Posts tonen met het label Verenigde Staten. Alle posts tonen
Posts tonen met het label Verenigde Staten. Alle posts tonen
“The government who robs Peter to pay Paul can always count on the support of Paul,” George Bernard Shaw once said. For a socialist Shaw demonstrated good sense with this citation Unfortunately, our Western countries have become a laboratory in which Shaw's hypothesis is being tested. The theory of government I was taught says that government provides benefits, primarily security, to the entire populus. In return we pay taxes. But lately the government has been a distributor of special privileges, taking money from some and giving it to others. America is now about evenly split between those who pay income taxes and those who consume them. The Brookings Tax Policy Center (BTPC) recently disclosed that close to half of all households in the U.S. will pay no income tax this year. Some will even pay less than zero -- that is, they will get money from those of us who do pay taxes.
The BTPC adds that this year the average income-tax rate for the bottom 40 percent of earners will be negative and that their cash subsidy will equal 10 percent of the total amount the income tax brings in, thanks to the Earned Income Tax Credit and U.S. President Barack Obama’s “Making Work Pay” program. The view from the top also shows the lopsidedness of the tax system. The top 20 percent of earners make about 53 percent of the income in America but pay 91 percent of the income tax. The top 1 percent pay 36 percent. The IRS says the bottom half of earners pay less than 3 percent… This presents a serious problem because government has such vast powers to dispense favors. As Shaw suggested, people who pay no tax will vote for politicians who promise big spending. Why not? They get stuff without having to pay for it.
Yes, working people who pay no income tax still pay taxes: sales tax and payroll taxes. But the income tax is big and visible, so it’s a problem that a growing number of people don’t pay but get benefits from those who do. Frederic Bastiat, the great 19th-century French economist, defined the State as “that great fiction by which everyone tries to live at the expense of everyone else.” I don’t know if he envisioned one half of the population living off the other half. It is important not to confuse the interests of the taxpayers with the interests of the politicians and other tax consumers. Yet that is done all the time. When the government bought toxic assets (of zero market value) from the banks, it said taxpayers would profit when the economy recovered and the assets once again commanded a positive price in the market. Even if we make the dubious assumption that the government is savvy enough to buy low and sell high, it’s not the taxpayers who would benefit from any profits. The politicians will spend every penny rather than cut taxes.
To put it bluntly, we are not the government. The built-in unfairness of the tax system has prompted a range of tax-reform proposals, such as a flat tax and replacing the income tax with a sales tax. These alternatives are better, but they have their drawbacks, too. For that reason, there is something more urgent than tax reform: spending reform. The true burden of government, the late Milton Friedman said, is not the tax level but the spending level. Taxation is just one way for the government to get money. The other ways - borrowing and inflation - are also burdens on the people. The best way to lighten the tax burden is to lessen the spending burden. If government spends less, it takes less. And if it takes less, the tax system will weigh less heavily on us all. Once again, we find wisdom in Adam Smith's book The Wealth of Nations: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
Deze column van John Stossel verscheen eerst in "The Freeman".
Meer columns van deze libertariër op www.thefreemanonline.org.
The BTPC adds that this year the average income-tax rate for the bottom 40 percent of earners will be negative and that their cash subsidy will equal 10 percent of the total amount the income tax brings in, thanks to the Earned Income Tax Credit and U.S. President Barack Obama’s “Making Work Pay” program. The view from the top also shows the lopsidedness of the tax system. The top 20 percent of earners make about 53 percent of the income in America but pay 91 percent of the income tax. The top 1 percent pay 36 percent. The IRS says the bottom half of earners pay less than 3 percent… This presents a serious problem because government has such vast powers to dispense favors. As Shaw suggested, people who pay no tax will vote for politicians who promise big spending. Why not? They get stuff without having to pay for it.
Yes, working people who pay no income tax still pay taxes: sales tax and payroll taxes. But the income tax is big and visible, so it’s a problem that a growing number of people don’t pay but get benefits from those who do. Frederic Bastiat, the great 19th-century French economist, defined the State as “that great fiction by which everyone tries to live at the expense of everyone else.” I don’t know if he envisioned one half of the population living off the other half. It is important not to confuse the interests of the taxpayers with the interests of the politicians and other tax consumers. Yet that is done all the time. When the government bought toxic assets (of zero market value) from the banks, it said taxpayers would profit when the economy recovered and the assets once again commanded a positive price in the market. Even if we make the dubious assumption that the government is savvy enough to buy low and sell high, it’s not the taxpayers who would benefit from any profits. The politicians will spend every penny rather than cut taxes.
To put it bluntly, we are not the government. The built-in unfairness of the tax system has prompted a range of tax-reform proposals, such as a flat tax and replacing the income tax with a sales tax. These alternatives are better, but they have their drawbacks, too. For that reason, there is something more urgent than tax reform: spending reform. The true burden of government, the late Milton Friedman said, is not the tax level but the spending level. Taxation is just one way for the government to get money. The other ways - borrowing and inflation - are also burdens on the people. The best way to lighten the tax burden is to lessen the spending burden. If government spends less, it takes less. And if it takes less, the tax system will weigh less heavily on us all. Once again, we find wisdom in Adam Smith's book The Wealth of Nations: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
Deze column van John Stossel verscheen eerst in "The Freeman".
Meer columns van deze libertariër op www.thefreemanonline.org.
The Thanksgiving triumph of capitalism over collectivism
29 Reacties Gepubliceerd door Vincent De Roeck
This time of the year, whether in good economic times or bad, is when we all gather with our family and friends and enjoy a Thanksgiving meal together. It marks a remembrance of those Pilgrim Fathers who in the old days crossed the uncharted ocean from Europe to make a new start in Plymouth, Massachusetts. What is less appreciated is that Thanksgiving also is a celebration of the birth of free enterprise in America. The English Puritans, who left Great Britain and sailed across the Atlantic on the Mayflower in 1620, were not only escaping from religious persecution in their homeland. They also wanted to turn their back on what they viewed as the materialistic and greedy corruption of the Old World. In the New World, they wanted to erect a New Jerusalem that would not only be religiously devout, but be built on a new foundation of communal sharing and social altruism. Their goal was the communism of Plato’s Republic, in which all would work and share in common, knowing neither private property nor self-interested acquisitiveness.
What resulted is recorded in the diary of Governor William Bradford, the head of the colony. The colonists collectively cleared and worked land, but they brought forth neither the bountiful harvest they hoped for, nor did it create a spirit of shared and cheerful brotherhood. The less industrious members of the colony came late to their work in the fields, and were slow and easy in their labors. Knowing that they and their families were to receive an equal share of whatever the group produced, they saw little reason to be more diligent their efforts. The harder working among the colonists became resentful that their efforts were redistributed to the more malingering colonists. Soon they, too, were coming late to work and were less energetic in the fields.
As Governor Bradford explained in his old English, though with the spelling modernized: “For the young men that were able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without recompense. The strong, or men of parts, had no more division of food, clothes, etc. then he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labor, and food, clothes, etc. with the meaner and younger sort, thought it some indignant and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc. they deemed it a kind of slavery, neither could man husbands brook it."
Because of the disincentives and resentments that spread among the population, crops were sparse and the rationed equal shares from the collective harvest were not enough to ward off starvation and death. Two years of communism in practice had left alive only a fraction of the original number of the Plymouth colonists. Realizing that another season like those that had just passed would mean the extinction of the entire community, the elders of the colony decided to try something radically different: the introduction of private property rights and the right of the individual families to keep the fruits of their own labor. Or as Governor Bradford put it: “And so assigned to every family a parcel of land, according to the proportion of their number for that end. This had a very good success; for it made all hands very industrious, so as much more corn was planted then otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would a ledge weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.”
The Plymouth Colony experienced a great bounty of food. Private ownership meant that there was now a close link between work and reward. Industry became the order of the day as the men and women in each family went to the fields on their separate private farms. When the harvest time came, not only did many families produce enough for their own needs, but they had surpluses that they could freely exchange with their neighbors for mutual benefit and improvement. In Governor Bradford’s words: “By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God. And the effect of their planting was well seen, for all had, one way or other, pretty well to bring the year about, and some of the abler sort and more industrious had to spare, and sell to others, so as any general want or famine hath not been amongst them since.”
Hard experience had taught the Plymouth colonists the fallacy and error in the ideas of that since the time of the ancient Greeks had promised paradise through collectivism rather than individualism. As Governor Bradford expressed it: “The experience that was had in this common course and condition, tried sundry years, and that amongst the Godly and sober men, may well convince of the vanity and conceit of Plato’s and other ancients; -- that the taking away of property, and bringing into a common wealth, would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed confusion and discontent, and retard much employment that would have been to their benefit and comfort.”
Was this realization that communism was incompatible with human nature and the prosperity of humanity to be despaired or be a cause for guilt? Not in Governor Bradford’s eyes. It was simply a matter of accepting that altruism and collectivism were inconsistent with the nature of man, and that human institutions should reflect the reality of man’s nature if he is to prosper. Said Governor Bradford: “Let none object this is man’s corruption, and nothing to the curse itself. I answer, seeing all men have this corruption in them, God in his wisdom saw another course fitter for them.” The desire to “spreading the wealth” and for government to plan and regulate people’s lives is as old as the utopian fantasy in Plato’s Republic. The Pilgrim Fathers tried and soon realized its bankruptcy and failure as a way for men to live together. They, instead, accepted man as he is: hardworking, productive, and innovative when allowed the liberty to follow his own interests in improving his own circumstances and that of his family.
And even more, out of his industry result the quantities of useful goods that enable men to trade to their mutual benefit. In the wilderness of the New World, the Plymouth Pilgrims had progressed from the false dream of communism to the sound realism of capitalism. At a time of economic uncertainty, it is worthwhile recalling this beginning of the American experiment and experience with freedom. This is the lesson of the First Thanksgiving. This year, when we sit around our dining table with our family and friends, let us also remember that what we are really celebrating is the birth of free men and free enterprise in that New World of America. The real meaning of Thanksgiving, in other words, is the ultimate triumph of Capitalism over the inherent failure of Collectivism in all its forms. In the early days as well as today.
Dit artikel van Richard Ebeling verscheen oorspronkelijk bij het "American Institute for Economic Research" en werd ook elders overgenomen. De auteur doceert economie aan Trinity College en was voorzitter van de "Foundation for Economic Education".
Meer teksten van deze liberale econoom op www.aier.org.
Het spreekt dan ook voor zich dat ondergetekende op Thanksgiving met vrienden een gevulde kalkoen met gravy, relish, cranberry sauce, sweet potatoes en - natuurlijk - apple pie verorberd heeft, overgoten met rode wijn uit Virginia. Een heildronk op de vrijheid.
Meer foto's van dit Thanksgiving-evenement op www.facebook.com.
What resulted is recorded in the diary of Governor William Bradford, the head of the colony. The colonists collectively cleared and worked land, but they brought forth neither the bountiful harvest they hoped for, nor did it create a spirit of shared and cheerful brotherhood. The less industrious members of the colony came late to their work in the fields, and were slow and easy in their labors. Knowing that they and their families were to receive an equal share of whatever the group produced, they saw little reason to be more diligent their efforts. The harder working among the colonists became resentful that their efforts were redistributed to the more malingering colonists. Soon they, too, were coming late to work and were less energetic in the fields.
As Governor Bradford explained in his old English, though with the spelling modernized: “For the young men that were able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without recompense. The strong, or men of parts, had no more division of food, clothes, etc. then he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labor, and food, clothes, etc. with the meaner and younger sort, thought it some indignant and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc. they deemed it a kind of slavery, neither could man husbands brook it."
Because of the disincentives and resentments that spread among the population, crops were sparse and the rationed equal shares from the collective harvest were not enough to ward off starvation and death. Two years of communism in practice had left alive only a fraction of the original number of the Plymouth colonists. Realizing that another season like those that had just passed would mean the extinction of the entire community, the elders of the colony decided to try something radically different: the introduction of private property rights and the right of the individual families to keep the fruits of their own labor. Or as Governor Bradford put it: “And so assigned to every family a parcel of land, according to the proportion of their number for that end. This had a very good success; for it made all hands very industrious, so as much more corn was planted then otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would a ledge weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.”
The Plymouth Colony experienced a great bounty of food. Private ownership meant that there was now a close link between work and reward. Industry became the order of the day as the men and women in each family went to the fields on their separate private farms. When the harvest time came, not only did many families produce enough for their own needs, but they had surpluses that they could freely exchange with their neighbors for mutual benefit and improvement. In Governor Bradford’s words: “By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God. And the effect of their planting was well seen, for all had, one way or other, pretty well to bring the year about, and some of the abler sort and more industrious had to spare, and sell to others, so as any general want or famine hath not been amongst them since.”
Hard experience had taught the Plymouth colonists the fallacy and error in the ideas of that since the time of the ancient Greeks had promised paradise through collectivism rather than individualism. As Governor Bradford expressed it: “The experience that was had in this common course and condition, tried sundry years, and that amongst the Godly and sober men, may well convince of the vanity and conceit of Plato’s and other ancients; -- that the taking away of property, and bringing into a common wealth, would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed confusion and discontent, and retard much employment that would have been to their benefit and comfort.”
Was this realization that communism was incompatible with human nature and the prosperity of humanity to be despaired or be a cause for guilt? Not in Governor Bradford’s eyes. It was simply a matter of accepting that altruism and collectivism were inconsistent with the nature of man, and that human institutions should reflect the reality of man’s nature if he is to prosper. Said Governor Bradford: “Let none object this is man’s corruption, and nothing to the curse itself. I answer, seeing all men have this corruption in them, God in his wisdom saw another course fitter for them.” The desire to “spreading the wealth” and for government to plan and regulate people’s lives is as old as the utopian fantasy in Plato’s Republic. The Pilgrim Fathers tried and soon realized its bankruptcy and failure as a way for men to live together. They, instead, accepted man as he is: hardworking, productive, and innovative when allowed the liberty to follow his own interests in improving his own circumstances and that of his family.
And even more, out of his industry result the quantities of useful goods that enable men to trade to their mutual benefit. In the wilderness of the New World, the Plymouth Pilgrims had progressed from the false dream of communism to the sound realism of capitalism. At a time of economic uncertainty, it is worthwhile recalling this beginning of the American experiment and experience with freedom. This is the lesson of the First Thanksgiving. This year, when we sit around our dining table with our family and friends, let us also remember that what we are really celebrating is the birth of free men and free enterprise in that New World of America. The real meaning of Thanksgiving, in other words, is the ultimate triumph of Capitalism over the inherent failure of Collectivism in all its forms. In the early days as well as today.
Dit artikel van Richard Ebeling verscheen oorspronkelijk bij het "American Institute for Economic Research" en werd ook elders overgenomen. De auteur doceert economie aan Trinity College en was voorzitter van de "Foundation for Economic Education".
Meer teksten van deze liberale econoom op www.aier.org.
Het spreekt dan ook voor zich dat ondergetekende op Thanksgiving met vrienden een gevulde kalkoen met gravy, relish, cranberry sauce, sweet potatoes en - natuurlijk - apple pie verorberd heeft, overgoten met rode wijn uit Virginia. Een heildronk op de vrijheid.
Meer foto's van dit Thanksgiving-evenement op www.facebook.com.
Telkens collectivisten in de VS aan de macht komen, zien we een "run on the gun store" optreden. Dit was met het aantreden van Hussein Obama dit jaar niet anders. De twee allereerste maatregelen die een collectivistisch regime steevast neemt, zijn nu eenmaal de confiscatie van privé-wapens en het verbieden van privé-onderwijs. Zonder deze twee acties is elke vorm van collectivistisch bewind immers gewoon onhoudbaar. Obama kent natuurlijk deze vuistregel voor collectivisten en is bereid deze opnieuw van stal te halen. De aanval op de vrijheid is ingezet. Deze persoon met een wel zéér onduidelijke afkomst, een schimmig verleden, een vrouw die openlijk met het communisme dweept(e) en er zelf bepaalde naïef-linkse waandenkbeelden op nahoudt, is in de ogen van een groot deel Amerikanen dan ook een regelrechte bedreiging. En gelijk hebben ze.
We herinneren ons allemaal nog de duistere zaakjes die Barack Obama in het verleden met ACORN (de organisatie die in een recente undercover-reportage adviezen in belastingontduiking blijkt te geven aan illegale vreemdelingen, mensenhandelaars en crackhoeren) en andere maffieuze groepjes gedaan heeft, en kennen zijn totalitair-socialistische kijk op de samenleving. Glenn Beck zei het nog in zijn show enkele weken geleden: "Ik herken Amerika niet meer!" en zeker nu ook de "leeuw van de senaat" Ted Kennedy het tijdelijke voor de hel ingeruild heeft, zal het niet lang meer duren voor Obama bureaucraten tussen patiënten en hun dokters zal plaatsen, ambtenarenpanels in het leven zal roepen om te beslissen over leven en dood van oudere patiënten, en het privaat wapenbezit verder aan banden zal leggen. Het overlijden van de grote anti-wapenadept en notoire socialist Ted Kennedy biedt immers opnieuw perspectieven om diens min of meer geheime agenda door te drukken. We zullen maar vergeten dat socialisme enkel op twee plaatsen écht kan bestaan: in de hemel waar ze het niet nodig hebben, en in de hel waar ze het hebben ;-)
Maar Amerika zou Amerika niet zijn, moesten ze dit zomaar over zich heen laten gaan. Het was vandaag dan ook leuk om lezen dat de wapenhandelaars in de Verenigde Staten met een chronisch tekort aan kogels zitten. De laatste weken en maanden hebben zoveel Amerikanen wapens gekocht dat de kogelfabrikanten de vraag naar kogels niet meer kunnen volgen. Zalig gewoon. Ook tal van ludieke anti-Kennedy-bumperstickers gaan opnieuw vlotjes over de toonbank. Mijn favoriete sticker is die met het opschrift "Mijn geweer heeft minder mensen vermoord dan de auto van Ted Kennedy". Ted Kennedy was een moordenaar, maar dat wordt in linkse middens zeker niet tegen hem gehouden. Socialisten, de slaafse volgelingen van ultra-linkse massamoordenaars als Ché Guevara, Adolf Hitler en Joseph Stalin, zijn immers niet begaan met menselijk leven. Hun ideologie kan enkel bestaan als, om het met de woorden van Bernard Shaw te zeggen, "bepaalde groepen in de samenleving uitgemoord worden."
Zondag was het in veel steden in België en Nederland een autovrije dag en dat hebben we zeker geweten. Ondergetekende heeft zondagnamiddag twee uur kunnen doen over het traject van Knokke naar Berlare. Zondag vierden de moslims echter ook het einde van de ramadan. Natuurlijk waren ze niet zo blij met het samenvallen van hun suikerfeest met deze autovrije zondag omdat ze dan hun familie willen bezoeken en daarvoor meestal de auto moeten gebruiken. Ik vind het suikerfeest zelf ook het hoogtepunt van de ramadan, het is immers de enige dag van de vasten dat er in Brussel voor de verandering eens geen auto's in brand gestoken worden, en ik begrijp de grieven van onze islamitische medeburgers. De dag was inderdaad wat ongelukkig gekozen. In Nederland lanceerde de hoofdgedoekte wethoudster Fatima Elatik van de islamosocialistische Partij voor de (overbelasting van) Arbeid het voorstel om moslims zondag wel de auto te laten gebruiken in de autoloze stadsdelen. Gelijkheid en non-discriminatie te pas en te onpas aangrijpen als het hen uitkomt, maar tegelijkertijd openlijk een apartheidspolitiek verdedigen als dat hen beter uitkomt. Zo schandalig, maar ook zo typisch... De Nederlandse website "The West is the Very Best" (die nogal dicht bij de PVV staat) fotoshopte bovenstaande afbeelding om de wansmakelijke ideeën van Elatik te visualiseren.
Via de Facebook-pagina van Frédérique Ries, oud-staatssecretaris voor Europese zaken en momenteel Europarlementslid voor de MR, vond ik vandaag dit snapshot terug van een hoofdgedoekte vrouw die Mazoet Achmadinges met haar middelvinger eens flink haar gedacht zegt. Net als uw dienaar is Ries een fervente voorstander van Israël en staat zij afkerig tegenover het "appeasen" van het islamisme bij ons en de radicale islam in de wereld. Jammer dat zei zo weinig de pers haalt met haar schitterende werk en haar verfrissende rechts-liberale ideeën.
Dit artikel verscheen ook op de metablog "In Flanders Fields".
Meer over de islamproblematiek op www.jihadwatch.org.
We herinneren ons allemaal nog de duistere zaakjes die Barack Obama in het verleden met ACORN (de organisatie die in een recente undercover-reportage adviezen in belastingontduiking blijkt te geven aan illegale vreemdelingen, mensenhandelaars en crackhoeren) en andere maffieuze groepjes gedaan heeft, en kennen zijn totalitair-socialistische kijk op de samenleving. Glenn Beck zei het nog in zijn show enkele weken geleden: "Ik herken Amerika niet meer!" en zeker nu ook de "leeuw van de senaat" Ted Kennedy het tijdelijke voor de hel ingeruild heeft, zal het niet lang meer duren voor Obama bureaucraten tussen patiënten en hun dokters zal plaatsen, ambtenarenpanels in het leven zal roepen om te beslissen over leven en dood van oudere patiënten, en het privaat wapenbezit verder aan banden zal leggen. Het overlijden van de grote anti-wapenadept en notoire socialist Ted Kennedy biedt immers opnieuw perspectieven om diens min of meer geheime agenda door te drukken. We zullen maar vergeten dat socialisme enkel op twee plaatsen écht kan bestaan: in de hemel waar ze het niet nodig hebben, en in de hel waar ze het hebben ;-)
Maar Amerika zou Amerika niet zijn, moesten ze dit zomaar over zich heen laten gaan. Het was vandaag dan ook leuk om lezen dat de wapenhandelaars in de Verenigde Staten met een chronisch tekort aan kogels zitten. De laatste weken en maanden hebben zoveel Amerikanen wapens gekocht dat de kogelfabrikanten de vraag naar kogels niet meer kunnen volgen. Zalig gewoon. Ook tal van ludieke anti-Kennedy-bumperstickers gaan opnieuw vlotjes over de toonbank. Mijn favoriete sticker is die met het opschrift "Mijn geweer heeft minder mensen vermoord dan de auto van Ted Kennedy". Ted Kennedy was een moordenaar, maar dat wordt in linkse middens zeker niet tegen hem gehouden. Socialisten, de slaafse volgelingen van ultra-linkse massamoordenaars als Ché Guevara, Adolf Hitler en Joseph Stalin, zijn immers niet begaan met menselijk leven. Hun ideologie kan enkel bestaan als, om het met de woorden van Bernard Shaw te zeggen, "bepaalde groepen in de samenleving uitgemoord worden."
Zondag was het in veel steden in België en Nederland een autovrije dag en dat hebben we zeker geweten. Ondergetekende heeft zondagnamiddag twee uur kunnen doen over het traject van Knokke naar Berlare. Zondag vierden de moslims echter ook het einde van de ramadan. Natuurlijk waren ze niet zo blij met het samenvallen van hun suikerfeest met deze autovrije zondag omdat ze dan hun familie willen bezoeken en daarvoor meestal de auto moeten gebruiken. Ik vind het suikerfeest zelf ook het hoogtepunt van de ramadan, het is immers de enige dag van de vasten dat er in Brussel voor de verandering eens geen auto's in brand gestoken worden, en ik begrijp de grieven van onze islamitische medeburgers. De dag was inderdaad wat ongelukkig gekozen. In Nederland lanceerde de hoofdgedoekte wethoudster Fatima Elatik van de islamosocialistische Partij voor de (overbelasting van) Arbeid het voorstel om moslims zondag wel de auto te laten gebruiken in de autoloze stadsdelen. Gelijkheid en non-discriminatie te pas en te onpas aangrijpen als het hen uitkomt, maar tegelijkertijd openlijk een apartheidspolitiek verdedigen als dat hen beter uitkomt. Zo schandalig, maar ook zo typisch... De Nederlandse website "The West is the Very Best" (die nogal dicht bij de PVV staat) fotoshopte bovenstaande afbeelding om de wansmakelijke ideeën van Elatik te visualiseren.
Via de Facebook-pagina van Frédérique Ries, oud-staatssecretaris voor Europese zaken en momenteel Europarlementslid voor de MR, vond ik vandaag dit snapshot terug van een hoofdgedoekte vrouw die Mazoet Achmadinges met haar middelvinger eens flink haar gedacht zegt. Net als uw dienaar is Ries een fervente voorstander van Israël en staat zij afkerig tegenover het "appeasen" van het islamisme bij ons en de radicale islam in de wereld. Jammer dat zei zo weinig de pers haalt met haar schitterende werk en haar verfrissende rechts-liberale ideeën.
Dit artikel verscheen ook op de metablog "In Flanders Fields".
Meer over de islamproblematiek op www.jihadwatch.org.
“We really have to do something about health care.” The scariest word in that sentence is not something. It’s we. The first-person plural form is not merely a convenience, as in “We’re in for a cold winter.” It indicates that decisions about “the healthcare system” should be made collectively, with one decision binding everyone. That’s collectivism. So why is virtually everyone a collectivist when it comes to health care? I do not exaggerate. Every prominent participant in the current debate over how to “reform” the medical industry approaches the issue in collectivist terms. They have differences at the margin–tax increases versus tax credits, a government-run “public option” versus subsidized nonprofit cooperatives–but there is no disagreement that “we” must have a policy. But why must we do anything about health care? Why can’t you do what you want, I do what I want, and he and she do what they want? Isn’t that what’s supposed to happen in a free society?
Reformers would say that costs are rising too much and some people can’t afford insurance. But that is no answer. It tells us only that possibly ameliorable conditions exist, not that collectivism is a good approach. When we see problems in other important markets, most of us don’t expect televised presidential town-hall meetings, congressional committees, and omnibus legislation to give us the answer. We individually adjust our behavior in the marketplace and anticipate that entrepreneurs will cater to us. Solutions, with inevitable tradeoffs, are micro, marginal, and tailored to individual needs, not macro, holistic, and procrustean. Out of this arises an orderly marketplace–without a conscious overall plan. No one has found a better way to make masses of people better off. Why is health care different? Must we collectively reinvent the industry? The social knowledge problem that F.A. Hayek spelled out should make us wary of any collective response. The reformers’ stock answer is that this is something only we, acting through the “democratic process,” can handle. That’s an assertion. Where’s the proof? What if earlier collectivist decisions gave us rising medical and insurance costs?
In fact they did. Nearly every aspect of medicine and health insurance that the politicians say needs fixing is the result of “our” -- that is, politicians’ -- previous attempts to fix something. Much of the escalation of prices comes from consumer demand freed from normal cost constraints thanks to third-party payers: government-privileged insurance companies, Medicare, and Medicaid. While that intervention boosts demand by eliminating cost consciousness, others constrict supply: occupational licensing, insurance mandates and barriers to entry, patents on drugs and devices, FDA regulations, certificate-of-need requirements, and more. So let’s hear no more about what we–collectively and coercively–must do about health care. If government would get out of the way, we -- individually and cooperatively -- will figure out what to do. Collectivism and government planning trample freedom and foster social stupidity. Individualism and free markets respect each person’s dignity and liberty while getting the most out of the “wisdom of crowds” in the marketplace.
Dit editoriaal van Sheldon Richman verscheen in "The Freeman".
Meer teksten van hem op www.thefreemanonline.org.
Reformers would say that costs are rising too much and some people can’t afford insurance. But that is no answer. It tells us only that possibly ameliorable conditions exist, not that collectivism is a good approach. When we see problems in other important markets, most of us don’t expect televised presidential town-hall meetings, congressional committees, and omnibus legislation to give us the answer. We individually adjust our behavior in the marketplace and anticipate that entrepreneurs will cater to us. Solutions, with inevitable tradeoffs, are micro, marginal, and tailored to individual needs, not macro, holistic, and procrustean. Out of this arises an orderly marketplace–without a conscious overall plan. No one has found a better way to make masses of people better off. Why is health care different? Must we collectively reinvent the industry? The social knowledge problem that F.A. Hayek spelled out should make us wary of any collective response. The reformers’ stock answer is that this is something only we, acting through the “democratic process,” can handle. That’s an assertion. Where’s the proof? What if earlier collectivist decisions gave us rising medical and insurance costs?
In fact they did. Nearly every aspect of medicine and health insurance that the politicians say needs fixing is the result of “our” -- that is, politicians’ -- previous attempts to fix something. Much of the escalation of prices comes from consumer demand freed from normal cost constraints thanks to third-party payers: government-privileged insurance companies, Medicare, and Medicaid. While that intervention boosts demand by eliminating cost consciousness, others constrict supply: occupational licensing, insurance mandates and barriers to entry, patents on drugs and devices, FDA regulations, certificate-of-need requirements, and more. So let’s hear no more about what we–collectively and coercively–must do about health care. If government would get out of the way, we -- individually and cooperatively -- will figure out what to do. Collectivism and government planning trample freedom and foster social stupidity. Individualism and free markets respect each person’s dignity and liberty while getting the most out of the “wisdom of crowds” in the marketplace.
Dit editoriaal van Sheldon Richman verscheen in "The Freeman".
Meer teksten van hem op www.thefreemanonline.org.
Competition so regularly brings us better stuff that we have come to expect it. We complain on the rare occasion the supermarket doesn’t carry a particular ice-cream flavor. We just assume the store will have 30,000 items, that it will be open 24/7, and that the food will be fresh and cheap. I take it for granted that I can go to a foreign country, hand a piece of plastic to a total stranger who doesn’t speak English... and he’ll rent me a car for a week. Later, Visa or MasterCard will have the accounting correct to the penny. Compare: Governments can’t even count votes accurately -- or deliver the mail efficiently. Yet now, somehow, government will run auto companies and guarantee us health care better than private firms? And the public seems eager for that! If you think it’s mainly the political class and mainstream media that are clueless, listen to the doctors. Dr. Atul Gawande, in an otherwise interesting article in "New Yorker" magazine on health-care costs, disparages medical savings accounts and high-deductible insurance.
First, he explains the theory behind this proposal to cardiologist Lester Dyke: “[People would] have more of their own money on the line, and that’d drive them to bargain with you and other surgeons, right?” Gawande comments, “He gave me a quizzical look.” The doctors then dismiss the idea with a sneer. “We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? ‘I’ll do three vessels for $30,000, but if you take four, I’ll throw in an extra night in the ICU’—that sort of thing? Dyke shook his head. ‘Who comes up with this stuff?’ he asked.” I do. Adam Smith did. Market competition is what’s brought us most of what’s made life better and longer. But the doctors have mastered the anti-free-market sneer: Markets are good for crass consumer goods like washing machines and computers, but health care is too complicated for people to understand.
That’s nonsense. When you buy a car, must you be an expert on automotive engineering? No. And yet the worst you can buy in America is much better than the best that the Soviet bloc’s central planners could produce. Remember the Trabant? The Yugo? They disappeared along with the Berlin Wall because governments never serve consumers as well as market competitors do. Maybe 2 percent of customers understand complex products like cars, but they guide the market and the rest of us free-ride on their effort. When government stays out, good companies grow. Bad ones atrophy. Competition and cost-conscious buyers who spend their own money assure that all the popular cars, computers, etc. are pretty good. The same would go for medicine -- if only more of us were spending our own money for health care. We see quality rise and prices fall in the few areas where consumers are in control, like cosmetic and Lasik eye surgery. Doctors constantly make improvements because they must please their customers. They even give out their cell numbers.
Drs. Dyer and Gawande don’t understand markets. Dyer’s elderly woman wouldn’t have to haggle over price before surgery. The decisions would be made by thousands of 60-, 40-, and 20-year-olds, the minority who pay closest attention. Word about where the best values were would quickly get around. Even in nursing homes, it would soon be common knowledge that hospital X is a ripoff and that Y and Z give better treatment for less. People assume someone needs to be “in charge” for a medical-care market to work. But no one needs to be in charge. What Hayek called “spontaneous order” and Adam Smith called “the invisible hand” would make it happen, just as they make it happen with food and clothing -- if only we got over the foolish belief that health care is something that must be paid for by someone else.
Dit artikel van John Stossel verscheen eerst in "The Freeman".
Meer teksten van hem op www.thefreemanonline.org.
First, he explains the theory behind this proposal to cardiologist Lester Dyke: “[People would] have more of their own money on the line, and that’d drive them to bargain with you and other surgeons, right?” Gawande comments, “He gave me a quizzical look.” The doctors then dismiss the idea with a sneer. “We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they’re supposed to haggle over the price as if he were selling a rug in a souk? ‘I’ll do three vessels for $30,000, but if you take four, I’ll throw in an extra night in the ICU’—that sort of thing? Dyke shook his head. ‘Who comes up with this stuff?’ he asked.” I do. Adam Smith did. Market competition is what’s brought us most of what’s made life better and longer. But the doctors have mastered the anti-free-market sneer: Markets are good for crass consumer goods like washing machines and computers, but health care is too complicated for people to understand.
That’s nonsense. When you buy a car, must you be an expert on automotive engineering? No. And yet the worst you can buy in America is much better than the best that the Soviet bloc’s central planners could produce. Remember the Trabant? The Yugo? They disappeared along with the Berlin Wall because governments never serve consumers as well as market competitors do. Maybe 2 percent of customers understand complex products like cars, but they guide the market and the rest of us free-ride on their effort. When government stays out, good companies grow. Bad ones atrophy. Competition and cost-conscious buyers who spend their own money assure that all the popular cars, computers, etc. are pretty good. The same would go for medicine -- if only more of us were spending our own money for health care. We see quality rise and prices fall in the few areas where consumers are in control, like cosmetic and Lasik eye surgery. Doctors constantly make improvements because they must please their customers. They even give out their cell numbers.
Drs. Dyer and Gawande don’t understand markets. Dyer’s elderly woman wouldn’t have to haggle over price before surgery. The decisions would be made by thousands of 60-, 40-, and 20-year-olds, the minority who pay closest attention. Word about where the best values were would quickly get around. Even in nursing homes, it would soon be common knowledge that hospital X is a ripoff and that Y and Z give better treatment for less. People assume someone needs to be “in charge” for a medical-care market to work. But no one needs to be in charge. What Hayek called “spontaneous order” and Adam Smith called “the invisible hand” would make it happen, just as they make it happen with food and clothing -- if only we got over the foolish belief that health care is something that must be paid for by someone else.
Dit artikel van John Stossel verscheen eerst in "The Freeman".
Meer teksten van hem op www.thefreemanonline.org.
A sequel to Dances With Wolves is reportedly scheduled for release in 2011. Not only did Dances create a romantic American Indian who never existed, it reversed the roles of the Sioux and the Pawnee. This kind of thing has been going on for hundreds of years, beginning with various European writers who, far removed from the reality of life on the American frontier, described the “noble savage” of the American forests. Americans got into the business also but only after the frontier was several generations removed from their reality. For 40 years I watched the same thing happen at the university -- first when I was an undergraduate, later as a graduate student, and still later as a professor. The noble savage is a fiction, of course, but few had the temerity to challenge the notion. The tribes who inhabited what is today the USA practiced torture, human sacrifice, cannibalism, gang rape, slavery, polygyny. They were illiterate and had not advanced beyond the Stone Age.
Before the arrival of the white man, they rode no horses, having hunted the horse to extinction thousands of years earlier. The horse was reintroduced by the Spaniards, and by the middle of the 18th century most of the Plains Indians had developed a horse culture, using the horse for hunting, war, packing, and trading. As an item of trade the horse could get a brave a wife -- one horse, one wife. A chief might demand two or three horses for one of his daughters. Those braves rich in horses acquired several wives. The horse did have one liberating effect on women. Until the arrival of the horse women had been the principal beast of burden for the tribe, carrying heavy packs whenever the tribe moved. Men carried nothing but their weapons. I have heard women anthropologists gush over the American Indian. I don’t know if they are ignorant or irrational, because Indian society was male chauvinism squared. All work was done by women while men hunted, fought, or lounged about.
The men, said François Larocque of the Crow in 1805, “do not even saddle their own horses when their wives are present nor do they take off their [own] leggings when they come in to go to bed.” When friends of a brave visited, he gave them his wife to indulge their lust. If a wife committed adultery without his permission, however, he was allowed to punish her by hacking off her nose and publicly casting her out. A man could also banish a wife for such minor transgressions as laziness or nagging. Suicide was not uncommon for women who had been cast out. Women and girls captured in raids were gang-raped and often tattooed or branded. They usually spent the rest of their lives as slaves. If they were lucky, they might become an extra wife for a brave. Captured pregnant women had their bellies split open and the babies pulled out. Captured men were tortured, often kept alive for days to suffer all the more. European witnesses regularly remarked upon anatomical knowledge of the torturers. Torture racks were a feature of semipermanent villages. The seminomadic tribes improvised torture apparatus on the spot. Saving “the last bullet for yourself” became a cliché for good reason.
The Jesuit Jean de Brébeuf learned this the hard way. He was working with the Huron when he has captured by a war party of Iroquois. He was taken off to a nearby village for fun and games. First he was forced to run the gauntlet. A man of enormous size and strength, Brébeuf, although bruised, lacerated, and bloodied, managed to stay upright as the Iroquois warriors clubbed him. The Iroquois then tied him to a post and burned him repeatedly from head to toe. They thrust firebrands into his mouth and strung a necklace of red-hot ax heads around his neck. Brébeuf bore the indescribable pain without flinching or crying out. The Iroquois redoubled their efforts. They poured boiling water over his head, mocking baptism. They wrapped a belt of burning resin around his waist, cut off his lips and ripped out his tongue, stripped chunks of flesh from his body, and scalped him. Still he did not cry out. The Iroquois finally could take no more. They cut out his heart, ate it, and drank his blood.
The torture of Brébeuf is remarkable only for his otherworldly fortitude. Whether white or red, men captured by the Indians underwent similar tortures. Pioneer settlers on the colonial frontier or those of the “dark and bloody” ground of Kentucky or latter-day frontiersmen in the trans-Mississippi West had no illusions about the American Indian. Most could tell of a relative or friend or someone they knew of who had been tortured to death by Indians. It seems that one of Andrew Jackson’s older brothers suffered such a fate. It is no wonder that his mother was described as an “old Irish lady, at dreadful enmity with the Indians.” The Jacksons were but one of hundreds of families who could relate tales of torture that was not aberrational or confined to a particular tribe, region, war, or era, but practiced universally and embraced, relished, and refined to a horrific degree by the American Indian. Noble, indeed.
Dit artikel van Roger D. McGrath verscheen oorspronkelijk bij het Amerikaanse "Rockford Institute" en in "Chronicles Magazine".
Meer teksten van hem op www.chroniclesmagazine.org.
Before the arrival of the white man, they rode no horses, having hunted the horse to extinction thousands of years earlier. The horse was reintroduced by the Spaniards, and by the middle of the 18th century most of the Plains Indians had developed a horse culture, using the horse for hunting, war, packing, and trading. As an item of trade the horse could get a brave a wife -- one horse, one wife. A chief might demand two or three horses for one of his daughters. Those braves rich in horses acquired several wives. The horse did have one liberating effect on women. Until the arrival of the horse women had been the principal beast of burden for the tribe, carrying heavy packs whenever the tribe moved. Men carried nothing but their weapons. I have heard women anthropologists gush over the American Indian. I don’t know if they are ignorant or irrational, because Indian society was male chauvinism squared. All work was done by women while men hunted, fought, or lounged about.
The men, said François Larocque of the Crow in 1805, “do not even saddle their own horses when their wives are present nor do they take off their [own] leggings when they come in to go to bed.” When friends of a brave visited, he gave them his wife to indulge their lust. If a wife committed adultery without his permission, however, he was allowed to punish her by hacking off her nose and publicly casting her out. A man could also banish a wife for such minor transgressions as laziness or nagging. Suicide was not uncommon for women who had been cast out. Women and girls captured in raids were gang-raped and often tattooed or branded. They usually spent the rest of their lives as slaves. If they were lucky, they might become an extra wife for a brave. Captured pregnant women had their bellies split open and the babies pulled out. Captured men were tortured, often kept alive for days to suffer all the more. European witnesses regularly remarked upon anatomical knowledge of the torturers. Torture racks were a feature of semipermanent villages. The seminomadic tribes improvised torture apparatus on the spot. Saving “the last bullet for yourself” became a cliché for good reason.
The Jesuit Jean de Brébeuf learned this the hard way. He was working with the Huron when he has captured by a war party of Iroquois. He was taken off to a nearby village for fun and games. First he was forced to run the gauntlet. A man of enormous size and strength, Brébeuf, although bruised, lacerated, and bloodied, managed to stay upright as the Iroquois warriors clubbed him. The Iroquois then tied him to a post and burned him repeatedly from head to toe. They thrust firebrands into his mouth and strung a necklace of red-hot ax heads around his neck. Brébeuf bore the indescribable pain without flinching or crying out. The Iroquois redoubled their efforts. They poured boiling water over his head, mocking baptism. They wrapped a belt of burning resin around his waist, cut off his lips and ripped out his tongue, stripped chunks of flesh from his body, and scalped him. Still he did not cry out. The Iroquois finally could take no more. They cut out his heart, ate it, and drank his blood.
The torture of Brébeuf is remarkable only for his otherworldly fortitude. Whether white or red, men captured by the Indians underwent similar tortures. Pioneer settlers on the colonial frontier or those of the “dark and bloody” ground of Kentucky or latter-day frontiersmen in the trans-Mississippi West had no illusions about the American Indian. Most could tell of a relative or friend or someone they knew of who had been tortured to death by Indians. It seems that one of Andrew Jackson’s older brothers suffered such a fate. It is no wonder that his mother was described as an “old Irish lady, at dreadful enmity with the Indians.” The Jacksons were but one of hundreds of families who could relate tales of torture that was not aberrational or confined to a particular tribe, region, war, or era, but practiced universally and embraced, relished, and refined to a horrific degree by the American Indian. Noble, indeed.
Dit artikel van Roger D. McGrath verscheen oorspronkelijk bij het Amerikaanse "Rockford Institute" en in "Chronicles Magazine".
Meer teksten van hem op www.chroniclesmagazine.org.
Not so long ago, the U.S. economy was the envy of the world. As of September 2007, we experienced 24 consecutive quarters of positive GDP growth. The stock market stood at historically high levels, and inflation and unemployment were low and stable. Things look different today. The U.S. economy is in recession, as is the economy of most every nation in the world. Many forecasters predict a domestic downturn on par with that of 1981-1982; some talk of another Great Depression. Meanwhile, we’ve experienced a huge range of interventions in the economy. We’ve seen the bailout of the Wall Street banks and the passing of a massive stimulus bill. We’ve seen coordinated interest rate cuts, expansions of deposit insurance, and government ownership stakes in banks. The stated aim of these policies when they were debated was to stave off a credit crunch and recession, but we got both anyway. Now, the claim is that they will prevent a bigger credit crunch or recession than we would otherwise experience. I’m not sure. Today, I’ll make the case for doing nothing. More precisely, I will argue that had the federal government not undertaken any new policies in response to the economic downturn, we would be better off than we are now. I will further argue that if a stimulus was necessary, it should have come from tax cuts and scaling back failed government programs, not new government spending.
WHAT WENT WRONG?
What caused the economic crisis? Although securitization, failures at rating agencies, and greed on Wall Street all played a role, at the root of the crisis, ultimately, were misguided federal government polices. The first of these was the attempt to expand homeownership. Let me begin by saying that government has no business taking a stand on how many people should or should not own homes, just as it has no business trying to influence how many toaster ovens we buy. There is no plausible market failure in the production of housing or in people’s decisions about whether to buy homes. Yet government has been interfering for decades. A partial list of policies designed to increase homeownership includes the Federal Housing Administration, the Federal Home Loan Banks, Fannie Mae, Freddie Mac, the Community Reinvestment Act, the deductibility of mortgage interest, the homestead exclusion in the personal bankruptcy code, the tax-favored treatment of capital gains on housing, the HOPE for Homeowners Act, and the Emergency Economic Stabilization Act -- also known as the bailout bill. The U.S. government’s pro-housing policies did not have major deleterious effects for decades. The reason is that the interventions in part substituted for activities the private sector would have undertaken anyway, such as providing a secondary market in mortgages.
Over time, however, these mild interventions began to focus on increased homeownership for lowincome households. In the 1990s, the Department of Housing and Urban Development ramped up pressure on lenders to support affordable housing. In 2003, accounting scandals at Fannie and Freddie allowed key members of Congress to pressure these institutions into substantial risky mortgage lending. By 2003-2004, therefore, federal policies were generating strong incentives to extend mortgages to borrowers with poor credit characteristics. Financial institutions responded and created huge quantities of assets based on risky mortgage debt. This expansion of risky credit was especially problematic because of the second misguided federal policy, the long-standing practice of bailing out failures from private risk-taking. Bailouts have occurred often and widely, especially in the banking sector. In the context of the recent financial crisis, a crucial example is the now infamous “Greenspan put,” the Fed’s practice under Greenspan of lowering interest rates in response to financial disruptions in the hope that expanded liquidity would prevent or moderate a crash in asset prices. In the early 2000s, in particular, the Fed appeared to have made a conscious decision not to burst the housing bubble and instead to “fix things”.
The banking sector’s history of receiving bailouts meant that financial markets could reasonably have expected the government to cushion any losses from a crash in risky mortgage debt. Since government was also exerting pressure to expand this debt, and since it was profitable to do so, the financial sector had every reason to play along. It was inevitable, however, that at some point a crash would ensue. The expansion of mortgage credit made sense only so long as housing prices kept increasing, but this could not last forever. Once housing prices began to decline, the market had no option but to suffer, the unwinding of the positions built on untenable assumptions about housing prices. This interpretation of the financial crisis therefore puts primary blame on federal policy rather than on Wall Street greed, inadequate regulation, failures of rating agencies, or securitization. These other forces played important roles, but it is implausible that any or all would have produced anything like the recent financial crisis had it not been for the two misguided federal policies. Wall Street greed, for example, certainly contributed to the situation, if by “greed,” one means profit-seeking behavior. Many on Wall Street knew or suspected that their risk exposure was not sustainable, but their positions were profitable at the time. Further, markets work well when private actors respond to profit opportunities, unless these reflect perverse incentives created by government. The way to avoid future crises, therefore, is for government to abandon generating such incentives.
BAILING OUT THE BANKS
The Treasury’s bailout plan was an attempt to improve bank balance sheets and thereby spur bank lending. The justification offered was that, as of early September 2008, major banks were facing imminent failure because their mortgage backed assets had declined rapidly in value. No one disputes that several banks were in danger of failing, but this does not justify a bailout. Failure is an essential aspect of capitalism. It provides information about good and bad investments, and it releases resources from bad projects to more productive ones. As noted earlier, housing prices and housing construction were too high at the end of 2005. This condition implied a deterioration in bank balance sheets and a retrenchment in the banking sector, so some amount of failure was both inevitable and appropriate. Thus, an economic case for the bailout needed to show that failure by some banks would harm the economy beyond what was unavoidable due to the fall in housing prices. The usual argument is that failure by one bank forces other banks to fail, generating a credit freeze. That outcome is possible, but it does not mean the bailout was right.
To see why, note that allowing banks to fail does not mean the government plays no role. Federal deposit insurance would prevent losses by insured depositors, thus limiting the incentive for bank runs. Federal courts and regulatory agencies (such as the FDIC) would supervise bankruptcy proceedings for failed institutions. Under bankruptcy, moreover, the activities of failing banks do not necessarily disappear. Some continue during bankruptcy, and some resume after sale of a failed institutions or its assets to a healthier bank. In other cases, merger in advance of failure avoids bankruptcy entirely. Private shareholders and bondholders take the losses required to make these mergers and sales attractive to the acquiring parties. Taxpayer funds go only to insured depositors. The bailout distracted attention from the fact that government was the single most important cause of the crisis. More broadly, the bailout will continue to encourage perverse actions by institutions that are eligible for the money, such as acquiring toxic assets that the Treasury might buy or taking huge risks with Treasury capital injections. The Treasury bailout of 2008 also initiated a government ownership stake in the financial sector.
This means that, going forward, political forces are likely to influence decision making in the extension of credit and the allocation of capital. Government might (again) push banks to aid borrowers with poor credit histories, to subsidize well-connected industries, or to lend in the districts of some legislators. Government pressure is difficult for banks to resist, since government can threaten to withdraw its ownership stake or promise further injections whenever it wants to modify bank behavior. Further, bailing out banks sets a precedent for bailing out other industries. Thus, the long-run implications of the bailout are unambiguously bad. Ironically, the bailout itself may have exacerbated the credit crunch. The announcement that the Treasury was considering a bailout likely scared markets by suggesting the economy was worse than markets recognized. Likewise, the announcement may have encouraged a credit freeze because bankers did not want to realize their losses or sell their institutions to acquiring firms if government was going to get them off the hook. The bailout introduced uncertainty because no one knew what the bailout meant: how much, what form, for whom, with what restrictions, and for how long.
THE STIMULUS
The American Recovery and Reinvestment Act of 2009 -- better known as the “stimulus” -- represents a massive transfer of resources away from the private sector to well-connected interest groups. The funds will come from our taxes and flow to the education sector, the health care sector, the creation of “green jobs,” and federal contractors and unions. Some proponents argue that the stimulus money was needed to embark on projects that are not being supported by the market but should be. This is the “market failure” argument for government spending. In fact, federal spending is already too high in most areas. From the $15 billion we spent on the failed Big Dig in my town of Boston to tens of billions we spend per month fighting in Iraq, there’s plenty of ill-conceived government spending to be cut. The spending that was included in the stimulus bill went in many cases to sectors that are neither facing especially high unemployment nor experiencing the worst declines in activity (e.g. education).
The stimulus was not about improving economic efficiency but about distributing funds to favored interest groups. If the administration was really concerned about education, for example, it should have promoted policy changes that improve outcomes while saving money, such as reduced restrictions on who can become a teacher. The administration instead chose to shovel money to the teacher’s unions. Part of the stimulus bill came in the form of tax cuts, but these were mainly one-shot cuts aimed at redistribution rather than improved economic efficiency. Although shifting money to private citizens and away from government is a good thing, repeal of the corporate income tax would have improved long-run incentives and created the foundation for economic growth in the future. Alternatively, the stimulus could have taken the form of lower employment taxes, which would have encouraged more hiring.
PEERING INTO THE LOOKING GLASS
Obama’s new budget is at least honest; it is an unapologetic attempt to restructure the U.S. economy and expand the role of government. The budget forecasts that have come from the administration appear extremely optimistic. In particular, the extra revenue being projected from repealing the Bush tax cuts understates the dynamic response of the economy to this higher rate. Faced with higher taxes, people will cut back on their work or withdraw from the labor force. On the spending side, the new initiatives will surely cost many times as much as projected; that is the iron law of government spending. Combined, if Obama enacts half of what he has slated, we will see trillion-dollar deficits for years to come. The stunning thing about the proposed budget is that nothing announced looks like it will improve the efficiency of the economy. Nothing looks like it’s in the direction of freedom or liberty. Nothing looks like it has any faith whatsoever in markets. It’s all about rewarding interest groups: unions, the green lobby, the education lobby, and the health care sector. To sum up, the crisis was at its most fundamental level the result of government policies, not market failures. The government policies adopted have been misdirected, at best. The lesson is clear; it is better to do nothing than to make things worse. In economics, as in medicine, the dictum is “first, do no harm.”
Dit essay van Jeffrey Miron verscheen oorspronkelijk in het kwartaalblad "Cato's Letter" en werd nadien in verkorte versie ook in "Reason Magazine" en op "Real Clear Politics" overgenomen.
Meer teksten van deze liberale econoom op www.catosletter.org.
WHAT WENT WRONG?
What caused the economic crisis? Although securitization, failures at rating agencies, and greed on Wall Street all played a role, at the root of the crisis, ultimately, were misguided federal government polices. The first of these was the attempt to expand homeownership. Let me begin by saying that government has no business taking a stand on how many people should or should not own homes, just as it has no business trying to influence how many toaster ovens we buy. There is no plausible market failure in the production of housing or in people’s decisions about whether to buy homes. Yet government has been interfering for decades. A partial list of policies designed to increase homeownership includes the Federal Housing Administration, the Federal Home Loan Banks, Fannie Mae, Freddie Mac, the Community Reinvestment Act, the deductibility of mortgage interest, the homestead exclusion in the personal bankruptcy code, the tax-favored treatment of capital gains on housing, the HOPE for Homeowners Act, and the Emergency Economic Stabilization Act -- also known as the bailout bill. The U.S. government’s pro-housing policies did not have major deleterious effects for decades. The reason is that the interventions in part substituted for activities the private sector would have undertaken anyway, such as providing a secondary market in mortgages.
Over time, however, these mild interventions began to focus on increased homeownership for lowincome households. In the 1990s, the Department of Housing and Urban Development ramped up pressure on lenders to support affordable housing. In 2003, accounting scandals at Fannie and Freddie allowed key members of Congress to pressure these institutions into substantial risky mortgage lending. By 2003-2004, therefore, federal policies were generating strong incentives to extend mortgages to borrowers with poor credit characteristics. Financial institutions responded and created huge quantities of assets based on risky mortgage debt. This expansion of risky credit was especially problematic because of the second misguided federal policy, the long-standing practice of bailing out failures from private risk-taking. Bailouts have occurred often and widely, especially in the banking sector. In the context of the recent financial crisis, a crucial example is the now infamous “Greenspan put,” the Fed’s practice under Greenspan of lowering interest rates in response to financial disruptions in the hope that expanded liquidity would prevent or moderate a crash in asset prices. In the early 2000s, in particular, the Fed appeared to have made a conscious decision not to burst the housing bubble and instead to “fix things”.
The banking sector’s history of receiving bailouts meant that financial markets could reasonably have expected the government to cushion any losses from a crash in risky mortgage debt. Since government was also exerting pressure to expand this debt, and since it was profitable to do so, the financial sector had every reason to play along. It was inevitable, however, that at some point a crash would ensue. The expansion of mortgage credit made sense only so long as housing prices kept increasing, but this could not last forever. Once housing prices began to decline, the market had no option but to suffer, the unwinding of the positions built on untenable assumptions about housing prices. This interpretation of the financial crisis therefore puts primary blame on federal policy rather than on Wall Street greed, inadequate regulation, failures of rating agencies, or securitization. These other forces played important roles, but it is implausible that any or all would have produced anything like the recent financial crisis had it not been for the two misguided federal policies. Wall Street greed, for example, certainly contributed to the situation, if by “greed,” one means profit-seeking behavior. Many on Wall Street knew or suspected that their risk exposure was not sustainable, but their positions were profitable at the time. Further, markets work well when private actors respond to profit opportunities, unless these reflect perverse incentives created by government. The way to avoid future crises, therefore, is for government to abandon generating such incentives.
BAILING OUT THE BANKS
The Treasury’s bailout plan was an attempt to improve bank balance sheets and thereby spur bank lending. The justification offered was that, as of early September 2008, major banks were facing imminent failure because their mortgage backed assets had declined rapidly in value. No one disputes that several banks were in danger of failing, but this does not justify a bailout. Failure is an essential aspect of capitalism. It provides information about good and bad investments, and it releases resources from bad projects to more productive ones. As noted earlier, housing prices and housing construction were too high at the end of 2005. This condition implied a deterioration in bank balance sheets and a retrenchment in the banking sector, so some amount of failure was both inevitable and appropriate. Thus, an economic case for the bailout needed to show that failure by some banks would harm the economy beyond what was unavoidable due to the fall in housing prices. The usual argument is that failure by one bank forces other banks to fail, generating a credit freeze. That outcome is possible, but it does not mean the bailout was right.
To see why, note that allowing banks to fail does not mean the government plays no role. Federal deposit insurance would prevent losses by insured depositors, thus limiting the incentive for bank runs. Federal courts and regulatory agencies (such as the FDIC) would supervise bankruptcy proceedings for failed institutions. Under bankruptcy, moreover, the activities of failing banks do not necessarily disappear. Some continue during bankruptcy, and some resume after sale of a failed institutions or its assets to a healthier bank. In other cases, merger in advance of failure avoids bankruptcy entirely. Private shareholders and bondholders take the losses required to make these mergers and sales attractive to the acquiring parties. Taxpayer funds go only to insured depositors. The bailout distracted attention from the fact that government was the single most important cause of the crisis. More broadly, the bailout will continue to encourage perverse actions by institutions that are eligible for the money, such as acquiring toxic assets that the Treasury might buy or taking huge risks with Treasury capital injections. The Treasury bailout of 2008 also initiated a government ownership stake in the financial sector.
This means that, going forward, political forces are likely to influence decision making in the extension of credit and the allocation of capital. Government might (again) push banks to aid borrowers with poor credit histories, to subsidize well-connected industries, or to lend in the districts of some legislators. Government pressure is difficult for banks to resist, since government can threaten to withdraw its ownership stake or promise further injections whenever it wants to modify bank behavior. Further, bailing out banks sets a precedent for bailing out other industries. Thus, the long-run implications of the bailout are unambiguously bad. Ironically, the bailout itself may have exacerbated the credit crunch. The announcement that the Treasury was considering a bailout likely scared markets by suggesting the economy was worse than markets recognized. Likewise, the announcement may have encouraged a credit freeze because bankers did not want to realize their losses or sell their institutions to acquiring firms if government was going to get them off the hook. The bailout introduced uncertainty because no one knew what the bailout meant: how much, what form, for whom, with what restrictions, and for how long.
THE STIMULUS
The American Recovery and Reinvestment Act of 2009 -- better known as the “stimulus” -- represents a massive transfer of resources away from the private sector to well-connected interest groups. The funds will come from our taxes and flow to the education sector, the health care sector, the creation of “green jobs,” and federal contractors and unions. Some proponents argue that the stimulus money was needed to embark on projects that are not being supported by the market but should be. This is the “market failure” argument for government spending. In fact, federal spending is already too high in most areas. From the $15 billion we spent on the failed Big Dig in my town of Boston to tens of billions we spend per month fighting in Iraq, there’s plenty of ill-conceived government spending to be cut. The spending that was included in the stimulus bill went in many cases to sectors that are neither facing especially high unemployment nor experiencing the worst declines in activity (e.g. education).
The stimulus was not about improving economic efficiency but about distributing funds to favored interest groups. If the administration was really concerned about education, for example, it should have promoted policy changes that improve outcomes while saving money, such as reduced restrictions on who can become a teacher. The administration instead chose to shovel money to the teacher’s unions. Part of the stimulus bill came in the form of tax cuts, but these were mainly one-shot cuts aimed at redistribution rather than improved economic efficiency. Although shifting money to private citizens and away from government is a good thing, repeal of the corporate income tax would have improved long-run incentives and created the foundation for economic growth in the future. Alternatively, the stimulus could have taken the form of lower employment taxes, which would have encouraged more hiring.
PEERING INTO THE LOOKING GLASS
Obama’s new budget is at least honest; it is an unapologetic attempt to restructure the U.S. economy and expand the role of government. The budget forecasts that have come from the administration appear extremely optimistic. In particular, the extra revenue being projected from repealing the Bush tax cuts understates the dynamic response of the economy to this higher rate. Faced with higher taxes, people will cut back on their work or withdraw from the labor force. On the spending side, the new initiatives will surely cost many times as much as projected; that is the iron law of government spending. Combined, if Obama enacts half of what he has slated, we will see trillion-dollar deficits for years to come. The stunning thing about the proposed budget is that nothing announced looks like it will improve the efficiency of the economy. Nothing looks like it’s in the direction of freedom or liberty. Nothing looks like it has any faith whatsoever in markets. It’s all about rewarding interest groups: unions, the green lobby, the education lobby, and the health care sector. To sum up, the crisis was at its most fundamental level the result of government policies, not market failures. The government policies adopted have been misdirected, at best. The lesson is clear; it is better to do nothing than to make things worse. In economics, as in medicine, the dictum is “first, do no harm.”
Dit essay van Jeffrey Miron verscheen oorspronkelijk in het kwartaalblad "Cato's Letter" en werd nadien in verkorte versie ook in "Reason Magazine" en op "Real Clear Politics" overgenomen.
Meer teksten van deze liberale econoom op www.catosletter.org.
If Barack Hussein Obama disappoints his supporters, they will have only themselves to blame for the cult they have created around the first black U.S. President. In January, former Arkansas governor Mike Huckabee said he was running to revive “our national soul”. He was not alone in taking an expansive view of presidential responsibilities. With the exception of Ron Paul, all the serious candidates waxed grandiloquent about their aims. John McCain said he modelled himself on Teddy Roosevelt, a man who “nourished the soul of a great nation”. Hillary Clinton lamented that America had no goals, and offered to supply some. And let us not forget the man they all sought to replace, George Bush, who promised, among other things, to “rid the world of evil”. Appalled by such hubris, a libertarian scholar called Gene Healy wrote “The Cult of the Presidency”, a book decrying the unrealistic expectations Americans have of their presidents. The book was written while Barack Obama’s career was still on the launch pad, yet it describes with uncanny prescience the atmosphere that allowed him to soar.
Mr Obama has inspired more passionate devotion than any modern American politician. People scream and faint at his rallies. Some wear T-shirts proclaiming him “The One” and noting that “Jesus was a community organiser”. An editor at Newsweek described him as “above the country, above the world; he’s sort of God.” He sets foreign hearts fluttering, too. A Pew poll published this week finds that 93% of Germans expect him to do the right thing in world affairs. Only 14% thought that about Mr Bush. Perhaps Mr Obama inwardly cringes at the personality cult that surrounds him. But he has hardly discouraged it. As a campaigner, he promised to “change the world”, to “transform this country” and even (in front of a church full of evangelicals) to “create a Kingdom right here on earth”. As president, he keeps adding details to this ambitious wish-list. He vows to create millions of jobs, to cure cancer and to seek a world without nuclear weapons. On July 20th he promised something big (a complete overhaul of the health-care system), something improbable (to make America’s college-graduation rate the highest in the world by 2020) and something no politician could plausibly accomplish (to make maths and science “cool again”).
The Founding Fathers intended a more modest role for the president: to defend the country when attacked, to enforce the law, to uphold the constitution -- and that was about it. But over time, the office has grown. In 1956 Clinton Rossiter, a political scientist, wrote that Americans wanted their president to make the country rich, to take the lead on domestic policy, to respond to floods, tornadoes and rail strikes, to act as the nation’s moral spokesman and to lead the free world. The occupant of the Oval Office had to be “a combination of scoutmaster, Delphic oracle, hero of the silver screen and father of the multitudes,” he said. The public mood has grown more cynical since then; Watergate showed that presidents can be villains. But Americans still want their commander-in-chief to take command. It is pointless for a modern president to plead that some things, such as the business cycle, are beyond his control. So several have sought dubious powers to meet the public’s unreasonable expectations. Sometimes people notice, as when Mr Bush claimed limitless leeway to tap phones and detain suspects. But sometimes they don’t. For example, Mr Bush was blamed for the Katrine debacle, although responding to natural disasters is largely a local responsibility. So he pushed Congress to pass a law allowing the president to use the army to restore order after a future natural disaster, an epidemic, or under “other condition[s]”, a startling expansion of federal power.
Mr Obama promised to roll back Mr Bush’s imperial presidency. But has he? Having slammed his predecessor for issuing “signing statements” dismissing parts of laws he had just signed, he is now doing the same thing. He vowed to close the prison at Guantánamo Bay, but this week put off for another six months any decision as to what to do with the inmates. Meanwhile, he has embraced Mrs Clinton’s curious notion that the president should be “commander-in-chief of our economy”, by propping up banks, firing executives, backing car warranties and so forth. Mr Healy reckons that Mr Obama is “as dedicated to enhancing federal power as any president in 50 years.” Nonsense, say his supporters. Taking over banks and car companies was a temporary measure to tackle a crisis. When the danger recedes, Mr Obama will pull back. The restructuring of General Motors, for example, is comfortably ahead of schedule, but is this a priority for the people? And far from lording it over Congress, the president has if anything abdicated too much responsibility to it.
These are all fair points. But Mr Healy’s warnings are still worth heeding. Mr Obama is clearly not the socialist of Republican demonology, but he is trying to extend federal control over two huge chunks of the economy -- energy and health care -- so fast that lawmakers do not have time to read the bills before voting on them. Perhaps he is hurrying to get the job done before his polls weaken any further. In six months, his approval rating has fallen from 63% to 56% while his disapproval rating has nearly doubled, from 20% to 39%. Independent voters are having second thoughts. And his policies are less popular than he is. Support for his health-care reforms has slipped from 57% to 49% since April. All presidential candidates promise more than they can possibly deliver. This sets them up for failure. But because the Obama cult has stoked expectations among its devotees to unprecedented heights, he is especially likely to disappoint. Mr Healy predicts that he will fail and become “the least popular of the modern era”. It is up to Mr Obama to prove him wrong.
Deze column van Lexington verscheen ook in "The Economist".
Meer columns van deze auteur op www.economist.com.
Mr Obama has inspired more passionate devotion than any modern American politician. People scream and faint at his rallies. Some wear T-shirts proclaiming him “The One” and noting that “Jesus was a community organiser”. An editor at Newsweek described him as “above the country, above the world; he’s sort of God.” He sets foreign hearts fluttering, too. A Pew poll published this week finds that 93% of Germans expect him to do the right thing in world affairs. Only 14% thought that about Mr Bush. Perhaps Mr Obama inwardly cringes at the personality cult that surrounds him. But he has hardly discouraged it. As a campaigner, he promised to “change the world”, to “transform this country” and even (in front of a church full of evangelicals) to “create a Kingdom right here on earth”. As president, he keeps adding details to this ambitious wish-list. He vows to create millions of jobs, to cure cancer and to seek a world without nuclear weapons. On July 20th he promised something big (a complete overhaul of the health-care system), something improbable (to make America’s college-graduation rate the highest in the world by 2020) and something no politician could plausibly accomplish (to make maths and science “cool again”).
The Founding Fathers intended a more modest role for the president: to defend the country when attacked, to enforce the law, to uphold the constitution -- and that was about it. But over time, the office has grown. In 1956 Clinton Rossiter, a political scientist, wrote that Americans wanted their president to make the country rich, to take the lead on domestic policy, to respond to floods, tornadoes and rail strikes, to act as the nation’s moral spokesman and to lead the free world. The occupant of the Oval Office had to be “a combination of scoutmaster, Delphic oracle, hero of the silver screen and father of the multitudes,” he said. The public mood has grown more cynical since then; Watergate showed that presidents can be villains. But Americans still want their commander-in-chief to take command. It is pointless for a modern president to plead that some things, such as the business cycle, are beyond his control. So several have sought dubious powers to meet the public’s unreasonable expectations. Sometimes people notice, as when Mr Bush claimed limitless leeway to tap phones and detain suspects. But sometimes they don’t. For example, Mr Bush was blamed for the Katrine debacle, although responding to natural disasters is largely a local responsibility. So he pushed Congress to pass a law allowing the president to use the army to restore order after a future natural disaster, an epidemic, or under “other condition[s]”, a startling expansion of federal power.
Mr Obama promised to roll back Mr Bush’s imperial presidency. But has he? Having slammed his predecessor for issuing “signing statements” dismissing parts of laws he had just signed, he is now doing the same thing. He vowed to close the prison at Guantánamo Bay, but this week put off for another six months any decision as to what to do with the inmates. Meanwhile, he has embraced Mrs Clinton’s curious notion that the president should be “commander-in-chief of our economy”, by propping up banks, firing executives, backing car warranties and so forth. Mr Healy reckons that Mr Obama is “as dedicated to enhancing federal power as any president in 50 years.” Nonsense, say his supporters. Taking over banks and car companies was a temporary measure to tackle a crisis. When the danger recedes, Mr Obama will pull back. The restructuring of General Motors, for example, is comfortably ahead of schedule, but is this a priority for the people? And far from lording it over Congress, the president has if anything abdicated too much responsibility to it.
These are all fair points. But Mr Healy’s warnings are still worth heeding. Mr Obama is clearly not the socialist of Republican demonology, but he is trying to extend federal control over two huge chunks of the economy -- energy and health care -- so fast that lawmakers do not have time to read the bills before voting on them. Perhaps he is hurrying to get the job done before his polls weaken any further. In six months, his approval rating has fallen from 63% to 56% while his disapproval rating has nearly doubled, from 20% to 39%. Independent voters are having second thoughts. And his policies are less popular than he is. Support for his health-care reforms has slipped from 57% to 49% since April. All presidential candidates promise more than they can possibly deliver. This sets them up for failure. But because the Obama cult has stoked expectations among its devotees to unprecedented heights, he is especially likely to disappoint. Mr Healy predicts that he will fail and become “the least popular of the modern era”. It is up to Mr Obama to prove him wrong.
Deze column van Lexington verscheen ook in "The Economist".
Meer columns van deze auteur op www.economist.com.
Alexis de Toqueville was so enthralled by the nine months he spent in the United States in 1831 that he wrote two fat volumes. He admired the vigour of its democratic institutions and the entrepreneurial spirit of its people, which was transforming a wilderness into a polished civilisation. And he approved of the way that the country’s potential vices were moderated by its commonplace virtues, particularly its civic pride and religious observance. The proud French aristocrat was happy to call himself “half Yankee”. But in the 1840s and 1850s de Tocqueville’s views on America took a darker turn, as a new collection of his writings makes clear. (“Tocqueville on America After 1840: Letters and Other Writings”). Public life was dominated by people who lacked “moderation, sometimes probity, above all education”. America’s sense of “exaggerated pride in its strength” was promoting military adventurism. “Primitivism” stalked the land. “What is certain is that, for some years, you have strangely abused the advantages given to you by God,” he chided.
It is presumptuous to mention oneself alongside the author of the greatest book written about America. But during the 13 years that the author of this column has spent in the United States, he too has found his initial exuberance clouded by darker thoughts. When he arrived in 1996, America was lord of all it surveyed, the world’s only remaining superpower, convinced of its supreme benevolence, and the engine of a productivity miracle that left Europeans in awe. Social pathologies such as violent crime were being brought under control; almost half of households owned shares. The place had an air of what Mark Twain once called “the serene confidence which a Christian feels in four aces”. Today, this serene confidence has long gone. Americans are more pessimistic than the Indians or Chinese, worried that their children will not enjoy the opportunities that they have taken for granted. Xenophobia is on the rise, as is nostalgia for a time of stable families and solid values. California, the state that has always reached the future first, is preparing to pay its bills with IOUs.
America has had an inauspicious start to the 21st century, to put it mildly. The Iraq war revealed the fragility of the “unipolar moment”. America sullied not just its moral authority, thanks to Abu Ghraib and “enhanced interrogation”, but also its reputation for competence, thanks to faulty intelligence about WMD and a botched occupation. The economic crisis has revealed the fragility of its financial system. Great investment banks have crumbled to dust. Financial wizards have been exposed as frauds or fools. A country that once lectured the world on the “Washington consensus” of deregulation and privatisation is busy re-regulating Wall Street and nationalising Detroit. America has got ever deeper into debt, unable to kick the habit of living beyond its means. The cost of entitlements has been rising vertiginously, and will do so even faster as the baby-boomers retire. The federal deficit is likely to average a trillion dollars a year over the next decade.
Sober projections suggest that by 2027, if federal revenues remain at around 18% of GDP—the level people are accustomed to—they will not even cover the cost of government-run health programmes, Social Security and debt interest. Everything else will require more borrowing. Foreigners, who currently hold around half of US Treasury debt, up from 18% in 1990, will not finance Uncle Sam’s self-indulgence for ever. But we should guard against substituting irrational pessimism for irrational exuberance. Yes, America will face competition from developing countries and from an enlarging and deepening European Union. But it brings great resources to the fight. China’s authoritarian regime is brittle. About 40% of India’s people are illiterate, and its pool of trained talent is limited. America will be spared the demographic disasters awaiting Europe and China, thanks to its high birth rate and genius for absorbing newcomers.
De Tocqueville, in his optimistic phase, said that “the greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” America has succeeded brilliantly in repairing the ancestral fault of racism. Thirty-six years after Richard Nixon casually remarked that “there are times when an abortion is necessary…when you have a black and a white,” America elected the child of a black father and a white mother to the presidency. The new administration is trying to correct some of the excesses of the Bush years, much as Ronald Reagan corrected the excesses of the Carter years. Barack Obama wants to tackle health-care costs and rebuild the economy on the rock of solid education and a sound infrastructure rather than the sands of financial speculation.
Whether Mr Obama can deliver on his promises is open to doubt: his inspiring rhetoric is marred by a willingness to compromise with his party’s free-spending establishment in Congress. But there is fortunately a more solid reason for optimism. That is the country’s taste for entrepreneurial capitalism, a taste that arrived with the first settlers and is becoming an ever greater resource, as the global economy is shaken by wave upon wave of disruptive technologies. America still has a genius for incubating entrepreneurs and giving those entrepreneurs the wherewithal to turn bright ideas into global behemoths. America’s biggest company, Wal-Mart, was founded only in 1962; its sexiest, Google, was conceived in a Californian dorm room at about the time that your columnist arrived on these shores. Even as de Tocqueville despaired about the future of his half-adopted country in the 1840s and 1850s, the likes of Carnegie and Rockefeller were about to unleash the greatest productivity miracle the world has seen. That is the America that still promises much. That great Republic.
Dit afscheid van Lexington verscheen ook in "The Economist".
Meer teksten van deze columnist op www.economist.com.
It is presumptuous to mention oneself alongside the author of the greatest book written about America. But during the 13 years that the author of this column has spent in the United States, he too has found his initial exuberance clouded by darker thoughts. When he arrived in 1996, America was lord of all it surveyed, the world’s only remaining superpower, convinced of its supreme benevolence, and the engine of a productivity miracle that left Europeans in awe. Social pathologies such as violent crime were being brought under control; almost half of households owned shares. The place had an air of what Mark Twain once called “the serene confidence which a Christian feels in four aces”. Today, this serene confidence has long gone. Americans are more pessimistic than the Indians or Chinese, worried that their children will not enjoy the opportunities that they have taken for granted. Xenophobia is on the rise, as is nostalgia for a time of stable families and solid values. California, the state that has always reached the future first, is preparing to pay its bills with IOUs.
America has had an inauspicious start to the 21st century, to put it mildly. The Iraq war revealed the fragility of the “unipolar moment”. America sullied not just its moral authority, thanks to Abu Ghraib and “enhanced interrogation”, but also its reputation for competence, thanks to faulty intelligence about WMD and a botched occupation. The economic crisis has revealed the fragility of its financial system. Great investment banks have crumbled to dust. Financial wizards have been exposed as frauds or fools. A country that once lectured the world on the “Washington consensus” of deregulation and privatisation is busy re-regulating Wall Street and nationalising Detroit. America has got ever deeper into debt, unable to kick the habit of living beyond its means. The cost of entitlements has been rising vertiginously, and will do so even faster as the baby-boomers retire. The federal deficit is likely to average a trillion dollars a year over the next decade.
Sober projections suggest that by 2027, if federal revenues remain at around 18% of GDP—the level people are accustomed to—they will not even cover the cost of government-run health programmes, Social Security and debt interest. Everything else will require more borrowing. Foreigners, who currently hold around half of US Treasury debt, up from 18% in 1990, will not finance Uncle Sam’s self-indulgence for ever. But we should guard against substituting irrational pessimism for irrational exuberance. Yes, America will face competition from developing countries and from an enlarging and deepening European Union. But it brings great resources to the fight. China’s authoritarian regime is brittle. About 40% of India’s people are illiterate, and its pool of trained talent is limited. America will be spared the demographic disasters awaiting Europe and China, thanks to its high birth rate and genius for absorbing newcomers.
De Tocqueville, in his optimistic phase, said that “the greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” America has succeeded brilliantly in repairing the ancestral fault of racism. Thirty-six years after Richard Nixon casually remarked that “there are times when an abortion is necessary…when you have a black and a white,” America elected the child of a black father and a white mother to the presidency. The new administration is trying to correct some of the excesses of the Bush years, much as Ronald Reagan corrected the excesses of the Carter years. Barack Obama wants to tackle health-care costs and rebuild the economy on the rock of solid education and a sound infrastructure rather than the sands of financial speculation.
Whether Mr Obama can deliver on his promises is open to doubt: his inspiring rhetoric is marred by a willingness to compromise with his party’s free-spending establishment in Congress. But there is fortunately a more solid reason for optimism. That is the country’s taste for entrepreneurial capitalism, a taste that arrived with the first settlers and is becoming an ever greater resource, as the global economy is shaken by wave upon wave of disruptive technologies. America still has a genius for incubating entrepreneurs and giving those entrepreneurs the wherewithal to turn bright ideas into global behemoths. America’s biggest company, Wal-Mart, was founded only in 1962; its sexiest, Google, was conceived in a Californian dorm room at about the time that your columnist arrived on these shores. Even as de Tocqueville despaired about the future of his half-adopted country in the 1840s and 1850s, the likes of Carnegie and Rockefeller were about to unleash the greatest productivity miracle the world has seen. That is the America that still promises much. That great Republic.
Dit afscheid van Lexington verscheen ook in "The Economist".
Meer teksten van deze columnist op www.economist.com.
We are fortunate to be living in these times, for we are seeing the unfolding of events long explained and predicted by the Austrian tradition. Maybe that sounds implausible. What is fortunate about our times? The economy is tanking, stocks have been pummeled, unemployment is rising, and Washington is pursuing the worst combination of economic policies since Hoover and FDR. Nor does the new guy in charge seem to have a clue about the limits of what government can do. Consider what it means to live through our times in the light of economic understanding. Even in the face of calamity, there is no mystery and hence fear is reduced. You look at department stores going belly-up, and you know why. You see parking lots empty, and you know the reason. You have friends losing their jobs, and there is clarity concerning the cause. You see depositors in failing banks lose their money, and you are not surprised. Prices behave in ways that shock and surprise everyone else, but you know what's what.
In many ways, it is like watching the movement of stars and planets with the scientific knowledge provided by astronomy, or observing the effects of a plague with medical knowledge. Without the understanding, the events look mysterious, like a curse from the gods, and their patterns appear random. With the knowledge, with the understanding, we can make sense of the events. Patterns of cause and effect emerge. You see events before they happen, like turning the page of a script before the movie catches up to you. This gives you a sense of intellectual coherence and inner peace – even in the midst of calamity. If you read what Mises wrote during the Great Depression and World War Two, you can see firmness of conviction and steadfast calm, even as the whole world was going nuts. Intellectual clarity is the key to seeing the right things and doing the right things. It is a matter of knowing the shape of things even before the things take shape.
Knowledge provides a means of curing the ill. It provides a way out, an answer that gives hope. This is a major reason why people with an Austrian understanding in the midst of financial meltdown keep their wits about them. Yes, it is more than frustrating to see people in Washington spending trillions in a futile effort to repeal economic law. It is sheer madness that they are creating vast quantities of new dollars by means of the Fed's power, even with evidence from the whole of human history that new money only waters down the value of the old, and does nothing to provide a long-term boost to the economy, and much to further distort economic structures. It's like watching as barbers bleed patients in the name of curing them, or bringing in the witch doctors to cast out demons from people with the flu. But even if our knowledge of events cannot stop what these people are doing for now, it provides us with a sense of solace in the face of disaster. We can keep our heads, even as others run around as if theirs had been cut off.
In order to understand events, there is no substitute for doing what the media and most economists refuse to do, which is to look at the big picture and the long view, over decades. It is a matter of applying the rule that Henry Hazlitt brings home so clearly in “Economics in One Lesson”: economics consists in looking at the effects of policies not on one group but on all groups, not only in the short run but also in the long run. From the long-run point of view, we observe an intriguing illustration of the Austrian warning against ever attempting to bail out an economy that is pushing toward recession. In 2001, the economy wanted to go into recession but the government wouldn't let it happen. It was the first stimulus package in the new millennium, consisting of vast new funding and vast money creation, with the Fed driving down rates and keeping them rock bottom.
If you look at the short run, it seems that it worked. But looking at the long run, we can see that the attempt to forestall recession only ended up creating a bigger disaster down the line. Something very similar happened in the short recession of 1991. Clinton came to power and shortened the recession, which only created another bubble in financials that broke and so on, until we are where we are today. Arguably the last time that a recession was permitted to run its course occurred following the crack-up boom in the end of the Carter years, as a result of Nixon’s inflation. Reagan came to power, with Carter’s choice of Volcker at the Fed. Reagan ignored the crying from Congress and the press. He let interest rates rise; the federal funds rate was 20% and prime was at 21.5% in 1982. Unemployment reached 11%. Inflation fell from 13.5% in 1980 to 3.2% in 1983.
If we include the S&L debacle in this, it was a nearly total blowout, and if Reagan had left it at that, it would have been a model for how to deal with recession. There is pain and suffering. But wait it out and you have a fertile ground on which to build a solid prosperity. Sadly, you also produce a solid financial footing that invites the government to abuse the system, as Reagan did with record spending and deficits. If we want to look back even further to find better examples of how to handle recession, we can look at 1920 and 1921. The less the government did, the better the results long term. Murray Rothbard's own dissertation on the Panic of 1819 is an interesting case. He took a look at a pure case in which nothing was done to fix a problem. The problem went away. What was notable about this Panic is precisely that it never made the history books. It didn't because the government didn't make it worse.
In the months ahead, we are going to witness more of these ridiculously futile attempts to patch up a failing economy, and we are going to pay a big price this time. It won't be like 2001 or 1992. We will be lucky if it ends up like 1978–1982. More likely, it is going to be worse – and how much worse depends on just how stupid the Obama administration is going to be. It is hard to imagine that these people will be worse than Bush, but it could happen. We all must deal with the possible death of the dollar. Many plans have been proposed through the years that would restore the gold dollar, and many have merit. They all provide a means to go back to gold. While they are not lacking in technical detail, they are lacking in something that they can't provide: the political will to do the right thing. They are all premised on the idea that our leaders might be interested in doing the right thing. But the same people that would be in charge of implementing the reform are the ones who got us into this mess.
It is hard enough in the course of regular life to get anyone to admit an error and reverse course. In politics, it virtually never happens. Even in the case of egregiously immoral effects, the political class persists in error, mainly because it is more interested in saving itself than saving society. Guido Hülsmann points out in his new book, “The Ethics of Money Production”, that "governments inflate the money supply because they gain revenue from inflation." This is hardly a new insight. Hülsmann quotes the 14th-century Bishop Nicholas Oresme as follows: "I am of the opinion that the main and final cause of why the prince pretends the power of altering the coinage is that profit or gain which he can get from it; it would otherwise be vain to make so many and so great changes…. Besides, the amount of the prince's profit is necessarily that of the community's loss."
The techniques are different today but the incentive and moral result are the same. Hülsmann points to another change: today's princes have "received absolution from the scientific authorities of our day." Princes used to work in secret to do these things, and be disgraced when caught. Now they announce the policy as responsible statecraft that is consistent with the teaching of modern economics – and the economists stand ready to nod their heads in agreement. In the face of this, it is time to deal with political reality that no one in Washington is even slightly interested in: an orderly plan to restore sound money. And yet the problems of fiat money and financial collapse cannot go unaddressed. What's more, the institutions of fiat money are failing, and this fact will be undeniably obvious to everyone in a matter of years.
We will look back on the end of the Bush administration as an economic disaster, a capstone of many years of horrible foreign policy moved to domestic policy. They will be disgraced, as will the new administration that pursued all the wrong policy measures as a response. The new Messiah will face the same reality that the old one did. No amount of bluster, political will, determined speeches, and money flowing from the printing press can get around the problem of economic reality. In an essay written at the end of his career, and recently brought back to life by the Mises Institute, F.A. Hayek discusses the only serious means of reform that is open to us. We must completely abolish the central bank. Money itself must be wholly untied from the state. It must be restored as a private good, privately produced for private markets. Government must have no role at all in monetary affairs. Money should be produced by private enterprise alone. Banks must exist only as free enterprise institutions, with no privileges from the state.
What strikes me is how this accords precisely with what Hülsmann writes. His book on the “Ethics of Money Production” ends with a call for an end to all intervention in monetary affairs. Coinage must be private. Banking must receive no privileges. There should be no legal tender laws, no guarantees, no restrictions on currency use – a fully laissez-faire system. What is further striking about the Hayek, Hülsmann and Paul idea here is that they offer no plan for restoring a gold dollar. It's not that they would disagree with the idea, but they have fully confronted the reality that the idea of converting the existing currency from fiat money to sound money is essentially a 19th-century ideal that presupposes an enlightened class of political managers. This condition is not met today.
But what is the means? It is the same as we propose in every other area of national life: get the government out. Let the people be free to manage their own affairs. Stop interfering with commercial acts between consenting adults. Stop using violence to interfere with economic affairs. Let the people pursue mutually beneficial exchange based on their own self-assessment of the advantages. Let property owners accept the risk and reward for their own decisions. It is the same with monetary policy and banking policy too. Let failing banks die. Let profitable banks live. Let the people choose to use any form of money. Let the people choose any means of payment. Let entrepreneurs create any form of financial instrument. Law applies only the way it applies to all other human affairs: punishing force and fraud. Otherwise, the law should have nothing to do with it.
What would be the results? We cannot know for sure. But history can be a guide in our speculations. Throughout all time and in all places, precious metals have emerged as the foundation of the monetary system. I think we can have every expectation that the same would be true today. Evidence comes from how people turn to gold in difficult times as a store of value, a safehouse from the machinations of government. Gold, in my view, is destined to be the foundation of a new free-market monetary system. To this extent, and with this expectation, all believers in liberty can consider themselves advocates of the gold standard. But we must also be careful with this phrase. It is identified with a particular set of policies associated with 19th-century practice. It was a policy choice among many that some favored and some opposed.
A free-market monetary system of the future will not be a policy option in this sense. It is not something we want the government to adopt as its own. In fact, we don't want the government to adopt any particular policy but rather abandon the policy option altogether. There should be no policy at all in the sense that this word is routinely used today. In this way, a path forward in money and banking is no different from the path forward in agriculture, labor, health care, education or any other sector. The right policy is no policy. The job of the government is to stop interfering altogether. Now, I'm aware that this is a big intellectual leap these days. But you only need to consider the myriad ways in which government fails at everything it attempts, whereas the market succeeds. There is nothing about the structure of the universe that confers upon money and banking any special status that requires the government to regulate it, to serve as a lender of last resort, the marker of money, the guarantor of stability or anything else. A free market in money would work the same as a free market in everything else.
And consider: We are not asking Congress to intervene with a plan. No one is demanding that the Fed adopt this policy as versus that policy. All we are asking is that it not intervene in the attempts by the market to fix the problems that have been created by the central bank and the executive department. Just imagine what would happen if legal tender laws were repealed and the government stopped intervention in the market for money. Virtually overnight, we would see the appearance of hundreds if not thousands of new payment systems and alternative monies online. Merchants would be free to accept any means of payment. There would be intense competition among them. Some would be foreign currencies like the Euro. Some would be new currencies based on existing commodities such as gold and silver. I'm certain that we would see a period of wild experimentation take place before the market settled back down again into a standard system that was famed for its reliability and stability and honesty.
Would we be able to endure the process of discovery? Certainly. We do this every day with our shopping online, or searches for good providers of services and products in the physical world, and our habits on how to invest our money. The market is a process of trial and error, one that never stops innovating and changing. We see everyday on the World Wide Web how this process of creation and change create the right balance between chaos and order, experimentation and standardization. This would happen in the field of money too. In fact, it might have happened already had the feds not intervened to stop the rise of alternative payment systems online. Wal-Mart might have already entered the banking sector. We might have a wide variety of currencies available to us. Google might already have created its own currency based on any number of goods. We might see a more elaborate use of barter in the online world taking shape, and that barter slowly converting itself into currency. This might be based on Google ad points, on PayPal dollars, or some other currency.
Had a free market been permitted to develop over the last ten years, we might have an option today. As it is, we are being forced to stay with a failing dollar system. What we've been hearing from Washington is that the economy and this country will be patched up by sheer force of will. If we have hope, and work together, anything is possible. There is only one thing standing in the way of this wish. It is called economics. Economic reality is more than a brick wall. It is like the sea or the world's tallest mountain, or like the force of gravity itself. Economic forces pay no attention to the wishes of charismatic leaders and their throngs of adoring followers. However, there is a kernel of truth in the idea that the force of will can make a difference. Transfer this hope and will outside the institutions of government and into the free market, let experimentation and innovation take place under conditions of freedom, and we will begin to see the emergence of an answer. We need the government merely to let the market be free of political violence, and we will begin to see our way out of this mess.
The government today is marshalling every resource and every means at its disposal to prop up a failing system of the past. Meanwhile, we live in completely new times. These new times are characterized by an international division of labor, global capital flows, digital information delivery, and the slow but systematic destruction of the establishment in media, banking, and finances. What is emerging to replace them is something that no government on the planet can stop. Markets will not be crushed and they resist control as never before. These new times are not the 1930s when a few eggheads in Washington could set most prices and wages and gather the captains of industry to cobble together business cartels. The economic and financial world moves at the speed of light and is so diffuse that no political authority can act quickly enough to control it. The establishment is going down. This is another reason that all believers in freedom have reason to rejoice today.
In twelve to eighteen months from now, it will be obvious that there is nothing the new administration can do to patch things up. Obama will be humbled by the market just as Bush and Clinton were before him, but this time the humbling will overwhelm any attempts to patch things up or put a spin on the much-needed upheaval. Yes, there is suffering and there will be more to come. But as a student of the Austrian school and a student of the history of liberty, you have the confidence and clarity to see that freedom alone provides the answers. It is the time for calm in the face of a storm that few fully understand. Let us, as advocates of freedom, be steadfast, rational, clear, and focused. Be of good cheer and never stop pointing to the truth about freedom. The answer is not the left nor the right nor the state. The way out of this mess is freedom. It is time we defer to it, and to the revolution in the status quo that freedom implies, and give up pretending as if any politician can finally stop it.
Lew Rockwell gaf deze speech tijdens de "Mises Circle" in Houston. Nadien verscheen een uitgeschreven versie van deze speech ook in het magazine "The Free Market" en op tal van weblogs.
Meer teksten van hem op www.lewrockwell.com.
In many ways, it is like watching the movement of stars and planets with the scientific knowledge provided by astronomy, or observing the effects of a plague with medical knowledge. Without the understanding, the events look mysterious, like a curse from the gods, and their patterns appear random. With the knowledge, with the understanding, we can make sense of the events. Patterns of cause and effect emerge. You see events before they happen, like turning the page of a script before the movie catches up to you. This gives you a sense of intellectual coherence and inner peace – even in the midst of calamity. If you read what Mises wrote during the Great Depression and World War Two, you can see firmness of conviction and steadfast calm, even as the whole world was going nuts. Intellectual clarity is the key to seeing the right things and doing the right things. It is a matter of knowing the shape of things even before the things take shape.
Knowledge provides a means of curing the ill. It provides a way out, an answer that gives hope. This is a major reason why people with an Austrian understanding in the midst of financial meltdown keep their wits about them. Yes, it is more than frustrating to see people in Washington spending trillions in a futile effort to repeal economic law. It is sheer madness that they are creating vast quantities of new dollars by means of the Fed's power, even with evidence from the whole of human history that new money only waters down the value of the old, and does nothing to provide a long-term boost to the economy, and much to further distort economic structures. It's like watching as barbers bleed patients in the name of curing them, or bringing in the witch doctors to cast out demons from people with the flu. But even if our knowledge of events cannot stop what these people are doing for now, it provides us with a sense of solace in the face of disaster. We can keep our heads, even as others run around as if theirs had been cut off.
In order to understand events, there is no substitute for doing what the media and most economists refuse to do, which is to look at the big picture and the long view, over decades. It is a matter of applying the rule that Henry Hazlitt brings home so clearly in “Economics in One Lesson”: economics consists in looking at the effects of policies not on one group but on all groups, not only in the short run but also in the long run. From the long-run point of view, we observe an intriguing illustration of the Austrian warning against ever attempting to bail out an economy that is pushing toward recession. In 2001, the economy wanted to go into recession but the government wouldn't let it happen. It was the first stimulus package in the new millennium, consisting of vast new funding and vast money creation, with the Fed driving down rates and keeping them rock bottom.
If you look at the short run, it seems that it worked. But looking at the long run, we can see that the attempt to forestall recession only ended up creating a bigger disaster down the line. Something very similar happened in the short recession of 1991. Clinton came to power and shortened the recession, which only created another bubble in financials that broke and so on, until we are where we are today. Arguably the last time that a recession was permitted to run its course occurred following the crack-up boom in the end of the Carter years, as a result of Nixon’s inflation. Reagan came to power, with Carter’s choice of Volcker at the Fed. Reagan ignored the crying from Congress and the press. He let interest rates rise; the federal funds rate was 20% and prime was at 21.5% in 1982. Unemployment reached 11%. Inflation fell from 13.5% in 1980 to 3.2% in 1983.
If we include the S&L debacle in this, it was a nearly total blowout, and if Reagan had left it at that, it would have been a model for how to deal with recession. There is pain and suffering. But wait it out and you have a fertile ground on which to build a solid prosperity. Sadly, you also produce a solid financial footing that invites the government to abuse the system, as Reagan did with record spending and deficits. If we want to look back even further to find better examples of how to handle recession, we can look at 1920 and 1921. The less the government did, the better the results long term. Murray Rothbard's own dissertation on the Panic of 1819 is an interesting case. He took a look at a pure case in which nothing was done to fix a problem. The problem went away. What was notable about this Panic is precisely that it never made the history books. It didn't because the government didn't make it worse.
In the months ahead, we are going to witness more of these ridiculously futile attempts to patch up a failing economy, and we are going to pay a big price this time. It won't be like 2001 or 1992. We will be lucky if it ends up like 1978–1982. More likely, it is going to be worse – and how much worse depends on just how stupid the Obama administration is going to be. It is hard to imagine that these people will be worse than Bush, but it could happen. We all must deal with the possible death of the dollar. Many plans have been proposed through the years that would restore the gold dollar, and many have merit. They all provide a means to go back to gold. While they are not lacking in technical detail, they are lacking in something that they can't provide: the political will to do the right thing. They are all premised on the idea that our leaders might be interested in doing the right thing. But the same people that would be in charge of implementing the reform are the ones who got us into this mess.
It is hard enough in the course of regular life to get anyone to admit an error and reverse course. In politics, it virtually never happens. Even in the case of egregiously immoral effects, the political class persists in error, mainly because it is more interested in saving itself than saving society. Guido Hülsmann points out in his new book, “The Ethics of Money Production”, that "governments inflate the money supply because they gain revenue from inflation." This is hardly a new insight. Hülsmann quotes the 14th-century Bishop Nicholas Oresme as follows: "I am of the opinion that the main and final cause of why the prince pretends the power of altering the coinage is that profit or gain which he can get from it; it would otherwise be vain to make so many and so great changes…. Besides, the amount of the prince's profit is necessarily that of the community's loss."
The techniques are different today but the incentive and moral result are the same. Hülsmann points to another change: today's princes have "received absolution from the scientific authorities of our day." Princes used to work in secret to do these things, and be disgraced when caught. Now they announce the policy as responsible statecraft that is consistent with the teaching of modern economics – and the economists stand ready to nod their heads in agreement. In the face of this, it is time to deal with political reality that no one in Washington is even slightly interested in: an orderly plan to restore sound money. And yet the problems of fiat money and financial collapse cannot go unaddressed. What's more, the institutions of fiat money are failing, and this fact will be undeniably obvious to everyone in a matter of years.
We will look back on the end of the Bush administration as an economic disaster, a capstone of many years of horrible foreign policy moved to domestic policy. They will be disgraced, as will the new administration that pursued all the wrong policy measures as a response. The new Messiah will face the same reality that the old one did. No amount of bluster, political will, determined speeches, and money flowing from the printing press can get around the problem of economic reality. In an essay written at the end of his career, and recently brought back to life by the Mises Institute, F.A. Hayek discusses the only serious means of reform that is open to us. We must completely abolish the central bank. Money itself must be wholly untied from the state. It must be restored as a private good, privately produced for private markets. Government must have no role at all in monetary affairs. Money should be produced by private enterprise alone. Banks must exist only as free enterprise institutions, with no privileges from the state.
What strikes me is how this accords precisely with what Hülsmann writes. His book on the “Ethics of Money Production” ends with a call for an end to all intervention in monetary affairs. Coinage must be private. Banking must receive no privileges. There should be no legal tender laws, no guarantees, no restrictions on currency use – a fully laissez-faire system. What is further striking about the Hayek, Hülsmann and Paul idea here is that they offer no plan for restoring a gold dollar. It's not that they would disagree with the idea, but they have fully confronted the reality that the idea of converting the existing currency from fiat money to sound money is essentially a 19th-century ideal that presupposes an enlightened class of political managers. This condition is not met today.
But what is the means? It is the same as we propose in every other area of national life: get the government out. Let the people be free to manage their own affairs. Stop interfering with commercial acts between consenting adults. Stop using violence to interfere with economic affairs. Let the people pursue mutually beneficial exchange based on their own self-assessment of the advantages. Let property owners accept the risk and reward for their own decisions. It is the same with monetary policy and banking policy too. Let failing banks die. Let profitable banks live. Let the people choose to use any form of money. Let the people choose any means of payment. Let entrepreneurs create any form of financial instrument. Law applies only the way it applies to all other human affairs: punishing force and fraud. Otherwise, the law should have nothing to do with it.
What would be the results? We cannot know for sure. But history can be a guide in our speculations. Throughout all time and in all places, precious metals have emerged as the foundation of the monetary system. I think we can have every expectation that the same would be true today. Evidence comes from how people turn to gold in difficult times as a store of value, a safehouse from the machinations of government. Gold, in my view, is destined to be the foundation of a new free-market monetary system. To this extent, and with this expectation, all believers in liberty can consider themselves advocates of the gold standard. But we must also be careful with this phrase. It is identified with a particular set of policies associated with 19th-century practice. It was a policy choice among many that some favored and some opposed.
A free-market monetary system of the future will not be a policy option in this sense. It is not something we want the government to adopt as its own. In fact, we don't want the government to adopt any particular policy but rather abandon the policy option altogether. There should be no policy at all in the sense that this word is routinely used today. In this way, a path forward in money and banking is no different from the path forward in agriculture, labor, health care, education or any other sector. The right policy is no policy. The job of the government is to stop interfering altogether. Now, I'm aware that this is a big intellectual leap these days. But you only need to consider the myriad ways in which government fails at everything it attempts, whereas the market succeeds. There is nothing about the structure of the universe that confers upon money and banking any special status that requires the government to regulate it, to serve as a lender of last resort, the marker of money, the guarantor of stability or anything else. A free market in money would work the same as a free market in everything else.
And consider: We are not asking Congress to intervene with a plan. No one is demanding that the Fed adopt this policy as versus that policy. All we are asking is that it not intervene in the attempts by the market to fix the problems that have been created by the central bank and the executive department. Just imagine what would happen if legal tender laws were repealed and the government stopped intervention in the market for money. Virtually overnight, we would see the appearance of hundreds if not thousands of new payment systems and alternative monies online. Merchants would be free to accept any means of payment. There would be intense competition among them. Some would be foreign currencies like the Euro. Some would be new currencies based on existing commodities such as gold and silver. I'm certain that we would see a period of wild experimentation take place before the market settled back down again into a standard system that was famed for its reliability and stability and honesty.
Would we be able to endure the process of discovery? Certainly. We do this every day with our shopping online, or searches for good providers of services and products in the physical world, and our habits on how to invest our money. The market is a process of trial and error, one that never stops innovating and changing. We see everyday on the World Wide Web how this process of creation and change create the right balance between chaos and order, experimentation and standardization. This would happen in the field of money too. In fact, it might have happened already had the feds not intervened to stop the rise of alternative payment systems online. Wal-Mart might have already entered the banking sector. We might have a wide variety of currencies available to us. Google might already have created its own currency based on any number of goods. We might see a more elaborate use of barter in the online world taking shape, and that barter slowly converting itself into currency. This might be based on Google ad points, on PayPal dollars, or some other currency.
Had a free market been permitted to develop over the last ten years, we might have an option today. As it is, we are being forced to stay with a failing dollar system. What we've been hearing from Washington is that the economy and this country will be patched up by sheer force of will. If we have hope, and work together, anything is possible. There is only one thing standing in the way of this wish. It is called economics. Economic reality is more than a brick wall. It is like the sea or the world's tallest mountain, or like the force of gravity itself. Economic forces pay no attention to the wishes of charismatic leaders and their throngs of adoring followers. However, there is a kernel of truth in the idea that the force of will can make a difference. Transfer this hope and will outside the institutions of government and into the free market, let experimentation and innovation take place under conditions of freedom, and we will begin to see the emergence of an answer. We need the government merely to let the market be free of political violence, and we will begin to see our way out of this mess.
The government today is marshalling every resource and every means at its disposal to prop up a failing system of the past. Meanwhile, we live in completely new times. These new times are characterized by an international division of labor, global capital flows, digital information delivery, and the slow but systematic destruction of the establishment in media, banking, and finances. What is emerging to replace them is something that no government on the planet can stop. Markets will not be crushed and they resist control as never before. These new times are not the 1930s when a few eggheads in Washington could set most prices and wages and gather the captains of industry to cobble together business cartels. The economic and financial world moves at the speed of light and is so diffuse that no political authority can act quickly enough to control it. The establishment is going down. This is another reason that all believers in freedom have reason to rejoice today.
In twelve to eighteen months from now, it will be obvious that there is nothing the new administration can do to patch things up. Obama will be humbled by the market just as Bush and Clinton were before him, but this time the humbling will overwhelm any attempts to patch things up or put a spin on the much-needed upheaval. Yes, there is suffering and there will be more to come. But as a student of the Austrian school and a student of the history of liberty, you have the confidence and clarity to see that freedom alone provides the answers. It is the time for calm in the face of a storm that few fully understand. Let us, as advocates of freedom, be steadfast, rational, clear, and focused. Be of good cheer and never stop pointing to the truth about freedom. The answer is not the left nor the right nor the state. The way out of this mess is freedom. It is time we defer to it, and to the revolution in the status quo that freedom implies, and give up pretending as if any politician can finally stop it.
Lew Rockwell gaf deze speech tijdens de "Mises Circle" in Houston. Nadien verscheen een uitgeschreven versie van deze speech ook in het magazine "The Free Market" en op tal van weblogs.
Meer teksten van hem op www.lewrockwell.com.
Suppose that you want to destroy a city. Should you bomb it, or would it be sufficient just to impose rent control? It's a bracing question at first, but some economists have argued that the two are roughly equivalent. When the price of rent is held below the market-clearing level, shortages emerge and the housing stock rapidly deteriorates. Those who advocate price controls often do so on the basis of their views on distributive justice. It isn't right, they might argue, that someone who has lived somewhere his entire life should be priced out of his neighborhood; nor is it right for fat-cat landlords to enjoy high rents simply because a lot of people want to live in New York or San Francisco. The typical rent control proposal is based on the assumption that the same amount of economic activity will take place but with a different distributional outcome. That is, the same number of apartments will be provided, and they will be provided to the same people and in the same quality. The only difference, according to rent control advocates, is that the hapless renter won't have to line the landlord's pockets. Any change in the housing stock is then viewed as a moral failing on the part of the landlord.
According to rent control advocates, landlords aren't working for the high rents they enjoy. They are just sitting around, watching the prices increase. But this view ignores the information-transmitting function of prices. A building can be used for many different things. It can be used for rental housing. It can be used for condos. It can be used for office space. It can be torn down, and the land can be used to grow crops. Prices tell us the most valuable use of the building and land. Under rent control laws, the signals are distorted.
The reality of rent control is far different from what its advocates envision. A September 13, 2008, article by the Mercatus Center's Eileen Norcross in the Wall Street Journal discusses rent control in New York City, and she suggests that this is a lesson that is worth repeating. Norcross tells us about the digs occupied by New York congressman Charles Rangel. Mr. Rangel "occupies four rent-stabilized apartments in a posh New York City building." He lives in three and uses a fourth as an office. Because of rent stabilization, we cannot tell whether those apartments would be better used to house several families instead. Mr. Rangel is able to use valuable resources, at below-market prices, to the detriment of would-be NYC residents.
Norcross reports that there are 43,317 apartments in New York City controlled by 1947 rent control laws and 1,043,677 "rent-stabilized" units; in total, she tells us that this is about 70 percent of New York City's housing stock. Originally, rent control was a temporary program aimed at helping people find places to live in New York City without paying exorbitant rents during World War II. Now, over sixty years after the war has ended, rent control still dominates the market.
At the height of the debate over whether capitalism or socialism was the most productive way to run a society, Ludwig von Mises argued that government intervention begets further government intervention. When rents are held below their market-clearing value, people take rental units off the market or convert existing units into condominiums, luxury housing, or offices. Something like "key money" might also emerge, whereby the rent is held artificially low, but the landlord demands a massive payment to rent the apartment's key. Other enterprising landlords have attempted to get around the restriction by providing "furnished" apartments, for which the tenant pays the controlled rent but must also pay a marked-up price to rent the apartment's furniture. Government officials and landlords find themselves in an endless cat-and-mouse game of regulate-and-evade that has created its own legal infrastructure in the form of the New York City Housing Court. The court has fifty judges and handles over three hundred thousand cases annually.
Rent control also destroys landlords' incentives to maintain the housing stock. With rent control in place, people are lined up for housing, and therefore, the landlord can discriminate on the basis of who will take the most meager accommodations. Eliminating a landlord's ability to enjoy the return from quality housing means eliminating the landlord's incentive to invest in upkeep.
So which is worse, rent control or bombs? On Mises.org, economist Joseph Salerno has a video lecture on prices, in which he offers a compelling visual exercise. He shows his audience pictures of destroyed urban areas and asks whether these are areas that have been subject to rent control or whether these are areas that have been bombed. It isn't easy to tell, but the lack of difference suggests a tragic but predictable irony. When a city is bombed, it is destroyed by people with evil intentions. When a city is subjected to rent control, it is destroyed by people with good intentions.
Dit artikel van Art Carden verscheen oorspronkelijk bij het Ludwig von Mises Institute en het Independent Institute, en werd ook op "Mises Daily", "The Beacon" en "Division of Labor" overgenomen.
Meer teksten van deze jonge econoom op www.thebeacon.com.
According to rent control advocates, landlords aren't working for the high rents they enjoy. They are just sitting around, watching the prices increase. But this view ignores the information-transmitting function of prices. A building can be used for many different things. It can be used for rental housing. It can be used for condos. It can be used for office space. It can be torn down, and the land can be used to grow crops. Prices tell us the most valuable use of the building and land. Under rent control laws, the signals are distorted.
The reality of rent control is far different from what its advocates envision. A September 13, 2008, article by the Mercatus Center's Eileen Norcross in the Wall Street Journal discusses rent control in New York City, and she suggests that this is a lesson that is worth repeating. Norcross tells us about the digs occupied by New York congressman Charles Rangel. Mr. Rangel "occupies four rent-stabilized apartments in a posh New York City building." He lives in three and uses a fourth as an office. Because of rent stabilization, we cannot tell whether those apartments would be better used to house several families instead. Mr. Rangel is able to use valuable resources, at below-market prices, to the detriment of would-be NYC residents.
Norcross reports that there are 43,317 apartments in New York City controlled by 1947 rent control laws and 1,043,677 "rent-stabilized" units; in total, she tells us that this is about 70 percent of New York City's housing stock. Originally, rent control was a temporary program aimed at helping people find places to live in New York City without paying exorbitant rents during World War II. Now, over sixty years after the war has ended, rent control still dominates the market.
At the height of the debate over whether capitalism or socialism was the most productive way to run a society, Ludwig von Mises argued that government intervention begets further government intervention. When rents are held below their market-clearing value, people take rental units off the market or convert existing units into condominiums, luxury housing, or offices. Something like "key money" might also emerge, whereby the rent is held artificially low, but the landlord demands a massive payment to rent the apartment's key. Other enterprising landlords have attempted to get around the restriction by providing "furnished" apartments, for which the tenant pays the controlled rent but must also pay a marked-up price to rent the apartment's furniture. Government officials and landlords find themselves in an endless cat-and-mouse game of regulate-and-evade that has created its own legal infrastructure in the form of the New York City Housing Court. The court has fifty judges and handles over three hundred thousand cases annually.
Rent control also destroys landlords' incentives to maintain the housing stock. With rent control in place, people are lined up for housing, and therefore, the landlord can discriminate on the basis of who will take the most meager accommodations. Eliminating a landlord's ability to enjoy the return from quality housing means eliminating the landlord's incentive to invest in upkeep.
So which is worse, rent control or bombs? On Mises.org, economist Joseph Salerno has a video lecture on prices, in which he offers a compelling visual exercise. He shows his audience pictures of destroyed urban areas and asks whether these are areas that have been subject to rent control or whether these are areas that have been bombed. It isn't easy to tell, but the lack of difference suggests a tragic but predictable irony. When a city is bombed, it is destroyed by people with evil intentions. When a city is subjected to rent control, it is destroyed by people with good intentions.
Dit artikel van Art Carden verscheen oorspronkelijk bij het Ludwig von Mises Institute en het Independent Institute, en werd ook op "Mises Daily", "The Beacon" en "Division of Labor" overgenomen.
Meer teksten van deze jonge econoom op www.thebeacon.com.
Lezers van deze weblog zullen al wel weten dat ik in de ogen van anti-wapenadepten een "gun nut" ben. Zelf kies ik voor “wapenliefhebber”, “vrijheidskoesteraar”, “burgerrechtenverdediger”, of iets anders in die trend, maar daar gaat het hier nu niet om. Ik ben net terug van drie weken Verenigde Staten en heb daar andermaal tal van interessante en intrigerende personen mogen ontmoeten. Ik heb daar o.a. ontdekt dat zelfs “gun ranges” in de Bijbelgordel op zondag gesloten zijn, dat het schieten met pistolen wettelijk doorgaans verboden is, maar het schieten met geweren niet, dat men voor amper 90 EUR in bijna 40 verschillende staten met militaire wapens mag schieten, en dat er in Amerika, ondanks het alom gekende Tweede Amendement, toch nog tal van anti-wapenwetten bestaan.
De eerste persoon wiens verhaal ik u hier wil vertellen, is Jim Chappelow. Deze jonge dertiger groeide op in Colorado, studeerde later economie in Alabama en werkt momenteel als economisch analist voor het “Institute for Trend Research” in New Hampshire. Hij is tevens redacteur van het vakmagazine “EcoTrends”. Chappelow is een persoon van niet al te goede komaf die zichzelf via sportbeurzen en militaire programma's een opleiding heeft kunnen geven. Chappelow is niet enkel een libertariër in hart en nieren, hij dient ook in de “National Guard” van Colorado, die in ruil voor het deels betalen van zijn studies zeven jaar lang over de diensten van Chappelow vrij mag beschikken. Wat aanvankelijk een “walk in the park” had moeten zijn, de Nationale Garde maakt immers reclame voor haar reservistenprogramma met de slogan “One Weekend A Month, Two Weeks A Year”, verwerd al gauw tot een helletocht.
In 2007 en 2008 diende Chappelow in totaal bijna negen maanden in Irak. Niet enkel werden de hem voorgehouden 12 weekends training en twee weken dienst niet gehonoreerd, ook de taak van de Nationale Garde, het dienen en beschermen van de thuisstaat, werd door de Bush-administratie en haar oorlogspolitiek in het Midden-Oosten geüsurpeerd. Chappelow was Army-reservist van opleiding en werd ook in die hoedanigheid in “combat units” in Irak ingezet. Als libertariër verzette hij zich tegen deze oorlog, als patriot vocht hij hem. Fysisch gewond en psychisch aangedaan kwam Chappelow tegen Kerstmis 2008 terug naar huis om binnen de maand van zijn vrouw te scheiden. Chappelow vertrekt in oktober opnieuw naar het front. Ditmaal Afghanistan. Colorado dienen, heet dat nog steeds.
Maar het schrijnende levensverhaal van dit stuk “white trailer park trash” dat zich puur op basis van zijn eigen mérites een beter leven wist te bezorgen, is niet de kern van wat ik hier wil zeggen. Het plaatst alles wel beter in perspectief. In de lente van 2009 wordt Jim Chappelow in Colorado door de politie tegengehouden. Zij ontdekken in zijn auto een vuurwapen en munitie, wat in strijd is met de wetten van Colorado. Het vuurwapen was vergund in Alabama, waar munitie eveneens vrij te koop is. Chappelow werd dagenlang in de cel opgesloten omdat hij zijn borg van 5,000 USD niet wou of kon betalen. Nadien werd hij veroordeeld voor illegaal wapenbezit en tot één jaar voorwaardelijke celstraf veroordeeld. De voorwaarde was de volgende: hij mocht buiten dienst (sic!) geen wapen meer dragen.
Samengevat. De persoon die ondanks eerdere overeenkomsten in Irak en Afghanistan ingezet wordt aan de frontlinie, gewond geraakt voor zijn vaderland, terugkeert wanneer ze het hem vragen, toch geacht wordt in staat te zijn om zijn thuisstaat en zijn land met oorlogsmateriaal te verdedigen, mag van de rechter buiten dienstverband geen wapen meer dragen. Iemand die goed genoeg bevonden wordt om met een wapen in de hand te sterven voor het Amerikaanse Rijk, mag in zijn vrije tijd geen wapen dragen voor zijn eigen bescherming, ook al heeft hij daarvoor de nodige vergunningen. Amerika is een schitterend land, daar ben en blijf ik altijd van overtuigd, maar het zijn dit soort verhalen die de ster doen tanen. Ik walg hier gewoon van.
Een tweede persoon is Alex Ransom, studente politieke wetenschappen aan de universiteit “Texas A&M”. Zij is graatmager, klein en fijn gebouwd, heeft een poeslief snoetje en oogt op het eerste gezicht een beetje als een kneusje. Velen zullen in haar de ideale dochter zien, en misschien is ze dat ook, maar wacht dan maar tot ze haar mond open doet en haar ultra-libertarische mening begint te verkondigen. Alex was voorzitster van de studentenraad en in die hoedanigheid de woordvoerster van de pro-wapenrechtenbeweging op de campus, zeker in de nasleep van de recente grote schietincidenten aan de Amerikaanse universiteiten. Die hadden allemaal, dixit Alex Ransom, vermeden kunnen worden als de campussen niet ontwapend waren. Ik ben geneigd haar daarin te volgen.
Het lieve onooglijke meisje van het eerste gezicht bleek helemaal geen katje te zijn om zonder handschoenen aan te pakken. Zij trok naar de directie met haar grieven en slaagde er zelfs in om hen te overtuigen de “gun ban” op campus terug in te trekken. Dit speelt zich allemaal af in Texas. Het zal dan ook niemand verbazen dat Alex na daarin geslaagd te hebben, als één van de weinige studentenvoorzitters ooit herkozen werd. Maar nog steeds was ze niet tevreden. "Texas A&M" mocht de “gun ban” zelf dan al wel teruggeschroefd hebben, de “concealed carriage ban” was nog steeds in voege. Deze verbood het verborgen dragen van wapens op campus. Alle vuurwapens moesten open en bloot gedragen worden, dit om te vermijden dat een ruzie zou ontaarden in een vuurgevecht omdat niemand wist dat de andere gewapend was.
Voor Europeanen mag zo’n “concealed carriage ban” dan wel vreemd in de oren klinken, wij zouden in onze schuchterheid liever opteren voor een “don’t ask, don’t tell”-beleid met verborgen wapens, in de Verenigde Staten is dit soort bepalingen eerder de regel dan de uitzondering. Alex was het daar natuurlijk niet met eens, en volgens mij opnieuw met recht en rede. Wapens moeten een afschrikkend effect hebben en iedereen, ook de niet-wapendragers, beschermen door onduidelijkheid te creëren in hoofde van de slechteriken over wie wel en wie geen wapens draagt. Alex trok opnieuw naar de directie maar ving bot, waarna ze een rechtszaak tegen de universiteit aanspande. Uiteindelijk kreeg ze een dik jaar later na tal van beroepsprocedures finaal gelijk van het Texaanse Hooggerechtshof. Daartegen was Alex natuurlijk wel al aan haar masterstudies aan de “UT Dallas” begonnen, maar doordat het een vonnis van het opperste rechtscollege van de staat betrof, werden alle “concealed carriage bans” op alle Texaanse universiteiten samen geannuleerd. Een prestatie om zeker naar op te kijken.
De derde en laatste persoon die ik hier even in de kijker wil zetten, is Brian Aitken, een 25-jarige zelfstandige uitgever in New York City, die ik op het “Advanced Austrian Economics”-seminarie van de “Foundation for Economic Education” tegen het lijf ben gelopen. Aitken studeerde journalistiek aan “Ruthers University” en de “University of Pennsylvania” alvorens een eigen uitgeverijtje uit de grond te stampen. Toen hij zich eerder dit jaar bewoog tussen zijn appartement op campus, zijn ouderlijk huis in New Jersey en zijn nieuwe loft in Brooklyn, New York werd hij tijdens een routinecontrole tegengehouden. In zijn wagen vond de politie een klein arsenaal aan vuurwapens en enkele pakken munitie. De vuurwapens en de munitie waren allemaal wettelijk vergund en alles was conform de regels verpakt voor transport.
De politie arresteerde hem echter, confisqueerde de wapens en de munitie en stak hem een nacht in de cel. Pas ’s anderendaags kon Aitken na het betalen van een borg van 10,000 USD het politiebureau weer verlaten. Volgende week maandag komt zijn zaak voor in New Jersey. Hij riskeert 7 jaar opsluiting. Zeven jaar om zijn grondwettelijk recht zoals gegarandeerd door het Tweede Amendement uit te oefenen. Ook dat is Amerika. New Jersey had kennelijk nieuwe regels uitgevaardigd rond het transport van vuurwapens en Aitken had die overtreden. Hij is er echter rotsvast van overtuigd dat de rechter hem volgende week gelijk zal geven. Zoniet is hij bereid in beroep te blijven gaan tot bij het Amerikaanse Hooggerechtshof. Een libertarisch fonds voor juridische bijstand en enkele wapengroepen hebben Aitken al geholpen met zijn borg en hebben nu een leger advocaten onder de arm genomen om hem vrij te krijgen én definitief een einde aan anti-wapenwetten te stellen.
Brian Aitken is helemaal geen wapengek of schietgrage cowboy, maar gewoon een beginnende ondernemer die op zoek is naar zijn plaatsje onder de zon en er als hobby het verzamelen van en het schieten met wapens op na houdt. Vorige week mocht Aitken zelfs zijn opwachting maken in de talkshow “FreedomWatch” op Fox News met Andrew Napolitano, zelf een gewezen rechter uit New Jersey. In die uitzending noemde Napolitano Aitken een “lover of freedom” en een “defender of liberty”, en sprak hij zich kritisch uit over de gang van zaken in New Jersey. “Die staat is geen vriend van het Tweede Amendement”, aldus Judge Napolitano, die verder ook resoluut de kaart van Aitken koos. “I am 100% on your side. The firearms were legally possessed.” Hopelijk denkt de rechter daar volgende week maandag ook zo over. Zoniet kan dit op termijn misschien wel eens de grote testcase voor de bende van Sonia Sotomayor worden.
Dit artikel verscheen ook op de metablogs "In Flanders Fields", "De Vrijspreker" en "Het Vrije Volk", alsook elders op het internet.
Meer over de laatste rechtszaak op http://current.com/items/90631586_judge-napolitano-voices-in-on-new-jersey-v-brian-aitken.htm.
De eerste persoon wiens verhaal ik u hier wil vertellen, is Jim Chappelow. Deze jonge dertiger groeide op in Colorado, studeerde later economie in Alabama en werkt momenteel als economisch analist voor het “Institute for Trend Research” in New Hampshire. Hij is tevens redacteur van het vakmagazine “EcoTrends”. Chappelow is een persoon van niet al te goede komaf die zichzelf via sportbeurzen en militaire programma's een opleiding heeft kunnen geven. Chappelow is niet enkel een libertariër in hart en nieren, hij dient ook in de “National Guard” van Colorado, die in ruil voor het deels betalen van zijn studies zeven jaar lang over de diensten van Chappelow vrij mag beschikken. Wat aanvankelijk een “walk in the park” had moeten zijn, de Nationale Garde maakt immers reclame voor haar reservistenprogramma met de slogan “One Weekend A Month, Two Weeks A Year”, verwerd al gauw tot een helletocht.
In 2007 en 2008 diende Chappelow in totaal bijna negen maanden in Irak. Niet enkel werden de hem voorgehouden 12 weekends training en twee weken dienst niet gehonoreerd, ook de taak van de Nationale Garde, het dienen en beschermen van de thuisstaat, werd door de Bush-administratie en haar oorlogspolitiek in het Midden-Oosten geüsurpeerd. Chappelow was Army-reservist van opleiding en werd ook in die hoedanigheid in “combat units” in Irak ingezet. Als libertariër verzette hij zich tegen deze oorlog, als patriot vocht hij hem. Fysisch gewond en psychisch aangedaan kwam Chappelow tegen Kerstmis 2008 terug naar huis om binnen de maand van zijn vrouw te scheiden. Chappelow vertrekt in oktober opnieuw naar het front. Ditmaal Afghanistan. Colorado dienen, heet dat nog steeds.
Maar het schrijnende levensverhaal van dit stuk “white trailer park trash” dat zich puur op basis van zijn eigen mérites een beter leven wist te bezorgen, is niet de kern van wat ik hier wil zeggen. Het plaatst alles wel beter in perspectief. In de lente van 2009 wordt Jim Chappelow in Colorado door de politie tegengehouden. Zij ontdekken in zijn auto een vuurwapen en munitie, wat in strijd is met de wetten van Colorado. Het vuurwapen was vergund in Alabama, waar munitie eveneens vrij te koop is. Chappelow werd dagenlang in de cel opgesloten omdat hij zijn borg van 5,000 USD niet wou of kon betalen. Nadien werd hij veroordeeld voor illegaal wapenbezit en tot één jaar voorwaardelijke celstraf veroordeeld. De voorwaarde was de volgende: hij mocht buiten dienst (sic!) geen wapen meer dragen.
Samengevat. De persoon die ondanks eerdere overeenkomsten in Irak en Afghanistan ingezet wordt aan de frontlinie, gewond geraakt voor zijn vaderland, terugkeert wanneer ze het hem vragen, toch geacht wordt in staat te zijn om zijn thuisstaat en zijn land met oorlogsmateriaal te verdedigen, mag van de rechter buiten dienstverband geen wapen meer dragen. Iemand die goed genoeg bevonden wordt om met een wapen in de hand te sterven voor het Amerikaanse Rijk, mag in zijn vrije tijd geen wapen dragen voor zijn eigen bescherming, ook al heeft hij daarvoor de nodige vergunningen. Amerika is een schitterend land, daar ben en blijf ik altijd van overtuigd, maar het zijn dit soort verhalen die de ster doen tanen. Ik walg hier gewoon van.
Een tweede persoon is Alex Ransom, studente politieke wetenschappen aan de universiteit “Texas A&M”. Zij is graatmager, klein en fijn gebouwd, heeft een poeslief snoetje en oogt op het eerste gezicht een beetje als een kneusje. Velen zullen in haar de ideale dochter zien, en misschien is ze dat ook, maar wacht dan maar tot ze haar mond open doet en haar ultra-libertarische mening begint te verkondigen. Alex was voorzitster van de studentenraad en in die hoedanigheid de woordvoerster van de pro-wapenrechtenbeweging op de campus, zeker in de nasleep van de recente grote schietincidenten aan de Amerikaanse universiteiten. Die hadden allemaal, dixit Alex Ransom, vermeden kunnen worden als de campussen niet ontwapend waren. Ik ben geneigd haar daarin te volgen.
Het lieve onooglijke meisje van het eerste gezicht bleek helemaal geen katje te zijn om zonder handschoenen aan te pakken. Zij trok naar de directie met haar grieven en slaagde er zelfs in om hen te overtuigen de “gun ban” op campus terug in te trekken. Dit speelt zich allemaal af in Texas. Het zal dan ook niemand verbazen dat Alex na daarin geslaagd te hebben, als één van de weinige studentenvoorzitters ooit herkozen werd. Maar nog steeds was ze niet tevreden. "Texas A&M" mocht de “gun ban” zelf dan al wel teruggeschroefd hebben, de “concealed carriage ban” was nog steeds in voege. Deze verbood het verborgen dragen van wapens op campus. Alle vuurwapens moesten open en bloot gedragen worden, dit om te vermijden dat een ruzie zou ontaarden in een vuurgevecht omdat niemand wist dat de andere gewapend was.
Voor Europeanen mag zo’n “concealed carriage ban” dan wel vreemd in de oren klinken, wij zouden in onze schuchterheid liever opteren voor een “don’t ask, don’t tell”-beleid met verborgen wapens, in de Verenigde Staten is dit soort bepalingen eerder de regel dan de uitzondering. Alex was het daar natuurlijk niet met eens, en volgens mij opnieuw met recht en rede. Wapens moeten een afschrikkend effect hebben en iedereen, ook de niet-wapendragers, beschermen door onduidelijkheid te creëren in hoofde van de slechteriken over wie wel en wie geen wapens draagt. Alex trok opnieuw naar de directie maar ving bot, waarna ze een rechtszaak tegen de universiteit aanspande. Uiteindelijk kreeg ze een dik jaar later na tal van beroepsprocedures finaal gelijk van het Texaanse Hooggerechtshof. Daartegen was Alex natuurlijk wel al aan haar masterstudies aan de “UT Dallas” begonnen, maar doordat het een vonnis van het opperste rechtscollege van de staat betrof, werden alle “concealed carriage bans” op alle Texaanse universiteiten samen geannuleerd. Een prestatie om zeker naar op te kijken.
De derde en laatste persoon die ik hier even in de kijker wil zetten, is Brian Aitken, een 25-jarige zelfstandige uitgever in New York City, die ik op het “Advanced Austrian Economics”-seminarie van de “Foundation for Economic Education” tegen het lijf ben gelopen. Aitken studeerde journalistiek aan “Ruthers University” en de “University of Pennsylvania” alvorens een eigen uitgeverijtje uit de grond te stampen. Toen hij zich eerder dit jaar bewoog tussen zijn appartement op campus, zijn ouderlijk huis in New Jersey en zijn nieuwe loft in Brooklyn, New York werd hij tijdens een routinecontrole tegengehouden. In zijn wagen vond de politie een klein arsenaal aan vuurwapens en enkele pakken munitie. De vuurwapens en de munitie waren allemaal wettelijk vergund en alles was conform de regels verpakt voor transport.
De politie arresteerde hem echter, confisqueerde de wapens en de munitie en stak hem een nacht in de cel. Pas ’s anderendaags kon Aitken na het betalen van een borg van 10,000 USD het politiebureau weer verlaten. Volgende week maandag komt zijn zaak voor in New Jersey. Hij riskeert 7 jaar opsluiting. Zeven jaar om zijn grondwettelijk recht zoals gegarandeerd door het Tweede Amendement uit te oefenen. Ook dat is Amerika. New Jersey had kennelijk nieuwe regels uitgevaardigd rond het transport van vuurwapens en Aitken had die overtreden. Hij is er echter rotsvast van overtuigd dat de rechter hem volgende week gelijk zal geven. Zoniet is hij bereid in beroep te blijven gaan tot bij het Amerikaanse Hooggerechtshof. Een libertarisch fonds voor juridische bijstand en enkele wapengroepen hebben Aitken al geholpen met zijn borg en hebben nu een leger advocaten onder de arm genomen om hem vrij te krijgen én definitief een einde aan anti-wapenwetten te stellen.
Brian Aitken is helemaal geen wapengek of schietgrage cowboy, maar gewoon een beginnende ondernemer die op zoek is naar zijn plaatsje onder de zon en er als hobby het verzamelen van en het schieten met wapens op na houdt. Vorige week mocht Aitken zelfs zijn opwachting maken in de talkshow “FreedomWatch” op Fox News met Andrew Napolitano, zelf een gewezen rechter uit New Jersey. In die uitzending noemde Napolitano Aitken een “lover of freedom” en een “defender of liberty”, en sprak hij zich kritisch uit over de gang van zaken in New Jersey. “Die staat is geen vriend van het Tweede Amendement”, aldus Judge Napolitano, die verder ook resoluut de kaart van Aitken koos. “I am 100% on your side. The firearms were legally possessed.” Hopelijk denkt de rechter daar volgende week maandag ook zo over. Zoniet kan dit op termijn misschien wel eens de grote testcase voor de bende van Sonia Sotomayor worden.
Dit artikel verscheen ook op de metablogs "In Flanders Fields", "De Vrijspreker" en "Het Vrije Volk", alsook elders op het internet.
Meer over de laatste rechtszaak op http://current.com/items/90631586_judge-napolitano-voices-in-on-new-jersey-v-brian-aitken.htm.
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