Category Archives: Socialism

>The Bursting of the Socialism Bubble

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>In the midst of what “debate” there has been about the eventual bailout of the financial sector, it is clear that even most of those opposed to the bailout do not understand what is happening. The unfortunate aspect of some of the commentary is that there is a faction arguing that without the bailout, the stock market will not crash. Thus, the debate is shifted to “which course of action can best protect stock market values?” They cannot be protected. The government argues that the credit squeeze could result in unemployment, while the other side argues that unemployment will not necessarily result if the bailout is not passed. Another position blames the crisis on too little regulation. All of these positions are wrong. There will be a painful adjustment in the stock market and massive unemployment, whether the government bails out the financials or not. The only question is how long it will last. That is reality when any bubble deflates.

The most unfortunate result of all of this misunderstanding would be for the American people to reverse their position and support the bailout just because there are severe market losses if it does not pass. Their initial instinct was correct, whether for the right reasons or not. The losses that these companies suffered due to massive malinvestment are real, and that must eventually be reflected in the value of their stocks.

Similarly, it will be unfortunate if the American people are convinced that more regulation is needed to prevent this from happening again. More regulation will not prevent a problem that was in part caused by too much regulation.

We have heard about the “tech bubble,” the “housing bubble,” and even the “dollar bubble.” All of these are real. The dollar bubble is about to burst, with global catastrophic consequences, but even that is not the biggest bubble that is out there. The biggest bubble, which has been building literally for the past century, is what I will call “the socialism bubble.”

What is the socialism bubble? Let’s define “bubble” first. The term “bubble” is used in economics to describe a large misallocation of resources (malinvestment). Anyone with even a passing familiarity with economics knows the basics: the central bank artificially infuses money and credit into the economy, that money flows toward projects that appear to be profitable under the artificially created conditions, but aren’t, and those projects ultimately fail, causing the bursting of the bubble. The worst part of the bursting of a bubble is that the greatest misallocation of resources has been human resources, and those people now have to find new jobs. They have to be reemployed elsewhere, in more profitable ventures, just like the capital goods that were misallocated to the projects. That is why unemployment accompanies recessions.

Like any other bubble, the socialism bubble is also a misallocation of resources. It has just taken longer to form and is much huger in scope. The principles behind it are the same, however. It represents government intervening into the economy to create artificial conditions that misallocate resources. Under these artificial conditions, the entire economy appears to be profitable, but isn’t. When the inevitable bubble bursts, all of the resources, including human resources, that were misallocated, become unemployed. We are about to experience the massive correction following this socialism bubble.

How did it happen? One must look back to before it started to understand it completely. It started at the turn of the last century. The United States of the 19th century had the closest thing to laissez faire capitalism ever achieved in history, arguably followed next by Great Britain. The defining principle of laissez faire capitalism is VOLUNTARY EXCHANGE. With everyone acting in their rational self interest, the minds of all participants were leveraged by the system to consistently produce optimal results.

In the laissez faire marketplace of the 19th century, wages generally declined over time. A pitiable lack of understanding of economics caused social reformers to condemn the free market for this.[1] They ignored the fact that the general price level fell faster than wages, making workers richer in real terms. They attempted to improve on the results that laissez faire capitalism had produced with government policy.

However, there is only one alternative to voluntary exchange: INVOLUNTARY EXCHANGE. Government economic policies FORCE economic agents to make choices that they otherwise would not make. No matter how one tries to euphemize socialism, that is what it is. By attacking voluntary exchange, socialism attacks the mechanism that creates wealth. That is the true root of the problem.

One way in which this manifests itself is in the cost of production. Government cannot come to a company that makes automobiles and force them to pay their employees more, provide them healthcare or pensions, pile one regulation on top of the next in terms of how the company operates its business, and then expect the company’s cost of making that automobile not to rise. As the cost of production rises, the company must find a way to keep the cost of producing their product below the market retail price. They might decide to manufacture SUV’s, which have larger margins, even though a spike in gasoline prices could put them out of business. See General Motors. The truth is that none of the American auto manufacturers are able to produce an automobile that is competitive in the market. Government will come up with a host of villains to blame for this, but look at the balance sheets of the Big Three and you will see why they are not viable. Concessions to labor unions (mandated by government) have made it too expensive for them to operate.

Similar government intervention is behind virtually all of America’s loss of manufacturing infrastructure. It is simply not economically viable to manufacture anything in the United States anymore. This is not a natural result of free markets. As previously noted, wages and other costs of production fell under the laissez faire system. Falling prices are a natural result of economic growth and innovation. Only the artificial conditions created by government intervention – the use of force to coerce economic agents – have made it more expensive to make things in America.

The cost of production is not the only pressure that socialism has put on the American economy. The welfare programs currently consume 11% of GDP. Keynesians would say that this is ok, because the recipients spend that money and increase demand. Hopefully, the coming calamity will discredit this economic school of charlatans once and for all. Wealth is created by production, not consumption. This redistribution destroys voluntary savings and ultimately capital. It also eliminates the other conditions that accompany a period of voluntary savings that facilitate natural expansion of the productive structure.

In any case, increasing socialism has put artificial pressures on the American economy for almost a century, and those pressures have accumulated to make America profoundly less productive. Like the communist countries, we have lived in a dream world in which government could use coercion to change economic reality. We have pretended that a business venture can spend more than it takes in and continue to survive. For a time, the free market aspects of America’s “mixed economy” allowed her to overcome these negative pressures, but that time has passed. Economic reality is about to assert itself in devastating fashion.

For at least two decades now, America has been producing far less than she consumes. All things being equal, this would not have gone on for long. However, all things have not been equal. The United States has a central bank, and the privilege of printing the world’s reserve currency. This is why the socialism bubble has been become so enormous.

Instead of a drop in consumption and a rise in unemployment[2] as its manufacturing sector migrated overseas, America went right on consuming, and those employees found new jobs in the “service economy.” With the Federal Reserve providing an unlimited supply of fiat currency, and with the ability to ultimately export that inflation overseas by importing foreign goods in exchange for U.S. dollars, America has been able to maintain the same standard of living as it enjoyed in its productive days. As long as foreigners accepted U.S. dollars, the dream world could persist. The bubble continued to inflate.

The ominous part of this is that today a large percentage of the American labor force is now misallocated by this bubble. There are tens of millions of American workers that are employed in ventures that will cease to exist once the socialism bubble bursts. We have seen the beginning of this with the failures of large retailers and restaurant chains, but that is only the tip of the iceberg. Worse yet, unlike previous recessions, there are no manufacturing jobs for these displaced workers to redeploy to. The productive structure must be rebuilt, and that doesn’t happen overnight.

Therefore, Americans must realize that a stock market crash[3] and mass unemployment are inevitable, whether government intervenes or not. The only question now is how long those undesirable conditions will last. There is no “solution,” government or otherwise, that will allow us to avoid this correction. If the government does not intervene, the stock markets will crash faster and the layoffs will begin sooner, but the total period of adjustment will be far shorter. If the government intervenes, no matter how they do it (including by allowing the Federal Reserve to massively inflate the currency), the adjustment period will be stretched out, with continued new malinvestment even as liquidation of current malinvestment occurs. That was the story of the Great Depression.

The only course of action that can speed up the recovery is a return to the laissez faire capitalism that made America great in the first place. This would include eliminating unnecessary regulation, abolishing the central bank and restoring sound money, eliminating minimum wages and other artificial price controls, capping and eventually phasing out the entitlement programs, eliminating other massive government spending like military welfare for other countries and unnecessary war, and restoring protections of property rights. In other words, Freedom. Don’t you think it’s time we tried it again?

[1] The lack of understanding of “real wages” was certainly not the only misconception of the social reformers, but it was a major misconception and representative of others.
[2] The European mixed economies have already experienced this adjustment, debased their currencies, regrouped under the European Union and an new currency, and are presently pursuing the same failed ideology to destroy this new economy as well.
[3] It is conceivable that the Federal Reserve could inflate the currency so much that the stock market remains at $11,000. However, if $11,000 only buys 10 loaves of bread at that point, it would still represent the same devaluation as a crash.

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>Be Careful What You Fight For

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>There is one positive consequence of the economic collapse that is occurring, and the futile attempt by the government to stop it with money stolen from its constituents: the American public has woken up. Despite the best efforts of the major media outlets to spin this the way the government would like, it is apparent that mainstream America is mighty angry that they are being fleeced to prop up the financial system. I hope that anger does not fade with the passage of time – at least not until after November 4th. While wholesale changes are unlikely, it would be nice to see a few incumbents packing after this election and replaced by non-Republicrats. It would be an encouraging sign of things to come.

However, as good as it is to finally see some outrage over the destruction of our Republic, there is still a long way to go. Listening closely to the cries of anger, it is apparent that the majority of Americans still haven’t found their way to actually demanding their freedom. While they are angry, it seems that government has successfully channeled their anger in the wrong direction. Generally, Americans are mad at Wall Street, and are blaming this crisis on “greed.” To the extent that they fault government, they are blaming the crisis on “not enough regulation on Wall Street” and even (ugh) “too much laissez faire capitalism.” This of course plays right into the government’s hands, because the answer to “too much laissez faire capitalism” is more government intervention into the marketplace – which was the REAL cause of this problem in the first place.

If anything, the number one clue that it was not free enterprise that caused this debacle is that the government says it was. By now, every American should know to listen carefully to everything that the Bush Administration says and assume that exactly the opposite is true. However, decades of conditioning to mistrust the free market is paying off for the government, at least for the time being. They have turned this into a class war, instead of an ideological one. They have Americans indiscriminately resenting the wealthy, whether they earned their money legitimately or not. They have Americans condemning corporations, whether they achieved their place in the market legitimately or not. While Americans are mad at their government, they have been convinced, for the moment, that government’s failure was not protecting the average American from the evils of capitalism.

Of course, the truth is that this crisis was a failure of socialism, not capitalism. It was the socialist idea that every American was entitled to a house, and that taxpayers must pay for them, that led to the creation of Fannie Mae and Freddie Mac. Those companies guaranteed mortgages to people that would not have received them in a free market. Only the ability of the government to forcibly collect taxes to back those mortgages allowed the lenders to offer them. If there was any doubt that the government was backing Fannie and Freddie with taxpayer money, that doubt was removed when the government took over the companies when their inevitable failure occurred.

Even with the GSE’s in place, it took another socialist institution, the Federal Reserve, to supply the imaginary money needed to lend to all of those “sub-prime” borrowers. Without the imaginary “liquidity” provided by the Fed, the loans could never have been made and the home prices could never have been bid up so far. The Fed merely blew up another bubble, as it has been doing since the day it opened its doors in 1913.

What these interventions into the marketplace do is create artificial demand. Everyone knows that an increase in demand, while supply remains equal (or when the increase in demand outpaces an increase in supply), results in an increase in price levels. However, demand is not merely the desire to purchase a product, but also the ability to do so. If demand were merely the desire to have something, there would be unlimited demand for all products and services, taking most of the challenge out of running a successful business! The Fed and Fannie Mae certainly didn’t increase the number of people who desired to have a house, but it dramatically increased their purchasing power. In fact, the combination of easy money and credit by the Fed and the incentive for lax lending standards represented a massive increase in demand over the entire housing market, with the predictable dramatic increase in home prices. None of this represents free market forces at work. It is textbook socialist central planning and wealth redistribution.

That brings us to the government “solution,” and what Americans should really be mad about. Our government is now going to forcibly extort trillions of dollars from us in a misguided attempt to maintain the artificial conditions it created in the market. It won’t work. They have tried it many times, and it has never worked. The artificial demand drove prices far above their natural level, and natural market forces are now pushing them back down. Borrowers were lent money that they were never going to be able to pay back. What is worse, a large percentage took the artificial equity caused by the rise in price of their homes in home equity loans and spent it. That money is gone, and the borrowers can’t pay it back. Government taking possession of the mortgages isn’t going to change that. Those borrowers are still going to default, and the home prices are eventually going to go where they naturally must go. Economic forces are like forces of nature. In the end they cannot be stopped.

This intervention is practically identical to the interventions attempted during the Roosevelt administration in the 1930’s, which turned a severe 2-year recession into a crushing, 10-year depression. This bailout will have devastatingly similar results. It doesn’t matter whether a CEO gets away with a $10 million dollar bonus or not. What matters is tens of millions of Americans unemployed for a very, very long time. THAT will be the result of government’s attempts to maintain the artificial conditions in the economy that GOVERNMENT created in the first place.

Since the Austrian economists predicted all of this, while the Keynesians did not, it might pay to listen to what the Austrians suggest as a solution to these government-created crises. While their first advice was always not to create the problems in the first place, they certainly were clear about what to do when the inevitable bubble bursts occurred. Not surprisingly, they advised us to do EXACTLY THE OPPOSITE of what the government proposes. The cure for the recession, according to the Austrians, was to EASE regulation on business, especially in the labor market, and allow the quickest, smoothest reallocation of resources (including human resources) that was possible. As government intervention had created the problem, more government intervention was not going to solve it. In fact, any intervention could only make it worse, no matter what form it took. That is because the wealth creating mechanism of capitalism depends upon the participants making their decisions voluntarily, and government intervention represents forcing people to make different choices. This is really what most Americans are demanding from their government right now – for government to force market participants to choose differently than they otherwise would. Be careful what you fight for, Mr. and Mrs. America, you will probably get even more than you asked for.

I do have hope, however. Sooner or later, Americans will figure this out. At least they’re screaming about something now, which is a lot better than the docile slumber they’ve exhibited over the past several decades as we’ve marched toward oblivion. The government would much rather have them keep on sleeping than to have to divert their anger towards scapegoats and imaginary boogeymen. They will succeed in doing just that this time, but their system is nearing its end. The inevitable economic debacle will occur, and hopefully that will be the final straw. Americans have put their faith in government control and central planning of their lives for almost a century, and it has consistently let them down. Perhaps this last calamity will finally make them see the socialist lie for what it is. Then, they will finally stop walking down the road to serfdom.

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The Failure of Capitalism: Government’s Great Lie

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President_George_W._Bush_bipartisan_economic_meeting_Congress,_McCain,_ObamaThe historic rip-off of the American public that has just taken place met with little resistance from the victims. Lest any inconvenient contrarians or clear thinkers rise up from the masses, the Great Rip-off comes with a Great Lie to justify it. While there has never been a shortage of factions ready to decry the evils of capitalism, it is important during a heist of this proportion that EVERYONE get on board. Therefore, virtually every politician, including the Republican nominee for president,  and the entire media are blaming the current meltdown as a failure of free market capitalism. This is government’s Great Lie.

A lie this enormous is necessary when you are stealing trillions of dollars from 300 million people who are watching your every move. To pull off a crime like that, you have to convince the victims you are really helping them out.

Despite decades of government intervention into the economy, including massive expansion of entitlements and regulation during the Bush administration, the American public seems to accept the narrative characterizing the past decade as “an experiment” with laissez faire capitalism. House majority leader Steny Hoyer told RTTNews,

“With inflation, everybody who had any investment has lost money, 401(k) savings plans, pensions, they’ve lost money,” he said. “That’s a stark failure of the economy and this administration’s laissez faire, take the referee off the field, let anyone do whatever they want to do and everything will be fine.”[1]

In an article published Saturday morning, AFP reported,

“The top Senate Democrat, Majority Leader Harry Reid, blamed the crisis on Bush’s laissez-faire policies, then called on the president to better explain why such a sweeping program was needed as the country prepared for a presidential vote in less than six weeks’ time.”[2]

While such rhetoric might be expected from Democratic Party leaders, especially during an election year, there is no substantive rebuttal from the other side. Quite the contrary, as John McCain’s interview with the New York Times makes clear.

“I’m a Teddy Roosevelt Republican. Teddy Roosevelt was the first one that took on the big trusts, first time we began to have regulatory agencies. He said, unfettered capitalism leads to corruption. I’ve always agreed with that.”[3]

If the Great Lie is this crisis representing a failure of capitalism, there are a lot of little lies that help support it. Congressman Hoyer’s characterization of laissez faire capitalism as letting “anyone do whatever they want to do and everything will be fine” is just such a supporting lie. It is a variation of the attack on freedom itself as if it places no limit on anyone’s actions. In both cases, the limit is harming another individual.

Laissez faire capitalism does not allow contracts to be broken, nor does it allow force or fraud to be initiated in forming them. While these limits are vital to laissez faire capitalism, Congressman Hoyer would have us believe otherwise. Take note of Hoyer’s choice of words. Even in the absence of any harm to others, Hoyer has an aversion to people doing “whatever they want to do.” He personifies statism.

The real substance of the Great Lie  is the characterization of the American economy in any recent decade as “capitalism.” It isn’t. Even our government and media establishments acknowledge we have a “mixed economy,” supposedly combining the benefits of free market capitalism with socialist central planning and redistribution. The Lie says that it has been too much “unfettered capitalism” that has caused our current crisis, rather than too much socialist central planning. How can we know which is to blame?

It’s a false dilemma. In reality, there is no such thing as a mixed economy.” We are witnessing the inevitable failure of that idea. It is doomed from the start, because the moment any central planning is introduced, capitalism ceases to exist. Once government intervention is introduced anywhere, it must eventually be introduced everywhere, resulting in all of the failures of socialism throughout history.

In truth, there is no “capitalism” at all in our mixed economy.

The proof? Let us consider what capitalism is, and whether its definition applies to the U.S. economy. Merriam-Webster defines capitalism as,

“an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”[4]

Of the three elements in this dictionary definition, private ownership of capital, voluntary exchange, and competition, it is the second that is fundamental to the other two. Why? First, as long as there is voluntary exchange of property, there will be private ownership of capital. There is no way for government to acquire property in a “voluntary exchange.” Even a revenue generating enterprise started by government has to be funded into existence by tax money, and taxes are collected under the threat of force. Therefore, in a system where all of the transactions are voluntary, all property, including capital goods, remain privately owned.

Second, when all transactions are voluntary, most buyers and sellers are going to try to act in their best interests. Sellers will constantly try to convince buyers to purchase their products or services, rather than those of others. Likewise, buyers are going to try to find the best products at the lowest prices, motivating sellers to maximize their quality and minimize their price so that their products will be chosen over those of other sellers. Therefore, voluntary exchange naturally results in competition. It is competition that motivates innovation and improvement in efficiencies, and lowers the cost of production. Thus, it is free choice that ultimately drives the wealth-creating mechanism of capitalism. Without free choice, there is no capitalism.

Investments in the U.S. economy can hardly be described as being determined by private decision when government actively steers the investment decisions of capitalists. It does so either by outright subsidization of investments it favors, or by providing tax breaks to companies that make those investments. It is ironic that government often characterizes this second method as positive action to stimulate growth. After taxing all business activity to the brink of insolvency, it then gives back a small portion of the booty to investors willing to do its bidding. By doing so it wins political support, and at the same time distorts the economy, creating new problems to solve with future interventions. Thus, the government protects the job security of its incumbents and creates the need for more government all in one fell swoop.

Neither are prices really determined by competition in a free market in the U.S. economy. Prices are routinely fixed by government intervention, such as the prices of agricultural produce by government farm subsidies or the price of healthcare by massive government subsidization through entitlement programs. The price of labor is distorted by minimum wages and massive regulation that makes employing people infinitely more expensive than it otherwise would be. Interest rates, or the price of borrowing money, are set by the central bank, which is the most harmful price fixing of all (we will look more closely at this momentarily). While some prices are set by market forces, a large percentage is affected in one way or another by government.

Similarly, the distribution of goods in the U.S. is sometimes determined by competition in a free market, but that is only after government has taken over 12 percent of all goods and services produced in the economy and redistributed them through massive welfare programs, destroying the possibility of any real, voluntary savings. For those goods that are distributed in part as a result of competition, it can hardly be described as occurring in a “free market” when employers cannot really decide for themselves who to hire, employees cannot accept any wage they wish to, massive regulation protects large companies from smaller competitors, and even imports and exports are subject to over 20,000 pages of regulation in “free trade agreements” like NAFTA.

Most harmful of all is the supreme intervention into the economy by the central bank, which not only artificially sets the interest rates that ultimately determine the cost of investment, but artificially controls the volume and purchasing power of the money supply itself. While truly free markets are characterized by a steady decrease in general price levels over time, the artificial inflation of the currency by the central bank reverses this process. While the business cycle is relatively mild in a free market, the bubble-bust cycle caused by central banking ranges from painful to castastrophic.

Thus, the economic problems facing America today are not caused by capitalism, because it doesn’t really exist in the U.S. economy. Capitalism results in a natural, economic equilibrium. Central planning disrupts this equilibrium. In fact, not only are our economic problems caused exclusively by government intervention into the marketplace, rather than capitalism, these problems are the INEVITABLE RESULT of government intervention.

Why? Central planning, by definition, precludes free choice, and therefore capitalism, but does not change human nature. Human beings will still attempt to make choices in their rational self interest. This is one of the reasons for all of the unforeseen consequences of central economic planning. When government forces buyers and sellers to make choices other than those they would make otherwise, those economic agents seek another way to pursue their rational self interest. As these alternative decisions naturally run counter to the government’s desired result, more force is needed to prohibit those choices by economic agents, or to force other economic agents to address the consequences of its intervention. That in turn causes further unforeseen results, requiring further use of force by government. Once government intervenes in the market, it is inevitable that it will have to continue to intervene until it controls every aspect of economic activity. This has been the trend in the U.S. economy for the past 100 years.

In addition, government intervention cannot change economic realities, such as the cost of production. Only innovation can do that, and innovation cannot be created by government decree. Therefore, when government intervenes into the economy, all of the economic forces that were acting upon the market before the intervention continue to act upon it. For example, as Von Mises pointed out, if the government sets a price ceiling for milk, the smaller, marginal producers of milk can no longer afford to continue producing it, and may decide to produce cheese or butter instead. By intending to make milk more available to the poor, government has actually caused a decrease in supply. It then has to fix the prices of factors of production that are necessary to produce milk, causing the same pressure on marginal suppliers in that market and a decrease in supply of those factors of production. The cycle continues to repeat until the government either ceases to intervene in the market completely or nationalizes the entire industry.[5] At that point, even private ownership of capital no longer exists.

Thus, there are some conclusions that can be drawn. One is that there is really no such thing as a “mixed economy.” Economic forces do not allow it. Allowing some economic agents to choose freely in some circumstances does not produce the same results as when all economic agents are allowed to choose freely in all circumstances. Economic events are too interrelated. If the government subsidizes ethanol production, it decreases the supply of corn for food, and drives up food prices. When it imposes a minimum wage, it causes workers that would otherwise have jobs to be unemployed. That in turn decreases supply and drives up the prices of consumer goods. Economic agents making free choices under these circumstances necessarily choose differently than they would if conditions were different. There is no such thing as controlling part of a free market. Therefore, our mixed economy really is no such thing. If the choices of all agents are not free, there is no capitalism. The economy that results simply doesn’t fit the definition.

Another conclusion that can be drawn is that attempting to achieve a mixed economy inevitably leads to complete socialism. As we have seen, the first government intervention into the economy necessitates further interventions, which in turn necessitate further interventions still. The cycle continues until government controls all of the distribution and eventually must take control of all of the capital, as there are no longer private firms that are willing or even able to continue producing under the distorted economic conditions. For those who would argue on behalf of complete control of capital and distribution by government, the plain facts of history are against them. Socialism in its purest form has consistently resulted in mass shortages, famine, starvation, and eventual death for tens of millions of people.

The solution to all of our problems is simple: FREEDOM. While that may sound like a bland platitude, it is nevertheless 100% true, for all issues, without compromise. As Thomas Jefferson said,

“Our legislators are not sufficiently apprised of the rightful limits of their powers; that their true office is to declare and enforce only our natural rights and duties, and to take none of them from us. No man has a natural right to commit aggression on the equal rights of another; and this is all from which the laws ought to restrain him.”[6]

This “Non-Aggression Principle” is often associated strictly with libertarians or objectivists, but as you can see it did not originate with either. It was a central tenet of the founding fathers, because this principle is THE VERY DEFINITION OF FREEDOM ITSELF.

While it is possible to garner wide support for this principle on many social issues, such as gay marriage, somehow the great majority of people cannot seem to apply it to economics. Despite the fact that economic freedom is the most vital to our survival, as it is the means of sustaining our existence, there are even some libertarians that would apply different rules to economic policy than to the other “civil liberties.” It is vital to recognize that not only is this principle equally applicable to economics, BUT THAT IT IS IN REGARD TO ECONOMIC POLICY THAT IT IS MOST IMPORTANT. It is the only principle that prohibits government intervention and central planning. It is the principle upon which a truly free market is built.

The move toward a truly free market cannot occur without painful side effects. When resources are misallocated on a mass scale, especially human resources, reallocating them means losses, unemployment, and economic suffering in the short term. This would have been the result of government choosing not to intervene in the market to bail out Fannie, Freddie, Bear Stearns, and AIG, to buy up the bad debt of other debt holders, and to guaranty the assets in the money market. However, that economic suffering has not been avoided by government intervention, but merely postponed. In fact, the longer that government intervention succeeds in postponing the inevitable reallocation that must occur, the more resources become misallocated and the more painful the correction will be. At present, we are facing the largest correction in economic history, and government has postponed it longer than a correction has ever been postponed before. Make no mistake. The reallocation is inevitable, and we will experience it either voluntarily or involuntarily.

However, before considering how to survive the painful consequences of this correction, we must first decide that a free market is what we want. This will never happen until the vast majority of Americans recognize the Great Lie for what it is. Doing so immediately might bring political pressure to bear on our government to reverse its present policy while the Great Rip-off can still be undone. This is unlikely to happen anytime soon. It is much more likely that the trend toward socialism will continue until it reaches the conclusion that socialism has reached throughout history: economic collapse. We are closer to that end than most people think.

At that point, Americans will have a choice. They can continue to believe the Great Lie and allow government to try to solve the problem, or they can choose to see the truth and demand their freedom. Historically, the government solution to an economic collapse has been totalitarianism. The fact that the least economically free nations of history were also the most totalitarian is no coincidence. In order to avoid this, Americans must cease to apply special rules to economics and realize that there is no freedom at all without economic freedom. The economics of freedom is laissez faire capitalism. The Great Lie says that laissez faire capitalism doesn’t work. This is merely the application to economics of an even greater lie – government’s most insidious, Greatest Lie of All: that freedom itself doesn’t work. When Americans finally recognize and reject this fallacy, they will once again find themselves on the road to prosperity and peace.

[1] House Majority Leader Slams Bush For Economic Policies RTTNews
[2] “Top Democrats skeptical of Bush bailout package” AFP September 20, 2008
[3] Transcript of an interview with Senator John McCain by John Harwood of The New York Times and CNBC, as provided by CNBC and published in the New York Times on September 21, 2008
[4] https://www.merriam-webster.com/dictionary/capitalism
[5] Von Mises, Ludwig Middle-of-the-Road Policy Leads to Socialism from Two Essays by Ludwig von Mises (Auburn, Ala.: The Mises Institute, 1991, pp. 42-68). https://mises.org/midroad.asp
[6] Jefferson, Thomas Letter to Francis Walker Gilmer June 7, 1816

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

>Life in the Post-5/7 America

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>We have spent the past seven years in a “post-9/11 world.” We started hearing this insidious slogan not long after the terrorist attacks occurred. To translate the slogan for anyone who has not realized what it means, it means this: Whatever was left of your personal liberty before the 9/11 attacks is no longer a privilege your government can afford to grant you (and make no mistake, your government considers liberty a privilege, not a right). It seems that personal liberty is something that was nice in the Old America, but is just impractical in a “post-9/11 world.”

Of course, the struggle for economic freedom was lost decades ago with the onset of public and corporate welfare, the abolition of the gold standard, and the emergence of the American Empire. However, as with the other “civil liberties,” some traces of the economic freedom of America’s former Republic have survived several decades into America’s post-WWII social democracy. Those last traces are about to disappear as well. The following is one way it could happen.

Why May 7th? There is no compelling reason for the exact day. However, it is the Thursday of the first full week after the next president’s first 100 days in office are completed. It may be just a coincidence, but cataclysms never seem to happen during those 100 days. Perhaps world market movers don’t do much until they get a feel for the new administration. Perhaps it is some kind of statist magic, left over from government sorcerers like Merlin or Morgan Le Fay. In any case, even the terrorists respected the first 100 days of George Bush’s administration before launching their attacks. So, I am going with the odds to say that the economic day of reckoning will not manifest itself until May 7, 2009 – the new “Black Thursday.”

Even if the American economy is already dead for all intents and purposes, an historic crash of the stock markets will officially signal the dawn of the new era. When it does, all pretense of the “possible moral hazard” accompanying massive government interventions into the marketplace will be dropped. We will be in a “post-5/7 economy,”[1] much like our “post-9/11 world,” and the last vestiges of your economic freedom will be lost, just as your personal liberty was lost after 9/11. Forgotten in debates regarding whether these interventions will be good or bad for “the economy” is the fact that each one amounts to stealing from someone – legal plunder because it is committed by government. Each new intervention, “unavoidable” because of the latest threat to the U.S./world economy, will cause three more problems for the government to solve with further interventions. Pointing out that the original problem was caused by a previous government intervention will be pointless. Free markets were a nice idea in the 20th century, but government control of the marketplace will be needed in a post-5/7 world.[2]

Despite the fact that government already treats the right to the fruits of your labor as a granted privilege, the small percentage Americans have been allowed to keep will seem relatively large compared to what they will be allowed after the big event. At that point, there will be a continual state of economic emergency that requires “Americans and Europeans to do more, not less,” as Barack Obama recently said in Berlin. There will be Housing in the New America and Universal Healthcare to be paid for, tens of millions of unemployed Americans to feed and clothe, and the “challenges of the 21st century (all created by government)” to meet.

Perhaps at that point it will occur to someone, somewhere, that none of this is necessary. Without the parasitic influence of a few thousand people, the other 300 million would naturally trade with each other to their mutual benefit, and would have little to fear from people thousands of miles away whom they would never think to bother themselves. It really is that easy. Americans can make a decision for freedom anytime they wish to, and rid themselves of the parasites once and for all. Hopefully, there will come a time when they will be easier to convince in the post-9/11, post-5/7 world.

[1] Whatever the actual date of the crash, simply insert it into the new government slogan and it works just as well.

[2] While it would be impossible in a Republic to enslave people with such nonsense as a market crash or a terrorist attack creating “a new world” where natural rights no longer exist, it is relatively easy in a Democracy, where only 51% of the people have to believe it for the scheme to work. This is just one reason why no politician refers to America as anything other than “a Democracy” anymore. Be suspicious of anyone who speaks likewise.

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>Housing in the New America

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>Lest it fade from memory amidst almost daily violations of our rights by the federal government, let us consider some possible implications of the housing bill passed almost one month ago. Since then, the shares of Fannie Mae and Freddie Mac have plummeted yet again, and at this point, the “bazooka” that Treasury Secretary Paulson said he would likely never have to use is certainly loaded and ready for firing. In case you have forgotten, the urgency behind passing the housing bill, and the stated reason for President Bush withdrawing his veto threat, was the need to keep the two Government Sponsored Entities (GSE’s) from imminent bankruptcy. Paulson said that he needed vast powers at his disposal (the bazooka), including the statutory authority for the federal government to buy shares in Fannie and Freddie. He said at that time that he didn’t anticipate ever having to use the bazooka, but needed to have it to “boost confidence.” He was either lying or a fool.

It is apparent by now that the bazooka is not going to inspire investors to buy back into Freddie and Fannie. Shares have been as low as $3 and $4, respectively, in the past week, down from highs of $69 and $68 over the past year. They literally have trillions of dollars worth of bad mortgages on their books and no way to cover their obligations. While there is some justifiable outrage over the use of public funds to backstop these firms (although not enough), it doesn’t seem that the great majority of people see where this scenario is likely headed.

The U.S. government is going to have to buy a substantial portion of Fannie and Freddie, because no one else will. Of course, that will push up the price of their shares artificially, as the market has decided (rightly) that these companies are worthless. It is not out of the question that the federal government will acquire a controlling interest or all of the shares of the two GSE’s, perhaps with the stated intention of selling them back into the public sector after they have stabilized under the federal government’s “astute management.”

What happens then? Well, the tsunami of mortgage defaults continues, and another 2 million people walk away from their homes. However, these homes are not now owned by private sector banks, who must sell them at pennies on the dollar, if necessary, to recoup as much of their losses as they can. No, these houses are now owned by the federal government, for whom market forces do not apply. Of course, the government would want to get what they could out of these assets, but they have another alternative that is not available to the mortgage lenders, who cannot lose money indefinitely (in theory).

Before considering the government’s “other option,” let us take a step back and consider the bigger picture for a moment. It is obvious that the bursting of the housing bubble is symptomatic of a much bigger, more systemic problem for the U.S. economy. After decades of consuming more than it produces, its productive structure decimated by an increasingly predatory and parasitic government, the U.S. consumer economy itself is poised to collapse. Already, retailers are going bankrupt at an alarming rate, and despite the stock markets’ refusal to face reality, the U.S. economy no longer has the productive means to mount a recovery. The Federal Reserve has done everything it can do other than inflate further, which is what it will do, further destroying the U.S. currency. By this time next year, Americans will be looking into the abyss of an unprecedented economic disaster. We have had double digit unemployment before – this time it could be worse.

Of course, if government has proven one thing, it is that they will never learn that intervention into the marketplace never helps. After some inspiring speeches, our new, first-term president will declare war on the problem. That’s when things may really get ugly.

Just what could the federal government do with 30 million unemployed people and 7 million empty homes? Enter the Public Housing Administration and Section 8. Of course, there will need to be a “catchy” new government name to spin the new program to not sound like welfare. Perhaps “America Lives Together,” or “Communities in Progress” or some such nonsense. What is important is that the federal government will REALLY be in the housing business now, and not just for those below the poverty line. Average Americans will now be living in government-owned homes and paying rent directly to the government. Eventually, the rent payments could be incorporated into their payroll withholdings. One thing is for sure, once a federal government program is started, there is one thing it always does and one thing it never does. What it never does is go away. What it always does is grow larger.

Of course, this is not meant as a prediction, but merely one possible scenario among many that could result from America’s economic day of reckoning. However, while 40 years ago average citizens living in government housing was confined to the dark visions of Orwell and Burgess, today the unthinkable shouldn’t surprise us when it comes to any aspect of our society. We are presently giving serious consideration –in “the land of the free” – to socializing medicine, nationalizing the oil industry, and ending the rights of inheritance forever. A nation of socialized housing would complete that picture very well. Perhaps that America is still a few years off. On the other hand, we have been promised “change” during this next presidential term by a candidate with the most socialist platform we’ve seen in decades. Let’s hope it doesn’t look like this.

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>False Prophets of Freedom

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>One might be tempted to celebrate the “growing” number of people here in America that associate themselves with the “freedom movement.” As encouraging as it may be to see a loss of confidence in the present “neo-con” ruling class, there is certainly no reason to think that what most people would replace them with would result in any more liberty. Sadly, as was the case in Germany in the early 1930’s, the opposition to the present tyranny simply thinks their form of tyranny is better. Using Bastiat’s terms, they don’t object to legal plunder, they just have a different idea of how to divide up the loot.

While professing to be staunchly against tyranny, it is apparent that most people don’t seem to understand what tyranny is, and most importantly don’t understand its motivation. Perhaps many do not WANT to understand, because their solution may not be substantively different. Let me clear the air in the hopes that the 800 pound gorilla hiding in the corner of this tea party we call the “freedom movement” can cease to be politely ignored. In all of human history, there has only been one motivation for tyranny: plunder.

No conqueror in history has gone to the expense and trouble of raising, training, and feeding an army, marching them across vast distances, and risked his own position and wealth for the purposes of suppressing free speech. Neither has he done so to suppress freedom of religion, the writ of habeas corpus, or the right of the people to freely assemble. While he may have attacked all of these rights, he did so only as a means to one end: plunder. Every tyrant that ever lived has violated the rights of his own people and of those he has conquered for no other reason than to gather wealth that he did not earn.

The reason that most people don’t understand tyranny or its sole motivation is that they don’t truly understand liberty, either. If your understanding of liberty ends at freedom of speech, freedom of religion, freedom of association, and the right to due process, then you are omitting the heart and soul of liberty – property rights. Without a right to keep the fruits of your labor, there can be no liberty, no matter how fiercely the other “civil liberties” are protected. The right to the fruits of your labor is the central right, the foundation of liberty. Without controlling the fruits of your labor, you have no control over your life. Whether you have nothing to eat, a little to eat, enough to eat, or enough to save for another day all depends upon your control over the product of your work. However, it is the violation of precisely THIS right that is the sole desire of the tyrant.

This is why Jefferson said that “’the guarantee to every one of a free exercise of his industry and the fruits acquired by it” is the “first rule of association.”[1] Samuel Adams called it “self-preservation, commonly called the first law of nature.”[2] It is the reason that John Locke devoted an entire chapter of his 2nd Treastise on Civil Government to property, and the reason he said that “The great and chief end, therefore, of men’s uniting into commonwealths, and putting themselves under government, is the preservation of their property.”[3]

Plunder is the violation of this central right. Plunder is the use of force to divest people of the fruits of their labor without their consent. When it is done by individuals or groups outside of the law, it is recognized as a crime. When it is done by government, it becomes what Bastiat called “legal plunder.” Legal plunder by government generally falls into two categories: welfare and warfare. While cosmetically different, these two practices are essentially one and the same. They represent the use of government force to plunder the property of the individual. One merely does so farther away than the other – a relatively minor difference.

Recognizing that the right to property is the most important civil liberty (without which there can be no liberty), and recognizing also that plunder is the only true threat to liberty, Bastiat devoted much of his brilliant essay “The Law” to the subject of legal plunder. Like Locke, our founding fathers, and all philosophers in the liberal tradition, he recognized that government in a free society has only one purpose, beyond which it may not be permitted to go. Its sole purpose is to protect life, liberty, and property. According to Bastiat, the minute that government goes beyond fulfilling this role, it must necessarily attack life, liberty, and property. This is the fundamental principle of government which must be understood before one can begin answering questions of liberty.

Bastiat correctly concluded that there are only three alternatives for a society in determining how to address the question of plunder. Only by choosing the last of these can a society be free. It is not surprising that our two political parties generally align themselves with one of the other two. I will take the “liberty” of inserting their names in parenthesis next to the alternative they advocate:

1. The few plunder the many. (Republicans)
2. Everybody plunders everybody (Democrats)
3. Nobody plunders anybody (Freedom – the position of neither party)[4]

Like the unfortunate child in the middle of a game of “pickle in the middle,” Americans have been running back and forth between the first two alternatives offered by their political parties for decades. It has never occurred to the great majority of people that NEITHER ONE can benefit them in the end. There are only two possible reasons for this. Either the great majority of people do not understand the true nature of liberty and tyranny – that they both revolve around property rights – or the great majority of people DO NOT WANT TO UNDERSTAND. This may be because they secretly do not want to let go of the possibility that THEY ALSO might benefit from legal plunder. This second possibility is even more pathetic than the first. Like the gamblers in Las Vegas, they should know by now that the House always wins.

Rather than objecting to legal plunder itself, false prophets of freedom frame the debate into organizing opposition to the present ruling class on the assumption that the loot should merely be divided up differently. At the moment, the Democrats position themselves as against the war in Iraq, not because it is wrong, but because the Republicans started it. Their position is no more the position of liberty than was the Republicans’ in objecting to President Clinton’s war in Kosovo, or their ludicrous impeachment of him over a sex scandal. They are merely looking to divide up the loot differently.

However, politicians will be politicians, and I am much more concerned about the average American than I am about them. In the end, politicians can be bought with votes. If the vast majority of voters demand liberty, liberty is what they will get. However, when the vast majority of voters are persuaded to demand legal plunder, then it becomes clear why Madison described democracy as “the most vile form of government.”[5]

For those interested in finding their way through this maze of false assumptions, I offer the following examples of common arguments made on current issues and their implications for true liberty.

If you are (rightly) against the war in Iraq, but go on to say that the money we are spending on that war should instead be spent on providing healthcare to uninsured Americans, you are not against legal plunder. You merely want to divide up the loot differently.

If you are opposed to the recent bailouts of the banks during the mortgage crisis, but like False Prophet of Freedom Lou Dobbs go on to say that the government should instead help average Americans that are in danger of losing their homes, you are not against legal plunder. You merely want to divide up the loot differently.

If you are against the fascist alliance being formed between large corporations and government, but suggest taxing the profits of corporations more heavily to fund some public redistribution of wealth, you are not against legal plunder. You merely want to divide up the loot differently.

If you are concerned that Social Security and Medicare are imminently insolvent, and go on to argue that they must be “reformed,” rather than abolished (or at least phased out), then you are not against legal plunder. You are merely concerned that you won’t get your share of the loot.

These are only a few examples of the lapses in reason so common even among those who claim to be part of the “freedom movement.” Presently, average Americans are running from the Republicans (the few plunder the many) to the Democrats (everybody plunders everybody) in their perennial game of pickle in the middle. They still haven’t noticed that no matter which side they’ve run to over the past century, they never actually get to catch the ball. However, the implications are more ominous than this.

After at least a century of practicing legal plunder in one form or another, the inevitable end to which such a society comes is now in sight. Having given up the central civil liberty – property rights – Americans now see that the government monster they have built is coming to gather up the rest of the rights that people have deluded themselves that they retain. It is vital to realize that the police state measures and the perpetual war that we now find ourselves confronted with are not an aberration of the Bush administration BUT THE LOGICAL END OF DECADES OF LEGAL PLUNDER. This was Hayek’s central point in his classic The Road to Serfdom – that Naziism was the natural result of socialism, and that England’s and America’s socialism of the 1940’s would eventually lead to the same results in decades to come as Germany’s socialism of the 1870’s had led to by 1933. He was not only correct in theory, but seems to have correctly predicted the duration.

In conclusion, there will be no “freedom movement” until Americans recognize and understand the nature of freedom and tyranny. Until Americans cease to marginalize or ignore property rights, and again recognize them as the MOST important rights, as our founding fathers did, we will not move one inch toward freedom. In fact, even if we were able to completely end warfare for several presidential administrations in a row, our practice of welfare would lead us right back to our present circumstances.

Do not look to your politicians to offer you Bastiat’s third alternative. They have seduced free people throughout history with the prospect of sharing in legal plunder, while keeping the majority of the loot for themselves. It is left up to every American to reject the notion of legal plunder on their own, to reject the false prophets of freedom, be they named McCain, Obama, Clinton, Dobbs, Paulson, Bernanke, or Roosevelt, and again take responsibility for their own self preservation, and thus regain the right to determine it themselves. This is the ONLY path to freedom.

Tom Mullen

[1] Jefferson, Thomas Note in Destutt de Tracy’s “A Treatise on Political Economy,” 1816. ME 14:466
[2] Samuel Adams The Rights of the Colonists (1772) The Report of the Committee of Correspondence to the Boston Town Meeting, Nov. 20, 1772 Old South Leaflets no. 173 (Boston: Directors of the Old South Work, 1906) 7: 417-428.
[3] Locke Second Treatise Ch. IX, Sec. 124
[4] Bastiat, Frederic The Law (1850) (words in parenthesis inserted by the author of this article)
[5] Madison, James Federalist #10

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>So Many Rights…

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>When looking for wisdom in the wilds of western New York, one might be surprised how often it can be found on the airwaves, listening to the legendary hockey announcer, Rick Jeanerette. Over the years, Buffalo Sabres fans have cheered while Jeanerette has boisterously called their teams triumphs with jingles like “Wowee Housley,” “This building is bedlam!” and the immortal “La-la-la-la Fontaine!” One night, after calling the action during a particularly one-sided fight, Jeanerette dryly remarked of the loser,

“He got hit with so many rights he was begging for a left.”

How prophetic.

After eight years of Republican rule (the barely noticeable change in power in Congress being largely irrelevant), most Americans have been reduced to the same circumstances. They may not love what the Democrats have to offer if they ever really take a moment to think about it, but as long as it’s not more of George Bush’s Republicans, they’ll take it. Like the hapless forward in that forgotten hockey brawl, they too have been hit with so many rights that they are begging for a left.

Left is just what they are going to get, and it’s going to hurt just as much – maybe more.
I don’t think that I’m alone in being astonished at how unabashedly socialist the rhetoric was during the Democratic presidential primary debates earlier this year. While Bill Clinton positioned himself as relatively centrist – sometimes almost Republican – while seeking to succeed what was perceived as relatively successful Republican administrations of the 1980’s and early 1990’s, the shift is quite startling now that today’s Democrats smell the blood of a Republican administration with approval ratings down around parking level 3. During the primary season, Democrats have suggested nationalizing the oil industry, nationalizing the healthcare system, and have even promised to “end poverty in one generation.”

Now that the primaries are over and Barack Obama has emerged as the party’s presidential candidate, one would expect that the rhetoric might ease a bit. Normally, candidates appeal more directly to the base during primary contests, but must play to independents and even voters of the opposing party when campaigning for the general election. In a way, Obama’s rhetoric is less inflammatory. However, having taken the time to sit down and listen to his speech in Berlin on July 24, I wasn’t, annoyed, disgusted, or outraged. I was terrified. I was terrified at the things that a man that is presently being cheered wildly by crowds of tens of thousands of Americans at a time was saying. Now, granted, he was speaking to the Germans, who practically invented socialism (no offense, monsieurs). However, the words he spoke were undoubtedly HIS words. Let’s take a close look at some of them.

““…that Europeans today are bearing new burdens and taking more responsibility in critical parts of the world, and that just as American bases built in the last century still help to defend the security of this continent, so does our country still sacrifice greatly for freedom around the globe.”

Well, there is a mouthful. It seems that Europeans now have responsibility for critical parts of the world, which I assume are outside of Europe. They are bearing burdens. Somehow, both of these things seem good to Mr. Obama. Of course, Americans are all too aware of the SACRIFICE they are making. Whether or not that sacrifice is really for “freedom” is very open to debate.

A few moments later, Mr. Obama tells the Germans that “the burdens of global citizenship continue to bind us together.” Not only that, but he warns that “A change of leadership in Washington will not lift this burden. In this new century, Americans and Europeans alike will be required to do more, not less.”

Would it be paranoid to suggest that someone wants us to get used to the idea of “burdens?” Of course, the word “sacrifice” has already appeared one time. It will not be the last.

““True partnership and true progress requires constant work and sustained sacrifice. They require sharing the burdens of development and diplomacy, of peace and progress, they require allies that will listen to each other, learn from each other, and most of all, trust each other.”

Now, someone will be bearing burdens AND sacrificing. Mr. Obama goes on to say, ““Now is the time to join together, through constant cooperation and strong institutions and shared sacrifice, and a global commitment to progress to meet the challenges of the 21st century.

Ok, Ok, I get it. Burden and sacrifice. Mr. Obama obviously wants us to get used to the idea. Of course, the best way to do that is to say the words over and over again. Once people are used to hearing the words, the ideas behind them are soon to follow. Mr. Obama’s intentions seem quite clear. In HIS 21st century, there are burdens to bear and sacrifices to be made.

Merriam-Webster’s dictionary defines sacrifice as “destruction or surrender of something for the sake of something else.” I think that it is safe to say that Mr. Obama is not talking here about destroying anything (although that is also part of his 21st century). No, the “sacrifice” that Mr. Obama refers to is definitely more in the “surrender” category, namely more of the fruits of your labor. However, the definition of sacrifice says that the surrender is made “for the sake of something else.” What does Mr. Obama have in mind?

Near the end of the speech, Mr. Obama tells us.

“This is our moment, this is our time. I know my country has not been perfect itself. At times, we struggled to keep the promise of liberty and equality of all people.”

Here we finally have it, the age old socialist oxymoron, liberty and equality. Certainly, those producing more than they consume will have to sacrifice quite a bit if equality is to be achieved with all of those consuming more than they produce, not to mention those producing nothing at all (including Mr. Obama – although I suspect he will end up in the “more equal than others” category). However, it need not be pointed out that government cannot try to achieve equality and protect liberty at the same time. Liberty recognizes equal rights, but it NEVER results in equality. That’s one of the great things about liberty.

As the Democrats often claim to be “the party of Jefferson,” I will remind Mr. Obama of the words of his party’s patron,

“…that our wish, as well as theirs, is, that the public efforts may be directed honestly to the public good, that peace be cultivated, civil and religious liberty unassailed, law and order preserved; equality of rights maintained, and that state of property, equal or unequal, which results to every man from his own industry, or that of his fathers.”[1]

For those who might not be getting the point, or think that it will be somehow noble or civic-minded to “bear the burdens” of Mr. Obama’s quest for equality, allow me to point out Merriam-Webster’s definition of “burden.”

“the bearing of a load —usually used in the phrase beast of burden.”

How does it sound now?

I do have a question for Barack Obama. It is this: What sacrifices will you make for liberty and equality in the 21st century, Mr. Obama? What burdens will YOU and YOUR family bear?
That’s what I thought.

I know those rights have hurt over the last eight years, Mr. and Mrs. American, but watch out for that left. It may be the knockout blow.

Tom Mullen

[1] Jefferson, Thomas 2nd Inaugural Address (1805)

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The Future of a Destructive Species

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Nature is often characterized as a delicate balance of plant and animal, predator and prey, land and waterway, forest and plain. While our world is probably more accurately viewed as an evolving environment, marked by constant change rather than balance, and certainly has periods of violent disruption (ice ages, etc.), for the most part, there are many long millennia between these disruptions during which Nature provides an environment of plenty for her creatures. The lion hunts the antelope, catching the slowest and weakest, and therefore culling the herd to make it stronger. The deer take what they need from the forest, leaving the forest intact to house the millions of other species which depend on its shelter. Even the lowly worm plays a part, consuming the very earth itself, and leaving behind nutrients that replenish the soil and make possible new life.

Of all of the species that have evolved on this planet, the mammals are among the most intelligent and most resourceful. While they enjoy many advantages over other species, they also have found their place in the great scheme of things, neither multiplying beyond the number their environment can support nor harming that environment in living out their lives and raising their families.

However, there is one mammal for whom this is not true. This species has developed an industriousness far beyond that of the others. Since its earliest history, this species of mammal has disrupted its environment and displaced other species, often wiping them out completely wherever it has made its home. It has destroyed forests both for the timber to build its homes and as collateral damage resulting from the expanse of its communities. It has destroyed the nesting habitats of countless endangered species of birds, interrupted the course of deer runs vital to the health of the herd, displaced fox, wolf, and squirrel, and destroyed countless ecosystems without hesitation, merely to expand its never-ending quest to subdue Nature herself in its own selfish interests.

It is long past the time to try to bring this species under some control before it succeeds in disrupting the environment any further. Its relentless need to widen its own habitat at the expense of every other species it shares a given locale with must be curbed before the earth as we know it becomes barren forever.

While some would argue that education or behavior modification could be successful in changing the habits of this ambitious species, the problem is now too urgent to wait several decades for such remedies to have an effect. A direct intervention is needed to prevent catastrophic consequences to the environment, including further deforestation, pollution of the water, and destruction of countless more ecosystems. Only the force of law can justly protect what we have left of the world we were born into.

Despite the urgent need of legislation and the immediate need to change the behavior of this species, it should be remembered that this species also has a right to exist, as long as it does not have any effect on its environment. Therefore, this new legislation must consist of just laws that will promote both the long-term sustainability of the environment and the long-term health of this species within it. Unlike so many failed efforts in the past, these laws should not amount to volumes of minute regulations that are difficult to enforce and impossible to fully understand. These new laws must represent a new way for this species to think about itself and its part in the world, and must be written so that obeying them is the only logical conclusion that a species not bent on suicide can come to. We must finally have laws written in words that this species can understand and accept.

We will need someone who can translate English into beaver.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Exxon Mobil Profits Continue to Sag

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The recession the federal government is just admitting we are in is obviously taking its toll on Exxon Mobil, whose profits sagged in the 2nd quarter of 2008. What? Didn’t Exxon post record profits of $11.7 billion, kicking us all when we’re down fighting high gas and food prices? That was certainly the headline today in most newspapers and periodicals (https://biz.yahoo.com/ap/080731/earns_oil.html).

As usual, however, the “record profits” are measured nominally in U.S. dollars, which are literally losing value before the ink is dry on these financial articles. A careful read of the article reveals that Exxon made these record profits on about $138 billion in revenue, giving them a profit margin of 8.48% That’s down from the 1st quarter of 2008 when profits were 9.32%, which was also significantly lower than their 3 year average of 10.08% from 2005-2007.

Considering that the Federal Reserve has embarked on the most inflationary binge in its 95-year history, it is a little disingenuous to characterize a company as making “record profits” by measuring those profits nominally, instead of as a percentage of revenue. While the media is almost as anxious as the government to label “Big Oil” as the villain that is profiting on the hardship of the average American, those Americans would be best served to look in the opposite direction when the media points its finger – especially when it is pointing in the same direction as our federal government.

Just to put things in perspective, Campbell Soup Company had a similar profit margin over the same three-year period, 2005-2007. During that time, Campbell averaged a 10.22% profit margin on about $22.7 billion in revenue. However, unlike Exxon Mobile, whose profits have sagged during the past two quarters, Campbell Soup’s profits exploded – more than doubling – in its last reported quarter. After rising to 13% on $2.1 billion during the quarter ending January 27, 2008, Campbell posted a 28% profit on lower revenues of $1.8 billion during the quarter ending April 27, 2008.

28% profits while food prices are skyrocketing? Outrageous! Children are going without while Campbell’s executives laugh and say “mm-mm good!” Congressional hearings are in order. Perhaps we should seriously consider nationalizing the soup industry. I know Maxine Waters has kindly offered to take over Big Oil for us, which would undoubtedly result in lower gas prices, improving emissions results, and a white Christmas in South Beach. However, before we worry about filling up our gas-guzzling SUV’s, we need to do something about Big Soup.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

>Is the Freedom Movement Really Ready for Freedom?

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>Ron Paul’s campaign for the Republican presidential nomination has ignited a revolution. For the first time in a century, a real movement against the entrenched system in Washington has arisen, and it is a movement of capable people who don’t just complain – they get things done. After a complete debacle for the neo-cons in Nevada, the Republican Party has actually had to mobilize itself in several states to prevent Ron Paul supporters from taking over state conventions and voting in their own delegates. They have resorted to breaking their own rules to prevent a party takeover. This is a sign that their political days are numbered.

Almost universally, Ron Paul supporters oppose the Iraq war. Whether conservative, liberal, moderate, or independent, Ron Paul has brought together a coalition that recognizes that the United States government had no right to invade Iraq. Regardless of their positions on other issues, people of all parties in this movement deserve high marks for taking a stand against the Iraq war.

Similarly, we are almost universally in agreement in our opposition to the expansion of executive powers, especially insofar as they have allowed the government to compromise our privacy and to threaten habeas corpus. These are direct attacks on our lives, and we have been right to defend ourselves against them. It is truly the good fight, and we will win.

So, we are certainly united in what we are against, but are we united in what we are for? Are we all really for free markets, for truly limited government, and for individual liberty? Do we all really understand what that means, and what responsibility that places upon us? Are we really ready to live in a truly free country?

Certainly the first inclination is to answer “yes” to all of the above. However, I wonder if the majority of the freedom movement is really ready for life without big government.

Are we ready to live without Medicare and Medicaid, and depend on the free market to determine the distribution of medical care? Supporting the programs means taking the money for them at gunpoint from our fellow citizens, so the moral question is easily answered. Sound economic theory as well as historical evidence indicates that the poor and elderly would have more access and higher quality care without these programs. Are we ready to trust the free market and private charities with medical care for the poor and elderly?

Are we ready to live life without a “safety net?” Like medical care, the benefits of traditional welfare are also funded by the coercive extortion of money. Similar appeals to economic theory and history prove that the poor would be less numerous and would again experience an improving quality of life without these programs. However, are we ready to admit that no one has the right to even the basic necessities of life?

Are we ready to take full responsibility to support ourselves for our entire lives? Despite the government’s official fairy tale, there is no “trust fund” for social security. The money collected from taxpayers today goes directly to pay today’s beneficiaries. While the program actually runs a surplus (although it will soon become insolvent), the government spends 100% of that surplus on other budget items, as it always has. At the end of the day, social security is just another government redistribution program funded by extorted money. Any financial analysis would show that the money collected from working Americans for social security would be better invested almost anywhere else. Are we ready to admit that no one has the right to retirement benefits, and enter our golden years without social security?

Here is one that even I have trouble overriding my own programming on. Are we ready to get government completely out of education? Are we ready to admit that, like medical care or any other good or service that is produced by somebody else, that no one has a right to education? Are we ready to trust the free market for this as well?

To the average American, the questions I have asked would sound like complete lunacy. However, to someone who understands and accepts the principles of liberty and wishes to live by them, I argue that the answer to every one of those questions must be “yes.” Reason, history, and economics all tell us that these programs are immoral and destructive, not only to society as a whole, but even to the recipients of the benefits. Only our conditioned fear tells us that we cannot live without them. Are we ready to overcome that fear?

There are certainly many more intrusions by the federal government into our private lives, but I have chosen these programs because this is where the money is. Despite what we are led to believe, the Iraq and Afghanistan wars amount to only 5% of the $3 trillion budget. Ending the wars in Iraq and Afghanistan would eliminate less than half of this year’s deficit. The entire military budget makes up only 20%, and some of that would still be necessary even if we brought our troops home from all 130 countries that they are stationed in.

By contrast, Medicare, Medicaid, Social Security, Welfare, and the Department of Education combine for over 55% of our $3 trillion budget (The Department of Education is only 2%, but after that no other expenditure has a significant percentage at all). Without them, there would be no deficit. Without these programs we could eliminate the income tax and begin paying down the national debt at the same time. The financial benefits to our country would be staggering.
I am interested in the answers that CDR members would give to the questions I’ve posed. Can you answer every one of them yes? If not, I would like to hear your arguments supporting why you cannot, and specifically how you would reconcile the programs with the principles of individual liberty, property rights, and the proper limits of government. In a free society, how does government derive the right to seize the funding for these programs from its citizens? Can we ever really be free while they exist?

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