Power & Market
President Trump’s recent cabinet shake-up looks to be a real boost to hard-line militarism and neo-conservatism. If his nominees to head the State Department and CIA are confirmed, we may well have moved closer to war.
Before being chosen by Trump to head up the CIA, Secretary of State nominee Mike Pompeo was one of the most pro-war Members of Congress. He has been militantly hostile toward Iran, and many times has erroneously claimed that Iran is the world’s number one state sponsor of terror. The truth is, Iran neither attacks nor threatens the United States.
At a time when President Trump appears set to make history by meeting North Korean leader Kim Jong-un face-to-face, Pompeo remains dedicated to a “regime change” policy that leads to war, not diplomacy and peace. He blames Iran – rather than the 2003 US invasion – for the ongoing disaster in Iraq. He enthusiastically embraced the Bush policy of “enhanced interrogation,” which the rest of us call “torture.”
Speaking of torture, even if some of the details of Trump’s CIA nominee Gina Haspel’s involvement in the torture of Abu Zubaydah are disputed, the mere fact that she helped develop an interrogation regimen that our own government admitted was torture, that she oversaw an infamous “black site” where torture took place, and that she covered up the evidence of her crimes should automatically disqualify her for further government service.
In a society that actually valued the rule of law, Haspel may be facing time in a much different kind of federal facility than CIA headquarters.
While it may be disappointing to see people like Mike Pompeo as Secretary of State and Gina Haspel as the head of the CIA, it shouldn’t be all that surprising. The few areas where President Trump’s actions are consistent with candidate Trump’s promises are ripping up the nuclear deal with Iran and embracing the torture policies of President George W. Bush. Candidate Trump in late 2015 promised to bring back waterboarding “and a whole lot worse” if he became president. It seems that is his intention with the elevation of Pompeo and Haspel to the most senior positions in his Administration.
We should be concerned, of course, but the real problem is not really Mike Pompeo or Gina Haspel. It is partly true that “personnel is policy,” but it’s more than just that. It matters less who fills the position of Secretary of State or CIA director when the real issue is that both federal agencies are routinely engaged in activities that are both unconstitutional and anti-American. It is the current Executive Branch over-reach that threatens our republic more than the individuals who fill positions in that Executive Branch. As long as Congress refuses to exercise its Constitutional authority and oversight obligations – especially in matters of war and peace – we will continue our slide toward authoritarianism, where the president becomes a kind of king who takes us to war whenever he wishes.
I am heartened to see some Senators – including Sen. Rand Paul – pledging to oppose President Trump’s nominees for State and CIA. Let’s hope many more join him – and let’s hope the rest of the Congress wakes up to its role as first among equals in our political system!
As we've already discussed in detail, here and here, police agencies are not under any general legal obligation to protect the taxpaying public from criminal behavior. The motto "to protect and serve" is an advertising slogan.
Moreover, police agencies are also protected by immunity laws from lawsuits in regards to police abuse or lack of action.
However, in the case of last month's shooting at a school in Parkland, Florida, a Sheriff's deputy had specifically been assigned to provide security services at the school. This, apparently open up the Sheriff's office to legal action. Reuters reports on how at least one student who survives the massacre has announced a plan to sue to partially offset medical costs:
Law enforcement officers are generally immune to legal claims over inaction, as courts have held they need to be able to make decisions without fear of liability.
However, the Sheriff’s Office and Deputy Sheriff Scot Peterson could fall under a “special relationship” exception because Peterson was specifically assigned to protect Marjory Stoneman Douglas High School in Parkland, Florida, said Timothy Lytton, a law professor at Georgia State University who has written a book on gun litigation.
“The children and teachers justifiably relied on him and his unique level of knowledge to protect them,” Lytton said.
The deputy’s failure to enter the school during the shooting has added to criticism of law enforcement officials over warnings that accused shooter Nikolas Cruz posed a threat.
This may be the only legal option for the students and parents seeking legal reparations from either the school of law enforcement agencies.
Government schools are generally immune from lawsuits claiming insufficient security, as well.
Overall, though, there is little reason to expect schools to start taking security seriously until they are held legally accountable for providing meaningful security on their premises.
Today Jay Powell had his first appearance before Congress as Chairman of the Federal Reserve, confirming that his leadership at the Fed will look very similar to Janet Yellen. Though his testimony did note that 2018 has witnessed some volatility in the stock market and other assets, he maintained the same positive outlook of his predecessor. Perhaps alluding to the impact of Republican tax cuts, Powell went as far to say that he was more optimistic about the economies future than he was in December - leading markets to believe that a fourth rate hike may be possible this year.
Powell faced several questions from Republicans regarding the Fed's payment of interest rates on excess reserves at the Fed. This tool, which Congress gave the Fed in 2006 and then sped up its implementation in 2008, has increasingly come under attack from Chairman Jeb Hensarling. Voicing many of the criticisms made by George Selgin and others, Hensarling grilled Powell on whether the Fed's current use of IOER has far exceeded the original aims of Congress - a charge Powell denied. While it's encouraging to seen increased scrutiny paid to what, in practice, is a blatant subsidy to Wall Street - potentially reversing this policy tool brings its own risks. After all, it is the fact that over $2 trillion remains parked within the Fed that has helped limit the inflationary consequences of qualitative easing. Letting that money leave the Fed's vaults and loaned out in the fractional reserve system could lead to significant inflation. This is simply one of the many challenges the Fed faces in the near future.
Meanwhile, the Democrat's questioning of Powell offered little in terms of substance.The lack of diversity - superficial, not ideological - within the Fed has become the go-to talking point during these sort of hearings. Other questions were aimed to get Powell to criticize various policies of the Trump administration, with Powell avoiding falling into any such traps.
As the Austrian School has pointed out, the ultimate source of human poverty and failure lies in poor logic.
Here is an example from Forbes Magazine and a leading hedge fund investor who is also a major charitable donor genuinely devoted to helping humanity and the planet.
The editor of Forbes, Randall Lane, quotes Paul Tudor Jones, as follows:
There is no bigger threat to our democracy than wealth disparity. It is a story normally reserved for monarchies, dictatorships and plutocracies….We got into this pickle because over the past 40 years the corporate focus on profits took on manic proportions relative to other stakeholders such as employees, communities and the planet.
There are several things wrong with this logic. In the first place, a focus on profits is not at odds with a focus on employees, customers, communities, or the planet. Profit, properly defined, is the net present value of all future profits, that is, what you should be able to realize by selling that profit stream today. To maximize profit, therefore, one must take a long term view and seek to provide exemplary service over many, many years to employees, customers, communities, and the planet. What Paul Tudor Jones is describing is not profit maximization, but rather short term profit taking, which will actually reduce the net present value of all future profits. As Henry Hazlitt pointed out in Economics in One Lesson, real capitalism focuses on the long run, not just the short run, and considers all consumers, not just some.
The problem of course is that we have never had the benefit of real capitalism. Thanks to the interventions of government into the economy, and especially into the pricing system, we get crony capitalism instead. This is bound to happen in a monarchy or dictatorship. But, contra Mr. Jones, it is no less likely to happen in an American style democracy, as American history has shown. So long as government influences, manipulates, or controls prices, powerful special interests will strive to use the power of government to gain monopolies or other advantages. There are, however, certain periods in which government ( and in particular central bank) policy puts crony capitalism on steroids, with a resultant sharp increase in economic inequality, and that is what we are seeing today.
This clip from MSNBC's Morning Joe went through my Facebook feed earlier, with the show's panel pointing to the willingness of Alabama Republicans to vote for Roy Moore as an example of "extreme" tribalism that has taken over American politics. As Willie Geist put it:
If you're willing to protect the tribe at the cost of a 14-year old girl, you need to re-evaluate yourself.
Now, living in Alabama, I know many Moore defenders will dismiss the legitimacy of the original claims made against him. Putting aside the specific details of the case, it's hard to argue with Mr. Geist's point - if you are truly willing to sacrifice a 14-year old girl simply for the sake of your "tribe", then it may be worth evaluating your actions.Of course, the case of Roy Moore isn't a particularly unique one. Whenever allegations of inappropriate behavior are made against an individual that wields political power, the natural reaction to defend or attack an individual often coincides with how close their political views are to yours.
In fact, one of my favorite articles that has emerged in light of recent allegations came out last week in the Washington Post after allegations emerged about Senator Al Franken. Written by a "feminist" who "studies rape culture", she is refreshingly honest by admitting that she would never want Democrats to take action against Franken simply because he's better than any Republican.
If I believed for one second that Franken is the only Democrat in the Senate who has done something like this, with or without photographic evidence, I would see that as the best and most appropriate option. But in the world we actually live in, I’m betting that there will be more. And more after that. And they won’t all come from states with Democratic governors and a deep bench of progressive replacements. Some will, if ousted, have their successors chosen by Republicans.
In other words, if we set this precedent in the interest of demonstrating our party’s solidarity with harassed and abused women, we’re only going to drain the swamp of people who, however flawed, still regularly vote to protect women’s rights and freedoms.
While it may be fair to argue that this reaction is "tribalistic", it's also quite rational.
After all, politics is simply war by other means - and you tend to prefer an SOB on your side over an enemy choir boy.
The solution, of course, is to change the battlefield. If we take away the power Washington has, and allow politics to be played out at the State and Local level, then America will no longer be a country in which we are required to force our political beliefs on everyone else. Instead, we would all have genuine options about the style of government we live under.
As the scope of government America continues to grow, we will see political tribalism only grow.
Until that trend reverses itself, a politician's political affiliation will always matter more than his morals.
A county sheriff in Texas has run afoul of the social media mob when he publicly announced on Facebook that he was seeking to press charges against a local resident known for using the F-word on a sign on his vehicle.
Social media readers responded with the expected protests over freedom of speech when Sheriff Troy Nehls posted a photo of the offending truck and announced the local district attorney "has informed us she would accept Disorderly Conduct charges regarding it."
Numerous other sites have focused on the First-Amendment implications of the situation. But let's focus here instead on the use of taxpayer-funded resources by a county employee:
In essence, the Sheriff is seeking to make an arrest over what amounts to a rude bumper sticker.
By announcing that he has met with or called the local prosecutor, and may have charges filed, the sheriff is threatening the owner of the truck with state violence that may include arrest, fines, and perhaps even a short period of imprisonment.
Given all the effort the Sheriff has gone to, a reasonable person might conclude that there is essentially no crime at all in Fort Bend County.
However, in spite of the fact that the Sheriff acts like he has nothing better to do, it turns out that Fort Bend County has its share of crime.
Indeed, according to the FBI's crime statistics, the Fort Bend County in 2016 reported a total of 758 violent crimes. This included 18 homicides, 83 rapes, 141 robberies, 516 aggravated assaults. Property crimes included 269 auto thefts.
The population of the county is approximately 580,000, which means the homicide rate is around 3.0 per 100,000. That's not an especially high homicide rate by American standards, but it's not an especially low one, either, especially for a high-income suburban area like Fort Bend County.
In other words, the county has its share of crime, but the Sheriff is more concerned with waging petty battles over bumper stickers with local residents, rather than focus on prosecuting violent criminals, or on recovering stolen property.
In the past, here at mises.org, we've noted how with any organization — including law enforcement agencies — time spent on one activity necessarily reduces the resources spent on other activities. The often-used police claim that police "must enforce all the laws" has always been nonsense since there are limited resources available.
Thus, there is a real opportunity cost to tracking down people with naughty words on bumper stickers, while there are also 500-odd aggravated assaults per year.
This should surprise no-one of course, since the Sheriff's department is not subject to any market discipline and is guided more by how well it can lobby the county government for a bigger budget, and how well the Sheriff is at getting votes from the local population. This fracas over a bumper sticker, of course, is likely little more than a political ploy, given that the Sheriff apparently has ambitions for higher office.
It may be that this publicity pays off well for the Sheriff. Local victims of crime, however, may fare less well.