Rights Violations, Nihilism Underlie Today’s Bad News

The following article by Linn and Ari Armstrong originally was published August 19 by Grand Junction Free Press.

Bad news knows no shortage these days. What common threads underlie the brutal headlines?

In London and around England, gangs of young hooligans looted shops, set fires, brutally beat journalists, and murdered a man as he sat in his car.

As a pretext, the rioters named the police shooting of the violent gangster Mark Duggan. (The Mail‘s Paul Bracchi reports the officers involved specialize in “fighting black-on-black gun crime,” but obviously that cannot be true because England banned most guns.) Alleged police brutality cannot justify the systematic destruction of the innocent; something deeper lies behind the rioting.

Somebody on the BBC referred to the violence as the “Blackberry Riots.” The thugs organized themselves with mobile computers and social mediaover the internet. They used the fruits of capitalism and voluntary economic exchange to destroy shops, cars, buildings, and people.

The rioters flagrantly abused people’s basic rights to life, liberty, and property; this much is obvious. Beneath this lies a fundamental nihilism: the destruction of values for the sake of destruction.

Or consider the latest craze in United States cities from Boston to Chicagoto Philadelphia: gangs of pampered teens organize “flash mob” crime sprees using information technology, looting goods and in some cases brutally beating residents.

Could such troubling cultural nihilism possibly have anything to do with the fact that, throughout much of the West, the typical student learns that producing wealth manifests greed while voluntarily trading it entails exploitation?

Students also frequently learn that human beings blight the earth and immorally reshape nature for human benefit.

Consider the English soccer star David Beckham, whose family recently welcomed their fourth child. New human life creates a time for celebration and rejoicing, right? Wrong. “The birth of their fourth child make the couple bad role models and environmentally irresponsible,” according to people-haters cited in a Guardian article.

But we need not focus on young rioters or anti-human environmentalists to find examples of cultural nihilism. We can find more civilized variants in the federal government.

Consider the flippant remark of Alan Greenspan on Meet the Press about the credit downgrade. (Remember that many years ago Greenspan criticized the very existence of the Federal Reserve before making himself the former head of that out-of-control monster.) He said, “This is not an issue of credit rating. The United States can pay any debt it has because we can always print money to do that.”

In other words: “Debt problem? What debt problem? The U.S. government can legally counterfeit dollars to pay off debt!” Never mind that such inflation debases the money supply and forcibly transfers wealth from those who earn it to those first in line for the government’s counterfeited dollars.

Or consider John Kerry’s remark on the same show calling Standard & Poor’s reevaluation of U.S. credit “the tea party downgrade” — ludicrously blaming those who warned about the debt bomb for its explosion.

Back up and consider the underlying problem: “Government spending in the United States has steadily increased from seven percent of GDP in 1902 to 40 percent today,” USGovernmentSpending.com summarizes. Last year the federal government alone spent around $3.5 trillion, more than $10,000 for every man, woman, and child in the country.

We come frighteningly close to an economic death spiral, in which increasingly high taxes and government spending further discourage productive effort. At a certain point, people simply give up and say to hell with it. As the French economist Frederic Bastiat warned, at its worst “government is the great fiction through which everybody endeavors to live at the expense of everybody else.”

We call for a renewal of values. Each individual human life is precious; every man is an end in himself. You are right to live your life, to strive for happiness, to reshape the natural world for your prosperity and enjoyment. To define and achieve your life-promoting values constitutes the height of a moral life.

As human beings, we survive through reason (as Ayn Rand pointed out). Our capacity for reason allows us to interact with others in a peaceful, voluntary, and mutually beneficial way. We share love in marriage and friendship; we trade goods and services through the marketplace.

Every person has the right to live his own life as he judges best, consistent with the rights of others. You have the right to use your property as you want, to produce the things you need to prosper, and to voluntarily exchange the fruits of your labor with others. The government properly protects those rights.

Today’s culture tolerates, even celebrates, the pervasive and systematic violation of individual rights. It devalues the individual person.

Our confidently bright future requires a reaffirmation of our nation’s core values of life, liberty, and the pursuit of enlightened happiness.

Corporations Aren’t People, So Stop Taxing Them

The following article by Linn and Ari Armstrong originally was published August 5, 2011, by Grand Junction Free Press.

Imagine if you and your spouse individually paid income tax, then you had to pay a separate tax on the same income as a family unit. That would be insanely unjust double-taxation, right?

It is equally unjust to tax corporations. If governments must resort to taxation (and frankly we’re not even persuaded on that point), they should tax only individuals, not groups. Notably, eliminating corporate taxes would jumpstart the struggling economy, something none of Obama’s tax-and-spend interventions has done.

We readily concede the left’s tireless mantra: “Corporations aren’t people.” Families aren’t people, either. However, both are composed of people, of individuals with rights.

In a family, two adults voluntarily agree to live together (usually), join their resources (at least partly), support each other, and possibly raise children. In a corporation, many individuals voluntarily pool some of their resources for some productive venture. You don’t lose your rights (or gain new ones) by joining a corporation any more than you do by getting married.

Ironically, it is the left that actually tends to treat corporations as though they were people. According to the typical leftist smears, a corporation is some soulless monster, a will unto its own, symbolized by a sinister cigar-smoking exploiter in a black hat. The left reifies the corporation — treats it as a concrete entity under its own motive power.

In reality, a corporation is an abstraction describing an organization of people who come together for a specific purpose. Within a business corporation, many individuals invest in a large-scale operation and hire directors to run it.

Here our focus is on the competitive business corporation. There are many other sorts of corporations; for example, the City of Grand Junction is a type of corporation. Historically, English law granted corporations the political power to forcibly block competitors, but that’s not the common meaning today.

Obviously we oppose all political favoritism that lets corporations (or individuals) forcibly damage competitors, gain tax subsidies and “bailouts,” or otherwise violate individual rights. (We’re talking about real rights, not the made-up “rights” promoted by the left to seize or control other people’s resources.)

With that background, we can turn to matters of taxation. Title 39, Article 22 of the Colorado statutes imposes a 4.63 percent tax on “C corporations,” the most common type. And the federal government imposes taxes as high as 35 percent, “the world’s highest corporate-tax rate,” Cato’s Richard Rahn recently lamented.

Among the many benefits that would result from eliminating all corporate income taxes, the most important would be to spur the American economy. Chris Edwards, another writer for Cato, summarizes, “A lower corporate rate would boost domestic investment, which in turn would generate more jobs and higher wages and incomes.”

Why? Without burdensome taxes, businesses would flock to the United States and pour more money into the economy. Today U.S. politicians drive companies offshore, then demonize them for fleeing political oppression. Without politicians siphoning off their profits, businesses would invest more in building up and expanding their productive capabilities, creating more and better jobs.

And consider the resources saved in compliance costs. Today, corporations must navigate the conflicting and inherently ambiguous state tax laws, then hire lobbyists to try to protect themselves from federal tax abuse. Through so-called “loopholes,” different businesses pay different net tax rates. The result is massive productive potential squandered appeasing and dodging politicians and tax bureaucrats.

Eliminating taxes on groups would hardly eliminate them on the individuals in those groups. Corporate executives would still pay income tax on their earnings, as would all the individual employees of the business and all shareholders earning dividends. The difference is they wouldn’t be subject to unjust and economically damaging double-taxation.

Another benefit to eliminating corporate taxes would be to end the social engineering of the Internal Revenue Service. Today, politically favored corporations pay no income taxes. They’re called 501(C)(3) corporations, or nonprofits. The problem is that politicians and tax bureaucrats get to decide which groups qualify and which do not.

The result is the absurd spectacle of partisan “nonprofit” groups, including many churches and think-tanks, pretending to be “nonpartisan” for tax purposes. The tax code promotes rampant dishonesty and political gaming within the nonprofit world. Much better would be to tax individual employees of all groups at the same rates.

The government should not be in the businesses of punishing some groups more than others with higher tax burdens. Instead, the government should treat all individuals, and all groups of individuals, equally under the law. Eliminating corporate taxes would substantially promote that goal.

Corporations aren’t people. Politicians should stop taxing them as if they were. Eliminate corporate taxes to promote economic growth and basic legal fairness.

***

Anonymous commented January 25, 2012 at 4:40 PM:
This is a very nice article. I would add, as an example of unfairness, the fact that some health insurance organizations, such as Blue-Cross/Blue-Shield are treated as non-profits, while others are treated as for-profits when there is scarcely a hairs width of difference between them. The result is that BCBS has been very successful in dominating the insurance marketplace, reducing choice and competition.
— Darrell

Ari Armstrong commented January 25, 2012 at 4:42 PM:
The entire distinction between “profit” and “nonprofit” is largely a creation of the federal income tax. In a free market, there could be a nonprofit designation, but that would be a contract between an organization’s leaders and its contributors. There would be no artificial political favoritism of some organizations over others.

Left and Right Assault Free Speech

The following article by Linn and Ari Armstrong originally was published July 22, 2011, by Grand Junction Free Press.

Within a week of Independence Day, representatives of the left and right started lining up to assault free speech and advocate censorship.

On July 7 Michele Bachmann, a Republican candidate for president, signed a pledge from the Family Leader to “protect” women from “all forms of pornography.” The next day, guests on Thom Hartmann’s “progressive” radio show called for a Constitutional amendment to censor political speech. God help us if they ever reach a “bipartisan” agreement to gut the First Amendment.

We’ll start with Bachmann. The pledge she signed neglects to specify what should be done about pornography. But this is a pledge for candidates, so we can sensibly conclude the intent is to pass laws limiting or outlawing pornography. Moreover, the pledge equates pornography with slavery and the murder of children, and obviously those latter two things should be outlawed. (The pledge also suggests abortion should be banned, but that’s the topic for another article.)

The first problem is who gets to decide which naked pictures constitute high art and which get banned as pornographic. For example, R. Crum’s illustrated Genesis features a nude Adam and Eve, both looking quite healthy (and neither wearing a fig leaf). Should we ban that?

Pornography can be written text as well as images. Chapter 19 of Genesis features Lot’s daughters getting him drunk and then having sex with him. The daughters get pregnant, having sons who go on to found the Moabites and Ammonites.

So who in Bachmann’s world gets to decide which sexually explicit images and texts rise to the sacred and which deserve criminal prosecution? What about Playboy? What about romance novels? What about Michelangelo’s sculpture of David?

Obviously the government has a legitimate interest in protecting the rights of children, who have not reached the age of consent. But consenting adults properly have the right to engage in whatever behavior they want, free from political interference. Anything short of that standard leads logically to the incremental destruction of individual rights.

While Bachmann deserves the harshest criticism for her frankly idiotic move to sign the pledge, the left’s censors deserve even harsher condemnation. They should know better. There was a time in this country when the left actually took free speech seriously. Not anymore.

Hartmann’s guests made two recommendations. First, amend the U.S. Constitution such that only registered voters may donate funds to a campaign or issue group, and regional politicians may limit the amount donated. Second, finance all campaigns for public office with tax dollars. Both these measures blatantly violate freedom of speech.

The purpose of the proposed amendment is to prevent corporations and other groups from funding campaigns. But who gets to decide which people are qualified voters? Some people don’t register to vote for ideological reasons; do they lose their rights of speech? Apparently seventeen-year-olds lose their rights.

Even if the amendment were restricted to individuals, rather than qualified voters, it still would violate people’s rights. True, as leftists monotonously drone, corporations aren’t people. But apparently leftists have neglected to notice that corporations are comprised of people. So are unions. So are educational organizations.

Individuals have the right of free speech, and they have the right to join with others to speak. People don’t lose their rights merely by collaborating with others.

Limiting the amount people can give to political causes also violates their rights of free speech as well as property. People have the right to support the speech of their choice, whether by lending a printing press, handing out flyers, or donating money to help somebody else speak. Limiting people’s ability to support the speech of their choice constitutes censorship.

What about “publicly” funded campaigns? The freedom of speech entails the right not to speak. If somebody forces you to stand up and recite the Pledge of Allegiance, or the Communist Manifesto, or whatever, that violates your rights of free speech. Likewise, forcing people to financially support speech against their will violates their freedom of speech.

An important practical problem is who gets to decide which candidates “deserve” tax dollars. Can just any kook declare to be a candidate and go on the campaign dole? Obviously that wouldn’t work, so somebody would be in charge of blessing the “right” candidates with political welfare.

Notice that both Bachmann and Hartmann’s guests offer their pretexts for imposing censorship. The religious right often claims that pornography promotes sexual promiscuity and so on. The left claims that money in politics corrupts it.

Censors of all stripes unite in their belief that individuals are just too stupid to make their own decisions, and therefore they need benevolent politicians and bureaucrats to do their thinking for them. No presumption could be more deadly to a free republic.

Stop the Hatchet Job on Medical Marijuana Shops

The following article by Linn and Ari Armstrong originally was published July 8 by Grand Junction Free Press.

Around the turn of the last century, Carrie Nation opposed alcohol use. So zealous was her crusade that she gained a reputation for barging into bars armed with her Bible and a hatchet to smash up the establishments. Some say she even excused the assassination of President William McKinley, as he allegedly drank alcohol.

Today’s prohibitionists, too civilized for direct physical force, instead seek to impose the force of the vote. Rather than send in a woman with a hatchet, they threaten to send in police armed with guns.

Grand Junction voters already banned medical marijuana dispensaries. Apparently they want to punish people with debilitating pain and nausea by making their medicine harder to obtain. (Disclosure: One of our relatives uses a medical marijuana card.)

The modern Carrie Nations now want to legally destroy the lonely medicalmarijuana shop in Palisade. But does this make any sense?

To vote for such a ban, you must believe that mob rule properly trumps rights of property, economic production, and voluntary exchange. Once the mob gains the sanction of the government and the use of its guns, it can be difficult to contain. Who will become the next victim, and on what pretext? Should the mob also be empowered to shut down gun stores or politically incorrect bookstores?

Another victim of Carrie’s hatchet is individual responsibility. Most early Americans placed the responsibility of overindulgence on the user. For example, they condemned drunkenness as an abuse of a God-given gift. But alcohol was no more to blame for being drunk than food was responsible for being fat or guns for being careless. While God made no bad drink, people tended to think, some people made bad choices. Today many count medical marijuana as a God-given gift.

We wonder whether Carrie Nation would gleefully applaud or recoil in horror to witness her modern intellectual heirs. Today, rather than blame individuals for obesity, many blame the clown Ronald McDonald, promotional toys, and supersized portions. Who needs parental responsibility? Far easier to blame inanimate objects.

Modern-day Carrie Nations have taken the hatchet to all of Mexico, where the United States’ prohibitionist policies have decimated the country by enriching violent and well-armed narcoterrorists. Tea Party favorites such as Ron Paul, Gary Johnson, and Tom Tancredo have suggested scaling back the drug war as a way to curtail that violence.

That prohibition causes crime waves and police corruption should come as no surprise. Alcohol Prohibition enriched violent gangsters like Al Capone and Bugs Moran. Today, we don’t know brewers of alcoholic beverages as violent gangsters with names like “Johnny the Hick,” we know them as respectable citizens with names like “Governor John Hickenlooper.” Yes, alcohol is a drug, so we elected a one-time drug dealer to lead our state.

We wonder whether Carrie Nation would have been proud that her prohibitionist legacy included the government intentionally poisoning people. Last year Deborah Blum wrote an article for Slate titled, “The Chemist’s War: The little-told story of how the U.S. government poisoned alcohol during Prohibition with deadly consequences.”

Blum writes, “Frustrated that people continued to consume so much alcohol even after it was banned, federal officials had decided to try a different kind of enforcement. They ordered the poisoning of industrial alcohols manufactured in the United States, products regularly stolen by bootleggers and resold as drinkable spirits. The idea was to scare people into giving up illicit drinking. Instead, by the time Prohibition ended in 1933, the federal poisoning program, by some estimates, had killed at least 10,000 people.”

Collateral damage, right? Just like the sick in the Grand Valley who no longer have access to their medicine.

Blum quotes a 1927 editorial from the Chicago Tribune: “Normally, no American government would engage in such business… It is only in the curious fanaticism of Prohibition that any means, however barbarous, are considered justified.”

By the logic of prohibition, the ends justify the means, and individuals and their rights become expendable.

At least medical marijuana is available now in Colorado — though the state recently saddled the industry with onerous rules and regulatory incompetence. We seem to be lurching in the right direction.

We are also heartened that Rep. Jared Polis from Boulder has signed on to a bill to help return marijuana policy to the states. Polis joins other Democrats as well as Republicans Ron Paul and Dana Rohrabacher.

Polis stated in a release, “When a small business, such as a medical marijuana dispensary, can’t access basic banking services [because of federal laws] they either have to become cash-only — and become targets of crime — or they’ll end up out of business.”

Frankly people of the Grand Valley should be embarrassed to let Boulder take the lead on such an important issue of property rights and individual liberty.

Colorado Slips in Freedom Index

The following article by Linn and Ari Armstrong originally was published June 24 by Grand Junction Free Press.

We don’t believe in grading liberty on a curve. We believe that any violation of individual rights creates an injustice, and that “injustice anywhere is a threat to justice everywhere.”

Thus, while we are pleased that Colorado remains in the top ten freest states (we’re seventh), we’re more concerned that we’ve dropped from the number two slot in 2007. Moreover, even if we surpassed New Hampshire for the top spot, that still wouldn’t mean much, competing against the likes of California, New York, and Massachusetts.

Moreover, with the federal government continuing to grow in power relative to state governments, largely turning state legislatures into conduits for federal funding, no place in the country is very free. The Founding ideal of federalism largely has been turned on its head.

Nevertheless, how state governments act very much impacts people’s lives — whether they can open businesses, how much of their earnings they can keep, whether they face persecution for peaceable activities, whether they retain important personal freedoms. So it is well worth a look.

The state rankings come from a new report from the Mercatus Center,“Freedom In the 50 States.” Broadly, the study finds that “Americans are voting with their feet and moving to states with more economic and personal freedom and that economic freedom correlates with income growth.”

For example, Jay Ambrose noted that the “deficit-slaughtering, budget-cutting, seriously limited government in Texas” (ranked fourteenth by Mercatus) “has added 730,000 jobs in the past decade.” Meanwhile, California, ranked 48th, has lost 600,000 jobs. Guess what: economic liberty promotes prosperity, while controls and high taxes threaten it.

Indeed, as the Wall Street Journal noted, “Some 37 percent of all net new American jobs since the recovery began were created in Texas.” So Texas, with about eight percent of the nation’s population, has single handedly created more than a third of all the new jobs.

How is Colorado doing? Mercatus notes our population grew 4.9 percent from 2000 to 2009. Mostly our unemployment rate has remained lower than the national figure, according to Bureau of Labor statistics compiled by Google. (As of April we showed 8.8 percent “seasonally adjusted” unemployment, compared with 9.1 percent nationally.)

But we have some serious problems, reports Mercatus. The severe smoking bans here violate property rights. The state places burdensome requirements on market schools and “particularly onerous recordkeeping requirements” on homeschoolers. Moreover, the “enactment of a minimum wage helped to drag down its regulatory freedom score.” Wage controls result in throwing some people out of work entirely. In addition, some of the state’s gun laws remain overly restrictive.

We would add to Mercatus’s list of abuses. The state continues to finance corporate welfare, despite the explicit constitutional provision against it. The energy mandates already have driven up utility bills and will continue to do so far into the future.

Protectionism, as in the beer and liquor industries, continues to screw consumers. Colorado’s campaign laws violate people’s rights of free speech and association.

Morever, the state’s sales and use taxes create nightmares for businesses as well as consumers. (That these laws remain widely ignored indicts the laws more than the lawbreakers.) Indeed, legislators made this bad situation worse by trying to force Amazon and other online retailers to help enforce Colorado’s tax laws, thereby forcing Amazon to drop all of its Colorado affiliates.

Of course on the positive side we retain the Taxpayer’s Bill of Rights. Yet we found this Mercatus line odd: “Overall, Colorado has strong fiscal policies and is the most fiscally decentralized state in the country, with localities raising fully 45.5 percent of all state and local expenditures.” Tax-and-spend localities further reduce economic liberty rather than augment it.

Mercatus lists some other positives about Colorado. We don’t have especially onerous “sin” taxes on politically incorrect goods. Medical marijuana is legal, and “arrests for drug offenses, relative to state usage, are relatively low.” And “Colorado is one of the very best states on occupational licensing and civil-asset forfeiture.”

We love Colorado largely because of our traditions of liberty. Generally, our Western sensibilities guide us to keep the government out of our bedroom and out of our pocketbook. Our attitude is “live and let live.” Don’t hurt other people, and don’t let them hurt you. We help people out, not because we are forced to, but because we assume responsibility to do so.

Mostly we want to live our own lives, the way we see fit, and achieve our own success and happiness. At least that’s the ideal.

We’re glad that Colorado remains in the top ten freest states. But we can do much better. We can strive to be first. And then we can realize our goal is not merely to be freer than other states, but to consistently and without failing protect the rights of each individual.

Spending Limits Protect Against Factions

The following article by Linn and Ari Armstrong originally was published June 10 by Grand Junction Free Press.

“Democracy is two wolves and a sheep voting on what’s for dinner.” It’s mob rule; fifty-one percent of the population voting to enslave the rest. “Democracy is a form of government in which you can vote for a living instead of working for one,” adds Lawrence Reed.

America’s Founders feared the inherent pitfalls of direct democracy, which is why they established a constitutional republic. The U.S. Constitution and its Bill of Rights (in its text, if usually not in its modern interpretation) tightly controls and limits the powers of the federal government.

The Constitution establishes a purely representative government at the federal level. We vote on elected officials, and (as outlined in Article V) congress or state legislatures must initiate constitutional amendments. Moreover, Article IV, Section 4 states, “The United States shall guarantee to every state in this union a republican form of government.” So, for instance, Colorado could not impose a hereditary line of state kings.

Does the federal guarantee of republican government render state-level popular votes void? Specifically, does it clash with the Taxpayer’s Bill of Rights (TABOR), passed by voters in 1992? That’s the claim of a lawsuitfiled in district court and signed mostly by elected officials. The suit hopes to overthrow TABOR and allow state and local governments to tax and spend more without voter approval.

The suit favorably quotes James Madison, who argued against pure democracy in the tenth Federalist paper. However, in an article for theColorado Springs Gazette, legal scholar Rob Natelson notes that republican governments easily accommodate some direct participation by the people.

Natelson explains, “What Madison actually was saying was that a type of mob rule identified by Aristotle (and called, in English translation, ‘pure democracy’) was not republican. Madison clearly thought a republic could feature direct citizen lawmaking, since in Federalist No. 63 he referred to ancient Athens, Sparta, and Carthage as ‘republics.'”

In other words, TABOR, as part of Colorado’s constitution, remains fully compatible with the U.S. Constitution. The politically motivated lawsuit presents a sham.

Moreover, TABOR actually helps protect against the sort of factionalism that Madison warned against. The lawsuit quotes Madison, “It may well happen that the public voice, pronounced by the representatives of the people, will be more consonant to the public good than if pronounced by the people themselves, convened for the purpose.”

The lawsuit conveniently omits Madison’s next line: “On the other hand, the effect may be inverted. Men of factious tempers, of local prejudices, or of sinister designs, may, by intrigue, by corruption, or by other means, first obtain the suffrages, and then betray the interests, of the people.”

This describes precisely the state of the modern Colorado legislature. “Factious tempers,” “local prejudices,” and “sinister designs” often rule the day at the state capitol.

For example, the legislature continues to finance corporate welfare, despite the explicit prohibition against doing so in the state constitution. And the legislature continues to impose protectionist legislation, as with the beer laws, rewarding interest groups at the expense of consumers and entrepreneurs. Most modern legislative functions involve forcibly seizing money from those who earn it to give it to those who do not.

Thus, the state legislature epitomizes the evils of faction. While Madison clearly saw the dangers of mob rule, he also warned against the comparable threat of an unrestrained legislature.

The essential characteristic of republican government becomes, then, its constitutional form, which limits the powers of government and protects the rights of the individual from abuse by factions, whether democratic or legislative. A legislature unbound by constitutional rule becomes the rapacious tool of special-interest factions.

The individual rightly claims among his essential rights his ability to work for a living, in voluntary association with others, and to dispose of the fruits of his labor by his own judgment. This is the fundamental human right most often threatened and abused by legislators, many of whom essentially institute legalized theft in exchange for political bribes.

TABOR helps to mitigate precisely this danger. Far from undermining a republican form of government, TABOR augments the constitutional protections of the individual and limits the threat of unruly factions. In requiring voter approval for new taxes, TABOR does not impose mob rule; it checks legislative abuses by the approval of the people. TABOR does not free the majority to abuse the rights of the minority; it allows the voters to stop the legislature from abusing people’s rights.

We can argue about whether Colorado voters too easily amend the state constitution. We can debate whether proposed constitutional changes should first meet a test of conformity to federal and state bills of rights. But as to the status of TABOR, far from undermining our republican form of government, clearly TABOR helps to protect it.

Why Spending More for Local Goods Harms the Economy

The following article by Linn and Ari Armstrong originally was published May 27 by Grand Junction Free Press under the title, “Channel 11 piece peddles economic nonsense.” Stay tuned for a related update about the views of Denver mayoral hopeful Michael Hancock.

If Bernie Lange had taken to the airwaves to promote therapeutic magnetic underwear or report alien anal probes, he rightly would have been laughed off the station. But apparently peddling economic nonsense fits perfectly well with the editorial policies over at Channel 11 News, the local NBC affiliate.

Last week the station broadcast the segment “Made In America,” a silly editorial masquerading as news that falsely argues buying overpriced American products creates jobs. Spending less for the same products made overseas, Lange intones sinisterly, costs Americans not only jobs but “billions in lost dollars.” That’s due to “the multipliers,” you see.

Thankfully, French economist Frédéric Bastiat* exposed Lange’s brand of foolishness way back in 1845 in his “Candlemakers’ petition.” To update the example, consider an obvious way to create jobs galore for manufacturers of light bulbs and the electricity required to run them. Simply block out all sunlight from your home. Board up all the windows. Think of all the American jobs we’d create if we all followed that one simple step. Say no to extraterrestrial sunlight!

Or consider the blight of foreign-made bananas and coffee. Scandalously, Americans tend to buy both those products from Central and South America. Think of all the American jobs we could create if we bought those goods only from U.S. suppliers, or better yet Colorado suppliers.

Impossible, you say? If you check out the web page of Denver Botanic Gardens, you will discover the center currently grows bananas, coffee, and chocolate right here in Colorado (as one of our friends pointed out). No doubt we could grow all those things locally if farmers spent enough on greenhouses and heaters.

Sure, the products would cost more, but just think of “the multipliers!” We could add billions upon billions of dollars to our economy just by spending more on the goods we consume every day. Indeed, by Lange’s logic, the more we spend, the more we prosper!

Clearly there’s something wrong with Lange’s reasoning. To get a better idea of the problem, consider Bastiat’s wisdom about the seen and the unseen. Bastiat writes, “The bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.”

What Lange sees are the manufacturing jobs lost. What Lange ignores are the exporting jobs created and the additional wealth made possible by trade.

Lange sees that spending more money on American-made products would contribute to the paychecks of American workers. Lange ignores the fact that spending more money on the same goods would deprive other businesses of those dollars. If you spend more money on toys and household items, you have less to spend with the local fruit grower or massage therapist.

Let’s get back to basics. Why should we trade at all? Why shouldn’t each individual produce everything he needs, all by himself? The answer should be obvious: everyone would become horrifically poor, and only a tiny fraction of today’s population would manage to survive at all. Just imagine making all your own clothes, growing all your own food, building your own shelter, and acting as your own dentist.

By trading, we benefit from other people’s skills, expertise, accumulated machinery, and natural advantages. Why does Lange think it’s any different when we trade with people in other towns, other states, or other nations?

China features lots of cheap labor. We would be fools not to take advantage of that. America, on the other hand, features lots of complex machinery and other capital goods made possible by industrialization and relative economic liberty. That’s why (as the CIA reports) per capita product in China is around $7,400 annually, whereas in the United Statesit’s $47,400.

If we stop buying stuff that China’s relatively good at making, that means we have to make stuff that we’re relatively bad at making. Such a policy is self-destructive. Buying cheap goods from China and elsewhere allows American workers to specialize on the things they make best.

Of course, it is worth looking into artificial reasons why some American companies move overseas, including high tax rates and business-crushing union policies. We should also explore the reasons for continued high domestic unemployment, particularly the Obama administration’s policies of blowing out the deficit and meddling in the economy. But let’s fix the underlying problems, not succumb to economic fantasies.

We doubt very seriously that Bernie Lange or anyone else at Channel 11 makes much of an effort to buy only American-made goods. And they’d be foolish to do so. Trade is all about specialization according to one’s strengths. We hope, therefore, that Channel 11 sticks to reporting the news and leaves the economic commentary to people like Bastiat.

* Note: I was paid a modest sum to help run Liberty In the Books, which has reviewed select works of Bastiat.

***

Elisheva Hannah Levin commented June 2, 2011 at 8:35 AM
I agree, should the local goods be identical to those from elsewhere. After all, I enjoy coffee as much as most Americans do. My caveat, is that often locally produced food is fresher and/or is produced in ways that make it tastier than mass produced food that is shipped in. And in many cases, such as the one of corn-fed beef in CAFO’s, the real cost is obscured because the federal government subsidizes the production of the corn heavily, and the cost to defend oil sources (need for transportation of feed and of product) is never factored in. Since this makes the American food supply chain an artificial economy, most people do not really know what the true cost of “cheap” food is, and how they are paying for it.
Sadly, although the term “free market” should be a redundancy, the understanding of the term “market” is so poor for most consumers, that we have to say it. Free markets, for all goods, across all boundaries produces a vital economy.

Films Show Fight Against Tyranny: Atlas Shrugged, Harry Potter, King’s Speech

The following article by Linn and Ari Armstrong originally was published April 29 by Grand Junction Free Press.

The same day Atlas Shrugged Part I arrived in theaters, Harry Potter and the Deathly Hallows Part I came out on disk. A few days later the Oscar-winning King’s Speech followed. These films vary dramatically in content and quality, yet they share an important theme: the fight against tyranny.

The hastily produced, low-budget Atlas Shrugged hardly does justice to Ayn Rand’s epic novel, though it remains basically true to Rand’s story and offers some good cinematography and acting. (It also offers some really bad acting in parts.) The film opened April 15 in Denver and other larger cities.

While the film misses the rich psychological complexity of the novel, it conveys Rand’s critique of the political oppression of producers. The basic story is that a railroad executive and steel manufacturer go into business together to rebuild a Colorado rail line of vital economic importance. Meanwhile, bureaucrats and politically connected “businessmen” join forces to shackle and loot the producers. Mysteriously, the nation’s top producers begin to disappear.

Part of the power of Atlas Shrugged is that much of the real world sounds remarkably like the novel. FreedomWorks even put a quiz online, asking, “Can you tell the difference between quotes from elected U.S. government officials and [villains in] Ayn Rand’s iconic book Atlas Shrugged?” Often it’s difficult, with President Obama threatening to soak the rich and Congressman Jesse Jackson, Jr., castigating the iPad for displacing jobs.

Unlike the low-budget, limited release Atlas Shrugged, the Harry Potterfilm consumed an enormous production budget and earned the box office to justify the expense. Like Rand’s works, the novels of J. K. Rowling offer richly complex characters that challenge the filmmaker.

While Rowling and Rand would clash over various political and philosophical issues, the writers would agree about the importance of defeating tyrants. The basic story arch of the Potter series follows Voldemort’s rise to dictatorial power and Harry’s quest to stop him.

(For more detailed discussion of Rowling’s work, see the Expanded Edition of Ari’s book, Values of Harry Potter, at ValuesOfHarryPotter.com.)

In many ways Voldemort resembles one of the 20th Century’s most vicious tyrants, Hitler, particularly in his bigoted cruelty. The King’s Speechtargets Hitler directly.

Mostly The King’s Speech is about a man with a speech impediment, a stammer, who works hard to overcome it. Only the man is King George VI, and his ability to speak becomes vitally important when he must lead his nation to war.

The King’s Speech richly deserves its awards, having presented an inspirational story with a phenomenal cast on a limited budget. The film offers two lessons to the producers of Atlas Shrugged. First, a great film can overcome meager funding. Second, a film climaxing with a long and important speech, whether the king’s speech or John Galt’s speech, can keep the audience riveted if properly set up and presented. (Galt’s speech does not appear until the third part of the story.)

True, as Christopher Hitchens warns us, The King’s Speech downplays the missteps of George VI. For example, Hitchens writes for Slate, “When Neville Chamberlain managed… to hand to his friend Hitler the majority of the Czechoslovak people, along with all that country’s vast munitions factories,” George congratulated and supported him. Yet George and the English came through in the end, and that counts for a great deal.

When you watch The King’s Speech on disk, be sure to listen to the original address on which the related scene of the film is based (or catch it on YouTube). It is moving seven decades later.

King George says, “We have been forced into a conflict. For we are called, with our allies, to meet the challenge of a principle, which if it were to prevail, would be fatal to any civilized order in the world. … Such a principle, stripped of all disguise, is surely the mere primitive doctrine that might makes right.”

The films about Harry Potter and George VI portray the defeat of a tyrant who would institute that primitive doctrine. Somebody like Hitler or his fictional counterpart Voldemort takes might, brute force, to its logical conclusion and attempts to impose universal enslavement.

Rand too had intimate knowledge of tyranny, having lived through Russia’s bloody revolution and escaped the oppressive Soviet regime, which slaughtered even more people than the Nazis did.

But Ayn Rand went further and fully articulated the opposite principle of “might makes right,” the principle of individual rights, according to which each individual holds the right to his own life and the fruits of his labor. If we wish to restore vitality to the “civilized order in the world,” it is the principle of individual rights for which we must fight.

The King’s Speech is spectacular, and the Potter film is very good. The film based on Rand’s novel, though flawed, is good enough to view and at times very moving. But, after you enjoy these movies as works as art, take to heart their warning against tyranny.

***

Benpercent commented May 6, 2011 at 9:20 AM
*Toy Store 3* is also another good film about combating tyranny. The toys actually find themselves in a dictatorship imposed within a daycare center where some “elite” toys live at the expense of other toys, and they work to establish a voluntary society.

Overall, it seems there’s a lot of films coming out lately about the evils of statism, at least implicitly. Could this be a sign of good ideas percolating in the culture?

Walter Walker Opposed Grand Junction’s Socialists

The following article by Linn and Ari Armstrong originally was published April 15 by Grand Junction Free Press.

June 15, 2020 Update: At the time I wrote this, I did not know the following information, as reported by Dan West: “According to interviewees from the Mesa County Oral History Project, Walker helped bring the Ku Klux Klan to Grand Junction and was a member. He later turned against the group and published editorials in the Daily Sentinel attacking the KKK and was even the target of violence from Klan members.” So that is an embarrassing omission, obviously. I think there are a couple of lessons here. First, Walker’s story is one of sin as well as of reform. Second, the enemy of my enemy is not necessarily my friend. I include some relevant context and links in a write-up for my Liberty ‘Gator.

Back in the era when the Daily Sentinel was “published every day in the year, except Sunday,” and a monthly subscription cost just fifty cents, the paper’s editor Walter Walker waged rhetorical war against the city’s socialists.

Karl Marx published his Communist Manifesto in 1848, and his ideas gained traction in subsequent decades, culminating in the Russian Revolution of 1917 and a socialist sweep through much of Asia.

American intellectuals too flocked to socialist ideas. The so-called Progressives arose in the early 1900s, and in 1927 some of future President Franklin Delano Roosevelt’s advisors-to-be visited Joseph Stalin. See Amity Shlaes’s book on the Great Depression for details.

Jeannette Smith writes for the Fall 1997 Journal of the Western Slope that, by 1913, “socialism had thrived for many years in Grand Junction and Walter Walker stood as one of the movement’s staunchest foes.” Smith notes that, in 1909, using a system of ranked voting, the city elected Thomas Todd of the Socialist Party as mayor. Based on Smith’s notes, we looked up several fascinating old articles.

To get a sense of the local popularity of socialism, consider this September 7, 1908 story: “Nearly one thousand people crowded and packed into the Park opera house last night to hear Eugene V. Debs, the socialist candidate for president of the United States.” It was “one of the greatest audiences that ever turned out to hear a political speaker in Grand Junction.”

Yet Walker consistently opposed Mayor Todd’s socialistic program. For example, the editor relentlessly derided Todd over his city-run ice house. The January 26, 1912 paper quoted Todd, “I am firm in the belief that the city should own and operate its own ice plant.” Yet Todd’s proclaimed savings of $30,000 a year defied reason, as “only $24,000 worth of ice was used here last year,” Walker retorted. (Note: while the articles are unsigned, we’ll follow Smith in attributing the anti-socialist editorials to Walker.)

Walker concluded the essay, “Municipal ownership of everything — whether that thing is paying while privately owned or not — is the song of the radical reformer. We have the municipal owned wood pile, now we are to have the municipal owned ice plant: wonder if the mayor will call attention to the need for a municipal owned lumber yard next?”

A few days later, on January 30, Walker pushed harder, suggesting “that the mayor demonstrate his abounding love for his ‘masters’ by cutting down the price of lumber at the yard he owns and operates in this city.”

The paper argued “that the man who experiments with his own money, or who is willing to cut his own profit for the benefit of the people, is more of a patriot than he who wants the public to put up for his benevolent operations, and whose great heart yearns first to take over somebody else’s business.”

We can only imagine what Walker might say to today’s local politicians who control recreational facilities, golf courses, theaters, swimming pools, ambulances, and so on.

Just a few weeks earlier (December 22, 1911), Walker had lambasted the “socialistic municipal wood pile.” The article mocked, “Even some of the socialists have smiled to see the lack of the ‘Reds’ on the woodpile.” Instead, four to six men worked the pile daily for food and accommodations at the jail; “the only men at work are some hoboes who drifted in… No family men have applied.” Moreover, the article notes, the “the Coal Dealers association” vowed to “fight against the city entering into the business.”

Not long after the controversies over the wood pile and ice house, Walker berated Todd yet again over the city’s support for the socialistic Industrial Workers of the World.

“The Grand Junction city administration was engaged in a mighty poor businesses yesterday afternoon when it made an appropriation to feed the members of the notorious I.W.W. who are passing through the city this week,” an April 9, 1913 article relates.

Walker continues, “We are not surprised at the socialist mayor pulling off a stunt like this: but we are surprised at the other commissioners for standing for it… Thus again does this city come under the lime-light as a ‘haven for hoboes…’ What right have the city commissioners to make an appropriation to care for these worthless, country-hating, law-denouncing drones? …Grand Junction has been made a laughing stock in such matters often enough. It is time to call a halt.”

Walker noted the hypocrisy of the city supporting those who “denounce the country, the government and the laws, and urge the use of revolutionary methods,” while at the same time dragging to jail “some poor devil down in the flats [who] gives another a swig of whiskey.”

We’re sure that, if Walker were around today, we would often enough find reason to criticize his views. We’re also sure that often we would unite to condemn the modern heirs of Todd’s socialist schemes.

TV Reporters to Register with the Federal Government

The following article by Linn and Ari Armstrong originally was published April 1 by Grand Junction Free Press.

A menace stalks our society, contributing daily to panic and untimely death. Irresponsible television reporting whips the public into a passionate frenzy and leads them to make imprudent decisions, sometimes with fatal consequences.

Clearly there should be a law. Congress should require reasonable, common-sense television controls to register all reporters with the federal government and require background checks to purchase cameras and other sensitive equipment. After all, it’s for the children.

Yes, that’s our attempt at an April Fool’s joke. But our point is quite serious: the First Amendment and the freedom of speech protects the rights of journalists, even though some journalists act irresponsibly and contribute to harmful and even deadly behavior.

Similarly, the Second Amendment and the right of self-defense rightly protects peaceable gun owners, even though a tiny fraction of people with guns handle them irresponsibly or even commit horrific crimes.

Apparently Don Coleman’s idea of news reporting over at KJCT Channel 8 is to lie to law-abiding, peaceful gun owners by calling them under false pretenses to harass them about existing gun laws. Coleman reports that his station called people making private gun sales and asked them about background checks, knowing full well that private sales are not subject to such checks. Coleman’s resulting report is a barely-disguised editorial masquerading as news.

The background check system is riddled with problems, to which we’ll return. First we want to demonstrate that irresponsible journalism can in fact help to kill people, something journalists might care to remember when they advocate forcing people to register with the federal government to practice their Constitutional rights.

Seth Mnookin, author of The Panic Virus, writes the “media seized hold of the story” about the bogus link between vaccines and autism and “helped to launch one of the most devastating health scares ever.” This “led to outbreaks of deadly illnesses like Hib, measles, and whooping cough.”

* Gary Taubes argues in Good Calories, Bad Calories that the media contributed to the demonization of saturated fat in favor of high-carb grains, promoting more obesity and diabetes.

* “The media are much more likely to do scare stories about plane crashes than car accidents,” John Stossel points out, leading some people to avoid planes in favor of risker car travel.

* While much of the media have sensationalized the risks of nuclear power in the wake of Japan’s earthquake, Lachlan Markay writes for Newsbusters that “wind energy has killed more Americans than nuclear energy.” Science writer Matt Ridley adds, “Compared with coal, oil, gas and biofuels, nuclear energy is pretty harmless and its environmental footprint is minuscule.” Tom Zeller of the New York Times points out that most nuclear reactors in the world are even safer than those in Japan. Yet media fear mongering may encourage Americans to utilize relatively dangerous forms of energy.

* What about guns? John Lott writes in The Bias Against Guns, “Though not always intentionally, the media and government have so utterly skewed the debate over gun control that many people have a hard time believing that defensive gun use occurs — let alone that it is common or desirable.” This media bias discourages some from considering the benefits of gun ownership, leading to more criminal victimization.

Yet, even though “pens don’t kill people, bad journalists do,” we fully endorse the First Amendment and its protections for all writers and speakers. The law should not punish good journalists for the irresponsibility of a few.

Likewise, the law should punish criminals who misuse guns, not responsible gun owners who help keep society safe by discouraging crime. But punishing the responsible is precisely what background checks are about.

Properly they are called “background registration checks,” because they register gun owners with the federal government. No, the names are not kept in a central database; they are kept on file by gun sellers, accessible to federal agents on request.

Under a demagog, such information easily could be abused. Those who want the global history of how gun-owner registration can lead to gun confiscation (and far worse) should see Death by ‘Gun Control’ by Aaron Zelman and Richard Stevens.

There is no magical, all-knowing Santa Claus who checks his list during a background check. The lists can be wrong, or somebody with a similar name may be wrongly delayed. When it comes to buying a tool for self-defense, delays can matter.

At Colorado gun shows, private sales must go through licensed dealers for a background check, adding to the costs of the gun.

Meanwhile, we have little reason to believe that background checks stop crime. Usually a criminal has easy access to black-market guns, or he’ll pass a check anyway. Meanwhile, we’re paying state and federal agents tax dollars to sit around running checks rather than chase down actual criminals.

Remember that nothing is so dangerous to our lives and the future of our nation than unjust, abusive laws.