How Many People and Decisions?

Picking up on one of this last week's In Real Time posts, this weekend edition of Chalk Talk is an interview with Thomas Sowell, conducted by Peter Robinson of Uncommon Knowledge. The interview questions are several and they emanate from the theme of Sowell's book, Intellectuals and Society. Draw up a chair, the beverage of your choice, and enjoy.

A key point in the interview is at the 14:20 mark. Robinson asks Sowell to explain the "vision of contemporary intellectuals" brought up in the book. That vision is one where experts "promote the transfer of decisions from the mass to those with more intellect."

What "decisions"? A society's economy is by nature dynamic and diverse. The interactions of millions upon millions of people require countless decisions on a minute-by-minute basis. What may seem like the simple act of purchasing the "common" everyday staples involves many people making many decisions about how to efficiently and affordably deliver those goods to you.

Consider one good you come to expect will be available, fresh milk for example, and consider the number of people and decisions it requires to provide that good. The dairy farmer extracted the milk from his cows and stored it. A shipping company provided a truck to transport the milk from the farmer to the processing plant. The plant pasteurized it, put it in containers, labeled it, and prepared it for shipping. The transportation company shipped it to your local store. The store puts it on your shelf.

How many people and decisions were involved in this process? Think of a number, then consider all the other people and decisions involved in all the related commercial activity involved in the above process. The farmer requires a lot of feed to keep the cows alive and well, and a lot of equipment to milk the cows. He requires the maintenance of buildings and equipment. Where do all these needs get met? And the transportation company needs a fleet of trucks. How many technicians, mechanics, moving parts, tires, and so on are required just to keep their trucks on the road? And the fuel required for the trucks, how did that get in their tanks. What about the processing plant? And the facilities maintenance of the store?

And on, and on, and on.

And we're only talking about a gallon of milk. How many other goods and services have we come to assume will be available to us on a daily basis? Can we even begin to quantify the number of people involved? It is easy to assume that these millions of people and countless minute-by-minute decisions required to provide us with our daily needs and wants just happen coordinate and happen naturally.

(For an excellent exposition on the complexity of market operations, click here to read Leonard Read's classic I, Pencil)

It is just as easy to assume that "experts" would be better at planning the economy that provides for our standard of living. It is a premise that needs revisited, to assume we the consumers cannot better make the decisions that direct the market and our society, that we need to abdicate that freedom and responsibility to a set of experts.

From a practical standpoint, central planning just does not work. It leads to shortages and a lower standard of living when myriad decisions required to operate society are delegated away from the masses and into the hands of a few. (Look at the standard of living in any socialist country and/or societies with authoritarian central governments.)

From a principle standpoint, central planning is an affront to individual liberty. What is the "private sector"? It is We the People freely pursuing the paths of our lives as We the Consumers. Giving up more and more of our freedoms, decision-making that is, to a group of experts is a very bad thing. (Would you be content to give up your freedom to vote to a group of experts who claim to know better than you?)

In Capitalism and Freedom, Milton Friedman reminds us that maintaining economic liberty is essential to preserving political liberty:

"The kind of economic organization that provides ecomic freedom directly, namely, competitive capitalism, also promotes political freedom because it separates economics power from political power and in this way enables the one to offset the other."

F.A. Hayek, in his classic exposition on socialism and economic planning, The Road To Serfdom, poignantly illustrates that power required to plan and control entire economies and societies:

"Most planners who have seriously considered the practical aspects of their task have little doubt that a directed economy must be run on more or less dictatorial lines."

It just is not a good thing when the power to control and direct markets and economies is given over to the same people who hold the power to tax and regulate the government. This marks a high concentration of power and a great loss of freedom, a loss no amount of intellectual expertise can compensate for.

Enjoy the interview:




sddf

Remembering America's Contract

We've had the Contract With American (1994). We've recently seen the Contract From America. (2010). Now we're being presented with the Contract On America.

How many prepositions are left?

The DNC seeks to link Republicans with the Tea Party Movement. To illustrate their argument, they've come up with the Contract On America: Here is their video:


The campaign ad alleges the Tea Party agenda is the agenda of the Republicans, that they are "one in the same."

If only that were true.

(I don't recall seeing Tea Party protests demanding those responsible for the Gulf oil spill not be held accountable, or for a repeal of the 17th Amendment, but we'll leave the DNC's creative cut-and-paste editing aside for the moment.)

Sorry, DNC, but the establishment Rockefeller folks at the RNC have not exactly embraced the Constitution-waving, We the People, leave-us-alone, freedom loving rabble at the Tea Parties .

The effort to lump the two together under yet another contract distracts the public from seeing one of the primary reasons the Tea Party movement cropped up.

At the heart of the movement is a revival of basic constitutional principles of limited government, fiscal responsibility, and individual freedom. Everyday Americans have organized by the millions to exercise their right of assembly to petition the government for redress of grievances. It is a bottom-up, grassroots movement looking to effect real change in government policy.

As such, any "contract" coming out of the movement would not be some new approach to reorganizing life in American. On the contrary, the Tea Party movement has returned public discourse to the country's governing document, The Constitution. This is the contract with, from, on, (pick a preposition) America, the one that binds the power of politicians in positions of power.

The question, Where in the Constitution is the federal government empowered to do x, y, and z? has for the first time crossed the minds of many Americans. This is a very good thing. Not surprisingly but no less disheartening, even powerful politicians need reminded:



Both political parties, Congress, the courts, and the president need to be bound to this contract as a reminder there are limitations to the power they exercise over the lives and liberties of Americans.

Now if only we could get politicians to hold up their hands and swear not to break this contract when they assume office...

Healthcare, British and American Style

The Brits' new coalition government has proposed a significant change in their nationalized health care system, National Health Service. From the New York Times:

"Practical details of the plan are still sketchy. But its aim is clear: to shift control of England’s $160 billion annual health budget from a centralized bureaucracy to doctors at the local level. Under the plan, $100 billion to $125 billion a year would be meted out to general practitioners, who would use the money to buy services from hospitals and other health care providers."

Yes, the system would still be a form of collectivism and redistribution of wealth, but the move to decentralize power away from central planners marks a significant improvement. More local control means freer choices made at the ground level where doctors and patients require it. The important matter is that the bureaucratic behemoth would have less central control of the system, not more.

Meanwhile, here in the U.S. the massive 2,409 page health care law will, if unaltered, lead to drastic centralization of the health care system. While the law contains no "public option", the mountains of new regulations, individual and corporate mandates, and still-undefined bureaucratic powers will lead to the ruin of privately insured health care. With enough time, fewer private insurers, and costs continuing to rise (as they always do) with excessive government intervention, centralization will culminate in the form of a "public option."

The cold truth is, the only "option" at this point will be nationalized medicine of some sort. And this situation will leave very few options---freedom, that is---when it comes to health services. the public option will lead to one option: Government-controlled health care.

Concerning the inevitability of the pubic option, major Democrat politicians admit so much. Senate Majority Leader Harry Reid recently assured leftists activists at the Netroots Convention in Vegas, "We're going to have a public option," Reid said. "It's just a question of when."

In December Senator Tom Harkin, D-Iowa, told progressive upset over the lack of a public option in the Senate version of the health care bill, “It will be revisited. This is just the beginning. … What we’re building is a starter home, not a mansion. And guess what? We have room for expansions and additions later on.”

(One must wonder if when White House Chief of Staff Rahm Emanuel called leftist activists upset over the lack of a public option, "F***ing retards," he was curious why they could not see the statist handwriting on the wall.)

The sheer size and scope of the law lays the groundwork for massive growth in government and centralization of power. But its size also offers proponents of freedom ample opportunity to pick off egregious parts of the bill, one at a time. Principled Republicans have already begun planting the seeds of piecemeal repeal; let's hope they continue and use the process to educate the public.

If particularly egregious portions of the bill are repealed, one at a time, each repeal would provide an opportunity to build public support for further erosion of the law, to remind ourselves that the freer we are to order our own lives and society, the more prosperous we are individually and collectively. Health care is no exception.

The Brits have potentially taken a small step in the right direction. We need to take small legislative steps of our own to keep ourselves from lunging in the wrong direction, centralized national health and a drastic loss of freedom.

Suppressing Your Vote, Economic Vote That Is

One thing Americans take seriously is the privilege of voting. We do it, encourage others to do so, and will not tolerate any infringement of it. We've passed monumental civil rights legislation to ensure all eligible citizens are not barred from voting. As the ongoing New Black Panther Party/Justice Department controversy illustrates, to this day the slightest restriction on voting attracts our attention and ire.

Through voting we assert our sovereignty as citizens. We just won't abide being disenfranchised from the political process.

Oh, that we were just a vigilant in protecting our voting privileges in our economic democracy, the market place.

Every time we make a purchase we are voting with our dollars. For whom are we voting? Those people who best serve our wants and needs, who deliver goods and services to us in the most efficient and cost-effective manner. Businesses large and small compete on a daily basis for our votes. If they ask us too much money, offer products insufficient to our needs and wants, we vote for someone else.

Unlike political elections every two and four years, elections in the market place occur every day and millions of times a day. From the moment we wake and put hot coffee (or tea, or orange juice, or some herbal libation) to our lips, to the moment we put our heads on our down pillows (or foam, or orphopedic), we truly vote early and vote often.

Each of us are what Ludwig von Mises calls the "sovereign consumers" in the "economic democracy of the market." This process first occurred when free market capitalism introduced into the static, hand-to-mouth societies of old a new and dynamic approach to elevating the living standards of the masses:

"Those underlings who in all the preceding ages of history had formed the herds of slaves and serfs, of paupers and beggars, became the buying public, for whose favor the businessmen canvass. They are the customers who are 'always right,' the patrons who have the power to make poor suppliers rich and rich suppliers poor."

As with political elections, those looking for our economic votes--dollars-- look where most votes can be found: the majority. The criticism of capitalism that it favors the few at the cost of the many denies the economic fact that the consumer is sovereign. Businesses that seek profit (how redundant is that?!) seek as many votes as possible. The majority represents volume, not a niche market. As Walter E. Williams puts it, who made more money, the founder of Rolls Royce or Henry Ford?

How, then, can we be disenfranchised in our economic democracy? What would limit or infringe our privilege of voting with our dollars?

Two things: Excessive taxation and excessive government intervention in the market.

Income taxation strips us of the fruits of our labor and leaves us with less of our own property. This confiscation of our property leaves us with less money. Few dollars means fewer votes to cast in the market.

More taxes on goods and services reduces the amount of goods and services Americans can afford. The less we can afford means fewer trips to the cash register, the ballot box of the market.

We have a pending tax increase looming at the turn of the year. This tax increase will deprive us of many economic votes in 2011, in the midst of a dogged recession.

Excessive government intervention in the market is the more prevalent, but less visible, way in which we are disenfranchised in the market.

With each non-essential regulation of economic transactions, government imposes new terms by which the consumers and producers must abide. These new third party terms corrupt what normally would be two parties exchanging money for goods on mutually-beneficial terms. As Thomas Sowell explains in Economic Facts and Fallacies,

"...these new terms preclude some terms that would otherwise be mutally acceptable to the parties themselves. With fewer terms available for making transactions, fewer transactions are likely to be made."

Having fewer available terms for basic economic transactions equates to limiting our range of voting privileges in the marketplace. We are less free to vote for the best possible products and services, therefore more confined to the status quo.

With 2,000+ page legislation on health care, finance reform, and, possibly, cap and trade, there are hundreds of regulatory powers and agencies, and inevitable new taxes, coming our way. With this additional bureaucratic anchor on the economy, there will be a lot of voter suppression and fraud taking place. We will be disenfranchised from the private economic process of bettering our lives.

How outraged will we sovereign consumers be?

Perhaps if we start taking our voting privileges more seriously, we will demand new voting rights legislation and protection from the Justice Department. Maybe we can call it the Sovereign Voters in the Economic Democracy and Freedom in The Market Act.

Progressive or Regressive?

Progress is the act of moving forward toward good things. Regress is the act of sliding backwards away from good things already enjoyed.

With this understanding of progress in mind, turn the clock back to 1700. Turn it back further, to the Middle Ages. Keep going backward.

Do we see anywhere in the world economic prosperity, affluent societies, and high standards of living? Do you see sustainable and forward-looking economies? Do you see the flowering of the sciences, arts, and learning?

No, we don’t.

When did social progress begin? Where in history do we see the liberation of millions from hand-to-mouth existences, poverty, and static societies?

Societies progressed away from ages of stagnation and poverty by embracing freedom. Progress began wherever there were free markets, free trade, and government policies that allowed for the unplanned progress of society. Regress occurs every time governments suppress freedom and seek to turn the clock back to the mercantile-style government planning of economies, and attempt to shape societies into the image of their choosing.

Back to historical examples.

Prior to the expansion of free market capitalism in19th century Europe, economic activity was dictated by the mercantile policies of a handful of people in governments. In Liberalism, The Classical Tradition, Ludwig von Mises reminds us that for western Europeans in the period between the end of the Napoleonic Wars (1815) and the beginning of the first World War (1914) an unprecedented improvement in the standard of living took place alongside a quickly rising population.

How did this transformation come to pass? Mises explains that, because of free market capitalism, millions of would-be serfs became the consumers businesses sought to please. Because people wanted a higher standard of living and because other people were free to provide so much for them, society progressed. This “democracy of the market” unleashed the creative and productive power of societies. "By the time of the start of the Great War, the average industrial worker in England and the U.S. “lived better and more graciously than the nobleman of not too long before.”

In Basic Economics, Thomas Sowell highlights the rapid progress countries experience when they loosen government restrictions on trade and price controls. India, New Zealand, Sri Lanka, South Korea, and China all experienced progress by permitting more freedom, not less, in their economies. In 1978, for example, “less than 10 percent of China’s agricultural output was sold in open markets, but, by 1990, 80 percent was.”

This increase in output and resulting boon to the living conditions of everyday Chinese citizens was the result of more freedom, not less. From 1978 to 1995 China experienced an annual economic growth rate of 9 percent.

As for aversion to freedom and regressive policies think of the living conditions in Cuba, North Korea, the former eastern European communist countries, and third world countries ruled by authoritarian governments. The contrast could not be sharper. These examples mark a regression to precapitalistic times, that is, before freedom in the market place was tried and embraced.

Listen to Milton Friedman’s summation of the issue:


It is interesting, if not befuddling, then, that the economic and social policies of self-described “progressives” (or, generically, “liberals”) point us backward to the kinds of mercantilistic, central planning authority in governments that predates any real progress in the world.

Returning to Friedman, he bemoans a similar frustration with the term “liberal”:

“In the name of welfare and equality, the twentieth-century liberal has come to favor a revival of the very policies of state intervention and paternalism against which classical liberalism fought. In the very act of turning the clock back to seventeenth-century mercantilism, he is fond of castigating true liberals as reactionary!”

Liberal has come to mean illiberal, and progressive has come to mean regressive.

In that short span of sixteen months the president and a Democratic Congress have pushed through three major pieces of legislation: the stimulus package, healthcare, and, now, financial reform. Self-proclaimed progressives back these measures and call more aggressive, even outright socialist, forms of statism.

All three involve thousands of pages creating mirky new powers for the government. All three cost trillions of dollars, increasing the debt and shackling the taxpayer tighter to the Treasury Department. All three mire citizens and their individual lives in a regulatory bog that is growing, not shrinking. All three attempts at “reform” are decidedly regressive, not progressive, and therefore are not reforms at all.

The result of these new laws will not be surprising: government will assume centralized control of the “private sector” and hence control of our lives. (What is the “private sector” but you and I voluntarily coordinating our lives by exchanging goods and services?) We will regress to less opportunity and choice.

That is, unless more Americans come to understand and embrace true progress, then insist on truly progressive policies. The more Americans understand that freedom is not an abstraction but at the heart of the only real progress in the world, the closer we’ll come to approximating a reinvigorated belief in freedom into real policy. We still live in a constitutional republic, and when the voice of the people is consistent enough and clear enough, public opinion will echo in the halls of legislatures.

A belief in freedom is a belief in the resourceful, creative, and productive powers of Americans themselves. Insisting on a policy of freedom is our best way of progressing forward.

Otherwise, we have no where to go but backward.

Can That Happpen Here?

Forget the Greek debt crisis. The British are starting to freak me out.

Our closest ally has given us lessons to learn concerning her state of "conservatism" and its impact on freedom.

Prime Minister David Cameron and members of his Conservative Party have recently revealed "Big Society," a government program. Big Society seeks to reinvigorate communities around Great Britain by encouraging individuals and private charities to take on some of the social services that are draining the national budget.

Unfortunately, Cameron's program is founded on the same elitist, central planning premises that have given rise to dependency on government and has led to soaring budget deficits.

At the end of the day, the leader of the Conservative Party has too much distrust of freedom:

"Of course there is not one lever you can simply pull to create a big society in our country. And we should not be naive enough to think that simply if government rolls back and does less, then miraculously society will spring up and do more. The truth is we need a government that helps to build a big society." (Emphasis added. Go to 3:50 mark.)

What could possibly cause the naivety to believe people would "do more" if an intrusive government is rolled back? How could the needs of people be abundantly and freely met, through voluntary cooperation unplanned by government authorities? Upon what could such a trust in a freer society be based?

How about all of recorded history?

As Milton Friedman points out,

"The great advances in civilization, whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government...Government can never duplicate the variety and diversity of individual action." (Capitalism and Freedom)

And where does Cameron get the notion that only governments can successfully construct a "big society," closely planning progress by the arm of the state?

Historical examples, please? There are none.

Listen to this opening exchange between Milton Friedman and Phil Donahue:




To add, from Ludwig von Mises' The Anti-Capitalistic Mentality:

"The substitution of laissez-faire capitalism for the precapitalistic methods of economic management has multiplied population figures and raised in an unprecedented way the average standard of living. A nation is the more prosperous today the less it has tried to put obstacles in the way of the spirit of free enterprise."

"In the kinds of societies" that distrust and depart from freedom, lower standards of living and, therefore, a higher dependency on government services are prevalent. Ignoring this historical neon sign has plagued societies for years, and Cameron's statement is a clear indication that the willful ignorance of politicians in socialist countries leads to a noxious type of naivety: History holds no lessons concerning freedom and prosperity, and if we keep on trying hard enough with this socialist idea, we'll make a brighter society for all.

It might seem remarkable to the American ear to hear the leader of the Conservative Party in Britain share this fundamental distrust of freedom held by progressive leftists. We should be curious how this came to be in Great Britain and then ask, Can that happen here?

The political realities of the Brits (as well as western Europe) illustrate the unpleasant reality that given enough time and enough government intrusion into society, enough government programs and enough of the population dependent on the nanny state, any so called conservative party becomes very similar to the socialist parties, with little alternatives to offer the public in the ways of reform and freedom.

There comes a tipping point when the best the opposition party can offer is We'll run the nanny state more efficiently than the other party. As Big Society demonstrates, the most substantive reforms that can be mustered by the erstwhile party of freedom assume socialist dogmas distrustful of freedom. At some point the party of Margaret Thatcher stopped presenting real alternatives to the British people, alternatives of free enterprise and free markets. They gave themselves, their party, and the hope of reform over to the notions and premises of centralized progressivism.

We shouldn't beat up on British conservatives too much, for all this is just political reality. To run for and hold office in a country where a majority of its citizens are dependent on some form of government spending, what else is a chap to do?

Can that happen here?

Yes, if we continue tying more Americans and their fates to the discretion of federal bureaucrats and the annual budget and if the two parties become more similar than dissimilar.

But things are different here in America. Politically, things have always been different here. We have this annoying persistence to hang on to our unique political traditions of freedom and all the concomitant suspicions of big government.

With every increase in the scope of government in our lives the past few years there has been a corresponding public push back. We just are not comfortable easing into an all encompassing socialist state. Considering the scale of American public discontent over the last two years---the Tea Party movement, town halls where congressmen are actually asked real questions, and large rallies on The Mall demanding less government---it is evident Americans feel no need to embrace the progressive nanny state. We are just not interested, the most of us.

Politicians' rhetoric and tactics evidence this long standing American attitude: They still feel the need to at least pay lip service to the word, freedom, even when they set about to limit, infringe, or destroy it. Open anti-freedom just does not sell in America. Freedom sells, so to speak, and most Americans buy it come election time.

We therefore have reason to expect the loosely articulated anxiety of the Tea Parties and town halls will can express our deep and long lasting cultural insistence for freedom. The sentiment is there; so long as public expression continues to surface it will more likely translate into actual reality in public policy.

Being it is a republic, getting representatives to understand and embrace our unique political DNA after elections is the frustrating and crucial task. Too often they run as conservatives touting the banner of freedom, then assume office and spend us into greater debt, more government, and a less free society. Tax adverse and debt weary voters are looking for someone to vote for, not once, but come reelection time: We don't want a nanny state run more efficiently. We don't want a nanny state at all.

Politicians are obliged to translate deep, unrelenting public opinion into policy, policy being an echo of public sentiment. As James Madison described it in Federalist 10, in a republic opinion is "refined and enlarged" through representation in government. When the echoes are heard long enough and clearly enough in state legislatures, Congress, and the White House, what is left to stop a policy of freedom?

Prime Minister Cameron claims his Big Society can be called "freedom." I am glad to say government programs like that could not be called so much in America.

Let's not let that happen here.

Finance Bill Illustrates The Cost of X, Y, and Z

When government sets out to make x, y, or z "more affordable," free market capitalism gets less free and x, y, and z become more expensive. Less freedom in the market place invariably leads to higher costs.

Need examples? Think of x as college tuition, y health care, and z housing.



After the predictable results of government meddling crop up in the form of higher prices, politicians like to blame businesses that operate in the skewed market they created with bad policies, then pile on new regulations that are intended to hold down the very effects of bad government policy.

This actual cause of economic problems usually goes unaddressed and culpable government schemes go on unabated.

Need a good example? The vast, 2,000+ page finance bill passed in the Senate does not reform or regulate Fannie Mae and Freddie Mac out .

Proponents of the finance "reform" bill argue its new regulations on Wall Street firms will reduce risky investment behavior in the financial markets, thus reducing risk to Americans' retirement accounts and, we are led to believe, saving taxpayers from the burden of future multi-billion dollar bailouts.



If only it were true.


Politicians are prone to covering up the symptoms of their efforts to control the free market; they loathe to treat the real causes of unhealthy markets. They make great fare out of treating the symptoms of their own bad policy; they ignore or downplay the fact their policies are the cause of high prices and needlessly volatile markets. It is just not good press to admit the dragon you are slaying on behalf of the taxpayer is a monster you had a hand in creating.

As Henry Hazlitt puts it in his indispensable book Economics In One Lesson, "By implication they (the government) put the blame for higher prices on the greed and rapacity of businessmen, instead of on the inflationary monetary policies of the officeholders themselves." (p. 118)

Taxpayers twice pick up the bill for such economic malfeasance, once as consumers paying artificially high prices for products and services and a second time under the burden of taxpayer funded subsidies and bailouts. Think again of college tuition, health care, and, of course, housing.

Leaving aside the hundreds of provisions included in the finance bill that have nothing to do with financial reform, the glaring omission is the lack of regulations on the lending giants Fannie Mae and Freddie Mac. By leaving these banks out of the bill, the Senate has ignored the major contributors to bad business practices they are purportedly trying to reign in.

Initiated as GSEs (government-sponsored entities), Fannie and Freddie have from the start infected the housing and financial market with a poisonous artificial influence. Being the bizarre hybrids of tax-funded entities (created by Congress) operating in the private market (paying dividends to shareholders), Fannie and Freddie have never operated under the normal pressures of the market. With an implied and open-ended source of taxpayer funding, what “company” would not make unnecessary risks?

It is no surprise, then, that Fannie and Freddie endorsed low underwriting standards and conjured the infamous sub-prime mortgage practice, allowing credit-challenged borrowers to purchase homes on a vast scale.

Operators of businesses that have no guaranteed backing of tax dollars do not engage in such risky, irresponsible, and unsound practices. Operators of government entities do, as the “risk” of doing business is not their own, but that of the taxpayers. (The actual cost, to tax payers, of the Fed takeover of Fannie and Freddie is difficult to nail down.)

Such is the result when decisions are based on political considerations and not business considerations. In a truly free market, politicians would not affect the price of your home or the conditions of your mortgage.

Now that Fannie and Freddie are total government agencies and unaffected by the regulations of the new finance bill, we can expect more of the same: higher than needs be housing prices, an unnecessarily volatile market, and more taxpayer burden via a federal guarantee of $8.1 trillion of liabilities.

In Capitalism and Freedom Milton Friedman noted that one of the reasons free market capitalism is important is power among many different hands. It is one more check on the power of the government, thus one more guard of freedom: “The kind of economic organization that provided economic freedom directly, namely, competitive capitalism, also promotes political freedom because it separates economic power from political power and in that way enables the one to offset the other.” (p.9) Via Fannie and Freddie, the government that collects taxes on your income is the same government that is probably underwriting your home mortgage.

With the proxy takeover of college loans and the groundwork for a single-payer health care system laid vaguely but firmly in the 2,500+ page health care bill of 2010, the next logical step, it seems, is the outright nationalization of the housing market. The current finance bill will do nothing to stop that.

In terms of real tax dollars and the condition of freedom, government really has made x, y, and z quite expensive, their stated purposes to the contrary. A return to freedom in the marketplace looks like our only viable option at reducing these costs.

"I can't legislate integrity. I can't legislate wisdom. I can't legislate passion or competency." Please add "affordability" to the list, senator.

From, not With

Republican candidate for Florida's senate seat, Marco Rubio, has signed Contract From America.

Click here to view David A. Patten's full article.


Three cheers! One cheer for the principles of the Contract, one for Rubio's signature, and one never-ending and persistently annoying cheer to remind him and other politicians to stick to it this time around.

As the Tea Party movement has doggedly illustrated for over a year, many Americans are looking for candidates that honor freedom, look to restrict the growth of government, respect the Constitution, and will stop the spending. These Americans instinctively will look to the Republicans. Aren't Republicans for small government and freedom?

On paper, yes. In recent history, no.

Remember the Republican Party-generated Contract With America of 1994. It sounded great. Now remember the Republican Congress and Republican president that vastly increased the size of the federal government and deficit spending. (Click here for a look at big government, Republican style.) Defense spending cannot be blamed for the spike in spending; in addition to not vetoing a single bill in his first term, Bush pushed through Plan D Prescription drugs and No Child Left Behind, increasing the rate of spending at a dizzying rate.

Unforced errors, all.

So now we are approaching a crucial midterm election. For a voting public justifiably skeptical about Republicans' commitment to less spending and constitutional government, what is different about the Contract From America? What might convince the public there is a significant enough difference between the parties, and that that difference will not again be brushed aside by some new New Tone?

One word: From.

A significant reason to find hope in this contract is the fact that it is a Contract From America, starting at the grassroots level and presented to politicians seeking votes. Contract From America was written by We the People. It germinated from an increased knowledge and unrest among the people, born of an increasing awareness of the unconstitutional waywardness that threatens freedom and fiscal stability. Americans have woken up to the ways of Washington, and they wrote a contract.

What Rubio signed is significantly not a Contract with America. It is not a document conjured by politicians in a party and offered to the public as a promise for future returns in exchange for votes. This is not a solution thought up by the same people who neglected their contractual obligations of 1994's Contract with America, becoming part of the current fiscal and constitutional problem. This problem has been wildly accelerated by the current administration and party in power but was momentum was started by the last administration and party in power.

This one word difference is a significant one, and let's hope it is not lost on both party establishments. As Ludwig von Mises pointed out, a regime that does not hold sway over the minds of people will not last. As more Americans come to embrace liberty and respect for the Constitution, and reject all policy to the contrary, more politicians will be feel obliged to sign on the dotted line. Maybe then we can, as Substitute Teacher Loren Romick longs for, once again love more of our politicians.

The Welfare State and The Warfare State

Does cutting defense spending weaken our national security? Having a principled stand on both domestic politics and foreign affairs should preclude assuming so. In light of our staggering debt, reducing defense spending is one way to strengthen our national security and the liberties our military is there to defend.

The possibility of cutting spending has again cropped up in the Washington. The ensuing debate offers a good reason to examine the premises of our assumptions when it comes to national defense, foreign policy, and how our brave men and women are used around the globe.

Conservatives and folks on the Right support strong national defense. When it comes to domestic policy, many of those same conservatives are guided by the principles of the Constitution, fiscal responsibility, and limited government.

Conservatives are rightly averse to "welfare state" policies. Such "big government" is unconstitutional, creates dependency, burdens tax payers, thwarts initiative and self-reliance, and limits freedom and opportunity. Worse still, entitlement programs become politically next to impossible to reform or eradicate after dependency sets in.

Valid points, all.

When it comes to the Defense Department, however, many conservatives quiet their concerns about fiscal responsibility, bloated and wasteful government spending, dependency on tax dollars, and a constitutionally-restrained government.

The Defense Department is part of the "big government" with which we should cast a suspicious fiscal eye. Cuts in unnecessary defense spending should be as welcome at cuts in wasteful domestic spending. With a budget set at $663 billion, there should be wasteful spending to be found, just as we could find pointless and wasteful spending in the Education Department, for example. Is every dollar consumed by the Pentagon vital to keeping us safe?

As of 2005, the total number of U.S. military bases around the world was 737. Again, that number is 737.

Bases require a lot of tax dollars to maintain. Countries hosting U.S. bases feel little need to provide for their own defense. Why do so so long as our military presence is there? Maintaining our presence in many of these countries becomes a humanitarian issue, not a defense issue, as withdraw could leave entire populations vulnerable to violent insurgencies and hostile government takeovers by brutal forces.

Local economies naturally grow dependent on the infusion of U.S. tax dollars via these bases. This artificial influence disincentives local markets from creating their own wealth and stabilizing their local economies. Dependency on U.S. tax dollars sets in and our military presence becomes a local economic issue, not a national defense issue.

At home we've created a welfare state; abroad we've created a warfare state. Both create dependency, burden the taxpayer, and are unconstitutional.

Continuing down the same old path of supporting an unnecessary military presence around the globe is adding to our mind-boggling national debt, and by so doing is a real threat to our freedoms at home. If running up unconstitutional domestic spending is going to shackle us, our children, and grand children to the Treasury Department, how is maintaining an unnecessary and unconstitutional global military presence not going to do the same?

Liberty is not possible without security. Our military provides our security. But security is not long possible with a fiscally and constitutionally unrestrained government, at home and abroad. How will be come to pay for defense without eventually imposing devastating tax increases? And if we cannot pay for it, how strong will our national defense be?

Now that defense spending cuts are again on the table, we need remember it was the last retired general to serve as president who warned us, upon exiting the White House, about the dangers to liberty wrought by "the military industrial complex."

Is Kagan Too Liberal? Why Do We Care?

If someone awakening from a coma clicked into a major media website, that person could justifiably wonder if Elena Kagan is being examined to fill some newly-created and dauntingly powerful position. "Is there a new presidential cabinet post, the Secretary of Interior, Exterior, and All Points Between? No? Then why all the fuss?"

Kagan has been appointed to occupy one seat on one Supreme Court. That's all.

Unfortunately, as all the buzz illustrates, that is not all. If we take a moment to examine the premises of all this concern over Kagan's partisan loyalties, we will acknowledge the Court has grown far too powerful--unconstitutionally powerful. Were Court justices to simply follow the Constitution and defer to the people in the legislative process, why would we care about the partisan leanings of appointees?

Asking whether or not Kagan is too liberal is a political question reserved for election cycles, not confirmation hearings. For decades the Court has settled political and social issues it has no constitutional business settling, hence it holds great power over the lives and freedoms of every American. In this constitutionally misaligned setting, the justices are in a position to institutionalize their partisan policy preferences. These policy preferences are cemented in the "precedent" (known as stare decisis)of the Court's decisions. Precedent is right up there with the text of the Constitution itself when it comes to influencing how future Courts settle future, unforeseeable controversies. If partisan policy goes into the making of precedent, judges can determine public policy for generations to come.

This is not the legitimate role of the Court. And this should not be.

Appointees should be chosen, questioned, approved, and held accountable by the standard of "judicial restraint." "Will you or will you not restrain yourself to the Constitution and openly reject judicial legislation?" should be the paramount question at the Senate confirmation hearings.

Now to pick on Senator Coburn. He drops the ball in his opening remarks to Kagan. The senator starts off well enough, stating it is his intent to determine whether or not Kagan has the "appropriate judicial philosophy." He then slides off into irrelevant questioning such as whether or not she will "do what's best for the country" (starting at 1:55). Do? Do what from the bench? What is best for the country is that the Court follows the Constitution and not further subvert the self-government of a free constitutional republican people. Coburn really drops the ball in his closing remarks with his view of the "real measure" of a court justice (3:56)




The other two branches of the federal government have for decades abdicated their constitutional responsibilities to keep the Court in line, so we are now left with combing through any partisan bread crumb on whatever "paper trail" we can find. (Pardon the mixed metaphors.)

Leaving the only constitutional "check" on the Court to these dog-and-pony shows in the Senate confirmations hearings is terribly out of step with the constitutional structure of the Court and its relation with Congress, the executive branch, and our liberties. During the debates before the Constitution was ratified, Alexander Hamilton, writing in Federalist Paper #78 under the pseudonym, "Publius," calmed public anxieties about the would-be judiciary in the Constitution. Many people feared the Court would become too powerful. Publius assures the public that

"...though individual oppression may now and then proceed from the courts of justice, the general liberty of the people can never be endangered from that quarter; I mean so long as the judiciary remains truly distinct from both the legislature and the Executive."

Hamilton was pointing to the judiciary's separation from the legislature and executive, stressing that the Court has neither the purse nor will of Congress, neither does it have the sword and force of the president. But the Court must remain distinct from the other branches of the federal government in an additional and important matter: The Court needs to be restrained from reaching into the political and social issues left to the other branches of government. Judicial activism, and all the partisanship and legislating from the bench that that entails, makes the Court too much like Congress, just another partisan branch of the government setting policy that governs the lives and liberties of Americans.

The most assuring opening remarks Ms. Kagan could make would be, "Hi. I am very liberal. And these are the reasons why that should not concern anyone..."