By now many of you are likely aware of the contaminated water fiasco in Flint, Michigan that has apparently resulted in 77 cases of Legionnaire’s disease (and 10 deaths). It is indeed a tragedy of shattered trust. It is also darkly humorous to witness the acolytes of Statism (i.e. the faith that The State can protect us from all harms and correct all wrongs) are apoplectically flummoxed as to how such a thing could happen: “But, but, the state is supposed to protect us from the depredations of cost cutting profiteers!” The state is supposedly there to protect the weakest among us – so how ironic that those most harmed by this incident is the predominantly poor population of Flint. How could such a thing have happened? The problem is structural. Private ownership weeds out failure; public ownership protects it.

Now one might argue that since there are thousands of municipal water systems across the country that operate without any problems this is simply a fluke, an outlier and is not indicative of any sort of problem with government run water systems. That is a dangerous premise. It’s like arguing that one doesn’t need a seat belt because they’ve never been in an accident. The problem is not that random groups of people do not know how to provide clean water. The problem is that humans are imperfect and eventually a perfect storm of errors will accumulate until a calamity results. This can happen in both public and private entities. It is the response to the calamitous event that distinguishes public from private entities.

First, private entities already have a natural incentive to prevent such events from occurring because the owners and the insurers are financially on the hook for problems. Problems are costly to fix and often results in expensive lawsuits, so prevention is the best medicine. Public entities have no such negative feedback. No one is financially liable. Everybody plays a part in creating the mess, but no one is actually responsible. Worst case someone might lose their job or the town is fined by the EPA (that is, ironically the taxpayers – the customers so harmed – end up being financially on the hook!) Oh well. Losing your job is not nearly the disincentive to preventing harm as would be losing hundreds of thousands if not millions of your own dollars.

Secondly, if something does still occur despite best efforts to prevent it, private entities have a natural incentive to fix it quickly as possible in order to contain the potential financial damage. It is the very greed that so many on the left decry that actually aligns the incentives of the owners with those of the customer. Keeping your customers happy, safe, and healthy is beneficial to the bottom line – otherwise you get sued or lose customers. But as we have seen in the Flint case, the response of the ruling class is more akin to a Three Stooges skit, with each part of that system poking the other one in the blame game – all too busy fighting with each other in order to avoid responsibility than focused on actually fixing the problem.

Lastly, no matter what happens, the public system remains in place. The public can’t “fire” them, they can’t choose another provider. They have no choice but to continue buying a product from a provider that has proven to be unreliable. No is allowed to come in and compete with them (that would be illegal). In many cases you can’t even legally dig your own well – you are obligated to buy from the local utility. With a private system one has options. You can put in your own well. A competitor could come in and “steal” customers – or perhaps the old company is sued into bankruptcy and completely new ownership takes over.

In closing I would ask you to imagine the following: Imagine that the standard in this country was that all water was provided by private entities. Now imagine that the same thing that happened in Flint happened but with a private provider. Would there not be an instant outcry and demand that the government take these systems over, or that they must be regulated for safety? Now realize that the reality today is the exact opposite. And what do we hear? Cries to “privatize” our water systems in order to allow market forces to naturally regulate the delivery safe water? No, instead we get self-righteous politicians (Clinton et.al.) trying to frame this event as some sort of partisan one-ups-man ship that endeavors to prove that the only reason this happened is evil Republicans hate “poor black people”. Well I guess they must hate themselves since it was their own city council (composed of Democrats) who signed off on the plan that ultimately led to the problem.

The closing irony here is that despite long being accused of selfishness and greed, it is the private market that has come (quickly) to the rescue in Flint. Walmart, Coca-Cola, and others have provided (for free) bottled water to the residents.  Why are they doing this? Perhaps they genuinely want to help. Or perhaps they see it as a grand PR opportunity to earn some loyal customers. Even if the latter it doesn’t matter – if “greed” compels people to help their fellow man, then I say bring on the greed!

February 02 / 2016

Market Failure: Revenge of the Commons?

If you missed last week’s article be sure to read it here, however, a synopsis of the article’s thesis is that “market failure” is impossible. Markets are closed systems and as such anything internal to the system affects the entire system. A market can no more “fail” than a pot of water exposed to a flame will fail to boil. Apropos the pot of water example: if a pot of water does not boil after 5-seconds of exposure to a lighter we do not say “ah-ha, physics has failed, here is proof that flames cannot boil water!” No, we realize that if sufficient heat is applied, it will boil (thermodynamics) but that the process takes time (kinetics). Failure of something to occur instantly or even within our own lifetime does not equate to “failure”. Markets regulate themselves; perhaps not as fast as some would like, but it occurs nevertheless. As the saying goes: you can have it fast, cheap, or good: pick any two. With state regulation of the market you only get one: fast, at the expense of it being both expensive (inefficient) and poor (ineffective). Natural market regulation is both good (effective) and cheap (efficient), but tends to be slow, which many find frustrating. This gradual process thus provides a framework of excuses for state intervention to speed things up. These people fail to see the thermodynamic forest for the kinetically slow-growing trees.

At first glance it might appear the pot example is not illustrative of a closed market system. The pot is exposed to the surrounding air, which can transfer the heat away. So we must clearly demarcate the borders of the system under discussion; let us say the pot and flame are in an insulated box. Everything outside is irrelevant to what occurs in the box.

So, we define the market as that system containing everything that is (apparently) part of the market. However, the counterargument here would be that things outside of the market system, unlike the pot and flame, do effect what is in the system. That is, the “commons” outside of the market (into which things may be dumped or extracted) apparently play a role. To the extent such commons are artificial in nature (“public” spaces) and thus through state coercion the market’s efforts to allocate and economize those resources via private property are frustrated, we cannot say then that any abuse of such spaces is a market failure. The state itself is setting up the very situation that opens them up to abuse. The state is not part of the market. The market is peaceful voluntary trade where both parties “win”; the state is violent involuntary trade where one side wins and one side loses.

However, there are natural common areas (the oceans and the sky) that are not amenable to conventional private property demarcations (e.g. fences) – although technology is slowly changing that reality. These would appear to be areas outside of the closed market (private) systems and thus immune to feedback from the market even though the market may benefit from them. For markets separated by a commons but connected through other means, the feedback occurs at the border with the commons and this information is transmitted via the other connection just as though they directly bordered each other.

But, let us consider the more difficult example of two isolated markets, not in communication, separated by a commons. We will consider the ocean (although the sky works equally well). Imagine that you live on the coast and fish for a living. Far across the ocean another settlement pollutes the water. Eventually that pollution reaches your shore and affects your fishing productivity. You have no idea where it is coming from (non-point source pollution), all you know is that it is a new cost you did not have before. Since you do not know the source you only have once choice: to clean up/remove the pollution at the bordering point to where you customarily fish.

Is the fact that you have to devote resources to cleaning this up a market failure? No. Why not? Well imagine that if instead of it being some far away people polluting the water it was some natural event (volcano, mudslide, etc.). Your actions would be no different (cleaning the water) yet you would not say the market has failed just because Nature foisted additional hurdles at you. If the effect is the same, the cause is irrelevant if you have no way of knowing or influencing the cause.

Now lets say you do find out who is polluting and ask them to stop but they refuse. You do not trade with them so feedback cannot occur that way. You now have two choices that prompt me to pose this question: Is it morally justified to attack and kill them until they submit to your will if continuing to remove the pollution yourself may also solve the problem? One option involves the ending of human life; the other option is a mere inconvenience. Which would you choose? If you answer yes to the former then I suggest you reflect on how the state has warped your sense of reality such that it is considered morally acceptable to initiate violent actions against others in order to resolve non-violent conflict. Now consider that all state actions rest on a bedrock of threatening violence against those that will not bend to its will, no matter how trivial the concern. History does not judge kindly those who initiate aggression to force others to do their bidding

Market Failure is not an option, it’s not even possible

Proponents of state intervention in markets (managed markets) unfailingly assert the legitimacy of their stance by pointing to “market failure.” Yes, yes, they admit, markets are great at delivering goods and services to people, but, sometimes they inexplicably fail and this consequently requires men with guns (the state) to “fix” them. To put it simply, market failure is a myth. There is a failure however, not of the market, but of their own ability to comprehend the complexities of a natural system whose chaos is brought to order through feedback.

Appeals for regulation by some central authority are predicated on the ideal of “fairness” in ensuring that all who use some resource pay for such use. In other words, if one perceives even the possibility of “free riding” with regard to some economic good then this is all the excuse needed to bring in men with guns to ensure all pay their “fair share.” Free riding is the quintessential example of market failure. Now, as they say, time to bust that myth.

Now rather than choose an example that would be quite easily dismantled as embodying free rider potential (roads, courts, police, fire protection, etc.) I shall choose what is perceived as the most difficult of all: the environment. For this example we shall use the ever-popular environmental whipping boy, carbon dioxide. The output of CO2, it is said, does not factor in the costs of the damage wrought by this “pollutant.” That is, the externality is not internalized in the cost of the product. In fact the truth is exactly the opposite. To see this let’s consider an economy of two actors, Y & Z. Y produces product y and Z produces z and they trade with each other. Now let’s imagine Y can increase his output if he dumps his waste onto Z’s property. Y can now produce more of y, but Z must now devote time and resources to cleaning up the mess (or perhaps it makes him tired or ill) and thus the output of z declines. Y can now only obtain that smaller fraction of z output when trading. Obtaining less for the same cost is equivalent to a greater cost for the same amount. In other words the apparently externalized cost that Y foisted on Z must necessarily be internalized back to Y by virtue of how his actions affect other actors in the economy. No regulation is needed; it is inherent to the system that for every action there is an equal and complementary reaction.

So now extending this metaphorical example to the real world let us assume for the sake of argument that all the doomsayer prophesies of the climate alarmists are true. Is it not obvious that all these bad consequences would negatively impact economic productivity? So all things being equal, if one sells a barrel of oil for $50 that $50 will now only buy the equivalent of say $40 worth of goods (that is, $40 of goods will cost $50, a de facto market “tax” that precisely mirrors the level of damage as reflected in the decreased output). If the damage predicted by the alarmists is real, then it can’t not have this negative effect. In other words, if everything becomes more expensive because there is less of it, then necessarily less will be consumed, including energy derived from CO2. If the damage is real, this natural negative feedback loop will self-correct the problem as profit seeking people strive to innovate their way to greater production. If the damage is not real, then no correction was necessary.

Ironically, carbon taxes, long touted as a “market” approach to solving this issue would do nothing whatsoever. Energy consumption is relatively inelastic and thus higher prices (taxes) for energy would force prices down in other sectors to compensate. Indeed carbon taxes are already touted as revenue neutral (through lower taxes elsewhere or rebates). The only thing that one might superficially assume could work would be a flat consumption tax on all goods. But even if you could impose a 50% sales tax on the entire economy it would ultimately have no effect on consumption at all. If the money is simply removed from the economy, then deflation takes over and all prices drop. That is, output has not declined, only the money supply. The same amount of goods still trade but with fewer dollars. But, if instead the government spends the money, other than productive losses due to government waste, the supply and demand for goods, including energy still won’t change. With natural market feedback the external cost is internalized as reduced supply; with an artificial system (taxes) supply is unaffected, only the identities of those doing the demanding changes.

The market system needs no overseer or committee to function. It is not “targeted”, the entire economy would be affected as if with a fever until the profit motive drives the innovators and entrepreneurs to shed the burden of the internalized costs of decreased output. To say that markets suffer failure is the intellectual equivalent of denouncing a fever as a failure of the immune system.

Market Justice

The standoff between ranchers and the federal government at a U.S. Fish and Wildlife Service building in Harney County, Oregon can be distilled down to one core issue: property rights. The Hammond’s land abuts Federal lands and due to their past less than neighborly management practices (setting containment fires that got out of hand) their neighbors (the Feds) believed they had the right to throw their neighbor (the Hammonds) in a cage for one year. Which they did. Then they decided to give it a different name (terrorism) and throw them in a cage for another 4 years. That’s when the Hammonds objected and said enough is enough. Just imagine if your next-door neighbor could lock you up in a cage at their whim for any perceived transgression. That would surely be quite frustrating and dare I say terrorizing? To know that any minor misstep could result in your freedom and liberties being ripped away from you is indeed terror inducing. Welcome to the world of the American Indian.

The federal government has been terrorizing the American Indian for the past 200 years. They’ve had a lot of practice. They’ve become quite adept at it. The modern western rancher is simply the latest recipient of this unilateral wielding of overwhelming violent force.  So to the ranchers I say this: your ownership and the related benefits of your land and abutting federal lands is the result of prior violence by the Federal government on behalf of your ancestors or predecessors. The Feds stole it from the Indians and made it available at a fraction of its value to millions of homesteaders. That is not homesteading, that is theft and redistribution.

While it is true that the Federal government has wrought numerous distortions into the fabric of society and the economy and some have benefited while others have been harmed, these past transgressions are so complex, intertwined and convoluted as to make it impossible to untie such a Gordian knot and make amends. But, presently the Federal government owns approximately 28% of the land in the United States – the vast majority of having belonged to one Indian tribe or another.  There is no chain of a multitude of prior owners; there is a direct link of ownership of Indians->Federal Government. In virtually all cases the transfer was illegitimately obtained through acts of violence. If the current presidential administration is so concerned with righting past wrongs and the redistribution of wealth then it should immediately hand over all property rights in federally owned lands to those tribes (still in existence) with the strongest past territorial claim.

Such a transfer would instantly transform many of the impoverished Indian reservations, who rely on a constant influx of Federal money to maintain their citizenry, into powerhouses of wealth. A $1 billion lotto jackpot pales in comparison to a $1 trillion jackpot! In other words the land would be taken from “public” use to “private” use. The new private owners could do with the land as they see fit relative to all economically demanded uses coming from the market. That is, those uses that people most want to see would have the most money behind them and enable the highest bid to prevail. People vote for what they want with their dollars and those with the most votes wins. Some tribes might maintain their land as a natural preserve. Some might sell portions to farmers, ranchers or those wishing to develop them commercially. Some might buy the land and build high rises, new factories, or wind farms. Others (like the Sierra Club) might buy land and create their own “private” nature reserve, where they, and not the federal government, is in control of its (seeing as how the Feds often allow mining or logging in “protected” regions).

In short, in one fell swoop a big chunk of the past wrongs against the American Indian could be rectified (nothing of course could ever undo all the damage) while simultaneously releasing nearly 1/3 of the land mass of this country into the most efficient system the world has ever known for optimizing the use of scarce and rivalrous resources: the market.

January 12 / 2016
Author Greg Morin
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Under the Hood

One of the apparently more innovative techniques automakers have applied to saving fuel is a concept borrowed from the electric or hybrid vehicle: automatic start/stop. The concept is fairly simple, turn off the engine when the car is stopped (i.e. at a stop sign or traffic light) and instantly turn the engine back on when the driver initiates their intent to commence motion (releasing foot from the break or depressing the clutch). Depending on the traffic patterns one encounters, fuel savings can be as low as a mere 0.5% all the way up to 10%. Truly this would seem to be getting something for nothing!

But as with any government mandated arbitrary standard there are unintended costs and consequences.  For example, prior efficiency decrees have compelled automakers to make their cars lighter – but lowering mass makes a car less crash worthy. To compensate as much as possible it became necessary to beef up the A, B, and C pillars (the front, middle and rear attachment points of the lower portion of the car to the roof) so passengers aren’t squashed in a rollover. That is, these pillars are now much wider and thus much more readily obscure objects behind them at a distance. Don’t believe me? Hold out your thumb at arms length and place it in front of a car 50 feet away; now unfurl all 5 fingers and block it with your hand. Completely disappeared now hasn’t it? Those of us who drove cars from the ‘80s or earlier are well aware of this slow change. Unfortunately anyone younger just assumes it’s totally normal to have a 6-8 inch A pillar blocking one’s view of oncoming traffic as they try to merge. Such actively growing blind spots have ironically led to more accidents, injuries, associated health care costs, repair costs, higher insurance rates and in some cases even death. But hey, what is human life worth when weighed against the “environment”?

In other words, there are costs associated with everything. If it were up to the individual to decide for him or herself how much more safety risk they are willing take relative to increased fuel economy that would be one thing. However it is quite a different story when the choice is taken away and there is only one option allowed for all. That is what government is: the removal of choice. Bureaucrats decide on the “best” route and make all other options illegal. The same removal of choice is now happening with these automatic start/stop systems. Starting with model year 2016 they are becoming more and more prevalent. Why is this? Because of government fuel economy standards like CAFE (or it’s European equivalent) mandate FLEET wide averages. Therefore the ability by the automaker to extract even a few small percent increase in fuel efficiency multiplied by a fleet of thousands or millions of vehicles helps them meet those standards and avoid possibly millions of dollars in fines. The problem, however, is that the cost of meeting those standards is shifted to the consumer. Such systems require larger, beefier starters and batteries – which cost more. Due to more frequent use these components will wear out sooner – which costs more. Ironically the greater the fuel savings, the more the engine will be damaged. Engines are most vulnerable at start up due to lack of oil. The longer it sits off the more the oil drains back down. Obviously an engine that has to be replaced or rebuilt on a more frequent basis is going to be a significant cost to the owner.

In other words, there is no free lunch. Even something seen (fuel savings) has an unseen cost (wear and tear and repairs). Fortunately, for now, we are permitted the ability to override and turn these systems off (although it must be done manually with every cold engine start). But there is no doubt that in order to eke out another 0.1% of CAFÉ fuel savings, automakers will soon remove the option to disable this feature. Then again perhaps it doesn’t really matter as soon enough the government will outlaw human drivers and we’ll all be passengers in self-driving cars within 30 years – cars that some are already discussing whether or not the automated “brain” behind it should sacrifice its passengers if it determines more deaths would result by protecting its occupants. Unintended costs indeed.

Removing all doubt

Poor Bernie, he went and opened his mouth and thusly removed all doubt that he has no grasp of economics. Such ignorance from an internet troll might be expected and can be amusing in the same way that a child’s explanation of something can be so. But when such breathtakingly inane statements emanate from a candidate for President of the United States, well, what can one do but weep for the future. To what perplexing attempt at pontification do I refer? None other than this Dec 26 Tweet from @SenSanders: “You have families out there paying 6, 8, 10 percent on student debt but you can refinance your homes at 3 percent. What sense is that?”

Now most people would probably look at this statement and not find it particularly outrageous. We as a society have been conditioned to accept the notion that interest rates are arbitrarily set from time to time by some talking head in government. The assignment of these rates is apparently disconnected from any external factors. They are like lotto numbers plucked from the ball machine. We assume other lenders (banks, credit cards, etc) set their rates in a similar pattern.

In reality non-government rates are primarily market driven. That is, the relative difference in rates is market driven while the net value rests on the arbitrarily set Fed rates. Interest rates are not arbitrary digits, they are prices. They are the price people are wiling to pay to not wait. Interest rates are a reflection of supply, demand, and risk. The demand for loaned funds is indicative of high time preference, that is, preferring something now rather than later. The supply of loaned funds is indicative of a low time preference, that is, the willingness to forego consumption in the present and defer it into the future – for a price. To understand high time preference, ask yourself, do you prefer to buy that 72” OLED 4k TV today, or in a year after saving the funds yourself? Most of us prefer to have it today so that we can enjoy it immediately. The cost of that sooner than otherwise realized enjoyment is reflected in the interest rate we are willing to pay. If there are a lot of people willing to supply loaned funds, then the interest rate will be lower (supply goes up, price i.e. interest rate, goes down). If there are few people willing to supply loaned funds then the interest rate will be higher (supply goes down, price, i.e. interest rate goes up). It’s really not that complicated.

The only wrinkle with interest rates relative to regular money prices exchanged for tangible goods is that unlike exchanging cash for a hamburger (where both parties have something after the exchange), with the process of loaning/borrowing, only one party has the thing they desire in the beginning. The other party has a promise to deliver the other half of the bargain at some future date. The future is uncertain and there is always risk that someone may not do what they say, either deliberately or for reasons beyond anyone’s control. That uncertainty is also reflected in the interest rate. If there is a high chance the lender won’t get paid back then the interest rate will be quite high. But, if something can be offered to mitigate that risk, something tangible, like say a house or a car, then the lender can feel more assured that at least they will get some portion of the loaned funds back in the worst case. So that brings the rate back down.

Bernie, this is why loans backed by tangible collateral (like a home mortgage or equity line) have a lower interest rate than a student loan which has no collateral. A student loan is no different than credit card debt – it is unsecured. Now, look at the interest rate on your credit card (likely over 20%) and compare to the 6, 8, or 10% figure being cited – doesn’t look so bad now does it? These rates are so much lower than they otherwise would be because of government intervention in the student loan market.

Now some might say the banks should be willing to invest in such human capital, that a college degree will translate into a high paying job that allows them to pay it off. That can be true. That is why years ago before government involvement lenders did give out student loans, but only to the most academically worthy of students, those that clearly would succeed. But even so, possible future income is not collateral, the bank can’t take possession of the student himself and enslave him or her to get their money; they can take a house or car, they can’t take a person.

If Bernie wants to help students he should promote the idea of removing government involvement from higher education. Every sector the government subsidizes (healthcare, housing, education) has seen explosive price inflation. That is no coincidence. The patient can’t heal until you kill the disease.

December 28 / 2015

In a mirror dimly

For all that is wrong with the Trump candidacy (xenophobic neo-fascist tendencies) the silver lining is that it is forcing us to face the ugly truth about democracy: mob rule is a frightful thing to behold. Trump is one of “us” and his popularity is a reflection of what the “mob” wants. Everyone loves democracy when it is their ideas that are popular but when the mob turns stupid it doesn’t seem like such a good idea anymore. Trump may be the first true “people’s candidate” for president that has an actual chance of winning. His financial independence all but guarantees he is not beholden to any individual, special interest, or political party elite. To the extent any candidate receives some measure of public or private funding, their words and deeds are held to account by the one doling out the money. Trump is accountable to no one but himself and the voters.

Since the advent of political parties we have been led to believe elections are about a democratic process, that we are making a choice and a difference – but – that is a lie, or rather, an illusion. A very apt line from the Matrix movies provides some context, “Choice is an illusion created between those with power and those without.” Those who already have power: the party bosses, the monolithic media outlets, the oligarchical dynasties (Roosevelt’s, Kennedy’s, Bush’s, Clinton’s) – they all understand and work the system to their advantage. That is, they present the illusion of choice so as to keep the masses pacified into believing they are in control of their destinies. But like choosing a white paint chip from an ocean of slightly variable gradations of white, the final choice is still just that: white. But Trump, Trump is lime green. He is a starkly different choice. He, unlike any of us, has the money to buy a seat at the table where they are doling out cards in the high stakes game of poker that is a run for the presidency. Perhaps Trump has touched a populist nerve because deep down we all know there is no choice. His candidacy is not so much support for Trump the man but rather support for NOTA (none of the above).

Trump may be spouting idiotic things, but Trump is no idiot. He is a masterful salesman and knows how to work a room. He, like any good conman or salesman, understands his audience/mark. Give them what they want and they’ll return the favor. Trump reflects America, but dimly. (1 Corinthians 13:12) Is his persona the true man, or merely a reflection of his environment? If elected we shall know fully. Most candidates appeal to the voter’s intellect, Trump appeals to their emotions (and not the good ones, i.e. fear, anxiety). This visceral appeal is a dim reflection of the American psyche. It is also a dangerous one. Emotion acts mindlessly without consideration of the consequences. History repeatedly tells a dark tale about leaders that preyed on the emotions of their subjects.

But Trump is not a solution to the moneyed concentration of power, he is merely a symptom, an immune response if you will – that cough you just can’t get rid of. Although the leftist progressives bleat incessantly on the need for government to hold the evil capitalists at bay lest they gain control of society, they miss the central irony here that their greatest fear (control of society by moneyed interests) has already come to pass not in spite of, but because of, government. Government is not a divine institution that has been corrupted by man. It is a human institution that exudes the very human nature from whence it is derived.

Think of it like this: government is simply another business. The key difference, though, is that what it sells is the ability to legally exert aggression against those that do not do its bidding. Its competitive advantage is that it is a self-declared monopoly within its arbitrarily defined geographical region. So what person, group, or other business would NOT want to tap into exerting some influence over how such a business operates? Is it really such a mystery as to why so many work so hard for so long to access that power and divert it to their advantage?

Some say the answer is to remove money from politics, but given that politics is just another economic transaction, that option is about as doable as converting to a barter economy. No, the solution is not less government, but more. That is, it is time to break up the monopoly and decentralize power to the point where our choices are not constrained but manifold. Power is kept in check when the individual is not compelled as a matter of law to acquiesce to the demands of others but may choose with whom they shall associate by voting with their wallet or, if necessary, with their feet.

December 22 / 2015

No-Rights List

“There are several steps that Congress should take right away. To begin with, Congress should act to make sure no one on a no-fly list is able to buy a gun. What could possibly be the argument for allowing a terrorist suspect to buy a semiautomatic weapon? This is a matter of national security.”– President Barack Obama


If I may Mr. President, Mr. Constitutional Scholar, I’ll take that one. The answer is “Due Process” as in the Fifth amendment to the U.S. Constitution which states, in part, “[N]or shall any person . . . be deprived of life, liberty, or property, without due process of law…”. In other words, the use of this list to deprive the individual of his or her rights is a blatant 100% violation of the constitution, no ifs, ands, or buts – but hey, go right on believing that a piece of paper can protect us from the machinations of the state. This list has put the lie to that fantasy. Those in power can do whatever they wish as long as they have mastered the art of fear manipulation.

There is nothing wrong with compiling such a list (e.g. passive monitoring until suspicion is either allayed or heightened), but it is its preemptive deployment that is problematic. Depriving one of their rights is the equivalent to an arrest insofar as arrestees too lose a number of rights. Therefore, a “listee” and an “arrestee” are legally equivalent and so both must be afforded the same opportunity to respond to their accusers. In other words, if there is to be such a list, its content must be subject to due process, that is, a trial. Even though this should be obvious it bears repeating: due process is not some artificial speed-bump on the road to getting the “bad guys” – it ensures that the innocent, you and me, are not erroneously treated as criminals. To believe such a process is not necessary is to believe in the infallibility of man (a most hubristic and dubious proposition). Government is merely a collection of imperfect, fallible human beings. Due process protects us from those failings.

As it stands today, if you are on this list (often people merely with names similar to those of suspected terrorist sympathizers, including small children, active military personnel and even Senator Ted Kennedy!) there is no procedure whatsoever to challenge the inclusion in order to have your name removed. The rationale for inclusion is not divulged due to reasons of “national security”, attempts to demonstrate ones innocence are not allowed due to reasons of “national security”. Do you see a dark pattern here? The government may target anyone for any reason at any time citing the circular tautology of “national security” as justification.

With Obama’s attempt to re-purposes this list into the “one list to rule them all” of unlimited state power a most sinister precedent is being set. One right, two rights, three rights – oh my, soon we are no longer free! There is nothing to stop them from adding a whole litany of rights that one could plausibly argue help terrorists achieve their goals: obtain credit, hold a job, own a business, rent a home, buy or rent a car, open a bank account and so on. Now imagine you have been erroneously placed on this list (like thousands of others) and the nightmare your life instantly transforms into as all your rights are instantly stripped away because of either a clerical error or someone’s hunch. But of course you don’t know it is a clerical error or someone’s hunch, because no one will even tell you why you are on the list..

Once the precedent of rights denial for the “listed” is in place, then the really dangerous component can be activated: arbitrary inclusion. Superficially only “terrorists” are to be included, but here’s the rub: what is the definition of “terrorist”? Most assume it means ISIS types, but as far as the state is concerned it encompasses anyone that it deems a potential challenge to its authority. In other words, whoever is in power will deem whomever is out of power as a threat. This is not hyperbole, it has already happened. Various federal and state agencies have issued reports where they expressed the opinion that anyone expressing “right wing” views such as support for the constitution, opposing the federal reserve or taxation, or showing support for Ron Paul could be potential terrorists. Masterful! Political challengers getting you down? Why simply classify them as “terrorists” and wipe away all their rights – that will shut them up pretty quick!

If private airlines want to compile their own list and bar entry aboard their planes, that is perfectly within their rights to do so. It is their property and they may do with it as they see fit. You are free to fly another airline. In a private system the number of false positives would be nearly non-existent (e.g. no kids would be on the list) since the airlines have an incentive to sell tickets and not bar perfectly safe passengers from handing them money. Various other free-market based systems that can’t legally exist in the current public system would ensure even those few false positives were rectified. The compilers of a public list bear no consequences to any mistakes they make, the compilers of a private list do and thus act accordingly. The lack of accountability in a public system necessitates due process, i.e. a method by which accountability can occur. Interaction with private entities is voluntary whereas interaction with public entities is not. This more than anything necessitates a different set of rules for public entities to ensure that absolute power is not abused.

December 14 / 2015

Low Hanging Fruit

With the recent shooting in San Bernardino national attention has again returned to that eternal yin-yang conflict between the gun banners and the gun lovers. Or should I say those who promote “sensible gun laws” and those that do not believe their rights should be curtailed because of the actions of others. Truth be told the former believes “sensible” = “total ban”– because, obviously, making things illegal always eliminates the problem (cough, drug war, cough, prohibition). Banning all guns because of the senseless acts of a few crazed lunatics makes about as much sense as castrating all men because some have raped. The ban-wishers realize that a total ban is not feasible, so they couch their rhetoric in innocuous sounding terms like “sensible” and “common sense” when referring to proposed legislation. The only problem with these proposed laws (if you can actually manage to get any of them to divulge exactly what they might entail) is that not a single one of them would have stopped any of the mass shooting rampages in recent memory. Not. A. Single. One. Calls for background checks to include the presence of psychological issues don’t help if one has never done anything crazy before. Barring felons from obtaining a weapon don’t help if one has never been convicted of a crime. Waiting periods don’t help if one has owned a weapon for years and then commits an atrocity or simply “borrows” it from a family member. In short it is a human problem, not a gun problem. Humans can do anything at any time and as much as we might all wish it to be true (oh, please let there be a Santa Claus!) it is metaphysically impossible to predict the behavior of any one person so as to shut them down pre-crime style.

Now some may object at this point and point to a number of “peer” countries with draconian gun laws who have lower homicide rates than the US. What this simpleminded analysis leaves out is manifold. First of all the use of the arbitrary distinction “peer” is simply a ploy to omit countries with lower gun ownership than the US but with much higher gun deaths. One prominent example is Mexico.  “Oh but that is left out because of the violence stemming from the drug war,” they will say. Oh really? That is interesting, because the US is currently involved in a massive drug war as well, so I suppose to be fair we should subtract those numbers out in the same way they deem it valid to leave Mexico out of the comparison. When you make that adjustment the estimates are that the US homicide rate drops precipitously from 4 per 100,000 down to as low as 1 per 100,000  – the same as all these other “peer” nations with their draconian laws. The other part of the analysis left out is a lot of these “peer” nations are extremely small, culturally homogeneous groups (e.g. Japan or Norway). If one were slice up the US the same way and break it down by state or city rather than as whole you find even without drug war adjustments the regional numbers are on par or lower than those very same “peer” nations. In other words 1% of US cities are responsible for the overwhelming majority of gun violence.

If those that want to “do something” about gun violence are serious then they would be well advised to examine what factors are driving the violence in these cities. They are the low hanging fruit as it were since most gun deaths occur within their borders. Since most (Chicago, Detroit, etc) already have strict gun control laws, that is obviously not going to be a solution. To solve the problem one must understand the source of the problem. That source is overwhelmingly the drug war. It is not simply mere shoots out between gangs that factor in here but all the other social and economic factors that drive one toward violence when a prohibition is placed on some arbitrary article of commerce. Like a cancer the prohibition infects the community and destroys it from within. But it all starts with the prohibition. Remove the drain stopper that is prohibition and all the other violence inducing factors will drain away as well. Will this solve all instances of gun violence? No, but wouldn’t solving 75% or more be a glorious first step?

The constitution says we have a right to keep and bear arms. Changing that fact would be incredibly difficult if not impossible. The constitution does not say drugs are illegal. Its implementation was unconstitutional, thus its termination would likewise be constitutional. We can end the drug war tomorrow with the stroke of a pen. Why not take that easier path and achieve the greatest good? Or is it more about ideology than about actually saving human lives? Prohibition never solved anything.

December 08 / 2015
Author Greg Morin
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Entangling Alliances

The recent downing of a Russian military jet by Turkey should serve as a reminder of the sage advice of Thomas Jefferson during his inaugural address, “Peace, commerce, and honest friendship with all nations-entangling alliances with none.” It is that last bit – “entangling alliances with none” that is most apropos. Turkey is a member of NATO, as is the US and virtually all other Western European countries. For anyone mindful of the deadly domino effect that plunged Europe into World War I (the assassination of a single man), this recent series of events should be a wake up call to de-escalate this situation as quickly as possible.

Fortunately, so far it seems Russia has shown an incredible level of restraint; one can only imagine the outpouring of jingoistic bellicosity had a US jet be downed by a close Russian ally. This may be simply that Russia is formulating a strategically crippling blow to Turkey or that it plans to milk this event diplomatically for all it is worth considering that Russian presently occupies the catbird seat of moral authority. The Russian jet was shot down and its pilots assassinated mid-air after entering Turkish airspace for a mere 17 seconds. Although Turkey insists the plane was warned for approximately 10 minutes to veer away lest it enter Turkish airspace, the standard course of action is to fire warning shots or to “escort” the plane back to the border. Yes, if Russia violated the airspace Turkey had a right to respond – proportionately. Mere flight is not in and of itself provocative enough to warrant instantaneous death, particularly when geographically it is the equivalent of flying over Key West and claiming a gross violation of the airspace of the US mainland. What Turkey did is akin to shooting the neighbor’s dog because it urinated on the edge of your lawn.

The magnitude of the overreaction by Turkey suggests something more is going on here. As it turns out this trivial border violation was but a pretext for Turkey to do what it has long wanted to do: directly provide military support for the Turkmen rebels in northern Syria who are fighting against Assad. The “airspace” violation merely provided cover to tactically engage with Russia without fully committing itself to an all out war with Russia over Syria. In other words, this was a sucker punch against a stronger opponent. Sometimes that tactic makes your opponent angry, but sometimes it stuns them into retreat. The outcome remains to be seen here.

So why attack that particular plane? It was on a well-known route that would end in it bombing regions of Syria where Turkmen reside. Russia has been bombing not only ISIS forces but also all those that oppose Assad, and this includes the Turkmen rebels fighting with the Free Syrian Army in the north. Sure enough, after the plane was shot down those Turkmen rebels shot and killed both airmen and destroyed a Russian rescue helicopter – with U.S.-made and supplied TOW rockets no less. The Turkmen (as one could have guessed) are ethnically Turkish but who happen to live on the wrong side of the arbitrarily drawn borders following the western led partitioning of the former Ottoman empire after World War I. Those arbitrary borders resulted in the Turkmen being inside what is today known as Syria. Turkey has long had an interest in aiding their ethnic siblings. Assad is no saint and has long suppressed the Turkmen minority (through attempts to Arabicize them, land seizures, and the banning of Turkish language). So to be sure there is plenty of blame to go around; there are no “good guys” in this Syrian conflict – not even the US, who in an attempt to undermine Assad (in furtherance of aiding our ally Turkey) gave arms to “Syrian rebels” who eventually morphed into ISIS and now threaten the stability of the entire region.

So in other words, our “entangling alliance” with Turkey, a moderate Islamic ally no doubt, resulted in the US directly playing a role in the creation of the most radical Islamic regime this world has even seen: ISIS. If the US is not careful, our entangling alliance with NATO and the requirement we come to the aid of NATO members who come under attack (i.e. Russian attacking Turkey in retaliation) may very well plunge us into World War III with a nuclear capable rival. Be afraid, be very afraid.

December 01 / 2015
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