandemic. But the virus, the incidental trigger of the market panic, must not be confused with the cause of the economic bust: a broken banking system. 

In healthy economic growth, businessmen borrow the savings of others—the size and existence of which is indicated by an accurate interest rate—and use it to invest in capital goods and workers. Production increases, and the standard of living rises. 

But in our septic central banking system, real savings are substituted by cheap credit that only exists on a banker’s balance sheet. Dials are twisted as the Federal Reserve system manipulates the rate of interest, causing distortions as businessmen are given false signals. This easy money, confused for real loanable funds, is borrowed and put into malinvestments that distort the structure of the economy. 

The story is the same whether you’re describing 1929, 2008, or 2020. The market inevitably hits its tipping point as businessmen realize that the money they’re playing with is nothing but smoke and mirrors. The bubble bursts, and the boom, toxic from the beginning, busts. 

And now that the good times are over, and the promise of false prosperity has crumbled in their hands, politicians have lined up to bail out big business in the most repulsive form of corporate welfare our system has to offer. The airline industry requested fifty billion dollars from the federal government, more than triple what they received in assistance after the September 11 attacks. Boeing, that behemoth of defense contractors, asked for sixty billion all for itself. Then comes the cruise lines, the hotels, and half a dozen other interests ready to get a handout from a half trillion-dollar slush fund.

The right response, both ethically and economically, would be to let them fail. It’s not right for Main Street to bail out Wall Street, allowing insolvent corporations to feed like vampires on the people’s tax money collected by their crony politicians. And saving them is the start of the same process that created our economic catastrophe in the first place.

The harm bailouts cause goes beyond first impressions. Yes, hundreds of billions of dollars are wasted, as our ominous national debt creaks and groans under its own weight. But it’s the secondary effects that produce the real rot. 

Capitalism is about profit and loss. Businesses succeed or fail on their ability to serve the demands of consumers at the cheapest price. But when you have a policy of “too big to fail,” where you bailout inadequate firms and their managers, you destroy both business incentives and the market’s self-regulating mechanism. Bailouts are a function of state capitalism and corrupt corporatist structures. 

And what would happen if the airline industry was allowed to go bankrupt? Their planes wouldn’t be melted down for scrap. The capital structure wouldn’t disappear. Instead, it would be sold off to younger, more capable entrepreneurs who would be more adept at serving the public. Free markets encourage dynamic and creative change, while bailouts and cronyism only encourage the preservation of dinosaurs and legacy brands.

This sort of clearing house ought to take place in every sector of industry. Malinvestments must be allowed to liquidate and free up wasted capital, instead of being kept on life support, a continuous drain on the economy. President Ronald Reagan and Federal Reserve Chairman Paul Volcker understood the wisdom of necessary, short-term pain in exchange for a return to long-term health. The recession of the early 1980s was deep, short, and politically damaging. But the result was real growth, not another series of cheap credit bubbles. 

Our leaders today don’t have the wisdom of Enoch Powell to prevent disaster, or the intrepidness of Reagan and Volcker to see the disaster through once it occurs. Instead, they make blanket promises that a state intervention will fix all that ails you, as if the piper never has to be paid. Donald Trump and senate Republicans could have done the right thing: refuse the bailouts, allow a much-needed market correction, and take the electoral results on the chin in November. 

They didn’t though. Instead they’ll hand billions of dollars to the big businesses that bankroll their campaigns, while simultaneously sinking trillions more in harebrained stimulus packages. That’s because we’re not ruled by statesmen. No, instead we’re overseen by men like Senator Richard Burr, scoundrels who enrich themselves off the public purse while the national interest be damned. 

Men like that, Powell said, who create and perpetuate these preventable evils, “deserve, and not infrequently receive, the curses of those who come after.”

News Roundup

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