Sunday, September 29, 2013

Mazzucato’s Fantasy: The “Courageous, Entrepreneurial State”

Who drives technological advancement? It’s not private enterprise, according to Mariana Mazzucato, author of The Entrepreneurial State: Debunking Public vs. Private Sector Myths. In an article for Slate, she claims technological innovation is driven by the “risk-taking,” “interventionist,” “courageous, entrepreneurial state” through its funding of scientific research and development. “A quick look at the pioneering technologies of the past century points to the state, not the private sector, as the most decisive player in the game,” Mazzucato asserts.

But this is nonsense. In America, the government didn't get involved in science funding to any appreciable extent until after World War II. According to research by the journal The New Atlantis, President Truman initiated the modern era of systematic federal government funding of  research and development in the late 1940s. In F.Y. 1949, federal R&D outlays totaled less than $1 billion, mostly for defense. Yet look at what had already been accomplished in America by then.

In America’s first 150 years, we saw the advent of railroads, radio, TV, and motion pictures. America went from darkness to the electric light; from the horse and buggy to automobiles and airplanes; from word-of-mouth to the telephone; from an impoverished agrarian economy to a thriving middle class industrial dynamo. America saw enormous advances in agriculture, medicine, and energy. This is just a sampling. As Andrew Bernstein observes, inventor-entrepreneurs flourished during this time period, particularly between the Civil War and World War I. Did government funding drive this almost miraculous technological progress? Hardly. As CATO’s Terence Kealey notes, “Without government funding of science, the United States overtook Britain around 1890 as the richest country in the world.”

But even in the modern era of government funding—which, as Mazzucato points out, includes subsidies and loans to business—we see that the private sector is the real champ. In her brazen attempt to glorify statism, Mazzucato evades crucial facts.

First, the state gets its money from productive private citizens via taxes (in one form or another). Essentially, it is not the state that funds science. It is the private sector. Without a productive private economy, where would the state get its revenue? The role of the state—a role that is not legitimately a government function—is merely as a conduit for money to flow from the private sector to those who actually do the work. There is no courage in politicians voting to tax money away from productive private citizens. There is no risk in government bureaucrats doling out other people’s money in grants and loans.

Second, who actually does the creative work? It is not the politicians who legislate taxes or the bureaucrats who dole out the proceeds. The creative work is done by the scientists, researchers, and engineers who discover the new knowledge and create the technology. It is the risk-taking, entrepreneurial businessmen who turn those advances into amazing end products like the iPhone and countless other life-promoting goods. Politicians may partially finance them with other people's money. But they don’t direct the research or the business decisions. Whatever the source of funding, it is the scientists, researchers, engineers, and businessmen to whose minds and vision we owe technological progress.

Third, why are the creators—“men of the mind,” as Ayn Rand called them—able to flourish? Because they are free to do so; to choose their careers, pursue their own goals, values, and happiness, and act on their own rational judgment in their work. This freedom owes to the Enlightenment philosophers and America’s Founding Fathers, who created a government charged with protecting individual liberty. It is only to the extent that the state refrains from intervening in men’s lives and protects individual rights that innovation can flourish. If this were not so, then every dictatorship that ever existed would have ruled over an economic utopia. But it was substantially free America, rather than Nazi Germany or Imperial Japan, that developed the atomic bomb and won W.W. II. It was America that flourished economically and Soviet communism that collapsed, ending the Cold War. And today, it is the North Koreas, not the South Koreas, that are mired in poverty, stagnation, and hopelessness. (For an in-depth analysis of America's atomic bomb project, see Ayn Rand’s Hollywood screenplay proposal “Top Secret” in Journals of Ayn Rand.)

Though useful technologies may sometimes emerge from government funding, this is no justification to violate the rights of taxpayers to spend and invest their own money as they see fit. And given that government funding wouldn't exist but for the pre-existing private sector financial and human capital, it is ludicrous to suppose that the science emerging from government and private labs funded by government grants would not have come into existence otherwise. The politicians merely leach off of this financial and human private capital. As Kealey points out, government funding merely “displaces private research money.” 

In fact, given the inherent wastefulness, corruption, inefficiencies, cronyism, and politicization involved in government funding of anything—including subsidies, loans, and bailouts to business—the government’s usurpation of science funding undoubtedly retards progress. As Ari Armstrong points out in his blog post in The Objective Standard:

Mazzucato commits the fallacy that Frédéric Bastiat exploded in 1848: She recognizes what is seen—the government spending—but she ignores what is not seen—all the technological advances that did not take place because government confiscated the resources that otherwise would have funded them.

We’ll never know how much taxpayer money has been poured down the drain of cronyism (think Solyndra), and thus how much technological progress went down the drain with it.
As of 2010, according to The New Atlantis, taxpayers funded a little less than one-third of total American scientific R&D spending—including about two-thirds of basic research. But this unfortunate fact does not and can not erase cause and effect. During the 19th and first half of the 20th centuries, technological progress flourished without meaningful government funding of either R&D or business. There is no reason to believe it wouldn't have continued—and at a heftier pace—without government intervention in science and business funding in the last 60 years.

Contra state apologists like Mazzucato, the government is not decisive in driving technological advances. Government funding creates the illusion that “the government did it.” But it is just that; an illusion. It is private knowledge-seeking scientists and entrepreneurial, profit-seeking businessmen, each in pursuit of his own goals, passions, values, and happiness, that drive innovation. It is private, productive taxpayers who supply the “government funding.” The state’s only role is as an inept, immoral, quasi-criminal, redistributionist money-laundering “enterprise.”

The history of the past couple of centuries clearly shows that it is the free private sector, not the interventionist state, that is the fountainhead of technological progress. Americans should demand that the state stop violating rights and stop hampering economic and technological progress, get out of the “business” of financing research and development, business capital, and the like, and return to the function the Founders charged it with: protecting individual rights.

Related Reading:

About That "Government Help," Mr. Roumel

How You Build That

"Government Help" Leads to Totalitarian Socialism

Saturday, September 28, 2013

The Connection Between the Healthcare Debate and the Financial Crisis

Bamboozled, PART 5

It is critical for capitalists to debunk the myth that the free market caused the 2008 financial crisis, not only for the sake of defending liberty in the banking sector but also because the ramifications of allowing that myth to stand extends well beyond the financial sector.

For example, Karen Price Mueller's Bamboozled article is about a man and his health insurance trevails. Yet, check out the twists in this comment thread. In relation to regulation of health insurance companies, one correspondent demanded "checks" on capitalism. In response, I defined capitalism as:

When you say capitalism needs "checks," you are saying that some people have the right to impose their choices on others, with the government as their hired guns.  
[Capitalism] is a social condition that upholds the individual's right to act on his own judgment, leaving people to live-and-let-live, solve their own problems, and deal with each other by voluntary association and trade, rather than force. Such a system can not exist without a government powerful enough to protect us from criminals, but not so powerful as to become the criminal.

To that, the correspondent threw this out, undoubtedly believing his clever curve ball could strike me out:

If you want to see what unchecked capitalism is like, just go back to 2008 and the global financial meltdown. There's your capitalism.  Before you use the "well if it wasn't for government over-regulation, none of this would've happened" argument, I say Hogwash! The wealthy who own the corporations, who own the government need lots of regulation! 

Just as for decades the statists rode the myth that laissez-faire Republican policies caused the Great Depression to justify their drive to grow the regulatory welfare state, so today's statists believe that the same magic can work in the coming decades regarding the Great Recession.

Though the 2008 financial crisis is off-topic, this correspondent's comment could not go unanswered. I replied:

Opinionsback, where, exactly, do you find anything resembling a free market in the financial sector in 2008? You have no facts, only hollow slogans and bigotry against profit-seeking businessmen. The government owns the monetary system, to start with. The entire financial sector was and is controlled lock, stock, and barrel by government, which is why it had to dance to the "affordable housing" music of the politicians. The list of regulatory agencies and laws are too numerous to list in an off-topic issue. But, right up until the meltdown, financial regulations were on the increase; up 23% just between 1999 and 2008. The financial crisis could never have happened in a free market, because there wouldn't have been "lots of regulation" and other coercive government intrusions to lead the entire sector down the same destructive path at the same time in the same way. 

The banking industry was grossly misregulated, not unregulated. Having assumed control of banking, the government caused the meltdown because the government is not God and its bureaucrats are not imbued with omniscience and infallibility. How is it that home mortgages, which had been for decades the safest type of loan, could suddenly—starting in the late 1990s—turn into an economy-crippling cancer? The government rigged the incentives to favor a conveyor belt of bad lending, running from the Fed to the FDIC to "affordable" housing crusades to Fannie & Freddie. We paid the price. 

The "free market caused the crisis" song is a big lie perpetrated by statists looking to cover up their own culpability and increase their own power. 

Capitalism is the only benevolent political/economic/social system, because it is the only system that banishes force from human relationships, on principle.

I did not receive a reply from this correspondent, who calls himself "Opinionsback". 

Related Reading:

Where Does Valid Law End and Regulation Begin?

The Financial Crisis and the Free Market Cure—John A. Allison

Friday, September 27, 2013

True Healthcare Reform Would Exalt Profits

Bamboozled, PART 4

Problems in our mixed statism/freedom healthcare system are often attributed to the profit motive. For example, the problem of the Branco's loss of health insurance prompted this comment:

There will never be true healthcare reform without taking the profit out of it.

I left these comments:

But, what is profit? 

Properly understood, profit is the reward that business earns by successfully delivering products and services to consumers who value them enough to willingly to pay a market price that is higher than the business's cost of production. Profit stands for value-added"Profit" does not mean appropriating money by hook or by crook—i.e., by force or fraud, a la Al Capone or Bernie Madoff or breach of contract. It is imperative for our freedom and our health to learn the difference. Profit is earned through productive work and voluntary trade, and nothing else. The government's proper job is to protect the right to pursue profit and keep whatever profit we do earn, in any field, while protecting us from the money-appropriating criminals. 

Healthcare is certainly more valuable than many other things. But that doesn't change the economic or moral principles involved. There is no essential difference between healthcare and any other industry: It is man-made, requiring someone's productive work—in the case of the businessman, the coordination of all of the factors of production that goes into delivering the product or service. Healthcare profits earned in this fashion are morally noble.

When you say you want the profit taken out of healthcare, you are saying that those with the power to deliver the means to heal you when you are sick or injured are your slaves who must provide it free of charge. You are demanding that the government become Al Capone or Bernie Madoff, on your behalf. You are essentially saying that you have right to profit from the slave labor of others, by means of forcibly depriving others of the profitable fruits of their productive work. 

Does this mean you have to accept profit-making against your moral objections? Not in a free market. In a free market, you are free to refuse to purchase any healthcare product or service produced by profit-seeking enterprises. Any other method of "taking the profit out of it" is the method of a plain parasitical thug.

I would add that profits are earned through voluntary trade—the win-win, mutually self-interested transaction between human beings in which value in exchanged for value, without self-sacrifice or unearned gain on anyone's part.

I often hear people assert that it is not right to profit off of sick people. But producers of healthcare profit off of the products and services that heal the sick. It is the statists who exploit the sick for political power over healthcare that actually "profit" off of the sick.

To be continued.

Related Reading:

"Prime" Controversy: Profit vs. Patient Health?

Thursday, September 26, 2013

Government Controlled Healthcare vs. Personal Responsibility

Bamboozled, PART 3

The correspondent I was answering in yesterday's column took issue with this that I said . . .:

We face a fundamental moral choice in America; taking personal responsibility for our own healthcare decisions in a free market, or reneging that responsibility to government bureaucrats with totalitarian powers. So far, the healthcare totalitarians are winning, and here's the shame of it: The totalitarians are winning, not for any lofty purpose, but because the renegers who want escape from personal responsibility are growing at the expense of the self-responsible. Thus, the government is cashing in with ever-growing power on problems that itself caused.

When he retorted:
Take personal responsibility for your own healthcare? that exactly what Romneys plan in Mass was sold as and Obama care is. Everyone has insurance and pays for their own healthcare.

My reply:

Taking personal responsibility implies acting on one's own rational judgment, and that requires full respect for and protection of individual rights by government. ObamaCare strips personal judgment from the individual, and replaces our judgment with a slew of bureaucratic boards with arbitrary powers over all of healthcare. The requirement to buy only government-approved health care is not personal responsibility in action. It is tyranny. Only when every provider and consumer of healthcare products and services is fully free to contract voluntarily with each other to mutual advantage can we be said to exercise personal responsibility.  

ObamaCare is an attack on personal responsibility. The fact that ObamaCare, RomneyCare, and the like are sold as promoting personal responsibility is outright fraudulent. That so many Americans view obedience to government dictates as the responsible thing to do is a sad commentary on the continuing corruption of the culture wrought by the entitlement mentality.

To be continued.

Related Reading:

Responsibility Depends on Individual Rights

Beware Counterfeit 'Responsibility'—by Paul Hsieh

The Irresponsible Individual Mandate—by Yaron Brook and Don Watkins

Wednesday, September 25, 2013

The False Alternative to the 3rd-Party-Payer System

Bamboozled, PART 2

The Bamboozled column implicitly raised another important question: What is the alternative to the problems caused by the 3rd-party-payer system of health insurance?

I responded to a correspondent's diatribe against the "scam" of "corporate medical predators making decisions of life and death for citizens of this country" and in favor of ObamaCare. 

After a good start—"The stupidity of tying health benefits to employment is a national disgrace."—his comments went downhill. He wrote:

This country in it's divine wisdom has allowed corporations to take financial control of our lives as predators once we fall through the employment cracks that are part of middle class existence in this country. Take a look around at the leading cause of mortgage foreclosures in this country. It's medical care if you still have you head up your butt. Obama care is the first step in correcting the injustice and if you want to keep blaming this guy for attempting to correct the crappy third world medical care you are completely uninformed. I'd love to hear a reasonable alternative to healthcare from one of these crusaders against "Obama Care". Has anyone against Obama Care given us a reasonable alternative to the crap program that was financially destroying this country.Strip healthcare from employment for everyone and you would give business a level playing field with the rest of the world.

He goes on, but you get the picture. My reply:

"The stupidity of tying health benefits to employment is a national disgrace."

You state the truth, and then evade the cause. Instead, you echo the false choice always offered by state supremacists: the status quo vs. totalitarian healthcare. But the status quo is a politically corrupted mixed system of massive government controls and limited freedom. You ask for a reasonable alternative to ObamaCare, but ObamaCare is just more of the same political corruption that is causing the many problems in the first place.

Rather than fantasize over some dark conspiratorial "corporate scam," you should look at the real culprit—the government. Branco-like predicaments are the direct result of government policies that created the 3rd-party-payer system. This put employers (or in some cases, unions), rather than the individual, in control of the individual's health insurance.

The solution to our "third world" healthcare is not to reward the culprit with slave-master power over healthcare providers and life-and-death control over patients' healthcare decisions—an actual third world "solution." The reasonable alternative to ObamaCare is to end government policies that drive the current insurance system, and empower through individual rights the liberty of the individual to own his own health insurance in the same way as life, auto, homeowners, and other types of insurance. If that were the case today, the Branco's absurd predicament wouldn't have arisen, and Ms. Mueller's column wouldn't even have been written.

We face a fundamental moral choice in America; taking personal responsibility for our own healthcare decisions in a free market, or reneging that responsibility to government bureaucrats with totalitarian powers. So far, the healthcare totalitarians are winning, and here's the shame of it: The totalitarians are winning, not for any lofty purpose, but because the renegers who want escape from personal responsibility are growing at the expense of the self-responsible. Thus, the government is cashing in with ever-growing power on problems that itself caused.

To be continued.

Related Reading:

The Left's False Alternative on Healthcare

Tuesday, September 24, 2013

Blame the Third-Party-Payer System, Not the Free Market, for Cancer Patient's Woes

Bamboozled, PART 1

This is the first in a five part series relating to an 8/12/13 New Jersey Star-Ledger column, 
Life-saving transplant denied, health insurance canceled over 26-cent shortfall.

Bamboozled intervenes in disputes between consumers and and businesses, government agencies, and the like to resolve the issues involved. This series covers my participation in the comments section, a favorite avenue of activism for me.

In her weekly column Bamboozled on 8/12/13, the New Jersey Star Ledger's Karin Price Mueller tells the story of a man who lost his insurance coverage just before he was to undergo expensive life-saving surgery.  

Sergio Branco lost his job at Russell Reid, a waste-management company, after being diagnosed with cancer. Under COBRA law, the Branco's paid the required premium to continue coverage for Sergio under his former employer's health insurance plan. 

The COBRA premium payment was $518.26, but Mrs. Branco mistakenly paid $518.00, inadvertently omitting the $0.26. Subsequently, just weeks before Branco's scheduled surgery, The Brancos were notified that, due to failure to pay the required premium, their coverage was canceled. Mrs. Branco offered to pay the additional $0.26, but even though the deadline for payment hadn't been reached, Branco's employer refused to allow the insurance company to reinstate the coverage.

Frantic, Mrs. Branco contacted Bamboozled, who intervened on her behalf.  Numerous telephone calls to the employer and its representatives by both Bamboozled and the NJ Department of Labor, along with pleadings from  Branco's surgeon that Branco "will most certainly die in the very near future if he does not proceed to [bone marrow] transplant," came to no avail. Only after the Branco's lawyer filed a court motion was Branco's coverage was reluctantly reinstated. 

Judging by Mueller's account, the employer seemed to act in bad faith, if not illegally. In my comments, I chose to focus on the more fundamental issue. In this series, I must stress that, as I told a correspondent who misrepresented my position, I did not say the government is at fault in the specific issue Mueller describes. I said the government created the insurance system that led to the problems the Branco's faced. I am not defending Russell Reid's behavior, or minimizing the Brancos' angst:

This case highlights a fundamental flaw in our health care "system": Most of us as consumers are not the insurer's customer. Through a series of government policies, particularly tax policy, health insurance was coercively shifted from the individuals' to the employers' responsibility to provide.

In regard to all other types of insurance, the consumer of the insurance service is also the customer, because he pays the bill directly. The loss of a job doesn't result in automatic loss of life, auto, homeowners, or other types of insurance. Since the individual contracts directly with the insurer, the customer knows what he is paying for, and the insurer is beholden to (and competes directly for) the individual receiving the service. No need for COBRA laws or the like. No middlemen to gum up the works, and cause angst for consumers. The policy says what it says. Both parties voluntarily agreed to its terms. Both are legally obligated to abide by those terms. It is a legally binding contract between consumer and provider, and the government steps in only when one party breeches that contract.

With employer-based health insurance, the consumer doesn't pay the bill directly. The employer pays. But here's the perversity of it: The employer pays for and thus controls the insurance with the employee's own money. It's the employee's money because health insurance is part of the employee's compensation. This perverse setup and it's consequential problems; all to avoid draconian taxes on the compensation. The logical solution: give the money the employer spends per employee for health insurance to the employee—tax free, as is is now—so the employee can contract voluntarily and mutually beneficially with the insurer whose policies best suit the consumer's needs and affordability. If that were the case today, the Branco's absurd predicament wouldn't have arisen, and Price-Mueller's column wouldn't even have been written.

The insurer is, rightfully, beholden to whoever pays the bill. The person responsible for paying the bill should be the consumer, not some third party. This doesn't happen, because the political leadership is not interested in protecting the individual's moral right and responsibility to take care of himself. The dominant political leadership is concerned with political power and unearned greatness.

To be continued.

Related Reading:

"Pre-Existing Conditions," and the Solution

Sunday, September 22, 2013

Burden of Proof is On Government in Concealed Carry Case

This Fall, the New Jersey Supreme Court will hear "a very important if not the most important case yet on the Second Amendment and New Jersey gun laws." 

So said Evan Nappen, the lawyer representing a Monmouth County man challenging NJ's strict 89-year-old concealed carry law. That 1924 law "says people must show 'justifiable need' if they want permits to carry handguns."

The law is extremely strict. Nappen's client, businessman Richard Pantano, must routinely carry large bundles of cash, and he claims to need a gun to protect himself and his property. Yet, the courts have refused to grant him a carry permit, because (believe it or not) "he had never been assaulted and hadn't proved a 'justifiable need' to carry a gun."

Gun-rights supporters say ordinary citizens almost never get permits to carry handguns because the law is one of the most restrictive in the country and state judges rarely find that applicants need to be armed.

New Jersey Courts have held that gun rights only pertain to the home. Pantano and others are suing on Second Amendment grounds, arguing that gun rights extend beyond the home. Federal courts are "unsure," saying that "It remains unsettled whether the individual right to bear arms for the purpose of self-defense extends beyond the home."

It is absurd to say that the right of self-defense ends at the individual's door. But that is exactly what NJ law assumes, unless some judge says otherwise.

But rights are not subject to a judge's whims. Rights, including the right of self-defense—the underlying justification for the right to bear arms— are inalienable. 

I have argued that the state should have the power to deny gun ownership to certain people, such as those with a violent criminal history or who are mentally ill. But the burden of proof is properly on the state to show why someone may not carry a gun. For stable, law abiding adults of sound mind, the state has no business demanding that they go hat-in-hand, begging for permission to own or carry a gun. 

The NJ case is likely heading for the US Supreme Court, since it is believed virtually certain that the NJ Supreme Court will reject Pantano's challenge to state law. Let's hope that the high court affirms the Second Amendment right to own and carry a gun for the purpose of self-defense, wherever the individual happens to be.

Related Reading:

Gun Control Should Focus On Principles, Not Guns

What Does it Mean to Say that Government is the Individual's "Agent of Self-Defense?"

Saturday, September 21, 2013

Is There a Right to Carry a Gun in Public?

Recently, the US Supreme Court considered, then declined, to hear a case that would have had monumental ramifications for the issue of guns. The case involved a challenge to a strict anti-concealed weapon carry law in New York. The plaintiffs claim that the law violates their Second Amendment rights.

Though the court declined to tackle the issue for now, the issue is timely. As the Associated Press's Mark Sherman notes, "Legal scholars say the issue of whether people have a right to be armed in public is likely to win high court review at some point." When it does, what principles should guide its decision?

The right to self-defense is inherent in the right to life. But, self-defense implies the use of force. Force is the enemy of a civilized society, and therefor must be legally banned from private relationships. But, there are two types of force; initiatory and retaliatory. The first is always unjustified, and the second is not only justified but required if a society is not to be overrun with criminals. So, how should the issue of force be handled?

In any civilized society, the initiation of physical force is strictly banned by use of all citizens, including citizens in any capacity as government officials. At the same time, the defensive use of physical force must be the exclusive monopoly of the government. A society in which every individual can take the law into his own hands in his own self-defense is not a society at all, but anarchy.

Instead, force must be put under the objective control of a government, and subject to ironclad constitutional limits restricting the government's use of force to defensive or retaliatory purposes. All laws must conform to this principle. The transfer of the individual's right to use retaliatory force to the government is a requirement  of any individual who chooses to live among other people.

In a civilized society, where the government holds a monopoly on the use of self-defensive, retaliatory force, government must regulate the use of that force. Private citizens may use retaliatory force only as permitted by government, and government officials may use force only where permitted by a proper constitution. This means that government may not initiate force against citizens who themselves have not initiated force, such as by regulating private voluntary production, trade, and contract.

The government has no right to do so because such regulation entails the initiation of physical force against private citizens where no intended or actual rights-violating actions are evident. Government's sole purpose is to protect individual rights; that is; to act as the individual's agent of self-defense. (See my Where Does Valid Law End and Regulation Begin?)

However, based upon its role of self-defensive agent, with its monopoly on the use of force, the government can and must regulate citizens in the area of defensive or retaliatory force. For example, private citizens may use force in self-defense only when permitted by law, such as when a citizen[s] is in imminent physical danger from a thug. The government may also have licensure authority over private armed security guards and companies. For adult individuals, proof of appropriate training and a criminal and mental background check may legitimately be required for gun ownership, including right-to-carry.

But, given that the right of self-defense is fundamentally an individual right, these regulations should not become a tool of anti-gun zealots to violate rights by unreasonably restricting gun ownership. Getting a gun license, including the right to carry a concealed weapon, should be as easy as getting a drivers license, and no more restrictive. For responsible, properly trained citizens, gun ownership should not only be permitted, it should be encouraged. If morally upstanding citizens can be trusted as armed policemen, then why not as armed private citizens? Imagine a society in which the police force is supplemented by what would in effect be a government regulated private, albeit informal, militia. What chance would armed thugs have in such a society?

The right to life encompasses the right to self-defense, which implies the right to possess the means to protected oneself (and others). This includes the right to concealed carry. Hopefully the Supreme Court will some day take on the issue, and side with individual rights.

Related Reading:

Gun Control Should Focus on Principles, not Guns

Friday, September 20, 2013

The "Auto Bailout Success Story" Just a Corrupt Crony Handout

Four years after the General Motors bailout, big government apologists are hailing the "success" of the bailout in "saving" the auto industry. As the NJ Star-Ledger editorialized:

Remember the right-wing vitriol over President Obama’s bailout of U.S. automakers? The spittle that flew while tea party critics flailed over the “big-government takeover,” and trying to decide whether that made the president a commie, a socialist or worse?Fast-forward to 2013 and here’s what you’ll find: Every dollar of TARP bailout money has been repaid, auto industry jobs are continuing to expand and Detroit carmakers are looking at another record year for sales.

Not so fast. I left these comments

Opponents of the auto bailout were right then, and right now. Long-established bankruptcy law could have smoothly handled the GM bankruptcy. The GM bailout, like all of the bailouts, was politically motivated usurpation of the rule of law.

The money for the bailout was stolen from the American taxpayer. The GM bondholders got screwed. Better businessmen and investors were robbed of the chance to bid on the legitimate opportunities that normal, rule-of-law bankruptcy proceedings would have opened up. Unemployed individuals lost out on the chance to apply for new jobs that would have opened up under a restructured company(s). This wasn't essentially a federal bailout, but a coerced taxpayer crony bailout by thug politicians armed with rogue legal powers. By what right?

The GM bailout, and TARP itself, was a "success?" What a leap of faith. It would take omniscience to know that the industry and the economy wouldn't have been stronger without the bailouts. Both would have snapped back without the bailouts, and been stronger in the longer run. Bailout expectations are now more entrenched than ever, setting the stage for the next, bigger economic calamity.

The whole corrupt bailout fiasco was immoral. It was a big push toward the unholy socialist alliance of big business and big government called fascism. Considering that the 2008 calamity that allegedly necessitated the bailouts was caused and exacerbated by government policy to begin with, the massive stench of bipartisan Washington corruption is impossible for any person without blinders to miss.

In answer to an opposing correspondent who questioned whether I am "such an established expert on bankruptcy that you know that it could have handled the situation 'smoothly,'" and whether I myself am omniscient in "saying the companies would have been better off 
without the bailouts," I wrote:

I didn't say the companies would have been better off. No one knows what the structural outcome of legitimate bankruptcy proceedings would have yielded. I said the industry and the economy would have been better off. It doesn't take an expert to understand that the suppression of productive individuals and the free flow of ideas under the weight of coercive political cronyism will suppress economic vitality.  

The apparent "success" of the bailouts are a mirage. The long term consequences of the TARP/GM bailouts are yet to be felt. What thoughtless risks are now being taken by which big companies in the expectation that the federal government will bail them out? We'll know when the next "failure of the free market" collapses the economy.

Related Reading:

Notes on the Sub-Prime Credit Crisis

Thursday, September 19, 2013

The Role of Rights in the Assisted Suicide Debate

This letter, What’s a life worth?, appeared in the New Jersey Star-Ledger on August 7, 2013:

"If self-determination gives terminally ill patients the right to kill themselves, then ordinary people should also have this right (“Dangerous suicide ‘help,’ ” op-ed, July 23). Is illness enough to restrict the right to self-determination of one class of people? What makes the terminally ill case different is impending suffering and death. We must therefore introduce some morality or economy to the situation.

"The most popular of these is the idea of the “value of a life.” The concept of assisted suicide for the terminally ill is framed in a way that juxtaposes suffering and humane death. If a terminally ill patient sees that he has no value to his life, then he may request assisted suicide.

"If medical consult is necessary, then there will be some determination of the value of a life by a doctor. If he determines that a terminally ill patient is in a good state of mental health and can request an assisted suicide, and that an otherwise healthy person is not mentally fit to make that decision solely on the basis that the decision is made, then want else is being done?

"We are saying that someone’s life does not matter. We have no right to do so."

I had to read this letter several times to make heads or tails out of it. I'm still not sure I understand the writer correctly, but he seems to be saying that if assisted suicide is legalized, doctors will be making life and death decisions for people who are incapable of deciding for themselves. But that is not what legal assisted suicide is, or should be, about.

I left these comments:

The only person who can make the determination on the "value of a life" is the individual regarding his own, provided he is an adult of sound mind. "We" have no say in the matter. The right to self-determination means the right to choose one's own values and act accordingly as one's own judgment dictates. This right applies equally to patient and doctor, who may refuse or grant the patient's request to assist in his suicide based on the doctor's own values.

So, yes, it is absolutely true that "If self-determination gives terminally ill patients the right to kill themselves, then ordinary people should also have this right." Not only should they have this right, they do have this right as an inalienable possession. Neither society (we) nor government can grant or rescind inalienable rights. Government's only proper job is to recognize and protect the right to end one's life, for whatever reason, as it must protect all inalienable individual rights.

Yes, we must introduce morality to the situation. That is the purpose of individual rights. Rights are moral principles that sanction the individual's freedom to act on his own judgment in a social context. Rights, in other words, are the means to subordinate society and government to moral law—to protect each one of us from those who would impose their values and choices on us by force.

The ultimate acknowledgement that life does matter is in respecting the rights of every individual to his own life and liberty—even when, by his own rational judgment, the individual concludes that his life has become intolerable and would rather end it than go on in a state of living death. Those who would violate another's right to decisions regarding his own life are in effect "saying that someone’s life does not matter."

[NOTE: My first sentence may be misleading. I refer to the value of one's life as it relates to the personal choice to live or to die. Obviously, one can value other people.]

The only way anyone can make life or death decisions for another is if that person has asserted his wishes in an Advance Directive (a living will), or in the case of a parents regarding a minor.

Related Reading:

Diane Coleman's Opposition to Assisted Suicide Ignores Rights – PART 1

Diane Coleman's Opposition to Assisted Suicide Ignores Rights – PART 2

Religious Objections Irrelevant to Assisted Suicide Law

Wednesday, September 18, 2013

The JPMorgan Witch Hunt

JPMorgan Chase's CEO Jamie Dimon has been an outspoken critic of government policy. In 2009, as Bloomberg reports, Dimon told a congressional panel investigating the 2008 financial crisis that "government-sponsored mortgage companies Fannie Mae and Freddie Mac were 'the biggest disasters of all time' and a leading cause of the U.S. financial crisis. 'That one was an accident waiting to happen.'” 
A year and a half ago, according to the DC Caller, Dimon warned“'Everyone is afraid of retaliation and retribution. We recently had an event with a hundred small bankers here, and 85 percent of them said they can't challenge the regulation because of the potential retribution. That’s a terrible thing, okay? This is not the Soviet Union — this is the United States of America.'"

Dr. Orly Taitz of the Defend Our Freedoms Foundation notes:

One thing is worth noting: the Pres of JP Morgan Jamie Dimon was critical of Obama administration and its’ witch hunt of successful entrepreneurs. In 2012 Dimon stated that he is barely a Democrat. Not so long ago Dimon published an article, where he stated that if a man steals from a bank, he goes to prison. If a bank steals from the people, it gets a stimulus with the taxpayer money. The regime removed this article immediately. Even Drudge removed it within a day, which pretty much confirmed my suspicion that Drudge is also controlled and censored.

John A. Allison, Chairman and retired CEO of bank giant BB&T, echoed Dimon's fears. In his book The Financial Crisis and the Free Market Cure, Allison writes, "the Fed regulates the banking industry, so it is risky for a banker to be opposed to the Fed (writing this book is risky)." 

Government regulatory agencies essentially operate outside the law. Their arbitrary power can descend on any business at any time. When they do, big government apologists can grab on to the "investigations" with dark statements like this one made by NJ Star-Ledger columnist and former editor John Farmer:

Meanwhile, the hanky-panky goes on seemingly unabated. Now it’s JPMorgan Chase, lauded as a model of good behavior during the crisis, which faces a host of regulatory investigations and fines.

The assault on JPM stinks of just what Dimon warned about—regulatory retaliation and retribution.  

The Street's Robert Weinstein calls the government assault a witch hunt. Jeffrey A. Sonnenfeld spoke of "The Jamie Dimon lynch mob" in the NY Times. 

Where is the outrage over the JPM witch hunt? Where are all of the Leftist champions of "whistleblowers"? They're too busy aiding and abetting Washington's desperate attempt to cover up its own culpability in precipitating the financial crisis. 

Tuesday, September 17, 2013

"letting the market decide" Means No Political Interference into the Market

Governor Chris Christie recently vetoed a bill that would have ostensibly reigned in tax-related cronyism to attract business, and sent it back to the legislature for revisions. Currently, New Jersey is rife with tax favoritism.

The bill would also have mandated "fair" wages. As the NJ Star-Ledger editorialized:

[T]his legislation got reshaped at the last minute in back rooms, without any public input. Now, the political bosses have effectively broken down the state into geographic fiefdoms — an opportunity to funnel taxpayer dollars into their own towns and districts. We should be letting the market decide where investments make sense, not legislators out for political spoils. 

The editors later said:

Christie struck out one of its better provisions, the language that mandates paying a fair wage to building maintenance and construction workers.

 I thought this was an interesting statement in light of what it said earlier about markets.

Can anyone spot the contradictions here? 

I left these comments:

"We should be letting the market decide where investments make sense, not legislators out for political spoils."

I couldn't agree more. "Letting the market decide" means no coercive government interference in individuals' economic decisions. 

It means leaving productive New Jerseyans free to invest their own money when, where, and how they judge best, which is their moral right, rather than have the state seize it in order to "funnel tax dollars" according to the whims of legislators.

It means letting employers and employees freely and voluntarily negotiate their own mutually beneficial wage terms, which is their moral right, rather than legally impose what "legislators out for political spoils" arbitrarily deem to be a "fair wage." 

And it NJ really wants to "let the market decide," it will drastically reduce and flatten taxes, and eliminate regulations and red tape, so that businesses willingly locate and expand in NJ. 

"Letting the market decide" is really about removing disincentives, not fumbling over artificial political "incentives."

Related Reading:

Why Capitalism Needs a Moral Sanction

Misunderstanding a Free Market

With Defenders Like Arnold Kling, Free Enterprise Doesn't Need Enemies