Essays

The Witch is Dead

Another essay from the vault – written on the occasion of Yasser Arafat’s death and published in a 2004 edition of the Boston Metro. Not quite radical enough yet, but on the right track.

Yasser Arafat is dead. One more Islamofascist bites the dust. Call it one small step forward for mankind. But is it? To Arabs he was an icon, a righteous victim and defiant guerilla warrior wrapped into one man who for decades acted as titular head of a stateless people, the Palestinians. Recent corruption was wearing the shine off of his reputation, but despite this and his tacit support for the increasingly brutal Palestinian terrorists, he remained the most viable partner for peace with Israel – the best choice of a bad lot.

Why should Americans care about Palestine vs. Israel, and the Middle East in general? Until recenty that would’ve been a good question. Meddling in their affairs only got us burned in the past. Our unstinting support of Israel earned us little in terms of strategic advantage, while only breeding resentment from Arabs. But today, it should be obvious why the Palestinian-Israeli conflict matters: our part in it was a key motivator for the 9-11 attacks, touching off an open-ended ‘War on Terrorism’ that promises to mire us in ideological and armed conflict for a generation.

“So was 9-11 our fault?” you ask indignantly. However harmful our policy might have been toward the Arabs what could possibly have justified a crime like 9-11? I hate talking down to adults, but with so many Americans having succumbed to George W. Bush’s childish view of the world as ‘goodies’ vs. ‘baddies’, I’m afraid its necessary: stop being a knee-jerker.

Pundit Pat Buchanan has long been a critic of the Bush Administration’s empirialistic foreign policy. He’s no knee-jerk Republican, but a common-sense conservative who’s vision of a non-interventionist America is looking better all the time. When Bush says “You’re with us or against us”, Buchanan says “If you’re not against us we’d like you to be with us”. When Bush says “We must stay the course in Iraq”, Buchanan quotes Kenny Rogers: “You have to know when to hold ‘em, Know when to fold ‘em”. When Bush says of muslim extremists “They hate freedom”, Buchanan asks “Do they hate us for who we are, or for what we do?”

Indeed, the Arabs love us for who we are. American culture reigns supreme and is emulated in the progressive Arab cities of Damascus and Amman. What they hate is our favoritism of Israel. And why should we take sides at all? There will always be interest groups with influence in government – pro-Palestinians no less than pro-Israelis – who want us to favor one side or another and to intervene on their behalf. But our government should keep hands off any foreign affairs that don’t directly affect Americans’ security. We must stop giving Arab extremists reason to use America as a scapegoat for their own misery, when their true opressors are their own corrupt rulers. Though I doubt Bush will take my – and Pat Buchanan’s – advice, let’s at least hope that Arafat’s death won’t propel us further down a dead-end road

Massachusetts, Kick the Tax Habit

Another essay from the vault – written for the occasion of the 2004 Massachusetts ballot vote to abolish the income tax. Only lost badly because carpetbaggers from out of state poured (teacher) union money into advertising against it. Too bad.

The great cultural critic H. L. Mencken once said “Every election is a sort of advance auction sale of stolen goods.” How true. One can picture candidates as auctioneers, taking bids from special interests and their voting consituents on the property and wealth of their fellow citizens.

I know that these days, with the income tax a fixture of political life, it may seem extreme to think of it in terms of confiscated property, but that’s exactly what it is. The only thing voluntary about Massachusetts’ income tax these days is the novel mechanism, that debuted on last year’s return, of giving taxpayers the option of paying the higher (and formerly statutory) 5.8% rate, rather than the current 5.3% rate. Not surprisingly, native son John Kerry exposed a bit of his liberal hypocrisy by calling for higher federal income taxes on the campaign stump, while quietly opting for the lower rate on his own state return.

Consider the fight this year over Governor Romney’s efforts to complete the voter-mandated roll back of the state income tax from 5.85% to 5%. This is something state legislators, led by late House Speaker and Chief Oligarch Tom Finneran, have willfully refused to do despite direct orders from the voters in a 2000 referendum.

Romney has been busy campaigning for a raft of new Republican candidates for statewide office. Democratic lawmakers, by their obstructionist, anti-democratic refusal to obey voters’ wishes on the tax cut may have unwittingly handed their opponents a potent weapon that will come back to wound them this tuesday. Though a Republican sweep is unlikely, there are several vulnerable Democratic encumbents. Even a few upsets would send a strong message to Beacon Hill.

Despite our unfortunate reputation as the ‘Commonwealth of Tax-achusetts’, our state does have a traditional resistance to big government and its attendant inefficiency and corruption. We are the birthplace of that great middle-class tax revolt,commonly known as the American Revolution. We are the descendants of Daniel Shays and his farmer’s revolt against high property tax. We are the citizens who in 2002 nearly voted away the state income tax entirely.

But to listen to the elites at the Boston Globe Editorial Board, the Massachusetts Taxpayers Foundation, and other tax-friendly organizations, we the poeple don’t know what’s good for us. We don’t fully appreciate the failing schools and ineptly managed public works (e.g. the Big Dig) that our taxes so amply fund. We don’t understand why big union payouts for town employees require some of the steepest property tax increases in decades. And most importantly, we are selfish and inhumane if we dare challenge the state’s monopoly on education by calling for more school choice and accountability.

Its a proven fact that taxpayers will always vote for smaller government. It happened in here in 2000, in Tennesse in 2001, in Alabama in 2003, and it will continue to happen throughout the country until lawmakers get the message: ‘Stop auctioning off our stolen goods”.

Big Dig, Big Corruption

Originally appearing in a 2004 issue of the Boston Metro – this kind of criticism is always current. Google “big dig corruption” on any given Sunday and you'll see what I mean.

The bad news about the Big Dig keeps getting worse. While most of the news media are accurately reporting the horrific figures – nearly 700 leaks in the main tunnel, bungling contractors bailed out over 3,200 times, and 500% in cost overruns – public outrage usually doesn't sustain itself for very long. People have gotten used to the Big Fat Obnoxious Dig. They shrug their shoulders and blithely move on with their daily doings, offering at most a toss-off comment like “Those pesky bureaucrats!”

Though we have little reason to be thankful so far for this boondogle of a public works project, we are thankful for one thing – that the feds are paying for most of it.

Ever since the project's inception in 1985, the funding ratio has been pegged at around 80% federal to 20% state tax dollars. That makes the it the most obscene pork barrel fleecing of the other 49 states in the history of public works. For this we can thank Reagan-era Cabinet Secretaries George Schultz and Casper Weinberger, both former Bechtel executives, who might have helped steer federal funding to Massachusetts, and consequently to their friends at Bechtel. Such rotten connections should be enough to induce an accute case of deja vu in anyone who's heard juxtaposed the words “Haliburton” and “Dick Cheney”.

With the most recent revelations of corruption and ineptitude, talk has begun in Washington of finally shutting off the Federal spigot. At that point, for Massachusetts taxpayers, the panic will set in. And for good reason – when its someone else's money you're spending, who cares how badly its spent?

This prompts a larger question: can publicly funded projects of any kind avoid corruption, inefficiency, and rape of the taxpayer? The Big Dig is routinely labeled “The largest and most mismanaged public project” in US history, as though these two aspects are coincidental. The facts speak loudly that most initial estimates for government projects are lowballed, later spiralling out of control, and funds are always allocated not to contractors who are the most innovative market entrepreneurs, but to the most persistent political entrepreneurs – that is, those with the greasiest lobbyists. So, the larger the project, the larger the corruption. As economist Lew Rockwell, President of the libertarian Ludwig von Mises Institute, puts it – “When the slop's in the trough, we can't be surprised when the pigs come out to eat.”

What we now hear from politicians is righteous indignation and steely determination. We can conquer the corruption, save the project, protect the taxpayer form further abuse, make the scoundrels at Bechtel pay.

This is absurd, and no one should believe it. Trying to root out government patronage and corruption is like playing whack-a-mole – whack it down here and it pops up there. Human nature, supremely adaptable and greedy to the core, always finds a way to be corrupted.

But greed can also be a definite good. In fact, self-interest in the free market has been the engine of social progress for two hundred years. The key to any successful project is private, not public, ownership. So in the future, we should look to privately financed and managed highway systems.

Its hard to imagine what a privately owned and managed Big Dig would look like only because government has long held a monopoly on civil construction. Whatever the funding mechanism would be for such an arrangement – tolls, an auto-use tax – is unimportant. Human ingenuity would invent a solution to that. But what can't be invented is a government that knows how to spend The People's money better than The People themselves.

New (old) Counterfeiter-in Chief

Another essay from the vault – written when Ben Bernanke was appointed – now very relevant as his future is uncertain – and his misdeeds and incompetence have become public knowledge.

I finally understand the mysterious nature of money. Rather than begin at the beginning, let’s work backward from recent news – Greenspan’s retirement and the naming of the new Fed dauphin, Bernanke. If you watch CSPAN you saw Bernanke and the assorted crooks yapping about what should be the Fed’s focus after Greenspan – achieving “full employment” or “controling inflation”. These two bogus shibboleths have been offered as the Fed’s reason for being since 1913. There have been others – moderating the “inherently” boom-bust cycle of capitalism, ensuring an “optimal supply” of money, etc. – all to justify the existence of what is essentially a mass counterfeiting and embezzlement operation – The Fed.

Ever since the rise of the modern state kings and parliaments have been grasping for control of the mint. The reason why should be as obvious as why a counterfeiter likes counterfeiting – its handy to be able to spend money without first having to earn it or, in the case of the state, to tax it. Taxing is cumbersome and ineffecient, and the people’s natural resistence to it placed a barrier to power that states wanted removed.

Things started small – monopolizing weights and measures enabled rulers to clip coins, spending the excess on favored groups and wars, though on a small scale. It wasn’t until the 20th century brought the twin hammers of income taxation and nationalized (and eminently inflatable) paper currencies that the bloodbath could begin. The slaughter of 170 million people in only 100 years couldn’t have been funded by gold shavings.

So, to pull off the Big Plan, financiers and their pet politicians realized that they needed a much slicker technique than the old printing press. Simply running off more and higher-denomination notes is a very third-world way to inflate. You still see this in backwaters like Zimbabwe, but the people catch on quick, and such governments suffer more than the usual number of uprisings.

It happens like this – the Fed’s “Open Market” committee holds a ceremony every few months, for the amusement of the press, to decide what shall be the interest rate on inter-bank loans. This is a distraction from the committee’s main activity which, as its name implies, is purchasing assets on “the open market”. Which assets is irrelevant, though in practice its usually federal bonds (to the immense benefit of the federal government).

The Fed buys assets with checks written against its own account, which is filled with nothing but air – money created out of thin air. The process of inflation begins – with each dollar put into circulation that wasn’t exchanged for something of value (like a sandwich, or an hour’s labor, etc.), the purchasing power of all other dollars is reduced. Prices rise.

So, pretend Joe Schmoe of Joe Schmoe Tractors just received a $1 million check from the Fed for assorted farm gear. The money supply is increased by $1 million. Joe deposits the check at his own bank. The bank, to its delight, sees this is a check payable at the Federal Reserve. It rushes to the Fed, and deposits the check in its own account with the Fed, thereby increasing its reserves by $1 million. Now, by law it can lend out $6 million to its other customers, also created out of thin air. Its bad enough when the bank does this so-called “reverse pyramiding” of its reserves with your hard-earned paycheck. But to create its own phantom money on top of the Fed’s phantom money is a double-whammy. So there you have it – counterfeiting (phantom money) at both levels, and embezzlement (banks lending out your real – and the Fed’s phantom – money) at one level.

If you’re confused, that’s because you’re supposed to be. Only a select few politicians and technocrats understand the process, which they leverage to their own emolument.

The upshot is that the Fed’s inflation does more to keep poor people poor than any capitalist bogeyman the Left would like us to believe, and its the cause of the modern boom-bust business cycle that ruins so many honest entrepreneurs, while rewarding the Haliburtons and Brown&Roots of the world.

The economics of QWERTY

First in a series of editorial "retrospectives" – published back when I was recovering from that tsunami I talked about over here.

When you get to work this morning, sitting down at your desk to a burnt cup of office coffee and your morning email, I ask you to contemplate that fixture of working life: the QWERTY keyboard.

Have you ever wondered how the keyboard got the way it did? I have. I've experimented recently with different key arrangements on my own board, a trivial thing to do in Microsoft Windows. As a chronic tendinitis sufferer, I have an incentive to try less fatigue-inducing alternatives to QWERTY, even if my words-per-minute get handicapped in the process. One promising arrangement I found is called "Dvorák". It purports to be laid out on strictly ergonomic principles, placing the most frequently used keys in the most prominent positions. Despite this I am finding little relief so far. Typing, no matter how I slice it, just plain hurts.

Investigating further, I found to my surprise that controversy has swirled for years among economists over whether Dvorák or QWERTY are superior, and how QWERTY gained its market dominance. The lowly keyboard, it turns out, more than just an overlooked symbol of life in our networked world, is Exhibit A in the case against free-market capitalism.

The typewriter was invented in 1868 and, so the story goes, the now-familiar QWERTY keyboard was selected precisely because it prevented fast typing, which jammed the keys. Though it may have been the right design for the time, QWERTY critics say, we've all been suffering its inefficiencies since, and a mass conversion to Dvorák should be undertaken forthwith by the computer industry. More tellingly, these critics say that government is needed to force that conversion on us.

This isn't a conspiracy theory. Mainstream economists like the liberal-left Paul Krugman discuss the so-called "Economics of QWERTY". This is the familiar story of BETA vs. VHS, Mac vs. PC, and Hybrid vs. SUV. To Krugman, the undeserved market success of technologies like the QWERTY keyboard is due not to superiority or low cost, but to early" lock-in". These technologies simply beat their competitors to the punch, and market inertia keeps them dominant – and keeps all of us dim-witted consumers from switching en masse, even though we all know individually we'd be better off doing so.

This is all garbage, of course. Products dominate a market if – and only as long as – they serve consumers' needs. The QWERTY keyboard remains dominant because, as I discovered first-hand, Dvorák is no better. If it were, consumers would clamor for the new keyboards, and savvy entrepreneurs would provide them.

The true lesson to be learned here is that anti-capitalists always underestimate the intelligence and autonomy of individual consumers and entrepreneurs acting without help or guidance from Big Brother government. To them, we are all helpless in the face of a cruel and capricious free market that rewards not innovation, but timing and luck. They couldn't be more wrong. I prove it every day I sit down at my computer to type.

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