Capitalists in a Statist's Land of Oz

Washington Post columnist E.J. Dionne’s latest piece is a classic example of a phenomenon identified in the novel Atlas Shrugged – government controls causing economic problems being blamed on capitalism followed by more controls, problems, and blame, followed by … etc., etc., etc. In classic Bush fashion – a supreme irony if there ever was one – Mr. Dionne’s article is entitled Want to save capitalism? Regulate it.

I’ve fired off the following commentary:

“In E.J. Dionne’s statist Emerald City fantasy world, the great and powerful Oz, exemplified by the Goldman capitalist Fabrice "Fabulous Fab" Tourre, has wreaked economic havoc under “our deregulated financial system [of] contemporary capitalism”. Nowhere is the role of government interference examined. Instead, by omission, Mr. Dionne wants us to pay no attention to that man behind the curtain – the government’s political and bureaucratic wizards who pull the levers that control the financial industry and manipulate the markets through such mechanisms as Fannie and Freddie, the FDIC, mark-to-market accounting rules, explicit and implicit mortgage guarantees, the government licensed and competition-protected rating agency cartel, the CRA, the FHA, affordable housing crusades, overt and covert pressures on banks to increase low-income lending by lowering loan standards, too-big-to-fail taxpayer bailout policies, the perverse inversion of normal market incentives through socialization-of-losses policies, and that mother of all culprits – that funny money machine called the Federal Reserve.

“Everywhere one looks, one sees the intrusive hand of government. Yet, in his Land of Oz, Mr. Dionne manages to blame capitalism. How? By employing a fallacy – the equation of capitalists with capitalism. Mr. Dionne simply holds up “a few investment bankers” as a straw man labeled “contemporary capitalism”. But “capitalists” can exist under quasi-socialist systems such as Bismarck’s Germany, Mussolini’s Fascist Italy, Hitler’s National Socialism, or our very own welfare state mixed economy. Capitalism, the political-economic system based upon the separation of state and economics and which rests on a foundation of individual political rights, is nowhere to be seen in American finance except for a few fragments here and there.

“The financial crisis is a monumental failure of the regulatory state. It occurred within the context of the most heavily regulated American industry governed by a central bank money monopoly. Any objective examination of the meltdown’s causes should begin with an examination of government. But not for Mr. Dionne, who wants to beat the drum for ever-stronger government control. Instead, he simply follows in the glorious tradition of George W. Bush (‘I had to abandon free market principles in order to save the free market’) … more regulations, more controls, more socialism, in order to “save” capitalism from socialism.

“While private investment banks like Goldman-Saks present a capitalistic-looking face on the financial crisis, the primary and ultimate causes trace straight back to government interference into the market. The toxic financial instruments peddled by irresponsible investment banks were the logical consequence of decades of politicians’ attempts to artificially expand homeownership through governmental coercion. It’s long past time we recognized that the great Oz is merely a mirage, and took a hard look at the political wizard behind the curtain.”

Posted 4/29/2010 6:11:02 PM

What you would find, I might add, is a good little government man frantically pulling the levers of government control, who happens to be just a very bad wizard.

Notice Mr. Dionne’s early statement: “Capitalism has not taken a hit like this since Mr. Potter made his appearance as the evil banker in ‘It's a Wonderful Life.’ ” This Leftist and I have at least this in common: We both recognize that classic as a virulently anti-capitalist movie. Mr. Dionne’s final sarcastic sentence reads: “The surest way to create socialists is for everyone to experience the economic consequences of counting only on the goodness in the hearts of Mr. Potter and Fabrice Tourre.”

For a review of “It’s a Wonderful Life” and its relation to the financial crisis and its causes and consequences, see my posts Potter’s Revenge and It’s a Wonderful Life – in Real Life.

E.J. Dionne makes it crystal clear why I wrote those two essays attacking and exposing the exact nature of a favorite American movie classic. As long as profit seeking is equated with “evil bankers” and “goodness” ascribed to the need-based lending practices of the George Baileys of the world, capitalism will continue to be under withering assault. I have been vindicated by a leading authority from the opposing side of the ideological divide!

"...until they prove themselves innocent"

What do the issues of immigration and financial reform have in common? Two articles highlight the fundamental characteristic linking these seemingly unconnected concerns.

Michael Gerson, writing in the Washington Post, discusses Arizona’s new immigration law (A test of Arizona's political character). Richard Sisk, for the NY Daily News, covers the Goldman-Saks hearings in the Senate (
Senator Carl Levin to Goldman Sachs executives: 'You ought to have plenty of regrets'
).

Michael Gerson asserts that Arizona’s immigration law is an abomination. I have not read the bill myself, but from what I know about it, he’s right. Mr. Gerson states that “This law creates a suspect class, based in part on ethnicity, considered guilty until they prove themselves innocent.” Perhaps.

But this, sadly, is nothing new in America. Arizona is simply following this country’s dangerous drift away from objective law. Consider, for example, the so-called financial reform legislation currently before congress. Like most government regulation, the underlying premise of the Democrats’ bill is presumption of guilt.

In the Goldman-Saks hearing on 4/28/10, as reported by Mr. Sisk, Senator Carl Levin ranted in regard to Goldman’s alleged fraud: "That's why we have to do some regulations, and re-regulation." In other words, punish the innocent! All of American finance, potentially right down to the local pawn shop, will be placed under the “oversight” of a government czar possessing veto power over any and all financial instruments. Like the “racial stereotyping” that Mr. Gerson believes would occur under the Arizona law, financial stereotyping will descend on “Wall Street”. Every financial professional will now find it “harder … to live without suspicion and humiliation.” Why? Because Goldman and perhaps a few other firms behaved badly? Is this any different than the law that Mr. Gerson laments, which empowers authorities to target people based upon some undefined “warning signs of illegality”?

To paraphrase Mr. Gerson:

“This law creates a suspect class, based on participation in American finance, considered guilty until they prove themselves innocent.”

This is the essence of the regulatory state. I discussed the nature of the kind of regulation that Senator Levin refers to in my post of 3/10/10.

Those who object to Arizona’s immigration law should fight with equal vigor against the finance bill now before congress. Both are equally unjust and un-American. Goldman can be prosecuted under existing criminal anti-fraud laws, without targeting innocent financial firms and their employees with burdensome new regulations. The same goes for illegal immigrants, who after all are not criminals but have merely broken procedural laws. Like freedom of speech, the principle “innocent until proven guilty” should be defended to the death.

Directive Number 10-289: From Fiction to “Fundamental” Reality

In a work of fiction published in 1957, the nation’s top politicians, businessmen, and bureaucrats have gathered in Washington to discuss the economic crisis and to consider policies to remedy the situation.

“But can we get away with it?” asked [economic czar] Wesley Mouch.

It was Eugene Lawson who answered. “We must not let vulgar difficulties obstruct our feeling that it’s a noble plan motivated solely by the public welfare. It’s for the good of the people.”

“It’s obvious that measures have to be taken. Drastic measures,” said James Taggart, speaking, not to [Head of State] Mr. Thompson, but to Wesley Mouch. “We can’t let things go the way they’re going much longer.

“Something’s got to be done…”

“Don’t look at me,” snapped Wesley Mouch. “I’m tied. I need wider powers.”

“I don’t care what you decide to do, Wesley,” said Mr. Thompson, “and I don’t care if the businessmen squawk about it.”

“Whatever type of men we’re counting on and planning for,” said Dr. Ferris, “there’s a certain old-fashioned quotation which we may safely forget: the one about counting on the wise and the honest. We don’t have to consider them. They’re out of date.”

James Taggart glanced at the window. A monument stood shining in the distance, hit by a ray of sun: it was a tall, white obelisk, erected to the memory of the man Dr. Ferris was quoting, the man in whose honor this city had been named. James Taggart looked away.

“Go ahead, Wesley,” [Mr. Thompson] said. “Go ahead with Number 10-289. You won’t have any trouble at all.”

They had all risen to their feet, in gloomily reluctant deference. Wesley Mouch glanced down at his sheet of paper…

“The chief difficulty is that I’m not sure whether the law actually grants us the power to put into effect certain provisions of Directive Number 10-289. I fear they might be open to challenge.”

“Oh hell, we’ve passed so many … laws that if you hunt through them, you’re sure to dig up something that will cover it.”

Mr. Thomson turned to the others with a smile of good fellowship. “I’ll leave you boys to iron out the wrinkles,” he said. “I appreciate your coming to Washington to help us out.”

They had not heard the text of Directive No. 10-289, but they knew what it would contain. They had known it for a long time…

They wished the directive to go into effect. They wished it could be put into effect without words, so that they would not have to know that what they were doing was what it was. Nobody had ever announced that Directive No. 10-289 was the final goal of his efforts. Yet, for generations past, men had worked to make it possible, and for months past, every provision of it had been prepared for by countless speeches, articles, sermons, editorials – by purposeful voices that screamed with anger if anyone named their purpose.

“The picture now is this,” said Wesley Mouch. “The economic condition of the country was better the year before last than it was last year, and last year it was better than it is at present. It’s obvious that we would not be able to survive another year of the same progression. Therefore, our sole objective must now be to hold the line. To achieve total stability. Freedom has been given a chance and has failed. Therefore, more stringent controls are necessary. Since men are unable and unwilling to solve their problems voluntarily, they must be forced to do it.”

Such was the state of the country in the fictional Atlas Shrugged, as America was about to take the final plunge into the abyss of dictatorship, via Directive Number 10-289. Henceforth, the people will be able to act, not on their own judgement, but only by order and by permission of the central planners in Washington. But this is only fiction, right?

Steve Forbes, Editor-in-chief of Forbes magazine, former presidential candidate, and passionate defender of free market capitalism, gives us a brief description of some of the laws and policies coming out of Washington today, 53 years after the publication of the fictional [?] Atlas Shrugged. Mr. Forbes is not a fully consistent advocate of capitalism. He clings to the belief in some limited government regulation of business – the wrong kind. Nevertheless, he offers much intelligent and cogent analysis of the issues, zeroing in on the essential nature of government policy, especially Obama-nomics. Mr. Forbes is not prone to exaggeration, giving his analysis strong credibility. Despite his inconsistencies and some fundamental disagreements, I have great respect for his point of view.

Here are some excerpts from a recent Fact and Comment essay entitled Marx Would Be Impressed:

Socialists believe that the way to paradise is for governments to own "the means of production." That didn't work so well.

Today's neosocialists are smarter than their ancestors. Instead of outright takeovers, they are achieving much the same goal through rigid regulations. ObamaCare is a prime example. Health insurers will eventually be private in name only, as the details of their policies will be dictated by governmental decrees.

Entitlements go hand in hand with sweeping, overbearing regulations. President Obama wants higher education in this country to be free of charge, which is why his Administration is pushing for a government takeover of student lending. With such powers it will be but a wee stretch to intrude even further into the governance of the nation's colleges and universities--including, ultimately, admissions. [And, ultimately, the career choices of the graduates, as it was in the old Soviet Union?]

Senator Chris Dodd's (D--Conn.) recently unveiled package of financial regulatory reforms is a neosocialist's dream.

The Dodd bill is an open invitation for government to micromanage the whole breadth of finance in America, including even your local pawnshop. Nationalizing the U.S. financial system without formally nationalizing it--Karl Marx would be drooling in delight.

What Mr. Forbes is describing is Fascism - nationalizing without formally nationalizing, Marxism without formal Marxism. “Why need we trouble to socialize banks and factories?” said Adolf Hitler in 1933 (p. 231-32). “We socialize human beings.” Mr. Forbes doesn’t name it. But it is what it is, and we’re headed where we’re headed, despite the “purposeful voices that screamed with anger if anyone named their purpose.”

Mouch leaned back in his chair. “I must say to all of you that I appreciate your coming here and giving us the benefit of your opinions. It has been very helpful.” He leaned forward to look at his desk calendar and sat over it for a moment, toying with his pencil. Then the pencil came down, struck a date and drew a circle around it. “Directive 10-289 will go into effect on the morning of May first.”

All nodded approval. None looked at his neighbor.

James Taggart rose, walked to the window and pulled the blind down over the white obelisk.

Not quite yet. We still have time to save the white obelisk. As Mr. Forbes points out on the same page under the heading A Grotesquerie, “the health care fight has just begun.” But the reality merging with the fiction dramatizes the critical stage of the battle we’re in.

Healthcare, education, and finance are but three of a number of areas where Obama’s very own version of Directive Number 10-289 is descending on America. Environmental policy (the regulation of CO2), energy (cap & trade legislation), and sweeping new federal controls over the food industry (with the blessing of the giants of the industry) are three others that come to mind. His theory on the function of the courts, the erosion of objective law in favor of arbitrary government power which is reflected in his Supreme Court pick of Sonya Sotomayor and his recent comments following the resignation of Supreme Court Justice J.P. Stevens, is a grave danger, long term.

The consolidation of power in Washington is occurring at breathtaking speed. But Obama is merely cashing in on the fact that “for generations past, men had worked to make it possible.” Obama himself will not become a dictator. Nor is that his desire. Nor is the timing right for the full extension of the government’s powers, both existing and newfound. The remnants of America’s revolutionary individualist spirit is still too potent, but it is slowly but steadily withering under the collectivist onslaught.

Obama’s self-professed goal is long term - to “fundamentally transform the United States of America.” His goal is ideological. He means to arrogate to an already too powerful government vast new tools of coercion and control over its citizens, and leave those powers to future leaders of the collectivist brigade to put them to use. His rhetoric is intended to pave the intellectual road ahead for them. He is the latest, and one of the most successful, in a long line of men who had worked to make socialism possible in America.

Directive Number 10-289 is being implemented, not in one draconian sweep, as in the novel, but stealthily and piecemeal. Is it constitutional? “Oh hell, we’ve passed so many … laws [and distorted the constitution in so many ways] that if you hunt through them, you’re sure to dig up something that will cover it.” America is not ripe for the full adoption of 10-289 … yet - but, a generation from now? The latent powers of our real-life 10-289 will lie dormant in Washington, for as long as it takes, or until they are exposed and repealed. America’s future is not baked in the cake, especially since, though battered and bruised, our free speech rights are still mostly intact. But Ronald Reagan's warning should always be remembered.

But the road ahead will not be easy for those of us who value our freedom. The nature of the forces driving events are potent. Obama understands these forces fully. So must we. Obama is not your typical politician. He does not concern himself with electoral prospects for himself or his party - not in the usual primary way. Understanding how fundamental Obama’s “change” really is is half the battle. When he says fundamental, he means it. The other half of the battle is to grasp that his “change” can only be fought in the arena of fundamental ideas, where he marches on.

[The preceding excerpts from Atlas Shrugged can be found in chapter VI, part II, pages 532-549]

The "Anti-Industrial Revolution" Rolls On

My third annual "celebration" of Earth Day arrives on Thursday after a not very good year for the global warming - or is it climate change - cabal. As I pointed out in March of this year, the so-called "climate consensus" is in shambles following Climategate.

Yet, the Obama Administration is undeterred as it pushes ahead with its statist agenda in the form of a climate bill to "fight" global warming, including with GOP support. Why is that?

Look no further than the upcoming Earth Day. Most Americans who participate may have an innocent perception of Earth Day, and that is the danger. There is nothing innocent or benevolent about this "holiday", which is a modern incarnation of the primitive worship of a nature that was believed to be ruled by vengeful gods or demons who required human sacrifices. The real meaning of Earth Day, and the danger it poses to our way of life, is explained below.

No amount of logic; no scandal, however egregious; no contrary scientific facts will derail the environmentalist agenda until the basic premises underlying and driving it are understood and rejected. We will know when that has happened, when Americans stop celebrating Earth Day.

The rest of this essay is a republication of last year's post, which is still as relevant as ever.

As we mark another Earth Day, I bring you these two bits of nature-friendly news:

News Item #1—From the Associated Press;

"Cars, power plants and factories could all soon face much tougher pollution limits after a government declaration Friday setting the stage for the first federal regulation of gases blamed for global warming.

“The Environmental Protection Agency took a big step in that direction, concluding that carbon dioxide and five other greenhouse gases are a major hazard to Americans' health.”

Yes, carbon dioxide…the gas that we exhale and that plant life requires for its survival…is now considered hazardous to your health! But it is also a gas generated by the burning of fossil fuels, which are vital to our very lives. Apparently, soaring energy costs and shrinking availability will not be “a major hazard to Americans' health.” Given the extent to which we depend on energy production for our everyday lives, virtually every area of human life can now be regulated, from the miles we are allowed to drive, to when we can cut our grass, to the temperature at which we can set our thermostats, right down to the number of children allowed per family. The scope of power now held in the hands of unelected, constitutionally unconstrained EPA bureaucrats makes the polar bear ruling look tame by comparison. So much power does this GOP-created agency hold that it can now dictate legislation to congress. Declared Sen. Barbara Boxer, D-Calif., “It's ‘a wake-up call for Congress’ — deal with it directly through legislation or let the EPA regulate”.

If you think I am exaggerating, consider that we now have a president who has vowed to bankrupt the coal industry, which supplies most of our electricity, in the name of fighting global warming. This, despite the fact that no evidence has yet surfaced that a gas that comprises less than 4/100ths of one percent of our atmosphere is or has ever been a significant factor in climate change.

News Item #2—From the Washington Times;

“Self-proclaimed victims of global warming or those who ‘expect to suffer’ from it - from beachfront property owners to asthmatics - for the first time would be able to sue the federal government or private businesses over greenhouse gas emissions under a little-noticed provision slipped into the House climate bill.

"Under the House bill, if a judge rules against the government, new rules would have to be drafted to alleviate the problems associated with climate change. If a judge rules against a company, the company would have to purchase additional "carbon emission allowances" through a cap-and-trade program that is to be created by Congress."

How does any company defend itself against the charge of causing climate change? It can’t and, of course, that is exactly the point. Needless to say, a dictatorship needs undefinable, vague, and arbitrary laws to consolidate its power. The avalanche of lawsuits to come will cripple one company after another, beginning with the energy industry. Start getting used to the lights not coming on when you flip the switch.

Never underestimate the power of ideas and of precedent. Once the power to regulate is initiated in a particular segment of a nation’s life, it grows exponentially, especially if it is based upon irrational ideas. The historical evidence is indisputable. The only way to stop it is to expose and challenge the fundamental abstract principles at its root. In yet another example of her ability to project future trends through philosophical detection, Ayn Rand warned us about what was then called the “ecology” movement, the hippie-laden precursor to the modern totalitarian environmentalist juggernaut. She wrote:

“The uncontested absurdities of today are the accepted slogans of tomorrow”.

And, I would add, the laws. One such uncontested (except by Rand) absurdity was inaugurated on April 22, 1970…the first Earth Day. The inability or unwillingness of Americans to understand and appreciate the actual meaning behind that concept has allowed Earth Day to evolve into a powerful symbol of an ideology that is anti-human life.

Ayn Rand coined the term “anti-industrial revolution” to describe the “ecology” movement of the 1960s and 1970s. That movement was the precursor to the modern environmentalist movement.

The basic premise of Environmentalism is that “nature” in its raw state…which means unaltered by human intervention…has intrinsic value. A volcano erupting and destroying Mount St. Helens, taking with it millions of trees and wild animals, is raw nature. Man clearing a forest and “destroying” an ecosystem to build a housing development is not. Animals devouring one another to survive is raw nature. Man using animals for the purpose of testing (human) life-saving medicines is not. Crop-destroying insects or plant diseases is raw nature. Insecticides and bio-engineered pest- and disease-resistant crops is not. A black primordial goo lying underground is raw nature. Gasoline and heating oil is not.

The common denominator of that which is not “raw” nature is that it represents the application of human intelligence to the advance of man’s well-being and survival. Life is a process of self-sustaining and self-generated action. Every living species, from the lowest bacteria to the most advanced mammals, must act according to its nature to sustain its life. In other words, every living species is provided by nature with some means of survival, which it must rely on and exercise.

There is one crucial fact of nature that sets man apart from every other living species. Every other species must adapt itself to its natural environmental background. It has no choice in the matter, since it basically has no way of altering that environment. It is thus equipped with the basic means of survival determined by its nature to survive in that manner. Any species that lacks or losses the means to adapt perishes. Man, however, is not equipped to adapt to raw nature. He must, if he is to survive and thrive, adapt his environmental background to his own needs…by building homes, inventing medical treatments, developing advanced agriculture, producing fuel for transportation and heating…all produced from exploiting the natural resources found in raw nature.

Environmentalism’s elevating of nature to a value status equal to or greater than man is a direct assault on, and denial of, man’s means of survival…his need to transform raw nature as dictated by his very nature. Since man’s primary, basic means of achieving this is his rational mind, the anti-science of environmentalism is thus anti-mind, which means anti-man.

Environmentalism should not be confused with the idea of developing cleaner methods of producing and consuming that which we need to survive and thrive. That is not what the leaders of the environmental movement have in mind. It is human production and technology that is the enemy. Following are some quotes from some of those leaders:

The collective needs of non-human species must take precedence over the needs and desires of humans.
—Dr. Reed F. Noss, The Wildlands Project

Human happiness, and certainly human fecundity, is not as important as a wild and healthy planets…Some of us can only hope for the right virus to come along.—David Graber, biologist, National Park Service

The extinction of the human species may not only be inevitable but a good thing....This is not to say that the rise of human civilization is insignificant, but there is no way of showing that it will be much help to the world in the long run.
—Economist editorial

I suspect that eradicating smallpox was wrong. It played an important part in balancing ecosystems.
—John Davis, editor of Earth First! Journal

We, in the green movement, aspire to a cultural model in which killing a forest will be considered more contemptible and more criminal than the sale of 6-year-old children to Asian brothels.
—Carl Amery

We have wished, we ecofreaks, for a disaster or for a social change to come and bomb us into Stone Age, where we might live like Indians in our valley, with our localism, our appropriate technology, our gardens, our homemade religion—guilt-free at last!
—Stewart Brand (writing in the Whole Earth Catalogue).

This last is the ideal that drives environmentalism…the return of mankind to a pre-industrial age when man lived “in harmony” with nature. A time when nature was worshipped, rather than exploited for human gain. Rather than a warm winter home, they long for an existence of savages cowering in fear of natural forces. The name itself, “Environmentalism”, captures the very essence of its meaning, just as Communism or Nazism captures the essence of those systems. In fact, statists of every stripe have latched on to the environmental movement to further their anti-capitalist agendas.

But make no mistake. The agenda of the environmentalists is to thwart, roll back, and destroy the life-giving technology and industrialization of the modern age. This is not to say that I believe that they will succeed. Most people don’t equate environmentalism with an anti-man’s-life agenda. There is a real danger, though, that they will succeed at advancing a statist agenda under cover of environmentalism, leading to a deteriorating economy, rising impoverishment, and possible dictatorship. I submit in evidence the two news items cited above.

By celebrating “Earth Day”, we should be aware of the enemies of man that we are helping to bring to power in America and around the world.

Rather than celebrate raw nature, as embodied in “Earth Day”, we should instead look around at all of the life-giving benefits we enjoy as a result of industrialization.

Earth Day is the “holiday” of the anti-industrial revolution. Instead, we should celebrate the holiday of the Industrial Revolution, Exploit The Earth Day!

The Mount Vernon Statement - Conservatism's Unilateral Moral Surrender

As the 2010 mid-term election season heats up, the battle for the soul of the Republican Party is in full swing. The apparent kick-off of this ideological battle was Mark Levin’s best-selling “Conservative Manifesto”, his book Liberty and Tyranny, which I reviewed on June 6 and June 11 of 2009.

Another manifesto has now made the scene. The Mount Vernon Statement promotes “Conservative Beliefs, Values, and Principles” as “A Statement for the 21st Century”.

It commits its signatories to “the ideas of the American Founding”. It seems to strike the right notes. But it contains irredeemably deadly flaws. The sixth paragraph reads:

“The conservatism of the Declaration asserts self-evident truths based on the laws of nature and nature’s God. It defends life, liberty and the pursuit of happiness. It traces authority to the consent of the governed. It recognizes man’s self-interest but also his capacity for virtue.” (Emphasis added.)

By separating self-interest from virtue, the Statement declares the moral nullification of the Declaration. The Statement declares flatly that the“capacity for virtue” cannot be found in the rights to “life, liberty and the pursuit of happiness”, the essence of "man's self-interest". The Declaration “defends” those ideas, but virtue is to be found elsewhere – implicitly, in one’s “capacity” for selfless service and sacrifice. To whom? The answer comes later, in point five of “the framework for a consistent and meaningful policy agenda”. That final point promotes “conservatism’s firm defense of family, neighborhood, community, and faith.”

The ethics of altruism (self-sacrificial service to others) and altruism’s political manifestation, collectivism (the supremacy of the group), are firmly ensconced in The Mount Vernon Statement. Though described not as “society”, the “people”, the “master race”, the “proletariat”, but rather the “family, neighborhood [and] community”, the collectivist strain in this statement of “conservative beliefs, values, and principles” is undeniable. Collectivism, the primacy of the group, invades, dilutes and undermines the alleged purpose of the manifesto - the promotion of “the ideas of the American Founding”. A group is a collection of individuals, and so the health of the family, neighborhood, and community derives from the opposite principle. Yet that core idea of the Founding Fathers, the primacy of the individual, is given short shrift in The Mount Vernon Statement.

And notice the fourth value – faith. Why faith? Because, put simply, altruism and collectivism cannot be defended rationally … i.e., in reason. This declaration of faith isn’t even consistent with its intended purpose of promoting “the ideas of the American Founding”. Completely ignored is the fact that the Founders, who were products of The Enlightenment, were primarily champions of reason, not faith. If the case for this nation's Founding ideals rests on nothing but faith, then what does that imply about her ideological antipode, the collectivists? Rationality is on their side!

If this is the way conservatives plan to defend Americanism, the socialists don’t need enemies.

To be fair, the Statement does talk of “individual liberty” and “free enterprise” and makes other references that seem to uphold American ideals. But the reference to the “conservatism of the Constitution” is historical revisionism. There is nothing conservative about the Founding of this nation. What was being conserved? The original Constitution and its foundational philosophic statement, the Declaration of Independence, are almost violent in their radicalism. The very worst and utterly false claim anyone can make about America’s Founding Fathers is to pin on them the label of "conservatives". Conservatism is the yoke that they pledged “our Lives, our Fortunes and our sacred Honor” to throw off. It was the entrenched tribalism of mankind’s history that they sought to overthrow – and did – to be replaced with its antipode, a nation of individualism.

The Founding Fathers didn’t explicitly set out to create the system we now call capitalism. That term, in fact, hadn’t even been coined yet. They set out to free the individual from omnipotent rulers, and from the exploitation of his fellow men, by guaranteeing to each the equal and unalienable rights to the pursuit of his own rational self-interest – i.e., to his own life, liberty, property, and pursuit of happiness, guided by his capacity for reason. There would be no rulers, as such … not the state, the community, or collective of any kind. For the first time in all of recorded history, the people - all of them, equally and as individuals – would be served by their political leaders rather than the other way around. The natural and logical consequence was our uniquely American political-economic system, which unleashed the individual to create free market capitalism, the system of individual rights, limited rights-protecting government, and the trader principle. The Founders spawned the world’s first moral nation that enshrined a system of individual selfishness, which properly understood is a noble ideal.

The Founders thus achieved the most radical and greatest political revolution in world history. It was an enormous advance in the political evolution of man. But the Founders were not philosophers. They were intellectuals who put into action the ideas of the Enlightenment philosophers, foremost among them of which was John Locke. In so doing, they inadvertently planted a poison pill. The failure of the Enlightenment thinkers to firmly establish the moral underpinnings of their individualist achievement left the Founders with an unresolved contradiction. This is not to diminish the Enlightenment achievement, also an enormous advance, in the philosophical evolution, of man. So that achievement, and thus the Founders’ achievement, was left incomplete until the 20th century.

The proper moral foundation of the American system was never identified and articulated at its origination. The Founders, as is obvious in their writings, clung to the age-old ethics of altruism, a term that also had yet to be coined. The altruist doctrine holds selfless sacrifice and service to others as the essence of virtue. But altruism is inimical to freedom. I refer you to the man who coined the term, which derives from “otherism”:

The French philosopher Auguste Comte (who coined the term “altruism”) puts this clearly: Because “to live for others” is “for all of us a constant duty” and “the definitive formula of human morality,” it follows that “[a]ll honest and sensible men, of whatever party, should agree, by a common consent, to eliminate the doctrine of rights.” Altruism, explained Comte, “cannot tolerate the notion of rights, for such notion rests on individualism.” On the premise of altruism, “[rights] are as absurd as they are immoral. . . . The whole notion, then, must be completely put away.” (From Craig Biddle’s Objective Standard essay, The Creed of Sacrifice vs. the Land of Liberty, Fall 2009.)

Tellingly, the Mount Vernon Statement doesn’t even mention the word “rights”, and merely presents a watered-down version of the Declaration’s core political and moral principle underlying “the ideas of the American Founding.” It claims that the Declaration of Independence merely “defends life, liberty and the pursuit of happiness”, rather than recognizing them as “unalienable Rights”. Perhaps the Statement’s drafters sensed what Comte declares explicitly. The Statement is as important for what it doesn’t say as for what it does. Considering the importance of the Mount Vernon Statement, as a look at some of its prominent signatories attests to, I can’t believe that the wording is an accident. The concept of rights simply cannot be reconciled with the concept of self-sacrifice – not in reason. And the Mount Vernon conservatives apparently know it, and don’t even attempt it. So they cling to faith. As philosopher Ayn Rand has observed, reason is a corollary of egoism.

So the Founders, who were committed to the egoistic Enlightenment ideas of reason and individualism, attempted to build a nation of reason and individualism on a foundation constructed of an ancient ethics that is inimical to reason and individualism. The Founding Fathers and the Enlightenment thinkers they followed failed to challenge the entrenched Judeo-Christian morality. The result was the lethal contradiction that is slowly destroying freedom and capitalism in America today. (For a much deeper study of the points made here, and an exalted and accurate tribute to the Founding Fathers, see The Nation of the Enlightenment, chapter five of Leonard Peikoff's book The Ominous Parallels, from which my analysis drew its inspiration.)

But contradictions do not and can not exist in nature. They are products of flawed human thinking, which must (and can) be corrected if the destructive effects of that contradiction are to be rectified. Reality is immutable. Today’s conservative defenders of free market capitalism, being firmly anchored in the concrete of tradition, refuse to challenge the lethal contradiction that the Founders accepted by default. Thus, though likely passionately sincere, they have been and are paving the ethical path for the collectivists.

The Conservative Right continues to attempt to build a pro-free market, pro-capitalist, pro-American case upon the ethical foundations of the Socialist Left. Not only can it not be done: It is counter-productive. Ever since the arrival of William F. Buckley’s National Review in the 1950s heralded the alliance between the conservatives and the Religious Right, America’s pro-capitalist forces have been paving the way for socialism. But capitalism, the system of rational self-interest, is utterly incompatible with the self-sacrificial code of Judeo-Christian ethics.

If the past century – and especially the past 60 years of the Christian-dominated conservative movement – has taught us anything, it is this. Despite the fact that socialism never has, doesn’t now, and never can work, it will continue to win as long as it is considered morally noble in theory. As long as capitalism is thought to be outside the scope of moral virtue, it will continue to wither as it has since America’s Founding. And along with it will go our unalienable rights. As indisputable proof, I bring you Barack Obama, whose path to power has been paved by American Conservatism. As proof of that, I present to you George W. Bush’s “Compassionate Conservatism”, which also “recognizes man’s self-interest but also his capacity for virtue”, resulting in a huge expansion of government under his presidency.

To be sure, some on the Right are beginning to grasp the real nature of the battle. But, by and large, the American Right remains tied to a failed strategy. The cultural penetration of Objectivism, the only coherent alternative to the collectivist trend, is just in its primary stages. It will take time, perhaps decades, for Ayn Rand’s philosophy to reach the level of cultural saturation that will translate into a new pro-capitalist pro-individual rights political direction. It is time we may not have. Capitalism’s defenders, including today’s conservatives, must move quickly to abandon their steadfast adherence to tradition and acknowledge that the Founding of this nation, as great an achievement as that was, was incomplete. The dichotomy between its implicitly egoistic principles and the entrenched remnants of self-sacrificial Judeo-Christian ethics is the biggest and deadliest shortcoming.

The fight for the future of America is a moral one. The battle lines are clearly drawn, thanks to the rise of Barack Obama. It’s the dark axis of faith/altruism/collectivism/socialism versus the enlightened forces of reason/egoism/individualism/capitalism. One leads to slavery, and the other to unalienable individual rights. One leads to tyranny and the other to freedom. One destroys American ideals, and the other completes and thus saves them.

The Mount Vernon Statement is a declaration of unilateral moral disarmament. As long as self-interest is divorced from virtue, the political trend will inexorably gravitate toward full collectivism based upon “man’s … capacity for virtue”. Or, as Barack Obama so eloquently put it some time ago:“Let us be our brother’s keeper ... and let our politics reflect that spirit as well.” Our politics will always reflect what people think is right, because most people are ultimately motivated by what they think is right. So long as the basic moral assumptions so confidently espoused by Obama go unchallenged, collectivism will continue to be the course of least resistance.

Conservatives are philosophically ill-equipped to stem the collectivist/statist tide, as long as they continue to surrender the moral high ground to the Left. Worse, by declaring that our Founding documents promote altruism as virtue, the Mount Vernon conservatives have turned freedom's most potent historical weapon, “the ideas of the American Founding”, over to the enemy camp lock, stock, and barrel. Can you see Barack Obama disagreeing with the claim that "the Declaration...recognizes...man's...capacity for virtue", which is reflected in his politics?

It’s either-or. Either each of us is morally his brothers’ keeper, or each of us has a moral right to his own life, liberty and pursuit of happiness. Either altruism is noble, or the Declaration of Independence is.

Judeo-Christian ethics, along with all concepts of altruistic self-sacrifice as the moral ideal, teaches that the abnegation of one’s values is the path to righteousness. Giving up, not pursuing, one’s own happiness is the goal to strive for. The beneficiary of the individual’s actions are good, if it is other than the individual who took the action … i.e., anyone who didn’t earn it. Virtue, in other words, consists of loss or pain or some form of making one’s life worse. The ethics of altruism consists of arbitrary assertions disconnected from the metaphysical facts of reality and the laws of nature, and thus it demands acceptance on faith and is therefor closed to human reason. It is impossible to reconcile this vision with capitalism.

Ayn Rand’s philosophy of Objectivism contains the definitive formulation of the ethics of America. If men are to be free to live, to exercise their unalienable rights in pursuit of their own happiness, it must be recognized that it is right to do so. The Objectivist ethics teaches you how to live your life to its fullest – to use your freedom to make it the best that it can be, to achieve values and thus your own happiness. Virtue, Objectivism holds, consists of personal gain or profit or any rational form of making one’s life objectively better. The Objectivist ethical system is grounded in the metaphysical facts of reality and validated by reason and logic and thus open to rational scrutiny and debate. It is impossible to reconcile this vision with collectivism.

Altruism in all of its forms is contrary to human nature. Egoism, properly understood, is fully consistent with human nature. Which ethics is consistent with American ideals? There is only one rational answer, and the practical results speak for themselves. They are written across the history of this greatest of countries.

It is Ayn Rand’s ethical concept that the Founding Fathers had in mind when those words in the Declaration of Independence were written and ratified by those 56 radicals in 1776, even as the document they signed clashed with their professed ethical beliefs. There can be no disputing this. The words say what they say. It is utterly inconceivable that Thomas Jefferson and the Founders who signed this monumentally important historical document didn’t know what they were endorsing.

No matter how hard altruism’s apologists of Left or Right try, there is no denying the power and the implicit meaning of those words in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” They have been written. No matter how hard anyone tries, they can never be erased. They define America, and America’s goodness. Now, their moral validity has been made explicit, thanks to Ayn Rand's historic ethical discoveries.

The Founding Fathers cast off the tribal, collectivist tyranny of a barbaric past to forge a nation based upon the supremacy of the individual. Ayn Rand cast off the sacrificial ethics of a barbaric past, and united the Founders’ individualism with an American morality.

Ayn Rand, America’s philosopher, has risen to say, and prove, that America is good, because it is right. She has completed the American Revolution. For her achievement in discovering and promoting America’s moral foundation, for which she has been unmercifully vilified, Ayn Rand deserves the title of America’s Last Founding Father. It’s time for the American defenders of freedom and capitalism to acknowledge this.

That is what it will take to save America.

NJ's Municipal Welfare State Meltdown

The New Jersey Star-Ledger is calling for municipalities to "save money by sharing services and maybe even (yes, we’re going to dream and use the M-word) merge (N.J. towns must explore merging, sharing). They cite examples of towns attempting to do just that.

"Maybe broke and broken taxpayers have reached their tipping point. Maybe they’re willing to consider radical changes they have rejected for years. And maybe courageous leaders, at the local and county levels, finally will emerge", write the Editors.

Gee. Governor Chris Christie's modest cutbacks in state aid to municipalities is causing towns across New Jersey to take a hard look for solutions to their sudden fiscal woes. They must now take a crack at living within their means.

So, how about this solution: end state aid altogether, coupled with an end to the income taxes that fund it. Just look at the frantic scrambling for budget savings that is going on across NJ as a result of these mere cutbacks. Imagine what no state aid will accomplish. The entire aid scheme is about redistribution of wealth from those who earned it to those who didn't, anyway. So state municipal aid is immoral to begin with.

Leave taxpayers with their own money, and the responsibility to pay for their own town's funding, including their schools. The drug of free money from the state has done what all redistributionist schemes do - foster fiscal irresponsibility. Why look for ways to cut costs, when you can just lobby the state capital for a little more of the loot?

Randolph Township is one of the towns approvingly cited by the Editors. Its mayor, Jay Alpert, declared that "We can’t have 566 fiefdoms in the state anymore." But it was state aid that supported them to begin with. It enabled the state's municipalities to ignore reality for decades. The shrinkage of the number of "fiefdoms" from the current 566 and the general streamlining of municipal services would have occurred gradually, steadily and naturally over the years if not for the state municipal aid honeypot.

No town has an inherent right to exist. If the residents can not or will not support their own town, let them solve their own town's fiscal problems. I'll bet solutions will flow freely once each town's residents must face reality - and once they lose the right to pick the pockets of the next town's taxpayers.

There is no way of knowing where the municipal restructuring wave that would result from ending state aid will lead. But one thing is for sure. Since more than half of the state's budget is aid to municipalities, New Jersey's fiscal condition will improve dramatically. Town political leaders will be a lot wiser about how they spend the taxpayers' dollars, because it will be their own town's taxpayers, and only their own town's taxpayers, that will be footing the bill. And the taxpayers may be a lot more frugal about demanding services, since they themselves will be responsible for footing the entire bill.

Discipline will return due to another aspect. A taxpayer has no control over how his tax dollars are spent when it is another town spending it. But that same taxpayer can confront his own town's leaders, when those tax dollars stay in his own town, rather than thrown around the state under municipal aid.

New Jersey is a poster child for failed policies. In this case, its municipal welfare state. It began with the advent of the income tax in 1977, instituted under cover of the need for a court-ordered "thorough and efficient" public educational establishment. This started the mad dash to Trenton as towns sought to cash in on the jackpot. As is always the case with any kind of resdistributionist government scheme, the taxes that fund it grew steadily but the aid grew faster as politicians courted municipal special interests in search of votes. And, as should be expected, municipalities, hooked on the drug of free state money, spent like spoiled teenagers. Said the governor in his budget address:

"State spending grew 59 percent from 2001 to 2008, before the current recession forced us to make do with less.

"That is bad enough, but as you know, more than half of what the State spends every year is sent to local governments, in the form of aid for municipal government and school districts. And local government has exercised even less control. Spending at the local government level has risen 69 percent since 2001."

New Jersey's municipal welfare state has been tried and has failed. The Star-Ledger blames "home rule", which should "be overruled by common sense". But what's really needed is to return to home rule - the real thing, where people take fiscal responsibility for their own town, not be made responsible for the next guy's town.

My proposal is not a panacea. Government is too big and too controlling. But at least we'll have less expensive government services, including education, when taxpayer dollars stay close to home. This would mean less expensive government, which would mean lower taxes and thus a better economy. Sounds good to me.

On Black Tea Partyers and Racism

I rarely pay much attention to any sort of insulting nonsense, preferring to keep to an intellectual level which is consistent with the seriousness with which I take my ideas. But this article by Associated Press Writer Valerie Bauman, entitled Black Conservative Tea Party Backers Take Heat, is an exception. I just had to defend my Tea Party "brothers".

Ms. Bauman writes:

"They've been called Oreos, traitors and Uncle Toms, and are used to having to defend their values. Now black conservatives are really taking heat for their involvement in the mostly white tea party movement — and for having the audacity to oppose the policies of the nation's first black president."

Unfortunately, Ms. Bauman gives credibility to the charges that the Tea Party Movement is fundamentally racist, without any attempt to provide evidence from the accusers. It's just presented as a valid position of "opponents".

"Opponents have branded the tea party as a group of racists hiding behind economic concerns — and reports that some tea partyers were lobbing racist slurs at black congressmen during last month's heated health care vote give them ammunition."

The "reports" of "racist slurs" are not evidence of anything but the ignorance of the few alleged "tea partyers". One can hardly call that "ammunition" for the "opponents" attack on the entire Movement.

Perhaps she felt she needed to give her piece balance, because it is otherwise a decent portrayal of the Black Tea Partyers and the unjust slurs they have to put up with.

Nevertheless, I had to address the racism charges. Here are my comments:

To fully understand the source of the smears against the Tea Party Movement, one must look to the epistemological level.

These absurd racism accusations thrown at the Tea Party Movement are a product of those whose minds are frozen on the perceptual level of consciousness. They see mostly white faces, and reflexively conclude racism. Where's the evidence? That would require logical connections. Their anti-conceptual inability to think on an abstract level blinds them to the fact that it is exactly that - their own racism - that leads them to their conclusion that "I see white, so it must be racism". The black Tea Partiers are not evidence to the contrary, in their concrete-frozen minds. They are mindlessly brushed off as traitors to the black collective.

The wide diversity of ideas espoused by Tea Party participants is ridiculed in an open admission of the inability (or fearful refusal) to challenge them intellectually. That would require thinking, which is hard work.

"How can you not support the brother?", is the refrain of the racist-tribalist-collectivist mentality, the most successful products and logical result of the Progressive Education Establishment, which fosters the anti-conceptual mindset.

Thinking is a choice that each of us must make, as individuals. The smear merchants should put aside their unsubstantiated insults and instead choose reason and debate, and refute the ideas of their black (and white) Tea Party "brothers" in honest intellectual discourse, if they can.

Posted 7:51 PM