April 19, 2015

No one really believes the Federal Reserve or the BLS

Federal ReserveLast Friday was anything but good for news on the economy. The Bureau of Labor Statistics (BLS) released a dismal jobs report that missed expectations by fifty percent. This followed a press conference two weeks ago by Federal Reserve Chairman Janet Yellen during which she indicated rate hikes might not come as soon as expected because “room for further improvement in the labor market continues.”

Yellen’s statement would be fairly unremarkable if it were not for one troublesome fact: the U.S. economy is supposedly at “full employment,” according to the measures the Fed uses to guide their interest rate policies. The Bureau of Labor Statistics has it at 5.5% as of today. That is the rate most economists consider full employment for the U.S. economy and we’ve supposedly been there since February.

How could there be room for improvement in the labor market if we’re at full employment? There can’t be. But everybody knows real unemployment is much higher than the manipulated BLS statistics represent. Janet Yellen knows it. The markets know it. Tens of millions of unemployed Americans know it.

Yet everyone keeps talking about the BLS unemployment rate as if it were true.

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Read the rest of the article at Rare…

The New Civil Rights Movement

The new civil rights

The Federal Reserve runs the economy, not Congress or the President

federal-reserve-building.top

BUFFALO, March 18, 2015 – Janet Yellen told the markets what they wanted to hear today and the indexes rocketed out of negative territory to finish up over 1 %. As usual, speculation abounds on precisely what was in the minds of investors.

Journalists tend to overstate the causal importance of breaking news when the market makes big moves. Often, those moves were predicted months in advance by serious traders and what happened that day had little to do with what the market did. Not true for the Fed’s announcements. They do move the markets immediately.
What most people don’t know, or at least don’t acknowledge, is that the Federal Reserve really runs the entire economy. When the Fed inflates the supply of money and credit, indexes go up, growth occurs and the economy “improves.” When it deflates the supply of money and credit, indexes go down, contraction occurs and the economy “slows.”

That’s really the whole story of the American economy. Think about that for a moment.

It doesn’t matter who is president, which party controls Congress or what any of those people do or don’t do. Yes, regulations and tax rates have some effect on the economy. Liberals might say more regulation is a good thing, conservatives might say it is bad.

But taxes and regulations haven’t really had much effect at all in the past 40 years. Before that, when taxes were at 90%, they mattered, but not when the top rate fluctuates between 35% and 39%. Do the math. It’s not that significant.

Read the rest of the article at The Huffington Post…

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

 

Republicans Like Ben Carson Wrong to Make Freedom of Association About Religion

405px-Ben_Carson,_MDJoe Biden invoked Jesus on Friday responding to Ben Carson’s bizarre argument that prison inmates “turning gay” after going into prison straight proves homosexuality is a lifestyle choice, rather than a genetic or otherwise innate trait.

As a libertarian, this debate holds little interest for me. Even if homosexuality is a lifestyle choice, it is one that does not harm other people and thus falls into that vast category of human behavior called “liberty,” which should be beyond the reach of any government.

What does concern me is Carson’s argument on why homosexuals “don’t have a right to be served in every single store.” Carson argues that store owners should be able to “refuse service if it violates their religious convictions.”

I’m immediately reminded of George Orwell’s Animal Farm, where a law at the beginning of the book reads “No animal should kill another animal,” but by Chapter 8 reads, “No animal shall kill another animal without cause.”

Read the rest of the article at LewRockwell.com…

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Why Progressives Should Let Republicans Repeal Obamacare and Close the Borders

obamacareLast week, Senate Republicans were given bad news by Senate Parliamentarian Elizabeth MacDonough. She doesn’t believe Republicans can bypass cloture and repeal Obamacare with a simple majority by attaching its repeal to a spending bill.

As a libertarian, I’m glad to hear it. No, I do not like Obamacare any more than I like most other government programs, especially those that further enrich multi-billion dollar corporations on my dime. But I’m glad it’s still difficult to get things through the Senate. That’s how it’s supposed to be.

But progressives should feel differently. The should want to see at least two bills pass both houses, one repealing Obamacare and one blocking the president’s immigration policies. Progressives profess a belief in democracy and the Republicans have been democratically elected to both houses. Whether you agree with them or not, there’s no question repealing Obamacare and reversing the president’s immigration agenda were two of their strongest mandates.

Read the rest at The Huffington Post…

 

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

 

Libertarians and Sandra Bullock agree; we really do want world peace

Miss-Congeniality1The Sandra Bullock movie “Miss Congeniality” hilariously lampooned the vapid plea for “world peace” by beauty contest contestants. But that’s really what libertarians want.

First and foremost, libertarians want an end to the most destructive government program of all, war.

But libertarians also recognize that forcing people to purchase things they don’t want or need, like “public” education, health care programs or bankrupt retirement plans, forcibly prohibiting peaceful activities like taking medicine without permission from a doctor or accepting a wage below the arbitrarily imposed government minimum, or forcibly mandating people to associate with others against their will are all just as unpeaceful, i.e. warlike, as sending armed men in government costumes into a field to slaughter each other.

In all of these cases, force is initiated against the innocent, which is, by definition, war. Peace is not possible until all legalized aggression is abolished, and peace reigns over all human endeavors. To the obtuse cry, “There ought to be a law,” libertarians respond “Let there be peace be within thy walls, and prosperity within thy palaces.”

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

What does the word “liberal” mean?

government_approvedI’m trying to figure out what the word “liberal” (derived from the same Latin root as “liberty”) means when used in a political context. The best definition I can come up with is the belief that individuals should be allowed to make absolutely no decisions themselves regarding any aspect of their lives.

Instead, they will eat and drink only food the government allows them to, in packages labeled as the government directs, in portions the government deems healthy.

They will work only for compensation the government deems “fair,” neither lower nor higher than what is allowed, and they will keep only that portion of said compensation the government doesn’t require for distribution to someone else.

They will live in houses built to the government’s regulatory specifications, including the light bulbs they use, the safety devices they employ and the amount of water in their toilets.

They will raise and educate their children as the government directs, in schools they are forced to pay for whether they use them or not, studying only subjects the government approves and taught the way the government says they should be taught, regardless of how idiotic the government’s teaching methods are.

They will treat illnesses only as the government prescribes and only from caregivers the government “licenses,” including preventative treatments, whether they want them or not. They will pay for that treatment with an insurance program they are required to purchase.

They are mandated to associate with whomever the government directs them to, with legal penalties if they don’t.

While living this completely directed life, they are not to say or even think anything the government deems offensive.

If they fail to comply with any of the above, uniformed, armed men will come and drag them away and lock them in a cage.

If I understand correctly, there is another, related word to describe this destruction of personal choice over time. We call that “progress,” from which we get the word “progressive.”

Am I in the ball park?

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Get cops off the streets (unless serving a warrant or responding to a 911 call)

police-role1BUFFALO, December 5, 2014 – Protests erupted in New York City yesterday following a second grand jury decision not to indict a white cop who killed an unarmed black suspect. Unfortunately, all of the attention is focused on the racial aspect of the two tragedies and not on a question that really needs to be asked.

Do we really need armed government agents patrolling the streets, looking for people to cite or arrest for mostly victimless crimes?

Few people propose to abolish police forces entirely, although some small communities have done so. Most believe that police forces are necessary to protect life and property. Whether that’s true or not, many honest police officers will tell you they spend very little of their time actually doing so.

Read the rest of the article…

Tom Mullen is the author of A Return to Common Sense: Reawakening Liberty in the Inhabitants of America.

Chapter Three: Who Will Build the Roads? (from Anti-libertarian Nonsense: The Ridiculous Arguments for Government Control of Everything)

 

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Chapter Three

Who Will Build the Roads?

“I suppose I won’t see you driving on any of those government roads, then, will I?”

Eventually, every libertarian runs into this supposed conversation ender. Anti-libertarians believe that not only does this “zinger” refute libertarian arguments for private roads, but libertarian arguments about anything. “Oh, you want to get the government out of health care? I guess I won’t see you driving on any government roads.” It gets that ridiculous.

This sophism is pregnant with anti-libertarian nonsense. Most superficially, it is a cheap shot at the character of libertarians. It implies that they are hypocritical moochers who not only fail to live by their beliefs, but seek to be “free riders” on the government’s road system without paying into it. It also contains the more serious argument that a workable road system wouldn’t exist if the government didn’t build it.

Both arguments are so wrong that one feels slightly embarrassed for the people who make them. Not only are supporters of government roads the “free riders,” but opposing government road and infrastructure building was once a policy position that won election after election. Anti-libertarians are sadly ignorant of their own history.

First, let’s examine the hypocritical moocher argument. It rests upon the assumption that libertarians want to use the roads but not pay for them. That is not even close to what libertarians say. Libertarians not only wish to, but believe they are obligated to pay for any good or service that they choose to buy. Like all libertarian arguments, the underlying principle is non-aggression. Exchanges of property should only occur with the mutual, voluntary consent of all parties to the exchange.

Nothing built by the government is paid for voluntarily. Taxes are compelled by a threat of force.

Libertarians don’t argue that roads shouldn’t be paid for. They merely argue that individuals should have a choice about whether they buy roads and from whom. The choices to buy or not, from whom and at what price are the cornerstone of free markets. They are the only reason the market performs better than government. In a free market, consumers can say “no.”

Libertarians believe that they should be responsible to pay 100% of the cost of anything they buy under those conditions. It is actually anti-libertarians who at least partially want to be “free riders.” Yes, they agree to pay taxes, but why is it necessary to have government in the middle of the transaction? Why can’t anti-libertarians simply pay the road builders directly?

The answer is the same for roads as it is for all government programs. The government is not merely an organizer or planner. The market does far better at both. But the government can do something the market can’t. It can force people to buy things whether they want to or not.

That’s really what anti-libertarians are arguing for, although most probably don’t realize it. The government monopoly isn’t necessary to ensure that you pay for products you bought yourself. For those, the seller simply sends you a bill. The government is necessary to compel you to pay for things other people want but are unable or unwilling to pay for themselves.

In a free market, those who want a road must pay for it. When the government builds the roads, both those who want the road and those who don’t are forced to pay. The latter group isn’t necessarily against roads. They might want a road built somewhere else, or by someone else, or not at all. They may benefit from the road, but not enough to justify the cost, in their own judgment. Thus, they may choose not to buy a particular road that others want. The government takes that choice away.

Anti-libertarians maintain that if some people want a road built, then they should have the power to make others who do not pay for it anyway. Who are the real moochers?

The charge of hypocrisy is equally spurious. It is not hypocritical to try to get some use out of a product one was forced to buy. Despite their objection to being forced to buy the government’s road and being prohibited from building their own, libertarians nevertheless pay for the roads like everyone else. Attempting to get some value out of them does not contradict their argument.

An analogy might be helpful. Suppose someone wants a BMW, but BMWs are illegal and everyone is forced to buy Toyotas. We wouldn’t accuse opponents of this policy of hypocrisy if they drove the Toyotas they were forced to buy. They would be perfectly justified in driving the Toyotas while at the same time objecting to the law.

The government monopoly on roads not only forces us to buy Toyotas, but at BMW prices.

The analogy is actually an insult to Toyota, which makes a good, affordable product that foregoes luxury to meet demand at a certain price point.

In contrast, the government road system is an unmitigated disaster. Not only are government roads among the most dangerous places on earth; they are grossly deficient in quality. They are under constant repair, which takes years, sometimes decades, for any given stretch of road. One cannot drive ten miles in any direction in America without encountering a sea of orange pylons and barrels. Those few government roads not partially closed for repairs are typically inadequate to the volume of traffic. Americans literally spend years of their lives sitting in their cars in bumper to bumper traffic.

Monkeys could be trained to manage the road system better than the government.

This isn’t to imply that the people who work on the roads or even the bureaucrats who plan them are lazy or incompetent. It’s the system they work in that’s broken, not the people. The incentives are all wrong.

Political decisions are made for political reasons. While the civil engineer managing the road construction project may want to finish the road on time and under budget, there are contrary political forces seeking to prolong the project to keep people employed and exceed the budget for political motives. A sea of regulations and licensing requirements slow the work even further. Corruption abounds, with contracts given to the politically connected rather than the most qualified. Funding is a political football.

This is how a four-mile stretch of Route 275 in Tampa, FL can remain under construction for ten years, with no end in sight.

Does anyone really believe that road construction would take as long if a private owner were losing money every day the road was not operating at full capacity?

This often brings up another variant of anti-libertarian nonsense, that private owners would exploit us all and charge exorbitant prices for access to the roads. A related argument says that we would necessarily pay more for the roads if they were privately owned because, in addition to the costs already paid by the government, we would have to pay a premium for the profits private owners would seek to make.

If that’s true, then why not have the government provide everything? Surely, if private owners should be prohibited from profiting from roads, which are somewhat necessary, then they should be prohibited from profiting from selling food, shelter or clothing, which are absolutely necessary to human survival. Wouldn’t everything be less expensive if we didn’t have to pay for profits?

That question was already answered in 20th century Russia and China, where tens of millions literally starved to death in an attempt to prevent “exploitation” by capitalists. To a large extent, the arguments against private roads are just another iteration of the arguments against free markets in general. The answers to these arguments rest upon the same principles as any arguments for free markets over socialism.

The profits earned by road capitalists are no different from the wages paid to their employees. They are compensation for capitalists’ labor, both present management of the productive structure and their labor in the past that produced the savings they used as capital to start the business.

Just as employees can demand no more in wages than employers are willing and able to pay for their services, capitalists can demand no more in profits than consumers are willing to pay for capitalists’ services. If a capitalist raises prices in an attempt to make unreasonable profits, his competitor will be happy to provide the product at a lower price. The competitor may make less profit on each unit, but he sells more units for every dollar he decreases his price. That’s just simple supply and demand economics, accepted by virtually everyone, libertarian or not.

Consumers bear the same costs of capital and management when the government builds roads. We just don’t call them “profits” and there is no competition to limit them. We pay a panel of bureaucrats a higher price to do the job the capitalist would do, plus pay for all of the waste and fraud that accompany government projects. Allowing capitalists to make profits is far cheaper.

Just as government workers aren’t inferior people, neither are capitalists superior nor more virtuous people. They simply operate in a system with different incentives. Capitalists in a free market please customers because customers have choices. They can buy from someone else. They can choose not to buy at all. Either choice means less profits, losses or bankruptcy for the capitalist. He can only survive and thrive when customers choose to buy his product.

Somehow, people have placed roads into a special category where these basic economic laws are supposedly suspended. But they’re not. The economics of road building is no different from the economics of food growing or toy making. Roads are just another product of human labor. A free market is the most efficient means for building, maintaining and distributing their benefits, just as it has proved to be for every other product.

Then, there is the convenience argument. Even if the roads would be cheaper if privately owned, wouldn’t it be terribly inconvenient to have to stop and pay a toll every time I left the property of one owner and drove onto the property of another? Wouldn’t there be toll booths every few blocks?

These concerns betray incredibly limited thinking. Even the government has somewhat overcome the inconvenience of stopping traffic at toll booths with wireless toll sensors overhead. This solution assumes that the only way to pay for roads is for consumers to pay a separate fee for each use.

Proponents of government roads assume that everyone benefits equally from them. While one could argue that most people benefit at least indirectly from government roads, it is obvious that everyone does not benefit equally.

The consumers who shop on a road where a group of retailers reside benefit from the road, but the retailers benefit much more. The consumers could survive without shopping there, but the retailers could not survive without the road. Thus, the answer to the perennial question, “Without government, who will build the roads?” For this road, the answer is simple: the retailers. Likewise for roads leading to the road they are located on.

Where would the retailers get the additional money needed to build and maintain roads? They’d simply pass along the costs in the prices of their products. This would not be an additional cost for consumers. Offsetting the slightly higher price of the retailers’ products would be the enormous savings in taxes not paid for the inefficient government road system.

Retailers already do this to an extent, as libertarian author Larken Rose humorously notes:

“On the supermarket’s private property are roads and parking lots (really wide roads). Where did they come from? Why didn’t they send me a bill for them? Because it was part of their premeditated loss in the deal to sell me sushi, pepperoni, and candy corns.”[1]

What about residential roads? That’s even easier. Voluntary contracts called “Homeowners’ Associations” already maintain landscaping and other “infrastructure” within residential communities. There is no reason roads could not be added to the list. Would that raise homeowners’ association fees? Yes, but savings in taxes would be greater than the increase in fees.

What about interstate highways and all of the other roads and bridges built by the government? The same principle applies. There are numerous entities who would be willing to build and maintain roads if the government didn’t do so. They include manufacturers who need roads to get their products to market, trucking companies who transport them there, retailers who sell them, and many other interested parties.

All of these benefit infinitely more from roads than the average commuter. Under a government road system, taxpayers are forced to underwrite this capital expense while capitalists keep all of the profits. As previously stated, capitalists aren’t more virtuous people. They respond to incentives like everyone else. The government road system allows them to let other people pay their expenses. It not only gives them an incentive to be moochers, it offers them no alternative.

Anti-libertarians often argue that libertarian ideas sound great in theory, but would never work in the real world. Certainly, private roads are a prime example, right?

Wrong. Not only would private roads work better than government roads, they have and still do.

Somewhere down George Orwell’s famous memory hole has fallen almost a century of American history where government roads were vehemently opposed. Before Social Security, healthcare or unemployment were political issues, road building was a central one.

During the Washington administration, Alexander Hamilton championed government roads as part of the Federalist Party domestic policy platform of high, protectionist tariffs, a central bank and “internal improvements,” which meant government funded roads and canals. Taxpayers would foot the bill for roads and connected private corporations would build them and keep the profits.

On the other side of the debate were Jefferson and his Democratic-Republicans. They referred to themselves as “Republicans,” but were not the same as the modern Republican Party. They eventually evolved into the modern Democratic Party, although their platform in 1800 was far different from their platform today. During the 19th century, the Democratic-Republicans were the party of free markets and limited government.

Jefferson’s “Republicans” opposed the central bank, supported tariffs sufficient to fund government but not to protect domestic manufacturers, and opposed government subsidized roads and canals.

The Republicans were at a disadvantage because they did not become a formal party until after the Federalists were firmly established. This gave Hamilton and the Federalists the opportunity to make the same arguments we hear today about why the government has to build the roads. They even got to launch a few projects. They were all disasters.

All of that changed with Jefferson’s electoral victory in 1800. So dramatic was the change in policy that Jefferson himself often referred to it as a Second American Revolution. Distraught with Jefferson’s election, the heavily Federalist New England states actually held conventions contemplating secession from the Union. Among their dire predictions was that America would languish without an adequate road system because the Jeffersonians refused to allow the government to fund them.

They couldn’t have been more wrong, as Loyola University economics professor and author Thomas Dilorenzo points out.

“But the fact is, most roads and canals were privately financed in the nineteenth century. Moreover, in virtually every instance in which state, local, or federal government got involved in building roads and canals, the result was a financial debacle in which little or nothing was actually built and huge sums of taxpayer dollars were squandered or simply stolen.”[2]

Dilorenzo goes on to describe the spectacularly successful, privately-funded “turnpike” industry that built virtually all of the roads in early America. He attributes the success to the same incentives that libertarians argue would motivate private investment in roads today.

“Local merchants had strong incentives to invest in private turnpikes because they would bring more commerce to their towns. Landowners would see their property values rise, and cities would more generally prosper as improved transportation extended the division of labor and the economic benefits derived from it.”[3]

This is not an arcane legend that libertarians invented. It’s been well documented by “mainstream” historians for hundreds of years.

Alexis de Tocqueville noted ubiquitous private roads in Democracy in America (1835-1840):

“In France, contributions in kind take place on very few roads; in America upon almost all the thoroughfares: in the former country, the roads are free to all travellers; in the latter turnpikes abound.”[4]

Seymour Dunbar documented the same phenomenon in his four-volume 1915 treatise A History of Travel in America:

“Out of these new qualities of public thought came a suggestion that the task of turnpike building be turned over to private companies created for the purpose. The idea was adopted through all the country. Under its general operation many thousands of miles of improved roads were constructed, and within a few years it was possible to travel by stage-coach from the Atlantic Coast to the border of Indiana in about two weeks, at a cost of only forty-five or fifty dollars exclusive of board and lodging.”[5]

The success of private roads and the waste, fraud and incompetence inherent in government-funded road projects made resistance to government road building a mainstream political position in 19th century America. Two major political parties met their demise largely for supporting government funded roads and other infrastructure.

So resounding was the Federalists’ defeat in 1800 that they ceased to exist as a party not long afterwards. Government roads then found new champions in a successor party. Led by Henry Clay, the Whig Party repackaged Federalist ideas into what Clay called “The American System.” Its pillars were a central bank, high protectionist tariffs and internal improvements.

Clay and the Whigs promoted their American System for decades, losing election after election. So unpopular was the idea of letting the federal government build roads that as late as 1857, Democratic President James Buchanan felt the need to justify in his inaugural address what little road building he believed the government should undertake. Emphasizing that the federal government’s powers should be strictly limited to the powers delegated in the U.S. Constitution, Buchanan went on to say.

“Whilst deeply convinced of these truths, I yet consider it clear that under the war-making power Congress may appropriate money toward the construction of a military road when this is absolutely necessary for the defense of any State or Territory of the Union against foreign invasion. Under the Constitution Congress has power ‘to declare war, to raise and support armies, to provide and maintain a navy, and to call forth the militia to ‘repel invasions.’ Thus endowed, in an ample manner, with the war-making power, the corresponding duty is required that ‘the United States shall protect each of them [the States] against invasion.’ Now, how is it possible to afford this protection to California and our Pacific possessions except by means of a military road through the Territories of the United States, over which men and munitions of war may be speedily transported from the Atlantic States to meet and to repel the invades?”[6]

Obviously, government roads were still very unpopular. Otherwise, Buchanan wouldn’t have felt the need to make such a lengthy argument for the few he advocated.

Like the Federalists before them, the Whigs eventually disintegrated after decades of failing to establish their American System. Private roads were firmly established as an American institution with little reason to believe that would ever change.

So how did government take over road building?

Like the Federalists, the surviving Whigs and their political heirs formed a new party. Calling themselves “Republicans” the new party was an alliance between former Whigs and abolitionists. Capitalizing upon the dominant issue of the day, the new Republican Party won a sweeping victory in 1860.

Most Americans remember the Lincoln presidency for the American Civil War, his Emancipation Proclamation and the eventual abolition of slavery in the United States. These huge issues tend to obscure what has now become a little known fact. Lincoln was a lifelong Whig who had supported its principles for decades. As far back as 1831, Lincoln had quipped during a stump speech,

“My politics are short and sweet, like the old woman’s dance. I am in favor of a national bank. I am in favor of the internal improvement system and a high protective tariff. These are my sentiments and political principles. If elected I shall be thankful; if not, it will be all the same.”[7]

These ideas, rejected by voters since 1800, had little hope of success before Lincoln’s victory. But by 1861, the issues of slavery and the war were so dominant that Lincoln and the Republicans had little trouble in finally establishing the American System. Opposition to government roads was the proverbial baby that went out with the bathwater of slavery.

Lincoln’s domestic policy agenda was not lost on the Confederate States. While their primary and most immediate reason for seceding was fear that the Republican policy of prohibiting slavery in new states and territories would eventually threaten the instituiton in their own, they also opposed the crony capitalism of the American System. Georgia’s Declaration of the Causes of Secession talks at length about it, arguing that the abolitionist movement had provided its proponents a new opportunity:

“…but the principle was settled, and free trade, low duties, and economy in public expenditures was the verdict of the American people. The South and the Northwestern States sustained this policy. There was but small hope of its reversal; upon the direct issue, none at all.

All these classes saw this and felt it and cast about for new allies. The anti-slavery sentiment of the North offered the best chance for success.”[8]

Sadly, the Confederacy did not have to change the U.S. Constitution significantly regarding slavery because the Constitution supported the institution at the time. But the new Confederate Constitution did make a significant change to the Commerce Clause:

“To regulate commerce with foreign nations, and among the several States, and with the Indian tribes; but neither this, nor any other clause contained in the Constitution, shall ever be construed to delegate the power to Congress to appropriate money for any internal improvement intended to facilitate commerce; except for the purpose of furnishing lights, beacons, and buoys, and other aids to navigation upon the coasts, and the improvement of harbors and the removing of obstructions in river navigation; in all which cases such duties shall be laid on the navigation facilitated thereby as may be necessary to pay the costs and expenses thereof.”[9] [emphasis added]

Private roads were not immediately abolished by the government the day after Lee surrendered to Grant. However, the Republican Party’s domination of American politics in the post-war period made a government takeover of the road building industry inevitable. Dunbar recognized the significance of the Civil War on road policy:

“Many of the toll road franchises have only lapsed in recent years, and a few are still effective. Maryland, and perhaps other states, yet possess toll-gates. Not until after the Civil War did the various commonwealths generally adopt a policy under which roadways were considered public works to be created and maintained by the people themselves and used without toll fees.”[10] [emphasis added]

Tragically, their defense of slavery has sullied many of the good, libertarian ideas the southern states espoused, including opposition to government subsidization of roads, canals and railroads. Some actually accuse libertarians of racism or even of condoning slavery because their arguments sound like some of those made by the Confederate states. If you don’t think the government should build roads, you must support slavery.

Yes, it gets that ridiculous, too.

A century and a half later, the seceding states have been vindicated on at least one issue. As wrong as they were on slavery, they were absolutely right about government roads. The government hasn’t improved at building them since those “financial debacles” Dilorenzo described. We’ve just become accustomed to its incompetence.

Long tradition has desensitized us to the farcical prospect of repairs on short stretches of road taking years to complete, road construction projects with no workers present for days or weeks at a time, traffic jams, potholes, and a predatory police force waiting to spring out from cover to mete out disproportionate financial punishment for the slightest infraction.

Even conservatives accuse libertarians of taking free markets to an extreme by suggesting private roads. That’s not surprising, because government roads has traditionally been a conservative position, since the early days of the republic when the Federalist Party were the conservatives and Jefferson’s Republicans were the liberals.

If they’re right about libertarians being free market extremists, then they’d be surprised to find out where this extremism has been implemented with spectacular success: in so-called “Communist China.”

After decades languishing under true communism, China has been making market reforms to its economy since the 1980’s. They still call themselves communist and the Communist Party still has absolute control of the political process, but their economy is in many ways more capitalist than the USA’s.

One way is the extensive highway system they’ve built in a remarkably short period of time. China’s highways are built and maintained mostly by private companies and financed in the private capital markets. It’s not a completely free market. There is still plenty of government meddling and attempts at planning. However, the most important element of free markets is present. The costs for the roads are paid by the people who use them. At least for roads, costs are not “socialized” in the socialist state.

So impressed was legendary investor Jim Rogers by China’s highway system that he devoted a chapter to it in his 2007 book, A Bull in China. Rogers had ridden his motorcycle across China in 1988 and felt lucky to survive the dearth of roads. Less than two decades later, the transformation dazzled him:

“Under socialism, the slogan of China’s forced industrialization was ‘China Reconstructs.’ Today, the operative phrase is more like ‘Highways to Heaven.’ With 28,210 miles of highways at the end of 2006, China boasted the world’s second-longest set of freeways, roughly equal to those of Canada, Germany and France combined. In the last four years, about 3,000 miles of expressways were added each year on average. And there are plans afoot to construct and pave up to triple the current number.”[11]

Rogers goes on to recommend several Chinese expressway companies as investment opportunities.

Adrian Moore, Ph.D., Vice President of Policy at the libertarian think tank Reason Foundation, has also taken notice. In a Reason TV You Tube video, Moore observes,

“Here we have this very capitalist culture and country and we have this incredibly socialist transportation system, where the idea of having the private sector build and run a road is just crazy talk. And over in China, where it’s an avowedly communist system, the idea of having the private sector build and run a road is like ‘Well, yeah, how else are we going to build all the roads?”[12]

The libertarian argument for private roads is used as a bludgeon to stifle debate on reductions in government anywhere. Promoting even a modest reduction in income tax rates is enough for many anti-libertarians to “play the road card,” hoping others will perceive the libertarian as crazy.

It’s classic ad hominem. When you can’t refute the argument, attack the person making it. That’s why this tactic is employed so often.

Guess what? The road card isn’t worth a deuce. Neither history, economics nor common sense support it. If early Americans and 21st century communists can build private roads, we can, too.

 


[1] Rose, Larken “Roads” http://nogov4me.net/archive/roads1.htm

[2] Dilorenzo, Thomas How Capitalism Saved America Three Rivers Press New York 2004 pg. 80

[3] Dilorenzo, How Capitalism, pg. 85

[4] De Tocqueville, Alexis Democracy in America Volumes I and II (Kindle Edition) pg. 165/location 5661. It should be noted that Tocqueville’s characterization of roads being “free” in France is misleading. The roads in France weren’t free, they were paid for in taxes. Tocqueville and his contemporaries would have understood this implicitly. Today, that is not always the case.

[5] Dunbar, Seymour A History of Travel in America The Bobbs-Merrill Company Indianapolis, IN 1915 Volume I pgs. 321-322

[6] United States Presidents Inaugural Speeches A Public Domain Book (Kindle) location 1969-1980

[7]Thomas, Benjamin Platt Lincoln’s New Salem Ann Arbor, Michigan: University of Michigan Library 2006  Pg. 58

[8]Georgia Declaration of the Causes of Secession The Avalon Project Documents in Law, History and Diplomacy Yale Law School Lillian Goldman Law Library    http://avalon.law.yale.edu/19th_century/csa_geosec.asp

[9]Constitution of the Confederate States; March 11, 1861 The Avalon Project Documents in Law, History and Diplomacy Yale Law School Lillian Goldman Law Library http://avalon.law.yale.edu/19th_century/csa_csa.asp

[10] Dunbar A History Volume I pg. 322

[11] Rogers, Jim A Bull in China Random House Trade Paperback Edition 2008 pg. 105

[12] Moore, Adrian China and Transportation: What We Can Learn In The United States Reason TV You Tube Channel http://www.youtube.com/watch?v=HUPRlrVTd2g#t=17

Earth to Bill Maher: Edward Snowden isn’t the crazy one

GREENWALD-largeTAMPA, January 21, 2014 – Bill Maher interviewed journalist Glenn Greenwald following President Obama’s speech on Friday in which the president discussed his proposals to reform the NSA. Greenwald is the journalist who first reported on the information released by Edward Snowden on the government’s domestic surveillance activities.

While Maher was respectful of Greenwald and, to some extent, Snowden, he went out of his way to smear some of Snowden’s claims about the government’s activities as “completely nuts.” He also found it necessary to take a shot at Ron Paul, who wasn’t even involved in the issue at hand.

For Maher and too many likeminded people, anyone who doesn’t view the government as a benevolent force for good is a tinfoil-hat-wearing kook who believes all civilian life is the target of a massive conspiracy involving the government, secret societies, aliens, etc. Thus Maher’s retort, “Everyone in the government isn’t out to get you.”

That’s what’s known as “framing the debate.” You’re either with Bill Maher and President Obama or you’re with the kooks. You may also be somewhere in the middle, where Maher apparently places Snowden. It completely ignores the many other perspectives one might have, including that of most libertarians.

Libertarians don’t believe that the people who work for the government are evil. It’s the institution of government itself, a monopoly on the use of force that can martial the resources of the entire nation. That kind of power is dangerous even when used by good people with good intentions.

Read the rest of the article at The Huffington Post…