Tuesday, February 26, 2013

Does Obama Claim Legal Power to Kill American Citizens on American Soil Without Due Process?

He won’t answer. It’s alarming that this is now a serious question, and more alarming that it’s treated as a mundane controversy rather than an impeachable offence. Americans have pretty much lost all of the exceptionalism (liberty) they once had. We really have to start from scratch; the Republican Party won’t save us, even if led by someone relatively decent like Rand Paul.

Monday, February 25, 2013

Favicons For Bob Murphy

Favicon stands for "favorite icon"- favorite as in browser favorites. Here’s a few I quickly made for Robert P. Murphy’s website, which really needs one (if you’re not following his blog, go ahead and fix that right now).

Here’s a Wordpress Favicon tutorial, in case it’s needed.

Thursday, February 21, 2013

What’s Wrong with Krugman’s Baby-Sitting Co-Op Model?

The famous Keynesian economist Paul Krugman says a story about a baby-sitting co-op “changed my life”, and he argues that it’s a “story that could save the world”. From his 1998 Slate article:

The Capitol Hill co-op adopted one fairly natural solution. It issued scrip--pieces of paper equivalent to one hour of baby-sitting time. Baby sitters would receive the appropriate number of coupons directly from the baby sittees. This made the system self-enforcing: Over time, each couple would automatically do as much baby-sitting as it received in return.

Okay, so an economy with “money” that can only be used for one thing. This is not really money, more like barter. Couples trade baby-sitting services for promises to babysit in the future. Note also, prices are fixed to one hour of babysitting per coupon.

The story continues:

[F]or complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple's decision to go out was another's chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.

In short, the co-op had fallen into a recession.

In other words, the supply of coupons was reduced, increasing demand for the remaining coupons. Evidently, unlike the real economy, prices were not allowed to adjust. One coupon was officially worth one hour, even though the market clearing price was higher. Naturally couples preferred hoarding/saving the more valuable coupon instead of getting one hour of babysitting. 

This is where the model completely fails to resemble the market economy. Prices are apparently not free to adjust, and the coupons- good for only one product- don’t even resemble money in the first place. Yet this doesn't stop Krugman, he equates the coupons with money:

Since most of the co-op's members were lawyers, it was difficult to convince them the problem was monetary.

Now in his model, he is correct to say, with prices not allowed to adjust, that increasing the number of coupons to the original ratio would reduce their value to a market clearing price, ending the “recession”. Of course, failure to return the supply of coupons to the original ratio will result in continued supply or demand problems. This is because prices are fixed one coupon equals one hour of baby-sitting, so mismatching obviously leads to trouble.

Thus the story ends:

They tried to legislate recovery—passing a rule requiring each couple to go out at least twice a month. But eventually the economists prevailed. More coupons were issued, couples became more willing to go out, opportunities to baby-sit multiplied, and everyone was happy. Eventually, of course, the co-op issued too much scrip, leading to different problems ...

Once again, this model has nothing to do with the real market economy, but Krugman continues as if it does:

For example, suppose that the U.S. stock market was to crash, threatening to undermine consumer confidence. Would this inevitably mean a disastrous recession? Think of it this way: When consumer confidence declines, it is as if, for some reason, the typical member of the co-op had become less willing to go out, more anxious to accumulate coupons for a rainy day. This could indeed lead to a slump—but need not if the management were alert and responded by simply issuing more coupons. That is exactly what our head coupon issuer Alan Greenspan did in 1987—and what I believe he would do again. So as I said at the beginning, the story of the baby-sitting co-op helps me to remain calm in the face of crisis.

Money printing in the real economy has entirely different effects. Prices adjust so there is no lack of "aggregate demand" and the only impact is distortion, with those getting the money first effectively taking purchasing power from those who get it last. The distortions temporarily result in false prices, which cause malinvestment, creating an unsustainable boom in some areas that must result in a bust (a.k.a. the business cycle).

Additionally money printing is plain theft and leads to a more powerful government, the latter of which is certainly consistent with Krugman’s ideology.

* * * * *

In January a video was post of economist Hans Herman Hoppe explaining how to deal with Keynesians like Paul Krugman. He strips it down to the fundamental question, does printing more paper money make society as a whole richer?

Krugman, of course, refers us to the babysitting co-op story, which doesn't properly model the market economy:

Well, it may be ridiculous, but it’s also true, under certain conditions — namely, when the economy is suffering from inadequate demand. And you don’t have to use highly abstruse reasoning to see this, either; all you need to do is think in terms of some kind of model, not necessarily of the mathematical kind. The whole point of the true story of the baby-sitting coop, which brings it down to a human scale, is that it’s quite possible for economies to get into a snarl that can be solved by printing more money, or having the government spend more.

So Krugman's answer is yes, in certain conditions. What's the next step in the conversation? Robert Wenzel nails it:

The way to counter this is to continue as Hoppe suggests, keep asking the baby questions of Krugman. By him writing that an economy can suffer "from inadequate demand," he is suffering from the delusion that supply and demand doesn't work. We should ask him if he accepts the proposition, that in a free market economy, market clearing prices will result because of supply and demand. If so, then how can he say that there is such a thing as "inadequate demand?" Prices will simply clear and wages and capital goods will be priced based on the prices of consumer goods. Where's the problem?

Krugman and his babysitting co-op model can’t answer this, without denying that supply and demand works. There is no such thing as inadequate demand, and printing money is never the solution.

Free Markets FTW!

Tuesday, February 19, 2013

Krugman’s Kingdom

Paul Krugman was asked a very interesting question: as an unrestrained king (a.k.a. dictator), what tax system he would have and what percentage of GDP taxes would be? His answers:

  • National Sales Tax (What rate?)
  • “Somewhat” Higher Income Tax (references a 73% rate proposal then says that might be too much)
  • A lot of extra revenue would come the middle class
  • Revenues would be used to provide a “good national healthcare system” and a “good social safety net”
  • Countries with reasonable systems have a tax share of 40% of GDP, but that’s not a target, wants outcomes not a number
In other words, Krugman is an socialist ideologue. His tyrannical, anti-freedom society is frightening to think about. Even though he may never get close to it this is a man many people pay attention to and consider a serious economist.

He wants to more than double federal revenue. Historically, taxes have been stuck at around 18% of GDP, but Krugman thinks 40% is decent:

Like some others, I don’t actually consider Paul Krugman to be an economist, the same way astrologers are not astronomers. He is mainly a political hack that peddles economic quackery and “leftist”/socialist propaganda.

Monday, February 18, 2013

Let's Campaign for Opting Out of Government

One thing the liberty movement should consider doing more of is campaigning on the idea that we should be able to opt of both the costs and benefits of government programs and services. Statists can have their statism if they leave us alone. In the meantime, we can build competing systems that can be there to replace the state when people are ready.

It’s important that we be able to opt out of the costs (taxes) associated with government programs that we opt out of; but even if that’s not possible, we should still be able to opt-out as much as possible. The homeschool movement stands as a spectacular example of what we can do even when only allowed to partially opt-out. I think the average American voter would be more sympathetic to opt-outs rather than abolishment/privatization options. This would at least get us closer to liberty and is consistent with Rothbard’s criteria for transition programs.

Friday, February 15, 2013

Ron Paul vs. RonPaul.com: Both Are in the Wrong

As you have probably heard by now, negotiations between Ron Paul and a fan site that owns the domain name ronpaul.com has took a surprising and unfortunate turn. Naturally, Ron Paul, now retired from Congress and ready to move on to new projects, wants ronpaul.com. But the owners of ronpaul.com have a long established website and demanded a steep price to give up their domain. Negotiations have apparently failed and now Ron Paul is taking legal action, by filing a complaint with the UN’s WIPO.

Several important points need to be made. Both sides are now in the wrong, for different reasons. Let’s walk through this step by step:

Domains Are (or Should be?) Private Property

As I understand it, domains are a scarce resource and thus should be private property. The ronpaul.com domain is legitimately owned by some Ron Paul fans, who have bought up many domain names, ostensibly to keep them out of enemy hands. Unfortunately for Ron Paul, he failed to purchase it years ago when it was worth much less. It’s all a matter of supply and demand. In the past 10 years, Ron Paul has went from obscurity to a household name, and that drives up the value and demand for a domain name such as ronpaul.com.

Domain names are limited to a supply of one, so there is no competition to drive down the price. Unless the owner can be convinced to sell, you’re out of luck. In this case, the owner offered to sell for a quarter of a million dollars. While this sounds outrageous, it’s important to keep in mind many domains are worth millions of dollars. There is nothing unusual about this case, but that doesn't mean the market price is really $250,000, and it doesn't mean that the owners are wise to charge that amount, even though it’s their right to do whatever they want since it’s their property.

RonPaul.com Owners Are Being Unreasonable

Just because they have a right to doesn't mean they should. The owners of ronpaul.com, if they really want to advance the liberty movement and support Mr. Paul, should make sure that the domain is in Ron Paul’s hands as soon as possible.

They made significant investments in their website and probably want to continue their activities, so it’s perfectly reasonable to ask a price that covers the expenses involved with moving to a new domain and business. They could do this by selling to Ron Paul, or by setting up a fundraiser, which would bring in the money so that the domain could be handed over to Ron Paul for free. They could also work in the deal, perhaps, a temporary free banner ad notifying visitors that the old site moved.

Any such deal would have been the classy thing to do, and would have earned them praise instead of the disdain they now are getting. Unfortunately, they stuck to their ridiculous $250,000 demand. While a five or six figure sum is probably the market price for this domain, as supporters of Ron Paul and the liberty movement they ought to prioritize getting the domain to Ron Paul above making the most money they can off him or the movement.

Ron Paul’s Anti-Libertarian Response

It may not be inconsistent with his past record, but Ron Paul’s actions are certainly inconsistent with the libertarian message. His problem is not in using a UN agency, anymore than it being a problem that he drives on government roads and uses Federal Reserve notes.

The real problem with Dr. Paul’s current actions is they are based on a claim to trademark, a.k.a. “intellectual property”, which is state granted monopoly over ideas. This is anti-libertarian; ideas are not scarce and therefore not private property. See Stephan Kinsella’s revolutionary work for further detail- either his book “Against Intellectual Property” or his other media, such as this speech.

Lew Rockwell, who appears to be closely involved in this situation, posted to his blog to deal with some of the disinformation over this issue; his points are all very good though he seems to concede the legitimacy of an IP argument against Ron Paul. Trademark is anti-free market, anti-private property, and anti-liberty, and that’s what’s wrong with Ron Paul’s side of the debate.


Both sides are wrong for different reasons. There is no reason for them to continue being wrong, and the sooner that is corrected the soon the liberty movement can get rid of this distraction and needless division and move forward.

"True in theory" but "not valid in practice"? Nonsense.

[W]e must challenge the very idea of a radical separation between something that is "true in theory" but "not valid in practice." If a theory is correct, then it does work in practice; if it does not work in practice, then it is a bad theory. The common separation between theory and practice is an artificial and fallacious one. But this is true in ethics as well as anything else. If an ethical ideal is inherently "impractical," that is, if it cannot work in practice, then it is a poor ideal and should be discarded forthwith. To put it more precisely, if an ethical goal violates the nature of man and/or the universe and, therefore, cannot work in practice, then it is a bad ideal and should be dismissed as a goal. If the goal itself violates the nature of man, then it is also a poor idea to work in the direction of that goal.

Thursday, February 14, 2013

Is Iran A Threat?

Not to the United States, says David Henderson, in a very interesting speech that is an excellent introduction to facts and arguments that undermine the case for both war and sanctions. Unless you're eager for war, this will brighten your day.

Tuesday, February 12, 2013

We Need More Media Like This

Here's the (already) classic Interview With a Zombie (and don't miss the blooper reel). This is well done media and we're going to need a lot more of it to reach people with the message of liberty.

Monday, February 11, 2013

How to Effectively Transition Towards Liberty

I consider "The Case for Radical Idealism" by Murray Rothbard to be one of his more important essays, as it deals with the crucial question of what strategies are needed to achieve genuine victories for liberty. Excerpted below is the portion where he discusses how we should judge the merits of a transitional or compromise proposal:
How, then, can we know whether any halfway measure or transitional demand should be hailed as a step forward or condemned as an opportunistic betrayal? There are two vitally important criteria for answering this crucial question: (1) that, whatever the transitional demands, the ultimate end of liberty be always held aloft as the desired goal; and (2) that no steps or means ever explicitly or implicitly contradict the ultimate goal. A short-run demand may not go as far as we would like, but it should always be consistent with the final end; if not, the short-run goal will work against the long-run purpose, and opportunistic liquidation of libertarian principle will have arrived. 
An example of such counterproductive and opportunistic strategy may be taken from the tax system. The libertarian looks forward to eventual abolition of taxes. It is perfectly legitimate for him, as a strategic measure in that desired direction, to push for a drastic reduction or repeal of the income tax. But the libertarian must never support any new tax or tax increase. For example, he must not, while advocating a large cut in income taxes, also call for its replacement by a sales or other form of tax. The reduction or, better, the abolition of a tax is always a noncontradictory reduction of State power and a significant step toward liberty; but its replacement by a new or increased tax elsewhere does just the opposite, for it signifies a new and additional imposition of the State on some other front. The imposition of a new or higher tax flatly contradicts and undercuts the libertarian goal itself.
It's important to keep these points in mind especially as we assess the new "Ron Paul Republicans" or "Liberty Republicans" that have been elected since 2010. Ron Paul was very good at upholding liberty as the ultimate goal and not taking steps to contradict those goals. In politics we should look for others that will do likewise, and be very careful of those who don't.

Friday, February 8, 2013

The Constitution Will Not Save Tax Protestors

Some people spend a lot of time trying to find legal ways to just not pay income taxes. This is of course an admirable goal, but it's not a good idea. Jacob Hubert explains why these tax protesters' attempt to play the feds at their own game is not productive, here.

One such person is the father of Peter Schiff, Irwin Schiff. I think Peter is making more of an impact for the cause of liberty by doing as Hubert's article recommends. Peter talked about this subject here.

Thursday, February 7, 2013

DOJ Memo Justifying Assassination of American Citizens Analyzed

Glenn Greenwald has published an important piece analyzing the White House’s attempt to justify its claim to powers of assassinating American citizens. It’s just incredible that so many Democrats and Republicans are silent or supportive of Obama and/or this extreme, dangerous policy of his. As delusional as the average voter and partisan voter is, up till recently I would have expected at least this sort of policy to face significant opposition.

This just goes to show how entirely partisan Democrats were being in their opposition to Bush’s unconstitutional actions. And Republicans’ minimal opposition is sure to dry up as soon as the next Republican enters office. Only libertarians and a tiny minority of others on the ‘left’ (like Greenwald) and ‘right’ are consistently standing against this trashing of a long tradition of critical checks on government powers .

Anyone that continues to support Obama and his ilk is an enemy of liberty and a supporter of present and, by creating precedent, future tyranny.

Tuesday, February 5, 2013

Ron Paul’s Controversial Tweet on Chris Kyle

Yesterday Ron Paul’s Twitter account stirred up a ton of controversy with this Tweet about Chris Kyle, the American Sniper author who killed 160 Iraqis and was himself tragically killed this past weekend:
I was at first confused by this Tweet. I noticed it lacked the "REP" initials that most of his Tweets include, so that immediately raised questions about who posted it. Further, as was pointed out by others, it doesn't quite sound like something Ron would say in an interview. Despite this, as we shall see, Ron seems to stand by it, so I will assume he approved it initially.

It was also unclear what the Tweet meant. I didn't get it completely until Ryan McMaken opened my eyes:
Remember that time Ron Paul used the Golden Rule to explain his foreign policy? Conservatives booed him for that. So who can be surprised that conservatives, including Rand Paul, have been falling all over themselves to condemn Ron Paul for quoting Jesus -in correct context, by the way - to note that the violence wrought by over a decade of nonstop war in America leads to tragedy on the home front
That does make sense. American foreign policy "lives by the sword", and one of the consequences is that it will come back to bite you. Kyle's tragic death was a indirect result of the aggression in Iraq he strongly supported an participated in.

Was Chris Kyle a hero? Are soldiers that fight in aggressive, non-defensive, and unconstitutional wars heroes? No, regardless of which country they come from. They are just government workers causing destruction. (Rand Paul, with his eye on 2016, unsurprisingly disagrees.)

The only criticism of Paul’s Tweet that holds water is that it was poorly worded- not uncommon for short blurbs on Twitter but still, this is not a good excuse. If I was confused by the Tweet, most anyone would be. Paul later followed up with a Facebook post that helped clarify things:
As a veteran, I certainly recognize that this weekend's violence and killing of Chris Kyle were a tragic and sad event. My condolences and prayers go out to Mr. Kyle’s family. Unconstitutional and unnecessary wars have endless unintended consequences. A policy of non-violence, as Christ preached, would have prevented this and similar tragedies. -REP
In conclusion, Ron Paul was right again, even if he stumbles when getting the message across. It’s only the usual suspects that are really outraged, and they have always been outraged with his principled stand against militarism. They will continue to call Ron Paul many names, but ask who is supporting more death and destruction, and who is calling for an end to needless death and destruction. I'll stand with Ron Paul any day of the week rather than with them.

Friday, February 1, 2013

10 Years Ago: Columbia

As a child I was very interested in the Space Shuttle program. That continued through adulthood. Even after my study of  politics and economics led me to libertarianism, I still kept up with the shuttle program and watched all four of the final launches and landings in person. (Hey, gotta get something out of those tax dollars).

The Columbia accident impacted me quite a bit. I recall always fearing and wondering when the second accident would occur. Oddly enough, it happened at a time when I wasn't paying much attention to the Shuttle Program. So it was a big shock when someone brought it to my attention around 10 am that Saturday morning. I didn't even know it was in space.

My interest in the shuttle was rekindled. I never missed another flight, but as time went on I realized the program was another big government boondoggle. When retirement finally came in 2011, I was more than ready for it. Shortly thereafter I wrote "The Free Market Goes to Outer Space- Much Better than NASA" for my Striking at the Root blog, to explain why free markets are the answer even in space travel.

Just reading over it now, I'm thinking it could use some revisions. However, it gets the main points across  and with today's unfortunate anniversary now is a good time to highlight it.

Inside Glenn Greenwald’s Mind: Highlights from his recent Q&A

For libertarians Glenn Greenwald is an interesting and important journalist, despite the fact that he is decidedly not libertarian on numerous issues. What probably attracts us to him is that he spends most of his time fighting the same battles that we fight, and he does so very well.

In this post I will highlight what supporters of liberty will find most interesting from Greenwald’s answers to a recent Q&A with his readers. (Unfortunately, I didn't get a chance to submit a question; maybe next time).

On Changing the World:

I would say this: one indisputable lesson that history teaches is that any structures built by human beings - no matter how formidable or invulnerable they may seem - can be radically altered, or even torn down and replaced, by other human beings who tap into passions and find the right strategy. So resignation - defeatism - is always irrational and baseless, even when it's tempting.

I think the power of ideas is often underrated. Convincing fellow citizens to see and care about the problems you see and finding ways to persuade them to act is crucial. So is a willingness to sacrifice. And to create new ways of activism, even ones that people look askance at, rather than being wedded to the approved conventional means of political change (the ballot box).

On Ideological Labels:

I won't say they have no meaning: they can be useful in some limited sense. But for me, they obfuscate far more than clarify. It could just be my own personal experience - people have tried to apply almost every political label to me since I began writing, and it's clearly just a shorthand means of trying to dismiss my arguments without having to engage them on the merits - so I just generally dislike them.

On Obama and the Inauguration:

I found the reactions to that Inaugural ritual creepy and depressing for two reasons:

(1) I can't believe how reflexively and reliably many progressives cheer for Obama's speeches and pretend that they signify anything substantive given how many times he's said things that had no bearing on what he does. I do agree speeches on their own can be important - that's the power of ideas I referenced above - but viewing one of Obama's speeches as reflective of his actual intent is the consummate case of Lucy and the football.

(2) This has been the case for a couple decades now, but everything about the inaugural festivities reeks of empire and royalty. It's pure Versailles - so gaudy and overwrought. It's particularly gross when the country is suffering so much financially. But that's precisely when people love their monarchs and royal families - it gives them a fantastical escape.
But the police state created in DC, and the marching and dancing troupes that parade before the waving Leader, and the ecstasy over his presence, are really unhealthy. The one exception was the 2008 inauguration - electing the first black president was something really worth celebrating given the country's history with race - but everything else is wretched. I had to ignore it.

Political leaders really aren't meant to be revered. It's unhealthy and dangerous.

On Politicians: Do they really believe what they are saying?

One of the things every good litigator will tell you they have to learn to do is first themselves believe what they want to convince others of. So yes, I think most of these government officials believe in their own virtue and that of the government they serve, even in the face of overwhelming evidence (and their own bad acts).

Most people don't want to believe that they are evil - they want to believe they're good - and so that desire can easily trump truth when it comes to shaping perceptions.

Her husband's secretary of state is on record as having said that the slaughter of a million Iraqi children as a result of US policy was "worth it" in terms of US objectives in the region.

The administration she serves in has its own abundant record of horrible acts. But they believe they are Good people, and therefore their acts are for the Good.

On Gun Control:

Like most policies, gun control can be motivated by some noble sentiments and some ignominious ones. I do think there is an authoritarian faction that wants to restrict guns for the same reason they want to have government control the lives of people in so many other realms, and I'd definitely include Feinstein and Lieberman in that group.

But the fact that some people support Policy X with bad motives doesn't mean Policy X is wrong.

[Reader Question] Glenn what is your view on the current gun debate in the US. I know from previous blogs that you were in favor of gun ownership in Brazil, does that hold for the US? – gregmcinerney

I wasn't exactly against gun control in Brazil. That was a post I wrote really early on after I began blogging, and I was really writing because of how impressed I was with the quality of the public debate that took place over that public referendum.

When it began, large majorities favored gun control. After they were told that the police were failing to protect them (which they already knew) and that their banning guns would leave them defenseless, huge numbers changed their mind. I was just writing to comment the rationality and substantive nature of that debate.

I don't write about or opine on every issue because I'm often ambivalent, or I don't feel I know enough to take up readers' time by writing about it, or because I think others have more valuable things to say. Gun control is one of those issues for me. I definitely see the reasons for wanting to ban especially the most menacing firearms, but it's a bit like the War on Drugs to me: I just can't imagine the government successfully taking guns out of the hands of criminals or even deranged people without very, very invasive and abusive measures, and even then, I'm not so sure it could work.

On Nuclear Weapons Proliferation:

I'm not sure it can be managed. Efforts to stop the spread of technology and knowledge are notoriously difficult. It's very hard to detect, and even harder to stop - and that will only get worse as the technology becomes more accessible. I also don't believe that countries will voluntarily give up their nuclear arsenals. Ultimately, efforts are more important to manage a world with nuclear weapons.

On Supporting Military Interventionism:

For me, this is a bit like the "ticking time bomb" torture question (though much more reasonable). There are interventions I'd support in the abstract: if the humanitarian suffering were truly extreme and widespread; there was widespread international support and involvement; the authorization was extremely limited (to end the acute humanitarian suffering); the harms could be minimized; the benefits of the intervention outweighed both the short-and long-term harms; and there was no reason to doubt that humanitarianism was the goal of the intervening actors.

I just don't think those circumstances prevail often at all. Very, very rarely, in fact. Add to that the unanticipated consequences - such as how the Libyan intervention worsened instability and suffering in Mali - and that usually tips the scales for me.

I am typically skeptical or opposed myself, however, I note the Mali intervention (for example) is small-scale, is supported by numerous authorities (not just the Western usual suspects, but Russia, China, the African Union, neighboring countries) and aims at regime stability rather than subversion as in Iraq or Libya.

The problem with interventions is they rarely stayed confined to their original structure or goal. Remember that Obama swore Libya would only be about a no-fly zone over Benghazi and wouldn't be about regime change. None of that was true.

On Fixing American Media:

That's not going to happen. That's not their business model. I gave up on that goal a long time ago. Developing alternatives to that - using the internet and other forms of developing new media - is the only real way that will happen.

Of course some isolated journalists even at establishment venues do this already. And it's sometimes possible to infiltrate those venues and do it. But as a general proposition, establishment media exists to support the establishment, not to challenge it.

I’d definitely quibble with and disagree with a few points he made here, but overall it’s pretty good stuff. Once again his original post is here.