Why Libertarians Should Shrug Off Memo Mania

Why Libertarians Should Shrug Off Memo Mania

03/01/2018Ilana Mercer

First came the Republican memo, courtesy of the Republican House Intelligence Committee chairman Devin Nunes. Their memo detailed the surveillance abuses against one Carter Page, enabled by a kangaroo court which was strengthened immeasurably by the old Republican-Party boss, George Bush.

Bush II had fortified the Foreign Intelligence Surveillance Court (FISC), and the Stupid Party greased the skids for the expansion of FISA infractions. Following Barack Obama's lead, Republicans have reauthorized the controversial Section 702 of the Foreign Intelligence Surveillance Act (FISA), which has resulted in the "incidental" collection of the communications of American citizens, and likely served as an impetus for prosecutions.

Enter Rep. Adam Schiff, Democrat from California. He and the other Democrats on the House intelligence committee have now presented their distillation of the counter case, namely that the "FISA warrant and repeated renewals to conduct temporary surveillance of Carter Page" were all justified. Well of course.

Media eminences—Republican Mark Steyn, for instance—have accused the Democrats of assaulting the rule of law. The libertarian, however, might wish to avoid wading into an intra-party fracas. Why intra-party? Because the Democrats and the Republicans of DC share most of their political DNA.

Am I saying libertarians have no dog in the fight over whether "Hillary Clinton and the DNC funded the [dodgy] dossier that was a basis for the Department of Justice's FISA application"?

Do we not care that the "venerated" FBI "had abused its surveillance authority and relied improperly on politically motivated sources—namely former British spy Christopher Steele who had been paid by Fusion GPS, a private intelligence firm hired first by conservative underwriters and then retained by Democrats during the 2016 campaign"?


Put it this way: What libertarians should care about is that the "America's political police"—the Federal Bureau of Investigation and its malignant offshoots—is being thoroughly discredited by its most enthusiastic advocates. This is of a piece with the creative destruction generated, inadvertently, by Donald Trump.

Moreover, the meta-perspective argued for here relies on a recognition that America is regularly convulsed by episodes of mass, hysterical contagion.

What is "hysterical contagion"?

Sociologists explain it as the spread of symptoms of an illness among a group, absent any physiological disease. It provides a way of coping with a situation that cannot be handled with the usual coping mechanism.

Arguably, the Trump-Russia "collusion," "obstruction of justice" probe, and the attendant frenzied behavior and belief-system it has engendered meets the definition of mass hysteria. With an exception: This particular form of mass madness involves a meme, a story-line that catches on and sticks. In particular, it is the emotional pitch with which the Trump-Russia collusion group-think is delivered, day in and day out, that has gripped and inflamed irrational, febrile minds.

Infected as it is by statism and group think, the country's collective consciousness is ready for the taking.

The topics for two years have been rumors for which no evidence can possibly be adduced, recounted as facts and, eventually, accepted as such.

The penalty: criminalization by the federal government—it has enough laws on the books to destroy each one of us, if it so desired—of naturally licit behavior: diplomacy with Russia and voluntary contact between Russians and Americans.

This collective and collectivist fetish has further been fueled and sustained by organizational and communication networks. Here, friendship and workplace networks, dominated as they are by like-minded individuals—government agencies and departments, newsrooms, think thanks, classrooms; the teacher's lounge—serve as conduits in a system that transmits faulty signals across the synapses of the country's collective, damaged brain.

At root, the storyline du jour is manufactured by America's gilded elites of both political parties.

During the era of Bush, aforementioned, DC operative Karl Rove put it plainly: "We're an empire now, and when we act, we create our own reality."

Indeed, when you're the most powerful entity in the world, as the US government certainly is—the only government to have dropped nuclear bombs on civilian populations ("good" bombs, because dropped by the US)—you get to manufacture your own parallel universe with its unique rules of evidence and standards of proof. What's more, as the mightiest rule-maker, you can coerce other earthlings into "sharing" your alternate reality. Or else.

Beltway averse libertarians need to understand that the manufacturing of Fake News by the Deep State and its institutional connective tissue, circa 2018, is of a piece with the anatomy of the ramp-up to war in Iraq, in 2003. (Chronicled in achingly painful detail in "Broad Sides: One Woman's Clash With A Corrupt Culture.") Except that back then, Republicans, joined by diabolical Democrats like Hillary Clinton, were the ones dreaming up Homer Simpson's Third Dimension.

Conscripted into America's reality, Iraqis paid the price for this ghastly American concoction. Hundreds of thousands of them were displaced and killed due to "Operation Iraqi Freedom," an idea that originated in Republican minds. Because of Fake News generated so effectively by the likes of Judith Miller, the Gray Lady's prized reporter at the time, American soldiers paid dearly, too.

Then as now, elements in the intelligence community worked with neoconservative counterparts in Bush 43's administration, in particularity with "the Office of Special Plans," to further manufacture consent around the war. With some laudable exceptions, Big Media went along with it all.

Salient in 2003, as in 2018, was the monolithic quality of the cheer-leading emanating from the networks; an unquestioning uniformity among the media establishment. For journalistic jingoism—war porn, really—it was, still is, impossible to best the coverage of the high-tech media extravaganza known as "Operation Iraqi Freedom."

Embedded with the military turned out to be a euphemism for in bed with the military. Practically all network embeds focused exclusively on the Pentagon's version of events, to the exclusion of reality on the Iraqi ground. Yet reporters who slept with their sources were treated as paragons of truth.

Reporting hearsay as truth and failing to verify stories were all in a day's work on cable and news networks. A Geiger counter that went off in the inexpert hands of a Marine stationed in Iraq became "Breaking News," possible evidence of weapons-grade plutonium. Every bottle of Cipro tablets located in Iraq was deemed a likely precursor to an anthrax-manufacturing factory. Anchormen and women somberly seconded these "finds," seldom bothering to issue retractions.

To comprehend the anatomy of hysterical mass contagion that is behind the memo narratives, it's vital to trace the contours of that other war, "Operation Iraqi Freedom," and understand the way an engineered reality is sold to the public.

If past is prologue; the frenzy of inflamed imaginations could spill over into all-out war—against Russia, Iran or North Korea. This existential evil is the litmus libertarian concern.

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The Fed: Just Doing My Job

05/13/2022Robert Aro

Last week Federal Reserve Governor Christopher J. Waller wrote: Reflections on Monetary Policy in 2021, where he discussed whether or not the Fed fell behind the curve. In Fedspeak, the Fed did not raise rates fast enough to “fight inflation.”

With April’s producer price index announcement of 11%, it’s likely someone at the Fed thought it best to give the public an explanation. The Governor begins by preparing listeners for the excuses to follow:

First, the Fed was not alone in underestimating the strength of inflation that revealed itself in late 2021. 

Then he explains that policy errors might not actually be policy errors:

…setting policy in real time can create what appear to be policy errors after the fact due to data revisions.

When referring to the dual mandate of maximum employment and price stability, he notes that:

Whether you believe this is the appropriate mandate or not, it is the law of the land, and it is our job to pursue both objectives.

Unfortunately, history is rife with instances where regular people were just doing their jobs, leading to countless atrocities.

Not only is the Governor just doing his job, but he doesn’t act alone. In a nation of over 300 million people, he explains:

…policy is set by a large committee of up to 12 voting members and a total of 19 participants in our discussions.

As per recent decisions made by the committee, on December 2020:

We said that we would "aim to achieve inflation moderately above 2 percent for some time"…

Meaning, the Fed wanted to increase the rate at which our currency debases year over year.

It’s also alarming when those in charge, whose job it is to make predictions about the future, always seem so wildly inaccurate. In the case of the 19 participants who weigh in on the fate of the US dollar:

With regard to future inflation, 13 participants projected inflation in 2022 would be at or below our 2 percent target. In the March 2021 SEP, no Committee member expected inflation to be over 3 percent for 2021.

This gets excused by claiming the Fed’s forecast was “consistent with private-sector economic forecasts.”

He concludes with questioning whether the central bank fell behind the curve and if they should have hiked rates sooner. However:

Even though we did not actually move the policy rate in 2021, we used forward guidance to start raising market rates…

Since the 2-year Treasury yield went from 25 basis points in September to 75 basis points by December 2021, then:

That is the equivalent, in my mind, of two 25 basis point policy rate hikes for impacting the financial markets.


That is the equivalent, in my mind, of two 25 basis point policy rate hikes for impacting the financial markets. When looked at this way, how far behind the curve could we have possibly been if, using forward guidance, one views rate hikes effectively beginning in September 2021?

One must wonder what exactly the 19 Federal Reserve participants do for a living. If rates can rise without the Fed, and if the private sector can forecast without the Fed, then the necessity of having the Fed should be questioned. Yet, according to the Governor, it really doesn’t matter what anyone thinks, or how detrimental the outcomes of the Fed become, as explained: “it is the law of the land,” and he’s just doing his job.

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Blame the FDA

One of the biggest issues this last week is countless parents struggling to find formula for their infants. The blame game started and the fingers are pointing. People are slinging accusations at everything from mothers who are not nursing to Biden feeding illegal immigrant infants before united states children.

But what is the real issue? The FDA!

In mid-February the FDA shutdown Abbott Laboratories (Which also happens to be the company’s largest U.S. formula manufacturing plant) due to fears of it being the source of a bacterial infection that killed two infants. However, these fears were unfounded and the factory was cleared of any wrongdoing. Yet, almost three months later the plant is still shut down. Why? That answer isn’t as clear from the FDA.

Like any “good” government agency, the FDA put the blame back on the manufacturer: “That plant needed to be shut down,” Former FDA Associate Commissioner Peter Pitts said on Thursday.
Despite this statement and not finding any wrongdoing, he doesn’t go into details about why it needed to be shut down and why it has taken three months to get it back up and running, nor was any warning about massive future shortages given to parents.

So tough luck the FDA says for mothers who can’t nurse, single fathers, infants with allergies, gastrointestinal issues, or metabolic disorders. As parents franticly search for food for their infants and search hours online for other solutions.

Just like their covid strategy, the FDA didn’t have one here. leading to countless stressed-out parents struggling to once again feed their children.
As Tho Bishop points out:

“The costs of the FDA bureaucracy is a far greater public health risk than any of the advantages that it claims to provide. It’s past time to scrap the agency altogether.”

Indeed. Just another fine example of what happens when the government intervenes in the market. It’s time to abolish the FDA and sow salt the earth where all the buildings stood.

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Will Abortion Rights Lead to Secession in the USA?

05/12/2022Peyton Gouzien

After the leaking of a draft opinion from the Supreme Court on “Dobbs v. Jackson Women’s Health Organization,” it seems clear that the precedent set in Roe v. Wade and upheld by Planned Parenthood v. Casey is being overturned. In the document, confirmed by Chief Justice Roberts, Justice Alito plainly says that the majority opinion is “that Roe and Casey must be overruled,” and that “It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.”. 

So, what does this mean for Abortion “rights”? Despite what liberal pundits' hysteria makes it look like, this does not mean that abortion is now banned in the entire United States. What it does mean is that the decision on whether it is banned is determined by each state’s government. 

Essentially, the power to legislate abortion has been handed from the federal government down to the states in a rare victory for states’ rights. Particularly on an issue that divides Americans more than nearly any other issue. 

Forty-nine percent of Americans identify as Pro-Choice and forty-seven percent as Pro-Life. Overall as well, thirty-two percent support abortion being legal in all cases and nineteen percent support abortion being illegal in all cases. Support or lack of it seems correlated to the region the state is in, as Pro-Life states tend to be in the South or Midwest, while pro-choice heavy states are in the Northeast and West coast. 

Twenty-three states already have laws that would trigger if the decision is made final that either impose restrictions on abortion they could not previously impose or an outright ban of abortion, all in either the South or Midwest. Conversely, sixteen states have laws that protect the “abortion rights” which are all on the Northeast and West coasts. 

The pre-existing divide between more rural, Southern, and Midwestern states and more urban, Northeastern, and West coast states is going to be furthered. The difference in policy, even among states that are generally pro-life or pro-choice, will create a new incentive for people in choosing where they live. One based around a moral issue. 

While what set of morals one wants to live under somewhat exists between the states in the varied cultures between them, abortion being a state issue gives an easy signaling device for them. It is a safe assumption that “what is their abortion policy” is a question people will ask when considering where to move.

This is a continuation of the trend of people moving from state to state concentrating certain states on one ideology and culture that is becoming increasingly opposed to other ones. The obvious question that comes from observing this trend is, “Are we going to see secession from this?”

The answer to that question cannot be definitively answered till something happens, but we can draw parallels to the last time the U.S. saw States secede in the Civil War. Historian Alan Taylor describes the U.S. up to 1850 as “built on an unstable foundation of rival regions and an ambiguous Constitution”. 

There were many conflicts between the states before the Civil War and even full-on rebellions such as the Whiskey or Shay’s Rebellion. The States only continued the trend of division among themselves leading up to the Civil War culturally, economically, and politically. 

Slavery would become the issue that is credited with causing the Civil War, but, while playing a part, was not the only reason, nor does it explain all of the divides between the states. In some states like North Carolina, it was never clear whether the general population even cared about the issue as it was a relatively small slave population state. 

Additionally, several Union states kept slavery throughout the war, even after the emancipation proclamation, till it was outlawed by the 13th amendment. Although slavery was not the sole cause of the Civil War, it did become the issue that served as the face of the divide.

Similar conditions do exist today as leading up to the Civil War if you replace the issue of Slavery with the issue of abortion. States before this decision had already been engaged in legal fights with the federal government over abortion. Not only this, several states have made laws to re-enforce “abortion rights” and provide greater access to it. 

It is clear that before and now after the leak states are dividing along this line and it is coming to the forefront of the differences between them. Though we can see that many other divides exist between the states that are only being exacerbated, such as COVID 19-policies and approach to the economy. 

This provides quite substantial evidence for some kind of situation similar to the Civil War secession or a softer secession such as the USSR. One can only wait, but regardless if such a scenario happens Abortion will be at the forefront of the divide between states for the foreseeable future. 

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PPI Inflation Is Over 10% Yet Again, Suggesting More CPI Growth in Coming Months

05/12/2022Ryan McMaken

The Us Bureau of Labor Statistics released new producer price index (PPI) data today, and it’s not good news for consumers.

The PPI is a measure of prices at the production phase of goods and services, and is often an indicator of where consumer prices are headed. Prior to 1978, the index was known as the wholesale price index.

For April this year, year-over-year growth in the PPI came in at over 10 percent for the fifth month in a row, reaching 11 percent. This was a small drop from March’s year-over-year rate of 11.5 percent, but continues to suggest ongoing upward pressure in prices. Ther month-over-month change for April was 0.5 percent, which was a sizable pullback from March’s 1.6 percent month-over-month change, but movement remains upward and from a very elevated base.

Year-over-year changes in the PPI have been over 7 percent for 11 months.


As with the CPI index, the narrative among optimistic analysists was that PPI measures would moderate significantly in April and signal a downward turn. That does not appear to be the case so far. As the AP reports today:

The report included some signs that price increases are moderating, but at a painfully high level … prices are still rising at a historically rapid clip. Food costs rose 1.5% just in April from March, while shipping and warehousing prices leapt 3.6%. New car prices rose 0.8%.

In other words, there are still no indications that inflationary pressures are about to disappear. Moreover, from a policy standpoint, neither the Biden administration nor the central bank have signaled they will be taking any steps that could reliably reverse this trend.

The Biden administration has repeatedly taken a stance in favor of greater regulation which only curtails production, further constraining supply and pushing up prices.

Meanwhile, the Federal Reserve—which has been the primary source of inflation due to its ongoing financial repression policies—continues to embrace nothing more than the most tepid steps toward reining in monetary inflation.

As I wrote here last week, after nearly than a year of very elevated inflation rates, the Fed has said it will not begin reducing its portfolio—thus reducing the money supply—until June. And even then, the scale of the reductions will be miniscule. Moreover, the Fed’s planned increases to interest rates will only raise the target federal funds rate to around two percent, assuming all goes as planned.

These are tiny interventions which will do little to reduce inflation unless they trigger a recession—and then we’ll have both inflation and high unemployment.

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This Colorado Cop Is Learning a Lesson about Proportionality

05/10/2022Ryan McMaken

Loveland, Colorado police officer Austin Hopp was sentenced this week to prison time for attacking an elderly woman with dementia in June 2020. After pleading guilty to second-degree assault and other crimes, Hopp reached a plea agreement with the county and was sentenced to five years in prison plus three years probation.

Hopp was “enforcing the law” when he threw victim Karen Garner to the ground, broke her arm, and dislocated her shoulder. The 80-pound, 73-year-old woman had allegedly attempted to walk out of a local Walmart with $13.88 worth of merchandise. When confronted, Garner left the merchandise in the store and walked home.

Hopp and his partner, Officer Daria Jalali, quickly caught up with Garner, who was picking wildflowers along the road. Hopp proceeded to assault Garner with the help of Jalali. [See video.] Hopp’s manhandling of the tiny woman was so aggressive that a local bystander even stopped—thinking Hopp was abusing a small child—and asked “do you have to use that much aggression?”

The sergeant on site, Philip Metzler, was quick to dismiss the bystanders’ concerns and shouted down the citizen, declaring Hopp “didn’t do anything wrong.” Metzler also invented a false narrative about how Garner “ran from the store” and “resisted arrest.”

Soon thereafter, Garner was taken to the local lockup where she was refused medical attention, even though she had a broken arm. While Garner while crying in pain in her holding cell, Hopp, Jalali, and Community Service Officer Tyler Blackett viewed the body cam footage from the incident. Video from the police station shows the three officers laughing and joking about Garner’s arrest and her broken arm. Hopp announced that he was “proud” and “super excited” that he had the opportunity to use hobble restraints on the elderly woman. Jalali and Hopp shared a fist bump over the arrest with Hopp declaring that the arrest “went great” and “we crushed it.”

But then nothing happened. As is so often the case with police assaults on members of the public, the leadership in the police department took no exception to Hopp’s assault or the fact that Garner was denied medical attention. The laugh-fest following Garner’s arrest was not seen as anything to worry about. Loveland's assistant chief of police Ray Butler, after viewing Hopp's video, concluded Hopp's felony assault was "necessary, reasonable, and within policy." 

It was only in April of the following year that Garner’s daughter was finally able to get information on her mother’s violent arrest. Thanks to their skilled attorney, bodycam videos of the incident were made public, as was the video from the police station. Only after a public outcry over the contents of the video did the police department’s leadership take any significant action. Hopp, Jalali, and Metzler were given paid vacations—also known as “administrative leave”—pending investigation.

Hopp, Jalali, and Blackett finally resigned—i.e., were not fired—in late April. It was not until more than a year after the incident, in September 2021, that Metzler resigned. Metzler, of course, had signed off on Hopp’s report, and—according to Garner’s attorney—deliberately mislabeled his own bodycam files so as to hide evidence. The other sergeant that  approved Hopp’s report, Sergeant Antolina Hill, remains employed by the department.

Now, nearly two years later—and certainly no thanks to the police department that employed and protected him—Austin Hopp is in prison. His partner Jalali is awaiting trial in June.

Do Police Understand the Concept of Proportionality? 

But this leaves us with an important question: what sort of thinking convinces a police officer to conclude it is laudable, or even acceptable, to rough up an old lady in this manner?

We can already guess the narrative that the police were telling themselves, given the words of Metzler: in their minds, Garner was apparently a “criminal” who resisted arrest and ran from the scene of a crime. Perhaps in their minds, this exaggerated version of events justified breaking an old woman’s arm and throwing her in a jail cell.

Most reasonable people, however, understand there is a problem of proportionality here. Garner didn’t actually steal anything, but even if she had stolen something, was the proper response to beat her up? Moreover, in Garner’s case, the value of the goods she had in hand amounted to under 14 dollars. This must all be viewed in light of the basic premise of proportionality which is that “[T]here should be a proportion between the severity of the crime and the severity of the punishment.”

So, here we have a woman who had not actually stolen anything, but police were acting as if she were a hardened criminal, deserving of harsh treatment. Moreover, as Murray Rothbard was always careful to note, when a suspect is in the process of being apprehended, guilt has not even been determined yet. In other words, all force taken against a suspect may ultimately prove to be against a party who is completely innocent.

Thus, in the Garner case, we witness police breaking an old woman’s arm in a case where:

  • Guilt has not been established.
  • The suspect has not actually stolen anything.
  • The suspect is a small elderly person and presents no threat to the community.

The public, on some level, understood all of this, which is likely why the public’s reaction to the police in Garner’s case was one of near-universal revulsion. Had Hopp arrested the local 200-pound ne’er-do-well in a similar fashion for stealing a pack of cigarettes, Hopp would almost certainly not be in prison today.

Reasonable people understand that not all cases of theft (or attempted theft) are created equal and do not call for the same response. Indeed, in many cases, proportionality and basic decency suggest no arrest at all is the most prudent course of action. Garner’s case is just such a case.

The "Arrest and Jail" Model for Minor Infractions Is a Modern, State-Centered Invention

“Law and order” types, however, often have problems understanding proportionality and the fact that arresting people is not necessarily the solution to every legal infraction. For many olaw-and-order advocates, even very minor infractions require forceful intervention, jailing, and arrest. Those suspects who don’t immediately and docilely submit to arrest? Those people—regardless of their alleged infraction—are “resisting arrest” and therefore must be made to comply by any means necessary

As the Garner case has demonstrated, however, this is a ghoulish position and out of touch with the real world.

For example, in the case of Garner, how might the situation have been handled differently? It was apparent to any decent person—i.e., not the personnel of the Loveland Police Department—that it is would not have been appropriate to use violence against someone in Garner’s situation. For one, the supermarket could protect itself from Garner in the future by simply banning her from the premises. This is common in the case of shoplifters. If the police were hell bent on establishing Garner’s identity—and if she refused to provide a name—they could simply have followed her the additional half mile home. Then they could have issued a summons to appear in court.

This almost certainly would have been less time-consuming and costly than arresting the woman and putting her in jail. The summons approach definitely would have been less costly than the $3 million settlement paid out to the victim’s family in the Garner case.

Yet, we continue to hear from the “always comply” crowd that any minor infraction requires a response of overwhelming force followed by violent escalation. But what if Garner had somehow managed to get free of the police officer and was able to run away? If we believe that compliance is of paramount importance, then we must conclude that it would be justifiable to use all types of force, up and including deadly force, on people in Garner's situation. In other words, we end up supporting the idea that death is somehow a proportional "punishment" for petty (attempted) theft.  Cleary, there is something very wrong with this position. 

Moreover, from a public-policy view, police resources are wasted on cases such as these. If Loveland is like most communities of its size and demographics, there are many unsolved, never-prosecuted car thefts, assaults, and burglaries. Anyone who has been a victim of a burglary, for example, knows that the police do next to nothing in terms of finding stolen property. Police often lie that they "must enforce every law" but this is obviously not the case. Police choose each and every day how to distribute police resources and what crimes to investigate and address. This is reflected in the fact that police devote very few resources to homicides, but large amounts of resources to more lucrative and easy investigations of illegal drugs

So why did two police officers and their sergeant decide to double down on arresting Karen Garner? Because it was the easy thing to do. Also, Garner presented no threat whatsoever to the personal safety of police officers. This made her an even easier target. Tracking down dangerous criminals, on the other hand, requires actual work and risk.

In the end, it would have been best to do nothing from the standpoint of police. If Walmart wanted to insist on punishing Garner somehow for her petty non-theft, Walmart could sue her in court. This, of course, would be the course of action recommended by Rothbard in his chapter on proportionality in The Ethics of Liberty. But even then, the penalty inflicted on Garner would still have to be proportional, since, as Rothbard notes

The victim [i.e., Walmart], then, has the right to exact punishment up to the proportional amount as determined by the extent of the crime, but he is also free either to allow the aggressor to buy his way out of punishment, or to forgive the aggressor partially or altogether. The proportionate level of punishment sets the right of the victim, the permissible upper bound of punishment; but how much or whether the victim decides to exercise that right is up to him.

In Garner's case, Walmart could pursue maybe 20 bucks for restitution for the time spent by store employees on reclaiming property from Garner. Or Walmart could simply decide it's not worth the trouble. Anything more than a few bucks restitution in this case is disproportional to the severity of the crime.  A broken arm is beyond the pale of reasonable responses. On the other hand, a doctrinaire commitment to police-enforced “law and order” simply depends on an imaginary version of reality in which every minor infraction can be addressed through government intervention. 

Such thinking is purely modern. Historically, prosecution for such offenses has generally been a matter of private civil law. The idea that police ought to be sent out to round up every low-grade thief is a product of big-government twentieth-century thinking, and it leads to a “cure worse than the disease.” 

That was clearly the case in the Garner situation. Fortunately, the court recognized this, and Hopp will have a few years in a prison cell to help him understand. Let's hope his partner Jalali will soon have the same opportunity. 

Image source:
Larimer County Sheriff's Office
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Taxes: The Barbarous Relic of the 21st Century

05/09/2022Andrew Packer

Ah, spring. That magical time of year when every productive American’s fancy turns to thoughts of how to legally reduce their income tax obligations.

This year, filing an extension and waiting to pay as long as possible has been the ideal tax strategy, thanks in part to the official inflation rate that just hit 8.9%.1

But while trading tax tips is useful (at least in March and into early April), the real key observation \is that taxes have become the true “barbarous relic” of our time.

That’s right, taxes, particularly income taxes, are simply not needed anymore!

That’s just in time too, given the rising complexity of the tax code. Systems that get as complex as the tax code tend to end up collapsing. Barbarous relic, indeed!

That term first originated by economist John Maynard Keynes, in reference to the use of gold as money. 98 years ago, he stated, “In truth, gold is already a barbarous relic.”

Keynes, as usual, was wrong.2

That’s because the decision to use gold as money was determined by many objective measures through centuries of use. Gold has durability, divisibility, and portability, among other qualities.

And it was only found in small proportions globally, at least in terms of what’s been easy and inexpensive to mine given the technology of the time.

As Ludwig von Mises details in Human Action:

“Men have chosen the precious metals gold and silver for the money service on account of their mineralogical, physical, and chemical features. The use of money in a market economy is a praxeologically necessary fact. That gold — and not something else — is used as money is merely a historical fact and as such cannot be conceived by catallactics.”3

In short, people chose gold.

Governments didn’t. But they did create a monopoly on determining weights and measures, the creation of coinage, and through centuries of beguilement, managed to weaken the global gold standard until a fully-fiat regime was born with the US closed the “gold window” in 1971.

But having replaced gold with a fiat currency, governments also found that they can “progress” in other areas as well.

Unfortunately, taxation is one such area.

Individual human beings have entered into governments for a number of purposes, notably collective self-defense and for the ability to redress differences through agreed-upon arbiters.

The use of taxation has historically been to support and pay for government services. However, government has, unlike the gold standard, often had far more flexibility in how taxes are raised.

In the United States, tax revenue was often generated through tariffs. Only during the “emergency” of the Civil War was the first attempt made to tax the income of American citizens. And taxation was limited because the amount of money in the system was limited by the amount of gold in circulation.

While initially struck down as unconstitutional, those who supported the early income tax did something that would be unthinkable today: They changed the Constitution.

This provision came at the end of the gold standard era, and conveniently, at the same time of the third central bank in US history, the Federal Reserve. One can’t help but wonder if the two events are intertwined.

The end of the gold standard led to a substantial rise in incomes, at least measured in fiat, non-gold-backed dollars. As income rose, more and more found themselves trapped into having to pay an income tax, as well as the less-discussed payroll tax.

Thus, what was initially proposed as an income tax on only the wealthiest Americans became an annual financial exam that nearly all have to complete today – even if it’s only to get a refund for overpayment.

Given the proliferation of taxes, it’s clear that the abandonment of the gold standard account the world has contributed to making taxation a barbarous relic today. As the monetary unit is further debased, “cost of living” rises in wages lead to higher tax burdens, which don’t change as often in nominal terms.

But it doesn’t have to be this way. Governments can now simply create as much of their preferred monetary unit as needed.

That’s because the monetary alternative to the gold standard, a fiat system, is known for its elasticity. Or, in other terms, the ability by governments to print as much of the monetary unit with only political restrictions (if any) to consider.

Or, in meme speak, “money printer go brrr.”

The Covid 19 pandemic was a golden age for printing money hand over fist. In the US alone, 80% of all dollars in existence were created, going from $4 trillion in January 2020 to over $20 trillion in late 2021.4

But if the government can print money to hand out in “stimulus payments,” or in forgivable loan programs to businesses, the real question is, why make anyone pay taxes at all?

Why even worry about issuing more government debt, if the money can simply be printed instead? Why should the government issue a bond that it has to repay, when it can simply print cash?

All told, it’s clear that taxes are a barbarous relic in our modern age, especially given the money printing of the past two years and its inflationary effects.

Even holding off on collecting taxes for a few years wouldn’t permanently make anyone whole for the destroyed purchasing power of their currency through inflation, but it would go a long way.

But, there’s still more reasons why taxes are truly barbarous. That’s because there’s more than just a monetary cost to paying taxes.

The IRS estimates that it takes around 15 hours5 to prepare their return. Again, taxpayers receive no compensation for their time, so that’s lost economic value creation by millions of man hours per year.

The tax code is complicated. How complicated? People can’t even agree on how long the tax code is.

One estimate is as little as 2,600 pages. Or as high as 75,000 pages.6 That’s a sizeable discrepancy. It’s also going to add a lot to your tax prep time to read and understand it all first.

And even with a written code, many provisions are open to interpretation. Asking 100 different IRS agents to review your tax returns will likely come up with at least 100 different solutions.

Simply put, the US income tax is a series of rules, exceptions to rules, and an overall structure that creates one of the most complex systems in human history.

However, for all the complexity of the tax code, studies have shown that the US has been pretty consistent about collecting 15-20% of GDP through taxes since the end of World War II.7

In other words, it doesn’t matter what the top rate is. It doesn’t matter what exceptions or carve-outs are made. Those who have proposed a “flat tax” that strips out the complexity of the tax code are on to something, and can point to the relative consistency of how much is collected.

But, again, the world has changed. Perhaps tax policy should too. If the government has been pretty good about collecting 15-20% of GDP every year via taxes, they could just scrap taxes and print the money instead.

The best benefit of this policy is that it would greatly slow down the money creation of the past two years!

To some extent, the notion of taxes being outdated is hardly new. Nor unique to the Austrian school.

According to the “modern monetary theory” or MMT, we now live in a more enlightened world. It’s one where monetary policy has become a magical wand capable of addressing things as previously un-economic as systemic racism8 and climate change.9

Given that we now live in a world where all problems can be solved by simply printing money, why not print what’s needed and save taxpayers 15 hours of prep time per year?

More importantly, by printing the money needed for taxes, former taxpayers would suddenly have more money on hand.

That would certainly come in hand to offset the inflation of pure money printing, but every new economic omelet has to break a few eggs.

But MMT is so far into printing money to solve problems that it, sadly, makes paying taxes look responsible.

There’s only so much in taxes that people will want to pay before a taxpayer revolt. It’s hardly a gold standard, which offers limited increases based on mining, but it’s at least a limit.

However, by the time inflation shifted to hyperinflation, MMT would implode too late to stave off a general collapse. Or it would simply encourage its proponents to simply try on a bigger scale next time.10

So with this tax season now behind us (unless you filed an extension) … it’s time to think about how to best scrap the outdated, barbaric system we’re in.

Beyond the complexity, limited effectiveness, and frustrations of the current tax regime, it still doesn’t meet the needs of today’s “do everything” state.

Alternatively, the economy should fare better by rapidly scaling back the amount of taxes collected, while also decreasing the size and scope of government by an even greater amount.

And, by removing a government-backed central bank diluting the currency either “quickly or less quickly,” we could have a more stable monetary unit and a better and more accurate measure of real economic growth as a result.

But such a discussion will likely leave the one proposing those changes as the one advocating for barbarous relics like gold as a standard of value.11

With the status quo being questioned in so many ways right now, it’s time to consider how to best shift the world towards a more reasonable way of taxing its citizens, combined with a discussion of how much government is really needed in their lives.

In truth, taxation is already a barbarous relic. As is the fiat currency regime that’s allowed it to spiral into a complicated morass sucking time and talent out of the productive, real economy.

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“The Northman”: Synthesizing Hollywood Historians with Reality

05/07/2022Sam Branthoover

Starring Alexander Skarsgård, the recently released film “The Northman” portrays Viking life in stunning and vivid detail. The historical accuracy is said to be unprecedented; Robert Eggers, director of The Northman and other historical tales (The Witch, The Lighthouse), emphasizes his employment of Viking experts to achieve such an accuracy. The film indubitably meets contemporary historians’ expectations; but for economists of the Austrian persuasion, the film provides an excellent example of the fallacious and often contradicting interpretations historians provide for historical phenomena.

At its core, the film balances two commonly-propagated tropes about Vikings: their brutal and animal-like nature, and their trust-based society of egalitarianism. How can one reconcile these views? On one hand, Vikings are rapacious misanthropes that plunder and torture with abnormal barbarity; on another, they live by oaths and reputation. Egger’s “The Northman” excellently displays this dichotomy; in the beginning of the film, we witness the Vikings “going berserker” before raiding a Slavic village, murdering and violating all they can.

In contrast, much of the film is about fulfilling oaths and attaining/maintaining “honor”; in a later scene, the protagonist hands a gold piece to an unknown Viking sailor, who are to bring the protagonist’s dazzling bride-to-be on a months-long sea journey to Orkney in recompense. How are the Vikings that violate any woman they find also entrusted with ensuring safe passage for a beautiful woman, of whom they have no consequences of disturbing once past the bay line? This is not an oversight of the scriptwriter (though one may imagine his or her own puzzled look), but one of contemporary interpretations of Vikings.

Pete Leeson has extensive literature on the economics of pirates. Using rational choice theory (and much supplementary data), he accurately deduces that pirates did not plunder and murder solely to quench their own depravity, but because doing so was wealth-maximizing for securing early surrenders. When merchant ships would spot the jolly roger, they predicted facing rapacious blood-fiends, and moreover that their lack of immediate surrender would result in excruciating torture and execution.

As Leeson notes, it behooved pirates to emphasize a favor for torture and a high discount rate (high time preference) to secure plunder with as little cost as possible. Contemporary historians failed to reconcile pirates’ brutality with their crafting of, and adherence to contracts of private governance; rational choice theory, however, gives us a clearer picture.

Vikings likely have a similar explanation. “Going berserker” and torturing victims brutally both imply a high discount rate, and further reinforces that retaliation would be met with severe consequences. Both serve the purpose of securing plunder and victory with little cost. Berserker roughly translates to “bare-shirted” or “bear-shirted;” note that although going berserker is a “state of mind,” they are denoted by physical appearance, almost as if they are signaling ferocity to enemies and not actually manifesting the spirit of a wild beast.

 If Vikings truly entered an altered state of mind granting them superhuman abilities that clouded their judgement (thus giving them a high discount rate), why would they take so much care to signal this to enemies? Deliberate signaling is contradictory to the frenzied disposition they exhibited, akin to pirates’ perceived temperament.

As the historians and archeologists advising Eggers’ film indicate, there is also surprisingly little historical text or archeological finds that give us any glimpse of the religious rituals which shaped Norsemen’s barbaric mindset. In an interview regarding his film, Eggers discusses how they crafted the set regarding the “scene where Berserkers need to transform human beings into beasts through shamanic ritual”:

“The academic consensus was that Vikings didn’t have special clothing for rituals. But the academic consensus is also that rituals involved splattering blood over everybody. I said to the archeologist Neil Price, ‘So, like, everyone was just walking around covered in blood all the time?’ And he was like, ‘Wow, I never considered that.’ So, based around a lot of other ideas we saw in sagas and archeology, we did invent the ceremonial clothing for rituals. That was total invention.”

Interestingly, we don’t know how Vikings became berserker; the “ritual” is completely unknown, save for the fact that blood was supposedly splattered on everybody. Therefore, it could be equally true that no ritual ever existed. It seems modern historians have interpreted this part of Viking lore with the same scrutiny as recently-raided 9th century Slavic villagers: completely accepting what the Vikings wanted their prey to believe. Remember that Leeson confronted a similar issue: contemporary historians interpreting pirates to be exactly what the marauders wanted their prey to believe of them.

Dissimilar from Leeson’s work, we do not have any early data on Vikings; record-keeping at the time was understandably scant. For comparison, the golden age of Vikings took place from 793–1066 AD; the “Domesday Book”, widely considered to be one of the first attempts at actual record-keeping, was written in 1086 AD. Without supplementary data and trustworthy sources, we may only deduce what we can with rational choice theory.

However, contemporary historians also lack sources. They use accounts written centuries after-the-fact (by the posterity of Vikings’ victims, nonetheless), and completely accept their retellings as truth. But, it is unlikely that Vikings could organize raiding expeditions alone if they were truly the carnal beasts one reads about in the sagas. Had they been so, merely transacting would be unfathomably difficult as commitment issues would stall parties’ enthusiasm. Without transaction, it is hard to imagine any society existing.

“The Northman”, a splendid (but gory) tale, was expertly informed by contemporary historians and archeologists; as such, the film excellently displays the flaw in common academic interpretations of Vikings. Logically, I would not go anywhere near an individual that violates and murders for sport, and I would certainly not transact with them; individuals in history would have likely thought the same, because they are equally rational beings.

To assume otherwise when interpreting historical phenomena is fallacious methodology, but it is common practice in contemporary academia. Economists are often accused of “economic imperialism” when applying methodology to non-market behavior; we must continue to do so until other social sciences begin to adequately interpret human behavior.

 Sam acknowledges Janna Lu for her wonderful editing help and encouragement.

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Powell’s Soft Landing

05/06/2022Robert Aro

It’s happening. The Federal Reserve raised the Fed’s Fund Rate to 1.0% and announced their plan to shrink the balance sheet. In the Q & A that followed, Powell shared his thoughts on the possibility of recession and what he thinks about the decision to reduce the nearly $9 trillion balance sheet.

When asked why the balance sheet reduction will commence on June 1, Chair Powell responded, (excusing for his grammar):

So why June 1, it was just pick a date, you know, and that happens to be that happened to be the date that we picked. It was nothing magic about it. You know, it's not going to have any macroeconomic significance over time. We just picked that.

He reassured reporters:

I wouldn't read anything into it. In terms of the effect, I mean, I would just stress how uncertain the effect is of shrinking the balance sheet.

Certainly, much can and should be read into this. Their plan is to reduce holdings of US Treasuries and Mortgage-Backed Securities by $47.5 billion each month, from June to August, and then beginning September to reduce by up to $95 billion a month.

This must not be taken lightly, since reducing the money supply has various effects on interest rates, interest expense, asset valuations, lending activity, as well as both consumer and entrepreneurial decision making. To say the effect is “uncertain,” shows Powell is either willfully ignoring both history, reality and Austrian economics, or simply doesn’t understand.

Surely, he must be concerned for the future since the topic of recession came out throughout his press engagement. The Chair believes:

Now, I would say I think we have a good chance to have a soft or softish landing or outcome, if you will.

The term “soft landing” gets used a lot, yet no one has ever described what exactly constitutes a soft landing. We can infer it to mean little economic pain or hardship, or avoidance of a recession, but it would be nice if the public were provided more detail.

As far as the Fed sees, the future shouldn’t be too bad. In his own words:

So it's a strong economy and nothing about it suggests that it's close to or vulnerable to a recession.

He continued to praise the strength of the economy and labor market. Even going as far to say that: “Businesses can't find the people to hire,” using this as proof of a strong jobs market.

At last, some references to Paul Volcker were made.  One reporter asked if the Fed would:

…have the courage to endure recessions to bring inflation down if that were the only way necessary?

Powell didn’t provide a firm yes response, but referred to the possibility of “restrictive” policies instead:

So I think it's certainly possible that we'll need to move policy to levels that we see as restrictive as opposed to just neutral… If we do conclude that we need to do that, then we won't hesitate to do it.

Much can be taken away from Powell’s press conference, especially how the Fed doesn’t appear overly concerned about the inevitable bust it set in motion. However, it’s the word “courage” that really stands out. To assign a heroic trait to members of the Fed doesn’t really fit. Not because some, if not all of the Board of Governors are multi-millionaires, but because not one of them will ever be held accountable for any adverse consequences caused by their policies.

It’s difficult to find anything heroic because central planners have little to nothing to lose; when things turn for the worst and a recession follows, at best the Fed might claim it was a policy error or blame something else, but that would be the extent of their suffering.

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We Can Learn from Disney's Private Property Initiatives Even If We Learn the Wrong Lessons from the Company's Politics

05/04/2022Connor Mortell

I recently wrote a piece explaining that there is a libertarian case for taking away Disney’s Florida privileges. However, I am writing this to stress that while strategically that is the appropriate approach, we must not throw out the baby with the bathwater.

Granting Disney these special privileges but not to organizations that may have been more amenable to the ideas of liberty is most certainly one step forward and two steps back, but nonetheless the one step forward does warrant some analysis. During its time with these privileges, Disney served as a valuable case study for the concept of a private city.

Part of Disney’s responsibilities in exchange for self-governance was that it was now responsible for its own security. We as Austrians regularly point to the theories of Rothbard and Hoppe as they pertain to the privatization of security, but Disney has given much more concrete evidence of the possibility.

Disney’s private security has permanent Emergency Operations centers, utilizing the same system as law enforcement agencies, and extensive two-way radio systems with more than 1,200 “cast members” employed in security operations. Disney achieves this almost invisibly as the security members are trained to blend in and seem as if they have appeared out of nowhere when they are needed.

Additionally, Disney achieves this at a lower cost than government security. The average police officer is paid between $27 and $32 per hour. Meanwhile, at Disney, the average security guard is paid between $11 and $17 an hour. 

However, as Austrians we can recognize that that’s probably much more indicative of the natural price discovered through exchange. And despite paying so much less, Disney maintains equivalent security - if not better security - than just about anywhere else in the world.

Its security team additionally benefits from the fact that Disney has the strictest borders in the country - private borders. This fits exactly in line with what Hoppe has described of private cities:

No one is against immigration and immigrants per se. But immigration must be by invitation only.

And Hoppe goes on to say:

In a fully privatized libertarian order, there exists no such thing as a right to free immigration. Private property implies borders and the owner’s right to exclude at will.

This is exactly the position in which we find Disney. Disney’s borders had little to no discrimination. All that is required to receive the invitation that Hoppe insisted private borders is a payment of a little over one hundred dollars. With it came not only admission through the border but access to all the amenities their private city had to offer.

But from a security standpoint, Disney was able to screen every single resident (employee) and visitor of its private city. In their screening they even retrieve fingerprints, names, and contact information. This also allowed for more peaceful security at Disney because rather than having to resort to violence like a government security officer would, Disney security has the ability to simply remove from the premises those who had breached their rules.

For the sake of brevity, we cannot analyze every single benefit of the private city that is Disney World, but it is worth noting that it was not even close to limited to the benefits of private security enhanced by private borders. Disney’s famous Monorail served as just one of their private city’s answers to public transportation.

Disney has been responsible for its own sanitation and is - while not perfect - indisputably cleaner than any city of its size. Disney has its own fire department that has been exceedingly successful. Disney’s hurricane preparedness programs have led to it being named a StormReady® community. All this coupled with dozens of other examples that made Disney’s private community either competitive with or significantly better than any government run city.

Again, I stress that Florida was right to take away these privileges as they only catered to those who were enemies of further privatization and thus likely to detract from these benefits spreading. As a result, these benefits are not helpful in the long term when they are only allocated to organizations like Disney. However, I reiterate that we must not throw the baby out with the bath water as it is so important that we learn from and use the invaluable case study that is Disney and its private city.

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Self-Interest Isn’t What It Seems: An Austrian Response to Socialism’s Broken Promises

A standard trope in socialist circles is that the poor and downtrodden refuse to vote their economic interests. See, e.g., Thomas’s Frank’s “What’s the Matter with Kansas? How Conservatives Won the Heart of America. This theory is used to justify various anti-democratic schemes to “protect” the vulnerable from themselves. If, after all, the poor aren’t voting their interests, then why can’t we achieve Pareto-optimal interventions on their behalf? 

Indeed, doesn’t this fact generally disprove all economic theory? You can’t very well argue that people are rational when it’s so “obvious” that they aren’t, right?

The problem, of course, with such theories is that they ignore risk. Even if socialism works exactly as advertised, even if all of its “failures” were solely the result of the fact that it hasn’t been “tried,” so what? The mere fact that socialism has failed in the past proves that socialism is risky, and risky investments must be assessed differently. 

It’s all well and good to say that a particular stock doubled just as predicted, but that doesn’t prove the would-be investor made a mistake; we’d have to consider the risk before we could assess the wisdom – or foolishness – of the decision not to invest.

Why then should the poor and downtrodden refuse to vote for socialism – even assuming for the sake of argument that socialism would work to improve their lives? It’s perfectly rational for a person living on the edge to be more risk adverse than the wealth; after all, who’s more likely to starve under socialism (if it fails)? 

Likewise, it’s perfectly rational for a person living on the edge to feel the burdens of failure will fall on them disproportionately; after all, who is more likely to form the firing squads and its victims? Who’s more likely to be in front as well as behind those rifles? Since the vulnerable are more vulnerable, it’s perfectly rational for them to fear socialism more than those who have the resources to protect themselves or flee.

Another more subtle, but important point: who is more likely to have actual personal negative experience with government than the vulnerable? The rich are less likely to have negative experiences with government and, when they do, they interact through superior counsel. The person who lost their car to parking tickets is far, far more likely to mistrust government than the person who can afford to park in a garage or pay their tickets when they don’t; therefore, it’s perfectly rational for the former to mistrust socialism more than the latter.

Note that I haven’t made any fancy assumptions about risk preferences or cognitive biases; rather, I’ve made some simple straightforward assumptions: people who are less able to bear risk are more risk adverse, and people who have suffered losses in a particular investment are less likely to repeat that same investment. Nothing fancy, and – yet – it accounts for all the observed behavior.

Now to be clear, I don’t think that socialists can deliver what they promise, but there’s nothing irrational about the skepticism of the vulnerable. To the contrary, it suggests that they prioritize their own personal experience above academic proclamations, which is the most rational preference imaginable.

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