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Wednesday, May 28, 2008

Climate Security Act

Using the http://www.congress.org/ website, I wrote my representatives the following regarding the proposed "Climate Security Act". I recommend this website as an easy way to reach your representatives.

I strongly oppose the Climate Security Act and urge you to oppose its passage. This bill is based on the theory of man-made "global warming" - the causes and effects of which are scientifically unsubstantiated and uncertain at best. What we do know with certainty is that this bill will increase the costs of domestic manufacturing and energy production and therefore increase consumer prices, damage the competitiveness of these industries, and decrease our quality of life.

If these global warming claims are true, let them be proven in a court of law with real litigants who must demonstrate specific harms.

Thursday, May 22, 2008

Reality Check: Price of Gas vs. Price of Government

Amidst all the hysteria related to rising gas prices including Congressional "investigations" of the oil companies and threats of additional taxes on their profits consider the following.

If you drive 15,000 miles per year and get 18 miles to the gallon you will consume 833 gallons of gas per year. This means that if gas prices rise $1 per gallon it will cost an extra $833 per year and if they were to rise another $2 per gallon it would cost an extra $1666 per year. Of course, no one wants to pay more, but consider the value you obtain from driving an automobile. It is an almost indispensable part of most of our lives and adds tremendous value in terms of our ability to travel and work.

Now, if you make $40,000 per year in income, which is about the average yearly income in the United States, consider this back of the envelope calculation of the taxes you must pay the government:

Social Security Tax, 7.5% = $3,000
Employer Match (which could be yours) , 7.5% = $3,000
Medicare, (say 1% because I'm too lazy too look it up) = $400
Income Tax, say 15% = $6,000
State Income Tax, average 5% = $2,000
Sales Taxes (say you spend $10,000 per year at 5%) = $500
Gas Tax (0.40c per gallon at 833 gallons per year) = $333
Property Tax (say you own a $150,000 house at 1.5%) = $2,250

TOTAL = $17,483 or 44% of yearly income, and were not done!

Consider the hidden taxes one pays, which I will not even attempt to quantify. For example, consider that taxes on businesses get passed on to consumers and make the price of goods and services higher than otherwise. Consider that government caused inflation drives up the cost of everything on the order of 3% to 6% per year as well as having the effect of destroying capital and reducing the productivity of labor which further reduces real wages. Consider the lost return on money you could be saving that instead went to Social Security. Consider the cost of simply filing a tax return which often requires the assistance of a trained accountant if you itemize deductions or own a business. Consider the lost productivity due to the fact that legions of highly intelligent people, viz. accountants and tax attorneys, which could be doing something valuable, are instead employed in the preparation and understanding of the 70,000 page tax code. I could go on, but I think I have made my point.

Perhaps most importantly, consider that if you don't like the price of gas then you do not have to buy it. You could simply choose not to purchase it or drive less. The oil companies don't put a gun to your head and demand you buy their product. They offer a product that is of the utmost value and people are voluntarily willing to pay the price. On the other hand, if you don't pay the government you will end up in jail, i.e., the government takes your money under the threat of physical force. This represents the difference between "economic power" and "political power", i.e., the voluntary exchange of value for value versus the point of a gun.

Why are we investigating the oil companies and not our own government?

Tuesday, May 20, 2008

Congress, American's Grasping At Straws and Strawmen

As the price of crude oil hits all time highs, the Congress has decided to act:

The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

In my previous post "Politics for Dummies" I said the following:

If you are trying to eliminate the effects of a particular problem, do you think it would ever help to understand the causes that give rise to the effects? For example, if a building were on fire, do you think it would help that the firemen in charge understood what tends to fuel a fire and what tends to extinguish it? If they did not understand the causes, wouldn't they be as likely to throw a ham sandwich on the fire as to pour water upon it?

In principle, this legislation is tantamount to throwing a ham sandwich on a fire.

Consider that if the oil companies have the arbitrary power to raise prices and "gouge" us at any time, why have they not been doing this for years? Why now? Were they just being nice when crude oil was $10 a barrel only ten years ago? Should the oil companies have been investigated at that time for excessive congeniality and maybe given an award? Is it coincidental, that gas prices are rising at the same time that everything is rising in price? If you look at charts of prices for the last 10, 50 or 100 years is there a pattern? Is it also coincidental that energy supplies are harder to come by as the hysteria surrounding apocalyptic environmentalist claims reach a fever pitch? If gasoline prices are arbitrarily high, then why doesn't everyone go into business selling it and reap huge profits by selling it just slightly below the supposedly high price of others?

In three previous posts (Gas Has Not Risen in Real Terms, Make gas cheap - wait expensive - no cheap - or else and Probe of Probes), I demonstrated how the relatively high dollar price of gasoline is entirely the result of government policy. First, it's policy of inflating the money supply above the level of increase in the supply of precious metals causes the price of everything to rise accordingly. Second, to the extent that gasoline prices have risen over and above the level to which they would have risen absent the government's inflation of the money supply, it is a result of government policies which discourage the production of gasoline in myriad ways. Third, (uh, duh) "gasoline taxes" evidently increase the price of gasoline more than otherwise (although this one might require more study by government experts).

Suing OPEC under so called "anti-trust" legislation is an absurd attempt to deflect responsibility from US government policy and evade the real underlying causes of higher prices. Such legislation will not work to bring about lower prices and is an attempt at contradicting the laws of reality. At best, such legislation betrays a complete and utter ignorance of the fundamental laws of economics.

Another point worth mentioning is the hypocrisy on the part of various American's who complain about the high cost of gasoline and support these legislator's efforts to demonize oil companies and take destructive action against them while evading or at best remaining ignorant of the real causes. It is time that American's take responsibility for their own government. What do I mean by this? Consider the following.

American's evidently will not allow the government to roll back entitlement spending. Yet, American's don't want to pay higher taxes. This results in an enormous national debt, yet, American's don't want the high interest rates that are brought about when demand increases in the credit markets relative to supply, but American's also don't want the increasing prices which result from the government's printing of paper money (inflation) to fund its debts and bail out mortgagees and mortgagors. At the same time, American's (due to the hysterical propaganda of the Ecology movement) demand that the "environment" be untouched which translates into regulations and policy that dramatically curtail drilling for supplies in the United States and retards the growth of refinery capacity. Yet, American's don't want to rely on corrupt fanatical foreign governments for oil who use the oil revenue to support terror against the West. Therefore, American's demand that oil companies find alternatives to oil yet they apparently want the government to pass a windfall tax on oil company profits - the very same profits that would be used as capital to fund the research of alternatives and find more energy supplies.

In this context, the Federal Reserve system and the government's unlimited power to tax and regulate enables American's (in the short run) to engage in a fantasy in which energy emerges from thin air without effort or contact with nature. In this fantasy, all the government needs to do is print money for us to buy energy from these mysterious people who seem to just have it and prosecute anyone that resists. Fundamentally, this fantasy represents a desire for the unearned, and it is the desire for the unearned which gives rise to such government policies in the first place. (My experience is that those who seek the unearned and want stuff for free usually get what they pay for.)

America is now like one of those deluded American Idol contestants whose fantasy is shattered by the judges who admonish them to quit music and find another job. The question is whether we will be like the contestant that stubbornly ignores reality to pursue a hopeless quest or whether we will recognize reality and change course. Unfortunately, I have a feeling we will see this contestant next season.

Wednesday, May 7, 2008

"It will wait upon the ladies at their toilett..."

Some of the greatest writing in the history of political science occured between 1787 and 1789 during the debate over the ratification of the federal Constitution. A series of famous essays known as the Federalist Papers were written by Alexander Hamilton, James Madison, and John Jay and expounded the principal arguments in favor of it. These writings have provided perhaps the most important primary source for constitutional interpretation. Not as widely known but just as important are the Anti-Federalist Papers, a collection of writings and speeches opposed to ratification authored by among others Robert Yates, Richard Henry Lee, George Clinton and Patrick Henry. Quoting the link:

[The Anti-Federalist Papers] contain warnings of dangers from tyranny that weaknesses in the proposed Constitution did not adequately provide against, and while some of those weaknesses were corrected by adoption of the Bill of Rights, others remained, and some of these dangers are now coming to pass.

Both the Federalist and Anti-Federalist Papers are writings with which every student of the American political system should be familiar. Among my favorites are Brutus V and Brutus VI in which Robert Yates, who wrote in the New York Journal under the pseudonym "Brutus", logically analyzes the "general welfare" clause as well as the likely consequences of granting the federal government the power to levy excise taxes . Yates' prescience should not be surprising. His work illustrates the enormous power of thinking in principle, a concept totally foreign to modern intellectuals and their dimwitted albeit loyal offspring - modern politicians. Some excellent context on Brutus by Professor Gary Galles can be found here. As Professor Galles states:

The anti-federalists opposed the Constitution on the grounds that its checks on federal power would be undermined by expansive interpretations of promoting the "general welfare" (which would be claimed for all laws) and the "all laws necessary and proper" clause (which would expand limited federal power to all-inclusive), leading to a federal government so powerful that its powers were bound to be abused.

One particular concern was that it gave the national government almost unlimited taxing discretion.

In Brutus V, Yates writes:

1st. To detail the particulars comprehended in the general terms, taxes, duties, imposts and excises, would require a volume, instead of a single piece in a news-paper. Indeed it would be a task far beyond my ability, and to which no one can be competent, unless possessed of a mind capable of comprehending every possible source of revenue; for they extend to every possible way of raising money, whether by direct or indirect taxation. Under this clause may be imposed a poll-tax, a land-tax, a tax on houses and buildings, on windows and fire places, on cattle and on all kinds of personal property: -- It extends to duties on all kinds of goods to any amount, to tonnage and poundage on vessels, to duties on written instruments, newspapers, almanacks, and books: -- It comprehends an excise on all kinds of liquors, spirits, wines, cyder, beer, etc. and indeed takes in duty or excise on every necessary or conveniency of life; whether of foreign or home growth or manufactory. In short, we can have no conception of any way in which a government can raise money from the people, butwhat is included in one or other of three general terms. We may say then that this clause commits to the hands of the general legislature every conceivable source of revenue within the United States. Not only are these terms very comprehensive, and extend to a vast number of objects, but the power to lay and collect has great latitude; it will lead to the passing a vast number of laws, which may affect the personal rights of the citizens of the states, expose their property to fines and confiscation, and put their lives in jeopardy: it opens a door to the appointment of a swarm of revenue and excise officers to pray [sic] upon the honest and industrious part of the community, eat up their substance, and riot on the spoils of the country.

Yates continues in Brutus VI with one of my favorite passages:

This power, exercised without limitation, will introduce itself into every comer of the city, and country — It will wait upon the ladies at their toilett, and will not leave them in any of their domestic concerns; it will accompany them to the ball, the play, and the assembly; it will go with them when they visit, and will, on all occasions, sit beside them in their carriages, nor will it desert them even at church; it will enter the house of every gentleman, watch over his cellar, wait upon his cook in the kitchen, follow the servants into the parlour, preside over the table, and note down all he eats or drinks; it will attend him to his bed-chamber, and watch him while he sleeps; it will take cognizance of the professional man in his office, or his study; it will watch the merchant in the counting-house, or in his store; it will follow the mechanic to his shop, and in his work, and will haunt him in his family, and in his bed; it will be a constant companion of the industrious farmer in all his labour, it will be with him in the house, and in the field, observe the toil of his hands, and the sweat of his brow; it will penetrate into the most obscure cottage; and finally, it will light upon the head of every person in the United States. To all these different classes of people, and in all these circumstances, in which it will attend them, the language in which it will address them, will be GIVE! GIVE!

I agree with Professor Galles conclusion:

If Brutus was here to witness our current tax tab, he would conclude that he had been far too optimistic. A federal government, grown orders of magnitudes larger than he could ever have imagined, guarantees tax burdens beyond his worst nightmare.

Campaigning in the 'Now'

I got a kick out of this clip of Hillary in the wake of her primary victory in Indiana. After getting demolished in North Carolina, barely edging out Obama in Indiana, and with a majority of her own party abandoning her and urging her to step aside - Hillary triumphantly declares that it is now "full speed ahead to the White House!"

Some might chalk this up to building the morale of her dejected supporters or even heroic defiance in the face of overwhelming odds. Others might attribute it to delusion or even schizophrenia. I claim her behavior is entirely consistent with the nature of the hippie as described in my previous post, The First Hippies. Recall this Ayn Rand quote from my post regarding the hippies' worship of the moment:

Their hysterical incantations of worship of the "now" were sincere: the immediate moment is all that exists for the perceptual-level, concrete-bound, animal-like mentality; to grasp "tomorrow" is an enormous abstraction, an intellectual feat open only to the conceptual (i.e., the rational) level of consciousness.
In other words, I believe that Hillary literally thinks that based on this primary win in Indiana -she is going to win the presidency. She can not abstract the concept of the national election or of the overwhelming odds against her winning the nomination. She does not care about the damage she is doing to her own party (in the long run) by staying in the campaign and aggressively attacking her opponent much less the damage she is doing to her own reputation. All that matters is today, the moment, the now. Afterall, to a hippie politician, if a criminal offers you campaign cash - take it. If the intern offers oral sex - accept it. If there is an election that day - win it by any means necessary. This is classic hippie.

Saturday, May 3, 2008

Thanks For The Textbook, Master!

The AP reports:
Hillary Rodham Clinton called for a vote Friday in the Democratic-controlled Congress on a summertime suspension of the federal gasoline tax, a plan that Barack Obama dismissed as a political stunt that would cost thousands of construction jobs.

...McCain told a town-hall audience in Denver: "I want to give the American consumer a little bit of relief just for the summer. Maybe they'll be able to buy an additional textbook for their children when they go back to school this fall."

Oh, how nice of Master to think of us at this time of year and offer to give us a "little bit of relief" even if it's "just for summer." Afterall, we could really use that textbook for little Timmy. Of course, we will still have to pay the income tax, social security tax, medicare tax, value-added tax, capital gains tax, sales tax, property tax, and inheritance tax as well as paying higher prices for everything since Master has seen fit to create a lot of dollars for us and pass them out, but that is ok. Afterall, it's not Master's fault that he must spend more than he takes in, and if he has to create a few of the dollars with his machines then so be it. We are working as fast as we can for him, but I guess it's just not enough. And all those nice people around the world have been willing to lend us a lot of money, and of course we have to pay them back with interest - so we all just better get to work! Sometimes I wonder how Master pays for the gas in his limousine and his jets when he flies around to grace us with his presence and tell us about all the wonderful laws he's passing and how many textbooks he will being giving us this summer. Oh well, I guess we must pay for his gas too, but that is ok because we will be getting a textbook so we better get to work so Master can fly around and give the wondrous news of the textbooks. And, oh boy, I hope they really sock it to those mean oil companies. All those oil companies do is provide oil for us so that we can go the pump and drive our cars and heat our homes and power our technology. That's no fair. They should be punished, because they do their job so well, and people are willing to pay them a lot of government dollars to buy their things. You see, if they tax the oil companies, the oil companies will then have less money with which to find more oil which would only reduce the price. And that must be a good thing or else Master wouldn't be talking about doing it. He's so smart. Thanks again Master!

Thursday, May 1, 2008

Ethics, Politics, and The Impotence of The Republican Party

In my previous post The First Hippies, I claimed that the combination of the ethics of altruism and moral relativism explains the lack of outrage displayed against the Clinton's transgressions as compared to the raging hostility routinely directed at the right. There is an important implication to this observation.

To start, recall that many on the left advocate giving free needles to heroin addicts. I submit that the advocates of this policy represent the ideal of the left: the non-judgmental altruist. The needle givers do not blame the addict for their predicament. That would require judgment. They do not try and reform the addict. That would imply that non-addiction is better than their current life of destitution and dependency on narcotics. The sacrifice of their time and other people's money (not their own, of course) to pay for the needles represents altruism. These attributes immediately qualify needle advocates for liberal sainthood.

As we have seen with the Clinton's, if one is considered to be a non-judgmental altruist or liberal saint, one is less likely to be censured publicly in a scandal. On the other hand, if one is judgmental but hypocritical one is at risk and therefore must hide his behaviour. For example, if a public figure is effusively pious and then subsequently caught with a hooker it results in a nationwide media frenzy whereas Clinton can rape his secretary and be celebrated as a "suave ladies' man".

Less obvious but more important is the example of Christian conservatives who uphold "self-sacrifice" and "brotherly love" as virtuous and at the same time attempt to defend capitalism, a system which entails selfishness and the profit motive. These conservatives are trapped in a contradiction. (Recall Bush's attempt to reconcile this contradiction with his ridiculous campaign slogan: "compassionate conservatism.") One might ask: how can Bush preach "turn the other cheek" and then launch war on Iraq? How can Bush preach self-sacrifice and charity and then advocate a tax cut for the wealthy? The fact that their philosophy is hypocritical leads them to conceal their true motives which I claim leads to the popular caricature of Republicans as "conspiratorial schemers plotting in dark smoky rooms ". (For example, on the TV show "The Simpson's", the Springfield republican party meets in an underground dungeon. This is typical.)

This observation is important in explaining why the Republicans are impotent as a political party and why America is drifting rudderless towards statism. Note that amidst their rhetoric upholding limited government and free enterprise, we have endured the biggest government expansion in the nation's history under Republican administrations. Republicans can not properly defend capitalism and freedom because to do so would necessitate a repudiation of Christian ethics in favor of rational egoism.

Why is it that ethics necessarily leads to politics?

Take, for example, The Declaration of Independence which asserts that man has an inalienable right to life, liberty, and the pursuit of happiness. The ethical concept that human happiness is a value has profound consequences politically. In order to pursue one's happiness and given that man uses reason to survive, one must be free to think. He must be free to produce that which will sustain his life. He must be free to trade his products with others which leads to the division of labor resulting in massive improvements in quality of life. In other words, political freedom is necessitated by man's nature as a reasoning being pursuing his own happiness and material well-being. In other words, in order to be happy, man's rights must be protected by the government. If the government protects life and property, the resulting economic system is capitalism.

On the other hand, what if you accepted the ethics of Islam or any other major religion? Islam teaches that the purpose of life is total submission to God (in fact, the word Islam means "submission"). At one time, Christianity preached this doctrine too although it has been watered down in the West. Such submission entails subjugation of your independent judgment in deference to sacred scriptures (as interpreted by anointed "experts"). The purpose of life is therefore not "happiness" but service to God in exchange for salvation and an eternal afterlife. Under this view, duty to God is the utmost virtue and any form of selfishness is derided as base pleasures of the "flesh". Given that the precepts of any religion have no basis in reason they must be taken on faith. The doctrines of any one religion are as arbitrary as another and may or may not lead to success in living. In fact, this is what gives rise to the moral-practical dichotomy. Since religious precepts are arbitrary and not related to the facts of man's nature, they are often in direct contradiction with the requirements of his survival. Therefore, a religionist is faced with a moral-practical dichotomy, i.e., do I be moral and follow the Bible or act selfishly-practically and be happy? (In fact, Genesis starts with this problem almost on page one. )But this is not really important to a religionist. Deference to a higher power is paramount, not one's material well-being. What type of government is entailed under such a philosophy? Fortunately, we don't have to imagine it. We have thousands of years of history to reference.

A classic example is the Dark Ages where the rise of Christianity led to the downfall of Rome and to the loss of the vibrant intellectual traditions of antiquity. Entire libraries containing a thousand years of writings on philosophy, law, science and mathematics were burned to the ground under the premise that the Holy Bible was the only text required. The Holy Roman Church dominated Europe and it led to a thousand years of stagnation, misery, and barbarism. Today, the Middle East is mired in a modern Dark Age as theocratic governments dominated by Islamic fundamentalists recognize no distinction between the church and state.

Note that in Ancient Greece, where the Western intellectual tradition began, respect for the reasoning mind led to the foundation of Athenian democracy and these ideas in turn influenced the foundation and expansion of the Roman republic. Where independent thought and human happiness are revered, we see movements towards political freedom. Conversely, when the independent mind is regarded as unimportant or even a hindrance to the alleged purpose of life whether it be service to god, service to the state, or service to mother earth, we see movements towards dictatorship and political repression.

When one abandons his mind, he must turn to the group, the tribe, or the gang in order to survive. And the leader of the gang is usually the one with the most guns and the most willing to use them.

The association of the Religious Right with capitalism is accidental. They accept and claim to uphold capitalism but not on principle. They accept it simply because it is America's tradition. Protestants were historically loyal to America because of their own experiences with religious persecution elsewhere and/or the mistaken belief that America represented a god-fearing Christian nation against the atheistic political systems of Europe, viz. the Communists or the "barbarous" religions of the Middle and Far East.

This is not to say the the liberals are any better. On the contrary, they are almost worse. Rather than justify altruism dogmatically by reference to a supernatural deity and sacred scriptures, they uphold it by default. They embrace relativism and have no philosophy. The difference between conservatives and liberals can be summarized in the following quote from Ayn Rand:

The conservatives want freedom to act in the material realm; they tend to oppose government control of production, of industry, of trade, of business, of physical goods, of material wealth. But they advocate government control of man’s spirit, i.e., man’s consciousness; they advocate the State’s right to impose censorship, to determine moral values, to create and enforce a governmental establishment of morality, to rule the intellect. The liberals want freedom to act in the spiritual realm; they oppose censorship, they oppose government control of ideas, of the arts, of the press, of education (note their concern with “academic freedom”). But they advocate government control of material production, of business, of employment, of wages, of profits, of all physical property—they advocate it all the way down to total expropriation.

The conservatives see man as a body freely roaming the earth, building sand piles or factories—with an electronic computer inside his skull, controlled from Washington. The liberals see man as a soul freewheeling to the farthest reaches of the universe—but wearing chains from nose to toes when he crosses the street to buy a loaf of bread.

Today, these distinctions barely even hold as Republicans advocate for government intervention into the economy (see Sarbanes-Oxley among others) and Democrats embrace speech codes and even religion (see Pastor Wright). Therefore, today, more than ever, Republicans and Democrats represent a false alternative, and, in the meantime, our country is being slowly destroyed. Unfortunately, there is no political party today that consistently defends individual rights and capitalism from a moral perspective. For such a party to emerge, it will require a philosophic revolution where a politician could proudly proclaim that the purpose of each individuals life is their own happiness and that the purpose of government is to protect that pursuit (and actually mean it). Until then, we must endure the spectacle of politicians like Hillary, Obama, and McCain fighting over which aspects of our lives need more of their control.