Sunday, December 28, 2008

LTE: Rational Economy

Economic woes are the result of regulation and intervention
Tim Peck | Asheville Citizen-Times | December 28, 2008

Dear Editor,

In his guest commentary, “This is a great time to invent a truly rational economy,” (AC-T, Dec. 19), Bill Branyon characterizes the inevitable consequences of government interference in the marketplace as the “current crisis of capitalism.”

There is no free market in this country – and never has been. And it certainly cannot have magically become the cause of any “current crisis.”

On the contrary, our current crisis is due precisely to government intervention and regulation, and not from any lack of them. Far from it, our hampered economy is heavily regulated; most notably, the banking, housing, and auto industries.

Capitalism, on the other hand, is the social system of freedom and it demands a strict wall of separation between economy and state. (Ironically, Mr. Branyon would have us believe that we are prisoners of freedom?)

For a slave, there are no degrees of freedom. He is either fully free or some variety of slave. Neither are there degrees of capitalism. Any form of “mixed economy” is simply a species of statism; whose key contributions to the economy are the destruction of liberty and wealth.

Mr. Branyon glibly informs us that we are “prisoners of the invisible hand of capitalism.” The only thing invisible in this matter is Mr. Branyon’s grasp of economics and history.


Gordon Smith wrote:

"Is it also fair to attribute economic boomtimes to government interference?"


Yes, the government is responsible for boom-bust business cycles by manipulating the money supply and interest rates.

The "boomtimes" are entirely artificial and must inevitably bust. It is a falsification of reality by the government and this causes malinvestment, poverty, inflation and unemployment -- none of which are articles of "faith."

These booms help the rich and well-connected and the busts hurt the poor and middle class.(Just recall the so-called "Roaring 20s" and the subsequent wrenching Great Depression.)

It is not the job of the government to run the economy and its interference is the cause of the (artificial) booms and (very real and painful) busts.

What we see in the economy today is a repeat of the ill consequences of intervention and regulation of an otherwise free market that continually seeks equilibrium. The only thing preventing those market corrections is the disastrous meddling of government in the economic affairs of free individuals.

For a more detailed analysis of the Austrian Business Cycle Theory, I recommend reading Ludwig von Mises on the subject. As Rothbard succinctly states:
"The classical, and now the Mises, theories have been generally scorned by modern writers, and mainly for this reason: that Mises locates the cause of business cycles in interference with the free market, while all other writers, following Mitchell, cherish the idea that business cycles come from deep within the capitalist system, that they are, in short, a sickness of the free market. The founder of this idea, by the way, was not Wesley Mitchell, but Karl Marx."


Austrian Business Cycle Theory: A Brief Explanation
Dan Mahoney | Mises Institute | 5/7/2001
The media’s favorite phony solution to the economic downturn is for the Fed to drop interest rates lower and lower until the economy registers an upturn. What is wrong with this approach? Printing money—which is what reducing interest rates below the market rate amounts to—is an artificial means of recovering from the very real effects of an artificial boom. This point, however, is completely lost on most commentators, because they haven’t the slightest understanding of the Austrian theory of the business cycle.

Austrian Theory of the Trade Cycle
by Mises, Rothbard, Haberler, and Hayek
Booms and busts are not endemic to the free market, argues the Austrian theory of the business cycle, but come about through manipulation of money and credit by central banks

The Fraud of Government Intervention
By Robert Tracinski | Intellectual Activist | December 31, 2008
The top story of 2008 is undoubtedly the revival of the left. After nearly two decades on the defensive following the collapse of the Soviet empire--the definitive example of the failure of socialism--advocates of a government-controlled economy are trying to make a comeback. How brazen has this leftist revival become? It has gotten so far out of hand that some on the left are openly defending central planning. Yes, comrades, you read that right...

Capitalism and the Moral High Ground
Craig Biddle | Objective Standard | Winter 2008
Economists from Adam Smith to Ludwig von Mises to Henry Hazlitt to Thomas Sowell have elucidated the general mechanics of a free market and demonstrated the unassailable practicality of capitalism. They have shown how freer markets provide better and cheaper health care, cleaner air and water, safer automobiles and airplanes, ample food and energy, better and cheaper schools, and so on. But their arguments have not convinced the world to embrace capitalism. On the contrary, people today are condemning the system of private property as loudly as ever.

Tuesday, December 23, 2008

Capitalism on Campus

Capitalism on campus, WCU follows profitable trend
by Nelda Holder | Mountain Xpress | 12/23/2008

A $1 million gift from the BB&T Foundation to Western Carolina University has raised basic questions about academic freedom versus funders’ ability to affect curriculum decisions.

[...] Ronald Johnson, the dean of WCU’s College of Business, actively sought the funding and says he’s fine with the philosophical implications. “Not that we want students to come out and be ardent supporters of objectivism,” he notes, “but we want students to come out and not be automatons, which is what happens in the colleges of business where there is no intellectual foundation.”


If WCU does not feel it should agree to the terms of a generous donation from a successful business enterprise that practices what it preaches, then, by all means, they can refuse the money.

As the article correctly states, this practice is “not uncommon.” So, why is it an issue now? Is this part of an ongoing series of articles on university donations?

As an Ayn Rand Objectivist myself, I am of the opinion that the students of WCU’s business school will profit handsomely from the inclusion of an explicitly pro-capitalist study of political economics.

Furthermore, I hold that capitalism is the only moral political-economic social system because it is the only one that fully recognizes, respects, and protects individual rights, and it’s about time someone began looking into the possibility of instituting just that kind of system in this country. Hopefully, within a generation.

Three cheers to BB&T!


Additionally: Mr. Greenspan is not a “free-market guru.” He rejected the free market philosophy of Ayn Rand early in his career and even took a position as Federal Reserve Chairman—a stark contradiction to the philosophy of individual rights, limited government, and free markets that is embodied in the over-arching concept of Capitalism.

** UPDATE **

4tees writes:
Ayn Rand’s theory is as bogus as the communist ideology she loathed. Both rely on human kind not trying to achieve an unfair advantage if left to their own accord, something history clearly shows is unrealistic to expect.

No system of economics or governance can or will survive long term without checks and balances, and a built in method to prevent entrenched interests from gaining undue control. Not one society in history has gotten it right yet.

It is worth including Rand’s work in any discussion of economics, as it is worth including most notable failed theories; so that we can learn from the mistakes of the past


You raise a very good point.

Capitalism does indeed rely on ethical behavior and this is what makes it the only moral social system.

People can be dishonest or manipulating regardless of the political-economic system they live under. Their villainy is not a consequence of the system. This is a universal ethical issue, not a particular political one.

Capitalism demands that people abstain from violating the rights of their neighbors and is not properly constructed without reference to an over-arching and objective rule of law (over against the rule of man) which constrains, prohibits and penalizes predation and willful disregard.

This is the definition of free markets. Any market that is not constrained by the rule of law is not free. These enforceable constraints, along with the free market forces of supply and demand, are its “checks and balances.” Beyond this, individuals are free to conduct their voluntary, peaceable economic affairs as they see fit and to their own profit.

However, under a Socialist system, or an Interventionist system, which we have in America, the violation of individual rights is endemic to the system; and that infringement is perpetrated by the very institution established to guard their preservation: The government.

4tees writes:
“By your argument communism is an equally viable theory to capitalism. Both require ethical behavior, as you describe, to function as intended. If man could be expected to act in such a manner either form of society could flourish.”


1. The ethical foundation of collectivist economies is injustice and the denial of reason and free will. The socialist state could not exist for one moment without the violation of individual rights. From the first day, Socialism alienates the individual from his right to property, his right to free trade, and his right to free association.

2. Pure Socialism is impossible. It can never calculate prices for commodities and must always rely to some degree on free market mechanisms to accomplish the simplest commercial exchanges.

3. Therefore, Socialism cannot be ethical nor can it flourish. The only political economy that is both ethical and flourishing is Laissez-faire Capitalism.

4tees writes:
“The laws required to ensure markets remain free markets would be very invasive and require a large external body (which is also subject to non-ethical behavior) to regulate and oversee said markets.”


1. The protection of individual rights is not invasive, but in fact absolutely necessary to a free society. And it is for the protection of individual rights that governments are instituted among men.

2. The only way government (or “a large external body,” as you put it) can be “subject to non-ethical behavior” is in the case where it lurches away from Capitalism and toward Socialism; which is the case that obtains in America.

Thunder Pig writes:
"Call it what it is: Meritism"


Yes, but this not what it is. This definition isolates one part and uses it to refer to a complex whole. Neither is the concept of desert -- that is, getting what you deserve -- a phenomenon exclusive to the political or economic realms; as the author admits (par. 8).

Capitalism is more than this one characteristic.

Laissez-faire Capitalism is a complete political-economic social system of freedom that recognizes, respects and protects individual rights, is based on the private ownership of the means of production, derives its principles from the facts of reality, human nature in a social context, and the ethic of rational self-interest, and finds its expression in peaceable, voluntary exchange within a framework of justice and the rule of law.

chops writes:
“What’s wrong with this situation is that WCU does not have the freedom to choose who offers $1 million. BB&T however, has the power to be self-serving through its own exploits and our faulty capitalist policies.”


1. The freedom that WCU does have is to choose whether or not to accept funding from a potential benefactor. This is not something that is “wrong.” If WCU would prefer not to receive the funding, and thereby not agree to its conditions, they are free to do so. BB&T is under no obligation whatever to offer funding to anyone and WCU is under no obligation to accept any. That is freedom of choice.

2. There is nothing wrong with BB&T being self-serving. In fact, this is their right: to use and dispose of their capital in any legal and peaceful way they see fit. Just like you and I.

3. Any profit that BB&T acquires is done so entirely appropriately by offering valuable products and services that customers voluntarily want to purchase and use. Profit-making is a perfectly moral human activity. And all this is in spite of being heavily regulated under an Interventionist political economy, not a Capitalist one.

chops writes:
Without profit, perhaps one’s motivation to raise our standards and incentive for innovation and production would be simply for the betterment of the greater community. Love for “thy neighbor” is a very strong force: in a highly evolved society, it motivates people to volunteer and become activists, benefactors and philanthropists.


In anticipation of the next issue of the Mountain Xpress, I would like to thank everyone for an engaging discussion on this story and bid this one adieu with these final thoughts:

1. Socialism is both immoral and unsustainable.

2. Capitalism does not exist in this country, and never has.

3. Our current economic crisis is a failure of Interventionism, not Capitalism.

4. Congratulations to WCU for their wisdom in accepting the very generous donation from BB&T. Congratulations to BB&T for making it a condition of their generosity that WCU add Ayn Rand’s remarkable novel “Atlas Shrugged” to their required reading list.

5. Who has done more to increase the general prosperity and happiness of the poor? Mother Teresa (self-sacrificial ‘love’) or Bill Gates (self-interest and profit).

[signing off]



Ayn Rand Center for Individual Rights

The Clemson Institute for the Study of Capitalism
The mission of The Clemson Institute for the Study of Capitalism (CISC) is to examine and increase public awareness of the moral foundations of capitalism.

What Is Capitalism? [audio]
By Ayn Rand

BB&T Spreading Capitalism On Campus Through Ayn Rand
Marc Gallagher | LibertyMaven | December 24th, 2008
I knew there was a reason I banked with BB&T.

Lecture: Unregulated Laissez-Faire Capitalism [video]
Dr. Yaron Brook | Ayn Rand Institute | April 14, 2008
Delivered at the University of California, Irvine. Q&A [video]

Who controls what’s taught?
By Julia Merchant |Smoky Mountain News | 1/7/2009
Western Carolina University’s College of Business recently secured a $1 million donation from BB&T — but not before discerning faculty fought to loosen the strings that came with the donation.

Bubble Boy: Alan Greenspan’s Rejection of Reason and Morality
Gus Van Horn | Objective Standard | Winter 2008
“[The] idea that Greenspan possessed ‘free-market convictions’ and that those convictions are why he failed to rein in unsound lending practices is ridiculous. The very purpose of the Federal Reserve—the central bank at the heart of our troubled, government-controlled economy and the money machine that Greenspan operated for almost twenty years—is to manipulate the market. Such a ‘bank’ would not even exist in a free market, and its precise function in our mixed economy is to engage in unsound lending practices as a means of such manipulation.”

Letters to the Editor
Smoky Mountain News | January 14, 2008

Tuesday, December 09, 2008


Let's get over our selfishness and help those in need
Terri Decker | AC-T | December 8, 2008
Dreaming of those snowcapped “Thomas Kinkade cottages” sitting like a beacon of enchantment through the forest with ember glow spilling out from the windows and smoke billowing magically from the chimney, I anticipate the warming comforts of family and friends. . . What happened to the conviction of believing in something bigger than ourselves though? If you don't believe in a higher power, what of the network of people around us working together as a thriving, living unit?

RESPONSE (w/edits)

The writer's attempt to sneak a subtle collectivist morality into a syrupy fable does not go unnoticed. She urges us to abandon selfishness -- which she intimates is a vice -- in favor of a sense of unity and fealty to "something larger than ourselves."

To the contrary, we are not a "living unit." Human beings distinguish themselves from the animal kingdom by this very fact. Certain moral and political philosophers would like to characterize human beings as metaphorical ants in an ant farm. But this is a misapprehension -- and a serious and consequential one.

Human beings are individuals who purposely and voluntarily choose to cooperate in a variety of societal arrangements, properly guided by self-interested motivations, and to our greatest mutual benefit.

People are not parts of an organism. They possess Reason, Free Will, Self-Consciousness, and are Individuated; that is, each person is unique. It is individuals making free choices and seeking their own rational long-term self-interest that makes social cooperation work. And the result is a synergy of value that delivers the greatest prosperity to the greatest number.

It is for this reason that I disagree with the writer and her advocacy of a collectivist self-image of humanity.


Sylvia Bokor comments:
Ms. Decker's article ignores the extent to which Americans have already spent millions in helping those in need. We have helped people through private charities, and through foreign aid to victims of hurricanes, earthquakes and fires.

To use the term "selfish" as if it were a dirty word ignores the source of value-creation. Men create values because they're concerned with their own interest---the dictionary definition of selfishness. To admonish us for being selfish as if it were a moral offense and simultaneously cry for the values we've created to "help those in need" is a monumental evasion.

Decker's collectivist premises are clear. For instance, referring to the irrational conduct of some New York shoppers, she asks, "What's happened to our humanity?"---as if we were all responsible for the disgraceful conduct of a few.

People like Decker are forever talking about things "higher" than you while asking you to give more and more without a single note of gratitude. Ignore her. Americans, you are to be thanked for your generosity, for your benevolence, for your concern for your own self-interests, which is a virtue. Thank you.


The Virtue of Selfishness
Ayn Rand | November 1964
rational interests of men do not clash—that there is no conflict of interests among men who do not desire the unearned, who do not make sacrifices nor accept them, who deal with one another as traders, giving value for value.

Ayn Rand's Normative Ethics: The Virtuous Egoist
By Tara Smith | April 2007
Far from representing the rejection of morality, selfishness ... actually demands the practice of a systematic code of ethics.

Sunday, December 07, 2008

Christmas Cheers

Will forego the commercial and focus on the spiritual
Michal H. Hall | Letter to AC-T | December 7, 2008
[...] Giving at Christmas (which probably evolved from the giving of the wise men) is a natural response of the season. But it has evolved into a sick and burdensome thing bringing chain stores into the black. Instead of running enslaved before it, we need to reshape our giving at Christmas into something appropriate to the season. My wife and I are sending out a letter to family saying that we will only give small personal gifts (that we either see during the year or personally make), or we will give to a charity in their honor. But no more will we bow to the chaos of commercialism that threatens the peace and wonder of this beautiful season.

RESPONSE (w/edits)

The writer may do as he likes. The rest of us will patronize businesses that provide the community with value in the form of products, wages and entertainment.

The writer can demonize the business man and his enterprise. But in fact he is making a demon of his neighbors: the people who are satisfied by the businessman's productivity and his vigilance to anticipate and satisfy demand.

Commerce is peaceable, voluntary exchange in a free market for mutual benefit. It entails free people using their minds for their own long-term, rational benefit. That benefit includes the ability to increase one's happiness by sharing store-bought gifts with loved ones.

Instead of finding joy in the happiness of others and their free action to pursue their own happiness, the mean-spirited writer chooses to characterize his prosperous and energetic fellows in a most uncharitable manner.

And in so doing, he demonizes only himself.


Why Christmas Should Be More Commercial
Leonard Peikoff | 2001
Christmas in America is an exuberant display of human ingenuity, capitalist productivity, and the enjoyment of life. Yet all of these are castigated as "materialistic"; the real meaning of the holiday, we are told, is assorted Nativity tales and altruist injunctions (e.g., love thy neighbor) that no one takes seriously.

Fairness Doctrine

In a discussion on the URTV mailing list, a member offered some comments on a video supporting the re-introduction of the Fairness Doctrine:

"skilarqaol" wrote:
RFK Jr on the Fairness Doctrine [video]
And a strong argument for bringing it back.

I would have to disagree.

What Mr. Kennedy and others are essentially proposing is to use the coercive force of the federal government to reduce individual liberty; in this case, in the marketplace of ideas.

This is a view that Mr. Kennedy shares with his political adversaries: conservative Republicans.
Conservatives have long supported the FCC’s war on so-called indecency. Both sides endorse the principle that the government should be dictating what Americans can and cannot say — they only differ in the way they want to use the censor’s pen to advance political agendas. -Don Watkins

For the supporters of so-called "fairness" to abandon persuasion in favor of coercion is, sadly, an admission of defeat. If reactionary liberals were competitive or even dominant in radio, the impulse to use force to achieve "fairness" would evaporate.

The Fairness Doctrine is an authoritarian encroachment on the rights of individuals by interfering in the marketplace of ideas behind the curtain of the law. It is for this reason that I do not, and cannot, support it.


In response, "skilarqaol" wrote:
The video made some points I find interesting, in that 5 or 6 huge companies own our national media...

Yes. Why have "The Big Five" when we could have the small 500?

The reason there are "5 or 6 huge companies" owning radio is because of government interference in the free market.

It is the government that grants licenses and regulates broadcast companies. This government intervention allows media monopolies to exist by hampering competition from entrants and by lending a reciprocal legislative hand to the most powerful among them. The larger the corporation the better they are able to afford the costs of licensing, regulation and lobbying, as well as afford the corporate largess that redounds to the lawmaker's benefit from time to time in exchange for a favor. Thanks to the government, the bigger the better.

And that's what we're seeing: Media conglomerates are simply playing by the rules forced upon them by the government in order to survive and continue providing value to the community for profit. That means, as a sad consequence, consolidating and limiting competition through legislation.

Monopolies can exist only by virtue of government interference in the economy. By artificially and arbitrarily setting the terms of entrance into a market, the government sets the stage for corruption and predation.
Corruption is a regular effect of interventionism. An analysis of interventionism would be incomplete if it were not to refer to the phenomenon of corruption. —Ludwig von Mises, Human Action

Not so in a free market. Monopolies cannot exist in a laissez-faire free market capitalist political economy. Any time a corporation consolidates to dominate a given market, the consumer always has the option of withholding their patronage or of patronizing other media or of entering the market themselves to compete for the attention of the media consumer.

In a free market, entrepreneurs would own and operate radio stations entirely without the permission, or the control, of the government. The radio broadcast spectrum is not the property of a mysterious and shape-shifting "public." It is property like any other, and must conform to the rules governing property, like any other.

The spectrum is treated like a street fair with each vendor having his own claim to a space along the avenue. Other vendors must respect this private property and the freedom the vendor should have to make use of it as he sees fit, without interference from other booth owners. The government, in this case, must restrict the scope of its action to protecting the rights of the property owners.

If someone attempted to buy up all of the booths themselves, they would still have to provide products or services that meet with the utmost approval of the consuming public. If they do not, then this necessarily opens the door to competition; any competition. The uncompetitive owner would then have to cash in, or sell some of his booths to someone else who could better turn a profit and thereby salvage his investment. And profit, keep in mind, is the key indicator that a business is providing a value to "the public."

Media consolidation is a problem. But it is only a problem for socialism, not capitalism.

I advocate the free market approach to the airwaves.

Friday, December 05, 2008


"Congress shall make no law respecting an establishment of religion..."

Today -- Friday, December 5, 2008 -- marks the 75th anniversary of the repeal of Prohibition, which should be cause for general celebration around the country.

On October 28, 1919, the Volstead Act was passed by Congress, vetoed by President Woodrow Wilson, and then overridden by Congress on the same day. The act stated that "no person shall manufacture, sell, barter, transport, import, export, deliver, furnish or possess any intoxicating liquor except as authorized by this act".

The following ratification of a Constitutional amendment marked the beginning of a 13-year-long Era of Prohibition, lasting from January 16, 1920 to December 5, 1933.

[Note: Marijuana has been illegal for 71 years.]

In February of 1933, after a decade long battle against Prohibition, Congress proposed an amendment to repeal Prohibition (in the form of the Blaine Act) and on December 5, 1933, the nation ratified the Twenty-first Amendment, repealing the Eighteenth Amendment, making the Volstead Act unconstitutional, and restoring control of alcohol to the states.

Prohibition laws were the direct consequence of meddling religionists attempting to codify into law, and through the mob rule of democracy, their own peculiar moral values and thus impose them on all others through the coercive force of the federal government. The insidious and pernicious encroachment of subjective, faith-based moralities into the objective law of a secular and pluralistic free nation must continue to be resisted today and into the future.

...the illegality of drugs rests on a certain philosophic idea that is inimical to the founding principles of America and should not be defended or accepted uncritically. The idea that people do not have the right to their own bodies and that the state (or collective) should intervene to "guide" people in making the correct choices provides the philosophical underpinning for the drug laws. -Amesh A. Adalja, Letter to Pittsburgh Tribune Review, 12/3/08

Congratulations on this anniversary go to all of the thinkers, politicians, activists and commentators who made this repeal possible; most especially H.L. Mencken (1880-1956), a Baltimore libertarian journalist, humorist, and stalwart defender of liberty.

The most dangerous man, to any government, is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are. -Mencken


Short Prohibition Documentary

Prohibition Repealed, Industry Booms

Still Free to Booze [audio]
Brandon Arnold | Cato Institute | December 5, 2008

Let's End Drug Prohibition
By Ethan A. Nadelmann | Wall Street Journal | December 5, 2008
Most Americans agreed that alcohol suppression was worse than alcohol consumption.

Drug Wars: The Movie
Exclusive interviews with some of the “big dogs” in the narco-trafficking food chain reveal what the narco lifestyle is really like in this tell-all investigation of the Mexican drug cartels.

Mencken: The American Iconoclast
by Marion Elizabeth Rodgers | September 10, 2007
For much of the early 20th century, Mencken, aka the Baron of Baltimore, was the country's most famous pundit, inspiring both love and fear and sometimes an equal measure of both. As novelist Richard Wright noted, "He was using words as a weapon." His targets were only the biggest issues of his day: Prohibition, puritanism and censorship.

Lord, Deliver Us from Prohibition
H.L. Mencken (as "Major Owen Hatteras") | The Smart Set | 1920
The one page article is written in typical Menkenese and catalogs example after example of how prohibition is creating a worse society, not a better one; citizens of all stripes who would otherwise be judged as honest souls, are instead committing illegal acts and there seemed to be no end in sight to such behavior.

Is the U.S. a Christian Nation?
In a 2007 interview with, John McCain stated that “the Constitution established the United States of America as a Christian nation.” While some were encouraged by McCain's words, others took great offense, reigniting a passionate debate about the intentions of America’s founders.

The Coalition for Secular Government
CSG advocates government solely based on secular principles of individual rights. The protection of a person's basic rights to life, liberty, property, and the pursuit of happiness -- including freedom of religion and conscience -- requires a strict separation of church and state.

Economics of Prohibition
Mark Thornton | 1991
The purpose of the following investigation is to improve our understanding of the origins and results of prohibition, and therefore indirectly to contribute to future policymaking, shifting it toward rationality.

Persuasion vs. Force
by Mark Skousen | 1992
Convincing the public of our message, that "persuasion instead of force is the sign of a civilized society," will require a lot of hard work, but it can be rewarding.

It's time to end drug prohibition
By Ethan Nadelmann | Pittsburgh Tribune-Review | December 14, 2008
Supporters of Prohibition blamed the consumers and some went so far as to argue that those who violated the laws deserved whatever ills befell them. But by 1933, most Americans blamed Prohibition itself.

Forbidden Thoughts from Mencken
Doug French | Mises Institute | 2/26/2009
Writes Menken, the common man has no interest in liberty: "he is not actually happy when free; he is uncomfortable, a bit alarmed, and intolerably lonely. He longs for the warm, reassuring smell of the herd, and is willing to take the herdsman with it."

Wednesday, December 03, 2008

Seven Trillion Dollar Bailout

So far, the government has taken these steps to interfere in the marketplace and prevent necessary market corrections (to the tune of $7 trillion):


Term-auction facility: $1.6 trillion in loans to banks so far in exchange for otherwise unwanted collateral. The Fed increased its monthly auction limit to $300 billion in October, up from $20 billion when the Fed began the program.

Dollar swap lines: Unlimited dollars to 13 foreign central banks to provide liquidity to foreign financial institutions. The Fed lifted its cap after raising it to $620 billion in October from $24 billion in December.

Bear Stearns: $29 billion in a special lending facility to guarantee potential losses on its portfolio. With the lending facility, JPMorgan was able to step in to save Bear from bankruptcy.

Lending to banks: $70 billion lent on average every day to investment banks, after facility opened to non-commercial banks for first time in March. $92 billion a day to commercial banks.

Cash injections: $250 billion allocated to banks from $700 billion rescue package in exchange for equity stake in the financial institutions in the form of senior preferred shares.

Citigroup: $300 billion in troubled asset guarantees and $45 billion in cash-injections to prevent fourth-largest bank from failing.

Fed rate cuts: Down to 1% in October 2008, from 5.25% in September 2007.


Stimulus checks: $100 billion in stimulus checks made their way to 140 million tax filers to boost consumer spending and help grow the economy.

Unemployment benefits: $8 billion toward an expansion of unemployment benefits, to 39 weeks from 26 weeks. Some states must now offer 39-week benefits after an extension act was passed in November.

Bank takeovers: $15.5 billion drawn down so far from the FDIC's deposit insurance fund after 22 bank failures in 2008.

Rehab foreclosed homes: $4 billion to states and municipalities in assistance to buy up and rehabilitate foreclosed properties.

Student loan guarantees: $9 billion so far in government purchases of student loans from private lenders. Higher borrowing costs made student loans unprofitable for a number of lenders, many of whom stopped issuing the loans.

Money-market guarantees: $50 billion in insurance for money-market funds. The Fed then began to lend an unlimited amount of money to finance banks' purchases of debt from money-market funds. The Fed then agreed to purchase up to $69 billion in money-market debt directly. In October, the Fed said it would loan up to $600 billion directly to money-market funds, which was extended for six months in November.

Housing rescue: $300 billion approved for insurance of new 30-year, fixed-rate mortgages for at-risk borrowers. The bill includes $16 billion in tax credits for first-time home buyers. But lenders have been slow to sign on.

Deposit insurance: $250,000 in insurance for interest-bearing accounts, up from $100,000. The FDIC also issued unlimited guarantees on non-interest- bearing accounts and newly issued unsecured bank debt.

Consumer loans: $800 billion extended to consumer loan-backed securities, including $200 billion for assets backed by credit cards and car loans and $500 billion in mortgage-backed securities. The Fed will also buy $100 billion of Fannie Mae and Freddie debt to try to make loans cheaper.


Business stimulus: $68 billion in tax breaks to corporations to help loosen the stranglehold on businesses trying to finance daily operating expenses.

Fannie Mae, Freddie Mac: $200 billion to bail out the mortgage finance giants. Federal officials assumed control of the firms and the $5 trillion in home loans they back.

AIG: $152.5 billion restructured bailout, including a direct investment through preferred shares, a easier terms on a $60 billion loan, and new facilities meant to take on the companies exposure to credit-default swaps.

Automakers: $25 billion in low-interest loans to speed the industry's transition to more fuel-efficient vehicles.

Commercial paper facility: $271 billion in corporate debt purchased so far by the Fed since its so-called Commercial Paper Funding Facility opened. The Fed allocated $1.4 trillion for the program.

[Courtesy of CNN Money]


Politicians caused and worsened the Great Depression
Lin & Ari Armstong | Grand Junction FP | December 8, 2008
Do we really want a new New Deal? The answer depends on whether we think Roosevelt’s New Deal made things better or worse during the Great Depression.

Monday, December 01, 2008

Stimulus Package

House to seek about $500 billion economic stimulus
Reuters | Dec 1, 2008

"Democrats in the House of Representatives likely will seek passage next month of an economic stimulus bill costing about $500 billion, a House Democratic aide said on Monday..."

I would support, instead, a three month moratorium on federal income and social security taxes.

Americans pay $101.6 billion per month in personal income tax and $65.6 billion per month in FICA tax, totaling $167.2 billion per month. A three-month tax holiday would equal $501.6 billion -- the same as the stimulus package but without the overhead.

The tax holiday would also relieve businesses of the burden of their contributions to the FICA tax; thereby boosting their revenue position and their ability to provide jobs and invest in production, however short-lived.

Rep. Louie Gohmert (TX) has even proposed "returning all 2008 income taxes to American taxpayers as a solution to boost the ailing economy, as he believes taxpayers, rather than the government, should be using their hard-earned money to choose the economy's winners and losers."


H.R. 7309 | December 9, 2008
To amend the Internal Revenue Code of 1986 to suspend employment and income taxes for the first two months of 2009, and for other purposes.

Sunday, November 30, 2008

City Council Application

Applications for appointment to vacancy on Asheville City Council 2008:

47 Applicants

32 men.
15 women.
41 whites.
2 African-Americans.
1 Hispanic.
3 race unknown.
8 are 18-35 years old.
34 are 36-64 years old.
4 are 65 years or older.
1 age unknown.

[This application did not make the deadline and will not be considered by city council at their December 2 meeting.]

Leslee Kulba
Asheville NC

What motivates you to apply for this position.

The current body, as constituted, is not preserving liberties. I want to be one vote against government coercion. Dollars collected at the force of government should go toward the public good – not master plans by Massachusetts firms pushing business improvement taxing districts, watershed studies, etc. Charged with protecting the rights of my constituents, I would have to shift resources from code enforcement (hassling people with bad taste) to law enforcement (hassling people who steal from and beat up other people). It would not be my job to jabber into the camera until the cows come home, but to be another vote for limiting government to its fundamental responsibility.

Where do you fall on the conservative-liberal spectrum in terms of fiscal and social policy?

I fancy myself to be a strict Constitutionalist, which puts me in the 99th percentile in the correct direction in both spectra. “Liberal” has too many definitions to have meaning. I am a classical liberal in that I believe government should grant no privileges. This is not the opposite of conservatism. With respect to fiscal policy, I believe minimal taxes should be collected for protecting the rights of citizens to pursue their dreams. This means I support a police force and an EMS force. I do not support a recreation force or a zoning force. I also tolerate government competing against the private sector to provide essential infrastructure. The public works department and water department are currently managed well by the city. With respect to social policy, man has a duty to work out his own salvation in his own way in his own timeframe. What people do in their own closets is between them and their God, until it infringes on the rights of others. Then, it becomes government’s business. I am freakingly appalled by policies that punish those with foresight to set up stable households and careers through high moral conduct, by making them support the foolish lifestyle choices of those who want to get drunk and party, leaving behind a trail of kids called mistakes, AIDS, addiction, and other sad consequences major world religions from time immemorial have warned against. Charity works when one is touched by the love and sacrifice of another on his personal behalf, and not when a bureaucrat shuffles reports 'ad nauseum' structuring data for his cases. Government can appropriately intervene in crimes against persons and property. The rest is best left to individual conscience and choice. Election to public office does not transmogrify base metal into omniscient gods. Government programs, as a general rule, do not work.

In your eyes, what should be the top 2 or 3 priorities our city council should be focused on in the upcoming year and why?

Public Safety. That is the 'raison d’etre' of government. I would be incompetent if I was seated in government office, and every week we continued to read about a shooting or stabbing in public housing. This is serious, and we need to acknowledge the limitations of the system and find creative ways to protect the liberties we pledge to uphold and stop acting like we expect Black people to shoot each other up in drug turf wars.

Scaling Back. This is supposed to be a country of limited government. The planning department doesn’t need to be so busy and meticulous it drags the city into expensive lawsuits for violating the liberties government is supposed to protect. The arts should be subsidized by those who appreciate particular works or skills. A one-year moratorium on studies would do more good than harm. The UDO needs to be scrapped and replaced with minimum standards that promote safe and healthy building. People should be able to live in housing made affordable by its smallness and use of economy materials and designs. The city may maintain public spaces, but it should not program them. No state or federal grants should be accepted for local business. Police officers need to be relieved of babysitting duties and stationed more strategically. Transit needs to be efficient.

What do you consider the most crucial problem, need, or cause for the citizens of Asheville? How would you approach its resolution or champion the cause?

Asheville needs to be liberated. Too many special interest groups want to clamp their agenda on others. City council wants to design doorways and parking lots without regard to the design costs and functional necessities of those who will own and occupy the buildings. People have forgotten what made America great. They want to sing the praises of Che Guevara and emulate Fidel Castro’s system of socialized medicine. They blame the stock market problems on deregulation. Citizens should, in the Ancient Roman sense, love and honor the laws of the land, but they can’t because no sane person is going to love, let alone commit to memory, laws that tells them how many inches go between what species of trees, for example. How can anybody write the UDO in their hearts and walk daily by its precepts? When laws are not self-evident, but can be derived only by consulting the books, the exercise of conscience becomes subservient to the wish to stay out of jail. The law should foster conscience. Government needs to be rolled back, and rolled back big-time. If people feel threatened by liberty, they can consider putting forgiveness and tolerance of diversity in action.

I’d like to get a group of volunteers together to knock the UDO down to a masterpiece of elegance and common sense. I would entertain any proposal to abbreviate the Code of Ordinances. I would vote against any unnecessary legislation.

2008-09 and 2009-10 fiscal years will be financially tough for the city. What will be your top funding priorities, and what would you like to see reduced to balance the budget?

If these questions have not yet been answered, it is because the respondent harbors a disconnect between hopes, wishes, and dreams and revenue streams. Either members of council suffer the same malady, or they have problems understanding the concepts of “necessary and sufficient,” and mutual exclusivity. Excessive regulation is symptomatic of failure to appreciate these concepts. My answers to this question were already provided.

Saturday, November 29, 2008

Schiff Was Right

Austrian Economist and financial commentator Peter Schiff was right in 2006 and 2007. Funny thing, that.


Weekly Columns by Peter Schiff | Financial Sense University

Interview with Peter Schiff
by Tim Swanson | Mises Economics Blog | April 21, 2008
My investment advice is rooted in my understanding of economics. It is that understanding that allowed me to accurately forecast the trends of the last decade, and to have positioned my clients in advance to both protect their purchasing power and profit from what has already played out.

Thanks for the Inflationary Depression [audio]
Peter Schiff | The Lew Rockwell Show | 05-10-2008

Friday, November 28, 2008

Conceptions of Capitalism

In an excellent blogpost at NoodleFood entitled Absent a Moral Defense of Capitalism, fellow Objectivist Gina Liggett writes:

"As Dr. Brook states in his talks, obviously the fact about capitalism's success is simply not enough; the fact that government interference in the economy wrecks havoc is simply not enough. We must make the moral argument that laissez-faire capitalism is not only practical, it is morally right."

A good friend involved in the Ron Paul Campaign for Liberty responds:

[I acknowledge] the right to enjoy the fruits of our labor, the right to possess that which we produce, the right to trade our possessions, the right to freely and peacefully associate with others and the right to pursue our individual happiness without any restraint beyond the reciprocity found in recognizing and honoring all of these same rights in others.

Unfortunately, what the rest of the world calls "capitalism" has nothing to do with any of these individual rights. The modern world consists of nations practicing what, at best, could be called "mixed economy" or "state capitalism". Most variants of "capitalism" in the world today, first violated one or more of these rights. What we refer to as laissez faire, laissez fair capitalism, capitalism, a free market or a market economy do not exist in any modern state. A moral defense is the only way to defended the concept. I just wonder if we shouldn't find a better name for what we all agree is the natural way for freemen to organize their financial affairs.

Thanks for your comments.

I share the view of Rand and Mises: Capitalism cannot violate any rights. Only statism violates rights.

A "mixed economy" is, by definition, not capitalist -- just as a mixture of water and poison is not water. What America and most of the rest of the world practice is Interventionism. The rest are socialist or variants thereof.

I believe there needs to be a renewed understanding, embrace and promotion of total laissez-faire free market capitalism. I am working on this with Objectivists around the country (world, even). That is why I drafted the conceptual scheme that I shared with you earlier.

There is even an Objectivist Party that has been started; although, I'm not confident that this is the proper approach (see correspondence to the Objectivist Party below).

Frankly, the so-called cause of "liberty" is vague, undefined, and has too broad an appeal. It is a valid principle, but without a concrete political expression, it leads to nothing substantial or consistent.

Both Mises and Rand have a lot to say about capitalism -- they are its primary champions. They also have a lot to say about anti-capitalist sentiments and policies. I am reading "Liberalism: The Classical Tradition" by Ludwig von Mises right now. This is von Mises's prescription for a properly ordered society; one based on the ideology of Liberalism. ("Liberalism" is another term I believe should be restored to its proper meaning.)

I honestly believe that if we cannot agree on the fundamentals, any moderate successes are doomed to fail in the long run. As we have amply seen already. Better to get on the same page first, then act.

The country and the world are at a crossroads. Let's get on the right side and pack a compass.

You have a better understanding than most and I look forward to working with you "as we go marching."


Correspondence with The Objectivist Party

From Dr. Tom Stevens
Sent: Friday, November 21, 2008 11:34:25 AM
Subject: Objectivist Party Member Priorities

Here are the priorities for Objectivist Party members who would like to be of help to the cause. If you feel something should be added to the list, do not hesitate to suggest it.

Thanks for your thoughtful and thorough notes.

I threw together some thoughts in graphic form on a conceptual framework for a liberty-oriented political action club for consideration by a local libertarian group (this is a draft with implications). It was coolly received and I forward it to you for whatever it might be worth.

I think that an Objectivist political organization should have as its central theme the unapologetic promotion of laissez-faire free market capitalism. This is the political component Ayn Rand identified in her synopsis of Objectivism, given on one leg.

I am unsure about turning the entire name Objectivism over to only a political focus. The political component, according to Rand and Objectivism, is Capitalism. I have tried to frame that aspect in the graphic, hopefully with fuller definitions and extrapolations to come. At any rate, I think it provides a good starting point, with much to develop, where Capitalism is broadly defined as a political-economic social system of freedom (per Rand, Reisman, Bernstein, & Mises).

I have, however, encountered a wavering commitment from libertarians and Ron Paul supporters to recognize and champion capitalism, as such. Below is some correspondence from that conversation with local libertarians for background.

Correspondence with Asheville libertarians

From: ...........
Ref: Conceptual Framework
Might I suggest that the chart would be perhaps improved if "Capitalism" were to be replaced with "Liberty". Liberty seems like a more broad ideology on which to build than capitalism. Also, it is far more attractive in that the mere word "capitalism", which is often regarded as fearful or downright evil to the political left.

Let me clarify something about the conceptual structure conveyed in the chart.

In this chart, an activist organization would consist of three main components: Organization, Ideology, and Activism. All of which enable the organization to fulfill its mission.

As part of the group's ideological development, certain foundational principles would be identified; such as the libertarian principles of Self-Ownership and Self-Determination. Those principles would naturally generate a set of values; for example: Privacy, Independence, and Justice. Taken together they lend themselves to the formation of key concepts. Those concepts, once fully broken down (as shown in the chart), can then help indicate which concrete and specific issues are the most appropriate targets of political activism as well as the ideological position to take on them.

The concept must support the principles and values that constitute an ideology.

Capitalism 'per se' is, as we know, the only political-economic social system that recognizes, respects, and preserves individual liberty. Therefore, at least for us, it is the principle of liberty that is hierarchically prior to the concept of politics and its subsequent concrete manifestations. A proper political system that derives from libertarian principles will be one that incorporates the key attributes of Rights, Governments and Markets. In this conceptual structure, the inclusive concept is Capitalism.

I hope that helps to explain the parts of the chart that I was able to expand on so far. Also, bear in mind that this chart is an internal document, it is a rough draft, and is intended for our consideration only.

On the further linguistic question, I have long considered shuttering away explosive terms like "capitalism" in my normal conversations in favor of terms that could better gain me entrée into diverse political conversations. However, capitalism, I now believe, cannot simply be called something else merely to sooth the nervous minds and sensibilities of its duplicitous opponents, the anti-capitalists. It is they who attempt to obfuscate their intentions through the disingenuous manipulations of language and ideas. We could at least set ourselves apart on precisely this point: by saying what we mean and meaning what we say.

I think it is long past time to be squeamish about important ideas. It is imperative that we precisely set the terms of the debate and clearly distinguish ideas that favor liberty -- in the social, economic and political arenas -- from those that do not. What better litmus test than to have clear and consistent libertarian ideas forthrightly upheld with substance and conviction.

If some terminology is from time to time shown to be wrong or wrongly used, the error should be corrected and clarifications made. If it is right, it should be embraced and promoted for what it is. We cannot 'synonym' our way around a foundational idea. If the term "capitalism" suffers disrepute, then surely it falls upon us to restore it.


The flowering of human society depends on two factors: the intellectual power of outstanding men to conceive sound social and economic theories, and the ability of these or other men to make these ideologies palatable to the majority. -Ludwig von Mises, Human Action


Capitalism and the Moral High Ground
Craig Biddle | Objective Standard | Winter 2008
We who wish to advocate capitalism must take the moral high ground—which is ours by logical right—and we must never cede an inch to those who claim that self-sacrifice is a virtue.

Capitalism Without Guilt: The Moral Case for Freedom [video]
by Yaron Brook | National Press Club | October 22, 2008
In this lecture in Washington, D.C., Executive Director Yaron Brook demonstrates how Ayn Rand’s revolutionary ethics of rational self-interest supplied the moral foundation that previous proponents of capitalism lacked.

Capitalism: The Unknown Ideal
by Ayn Rand | 1966
Ayn Rand explains the social system that she held has “never been properly understood and defended—and whose very existence has been denied.” That system is laissez-faire capitalism: a social system in which the government is exclusively devoted to the protection of individual rights, including property rights, and therefore in which there exists absolutely no government intervention in the economy.

The Capitalist Manifesto: The Great Disconnect
by Andrew Bernstein | August 28, 2005
The capitalist revolution began in Great Britain in the late-18th century. Since that time, the capitalist nations have been the freest countries of history.

Ayn Rand: Radical for Capitalism [video]
Yaron Brook | October 11 2007
Capitalism is usually conceived as an evil idea, the mere fact of practicing self-interest has been thought as wrong and the traditional ethics teaches us that we don't have to combine with the idea of entrepreneurship. In her book Atlas Shrugged, Ayn Rand explains us how these two ideas are compatible: When we seek our benefit, we benefit the others.

The Ludwig von Mises Legacy [video]
Mises Institute | December 13, 2005
A man who never stopped fighting for freedom: not when the Nazis burned his books, not when the Left blackballed him at universities, not when it seemed as if statism had won. With courage and genius, he fought big government until the day he died... in 25 books, hundreds of articles, and more than sixty years of teaching.

Radicals for Capitalism
by Brian Doherty | February 12, 2007

The Free Market and Its Enemies
by Ludwig von Mises | 2006 (1951)

Capitalism, topic search, Ayn Rand Center for Individual Rights

Saturday, November 22, 2008

Brother, Can You Spare a Bench?

Sit-in will protest removal of benches in Asheville
by David Forbes | Mountain Xpress | 11/20/2008

A group of “concerned citizens” will hold a sit-in at noon this Sunday to protest the city’s removal of two park benches in front of Pack Memorial Library. The city has announced that the Asheville Police Department will remove protesters if they impede traffic on the sidewalk.

According to the protester's press release, “many city officials, residents, and businesses seem determined to treat their homeless neighbors as undesirable garbage that should be promptly disposed of.”

In specifically what way does the removal of a bench treat “homeless neighbors” as trash?

Local activist and concerned citizen Jen Bowen recently commented online: “Taking away our park benches just makes our city appear as if we can’t deal with the these human beings in any thoughtful manner...”

I think Jen is right. But it does not only appear that we can’t deal with the homeless in any thoughtful manner: We cannot deal with the homeless in any thoughtful manner.

The city has spent a lot of time and money implementing it’s quixotic decade plan to end homelessness. (We have 7 years left and I just can’t wait ;) I am unsure how the city can eliminate a lifestyle that, to a large extent, is voluntarily chosen. Government should be protecting individual rights, not violating them.

The government cannot solve social problems. It can only stop causing them. Zacchaeus House was doing its part but the city wanted to shut them down for want of segregated bathrooms.

“...the property must satisfy a host of special building-safety requirements, such as multiple bathrooms, exit signs and compliance with the Americans with Disabilities Act.” - Mountain Xpress

Instead of a chest-thumping protest of the city’s removal of a bench, this could have become a symbolic launching point to reassess our approach to the problems of vagrants, drunks, and miscreants—as well as the genuine homeless. But we have trouble making moral distinctions, don’t we?

I worked for a Task Force for the Homeless in Atlanta. Endlessly collecting statistics on the homeless does not feed or clothe. The purpose of collecting stats is to lobby the government for funding for administration, salaries and facilities for the stat collectors.

Significant and lasting solutions must come from a charitable community. The public sector is incompetent in dispensing charity. In fact, forced charity is an oxymoron. The consequence of government interference in charity is the extinguishing of the charitable sense. Individuals turn regard for their neighbor over to cloistered, grasping bureaucrats. Some charity, huh?

And how are those change boxes coming along? If you see a hungry woman on the street, will you walk over her to put a dollar in a box?


Zacchaeus House
Tim Peck | March 19, 2008
A private home in Asheville doubles as a place of worship and a sanctuary for the homeless. the home-church has been named Zacchaeus House and is operated by Rev. Amy Cantrell.

The Death of Common Sense: How Law is Suffocating America
by Philip K. Howard | Grand Central Publishing | March 1, 1996

Sunday, November 09, 2008

City Council Vacancy

The 2008 Buncombe County Board of Commissioners election will leave open one seat on city council by virtue of a sitting council member having won a county board seat.

This vacated council seat will be filled according to state statute. Statute allows council to summarily appoint a member of their choosing from all of the public or submit a pool of candidates for the appointment to an administrative review process of their own design. They have chosen the latter and promise to give their full consideration to any and all comers.
N.C.G.S. §160A-63: "A vacancy that occurs in an elective office of a city shall be filled by appointment of the city council..."

Asheville City Charter, Sec. 7: "Any vacancy in the office of mayor or council shall be filled by the council for the remainder of the unexpired term from the qualified electors [a qualified voter in an election] of the City of Asheville."

N.C.G.S. §160A-60: "City councils shall have authority to fix qualifications for appointive offices..."
But does this general talent search not leave the other trailing candidates a bit in the lurch? -- Freeborn, Butner and Lite (in that order). Do they not have some standing in the whole affair that sets them apart from other possible late applicants? Have they not already established their qualifications to a substantial degree?

That Bryan Freeborn lost in the 2007 city council race is not just a function of votes cast but also of the seats available in the race. They were the constraint that would provide us the outcome in a democratic contest.

The votes measured the popularity of candidates for a seat and Mr. Freeborn simply came up shy. In the end, he was edged out by another candidate, Bill Russell, and the seats were filled. Had there been an additional seat open, Freeborn would have taken it by dint of a formal participatory public process.

A great number of voters, at least 5,505, -- and plenty more besides, can probably guess by now how Mr. Freeborn would respond in the questionnaire that council intends to distribute to the general public. And there is plenty of footage one can review to get a sense of his "contribution."

But why should the runners-up be placed into the general cue. Mr. Freeborn has already applied for the council seat in question and has received a substantial endorsement from the community in his pursuit of it. An endorsement that should at least curry some favor with the sitting council charged with filling a vacant seat in a volatile political season.

Mr. Freeborn achieved his electoral ranking by submitting to a fair and open process in the public arena. And the people have demonstrated their preferences in all recent candidates put before them (And Butner should be considered should Freeborn decline).

Council should reclaim leadership and, in as much as possible, respect the will of the people just this one more time and forgo this tedious and empty exercise that they taunt us with.


Application To Be On Asheville City Council
By Gordon Smith | Scrutiny Hooligans | November 5th, 2008
I’m listening to Matt Mittan getting frothy over City Council’s plan to choose a replacement for a vacated City Council seat by employing an application and interview process rather than using the fourth-highest-vote-getter precedent. Mittan’s objection is that the process is not democratic and that there ought to be an election instead.

Why Council should give Freeborn the open slot
Ashevegas | November 9, 2008
There's been a lot of discussion lately about Asheville City Council's decision to have local residents apply to be appointed to the seat that will be left open when Councilwoman Holly Jones moves over to the Buncombe County Board of Commissioners in December.

Election 2008 left potentially contentious loose ends
Editor | Asheville Citizen-Times | November 9, 2008
The 2008 General Election left two important seats in limbo, one on Buncombe County Board of Education and another on Asheville City Council.

Candidate: Bryan Freeborn
Staff report | Mountain Xpress | 10/03/2007
Political party: Democrat. Political experience: Asheville Regional Airport Authority; Young Democrats of Buncombe County; French Broad Metropolitan Planning Organization. Endorsements: Asheville Fire Fighters Association; Asheville Democracy for America; Sierra Club; Council member Robin Cape.

Freeborn requests recount of election results
Clarke Morrison | Asheville Citizen-Times | November 15, 2007
City Councilman Bryan Freeborn has requested a recount of the Nov. 6 election results, saying he doesn’t think it will change the outcome of the race, but he wants to make sure.

Saturday, November 08, 2008

Spreading Wealth

The now commonly-held Marxist concept of "spreading wealth" (or "redistribution") advocates manipulating government power to forceably take property (money) from an individual who has earned it so as to give it to someone else who has not.

This places every productive individual in society into involuntary servitude -- something explicitly prohibited by the U.S. Constitution; specifically, the 13th Amendment).

In the private sector this "redistribution" is called theft. In the public sector this is called taxation; which Bastiat called legal plunder. Theft in the public sector is worse because it assumes that all wealth belongs to the government and not the individual who earned it. At least the common thief knows better.

This concept of redistributive taxation has nothing to do with adequately funding the very few legitimate, constitutional functions of government.

The government's proper role is to protect individual rights against violation. Not to run the economy or act as general benefactor.

What we have now is a society of individuals who all seek to live at everyone else's expense.

The illogic is astounding. The sad consequences have already been well documented. Need we, yet again, pursue this folly?


The Goal Is Freedom: Humility or Hubris?
Sheldon Richman | Foundation for Economic Education | November 7, 2008
Because there are economic laws, there are limits to what "we" can do and how we can do it. (By we, of course, Obama doesn't mean the spontaneous social order; he means the state and deliberate planning.)

Taxes are to make government function, not spread wealth around
Ed Blanchfield | Asheville Citizen-Times | November 8, 2008
The purpose of the income tax is to run the government. It is not to spread the wealth. Sen. Obama and his supporters tell us it works better when we spread the wealth around. Spreading the wealth is fine, provided it is spread by those who have it. Forcibly taking someone's wealth is wrong and used to be un-American.

Evil Concealed By Money
Walter E. Williams | November 19, 2008
Evil acts can be given an aura of moral legitimacy by noble-sounding socialistic expressions such as spreading the wealth, income redistribution or caring for the less fortunate.

Tuesday, October 21, 2008

End of Libertarianism?

The End of Libertarianism
By Jacob Weisberg | Slate | Oct. 18, 2008

Haven't you people [libertarians] done enough harm already? We have narrowly avoided a global depression and are mercifully pointed toward merely the worst recession in a long while. This is thanks to a global economic meltdown made possible by libertarian ideas...Any competent forensic work has to put the libertarian theory of self-regulating financial markets at the scene of the crime...


Blaming Liberty for the State’s Depredations
by Anthony Gregory | | October 20, 2008

Surely, libertarians have not exactly been in charge of the state. Indeed, it would be a contradiction to say that we have – insofar as the state is libertarian, it ceases to be a state. Yet somehow, America’s $3-trillion federal government – the largest state in our planet’s history – is associated with free enterprise in the minds of confused pundits, left and right. But every single dollar spent by that government is of course a dollar that has nothing to do with free enterprise...


Has Libertarianism Ended?
D.W. MacKenzie | Mises Institute | 10/29/2008

The recent financial crisis has been a source of new hope for those who despise capitalism. The Democratic presidential candidate has gone out on a limb by declaring that the current crisis is the result of deregulation during the Bush presidency. (No such deregulation took place.)'s Jacob Weisberg has taken a more cautious approach. According to Weisberg, the current crisis is the result of the lack of new regulations rather than the shredding of old regulations. While Weisberg is not as obviously wrong as Obama, his claims are unsubstantiated, poorly argued, and false...


The Attack on Libertarianism
Aaron David Ward | | October 30, 2008

A source of tremendous frustration amid the financial carnage has been watching the mainstream media exemplified by Jacob Weisberg.


Is Laissez Faire Responsible for the Financial Crisis?
George Reisman | Mises Institute | 10/23/2008
The news media are in the process of creating a great new historical myth. This is the myth that our present financial crisis is the result of economic freedom and laissez-faire capitalism...

Critique of Interventionism
Ludwig von Mises | 1929
In Mises's view, interventionism is an inherently unstable policy because it creates new dislocations that would seem to cry out for further interventions, which, in turn, do not solve the problem. The end of interventionism is socialism, a fate which can be logically avoided only by a sharp turn towards free markets...

What deregulation?
Pierre Lemieux | Financial Post | October 29, 2008
Many critics blame the current crisis on loosened financial regulations. But they can’t get specific.

The Economic Crisis and the Future [audio]
Lew Rockwell Show, special guest: Ron Paul | October 26th, 2008
Greenspan has joined the gang of liberals and socialists to blame the free market for all the problems.

Why The Mortgage Crisis Happened
M. JAY WELLS | Investor's Business Daily | October 29, 2008
It is not free-market capitalism at the root of the current mortgage industry crisis, but rather the very socialism Obama hawks. The historical record makes this fact unmistakably clear.

Wednesday, October 15, 2008

Values and Politics

Christian values noticeably absent from parties and politics

Pete Reilly | Letter, Asheville Citizen-Times | October 15, 2008

Unless we change things soon, this great nation of ours is in a death spiral and we have no one to blame but ourselves. For a Christian nation it is inconceivable that we have two political parties that have absolutely no Christian values. Lying, slander, innuendo, half-truths, distortion, castigation of another human being by any means possible, solely to achieve the highest office in the land. Or at the rate we are going, is it the lowest office in the land?...

Politics is the concrete expression of an abstract moral framework in the domain of human action.

The writer is correct that there are super-ordinate values that inform morality, and in turn, politics and law in a rational society. But those values do not derive from religion -- even the writer's favorite one.

The values that inform a proper moral worldview derive from the human individual's fact of existence and the facts of reality. A proper moral code respects freedoms of action, freedom of association, and freedom of contract and forbids any predation, fraud or negligence that stands to hamper or injure the individual.

Reason, free will, lucid consciousness -- these are the qualities that distinguish the human animal. It is the need to protect the free exercise of these unique human qualities in a pluralistic society that requires an objective, secular body of law that respects individual rights and the pursuit of happiness as primaries over against the primacy of any social, organizational or religious agglomeration that may form to circumvent the free exercise of human will.


Man's Rights by Ayn Rand | April 1963
“Rights” are a moral concept-the concept that provides a logical transition from the principles guiding an individual’s actions to the principles guiding his relationship with others -- the concept that preserves and protects individual morality in a social context -- the link between the moral code of a man and the legal code of a society, between ethics and politics. Individual rights are the means of subordinating society to moral law.

Ayn Rand's Normative Ethics: The Virtuous Egoist
By Tara Smith
Ayn Rand is well known for advocating egoism, but the substance of that instruction is rarely understood. Far from representing the rejection of morality, selfishness, in Rand's view, actually demands the practice of a systematic code of ethics.

Wednesday, October 01, 2008

No Bailout!

Leave it alone and the marketplace will mend itself
Letter to Asheville Citizen-Times | October 6, 2008

I oppose the bailout.

The current economic crisis is not a failure of a (non-existent) free market. This crisis is a failure of 100 years of interventionist public policy that hampers the free market. Policy such as Smoot-Hawley, Sarbanes-Oxley, Community Reinvestment Act, Federal Reserve Act, Fannie Mae.

These are egregious interferences into the economy by the government that result in loss of wealth and liberty. The Community Reinvestment Act (1977), for example, allowed the government to coerce honest business-people into providing housing and mortgage loans to the riskiest Americans, who invest erroneously. The program paints a false picture of the economic and business environment that humans act in and which must, at some point, be corrected – usually painfully.

Dishonesty (faking reality) is the moral basis of these interventionist policies. Socialism isn't bad because it doesn't work; it doesn't work because it's bad -- that is, immoral.

We now propose rewarding these government and corporate failures with public plunder for private gain. We cannot expect a greedy and powerful federal government to reign in the leviathan political culture of economic interference and regulation that now, and inevitably, culminates in disaster.

Reject the bailout and allow the marketplace to operate freely.


Repeal the Bailout
Online resource for intellectual activism on the US Government's dangerous and immoral "financial bailout" policies. Inspired by outrage at Congressional passage of the 850 billion dollar Bush/Paulson "financial bailout bill" on October 3, 2008, Repeal the Bailout uncompromisingly opposes such legislation, advocates the repeal of any that may still be in effect, and calls for the removal from office of elected officials who support its passage.

Ron Paul on CNN 10/1/08 [video]

Bob Barr on "Your World w/Neil Cavuto. [video]

Bob Barr weights in on the attempted $700 billion bailout. [video]

DeMint Opposes Wall Street Bailout
U.S. Senator Jim DeMint (R-SC) | September 22, 2008
"Plan does not solve the problems that caused the current credit crunch, and could make them much worse.."

How Government Stoked the Mania
By RUSSELL ROBERTS | Wall Street Journal | Oct 3, 2008
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

Pressured to Take More Risk, Fannie Reached Tipping Point
Charles Duhigg | New York Times | October 4, 2008
With that self-assurance, the company announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010. All this helped supercharge Fannie’s stock price and rewarded top executives with tens of millions of dollars. Mr. Raines received about $90 million between 1998 and 2004...

Kill the Bailout
By Robert Tracinski | Real Clear Politics | October 02, 2008
Some cold, realistic scrutiny of the bailout is desperately needed because this plan is not just an attack on the free market. It is an attack on reality. The financial crisis was caused by more than a decade of using government power to rewrite the facts of reality and override the judgment of the market, and the bailout just offers more of the same fantasy economics...

The Long Road to Slack Lending Standards
By Steven Malanga | Real Clear Markets | October 01, 2008
What happened in the mortgage industry is an example of how, in trying to eliminate discrimination from our society, we turned logic on its head.

Financial Crisis and Recession
Jesus Huerta de Soto | Mises Institute | 10/6/2008
The severe financial crisis and resulting worldwide economic recession we have been forecasting for years are finally unleashing their fury. In fact, the reckless policy of artificial credit expansion that central banks (led by the American Federal Reserve) have permitted and orchestrated over the last fifteen years could not have ended in any other way.

An Open Letter to Members of Congress on the Financial Mess
by John Lewis | Capitalism Magazine | September 30, 2008
I oppose all bailouts of financial institutions by the US government. Government regulation and meddling is solidly to blame for this crisis. We must reduce government involvement in the economy now.

Ayn Rand Center's Response to Financial Crisis
ARC experts clarify the fundamental issues involved in the current crisis—the controls that led to it, the ideas that led to the controls, the destructiveness of the government response so far.

Economic Depressions: Their Cause and Cure
Murray N. Rothbard | Mises Institute | 10/2/2008
[...] But all parties agree that the fault lies deep within the market economy and that if anything can save the day, it must be some form of massive government intervention. There are, however, some critical problems in the assumption that the market economy is the culprit...

Don't Blame Capitalism
By Peter Schiff | Washington Post | October 16, 2008
...Absent from such conclusions is the central role the government played in creating the crisis. Yes, many Wall Street leaders were irresponsible, and they should pay. But they were playing the distorted hand dealt them by government policies. Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets.

Fannie Mae Eases Credit To Aid Mortgage Lending
Steven A. Holmes | New York Times | September 30, 1999
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's...