- This is the desire of those who proclaim war
- ‘Those who cannot remember the past are condemned to repeat it’
- ...the chain of historical events which led up to today’s National Security State and the American empire. From Harry Truman to Barack Obama, we have seen an out-of-control executive branch wage unconstitutional, undeclared wars by centralizing power in the presidency. How did this all come about? Here are three exceptional documentaries which introduce that history. The first film is the 1987 PBS documentary, The Secret Government: The Constitution In Crisis, narrated by Bill Moyers. It explores the comprehensive background of the secret covert government established in 1947 by the National Security Act. In particular, this powerful video compares and contrasts the Iran-Contra affair of the Reagan era with that of the Watergate scandal of 12 years earlier which brought down Richard Nixon. The second documentary is the exceedingly rarely seen 1988 Coverup: Behind the Iran Contra Affair, narrated by Elizabeth Montgomery. As you watch this extraordinary story unfold, you will see precisely why this incredible film has been shoved down the Orwellian Memory Hole for many decades. It discusses not only the hidden dimensions of the Iran-Contra affair but also the October Surprise scandal of 1980; CIA complicity in the global narcotics trade; CIA assassinations and covert activities; and FEMA, REX84, and the suspension of the U. S. Constitution.
Many of the Reagan administration criminals and nefarious characters featured in both of these first two documentaries will later turn up in the George W. Bush administration — “continuity of government.” A key component to the Iran-Contra affair was the secret shipment of cocaine from Central America to the United States under the cover of the National Security State. One of the major delivery points of these narcotics was Mena, Arkansas. The third documentary, The Clinton Chronicles, details how then governor Bill Clinton and his administration were up to their eyeballs in these illegal covert activities. For more information on these matters, please consult this book list.- Get the links
- Social Security & The Ponzi Scheme (by Christopher Manion)
- In 1956, my father got Pearl-Harbored (one might say he was almost Hiroshima’d) for suggesting on his popular radio show that Social Security was a “Ponzi Scheme.” He told the story of Ponzi’s arrest, incarceration, and ultimate deportation to Italy — and then made some poignant observations about the Social Security program:
“Ironically, Ponzi was hardly out of the country before the same federal government that had imprisoned him for fraud proceeded to adopt the Ponzi “get rich easy” scheme as its very own. Ponzi had represented his financial jackpot as a “securities exchange.” The federal government proceeded to call it “Social Security.”
The federal government was able to add some important features to this bizarre shell-game that were unavailable to Ponzi. First of all, the federal government cannot be prosecuted for fraud. But more important than that is the exclusive governmental feature of compulsory participation.”
Today, 54 years later, Paul Krugman exonerates the Federal Ponzis, insisting that “cruel attacks” on its solvency are baseless because “Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund.” But just in case — how could the Compassionate Krugman resist?—- he one-ups Ponzi with his usual bromide: tax the rich.
In the mid-1980′s, a stalwart senate staff colleague of mine decided to find this “Social Security Trust Fund.” She finally found it, literally, in the desk drawer of a mid-level federal bureaucrat somewhere in West Virginia — handwritten numbers representing the “value” of the “trust fund” for each passing year. Of course, the “bank account” had no money in it: Congress had already spent every penny.
Showing posts with label socialism. Show all posts
Showing posts with label socialism. Show all posts
Tuesday, August 17, 2010
War & Social Security
Thursday, July 29, 2010
As Arizona Goes, So Goes the Nation: How Medicaid Ruins the States' Fiscal Health
As Arizona Goes, So Goes the Nation: How Medicaid Ruins the States' Fiscal Health
No. 6, July 2008
All is not well in Senator John McCain's home state. Confronted with a general fund budget shortfall of more than $1.3 billion, the Arizona legislature in June enacted modest cuts (primarily in community college and prison budgets), a stepped-up traffic enforcement system to produce some $90 million in speeding tickets, and $2 billion in new debt--half of it to close the hole in the $10.9 billion budget. (The other half will fund university construction.) The budget is a stopgap measure that bodes ill both for next year's budget and for the state's fiscal future, and no Arizona politician pretends otherwise.
Measured as a percentage of the state's fiscal year 2008 general fund, Arizona's projected FY 2009 deficit was the most serious shortfall of any state, exceeding even California's....
Arizona's fiscal crisis is due chiefly to the state's expansion of its Medicaid programs. That decision, in turn, is largely attributable to the perverse incentives created by Medicaid's inordinately generous transfers to the states. To oversimplify slightly, states get into fiscal trouble not because the feds shirk their obligations, but because they have made promises to pay in the first place. While Arizona's problems are exacerbated by a dysfunctional political system, the state's predicament illustrates a pervasive structural crisis.
Despite a relatively conservative political climate, Arizona used to be a high-tax state. Over the decades, however, Arizona's tax burden has remained roughly constant, while that of many other states has risen. As a result, Arizona has improved its position relative to other states. By the most widely used measure (the Tax Foundation's index of state tax burdens), Arizona is now near the median in terms of combined state and local tax burden on citizens....
However, the fiscal effects of federal-to-state transfers are not unambiguously positive, even for net recipient states like Arizona. While federal grant programs may have some fiscal substitution effect, on balance they increase state and local taxation and spending. By making program expansions look cheap and making cuts look outrageously expensive, federal matching grants ratchet up spending and taxes and tend to exacerbate the states' boom-and-bust budget cycles. All else equal, those effects increase in proportion to the matching program's size and generosity....
Under Medicaid, the federal government reimburses between 50 and 77 percent of a state's qualifying expenditures, depending on the state's wealth. Put differently, a state can purchase a dollar's worth of Medicaid health services at a cost of less than fifty cents to itself. Less happily, it cannot cut a dollar from its domestic budget without "losing" federal transfers....
Some states now cover families with incomes of up to 275 percent of the poverty level. Almost all provide long-term care for the poor and low-income elderly. In a few states, one-third of the population is now on Medicaid. In Arizona, about one-fifth of the population receives health care coverage through AHCCCS [Arizona Health Care Cost Containment System]....
Unsurprisingly, Medicaid expenditures constitute an ever-growing share of state expenditures. In 1987, that share amounted to slightly more than 10 percent. In 1992, the number was 17.8 percent; in 2006, 22.2 percent....
In Arizona, the crowding-out has been far more severe and rapid. The state's involvement with Medicaid did not begin until 1982, with the creation of AHCCCS. Previously, Arizona had been the only state to reject federal Medicaid funds. (Individual counties provided a piecemeal system of health care for the state's indigent.) AHCCCS was the first statewide Medicaid program to use managed care, offering recipients a variety of private and public health plans that channeled them into private physicians' offices. As recently as 2002, AHCCCS was cited as a model Medicaid program.
But AHCCCS has since caused much fiscal and budgetary trouble. These difficulties can be traced to the enactment of Proposition 204 in 2000, which substantially expanded Medicaid-eligible populations and services. Proposition 204 significantly loosened eligibility requirements for several AHCCCS programs. (For example, it allowed persons with incomes above the poverty line to spend down their income on medical bills to qualify for coverage.)...
The option of finding offsets for increased Medicaid spending elsewhere in the budget is illusory. Only the general fund and "other appropriated funds"--less than half of all state expenditures combined--are actually subject to the legislature's appropriation authority. "Other" appropriated funds are earmarked, and even within the general fund, about 60 percent of spending is essentially nondiscretionary, as it is automatically set to increase or decrease each year.[9] Thus, short of closing down community colleges and state prisons (or, perhaps, launching an aggressive pro-smoking campaign to raise short-term revenues and long-term mortality rates among Medicaid consumers), the Arizona legislature can do only what it has, in fact, done: enact phony cuts, use traffic enforcement as a revenue device (not a tax and therefore not subject to the Proposition 108 two-thirds requirement), and issue a pile of new debt....
Arizona instead resorted to aping the Bush administration's major domestic policy innovation: the tax-free, debt-only finance of a major public health program.
No state can avoid the choice between more debt or rip-roaring tax hikes, combined in some way. The only plausible solutions to the states' Medicaid-induced fiscal troubles are to be found in Washington. Those solutions, however, have foundered and will continue to founder--paradoxically, due to the opposition of the states.
It is tempting but wrong to view Medicaid's stupendous, irresistible growth trends and its effects on state budgets as accidents. Medicaid is designed to be fiscally unsustainable--but politically self-sustaining....
Medicaid has created a political wonderland: to a man and woman, public officials who know the program to be ruinous to their states nonetheless clamor for more of the same. There is no will or incentive in Washington for a call to reality--not among Democrats, who rightly view Medicaid (and SCHIP) as HillaryCare on a bicycle, and not among Republicans, who are receptive to the intergovernmental lobby's call for "states' rights" and its clamor against "unfunded mandates" (and never mind that Medicaid is neither).
Eventually, Medicaid will fall victim to the late Herbert Stein's law: something that cannot go on will eventually stop. No one knows on what terms it will stop. We do know this, though: before it stops, there will be a lot more Arizonas.
My thoughts: ...And socialism sucks. I still can't excuse our legislatures for our debt. They are there to be leaders and to tell the truth not lie and be cowardly.
No. 6, July 2008
All is not well in Senator John McCain's home state. Confronted with a general fund budget shortfall of more than $1.3 billion, the Arizona legislature in June enacted modest cuts (primarily in community college and prison budgets), a stepped-up traffic enforcement system to produce some $90 million in speeding tickets, and $2 billion in new debt--half of it to close the hole in the $10.9 billion budget. (The other half will fund university construction.) The budget is a stopgap measure that bodes ill both for next year's budget and for the state's fiscal future, and no Arizona politician pretends otherwise.
Measured as a percentage of the state's fiscal year 2008 general fund, Arizona's projected FY 2009 deficit was the most serious shortfall of any state, exceeding even California's....
Arizona's fiscal crisis is due chiefly to the state's expansion of its Medicaid programs. That decision, in turn, is largely attributable to the perverse incentives created by Medicaid's inordinately generous transfers to the states. To oversimplify slightly, states get into fiscal trouble not because the feds shirk their obligations, but because they have made promises to pay in the first place. While Arizona's problems are exacerbated by a dysfunctional political system, the state's predicament illustrates a pervasive structural crisis.
Despite a relatively conservative political climate, Arizona used to be a high-tax state. Over the decades, however, Arizona's tax burden has remained roughly constant, while that of many other states has risen. As a result, Arizona has improved its position relative to other states. By the most widely used measure (the Tax Foundation's index of state tax burdens), Arizona is now near the median in terms of combined state and local tax burden on citizens....
However, the fiscal effects of federal-to-state transfers are not unambiguously positive, even for net recipient states like Arizona. While federal grant programs may have some fiscal substitution effect, on balance they increase state and local taxation and spending. By making program expansions look cheap and making cuts look outrageously expensive, federal matching grants ratchet up spending and taxes and tend to exacerbate the states' boom-and-bust budget cycles. All else equal, those effects increase in proportion to the matching program's size and generosity....
Under Medicaid, the federal government reimburses between 50 and 77 percent of a state's qualifying expenditures, depending on the state's wealth. Put differently, a state can purchase a dollar's worth of Medicaid health services at a cost of less than fifty cents to itself. Less happily, it cannot cut a dollar from its domestic budget without "losing" federal transfers....
Some states now cover families with incomes of up to 275 percent of the poverty level. Almost all provide long-term care for the poor and low-income elderly. In a few states, one-third of the population is now on Medicaid. In Arizona, about one-fifth of the population receives health care coverage through AHCCCS [Arizona Health Care Cost Containment System]....
Unsurprisingly, Medicaid expenditures constitute an ever-growing share of state expenditures. In 1987, that share amounted to slightly more than 10 percent. In 1992, the number was 17.8 percent; in 2006, 22.2 percent....
In Arizona, the crowding-out has been far more severe and rapid. The state's involvement with Medicaid did not begin until 1982, with the creation of AHCCCS. Previously, Arizona had been the only state to reject federal Medicaid funds. (Individual counties provided a piecemeal system of health care for the state's indigent.) AHCCCS was the first statewide Medicaid program to use managed care, offering recipients a variety of private and public health plans that channeled them into private physicians' offices. As recently as 2002, AHCCCS was cited as a model Medicaid program.
But AHCCCS has since caused much fiscal and budgetary trouble. These difficulties can be traced to the enactment of Proposition 204 in 2000, which substantially expanded Medicaid-eligible populations and services. Proposition 204 significantly loosened eligibility requirements for several AHCCCS programs. (For example, it allowed persons with incomes above the poverty line to spend down their income on medical bills to qualify for coverage.)...
The option of finding offsets for increased Medicaid spending elsewhere in the budget is illusory. Only the general fund and "other appropriated funds"--less than half of all state expenditures combined--are actually subject to the legislature's appropriation authority. "Other" appropriated funds are earmarked, and even within the general fund, about 60 percent of spending is essentially nondiscretionary, as it is automatically set to increase or decrease each year.[9] Thus, short of closing down community colleges and state prisons (or, perhaps, launching an aggressive pro-smoking campaign to raise short-term revenues and long-term mortality rates among Medicaid consumers), the Arizona legislature can do only what it has, in fact, done: enact phony cuts, use traffic enforcement as a revenue device (not a tax and therefore not subject to the Proposition 108 two-thirds requirement), and issue a pile of new debt....
Arizona instead resorted to aping the Bush administration's major domestic policy innovation: the tax-free, debt-only finance of a major public health program.
No state can avoid the choice between more debt or rip-roaring tax hikes, combined in some way. The only plausible solutions to the states' Medicaid-induced fiscal troubles are to be found in Washington. Those solutions, however, have foundered and will continue to founder--paradoxically, due to the opposition of the states.
It is tempting but wrong to view Medicaid's stupendous, irresistible growth trends and its effects on state budgets as accidents. Medicaid is designed to be fiscally unsustainable--but politically self-sustaining....
Medicaid has created a political wonderland: to a man and woman, public officials who know the program to be ruinous to their states nonetheless clamor for more of the same. There is no will or incentive in Washington for a call to reality--not among Democrats, who rightly view Medicaid (and SCHIP) as HillaryCare on a bicycle, and not among Republicans, who are receptive to the intergovernmental lobby's call for "states' rights" and its clamor against "unfunded mandates" (and never mind that Medicaid is neither).
Eventually, Medicaid will fall victim to the late Herbert Stein's law: something that cannot go on will eventually stop. No one knows on what terms it will stop. We do know this, though: before it stops, there will be a lot more Arizonas.
My thoughts: ...And socialism sucks. I still can't excuse our legislatures for our debt. They are there to be leaders and to tell the truth not lie and be cowardly.
Tuesday, June 1, 2010
Regulation and the State Part 1
This was originally aired by Stefan Molyneux on his Sunday Show podcast FDR1663 this transcript starts at [15:03]. Note, this has been edited for language and content.
[T]his idea that we need control over private capitalist organizations is so completely irrational that...this is why i started looking at family stuff. [Since] there's just no way that anybody can look at a logical diagram and say the following, "We need control over social institutions and so let's a create one social institution arm it to the...teeth, have it be able to steal at will and imprison the population and the population has zero control economically at least over this entity and so we need to create an entity that is completely involuntary and is all powerful and has complete control over the citizenship and we need to create this entity because there are social agencies that the citizens are afraid of not having control over." I mean that is that is so completely insane that no rational human being with more than 4 1/2 brain cells to rub together would ever come up with that solution. It's like saying I’m afraid of dating so i want to get raped, i mean that just makes no sense at all, right?
So that's the first thing I would say [the] citizens have no control over the all powerful government so the idea that we create a government in order to control dangerous social institutions like free market companies is insane. [T]he huge difference between me dealing with some local grocery store is that if I don't like that grocery store I don't have to do [a] thing, I don't have to get off the couch, I don't have to take my finger out of my nose or my other hand off the remote let's say. I don't have to move a muscle or take a breath if I don't like the grocery store down the road because I just won't go there so an action going about my day everything that you do in a free market that is not involved in giving money or time or services to a particular organization is a complete vote against every other corporation in the world, right?
So if I go out and buy an iPad that is a vote against every other $600 worth of consumption that I could have made so if I am voting for an iPad I’m voting against every other possible use of that money including saving it…. I don't have to do anything if I don't approve of a particular corporation. On the other hand, with the government, if you don't agree with what the government does your [screwed]. If you don't like what the government does what are you going to do? Well you have to go marching, you have to try to get into office, you have to spend a lot of money, you have to risk going to jail if you don't want to pay your taxes. In other words, the government compels you to obey and the cost of disobedience is unbelievably high to the point most people, and I think reasonably so, won't risk it.
On the other hand, if I don't agree with what some corporation is doing I don't have to do anything. I can just sit there and suck up the Doritos dust from my chest as I continue watching another season of “Lost.” I don't have to do anything. [T]his difference between positive and negative action is something that people don't understand. The idea of creating a monopoly of violence in order to solve a multiplicity of voluntarism is completely mad….
[Also, it has to do with] this bizarre belief that corporations have something to do with the free market. That corporations exist somehow wildly independent of the government and that corporations are the spawn of the free market, they are the spawn of voluntarism, and they are controlling the government and bribing the government and influencing the government and all this that and the other and that is all complete ahistorical propagandized nonsense. [C]orporations are state created and state controlled ways of avoiding legal liability for your economic decisions.
So if you have a corporation and your corporation does well you take all the money if you have a corporation and your corporation does something stupid or illegal or dangerous or harms people then the corporation gets sued and you don't get touched. So for instance, this terrible gulf oil spill or this oil leak that is going on at the moment. That is just completely disastrous and is going to have effects on the ecosystem of the gulf for probably years if not decades to come….
[W]hy are they… drilling 400 miles below the earth below the surface of the sea? Because, according to environmental regulations, they are really not allowed to drill on land. Also, why we are we still so dependent on oil? It's because the U.S. Saudi Arabia Saudi Arabia and other countries that they prop up through U.S.
Do you think...that one oil executive is going to lose his house over this I mean if I crash into someone’s car without insurance I’m going to lose my house, assuming they get injured, they're going to take my house I don't think that's unfair but these oil executives hide behind these legal shields called corporations and they don't get any personal exposure to the actions of that corporation you can't go after their houses you can't go after their assets. So when they are weighing the calculations about whether to spend another 1/2 million dollars because they're drilling at the bottom of the ocean because of all the other government regulations, they're weighing that decision there's no personal stake in that decision. [T]hat's a bit of an overstatement they may want to keep working, they may want to keep their jobs, they might lose their jobs but their personal assets [won’t be lost]. The people at the top pool making these decisions are already making millions of dollars, have more than enough money to live on for generations. If they want, and there's no personal stake in any of that, so they make these decisions knowing that if there is a catastrophe it's not going to affect their personal wealth.
It's completely insane. It's like I have a fictional friend and if I do anything good I get all the benefits and if I do anything bad it's my fictional friend who goes to jail and I just get to make up another fictional friend if I want to. [I]f you could just invent your own personal alternate corporation hand puppet and if anything went wrong you said, “No, no, talk to the hand puppet.” [W]e wouldn't have a functioning system at all. If that's how it worked at a personal [level nothing would work]. But this how it works at a corporate level. [I]t has nothing to do with the free market. I guarantee you there would be no such thing as a corporation in the free market. A corporation is an entirely state generated entity and it's a way the government buys the votes of rich people and gets their donations by giving them legal immunity from the negative consequences of their bad decisions. [T]hat's what a corporation is. It's a bribe to the upper classes to excuse them from the liability of doing disastrous things like screwing up the entire ecosystem of the gulf with 12 billion barrels of oil...
...But if it was a free market how would they be regulated?
...In a DRO society if I wanted to go drill at the bottom of the ocean the DRO would have…insurance…. I would have to be able to prove in order to get that insurance…to whatever organization that would be responsible for paying out that insurance…that it is safe as humanly possible. [T]he gulf wasn't even remotely safe as humanly possible. BP is going to have to pay 1 1000th of the cost of the clean up. [N]o executives, I guarantee you, no executives will be personally liable one dime of that catastrophe. It will all get stuck on the tax payers. That would never happen in the free market because there are no tax payers in the free market.
...So you’re just changing the checks and balances from the government to the Dispute Resolution Organizations (DROs) ...
There are no checks and balances in the government, there's only excuses and predations....
[27:00]
Saturday, May 29, 2010
Everything You Love You Owe to Capitalism
[This talk was delivered at the Mises Circle in Seattle on May 17, 2008.]
Read the whole article here.
I'm sure that you have had this experience before, or something similar to it....But then the topic turns to economics, and things change....Then the truth emerges in the form of a naïve if definitive announcement from one person: "Well, I suppose I'm really a socialist at heart." Others nod in agreement....On one hand there is nothing to say, really. You are surrounded by the blessings of capitalism....All of history has been defined by the struggle for food....The ancients, peering into this scene, might have assumed it to be Elysium....[W]e owe this scene to centuries of capital accumulation at the hands of free people who have put capital to work on behalf of economic innovations, at once competing with others for profit and cooperating with millions upon millions of people in an ever-expanding global network of the division of labor....
...And yet, sitting on the other side of the table are well-educated people who imagine that the way to end the world's woes is through socialism....[Their definition] might be as simple as the desire to put a cap on the salaries of CEOs, or it could be as extreme as the desire to abolish all private property, money, and even marriage....Whatever the specifics of the case in question, socialism always means overriding the free decisions of individuals and replacing that capacity for decision making with an overarching plan by the state. Taken far enough, this mode of thought won't just spell an end to opulent lunches. It will mean the end of what we all know as civilization itself....Nor is it possible to divorce socialism from totalitarianism, because if you are serious about ending private ownership of the means of production, you have to be serious about ending freedom and creativity too. You will have to make the whole of society, or what is left of it, into a prison.
In short, the wish for socialism is a wish for unparalleled human evil. If we really understood this, no one would express casual support for it in polite company. It would be like saying, you know, there is really something to be said for malaria and typhoid and dropping atom bombs on millions of innocents.
Do the people sitting across the table really wish for this? Certainly not. So what has gone wrong here? Why can these people not see what is obvious?
...What we have here is a failure of understanding. That is to say, a failure to connect causes with effects. This is a wholly abstract idea. Knowledge of cause and effect does not come to us by merely looking around a room, living in a certain kind of society, or observing statistics....
Let me take you back to the years 1989 and 1990. These were the years that most of us remember as the time when socialism collapsed in Eastern Europe and Russia. Events of that time flew in the face of all predictions on the Right that these were permanent regimes that would never change unless they were bombed back to the Stone Age. On the Left, it was widely believed, even in those times, that these societies were actually doing quite well and would eventually pass the United States and Western Europe in prosperity, and, by some measures, that they were already better off than us....And yet it collapsed....They may have all the guns and all the power, and the people have none of those, and yet, when the people themselves decide that they will no longer be governed, the state has few options left. It eventually collapses amid a society-wide refusal to believe its lies any longer.
When these closed societies suddenly became open, what did we see? We saw lands that time forgot. The technology was backwards and broken. The food was scarce and disgusting. The medical care was abysmal. The people were unhealthy. Property was polluted.
...This [collapse] is what anyone who had been exposed to the teachings of economics — to the elementary rules concerning cause and effect in society — saw....But this is not what the ideological Left saw. The headlines in the socialist publications themselves proclaimed the death of undemocratic Stalinism and looked forward to the creation of a new democratic socialism in these countries.
...Now, if the proper lessons of the collapse had been conveyed, we would have seen the error of all forms of government planning. We would have seen that a voluntary society will outperform a coerced one anytime. We might see how ultimately artificial and fragile are all systems of statism compared to the robust permanence of a society built on free exchange and capitalist ownership. And there is another point: the militarism of the Cold War had only ended up prolonging the period of socialism by providing these evil governments the chance to stimulate unfortunate nationalist impulses that distracted their domestic populations from the real problem....Not even an event as spectacular as the spontaneous meltdown of a superpower and all its client states was enough to impart the message of economic freedom.
...We are also inundated daily by the failures of the state. We complain constantly that the educational system is broken, that the medical sector is oddly distorted, that the post office is unaccountable, that the police abuse their power, that the politicians have lied to us, that tax dollars are stolen, that whatever bureaucracy we have to deal with is inhumanly unresponsive. We note all this. But far fewer are somehow able to connect the dots and see the myriad ways in which daily life confirms that the market radicals like Mises, Hayek, Hazlitt, and Rothbard were correct in their judgments.
What's more, this is not a new phenomenon that we can observe in our lifetimes only. We can look at any country in any period and note that every bit of wealth ever created in the history of mankind has been generated through some kind of market activity, and never by governments. Free people create; states destroy.
...The empirical truth has never been hard to come by. What matters are the theoretical eyes that see. This is what dictates the lesson we draw from events. Marx and Bastiat were writing at the same time. The former said capitalism was creating a calamity and that abolition of ownership was the solution. Bastiat saw that statism was creating a calamity and that the abolition of state plunder was the solution. What was the difference between them? They saw the same facts, but they saw them in very different ways. They had a different perception of cause and effect.
I suggest to you that there is an important lesson here as regards the methodology of the social sciences, as well as an agenda and strategy for the future. Concerning method, we need to recognize that Mises was precisely right concerning the relationship between facts and economic truth. If we have a solid theory in mind, the facts on the ground provide excellent illustrative material. They inform us about the application of theory in the world in which we live. They provided excellent anecdotes and revealing stories of how economic theory is confirmed in practice. But absent that theory of economics, facts alone are nothing but facts. They do not convey any information about cause and effect, and they do not point a way forward.
...Data points on their own convey no theory, suggest no conclusions, and offer no truths. To arrive at truth requires the most important step that we as human beings can ever take: thinking. Through this thinking, and with good teaching and reading, we can put together a coherent theoretical apparatus that helps us understand.
...In fact, what we have here is a simple mix-up of cause and effect. Bigger companies tend to be more likely to attract a kind of unpreventable unionization than smaller ones. The unions target them, with federal aid. It is no more or less complicated than that. It is for the same reason that developed economies have larger welfare states. The parasites prefer bigger hosts; that's all. We would be making a big mistake to assume that the welfare state causes the developed economy. That would be as much a fallacy as to believe that wearing $2,000 suits causes people to become rich.
...[T]he most important step economists or economic institutions can take is in the direction of public education in economic logic.
There is another important factor here. The state thrives on an economically ignorant public. This is the only way it can get away with blaming inflation or recession on consumers, or claiming that the government's fiscal problems are due to our paying too little in taxes. It is economic ignorance that permits the regulatory agencies to claim that they are protecting us as versus denying us choice. It is only by keeping us all in the dark that it can continue to start war after war — violating rights abroad and smashing liberties at home — in the name of spreading freedom.
Read the rest of this article.
Read the whole article here.
I'm sure that you have had this experience before, or something similar to it....But then the topic turns to economics, and things change....Then the truth emerges in the form of a naïve if definitive announcement from one person: "Well, I suppose I'm really a socialist at heart." Others nod in agreement....On one hand there is nothing to say, really. You are surrounded by the blessings of capitalism....All of history has been defined by the struggle for food....The ancients, peering into this scene, might have assumed it to be Elysium....[W]e owe this scene to centuries of capital accumulation at the hands of free people who have put capital to work on behalf of economic innovations, at once competing with others for profit and cooperating with millions upon millions of people in an ever-expanding global network of the division of labor....
...And yet, sitting on the other side of the table are well-educated people who imagine that the way to end the world's woes is through socialism....[Their definition] might be as simple as the desire to put a cap on the salaries of CEOs, or it could be as extreme as the desire to abolish all private property, money, and even marriage....Whatever the specifics of the case in question, socialism always means overriding the free decisions of individuals and replacing that capacity for decision making with an overarching plan by the state. Taken far enough, this mode of thought won't just spell an end to opulent lunches. It will mean the end of what we all know as civilization itself....Nor is it possible to divorce socialism from totalitarianism, because if you are serious about ending private ownership of the means of production, you have to be serious about ending freedom and creativity too. You will have to make the whole of society, or what is left of it, into a prison.
In short, the wish for socialism is a wish for unparalleled human evil. If we really understood this, no one would express casual support for it in polite company. It would be like saying, you know, there is really something to be said for malaria and typhoid and dropping atom bombs on millions of innocents.
Do the people sitting across the table really wish for this? Certainly not. So what has gone wrong here? Why can these people not see what is obvious?
...What we have here is a failure of understanding. That is to say, a failure to connect causes with effects. This is a wholly abstract idea. Knowledge of cause and effect does not come to us by merely looking around a room, living in a certain kind of society, or observing statistics....
Let me take you back to the years 1989 and 1990. These were the years that most of us remember as the time when socialism collapsed in Eastern Europe and Russia. Events of that time flew in the face of all predictions on the Right that these were permanent regimes that would never change unless they were bombed back to the Stone Age. On the Left, it was widely believed, even in those times, that these societies were actually doing quite well and would eventually pass the United States and Western Europe in prosperity, and, by some measures, that they were already better off than us....And yet it collapsed....They may have all the guns and all the power, and the people have none of those, and yet, when the people themselves decide that they will no longer be governed, the state has few options left. It eventually collapses amid a society-wide refusal to believe its lies any longer.
When these closed societies suddenly became open, what did we see? We saw lands that time forgot. The technology was backwards and broken. The food was scarce and disgusting. The medical care was abysmal. The people were unhealthy. Property was polluted.
...This [collapse] is what anyone who had been exposed to the teachings of economics — to the elementary rules concerning cause and effect in society — saw....But this is not what the ideological Left saw. The headlines in the socialist publications themselves proclaimed the death of undemocratic Stalinism and looked forward to the creation of a new democratic socialism in these countries.
...Now, if the proper lessons of the collapse had been conveyed, we would have seen the error of all forms of government planning. We would have seen that a voluntary society will outperform a coerced one anytime. We might see how ultimately artificial and fragile are all systems of statism compared to the robust permanence of a society built on free exchange and capitalist ownership. And there is another point: the militarism of the Cold War had only ended up prolonging the period of socialism by providing these evil governments the chance to stimulate unfortunate nationalist impulses that distracted their domestic populations from the real problem....Not even an event as spectacular as the spontaneous meltdown of a superpower and all its client states was enough to impart the message of economic freedom.
...We are also inundated daily by the failures of the state. We complain constantly that the educational system is broken, that the medical sector is oddly distorted, that the post office is unaccountable, that the police abuse their power, that the politicians have lied to us, that tax dollars are stolen, that whatever bureaucracy we have to deal with is inhumanly unresponsive. We note all this. But far fewer are somehow able to connect the dots and see the myriad ways in which daily life confirms that the market radicals like Mises, Hayek, Hazlitt, and Rothbard were correct in their judgments.
What's more, this is not a new phenomenon that we can observe in our lifetimes only. We can look at any country in any period and note that every bit of wealth ever created in the history of mankind has been generated through some kind of market activity, and never by governments. Free people create; states destroy.
...The empirical truth has never been hard to come by. What matters are the theoretical eyes that see. This is what dictates the lesson we draw from events. Marx and Bastiat were writing at the same time. The former said capitalism was creating a calamity and that abolition of ownership was the solution. Bastiat saw that statism was creating a calamity and that the abolition of state plunder was the solution. What was the difference between them? They saw the same facts, but they saw them in very different ways. They had a different perception of cause and effect.
I suggest to you that there is an important lesson here as regards the methodology of the social sciences, as well as an agenda and strategy for the future. Concerning method, we need to recognize that Mises was precisely right concerning the relationship between facts and economic truth. If we have a solid theory in mind, the facts on the ground provide excellent illustrative material. They inform us about the application of theory in the world in which we live. They provided excellent anecdotes and revealing stories of how economic theory is confirmed in practice. But absent that theory of economics, facts alone are nothing but facts. They do not convey any information about cause and effect, and they do not point a way forward.
...Data points on their own convey no theory, suggest no conclusions, and offer no truths. To arrive at truth requires the most important step that we as human beings can ever take: thinking. Through this thinking, and with good teaching and reading, we can put together a coherent theoretical apparatus that helps us understand.
...In fact, what we have here is a simple mix-up of cause and effect. Bigger companies tend to be more likely to attract a kind of unpreventable unionization than smaller ones. The unions target them, with federal aid. It is no more or less complicated than that. It is for the same reason that developed economies have larger welfare states. The parasites prefer bigger hosts; that's all. We would be making a big mistake to assume that the welfare state causes the developed economy. That would be as much a fallacy as to believe that wearing $2,000 suits causes people to become rich.
...[T]he most important step economists or economic institutions can take is in the direction of public education in economic logic.
There is another important factor here. The state thrives on an economically ignorant public. This is the only way it can get away with blaming inflation or recession on consumers, or claiming that the government's fiscal problems are due to our paying too little in taxes. It is economic ignorance that permits the regulatory agencies to claim that they are protecting us as versus denying us choice. It is only by keeping us all in the dark that it can continue to start war after war — violating rights abroad and smashing liberties at home — in the name of spreading freedom.
Read the rest of this article.
Tuesday, May 18, 2010
AZ News & Blogs 5/18/2010 (Sales Tax Vote is Today)
- If the government tells you to be afraid, then you know you need not be afraid
- Rejection would trigger $862 million of contingency spending cuts beyond those already included in the budget due to the state’s loss of 30 percent of its revenue.
- Most of the contingency cuts were aimed at education. Those include $428.6 million for K-12 schools, $107.1 million for universities and $15.2 million for community colleges and $4.7 million for other programs.
- Budget and school officials said rejection of the tax increase would produce larger class sizes, reductions in specialized instruction and layoffs and furloughs for teachers and other school workers.
- Elsewhere in government, predicted cutbacks tied to rejection of Proposition 100 included layoffs of Highway Patrol officers, transfers of 3,000 to 5,000 prison inmates to county jails, new reductions of payments to hospitals and other health care providers, and reduced services for developmentally disabled adults and disabled children.
- Proposition 100 opponents argued that the state hadn’t cut spending deep enough and that passage of the measure would keep spending at levels that the state cannot afford. They also said a tax increase would throttle the state’s ailing economy by stifling retail trade.
- My Thoughts: Notice how the government always uses fear tactics to get what they want? That's the way it's always been, they use these tactics to take our freedom away and they will continue to use the tactics to take our freedoms away. Note how they did this with the anti-illegal immigration law that recently passed, they slipped into the law the ability to send all our personal ID information to the federal government and to stop us and ask for papers with no true cause. Lets stop the anti-freedom politicians and vote no on 100.
- Where's all the money going for schools for the recent rise in taxes?
- Most schools received a 10% increase in Maintenance and Operating (M&O) funding from higher 2009 primary property taxes.
- In March special elections were held so schools could add an additional 15% override to their M&O funding. Overrides are part of secondary property taxes and are calculated on Full Cash Value.
- We need to find out where all the money is going before we raise taxes, worsen the recession, and further depress much needed economic growth.
- My Thoughts: There is no end to the money hungry politicians!
- Lessons From Venezuela’s 21st Century Socialism
- The accomplishments of Venezuela’s “Socialism of the 21st Century” are looking very much like those of old-fashioned socialism with basic goods shortages, high inflation, negative growth, blackouts, water rationing, the persecution of Hugo Chávez’s critics, plus skyrocketing crime.
- My Thoughts: Socialism just doesn't work...the public schooling system in the US is socialism and has proven not to work. It only dumbs down the population and recreates an anti-freedom-loving people.
- Supreme Court Further Reduces Constitutional Limits on Federal Power
- ”turned an instrumental power, dependent on Congress’s other powers, into an independent power.”
- the Court did further damage to principled constitutional interpretation in citing foreign law as support for its holding that life-without-parole (LWOP) sentences are unconstitutional as applied to juveniles committing non-homicide crimes.
- My Thoughts: The government can now hold you forever in prison without due process and after you've served your entire sentence. Wait, the government could already do that. Time to wake up I suppose.
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