February 16, 2019

Just like modern “progressives,” the big government Federalists meant well

mobocracyIt’s true Federalists like Madison (at the time) and Hamilton proposed a much stronger federal government than the 1788 constitutional convention authorized, but many people wrongly argue they were motivated by purely tyrannical intentions. On the contrary, their main motivation was the belief a stronger central government would protect the individual from the democratic mobocracies they believed the states were already becoming.

While there is certainly an argument their concerns were exaggerated at the time, one need look no further than NY, CA, MA or any number of “blue states” (and many red ones, too) for proof their concerns were valid. 

The flaw in their thinking was that a more powerful central government would ever protect individual rights from government power. Everything they wanted and more has come in through the back door over the past 231 years. Hamilton’s central bank and Madison’s federal government veto over state laws (but by SCOTUS, instead of Congress, as Madison proposed) are just two examples. We can see their strong central government turned out precisely the opposite of what they intended.

Power corrupts, absolute power corrupts absolutely, and absolute power over hundreds of millions of people, concentrated in one city, is absolutely terrifying.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

I, Interest Rate

interestIt is often said, “Don’t kill the messenger,” but that is precisely what everyone seems to want to do in my case. I’m not sure why because the news I bring is neither good nor bad. It is simply the truth; and it is a very sad day when telling the truth can foster such ill will. There are some who go so far as to declare my very existence wicked simply for providing information people use to engage in a specific type of voluntary exchange that, although of immense benefit to society, has somehow acquired an unsavory reputation.

As you may have surmised, I am the rate of interest, the price difference between present goods and future goods. Now, many economists mistakenly identify me merely as the price of borrowing money over time, but that is only one of the many messages I carry. I also represent the price spread in the various stages of production, where capitalists purchase present goods in the form of factors of production in the hopes of selling what is produced by those factors for a higher price than what they spent. I am also this difference in price.

Nobody but me can gather the information I gather, for my message is determined by billions of individual transactions occurring simultaneously all over the economy. I consider the individual supply and demand schedules of hundreds of millions, sometimes billions of individual consumers and producers, along with the uncertainty involved in every time transaction, to determine the current price levels for transactions that involve time at any given moment.

In the case of individual borrowers, the uncertainty I mentioned includes that borrower’s previous behavior, which is generally called a “credit rating.”

While it is only one of the many prices I make available to the market, an inordinate amount of attention is paid to the price of borrowing money. That is likely for two reasons. One, as I said, is that most people erroneously believe it is the only information I impart. Two, people seem to be borrowing a lot more than they did previously in history for reasons I will explain shortly. As a result, it is regarding the price of borrowing money where I am most slandered and abused.

Because this price of borrowing is above zero, there are some who consider my existence alone as evil. They say I’m a party to a crime they call “usury,” which is a very strange concept. When everyone is acting honestly, money is a scarce commodity, so any loan by Person A to Person B requires a sacrifice on the part of A. Person A must forego consumption in the present in order to lend to B.

It is no different than if A were saving for a new car or some other expensive item for himself. He must forego eating out as much, or buying new clothes, or going on vacation this year in order to put aside money to buy the expensive item next year.

By loaning money to B, A is allowing B to skip this sacrifice and purchase the expensive item now. It seems a very peculiar notion that A should forego spending his own money on himself only to let B use it for free when needed. How did this obligation to serve B free of charge come about? Aren’t all men created equal?

Read the rest at Foundation for Economic Education…

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Should Social Security Be Means Tested?

383px-Ponzi1920Ken Langone told CNBC on Wednesday Congress “has to have the courage” to make Social Security means tested, arguing a billionaire like him shouldn’t be getting $4,000 a month (he and his wife) from the government when entitlements are 71% of spending.

In a way, means testing would be a good thing, as it would finally cure the delusion that Social Security is anything other than a welfare program, although I’m not sure the public wouldn’t make peace with that rather quickly, rather than consider turning off the spigot.

What it wouldn’t do, unless the benefit cutoff threshold were very low, is make a difference in the program’s basic insolvency. The problem with Social Security isn’t just that it’s welfare, but that it’s welfare for everyone – “Everybody plunders everybody,” as Frederic Bastiat would say. There are currently 62 million currently receiving checks. For 60% of them, Social Security makes up half or more of all their income. Millions more have come to depend upon the benefits, even if they make up a smaller percentage.

It might make people feel good to know millionaires and billionaires will no longer receive Social Security checks, but it won’t make much of a fiscal difference. There aren’t enough of them to significantly lower the payouts. To affect Social Security’s bottom line, people who would miss the money are going to have to take a hit.

There are only two ways out: default or bankruptcy. Either way, it’s going to be ugly. Social Security really is an evil mess that can’t but end badly. Ditto for Medicare, times ten.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Democracy Goes Out the Window During “Government Shutdowns”

Important_government_shutdown_notice_for_the_Stature_of_LibertyEveryone loves democracy, until the vote doesn’t go their way. Then, there are protests, marches, recounts, and other forms of whining from everyone who doesn’t like the results. We saw that after Donald Trump’s election and after the 2018 midterms, when Democrats tried to keep recounting the votes in some races until they got the result they wanted.

Now, we’re seeing it with the impending “government shutdown.” I use quotation marks because two things are true. First, this time around, about 75% of the government is already funded through September 2019. Second, even when none of the government is funded, it doesn’t really shut down.

But it should.

Somehow, the strange notion has taken hold that when Congress votes not to pass a new bill, it “isn’t getting anything done.” Not true. If Congress takes a vote and the bill is voted down, Congress has done its job every bit as much as if the bill had passed. In most cases, it does us all more good voting bills down than passing them. Regardless, Congress is representing the people no less by voting “no .” There is no immutable law of nature that says new bills must be constantly passed. The system is actually set up to make new legislation difficult, not easy.

If you’re going to insist on the superstition that Congress does “the will of the people,” then at least be consistent. If Congress votes a bill down, that is as much the will of the people as passing one.

This Friday, Congress may very well fail to pass a bill to fund the remaining 25% of the government. If they don’t vote to appropriate those funds, then no money should be spent on any part of the government for which funds aren’t appropriated. Those aren’t my rules. It’s right there in the government’s own rule book, in black and white: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”

By the way, spare me the “republic-not-a-democracy” comment blizzard. I know it better than you do. The form of government is a republic, but there is a lot of democracy baked in – more all the time, unfortunately, thanks to the Supreme Court’s rampage over what’s actually written into the Constitution. But even without their tyrannical creativity, the republic is built on a series of majority votes. That’s “democracy,” even if the government is not “a democracy.”

Regardless, the rules say majorities in both houses of Congress and the president have to approve any spending. When that doesn’t happen, those of us who want the government to shut down are supposed to get our way. After all, Congress represents us, too, whether we like it or not. That’s one of the key rationalizations for taxing us (“no taxation without representation”).

I won’t hold my breath waiting for the evangelists of democracy to follow the tenets of their own religion. Those seeking your money in the name of their deities rarely do.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

But without government, who will plow the snow?

web-GMCSierraSnowPlow03Many of my southern friends who have never lived in the north may not know how snow removal works up here. What if you’re elderly or disabled and can’t shovel/snowblow your driveway? Or what if you just don’t want to?

As usual, capitalism saves the day. There is a vibrant market of snow plow contractors who will guarantee your driveway is always plowed for an extremely reasonable rate – usually $300-$350 for the entire winter for the average suburban driveway. If it snows too many times, they lose money. If their projections are accurate, they make a profit.

They take 100% of the risk to do something most people don’t want to do, in the hope of making some extra money during winter slow periods for their regular businesses (many own lawn service/landscaping businesses).

Purchasing their service is 100% voluntary. No one but you votes on how much they are paid or whether you buy their services at all.

To every guy or gal out in a truck right now, likely up and working long before dawn, THANK YOU FOR YOUR SERVICE AND MAY YOUR MARGINS BE HIGH!

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Pearl Harbor: The Day the Tyrant FDR Succeeded in Getting the US into WWII

pearlToday is the 77th anniversary of the day the tyrant FDR succeeded in getting the U.S. into WWII, over the wishes of the people who elected him. Ironically, Roosevelt’s excuse for seizing Japanese assets and cutting off their oil was Japan’s brutal occupation of China, begun with the support and encouragement of Roosevelt’s own cousin just a few decades earlier, as the late William N. Grigg explained. Thus did Franklin Roosevelt goad Japan into the foolish attack that would eventually lead to the end of the empire Teddy Roosevelt encouraged them to build.

This was one of the more momentous in a long list of examples of Washington, DC cozying up to authoritarian powers and then turning on them when they no longer served DC’s purposes. Americans of this century might remember the Muhadajeen, Saddam Hussein, Muammar Ghaddafi, etc.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

The Best Argument Against Minimum Wage Laws: You Don’t Own Other People

min wage article picWith Democrats about to take control of the House, it is likely we will see an increase in the federal minimum wage pass the lower chamber, even if it has no chance of becoming a law. We will just as surely hear opponents making completely sound economic arguments against minimum wage laws.

Minimum wage laws cause unemployment, these opponents say, because they price those workers whose skills don’t justify the minimum wage out of the market completely. If a worker only has the skills to produce $14/hour worth of benefits to an employer, the employer is better off not employing that person rather than losing $1 dollar/hour doing so, if the minimum wage is $15/hour. And regardless of where the minimum wage is presently, any increase in the price of labor will result in less demand for labor, all other things being equal.

That’s basic economic reasoning and wasn’t even controversial until recently when, for political reasons, economists like Paul Krugman began contradicting their own earlier writing on the same subject. But as economically sound as the unemployment argument against minimum wages may be, it ignores a previous and much more important one: you don’t own other people.

Read the rest at Foundation for Economic Education…

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Some real “politically incorrect” talk on Veterans Day

BC928881-DA33-4445-A218-C9A3144641F4I’m told the former Armistice Day, co-opted by the warfare state to celebrate war rather than its absence, is not the time to remind my fellow taxpayers that no war in the past seventy years has benefited them in any way whatsoever, much less preserved what freedom they have left.

I disagree. What better time than when the myth Americans are freer because of these wars is echoing from every media outlet, statehouse and social media channel to point out the harm this propaganda continues to do?

No American would be less free if Washington, D.C. had abstained from invading Afghanistan, Iraq, or Africa (the invasion nobody talks about). On the contrary, they’d be freer, richer, and would suffer less blowback terrorism than they have these past seventeen years. No American would be less free if Washington had stayed out of Vietnam or Korea, either.

In response to to these rather obvious observations, we’re often regaled with the somewhat irrelevant claim that people join the military to “defend the Constitution” and it is only politicians who are to blame for the unconstitutional and immoral wars constantly waged by the DC empire.

The reasons people join have nothing to do with whether American taxpayers benefit from any of this. But let’s be honest here. The overwhelming majority of people who join the military do so because it greatly improves their economic situation. At what point, after decades of unconstitutional, unnecessary wars of aggression, will people who join the military voluntarily bear some responsibility?

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

21 Months Later, Nothing in DC Has Changed Under Trump

Publication1Despite 21 straight months of screaming headlines from both anti-Trump and pro-Trump media, virtually nothing about Washington, DC and it’s empire has changed.

There are still US troops and their suppliers voraciously consuming taxes all over the world. Not a single regulatory agency has been eliminated or significantly cut. Entitlements continue their headlong sprint towards fiscal oblivion. And federal spending continues to outpace inflation, faster under Republicans, as usual.

And honestly, neither Republicans nor Democrats voted against any of that.

Trump was able to win the 2016 election not because he was going to radically change Washington, DC, but because he was going to superficially change its marketing from “progressive” to “conservative.” To be fair, he never promised to cut anything. On the contrary, he promised not to touch Social Security or Medicare and to increase spending on the military. He’s kept both promises.

He did promise to eliminate two regulations for every new one, but that is a very vague promise. Suppose there was one regulation that said all construction workers had to wear hard hats and another regulation that said they all had to wear safety googles. Repealing both regulations and replacing them with one that says, “All construction workers must wear hard hats and safety goggles” is perfectly consistent with Trump’s promise. Is that what his regulators are doing? It’s hard to tell. It appears the federal register is smaller, but is the economy fundamentally less regulated? What happened to getting rid of whole federal departments, as Republicans promised to do just six years ago?

The truth is the so-called Swamp continues because most Americans don’t really want to drain it, despite overwhelming evidence that everything it does creates large-scale human misery. Just ask any ten neighbors if they’d support cutting Social Security or Medicare, much less eliminating either, or cutting the military by even 30% (which would still leave it by far the largest in the world). Ask them if they’d support getting rid of the Departments of Education, Agriculture, or even the completely useless Department of Commerce.

When push comes to shove, they won’t even support getting rid of the TSA, which is Oh-fer in seventeen years on preventing actual terrorist attacks and still has a well over 90% fail rate in detecting dangerous items on its own tests. That’s not to mention the nightmarish surveillance state, five years after Edward Snowden exposed it. Americans are only upset about it when it spies on politicians – a completely backwards position in a supposedly free country.

The mid-term elections are approaching and the usual “this is the last chance to save the republic” rhetoric is already reaching a fever pitch. In reality, nothing about the republic has changed or will change until a critical mass of Americans truly want less government. Right now, that’s hard to imagine considering who wins elections.

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Tucker Carlson Feeling the Bern Illustrates Conservatism’s Hostility to Free Markets

screenshot-2018-08-31-at-92959-amTucker Carlson is feeling the Bern on at least one well-established left-wing narrative: that corporations are robbing everyday Americans by paying their workers so little that many of them qualify for food stamps or other welfare benefits. Thus, the founders of Amazon, Uber, Walmart, and other corporate behemoths get richer while taxpayers are forced to pay part of their labor costs.

Carlson appears honestly surprised to be saying “Bernie is right,” referring to U.S. Senator Bernie Sanders, who plans to introduce legislation forcing corporations to “pay back” the government by taxing corporations at 100 percent of all food stamps, public housing, Medicaid, and other federal assistance paid to their employees.

He shouldn’t be.

Conservatism shares the same hostility to laissez-faire markets as modern liberalism. Both are ultimately collectivist philosophies, hostile to liberty in general, albeit for slightly different reasons, and prone to economic fallacy to rationalize that hostility.

First, to the economic errors. It’s hard to believe Carlson could get so many things wrong in under five minutes, starting with his general premise. He and Bernie argue the problem is the corporations not paying enough, resulting in taxpayers having to pick up the slack. But business enterprises in a free market are supposed to seek the lowest prices they can find for labor and other inputs. That’s how market economies drive down the costs of consumer goods and make all members of society richer.

The problem isn’t businesses acting in their economic self-interest; it’s the existence of the welfare programs themselves. They are an intervention in the market that distorts the price of labor. If they did not exist, the market would naturally set labor prices higher because employees wouldn’t accept jobs that didn’t pay them enough to cover the necessities currently subsidized by the programs.

Read the rest at Foundation for Economic Education…

Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? Part One and A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.