Thursday, December 6, 2012

A Reply to Scott Weathers on Smoking Bans

Reprinted from a post on Define:Liberty

A guest column was recently published on Define Liberty by Scott Weathers on Smoking Bans.  Before writing this reply, I noticed many comments have already been posted to address the problems with Weathers argument.  While I agree with many of the comments, I want to dive a little deeper into the fundamental problems with the Weathers’ argument.

Weathers starts off his article with this to say.

The essential question of rights is not whether they are worth protecting, but which are worth protecting... we must recognize that rights often conflict and therefore must prioritize our most fundamental, necessary rights. American University’s smoking ban does just this. (emphasis mine)

Weathers concedes his argument is utilitarian in nature given the first few sentences.  While I acknowledge some libertarians consider themselves utilitarians in the “cost-benefit” persuasion, most libertarians reject this approach and adhere to the standard “non-aggression principle.”  If you are unfamiliar with this term, I would recommend any YouTube by Walter Block on the NAP.

Which rights are worth protecting?  This begs the question: what are rights?  Where do “rights” (if they exist) originate?  On the subject of rights I would recommend a recent post by Tom Woods who addressed this at a conference back in 2009.

Self-ownership and private property do not cause or create conflict.  They solve the problems of conflict and scarcity.  Self-ownership implies the exclusive use, control, and decision making over one-self and the property one acquires through “original appropriation” of un-owned resources or through the exchange of property titles and voluntary contractual arrangements between agents.

Upon this premise of self-ownership, norms of behavior become apparent of what is permitted and what is prohibited.

Private Property Means Owners Decide

Weathers continues,

Although many will decry AU’s smoking ban [...] Smokers can exercise their right to smoke, simply not in areas where it will harm the health of others. And very fundamentally, this is the right that must take precedence over the right to smoke wherever one pleases.

No disagreement here.  If the owner of a business wants to allow people to smoke on his/her property which the owner has originally appropriated or acquired through a voluntary trade/acquisition, shouldn’t the owner possess the legal right to determine the rules (contract arrangement) and conditions of how patrons use to his/her drinking establishment? After all, the bar patrons are “guests” on the owners property.

Property owners are the ultimate decision makers of how their property is used and the norms for how visitors use their resources.

Secondhand Smoke Exposure Claims

Every year, 46,000 Americans die of exposure to secondhand smoke [...] we must use every tool we have to cut the health burden of smoking [...] these are not just statistics, these are the deaths of real people because of secondhand smoke—thousands who die because of a habit that is not their own.

The USA Today article's non-specific National Cancer Institute study misses a critical point.  Of those alleged 46,000 poor souls who (allegedly) die from secondhand smoke, what type of exposure did these people have?  What exactly was the cause of death?  Were all of the people locked in houses bellowing with smoke 24/7?  Did these people have the choice to “escape” and/or “evade” the exposure to smoke?  Were any of the people former smokers who became non-smokers yet ended up living with a spouse who smoked?  How many non-smoking people each year (who live in a household with a smoker) die from something else other than secondhand smoke?  Were these people exposed to 100,000 hours of smoke?  1,000 hours?  1 hour?  How much exposure can one tolerate before it kills them?  You get my point.

The “secondhand smoke = 46,000 deaths” abstraction is effective at creating this mystical hobgoblin caricature in the minds of the people (much like other things despised by the Nanny State).  Is smoking (firsthand or secondhand) healthy?  No, of course not.  But, the question of how much exposure is negligible versus harmful versus toxic is a very important one to ask answer.

Read the rest of the article on Define: Liberty

Thursday, November 29, 2012

Liberty for Laymen Podcast: The Upside Down World of MMT- with Robert Murphy



Dr. Robert Murphy completed his B.A. in Economics at Hillsdale College and earned his Ph.D. in Economics from NYU. He is the author of several books including The Politically Incorrect Guide to the Great Depression and the New Deal, Politically Incorrect Guide to Capitalism, Lessons for the Young Economist, as well as study guides to Rothbard's Man, Economy, & State; and Mises' Human Action, and Theory of Money & Credit.  He also teaches courses through the Mises Academy online program.

The topic of this podcast is "MMT", otherwise known as Modern Monetary Theory.  MMT has grabbed the attention of many people in Financial Planning circles and conferences.  What is MMT and what does it have to say about economics?  Is it correct?  Is it a complete crank macro-economic theory?  Where does it fall flat (if at all)?  We discuss it all in this podcast.

During the interview, we discussed Seven Deadly Innocent Frauds of Economic Policy written by one of the chief proponents of MMT, Warren Mosler.

What are the 7 Deadly Innocent Frauds according to Mosler?
    1. The government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow.
    2. With government deficits, we are leaving our debt burden to our children.
    3. Government budget deficits take away savings.
    4. Social Security is broken.
    5. The trade deficit is an unsustainable imbalance that takes away jobs and output.
    6. We need savings to provide the funds for investment.
    7. It’s a bad thing that higher deficits today mean higher taxes tomorrow.
Robert Murphy has written many articles, op-eds, and blog posts about MMT and issues related to the (alleged) frauds posited by Mosler.

If you have or have not heard of MMT, we invite you to listen to this podcast as Robert Murphy dives into the heart of the accounting tautologies that make MMT both intriguing and yet incorrect on many fronts.

Lastly, I would like to encourage people to visit the "KrugmanDebate" which is a promotion to entice Paul Krugman to debate Dr. Murphy that would benefit a food bank in New York City .  I can think of few better reasons why these two economists should not get together and discuss the competing theories of Business Cycle Theory.

Thank you for listening.

~Andy Katherman

Monday, October 29, 2012

Voting: an exercise in futility

Republished from Define-Liberty.com – please click here to read the full article.

I was compelled to write this after family and friends prodded me about the upcoming Presidential elections.  Also, Chance Stoodt had a great post a few weeks at “Define-Liberty” (an online magazine dedicated to spreading the ideas of liberty).  I hope to expound on his theme.

Who will I be voting for in November?  My answer:  I will not be voting.

Yes, I know I know.  I expected that scowl on your face, frown across your brow, or those obscenities you're slinging in response to my allegedly ridiculous proposition. But, please allow me to make my case before you castigate me for not upholding my alleged civic duty.

For as long as I can remember being somewhat interested in politics, the entire process of electing people into place of power through the ballot box always seemed unnatural.  Something didn’t quite smell right.  But, I couldn’t put my finger on the reason why it felt so misguided.

My voting experience started back in the year 2000.  At that point in my life, I was a political and philosophical neophyte.  My grasp of politics went something like “Republicans stood for X and Democrats stood for Y”.  Seemed like a pretty easy formula (assuming X or Y was the right answer).  So, for awhile I voted for X.

But, here are some critical questions which only hit me recently.  What if both X and Y were wrong?  Stated differently, what if neither of these options would make our social order any better off?  What if voting always meant voting for the constant, “S” …(otherwise known as Statism or Socialism – take your pick)?

What is a person to do who wants to “opt-out” of the entire charade?

After much discernment, I’ve come to this radical theory.  Voting is a futile act.  Voting, in my humble opinion, is the act of playing a high stakes game of musical chairs (every N years) – except the chairs are not really chairs but sociopathic elected officials.  “If only we had the RIGHT person in office, things would be fantastic,” some might say.  To them, I say you are wrong.  Here’s why.

Read the rest of the article here on Define-Liberty.com.

Wednesday, September 5, 2012

Rethinking Democracy

These people actually vote.  Are folks like these that much in the minority? God help us.

Thursday, August 23, 2012

Government spending is always a "net good" - not so much (continued)

Here is the breakdown of the latest counterpoints my friend submitted to me.  The debate continues as follows:

I 100% agree that there are major problems within our current government structure on spending policies, taxation policies, and regulation policies. I am for capitalism and less government embedded in the bedrock of our economy. I am for major reform in all of these areas. I do also agree there were many mistakes leading into the financial crisis and out of them that I would love to see not happen again. I do believe that continuing to operate with misperceptions at the macroeconomic level will plague us for some time."Andy, sticking just at a macroeconomic level, I disagree that government spending deficits take away from the people. Taxation takes away from the people. With our basic accounting summary of this, either the government side or the private/public/people side runs the deficit. It is not healthy for the people to be running deficits and the government surpluses because we wont have money to buy the goods and services we need and stall economies into recession. On the flip side it is healthy to keep the deficit on the government side. For 15 years we have run deficit spending on top of our taxation revenues. So this is possible to spend more then we bring in and budget deficits do not take away from savings.   You bring up inflation concerns, but the last 15 years have had excess spending "creation of dollars" and below historic inflation. From the reading of Stephanie Kelton, this is because we are not at max production and there are surpluses of goods and services on the market today, so the creation of dollars is not inflationary. If we were at max production where all goods and services were spoken for then yes the creation of dollars would cause inflation. The examples you site of Germany, Argentina, Zimbabwe are all examples where they were on a fixed exchange system or pegged to another currency, so when those currencies were mass created in relation to the fixed exchange placed on them, that caused the hyper inflation.  The U.S. dollar has the luxury of being at the top of the monetary pyramid not fixed to rate, gold or any other currency. Everyone thinks that because we at the state level, city level and household level have to balance our spending to our in flows make it so the Fed has to do the same. This is not true. The reason a state, city or we can go broke is because we don't have the luxury of creation of dollars at our disposal. States, cities, and people rely on their income alone. This is also the case for Spain and Greece running out of a finite resource of Euros and could not control getting more.  My readings have focused in the Post-Keynesian school currently being cultivated by Warren Mosler and Stephanie Kelton. Warren's book "The 7 Deadly Innocent Frauds of Economic Policy" It is a quick read, and a few of your comments fall under his innocent frauds that we believe are true.


Here is my response.

Awesome. I'm glad you are for capitalism, less government, regulatory reform, not repeating the mistakes that caused this depression, and learning from the mistakes we've made.

The only problem is that all the policies you advocate contradict this entire statement. Infinite government deficit spending and centrally planning the supply of money and credit does not coincide with any of the ideals you say you espouse. And that is what frustrates me the most. So, I'll try and offer some commentary.

Taxation, deficit spending, AND printing money (or creating bank reserves through digits on a keyboard) ALL take away from the people as well as the economy. Deficit spending must be repaid through future taxation or future inflation of the money supply through more fiat paper dollars. Your statement that it is not healthy ("on the flip side") for people to run deficits AND the government to spend less than it receives in revenue is incorrect. The less the government spends the better - 100% without equivocation (for reasons I've stated in my previous post). And your premise of why a recession occurs is another place where you are unfortunately incorrect. 

The REAL reason an economy booms and then busts is that artificial expansion of the supply of money and credit occurs (whether in the 1920s or during the early 2000s) without enough real savings. The money inflation is mistaken for real saving and both investment (capital goods) and consumption increases. This bids up asset prices and makes people FEEL richer. But, soon all prices start rising (including consumer prices) as well as interest rates rise.  When this happens, the Fed is faced with 2 choices - keep expanding the money supply and introduce hyperinflation or stop the money supply growth.  When the money supply contracts (through raising interest rates or other methods), the euphoria is over and a massive correction ensues to let prices fall back to the sustainable levels. This causes a lot of pain since many people thought they were richer and it was after all just inflation in their asset prices (think houses, equities, balance sheets, capital goods, etc).  Resources must then be deployed elsewhere to satisfy the real wants and needs of consumer goods that are most needed. This causes capital goods to fall much lower than consumer staple/service goods.

Yes, we have run deficits for years and years and years. But, there comes a point when a country cannot service its debt obligations (think 1920 Germany after the Treaty of Versailles). Two things must happen - monetize the debt or default on the debt owed to the creditors. Some might say (and I agree with them) that monetizing the debt is a virtual form of default. Either way, it is extremely painful and more like a choice of being hanged or shot (you pick which is which).

I'm not sure what you are using to measure price inflation (which is what I think you mean). And, there is a difference between price inflation and money inflation. Price inflation is a by-product of inflating the money supply. Inflation is always and everywhere a monetary phenomenon. I'm not sure why you only go back 15 years to track inflation. But if you want to use 15 years as a benchmark we can evaluate this. I personally cannot think of many things at all that cost less than what they did when I was 17 years old (15 years ago). Gas was below a dollar, you could purchase a can of pop for $0.35, go to the movies with someone for under $10. I could go on and on. The only "deflation" has been in electronics and there is a reason for this, but i won't go into why. 

But, the point here follows that money inflation does not bid up all prices at once. Money inflation affects capital and producer goods first and then eventually bids up consumer/staple prices. An example of this is commodity prices most notably with Corn going above $8.00. Commodities (such as oil and petroleum products) are all priced in DOLLARS and not Yen or Euros. So, if the purchasing power of the dollar falls in relation to other currencies, it is going to cost more to buy goods denominated in dollars. 

Full employment is not the ideal for an economy. If that were the case, having people retire (who have saved a stockpile of cash) would be a drag on the economy. Wealth, prosperity, and personal satisfaction are the ideal. Working is simply a prerequisite required to reach this ideal (goal + ideals). I work 40 hours a week, yet i spend 40 hours a week sleeping. Does that mean I'm not in a state of "full employment". This common fallacy of full employment was demolished by Henry Hazlitt decades ago 

You talk about 1920s Germany. As far as I remember, in 1920 we were still on a gold standard. So, I think you need to read more about 1920s Germany (which i do not think is entirely comparable to our situation, but a very very important study). A good book that chronicles this is Adam Fergusson's, When Money Dies.

I 100% agree with you that the U.S. Dollar's only saving grace is that it is the world's reserve currency. This allows the U.S. to continue to deficit spend as long as it is the reserve currency. However, nothing is set in stone that it will continue to be the case, States do not have a monopoly on the issuance of their own currency like the Fed does. However, you are wrong in regards with the Euro. The ECB could create an infinite amount of money if it wanted to do so (which I do not think it will do). It is a fiat currency like any other currency around the world and suffers from the same problems. I'm not sure about how serious mario draghi is about buying up sovereign debt with Euros, but anything is possible.  A great book on the Euro is by Philipp Bagus', The Tragedy of the Euro.

The likely action I see happening in a world of international fiat money backed by nothing is that all Central Banks inflate together. And while this might keep government solvent, it will lead to a continued decrease in the purchasing power of each type of fiat currency - otherwise known as massive price inflation.

I disagree vehemently with your premises, but I hope what I've said might stop our Mexican Economics Standoff. I've read Post-Keynesians, New-Keynesians, neo-Keynesians and they all share something in common. They are all Keynesians. While Keynes was no doubt one of the most influential economists of the 20th Century, I have spent the better part of the last 4 years determining how wrong Keynes was in the field of macroeconomics.

Wednesday, August 22, 2012

Government spending is always a "net good" - not so much

I recently got into a debate with a friend on facebook about fiscal policy. He posits the following:
"Economics 101: Fiscal Policy levers are taxation and government spending to regulate the economy. In a recovering economy we need to keep taxes low and keep government spending. I find it very interesting that of our two future leaders claim to want to help the economy, one wants to increase taxes, and the other cut government spending, both HURTING the economy. HUM??? (a conundrum)..."

"... government spending IS a net gain to the economy and that it does not need tax dollars to support it. All the rules changed in 1974 Bretton Woods when we went off the gold standard and a fixed exchange rate world. We are now a "fiat" currency and the controller of it and at the top of the pyramid. And our modern monitary system is done with keystrokes on the computer, and Ben Bernanke is sitting at the helm. With the bailouts in 2009 when Ben Bernake was on 60 minutes getting grilled that they spent tax payer money, he said "no we didn't, we simply used the computer to mark up the size of the accounts." People today and our polititians still think about things in an old system and talk about making the economy better, which as I stated initially, their plans will both hurt it. So what they are really talking about is the "deficit." Here lies where the problem is and people/politians belief that the deficit is bad, when it is not. In todays world there is no arbitrary limit to the deficit and we really need to look at the economy and that is keep taxes low, keep spending, and most importantly get us more productive and get people working. So then back to taxes, what is its purpose if not for governement spending? It is to keep the value in the dollar. Because by having a tax it forces people to work for dollars, trade goods and services in dollars, so that they have dollars to pay their taxes. Think about it for a while, I did! :)"


He disagrees with Obama who "wants to increase taxes" (so far so good).  However, he then says the other one (Gov. Romney) wants "to cut government spending" (ok not so good).

*[Please note for the record, this post is not an endorsement for Mitt Romney]

Well, I could not let this stand without a response when it was presented under the auspices of "Economics 101."

Unfortunately, my friend's entire premise (and that of all Keynesians) is incorrect about government spending being a net positive. Government spending is always a net loss to the economy since Government does not create anything it doesn't take from someplace else.

It can do this by 3 ways: taxing (which we agree is bad), deficit spending (maybe not as bad as taxes, but worse in other ways), and/or printing of money (reducing the purchasing power of money). All three methods extract resources out of the private sector in different ways and more importantly distort the economy in different ways. I will omit taxes from discussion since no disagreement exists regarding its harm to the economy.

Let's describe how both deficit spending AND money printing are both bad for different reasons.

Implications of Massive Deficit Spending


By creating an expansionary fiscal and monetary policy, the money that is used by government to spend goes to projects that CONGRESS and those who get the NEWLY created dollar bills (or bank reserves). Instead of the free market determining what projects get funded, a central planning board of technocrats shells out money to those constituencies that will vote for them during election time.

A government "investment" is an oxymoron. Government is "groping in the dark" (as Mises once said when writing about Economic Calculation in the Socialist Commonwealth when it enacts central planning of resources.

In the socialist commonwealth every economic change becomes an undertaking whose success can be neither appraised in advance nor later retrospectively determined. There is only groping in the dark. Socialism is the abolition of rational economy.

This is what happened in the Soviet Union. It is not a business which must make a profit or use cost accounting to evaluate its opportunity costs for making widgets or getting information feedback.

L. v. Mises (1920)
However, these fact do not stop Congress from determining winners and losers. It simply calculates politically speaking which businesses should be bailed out (i.e. GM or the UAW workers or Big Banks who knew the government would back stop their risky lending). Ventures that make no economical sense are given billions of dollars (whether it is Solyndra or failing municipalities with giant unfunded liabilities). The list goes on and on.

When government issues T-Bills, this affects the credit markets by crowding out other lenders who are also issuing billions of bonds (think Corporate Bond which rise in price above what they would otherwise be without Gov't floating it's own bonds). This is evident with Greece, Spain, etc. They are finding few bidders for their massive amounts of debt since no one thinks they will receive their interest let alone the initial principal back if they buy the sovereign debt/bonds from these countries.

How an Expansive Monetary Policy Hurts the Economy


With Monetary policy and the Fed, this charade of an ever increasing deficit can continue for a little while since the Fed can buy up this debt and hold it on its balance sheet (that expands with the press of a key on a computer). But, by continually expanding monetary base (M1 or M2)., the purchasing power of these dollar will most assuredly fall year over year. More and more money chasing the same amount of goods will always result in price inflation.

Inflation is the most insidious form of theft. Inflation robs savers and holders of dollars of their purchasing power. Even if the Fed wanted to add a couple of zeros to everyone's bank account, this would not make people on net wealthier. It would make people poorer seeing as some people would spend their newly received money faster than others. The people who recognized this phenomenon would benefit while those who did nothing would suffer as prices were bid up around them.

But, in reality, new money does not come to everyone equally. Certain people get the new money first (similar to those who are first to receive the money that flows out of congress on various spending projects). Someone who is retired on a fixed income and living off of the interest of their savings gets killed in this scenario since they will be the LAST to receive the new money or receive none at all. All the while certain goods are bit up around them and they have to pay more for food, clothing, gas, shelter, etc. Again we see those who were savers and who were prudent with their money get the short end of the stick.

As to the point of there being no limit to how high the deficit could go and/or how much money can be printed, we need only look to the best cases of history where this was tried in 1920s Germany and in the present day Zimbabwe (up until recently). Once a government refuses to pay it's debt obligation, it either a default on its debt obligations or experiences hyperinflation. Both are bad, but hyperinflation is probably worse in my opinion.

Bernanke is trying to reflate the bubble.  The boom turned to bust but it was not allowed to fully correct. We have only prolonged the pain and have not cured anything. All of the mistakes have simply been papered over.  Yes, asset prices have been reflated in certain areas (stock market, cars, some real estate, other capital goods), but as soon as interest rates rise, or price inflation eventually starts heating up, or the money supply slows down (which is what caused the slowdown in 2007 after massive price inflation), a crash is likely - it's just not know how severe or to what degree.

The quickest read that explains the cause and cure of a booms, busts, and recessions/depressions is Murray N. Rothbards, Economic Depressions: Their Cause and Cure. Everyone is taught Keynesian economics - in a recession we need to have the government fill in the spending hole. This is 100% wrong and a complete fallacy. The business cycle is caused by an artificial expansion of money and credit that must eventually slow down or retract. This causes a correction since the boom is unsustainable. The recession is the CURE and natural process for correcting the malinvestments that went  into the boom. Fiat money is an inherent cause of much of this process in addition to the fractional reserve banking system.

What SHOULD Government Do?


If government should do anything, it should be to protect our property rights, enforce and uphold contracts, and promote liberty. Even these goals are a difficult task for reason I will not mention at this time.  Government should stay out of intervention in the market since it is always and everywhere a drain.  It has no resources it provide without first acquiring other resources through some form of confiscation and coercion.

Tuesday, August 21, 2012

Against Facebook Nationalization


The other day I was poking around on the internet (Facebook to be specific) and saw an opinion piece from Slate.com with the headline:

“Let's Nationalize Facebook”

Clearly, the title is provocative to say the least and my initial reaction was to laugh. I immediately figured this piece was written by a comedian, satirist, or some journalist trying to be cute.

To say the least, I was sorely mistaken. The piece is 100% serious and the author is one Dr. Philip N. Howard, a Professor at the University of Washington and fellow at Princeton.

A friend forwarded his own response to this piece.  I  found it was close to being spot on with my reaction.  He has given me permission.  His thoughts are below:



I gotta say, this article is a gem, a true shining example of leftist thought: a guy honestly trying to argue that things get better through national control. My favorite highlights:

"Facebook has become a public good and an important social resource."

Yah, ruining marriages, and time hopelessly squandered through brainless games and idle curiosity about old high school acquaintances... that's public good.

"A spring survey found that almost half of Americans believe that Facebook will eventually fade away."

I wonder why Americans believe that. Maybe it's because there are so many examples of it. Besides, the market has a way of filling voids. AOL is all but gone as an internet provider, but (gasp) I'm on line right now. HOW DID THIS HAPPEN? Shouldn't the government have nationalized AOL to save the internet?

"Even the business side has been a bit of a disaster lately, with earnings lower than expected and the news that a significant portion of Facebook profiles are fake."

So I should give a crap about FB's stock price now. Methinks the author is losing his shirt. BTW, how do FB's fundamentals look? I'm going to guess terrible. Too bad Mark Zuckerberg conned the world into giving him billions of dollars in exchange for their personal information.

"When nationalizing the company restores the public trust,..."

I love this premise. Because the public trust is so high in the Postal Service, Medicare, and GM's car manufacturing decisions.

"There are three very good reasons for this drastic step: It could fix the company's woeful privacy practices, allow the social network to fulfill its true potential for providing social good, and force it to put its valuable data to work on significant social problems."

My sides hurt from the laughter. Life must be great in the author's world... because it is a world set apart from the rest of us.

"It would be better to have a national privacy commissioner with real authority, some stringent privacy standards set at the federal level, and programs for making good use of some of the socially valuable data mining that firms like Facebook do. But in the United States, such sweeping innovations are probably too difficult to actually pull off, and nationalization would almost get us there."

We need to check the Professor Howard's blood alcohol content at this point. So many absurdities packed into such a small space. Nationalization -- government control of ONE COMPANY -- would bring about sweeping innovations? Anyone with any government experience knows that a federal bureaucracy is perhaps the body least capable of innovation of any kind. This guy wants FB to be taken over by someone who thinks like he does. Here's a thought: he should try to create a social networking company that he likes, as opposed to advocating government control of someone else's.

I bet the author lives in a nice place. With all the time he spends crafting expert opinion, I bet the author's grass is a mess, and his flowerbeds are in need of weeding. The federal government should appoint a Yard Commissioner for his house, to see to it that this guy takes care of his grounds. If he doesn't do as Mother Government says, then maybe the government should appoint me Head Occupant of his house. That would be awesome, and he'd have it coming.


"Facebook communications are an important tool for democracy advocates, including those who helped organize the Arab Spring."


The hits just keep on coming. Arab Spring = Democracy. There are many dead Christians in Egypt who might object.

"While most U.S. citizens and most global citizens treat Facebook as their social network infrastructure, the firm is greatly understaffed: It has about 4,000 employees serving nearly 1 billion users. Facebook staffers—at least those in it for the social good, rather than the bonuses—might even welcome the move to nationalize. Currently, Facebook employees are tasked with discovering marketable trends, selling advertising, and doing data mining in the service of profit. Nationalizing Facebook would allow more resources to go into data mining for public health and social research."

That's what a billionaire needs -- more government money! Who could write this with a straight face? Those poor FB employees! How do they survive on their large salaries and exclusive corporate culture? The author is clearly deranged, or still in school. Does he know anyone who works at FB? I am going to guess not.

"Users in some parts of the world might panic if Facebook becomes an official part of the U.S. government. But there are plenty of examples of good public investment in media and infrastructure. For instance, citizens around the world benefit from the BBC, and many governments use the public purse to support technology innovation and build up information infrastructure. The public policy benefits of scholarship with Facebook's "big data" would spread around the world. Having occasional access to anonymous profiles would help democracy activists living in dictatorships. The high—and globally consistent—privacy standards that could be swiftly implemented after nationalization would be good for everyone."

Isn't the BBC great? No privately owned media outlets could entertain us like they do (or control the messaging as they see fit). And I'm sure the government would only use personal data about everyone for good at all times. They could never abuse such a thing, could they?

My solution for FB is still the correct one: stay away. If you don't like what they're doing, then turn your back on them. Perhaps the author should start a "socially conscious" alternative company that opens up its databases to the government and anyone else who wants it. I'm sure users would flock to it. Both of them.


Friday, May 18, 2012

Does the State OWN You?

This week, the Facebook IPO was all over the news.  What a phenomenal story of how a few Harvard kids turned an idea into a global entity worth upwards of $100 Billion dollars.  Entrepreneurs created Facebook, not the State.

Now comes the side story of one of the founders, Eduardo Saverin, who is a native-born Brazilian.  In 1998, he became a U.S. citizen after his family fled Brazil.  Saverin now lives in Singapore and wants to become a citizen there.  The problem is that Singapore does not allow its citizens to retain dual citizenship.  It is also a plus that Singapore has a 20% income tax and no capital gains taxes.



This upsets the totalitarians that reside in Washington, D.C. - most especially Senator Chuck Schumer (D-NY) and Bob Casey (D-PA).  They find it "unfair" that a U.S. citizen would even think of escaping the benevolence of this fair country where people are asked to pay their "fair share" (whatever that means).

The two Senators have come forth with legislation called the "Ex-Patriot Act" (Patriot is short for the acronym: Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy).

Really?  Did George Orwell help craft this absurd and disgusting abomination?

This whole ordeal begs the fundamental question: do we all own ourselves or not?  According to these power drunk Senators, the answer to this question is an emphatic NO.  Of course (they would say), the State owns YOU and you must seek permission from it to do pretty much anything.

Here's a question.  What if Eduardo Saverin (or any other Facebook shareholder) wanted to take their company public on one of the other Stock Exchanges and relocate their company completely outside of the United States.  Would this be permitted by the State?

Our country is in a sad state of affairs when we have Senators who are so brazen and smitten by power to propose such an insidious piece of legislation as described above and THEN attach the word "Patriot" to it.

I could go on, but doing so would probably rupture a blood vessel.




Wednesday, May 16, 2012

How to Advance Liberty - by Leonard E. Reed

Leonard E. Reed (famous for his great work, I, Pencil) founded the Foundation for Economic Education (FEE) and is one of the best champions of liberty.

Here is a lecture of Reed back in the late 1970s.  How fortunate and privileged are we to have access to his insights and ideas!?  Simply amazing.

Now, the lecture does move a bit slow and groggy at times, but nuggets of gold are sprinkled throughout this lecture.

I'm especially drawn to 29:00 to 35:00 time slice where Reed talks about the "key" to advancing liberty and the example of Hoover Dam (nice name drop of the Quad Cities and Moline!).




Monday, May 14, 2012

Why Marxism: C. Bradley Thompson

Professor C. Bradley Thompson recently gave an excellent seminar on Marxism that deserves anyone and everyone’s attention.  I’ve always wondered what the alluring “siren song” or stream of thought about Marxism that people were attracted

I believe Bradley Thompson does an excellent job of examining that stream of thought of most true believers.

Here is a short abstract of Prof. Thompson’s argument.

Here is the full seminar.

Thursday, May 10, 2012

Intellectual Property and Ideas - Oracle vs. Google

As a software developer, strong opinions exist on the "open source" versus "proprietary" software debate with regards to "intellectual property".  Are patents or copyrights legally justified?  Does open-source software hinder or hurt innovation?

These are the sorts of questions that have been in the news lately as wireless and mobile phone carriers strive to limit competition and corner the market through a myriad of barriers to entry said companies erect to squash new entrepreneurial entrants.

Today, it is common place now a days for software giants to stockpile a war chest of "patents" for chunks of functionality for a given electronic device.  How silly is it that if I'm off in a lab at the center of the earth trying to design the NEXT big thing (let's say some type of Operating System for a phone).  But, if I'm using some commonly used design patterns, code, and algorithms which someone else already implemented in a current  product blessed by the State's patent office, I'm up a creek without a paddle..

Why does this madness pass the legal smell test?

The absurdity of intellectual property has really been exposed in ongoing Oracle vs. Google (Android OS) battle.  Can anyone make any sense out of this?  Since Google implemented and used some JAVA "APIs" (Application Programming Interfaces) when it was building its code base for its Android OS (from scratch), allegedly Google "damaged" and "stole" resources from Oracle?  Really?

Exactly what "property" was stolen and in what way was ownership transferred from Oracle to Google?  Couldn't Oracle have come up with an OS faster and better than Google if it had access and knowledge of these super secret APIs?  Would Oracle be suing Google if it wasn't one of the largest market cap phone software providers?

APIs are really just mechanisms for reading and writing data between two software entities.  For example, Twitter has some elegant, yet simple APIs for reading and writing "tweets" on different software applications.  If I write a similar application that uses the same API design to mimic the Twitter APIs, have I stolen or taken anything away from Twitter?  No!!!  All I've done is reuse the method/model of how data is conveniently exchanged.

I understand people may not have thought through all of the nuances of intellectual property and the justification of force by the State to grant monopoly privilege to such things as described above.  But, I hope this trial is a wake-up call for what is in store if Oracle wins this ridiculous case.

**Coercion vs. Cooperation: Against the State** with Professor Gerard Casey



You can download the interview from this link.

Podcast Interview: The Philosophy of Liberty and Anarchy with Professor Gerard Casey.

Professor Casey teaches Philosophy at University College Dublin and is also an Adjunct Scholar at the Ludwig von Mises Institute.  He earned his Masters and PhD at the University of Notre Dame.  His research interests include Political Philosophy (Libertarian Anarchism), Aristotle, and Aquinas.
  

You can email Professor Casey at gerard.casey@ucd.edu

Professor Casey is the author of two important books. One is The Worldview of Murray Rothbard (published last year as part of a 20 volume series on Conservative and Libertarian Thinkers).  His new book, Libertarian Anarchy: Against the State, will be released September 2012.

Who was Murray Rothbard as a Political Philosopher and Historian?  What was the approach to his scholarship in these roles?  What was the common ingredient to Rothbard's intellectual toolkit he applied to so many areas of study?

How valuable is Natural Law Ethics to the Philosophy of Liberty and Law?  What can Rothbard's The Ethics of Liberty teach us about Natural Law?

What IS Anarchy and what is Anarchy NOT?  Is anarchy synonymous with chaos, death, and destruct ion?

How did the State originate?  What is The State's history as it relates to war making and excessive taxation? What are current and historical examples of Stateless and Anarchic societies?

Do all Libertarians identify themselves as Libertines?  What is the difference?  And, why is the non-aggression principle the ultimate guide post for Libertarians who advocate a free society that thrives on peaceful cooperation vs. coercion?

Can Law, Order, and Security be provided without The State?  If so, what is the fate of the State once more people come to understand this point? 

How can you help convince others about these arguments?

Please tune in to hear a riveting discussion with special guest Gerard Casey about these important topics.

Friday, April 20, 2012

Situational Awareness - Money and its Origin


The problems which exist in our nation are too great to adequately quantify.  Having studied these problems for the greater part of two years, one of the best places to start is with the things we interact with every day - money.
Money is what we as humans use as a means of indirect exchange with others in society.

Knowing everything you can get your hands on about MONEY will take you very far and most likely keep you from being poor.  This knowledge about money will give you invaluable situational awareness to survive and thrive no matter your state in life.

We trade our labor, property, talent, time, and skills for money instead of participating in direct exchange since many of our needs are known while others are unknown to us at the time we acquire our wages. Barter may be efficient for short term transactions (food, shelter, clothing, transportation), but it does not work for more complex transactions in which time preference plays a role. But, in a barter economy, what would the most frequently traded goods be? They would most likely be commodities.

However, one can quickly see the problems with a barter economy.  If I have 8 loaves of bread and my neighbor has 5 fish, we can easily work out a short term medium of exchange (i.e. 2 loaves of bread = 1 fish).  But, neither of us can save these items as "money units" long term since money must be scarce, durable (cannot spoil), easily divisible, and so on.  Also, barter requires a coincidence of "double wants".  Someone has to value my loaves of bread more than I value mine in order for the exchange to transpire.

So, as an economy becomes more complex, money as the arbiter of exchange and store of value comes into being in a free society.  Thus, any form of "money" must start out as a commonly understood money in any society. Ludwig von Mises made this important observation in Human Action:
"It [money] is the most marketable good which people accept because they want to offer it in later acts of impersonal exchange." (Human Action, p. 401).
Why is this important?  Because acknowledging the fundamentals of how a money unit comes into society is paramount to recognizing the types of "money" that have been transformed through government decree, coercion, and force.  Instead of allowing the free market determine the best medium of exchange and money unit (which tends to be either gold or silver precious metals), governments have introduced legal tender laws and a monopoly on the coinage of money.

Many books do an excellent job of explaining the fundamentals of money.  Scholars rooted in the Austrian school of economics are uniquely qualified to understand money while other schools have a "muddled" theory of money at best.

Please do yourself a favor and learn everything you can about the basics of money.

Tuesday, January 31, 2012

Ron Paul: Freedom brings people together

From Snoop Dogg to Barry Manilow, the message of liberty presented by Ron Paul's presidential campaign is beyond profound. The United States is full of so many folks stuck in their red versus.blue tribal corners, yet the message of freedom cuts across divisions and unites people.

While other candidates take pot shots at each other for what they did or said on this and that policy, no one has had a more cogent message of how and why a free society is better than the status quo which exists today.

Ron Paul's speeches and campaign events attracts hundreds if not thousands of people. Why is this so? Why do droves of young people show up at campuses where Paul routinely speaks?

Again, the message of liberty is contagious and slices straight through to the fundamental question of how best does society want to organize herself and who owns you. Do you own your life? Or does someone else (the State) own you? Do you own the fruits of your labor or do you? Do get to determine how you spend your life and the fruits of your labor or does someone else?

These questions are obviously rhetorical and yet these are the ones only Ron Paul is asking. Maybe there is a method and reason why and the formula behind his success in changing the direction of the political discourse.

Please check out the RadioFreeMarket archive where you can find many other shows dedicated to liberty, economics, and politics.

Tuesday, January 24, 2012

A Catholic Case for Ron Paul: Subsidiarity

Yesterday, I blogged about Tom Woods' persuasive case for Ron Paul over Rick Santorum from a Catholic perspective.  If you are unfamiliar with Tom Woods’ Catholic bona fides, please check out his website and his books (four of which are exclusively about the Catholic Church).

Now, as a faithful and devout Catholic, I have a foundation of moral principles which guides me on what is just – right versus wrong.  In the abstract, this is referred to as “ethics”.

Ethics, however, does differ from politics - which deals with decision making from a public policy perspective of those in government.  In politics, laws are passed to demarcate what is a CRIME versus a sin or viceWithout going into a law or history lesson, the States retained the plenary police power and jurisdiction to determine the criminal codes for its citizens. 

As each State might encompass different groups of people, norms, and values, common sense would logically follow the closer the government is to the people the more responsive and adaptive it would be.

Moreover, as Tom Woods mentioned in his blog post the Catholic Church’s teaching on Subsidiarity is another application of the de-centralized principle.  The Catechism of the Catholic Church discusses the premise of Subsidiarity as follows:

1883 Socialization also presents dangers. Excessive intervention by the state can threaten personal freedom and initiative. The teaching of the Church has elaborated the principle of subsidiarity, according to which "a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co- ordinate its activity with the activities of the rest of society, always with a view to the common good."7

1885 The principle of subsidiarity is opposed to all forms of collectivism. It sets limits for state intervention. It aims at harmonizing the relationships between individuals and societies. It tends toward the establishment of true international order.

1894 In accordance with the principle of subsidiarity, neither the state nor any larger society should substitute itself for the initiative and responsibility of individuals and intermediary bodies.

When power and intervention is prevented from being centralized, problems are solved and a community is much more likely to prosper in peaceful cooperation.  The framers of the country had this in mind and felt the role of government was to protect liberty and restrain power. 

Ron Paul’s positions are laid out reasonably well in a recent article in the National Catholic Register.  Throughout the article, Dr. Paul’s positions recommend issues be settled at the State level, which remains consistent with the principle of Subsidiarity.

In today’s political environment, our country resembles something of a national omnipotent government.  In contrast to Ron Paul, Rick Santorum wants to evoke the police power at the national level to codify Constitutional amendments about Marriage, Abortion, and other social issues. 

While I may personally agree with Senator Santorum’s definition of Marriage or be Pro-Life from a personal standpoint as a Catholic, the Constitution is silent on crimes since the police power resides with the States.  And, despite how much I might disagree with capital punishment or victimless crimes, these matters are best left to the lowest possible unit of governance to be settled.

Further, Santorum is someone who obviously does not subscribe to subsidiarity and projects a paternalistic parent who knows what is best for 300+ million people.  And, with this voting record of such programs as Medicare Part D, No Child Left Behind, and the infamous bridge to nowhere in Alaska, these decisions should give Catholics pause as to what a Santorum Presidency would include.

Below is a short, yet precise description of what constitutes Subsidiarity from Acton Institute Founder, Fr. Robert Sirico. 

Saturday, January 21, 2012

Ron Paul vs. Rick Santorum - Who Should a Catholic Choose?

Tom Woods presents a solid case why Catholics might favor Ron Paul (a Christian Presbyterian) over Rick Santorum, who happens to be Catholic as their choice for President.

I will be submitting my own Catholic case for Ron Paul in the coming days.

Update: My Catholic Case for Ron Paul can be found here.

Friday, January 20, 2012

Homage to my personal heroes of liberty

Please check out my Podcast dedicated to this topic.  Thanks for listening and reading!

This post is really an homage to those I owe my political, economic, and philosophical framework.  I didn’t come to this philosophy lightly or without great discernment and reflection.

Obviously, I’m not a prestigious or scholarly person of the Ph.D persuasion nor do I pretend to be someone like that.  I really am just a layman like the rest of us out there in society (not sure I like that word but I’ll use it in this case).  With that being said, I feel much more informed and aware of the reality that exists around me than many of the Ivory tower types in D.C. or in higher education.  And, my hope is that those of you out there can follow the same path.

The 2008 financial crisis really launched me in what I’ll call my quest.  All of the media hacks and pundits tried to explain the dynamics of the crisis and how absolutely no one could have predicted the crisis.  The only consensus about the crisis was that there wasn’t a consensus on how it was caused.

I didn’t buy any of this nonsense.  But, three individuals were instrumental in curing my apathy and actually DID predict the crisis.

The person I want to recognize is Peter Schiff.  Schiff is the President of Euro Pacific Capital which is a global strategy and investment firm.  So, I had been following him on Headline News, Fox News, and CNBC and some of the other cable channels explain for awhile the dynamics of the bubble in Housing and the root causes of it (fiat money from the Fed and the increased money supply and artificially low interest rates).  The YouTube called Peter Schiff Was Right has more than 2 million hits and it’s a must see production. 

Peter Schiff took on an army of misguided Keynesian investment hacks and the comical part is how he was treated on these shows.  Many times he was laughed at on-air by the guest and even some of the hosts of these shows.  Peter remained un-phased in his arguments and theory (rooted in Austrian economics) about what caused the bubble and the ensuing housing bust.

So, I owe a thank you to Peter Schiff and his books like Crash Proof as well as How An Economy Grows and Why It Crashes, which is written as a children’s book caricature. 

The second person I want to recognize is Tom Woods who is an Economic Historian, best-selling author, and Senior Fellow at the Mises Institute.  Tom Woods is just a fantastic author who’s educated me on so many things. 

His book, Meltdown, is without a doubt the single best resource on the crisis, economic history, and the business cycle I can recall.  It’s really hard to sum up everything in Meltdown other than it’s a handbook you must own if you want to understand the free market, the Austrian theory of the business cycle, and sound money. 

How many times have you heard your friends or family say how the entire financial crisis was caused entirely by Wall Street and if not for them, all of this would have been avoided?  Or, it was caused by greed on the “free market” as fault of the financial collapse?  Meltdown just explodes these myths and gives you a bulletproof argument about the real cause of how the boom was started and why the bust was the likely result.

And, as a devout Catholic like myself, Tom Woods has written a wonderful book called The Church and the Market discussing common honest arguments and disagreements with the Church’s social teachings.  Whether it’s minimum wage, labor unions, inflation, or even the guild system, all of the arguments are well reasoned and posited in a polite manner with good scholarship and references to other Church teachings.  Even if you are not Catholic, the book is a brilliant read about the virtues of the market from a moral perspective.

The final person that I owe a deal of gratitude for getting me excited about the principles of liberty, free markets, and economics is Congressman Ron Paul of Texas.  I first was introduced to Ron Paul back in early 2007 when one of my old roommates from Iowa told me about him.  Once I actually grasped the arguments of Ron Paul, I wanted to know more and more and more.  It was like he was a highly addictive drug.  Except, Ron Paul wasn’t Meth or Speed.  He was (and still is) an antidote and cure to the disease of tyranny, power, and control.

Probably the most important part of Ron Paul’s message was on the topic of Foreign Policy.  I remember the moment during the GOP debates when Rudy Giuliani was utterly shocked at Paul’s theory of why Al-Qaeda and Bin-Laden attacked us on 9-11.  At first glance, I didn’t understand Paul’s argument.  But after reading the works of Michael Scheuer (the CIA’s Bin Laden unit Chief during the late 90s and early 2000s) – which were recommended readings by Ron Paul - I understood clearly the degree to which animosity breeds contempt from foreigners and those who view the United States as an instigator of trouble instead of a liberator, hero, or savior. 

A foreign policy of non-intervention, friendship, and trade with nations just makes sense and is not na├»ve as many make it out to be.  Being the world’s policeman is not a virtuous ideal that individuals around the world enable us to serve.  A national defense should be confined to protecting the borders and sovereignty of its own people and not to inflame conflict around the world just because it can do so.

But, Ron Paul’s message is not necessarily about politics as much as what the proper role of government.  And, his candidacy to be President is more than just a political endeavor as much as it is a strategy to create a bottom up movement.  This movement is aimed at unsuspecting citizens with the hope to awaken the principles of liberty and the application of such a framework.

After starting my blog, I’ve evolved in my opinion of government and what the concept of liberty entails.  Ron Paul (and the folks at Lew Rockwell.com and the Mises Institute) basically “cured my apathy” and “woke me up” like Morpheus did with Neo in The Matrix.  Ron Paul is our Morpheus and he hands us the red pill to wake up from the chains of government enslavement … of your mind.

In many ways, the contributions of Peter Schiff, Tom Woods, and Ron Paul encapsulate the red pill.  After all, there is no spoon if you believe in Liberty, Freedom, and Prosperity.