Power & Market

Cop Amber Guyger Is One Reason We Need Private Gun Ownership

09/12/2018Ryan McMaken

When advocates of gun confiscation complain about "guns" and say "no one needs a gun for x" all they are really saying — whether they understand it or not — is "I want only cops and soldiers to have guns."

While gun control advocates often claim to be suspicious of police power, logic dictates that the gun-confiscation position is simply the position that only government employees should have guns. Similarly, more mild gun-regulation positions are designed to increase the coercive power of government over the taxpaying citizenry, and to lessen access to private sources of self-defense — thus increasing private-sector dependence on government police for "protection."  The gun-regulation position is premised on the idea that only the police can really be trusted with gun ownership.

And what a terrible position that is.

Richard Black could tell us more about this. Were he still alive today. After Black killed a home intruder in self-defense, he called the police. Sometime later, the police showed up and shot Black dead in his own home.

The dead victims of the school shooting in Parkland could tell us more also. When sheriff's deputy Scot Peterson — who was specifically supposed to provide security at the school — was faced with an armed intruder, he ran away and hid.

And now we hear about the case of Amber Guyger. Guyger is the police officer who confused another man's apartment for her own. She trespassed on the man's property, saw his "silhouette" and then open fired. Her victim, Botham Shem Jean, died.

A Double Standard

In cases like these, police could not be counted on to use firearms appropriately — or they failed to use them to defend the innocent.

Moreover, this latest case serves to illustrate, yet again, the enormous double standard that is employed when police behave in ways that any private citizen would be roundly and viciously denounced for. Were a private citizen to do what Guyger did, his actions would be provided as more evidence that private ownership of guns ought to be curtailed.

Guyger has claimed in her defense that she "gave verbal commands" to her victim before she shot him.

That this should even be considered any sort of "defense" requires a special kind of deference to government. But this is how police officers and their defenders think. If a normal person is woken or surprised in the middle of the night by an intruder with a badge, the victim is supposed to know — by magic, apparently — that the intruder is a police officer and then do what you're told. Never mind that the person might just be claiming to be a police officer.

For police of course, private citizens are always supposed to respond calmly and obediently when screamed at by multiple police officers. Often, the victims receive conflicting orders from police.

Similar rules do not apply to police. Police — we are told — "must make split-second decisions under extreme pressure. "In other words, if the police make a poor decision under pressure, they're heroes who did what had to be done. If a private-sector taxpayer like Richard Black makes the "wrong" decision? He deserved to die.

The law reinforces this view as well. It is extremely rare for a police officer to be prosecuted for gunning down unarmed victims. In the Black case, the police chief has already blamed the 73-year old war veteran for his own killing. The chief's reasoning? Black, who was hearing impaired, should have responded faster to verbal police commands. Case closed.

Even when a trigger-happy police officer is brought up on charges, the law is written in such a way as to make it extremely hard to thread that needle. Members of the jury are easily browbeaten into coming down on the police officer's side. We saw this in the case of Daniel Shaver, an unarmed man who was crawling and begging for his life when gunned down by police. Police officer Philip Brailsford was so fearful of this weeping, trembling man on the ground that Brailsford just couldn't keep himself from opening fire. The jury's verdict? Not guilty.

What If a Private Citizen Did the Same Thing?

But imagine if a private citizen did what Guyger did. If a private citizen trespassed into someone's house, screamed at the residents, and then opened fire — regardless of the details in the case — we all know what would happen.1 We'd all be told we need to have "a national conversation" about how there are "too many guns" in private hands. If the whole thing were shown to be an accident, pundits would endlessly be quoting statistics designed to make it look as if guns in private hands lead to countless accidental shootings. But since it was a police officer who did the shooting, we'll hear about none of this. Why? Because gun control does nothing to control the use of firearms by police. Although we're repeatedly told that guns in private hands lead to spades of accidents, mistaken shootings, and overly-aggressive gun owners, none of this applies when that gun is in government hands. Then it's all just unavoidable. It's never a problem with the guns themselves.

And the double standard doesn't stop with the media. Were the roles of Jean and Guyger reversed, the response by criminal-justice officials would be totally different. A person who trespassed into someone else's home and started shooting — even if totally accidental —  would be arrested immediately. A plethora of charges would be aggressively applied to the defendant, ranging from illegally discharging a firearm to criminal trespass to second-degree murder.

In Guyger's case, she isn't even arrested at the scene, and so far she only faces manslaughter charges. The Texas Rangers have handled her with kid gloves, allowing her to turn herself in at her convenience. All her statements to the police have been treated as indisputable facts — and not as the claims of a person who breaks into people's homes and starts shooting. Attorneys who have read the arrest warrant are saying that, given the way it is written, law enforcement clearly thinks it's all just an accident and "the Texas Rangers were careful not to implicate Officer Guyger."  It's the usual "professional courtesy" of the Thin Blue Line. There is one set of laws for government agents. And another set of laws for the taxpayers who pay all the bills.

Guyger's chain of mistakes in this case belies the pro-gun-control argument that police ought to have a monopoly or near-monopoly on firearms because private citizens can't be trusted with weapons. These ordinary people are too likely to be mentally unstable, too trigger-happy, or too lacking in training to be allowed to own firearms.

But who is to defend us from the mentally unstable or poorly-trained police officers? Or perhaps from the ones who are too distracted or unintelligent to figure out which apartment is theirs?

It is precisely this sort of thing that led to the infamous Indiana law which explicitly states that it is not a crime to defend ones self from an abusive police officer — even using deadly force if necessary. That law was a response to an Indiana Supreme Court decision which stated that “there is no right to reasonably resist unlawful entry by police officers.”

Amber Guyger will benefit form this sort of judicial thinking if her case ever goes to trial. The deck in stacked in favor of the government and its law enforcement arm. It's not a coincidence that government judges too often side with government police. They all work for the same organization — and they all live off the sweat of the taxpayers who have very little say in the matter. Moreover, courts have ruled that police have no obligation to protect the citizenry. Thus, "officer safety" is priority number one.

[RELATED: "Lack of Police Accountability Shows the "Social Contract" Isn't Working" by Ryan McMaken]

At this point, the details of Guyger's motivations and actions remain vague. But let's assume it was just an innocent mistake. There's not much comfort there since we've already seen the double-standard — even in cases of accidents — employed for police shootings and shootings by private citizens. The definition of "innocent mistake" varies widely between police officers and everyone else.

But could anything have been done to change the outcome in Jean's apartment? Even once we know the details, it will be impossible to say — and there's no way to assume that Jean would have successfully defended himself with a firearm in this case. But what if Guyger had missed at first? Botham Jean would have been perfectly rational to retreat, grab a gun, and then return fire. Then Jean might at least had a chance.  After all, what reason had he to believe she was a police officer beyond her uniform? It's not as if imposters can't buy those. And even if Jean had believed she was a police officer, he still would have been within his rights — morally speaking — to shoot her dead.

Few who know the realities of real-life violence would see this is a "good" alternative — but it's hard to see how this is any worse than a reality in which police can shoot innocent bystanders without any fear of self-defense on the part of the citizenry. For gun-control advocates, however, this is all too messy. For them, it would all be much more neat and tidy to make sure that private citizens like Jean have no access to the tools of self-defense. "Why you just want the Wild West!" is the typical refrain. The implication is that in a "civilized" society, these sorts of "shoot-outs" should never happen. Apparently, being shot dead while defenseless by a government-employed home intruder is the preferred "civilized" alternative — and only when we all learn to embrace this sort of untrammeled police power will we all be "safe."

  • 1. Guyger's defenders are already trying to claim she is innocent of any misdeed because Jean's door was unlocked. However, whether or not the door was locked is irrelevant to the question of whether or not Guyger was trespassing.
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Civility and Political Debate

09/05/2018Gary Galles

The 2016 campaign set a new standard for interruptions and other crimes against civility by candidates. The primaries were full of such rudeness, particularly the Republican free-for-alls. The presidential debates provided additional examples. Even the vice-presidential debate was described by one pundit as an “interruptionfest.”

One side would call such interruptions beyond-the-pale rudeness proving unfitness for office, while the other would cheer them as necessary to make good points. And things are not improving, judging from the hyper-hypocrisy illustration of Democrats who lauded John McCain for not being blindly partisan screaming their intense partisanship at the opening of Brett Kavanaugh’s Supreme Court hearing. So how should we view such political interruptions and other examples of rudeness, now that Americans are facing another election that will be in large part a response to the 2016 outcome?

The structure of logical arguments offers a clue. They run from premises to conclusions—A implies B implies C…implies Z. Correctly structured, if the premises are true, the conclusion must be true. However, if a premise or step in an argument is false, factually or logically, even if every succeeding step is valid, the conclusion need not be correct.

Consequently, when someone observes an important false premise or errant step in an argument, logic and a desire for better real-world results both suggest immediately focusing on where and how such premises depart from truth. After all, if people can come to some resolution with respect to the contested step, we can move on in our discussion, and potentially even compromise or agree, in the end. Without that step, further discussion may yield a great deal of stomach acid, but little fruit.

This is particularly important when the pivotal step involves the exact reverse of the truth, which can not only invalidate the conclusion, but actually confirm the opposite conclusion. That is, while statement A, if true, may imply Z, when A is false, it may exclude Z as a possibility.

For example, protectionism can save some jobs, and the income derived from them, from superior competitors. However, protectionism does not create jobs and wealth for the economy, as protectionists assert, or any of the consequences that would follow. “Saving” certain jobs eliminates others, including those in export industries, those facing higher input costs and those whose jobs would have been created from the greater wealth unrestricted trade would produce. That shifting of resources from where people’s circumstances and preferences would lead them voluntarily to where government favoritism dictates also destroys societal wealth.

We must also consider what happens if we wait politely until the end of a disputed chain of reasoning. Think back on your personal experiences. How well did you remember precisely what was said at step B, where disagreement began, multiple steps (possibly also in question) and many minutes later? How well did your recollections match those of your opponent(s)? What was said and why we disagree is easily lost, generating still more uncivil bickering. And such problems are only worsened when, as today, one side often insists that certain words or phrases should not be taken at face value, but as “dog whistles” for hidden and nefarious meanings.

The upshot is that even though interruptions feel rude (because no one likes being sidetracked before reaching their intended conclusions), they may be more justifiable in political debate than in other circumstances. When the direction of the country is at stake, the benefits of more effectively revealing core policy disagreements exceed those in day-to-day conversations. Consequently, we may want to allow more leeway for rudeness when disputing over government policy. We do not want rudeness to become the issue deciding political choices, rather than logic and evidence.

Of course, citizens still must judge whether and when interruptions are sufficiently justified. There are many instances that are not. For example, when one person just talks over another until they quit speaking, interruptions are unjustified. The same is true for interruptions whose purpose is to derail a line of thought, inject misrepresentations that will move us further from the truth or make ad hominem attacks. Electorally punishing such assaults on the possibility of advancing Americans’ well-being, by undermining the potential for increased clarity, remains appropriate.

There will be always be vast differences of political opinion expressed in elections. And citizens will fight over the relevant facts. That process can certainly produce rudeness. But it would be far better to fight over such matters, even rudely, than to let real issues be hijacked into battles over whose rudeness most disqualifies them and their positions from consideration.

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Can't We Just Leave Syria Alone?

09/04/2018Ron Paul

Assad was supposed to be gone already. President Obama thought it would be just another “regime change” operation and perhaps Assad would end up like Saddam Hussein or Yanukovych. Or maybe even Gaddafi. But he was supposed to be gone. The US spent billions to get rid of him and even provided weapons and training to the kinds of radicals that attacked the United States on 9/11.

But with the help of his allies, Assad has nearly defeated this foreign-sponsored insurgency.

The US fought him every step of the way. Each time the Syrian military approached another occupied city or province, Washington and its obedient allies issued the usual warnings that Assad was not liberating territory but was actually seeking to kill more of his own people.

Remember Aleppo, where the US claimed Assad was planning mass slaughter once he regained control? As usual the neocons and the media were completely wrong. Even the UN has admitted that with Aleppo back in the hands of the Syrian government hundreds of thousands of Syrians have actually moved back. We are supposed to believe they willingly returned so that Assad could kill them?

The truth is Aleppo is being rebuilt. Christians celebrated Easter there this spring for the first time in years. There has been no slaughter once al-Qaeda and ISIS’ hold was broken. Believe me, if there was a slaughter we would have heard about it in the media!

So now, with the Syrian military and its allies prepare to liberate the final Syrian province of Idlib, Secretary of State Mike Pompeo again warns the Syrian government against re-taking its own territory. He Tweeted on Friday that: “The three million Syrians, who have already been forced out of their homes and are now in Idlib, will suffer from this aggression. Not good. The world is watching.”

President Trump’s National Security Advisor, John Bolton, has also warned the Syrian government that the US will attack if it uses gas in Idlib. Of course, that warning serves as an open invitation to rebels currently holding Idlib to set off another false flag and enjoy US air support.

Bolton and Pompeo are painting Idlib as a peaceful province resisting the violence of an Assad who they claim just enjoys killing his own people. But who controls Idlib province? President Trump’s own Special Envoy for the Global Coalition to Counter ISIS, Brett McGurk, said in Washington just last year that, “Idlib province is the largest al-Qaeda safe-haven since 9/11, tied to directly to Ayman al Zawahiri, this is a huge problem.”

Could someone please remind Pompeo and Bolton that al-Qaeda are the bad guys?

After six years of a foreign-backed regime-change operation in Syria, where hundreds of thousands have been killed and the country nearly fell into the hands of ISIS and al-Qaeda, the Syrian government is on the verge of victory. Assad is hardly a saint, but does anyone really think al-Qaeda and ISIS are preferable? After all, how many Syrians fled the country when Assad was in charge versus when the US-backed “rebels” started taking over?

Americans should be outraged that Pompeo and Bolton are defending al-Qaeda in Idlib. It’s time for the neocons to admit they lost. It is time to give Syria back to the Syrians. It is time to pull the US troops from Syria. It is time to just leave Syria alone!

Reprinted with permission.

 

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Congress Has Become Very Good at Spending Money

08/15/2018

This week President Trump signed the 2019 National Defense Authorization Act, increasing America’s war budget to a whopping $717 billion. For comparison, this is roughly equal to the next 11 highest military budgets combined.

Military Spending_815.png

In fact, the $107 billion increase from last year alone is roughly equal to the total military spending of Russia and Germany together.

Congress isn’t done spending taxpayer money yet though. Next up is a spending bill that will fund the Departments of Labor, Health and Human Services, Education, and Defense, because the Pentagon apparently can’t get by with a humble $717 billion. This will be the third “minibus” to pass Congress  in 2018, the result of which has been the US running its highest deficits in years.

Of course reckless Federal spending isn’t anything new. What is particularly noteworthy about Congress’s recently behavior is that it has now become extremely efficient at passing these spending bills.

Congressional budgets are broken up into 12 different bills. When this next package clears the Senate – as expected – it will have passed 9 of the 12. As Axios notes, the Senate “has already passed the majority of spending bills by early August for the first time since 2000.” Should Congress continue on this pace and complete all 12 budgets by October, it will be the first time this has occurred since 1996.

None of this is surprising. As Ryan McMaken noted prior to the 2016 election, no one spends money more liberally than a Republican-controlled Federal government. Ideas like fiscal responsibility (and political decentralization) makes for great rhetoric in a political minority, but are extremely inconvenient when in a position of political power.

What makes this all the worse is that the GOP’s fiscal irresponsibility will inevitably result in blow back for some of its better policy victories, such as last year’s tax cuts.

Already progressive outlets are trying to peg last year’s reforms as the reason for historically high deficits, even though tax cuts have (unfortunately) increased government revenue. As such, when the Democrats next find themselves in political power, we can count on a push for tax increases to address America’s fiscal ills – likely while advocating for a new list of new government programs.

This cycle will continue to play out until the power to spend is taken away from Washington. The question is whether it will be due to a debt and monetary crisis, or pro-active restraints placed on it from the states.

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Caitlin Long: ICE Cryptocurrency A "Double-Edged Sword"

08/07/2018Caitlin Long

Caitlin Long, a 22-year Wall Street veteran and a leader in the cryptocurrency sphere, recently took to Forbes to write about the pros and cons of the Intercontinental Exchange (parent of the New York Stock Exchange) announcement that it is building "a new ecosystem for cryptocurrencies." As she explains, while this is a major leap forward in the "normalization" of crypto, she has some concerns about what a growing role for Wall Street in the industry:

Positives

Bakkt is yet more evidence that incumbent institutions are increasingly taking the “join ‘em” approach to cryptocurrencies, as explored in Part 1 of my 3-part series about the building rivalry between cryptocurrencies and Wall Street. Bakkt could bring many positives to cryptocurrencies:

it will likely attract more institutional investors to cryptocurrencies,

it may solve the custody problem that has so far kept large institutions from investing in the cryptocurrency asset class due to the absence of a qualified custodian, which the SEC requires for investment advisors that manage $150 million or more,

it may help regulators become more comfortable with the sector to see ICE involved, and

most importantly—it will probably attract corporate issuers to raise capital using the Bakkt ecosystem. Cryptocurrencies offer issuers the prospect of covenant-free and preference-free capital at low cost. Investors have proven their willingness—rational, in my view—to trade standard investor protections in return for the low friction costs involved with cryptocurrencies—there are no underwriters, trustees, transfer agents, exchanges, custodians, clearinghouses or central securities depositories involved in cryptocurrency issuance, and—very importantly—cryptocurrency trades settle instantly and with no counterparty risk. Moreover, issuers incur only a small percentage of the costs of being a public company, such as investor relations costs, proxy solicitation costs and the significant compliance costs related to public-company financial reporting and auditing. Additionally, cryptocurrency issuers can repurchase coins or execute a tender/exchange offer much more efficiently than for traditional securities.

I doubt it will be very long before major corporate issuers join Telegram and Eastman Kodak in raising capital via these markets. This is the good type of financialization—attracting new investors to the networks, each of whom (in proof-of-work blockchains) makes the networks more secure by bringing new computer resources to the networks, directly or indirectly on their behalf—and that, in turn, makes the networks more decentralized, resilient and immune to attack.

Kudos to ICE for being first!

Negatives

But ICE’s news also has downsides. As explored in Part 2 of the 3-part series just two days ago, Wall Street's only shot at controlling cryptocurrencies is to financialize them via leverage—by creating more financial claims to the coins than there are underlying coins and thereby influencing the underlying coin prices via derivatives markets. It’s pretty much impossible at this point for anyone to gain control of the Bitcoin network (and likely the other big cryptocurrency networks too), so Wall Street's only major avenue for controlling them is to financialize them via leverage.

The financial system has perfected the art of leverage-based financialization, unfortunately, and ICE’s announcement about plans to launch a regulated, physical bitcoin futures contract and warehouse (subject to CFTC approval) in November means leverage-based financialization is likely coming to bitcoin in a big way.

This is exactly what I’d warned of in Part 2:

“As cryptocurrency markets develop further, here’s what I’ll be on the lookout for: financial institutions beginning to create claims against cryptocurrencies that are not fully backed by the underlying coins (which could take the form of margin loans, coin lending / rehypothecation, coin-settled futures contracts, or ETFs that don’t 100% track the underlying coins at any given moment). None of these are happening in the market yet, though.

“So far, regulators have only allowed bitcoin derivatives in cash-settled form among major derivatives counterparties. While cash-settled derivatives can affect the price of the underlying asset, the magnitude of the impact is lower than the impact if derivatives were settled in an underlying that is “hard to borrow” or “special” (using securities lending parlance). Bitcoin is especially “hard to borrow” so a requirement to deliver the underlying bitcoins into derivatives contracts would amplify bitcoin’s price fluctuations.

Eventually it’s likely regulators will approve bitcoin-settled derivatives among major derivatives counterparties. At that point, banks will be looking to borrow the underlying bitcoin—and that’s when the custodial arrangements made by institutional investors will start to matter. Will custodians make their custodied coins available for borrowing in “coin lending markets” as they do with securities lending today? Or will they deem the cybersecurity risks of lending coins (which entails revealing private keys) too high relative to the extra return available for coin lending? And will institutional investors even allow coin lending by their custodians? Regardless, when bitcoin-settled derivatives appear on the scene, it’s very likely that cryptocurrencies will be “hard to borrow” for quite some time because HODLers (long-term holders) own most coins and rarely use custodians.” (emphasis added)

Why does this matter? Bitcoin has algorithmically-enforced scarcity, and that’s a big part of what gives it value. If Wall Street begins to create claims to bitcoin out of thin air, unbacked by actual bitcoin, then Wall Street will succeed in offsetting that scarcity to some degree.

Read the rest of the article here

For more on this topic, listen to Cailtin Long's talk at our recent Future of Money conference in San Francisco. 

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China's Currency Manipulation Harms China — Not Its Trading Partners

07/02/2018Patrick Barron

Americans are being told that China's currency manipulations are causing harm to its trading partners, America being the main victim. Nothing could be further from the truth. China's currency manipulations certainly cause harm, but to China itself!

No country can cause harm to another by adopting any economic intervention. All economic interventions cause harm only to the country that adopts them. This applies to subsidies of home industries, quotas restricting import volumes, tariffs imposed on imports, and currency manipulations.

A nation typically manipulates its currency by giving more of its own currency in exchange for the currency of other countries. Thus foreign importers can buy more goods per unit of currency exchanged. In other words, if the free market exchange rate between the dollar and the yuan is six yuan per dollar, an importer would be able to buy goods costing six yuan by tendering one dollar. If the Bank of China arbitrarily decides to boost imports, it can give eight or ten yuan for each dollar presented. Chinese goods drop in price on the American market.

Protectionists such as President Trump view this as harm, but where exactly is the harm? A Chinese good that previously cost a dollar now may be purchased for sixty or eighty cents. Our American standard of living goes up at China's expense! The extra money in Americans' pockets may be used to consume or invest more. This is a very strange definition of harm.

The real harm occurs in China. The Bank of China sets off price inflation in its own country. It may try to mitigate this inflation by raising the interest rate on its own debt in order to withdraw the extra yuan from circulation. This is known as "sterilization". It then appears as if China has achieved greater exports with no price inflation. However, China's debt rises. Eventually holders of Chinese debt will desire to draw down their yuan-denominated debt. Demand for yuan for spending purposes will increase. At that point China will be faced with a dilemma. Either it can raise the interest rate high enough to entice enough marginal holders of debt to roll over their holdings or it can print yuan. The former causes a recession and the latter causes price inflation.

There is no such thing as a free lunch or an economic intervention that causes harm to others and not one's own country.

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Civility and Property vs. Politics

06/27/2018Jeff Deist

Calls for civility in politics are nothing new, and the incident involving White House spokesman Sarah Sanders at a restaurant has yielded plenty of smoke but little heat from both phony sides of this non-debate/non-issue.

I suppose we should be happy when property rights become part of the conversation. It's healthy when our Left progressive friends develop a situational private property ethic. Of course property owners have the unfettered right to remove people or refuse service. And of course we should all be civil with those who don't share our views. The day to day interactions that make any society at least tolerable, if not healthy, comport with customs and mutual-self interest, not positive laws. 

But liberty requires property, and civility requires civil society. When politics and the state serve as the chief organizing principles in society, property rights and social cohesion necessarily suffer. Incivility is a feature, not a bug, of a highly political society. It is also a feature of an America where far too many things are decided by the federal government or its super-legislative Supreme Court.

What kind of healthy society devolves into cheering and jeering over judicial decisions, decisions swung by just a few judges voting one way or another? Should 320 million people have to worry so much about 5 or 7 Supreme Court justices?

It's hard to argue for civility in winner-takes-all political scenarios. In fact it's a recipe for hyperpartisanship, "othering," and tribalism. It's senseless to lament a loss of civility and then argue for overcoming our differences by voting harder and suing each other more.

Ludwig von Mises witnessed the collapse of the Habsburg civilization, the rise of Nazism in Austria and Germany, and two horrific European wars-- a series of events far beyond mere incivility. His answer to actual barbarity was real liberalism, distilled in its purest form to one word: property. "If history could teach us anything, it would be that private property is inextricably linked with civilization," Mises tells us in the aptly-titled Omnipotent Government.

But property is not part of the liberal program today; on the contrary, private ownership is under serious attack not only among rising "democratic socialists" like Alexandria Cortez and Bernie Sanders but also by protectionist and mercantilist forces in the Trump administration.    

In fact only libertarians believe in full ownership--i.e. full control-- of private property. This is hardly an edgy argument at this point; Murray Rothbard made it 50 years ago. But nobody in politics or media actually believes this or argues for it. In the context of real estate, full property rights would require no property taxes, no zoning, no permits or building codes, complete freedom to alienate or sell at will, and most of all full control over who enters and who is required to leave. This kind of private property is not available to cake bakers or quaint southern restaurateurs.

America slowly but surely lost her sense of robust private ownership, the soul of a free society. It happened through the tax and regulatory state, by overturning the Lochner case and jettisoning economic substantive due process, through absurd readings of the Commerce Clause, through the creation of wildly extra-constitutional administrative agencies, and through the creation of an inferior form of property called "public accommodations."

By giving up property we gave up liberalism and civil society. By insisting on political control over vast areas of human affairs we gave up civility for force.

Remember, politics is zero sum. The restaurant owners view Sarah Sanders as a threat, as someone who is going to cause them harm if her (Trump's) administration prevails. That the owners acted absurdly is not the issue, nor is the incoherent argument that Trump somehow is beyond the pale relative to past presidents. The scene at the Red Hen restaurant was the result of the owners' not-unjustified perception that the US political system vanquishes people. To avoid being vanquished they must vanquish Trump, at least in their eyes.

Ideally, when asked to leave by the proprietors of the restaurant Ms. Sanders simply should have shrugged her shoulders and left quietly. Which is apparently what she did, although reportedly she was followed and harassed at a restaurant down the street. What's unfortunate is not merely the twitter incivility that followed, or the nasty news articles clamoring about a brewing civil war, but rather our blindness in understanding where "democracy," politics, and disrespect for private property lead. 

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China is Right, Washington Should Only Blame Itself for Opioid Crisis

06/25/2018Tho Bishop

As good as Washington is at making bad things happen, it is just as good at finding other people to blame it on. A great example of this is the push the last year to blame America’s opioid crisis on one of its favorite boogeymen: China. While it’s perhaps not so surprising to see such rhetoric from the Trump Administration, it’s a narrative that has received a bipartisan endorsement in Congress.

The argument is that it is far too easy for Chinese chemical manufactures to send products like fentanyl to the United States, and therefore China deserves blame for its role in overdoses. This argument, however, is absurd for a number of reasons - including that by Congress's own analysis, it's the United States Postal Service that is the preferred method of transport (perhaps this explain's Trump's new desire to privatize the post office?) In responding to the allegations in a press conference today, the Chinese government rightfully pointed the finger at the only government body that deserves blame: the Federal government.

"It's common knowledge that most new psychoactive substances (NPS) have been designed in laboratories in the United States and Europe, and their deep-processing and consumption also mostly take place there," said Liu Yuejin, deputy chief of China's National Narcotics Control Commission.

"The U.S. should adopt a comprehensive and balanced strategy to reduce and suppress the huge demand in the country for fentanyl and other similar drugs as soon as possible," said Liu, who comments coincided with the release of China's annual drug situation report.

"When fewer and fewer Americans use fentanyl, there would be no market for it."

While the Chinese officials didn’t go so far as to explicitly blame Washington for the problem, they would have been justified in doing so.

Last year Mark Thornton did a great job walking through how the opioid crisis is the direct result of misguided government policies that escalate the very issues politicians claim to want to fix:

The real cause of this epidemic is various government policies and the real solution is the dismantling of those same policies, in perpetuum.

The Four Causes

Let us start with drug prohibition which dates back to the Harrison Narcotic Act of 1914. Drug prohibition results in a black market where illegal products are not commercially produced and where suppliers are not constrained by the rule of law and product liability law. The result is that illegal drugs are more dangerous than legal drugs. Potency varies greatly from batch to batch and products often contain dangerous impurities and substitute ingredients. Opiate overdoses often occur when an addict is unaware that a particular dose is highly potent or contains Fentanyl, a pain medication that is 50 to a 1,000 times more potent than morphine.

The next cause is called the Iron Law of Prohibition, a phrase first used by Richard Cowan to describe the phenomenon that when drug law enforcement becomes more powerful, the potency of illegal drugs increases. One of the effects of enhancing prohibition enforcement is that suppliers will produce a higher potency drug. For example, during alcohol prohibition in the 1920s suppliers switched from producing beer and wine to highly potent spirits, such as gin and whiskey.

A second result of more rigorous prohibition enforcement is that suppliers will switch from lower potency drug types to higher potency drug types. For example, during Ronald Reagan’s “war on drugs” during the 1980s, smugglers switched from bulky marijuana to highly concentrated cocaine and domestic suppliers turned much of this cocaine into crack cocaine, resulting in the crack cocaine epidemic. The Iron Law of Prohibition explains why we see more and more dangerous drugs on the black market and why we see decreases in overdoses in states that have legalized cannabis.

Government intervention in the economy is a largely unrecognized cause of addiction. Intervention has at least two distinct channels of creating addicts. The first is war. War creates addicts through both painful physical injuries and painful emotional and psychological disorders, such as Post Traumatic Stress Disorders. The second cause is the general impact of widespread government intervention in the economy. Much of government interventionism results in the creation of privileges and monopoly power. For example, licensing requirements provide members of a profession, such as medical doctors, with monopoly profits by restricting the number of practicing physicians. This enriches licensed doctors and impoverishes potential doctors who must find work in another profession. These excess potential doctors thereby suppress wages in other labor markets. Given the pervasiveness of government intervention, this creates two classes in labor markets — the advantaged and the disadvantaged and addiction tends to develop in disadvantaged labor markets where people are more likely to be despondent and lack hope and economic resources.

The three above causes have been around for a long time creating the environment for drug overdoses, but at much lower levels than we see today. The final cause has only been around for a couple of decades, but it is now responsible for the majority of deaths. Alluded to above, Big Pharma undertook “aggressive marketing” in order to encourage doctors to write massive numbers of prescriptions for opiate painkillers and to change to pain prescribing guidelines in order to sell more of these heroin-like pills.

As a result, doctors began prescribing drugs such as Oxycontin and Vicodin, which are similar to opiates, such as morphine and heroin, for ordinary injuries and minor surgeries. The problem with this is that if you take these pills for 30 or 60 days, there is a distinct possibility that you will become physically addicted to them. The doctor is not going to write you refills for the prescription once the injury has healed.

This leaves the addict with three bad choices. One, you can enter a drug addiction rehabilitation program, but these programs are expensive and are not necessarily effective. Two, you can go cold turkey. However, detoxification comes with a slew of physical and psychological symptoms and can result in suicide and death. Three, you can go into the black market and buy illegal Oxycontin and Vicodin pills. The problem with this option is that such pills are expensive and have an unstable supply.

What happens if you choose this option, but run low on money or have trouble acquiring the pills? Well, very often the drug dealer who sold you the pills can also sell you heroin or tell you where to buy it. Heroin is often cheaper per dose and has a more stable supply. This is how people who would never even consider entering a room in which heroin was present become heroin addicts. This process is what has caused the major surge in drug overdoses.

So the solution to the opioid crisis is to end the failed policy of prohibition. While public demand has forced the Federal government to make some progress on respecting state sovereignty on marijuana, we are still far away from the Washington significantly re-evaluating its approach to drugs overall. As such, we are far more likely to see even tighter controls placed on legal pain medication – such as what we saw in Florida this year – which will tragically only make the epidemic of heroin and fentanyl deaths worse.

We will see who else Congress can find to scapegoat as a result. 

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China's Censorship Obsession

The Chinese government has recently produced a lot of international news: the trade war with the U.S. government; the suspicious financing on Malaysia’s former corrupted ruling party; the suppression on Taiwan’s foreign and diplomatic space, etc. Excluding the news related to international politics, the Chinese government was also fighting against the Chinese internet users at the same time. What exactly is going on?

Let's review these entire events. During the first semi-final of the 2018 Eurovision Song Contest, Irish singer Ryan O'Shaughnessy's performance featured two male dancers expressing a gay love story. This might not be a big deal in Western countries, but in China, the program violates the latest media censorship regulations. Therefore, Eurovision's Chinese agent Mango TV deleted all of O'Shaughnessy's song performance . At the same time, by the new media censorship regulations, Mango TV also blurred the rainbow flag that appeared in the competition and the tattoo of another Azerbaijani contestant . Subsequently, due to the intervention from EBU, Eurovision had to retreat from the Chinese market temporarily.

In addition to this Eurovision incident, Peppa Pig, Winnie the Pooh, tattoos, and Hip-Pop are all prohibited from transmitting in media in various forms. Obviously, the Chinese government has recently intensified media censorship. In the ongoing 2018 FIFA World Cup, we will undoubtedly see many tattooed soccer players. But China's soccer players were also recently ordered to cover their tattoos on the match day, and due to the recent media censorship regulations, is the Chinese government ready for blurring all the tattooed players when the World Cup matches are live?

This series of Internet censorship incidents has spurred Chinese netizens to action. Faced with the Eurovision incident, Chinese Internet users directly criticized the media censorship regulations and Mango TV’s compromise with the government . In response to the previous incidents, on April 12, Chinese activists drove hundreds of cars at late night, passing through the entrance of the State Administration of Press, protesting its media censorship with horn.

We do not know the particular beliefs or motivation behind the Chinese officials enforcing censorship rules. But, what the government officials believe is not the most important factor. What matters most is that media censorship is an infringement of property rights and voluntary exchanges for information; and what is important is that this wave of protests, shows a general increased awareness of consumer sovereignty

It is not known whether the Chinese politicians have realized that 40 years after the market-oriented reform, many people who benefited from the free exchange of markets and private property rights, especially young netizens, are less likely to behave like many in the older generations who had experienced the terrible Cultural Revolution, which brought widespread violations of individual freedom and the infringement of private property rights. This reality may also be a reminder to the Chinese government which has deliberately intensified the cult of the political leader: the rise of individualism is making it harder for China to return to Mao-era politics. Only by respecting individual freedom, and further advancing market-oriented reforms will it be a policy for all to win together.

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CEI: Federal Regulations Cost $1.9 Trillion Annually

05/10/2018Tho Bishop

A recent report from the Competitive Enterprise Institute highlights the cost of America's regulatory state.

According to CEI:

The estimate for regulatory compliance and economic effects of federal intervention is $1.9 trillion annually for purposes of comparison with federal spending and other economic metrics. This estimate was compiled using available federal government data and reports, in context with contemporary studies.

Putting that number into perspective:

The estimated burden of regulation is equivalent to nearly half the level of federal spending, expected to be $4.1 trillion in 2018.

If it were a country, U.S. regulation would be the world’s eighth-largest economy, ranking behind India and ahead of Italy

The regulatory hidden tax is equivalent to federal individual and corporate income tax receipts combined, which total an estimated $1.884 trillion in 2017 ($1.587 trillion in individual income tax revenues; and $297 billion in corporate income tax revenues).

This significant drain on America's productive sector exists in spite of the fact that deregulation has been one of the bright spots of the Trump Administration. So far the Administration has been able to maintain its objective of repealing two rules for every new one written and the number of pages in the 2017 Federal Registry was down dramatically from the previous Federal regimes. 

Federal Registry.png

Still, the full costs of Federal regulation are truly impossible to calculate because beyond the compliance costs imposed on current businesses are those companies that do not exist due to America's regulatory environment. As Per Bylund noted while discussing his book Seen, the Unseen, and The Unrealized: How Regulations Affect Our Everyday Lives:

Regulations make it costlier to act — and therefore some actions are no longer profitable when they would have been otherwise. So, for those businesses that lack political influence and aren’t the most effective, a regulation may decide whether there is a business or not. At the same time, businesses that survive the regulation might benefit from a protected situation because the regulation raises barriers to entry. This is why, for instance, it is rational for Walmart to support a high minimum wage — it will hurt Walmart’s competitors more than it hurts Walmart.

The real losers are common people who, as consumers, do not get the valuable goods and services they otherwise would have, and, as producers, cannot find the jobs they otherwise would. The winners are the incumbents, at least short-term, and — as always — the political class.

 

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