tag:blogger.com,1999:blog-9760873059855726152024-03-07T20:46:54.099-08:00The Philosopher King in ExileMusings on economics, politics, philosophy, and society.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-976087305985572615.post-79398976123216368442012-04-19T17:18:00.003-07:002012-04-19T17:18:27.163-07:00Medical CareThe reason for the medical care crisis in America is simple. There is no connection between the price and the product, no relation between value provided and price paid.<br />
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Before we begin any further attempt to use the government to solve problems in the medical industry that the government created, we should give the free market a chance to work.<br />
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This involves three simple new laws:<br />
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1. Require medical care providers to provide a good faith estimate of the cost of any good, service or proceedure before providing it (unless its an emergency, obviously), publish these prices on the internet, and limit the amout they can collect to that estimate. This would remedy the basic problem with healthcare. If you want to see an entire medical office go insane, just do this: Ask how much something is going to cost. They don't know. They have no way to find out. You will eventually be put on the phone with someone in billing, who will tell you they can send you an estimate by mail in 2-6 weeks. Again, this is one basic problem with the system, and it can be fixed easily. Yes, the health care providers will squeel that providing estimates is just too hard. Well, it seems to me that they manage to figure out the price when it comes time to charge you. At any rate, every other industry in the world does it. Doctors are supposed to be smart, right? I have every confidence they can figure it out.<br />
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2. Make it illegal for indivudual medical care providers to charge different people different amounts for the same good or service (i.e. outlaw "price discrimination"). This is already the law for almost every other industry, and is a basic rule of antitrust/anti-monopoly law. The health care industry got Congress to give it an exemption. This is highly inappropriate, and needs to be reversed.<br />
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3. Make people pay a significant part of their medical bills, so they have an incentive to use the above rules to shop around. The best solution would be to simply outlaw anything but very high deductable ($10,000+) insurance policies. If you have socialist leanings, at least you could agree to work within the current system by implementing a sliding scale regarding copayments, so that rich people have to pay a lot of their bill, say half, while poorer people could pay a much smaller amount, say 5%. The point is that the amount needs to be enough for the person in question to CARE how much his medical care is costing. This would mean that we'd have to change the law to require health insurance policies to implement this type of arrangement in their policies.<br />
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That's it. Implement these laws and give it three years. I absoultely guarantee you the "health care crisis," defined as runnaway costs, would be over for good.<br />
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<br />The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-41436663891175203282010-01-14T12:14:00.000-08:002010-01-14T13:27:31.265-08:00Whose Fault Is The Financial Crisis?The Politicians are all trying to figure out who to blame for the financial crisis, other than themselves, of course.<br /><br />Well, I'm now going to provide a perfectly accurate list of the guilty parties. By guilty, I mean people who were either grossly negligent, or outright fraudulent in their activities that lead to the housing bubble, and the resulting financial collapse. But the main component of being "guilty" is that these actors violated duties, moral and likely legal, to other people that trusted them, who as a result of that trust, got screwed.<br /><br />The first guilty party is the Wall Street Investment Banks like Goldman Sachs, JP Morgan, and others that made obscene amounts of money packaging mortgages and selling them to people and institutions seeking "conservative" investments. By packaging risky mortgages, and getting the ratings agencies to give them "AAA" ratings, the Investment Banks created a supposedly safe product that yielded returns far above other "AAA" bonds. This, in turn, created a huge worldwide demand for these investments. The banks needed more mortgages to create more of these "bonds" (which they earned huge fees creating and distributing), so they put out word to mortgage brokers and homeowners that they would buy any mortgage as long as the borrower had a pulse. This, the ability of anyone to get any amount of money to buy any house, is what led to the housing bubble, period.<br /><br />The reason the Investment Banks are "bad guys" is because they violated their duties, moral and probably legal, to their clients, customers, and others. They were the ones selling the bonds, supposedly to conservative investors. In essence, they conned investment managers, ratings agencies (see below), and individuals into believing that what they were selling was a "AAA" bond. But it wasn't. Imagine a client of an Investment Bank, who tells them that he wants to create a "very conservative" investment portfolio that produces steady income. The Investment Bank tells the client or potential investor that the best thing he can do is buy these mortgage backed "bonds" that they have created, and that they are "AAA" rated, meaning they're as safe as government bonds. In other words, the Investment Bank tells the conservative investor to invest in the most risky asset imaginable, a bond that is sure to become worthless as soon as the housing bubble bursts.<br /><br />So the Investment Banks are "bad guys" because they either (1) knowingly defrauded their clients and ratings agencies or (2) were so incompetent that their conduct rises to the level of gross negligence in recommending (or even mentioning) these "bonds" to clients. Add to that their obvious motive to peddle these "bonds", in the form of huge origination and distribution fees, and the case is closed. These people should either be in jail, or at the very least sued into poverty. And, just in case there were any doubt, one can recall that some Investment Banks (Goldman Sachs) were actively betting against these "bonds", and made lots of extra money when they went bad.<br /><br />The second "bad guys" are the rating agencies that gave these "bonds" "AAA" ratings. To make a long story short, they gave the "AAA" rating because the bonds were insured by an insurance company that itself had a "AAA" rating, like AIG. Because the insurer of the bonds (bond insurance guarantees that the bonds will pay out as promised) was "AAA", the bonds themselves were "AAA", according to the rating agencies. Problem is, the insurance companies had issued so much insurance on bonds, that they were headed for a certain bankruptcy if the bonds went bad. Thus, the insurance companies themselves were not "AAA" by any stretch of the imagination, but rather they were "junk" investments. And thus, the bonds were actually "junk".<br /><br />It was the ratings agencies duty to investors and the system to figure this out. Their failure to do so is at best gross negligence. But a jury would probably conclude that it was intentional based on circumstantial evidence: The ratings agencies had a huge monetary motive to give the bonds "AAA" ratings, because they were getting huge fees every time a new bond was issued. It wasn't that hard to figure out that insurers like AIG were at risk of bankruptcy, if the Ratings Agencies had bothered to look (assuming they didn't, which is a stretch). The people responsible for the bogus "AAA" ratings of the insurance companies should go to jail for fraud. The people who, though not charged with assessing the insurance companies credit worthiness, nevertheless gave mortgage bonds "AAA" ratings without looking into the rigor of the "AAA" rating of the insurer were negligent, and should be sued into poverty.<br /><br />The third "bad guy" is the Federal Reserve. It kept interest rates far below a market rate, which caused lots of over-investment in housing. Thye have a duty to society not to be downright stupid. Their stupidity is negligence at best.<br /><br />The final bad guys are politicians, state, local, and most importantly Federal (Congress and past Presidents), for putting in place a host of idiotic programs and Ponzi schemes. But they are always the bad guy.<br /><br />The following actors were not " bad guys", in that they never violated any duty to a specific third person, although their conduct may have deviated from the perfectly moral path: Mortgage originators like banks and mortgage brokers. People who took out crazy zero-down adjustable rate mortgages. With Wall Street BEGGING people to borrow money, and BEGGING mortgage brokers for more mortgages to buy, these people were just acting in their interest. Of course, there are bad eggs in every basket, but generally, these groups are not to blame for the financial crisis.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-80145153549184002132009-01-25T11:06:00.000-08:002009-01-25T11:44:45.121-08:00Helping Africa, A new form of governmentThe basis of the "nonconservative" doctrine is simple: Just as the Romans used military power to colonize the world, the U.S. should use its power to democratize the world. It is viewed as a moral imperative, under the basic principle that, if a fellow human is suffering under tyranny, you should help liberate him, if you can. That was the underlying basis of the War in Iraq, i.e. to establish a democracy in the heart of the middle east. I supported the war originally on this basis alone (I never bought the WMD argument), but changed my opinion after the high cost was revealed. In short, because we can't afford it, we shouldn't do it. Too late now, I suppose.<br /><br />I am of the opinion that Bush will be viewed quite favorable by history regarding Iraq because a democracy will emerge there. The younger generation will have access to the internet. If you go to a third world country, and see all the school kids on computers and surfing the internet, you are immediately struck by the notion that these kids will almost surely improve upon the society that they inherited. Their minds have been set free, in a very real sense. Their parent stare at them in wonder. Its hard to imagine computer and internet literate people living in mud huts.<br /><br />To Africa: The problem we face in trying to help Africa is that most of the continent lacks the basic foundations for growing a free society. The three legs are (1) the uncorrupted rule of law under liberal, minimalist principles and a strictly limited government focused on police and public safety issues, (2) protection of private property rights, and (3) a stable currency. Once these three legs are in place, a stable, free society will grow, no matter what else happens. The Africa problem will not be solved until institutions, likely government institutions, are established that guarantee these things over an adequate geographic area.<br /><br />I think we should now focus our attention on establishing a stable society somewhere in Africa. This we could likely afford. The plan, in short: (1) Pick a nice piece of land appropriate for the establishment of a new African state, (2) send the military to occupy it, (3) govern according to the three legs. I would also note that democracy is overrated. In fact, it would be counterproductive to establish democratic rule until the populace is educated, which will happen only after decades of evolution, if ever.<br /><br />A post arguing against representative democracy would be too long to complete here. But I would suggest that a better form of government might be semi contractual, with the agreement between the people and the government being something along the lines of this: The government agrees to provide certain government services. The citizens agree to pay taxes to support these services. So how do we choose the rulers? We vote on contracts of a certain term, say 10 years, proposed by various sets of aspiring ruling parties, with each contract listing the power structure proposed, the services to be rendered, and the cost. Long term debt would not be allowed. If you want a contract with more services, you need to pay as you go. Also, the tax structure outlined by the contract would have to be evenly spread among the population as a flat tax, possibly with an exemption on the first, say $10,000 of income. That is the only way I see for the cost of government services to be taken into account by the body of voters. And of course, the tendency of voters to ignore the costs of the government they demand is at the root of our current problems.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-61810521820516693112009-01-10T10:53:00.000-08:002009-01-10T11:25:44.227-08:00Yay for ObamaThe current media take on the large "economic stimulus" package now being advanced by Mr. Obama is that it is an "attempt to save capitalism".<br /><br />It is quite the opposite. It is rather a last ditch attempt to save the concept of central government planning in America. It is beyond reasonable dispute that the American economy has been centrally planned since at least the early 1970s, and the intensity of the planning effort has increased every single day, and continues to increase. Without going into the details of the myriad government interventions, regulations, and plans, suffice it to say that the vast majority of capital allocation decisions in our economy have been either directly made or fundamentally influenced by government programs, policies, or regulations. Every decision, down to a decision as small as to whether or not to buy an apple, is heavily influenced or directly controlled by government (in the case of apple, an apple is normally not subject to sales tax, so government encourages it, and a host of international trade regulations that regulate type and price of apples further limit consumer choices among foods and relative prices).<br /><br />When Mr. Obama was elected, I was pleased, but was having trouble articulating why. I decided to write this post because my feeling have crystallized a bit.<br /><br />The next president is going to be the standard bearer of the pro-government forces last stand, their last chance to demonstrate that a society characterized by government planning and intervention is sustainable.<br /><br />Both Republican and Democratic Parties (along with all minor parties other than the Libertarians) are devout planners and regulators. It is an unfortunate fact that Americans, thanks to inexcusably incompetent media organizations and the government educational establishment, have been taught that the Republicans are a "small government" party, that they represent a non-central-planning philosophy. Of course, nothing could be further from the truth.<br /><br />So either party, if given power, would do the same thing: Take all steps possible in an attempt to "save government."<br /><br />Put simply, I'm happy that Obama will soon be president because I want the best, most honest, most well-intentioned, most popular, most "progressive" central planner in charge of the last ditch attempt to save government.<br /><br />I (unlike many of my progressive buddies) am not thoroughly convinced in my convictions. I know that the evidence is strong and growing that a society planned by the government is not sustainable. But now we are going to find out whether central planning can work or not. If Obama cannot make it work, who can?<br /><br />I would be willing to bet that Obama, despite his intelligence, integrity, and good intentions, will utterly fail. But we don't need to speculate. We're now, finally, going to see.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-22623171597572281372008-09-27T14:05:00.000-07:002008-09-27T21:16:52.853-07:00The Financial CrisisMany people are confused about what is going on in the economy right now. I thought I'd provide a post that describes how it would be viewed by adherents of the main branches of modern economics.<br /><br />The two most credible strains of economics are the Monetarists and those of the Austrian School. Keynesians represent a third school.<br /><br />Monetarist theory is associated with Milton Friedman and current Fed Chairman Ben Bernanke, among others. No politicians, to my knowledge, are associated with Monetarist theory.<br /><br />The Austrian School is associated with economists Fredrick Hayek, Ludwig Von Meise, and Murray Rothbard, and politician Ron Paul, among others.<br /><br />The work of both the Monetarists and the Austrians are clear expansions on the work of Adam Smith ("The Wealth Of Nations", well accepted arguments in favor of free trade and free association, and of the free market mechanisms that create wealth), and have few contradictions with it.<br /><br />The Keynesians are associated with John Maynard Keynes, and by implication, Carl Marx and his contemporaries. The Keynesians would claim linage to Adam Smith, but their theories are inherently inconsistent with much of Smith's work, and directly contradict the theories of the Monetarists and the Austrians.<br /><br />It should be noted that no respectable economist is now a pure Monetarist or Austrian. They are two competing theories that have many of the same underlying principles, and differ mainly on whether monetary policy can be used constructively. The Federal Reserve is a tool of Monetarism, and the Fed Chairman has no choice, under law, but to act like a Monetarist, attempting to use the printing of money promote economic growth.<br /><br />It should also be noted that the current system, put in place by the government, is an attempt to use the (most controversial) aspect of Monetarism that theorizes that monetary policy can be used as a productive economic tool, in conjunction with Keynesian economic planning. This is somewhat ironic, in that any serious Monetarist will reject Keynesian planning in virtually any form. This is, in practice, why Federal Reserve Officials are constantly advising Congress to reduce government interventions, warning that there is only so much they can do to support the economy.<br /><br />All current elected leaders (other than Ron Paul) subscribe to the Keynesian/Monetarist hybrid philosophy, whether they know it or not. (Pure Keynesians are extinct in serious economics circles).<br /><br />So how would members of the various schools view the current financial crisis?<br /><br />The Keynesian/Monetarists:<br />The Cause: It is a Keynesian style economic "planning" effort that the United States has employed since the beginning of the 20th Century. One would expect that they would attempt to explain the current crisis in terms of fixable shortcomings an otherwise good "plan" to improve on the free market's allocation of housing, as well as more Marxist explanations related to the greed of capitalists. This is exactly what we are seeing in the news. They assert that the aspect of the "plan" now causing trouble, i.e. an artificially high rate of housing development, followed by the bursting bubble, is only causing trouble due to a lack of proper regulations, and the resulting ability of greedy businessmen to run amok. (The relevant policies related to this part of the Keynsian "plan" include the home mortgage deduction, various direct subsidies for housing including the FHA and HUD, the creation of subsidized and government guaranteed mortgage insurance with Fannie Mae and Freddy Mac, and various "civil rights" type laws requiring banks to provide loans in poor areas such as the Community Reinvestment Act, along with the Federal Reserve policy of keeping interest rates artificially low).<br /><br />The Solution: Fix the plan by outlawing certain behaviors that are incentivized under the structure created by the plan (such as uncreditworthy people buying houses, and investors taking high levels of financial risk). Massive government spending financed by printing money, and lower interest rates (more printing money) will create jobs and save the economy.<br /><br />The Monetarists:<br /><br />The Cause: The pure Monetarists believe that the problem was cause by a fundamentally flawed "plan," which would describe virtually any economic plan conceived by government. Their theories dictate that the unavoidable misallocation of resources caused by any large scale government planning effort would, as a mathematical certainty, eventually result in a major economic contraction. The plan, they would argue, turned the irresistible forces of economics toward a bad result. They would point out that the plan created an underlying structure in which people and lenders had a strong incentive to act just as they have acted. They would argue that more regulation (i.e. a less bad plan with more laws making it difficult or inconvenient for people to act in accordance with their structural incentives) could have slowed the progression of the unavoidable adverse economic effects of the plan, making them better able to mitigate the damage through activist monetary policy.<br /><br />The Solution: Drastically alter the plan to slow the progress of it damaging effects. Better yet, eliminate government intervention in the economy completely. The resulting economic downturn can, to at least some degree, be mitigated by massive monetary expansion. Printing money and giving it to banks, and low interest rates.<br /><br />The Austrians:<br /><br />The Cause: The Austrians believe, like the Monetarists, that the problem was cause by a fundamentally flawed plan. But they would focus on the activities of the Federal Reserve, and would assert that excess money creation, artificially cheap credit (i.e. the primary tool of the Monetarists), would alone have caused the problem, regardless of the so-called "quality" of the plan. The combination of the flawed Keynesian plan and the flawed Monetarist monetary policy is the worst of all possible worlds.<br /><br />The Solution: There is no solution. We are in for a major economic contraction. The more the government does to try to stop it, the deeper and longer it will be. If the government again attempts to use monetary policy to "bubble" our way out of economic trouble, it will either fail, leading to the immediate downfall of our society, or, if successful, create a bigger bubble which will cause a far more severe crash in the near future, one from which there will be no escape. The Austrians would state that the best option is to reform the monetary system, creating "sound money" and stopping the government from printing money, which will cause a very severe, but relatively short-lived (say 3-7 years), economic contraction, after which sustainable economic progress could resume. It would also be best to abandon the Keynesian plan in its entirety immediately. However, if Keynesian planning continued under a "real" money system, the damaging economic effects of the plan would be impossible to conceal.<br /><br />It is an unfortunate fact that the Austrians are the only branch with any success in predicting macroeconomic trends. In early 1929, both Hayek and Von Meise predicted the then-coming depression. More recent Austrians predicted both the Internet Bubble and the current Housing Bubble. They have been warning of the current financial crisis. The Austrians also predict that, prior to the ultimate disintegration of our society, great institutions of the Keynesian system, thought invulnerable, will crumble spectacularly, like pillars of sand. That is one reason why the recent fall of all five venerable investment banks on Wall Street and the largest insurance company in the world are very concerning events to students of economics: They are late-stage predictions of the Austrians, events that occur shortly before a "death spiral".<br /><br />It is worth noting that the increasing frequency with which the predictions of the Austrians were coming to pass was a central theme of Ron Paul's presidential campaign.<br /><br />The Keynesian/Monetarists and the Monetarists would predict that we are in for a mere recession. Unfortunately, neither the Keynesian/Monetarists nor the pure Monetarists have any record of macroeconomic predictive success. Neither branch would have predicted the severity of the current crisis, and the Keynesian/Monetarists would have thought it utterly impossible. Further, Keynesian (and arguably some measure of Monetarist) "solutions" to the Great Depression were not successful, in terms of measurable macroeconomic effects.<br /><br />Finally, it should be noted that there is much argument in serious economics circles about whether the Great Depression could have been avoided. The Keynesians are not serious participants, as it was Keynesian policies that were tried and unambiguously failed during the Depression. However, the Monetarists (notably current Fed Chairman Ben Bernanke in this PhD Thesis) argue that massive monetary expansion could have turned the Depression into a mere severe recession. The Austrians say that is rubbish, and that massive monetary expansion would have only aggravated the situation by causing hyperinflation, to go along with the economic contraction.<br /><br />The current solution being attempted by the Government is a combination of Keynesian and Monetarist solutions. For us economics buffs, it will be interesting to see whether the Austrians or the Monetarists are right. Just a very bad recession, or a hyperinflationary depression? Oh well, at least its good to live in interesting times.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-15253534220242853572008-09-26T13:33:00.000-07:002008-09-26T13:54:12.690-07:00The BailoutThe Actual Truth About The Bailout: The basic purpose of the bailout is to allow banks to sell their toxic assets, mostly mortgage backed securities, for more than they are worth. I.e., to give free money to banks and financial companies.<br /><br />The reason cited is that banks with lots of these assets cannot borrow money from each other, because one bank will not lend to another bank if the other bank has a bunch of toxic assets. This is because they don't know if that bank, the borrowing bank, will suddenly declare bankruptcy, wiping out the loan. The Bailout Plan will buy those assets. Thus, the banks will not have those toxic assets, and they will be willing to lend to each other again. This, in turn, is important, because banks usually have lots of their assets tied up in illiquid things, like business loans, so they need to be able to borrow cash when, for example, a bunch of people withdraw their money.<br /><br />The bailout plan is not necessary because for several reasons.<br /><br />First, most banks are not in trouble. They did not make the large returns that the now toxic bonds paid. They were conservative. There are enough banks to provide all the credit our economy needs. It should be noted that none of the major financial conglomerates are in trouble, e.g. BofA, Wells Fargo, JP Morgan.<br /><br />The bailout is for $700 billion (it will ultimately be at least twice, maybe ten times that much). The argument is that only the government can come up with that much money. That is a specious argument. This $700 billion is not just one chunk of money, but a whole bunch of small chunks. The private market will provide capital to save the banks that can and should be saved. Private capital has already saved Morgan Stanly, Goldman Sachs, and saved the depositors of Washington Mutual. Without the bailout, the worst managed banks and financial companies, those that cannot raise capital, will fail. And guess what? They should fail<br /><br />The only things the bailout accomplishes are(1) saving a group of recklessly managed banks and financial companies that made exorbitant profits for years by investing in risky securities, and (2) giving free money to strong banks, that don't really need it, but will happily take free money.<br /><br />The overall effect of the bailout will be negative for Main Street. The positive effects of the $700 billion of printed money pumped into the banks will be more than offset by the negative effects of a declining dollar, increased inflation, and the structural effects of keeping all of the bad financial institutions in business.<br /><br />And, of course, can there be any doubt that there will be wholesale corruption? This $700 billion is likely to be little more than a piggy bank for the administration and its friends. Do you think a bank with shareholders that are enemies of the administration will be getting loans? Fat chance. So the other result will be that the Administration will be able to give its friends a huge business advantage over its enemies.<br /><br />Frankly, we'd be better off funding increased amounts of insurance deposits (the FDIC) to make sure that depositors don't lose their money, (even over $100,000). That would prevent bank runs. <br /><br />Then, the government could handle crisis individually, as they come up. But it the private market will not come in to save an institution, there is no conceivable reason that the government should.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-74091013837895547122008-09-22T14:14:00.000-07:002008-09-22T14:15:29.555-07:00Post to Wired Website<div class="comment-content"><p>The American Revolution represented the expulsion of religion from government.</p> <p>So, those who had forever held power on the basis of divine right needed a new religion that would avoid the new rules.</p> <p>The answer: Socialism. The priests of social engineering.</p> <p>Their proposition: We will give you Heaven on Earth. You need need only give us control of your government.</p> <p>Our only defense to this attack was reason.</p> <p>So they perpetrated the lie that social engineering is something that can be accomplished by the ignorant through the whims of the heart. Reason is not relevant in matters of social engineering, they said. They told you that your opinion is what really matters, your innate spiritual sense of right and wrong, and you believed it. They told you that those greatest of economic minds, Hayek, Von Meise, Friedman, Smith, were false prophets. Their mathematics were false. Their empirical data corrupted. The engineers were the priests, and the priests the engineers. </p> <p>They told you to just do what feels good. Just believe. They said: "Know that if we are your rulers, you are righteous, moral, true, good. But if we are not your rulers, you prove yourself greedy, base, inhuman."</p> <p>So I ask you, if you have persuasive counterarguments against the great libertarian economists (most are Nobel laureates), why have you not yet received prizes and accolades recognizing your transcendent insights? </p> <p>If you have discovered the secret of centrally planned social engineering that will not lead to civilizational collapse, as the true economists all predict (their predications are coming to pass as I write), publish it. You'll be the most famous economist in human history.</p> <p>The answer is that you are the worst kind of fools. You are the modern day armies of inquisition. You have brought our society to the edge of the abyss by your determination to impose your religion on society by force. You are no different than all the tyrants, and their ignorant minions, before you.</p> <p>Obama is the Great Prophet of the Socialists, though he cannot call himself this. The great Priest of Social Engineering. His blank-eyed minions, entranced baying mobs, worship every word he utters.</p> <p>We are doomed.</p> <p>(By the way, McCain is merely a lesser priest of the same sect. Ron Paul was our last hope, and, though unable to defeat his arguments, you rejected him and the great economists whose views he advanced, as would an Evangelical an atheist).</p></div>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-43452565087469508692008-01-20T09:34:00.000-08:002008-01-20T09:48:11.066-08:00Sacramento Bee ResponseOne Kevin Yamamura wrote this article in the Sacramento Bee about Ron Paul. I sent him this email response:<br /><br /><div></div><br /><div></div><blockquote><div>Why do you insist on misrepresenting Paul's positions?</div> <div> </div> <div>He does not advocate a "return to the gold standard." I doubt you have any understanding whatsoever of monetary policy, so to even address this subject is irresponsible. However, I'm sure you know that saying somebody advocates "a return to the gold standard" makes them sound crazy, like saying he believes in UFOs (same with calling them an "isolationist", see below).</div> <div> </div> <div>At any rate, Paul advocates legalizing transactions in instruments other than federal reserve notes. Such transactions are currently illegal. If I want to pay you for your services in gold or stock or bonds, we both go to prison (unless we comply with IRS regulations and pay lots of taxes on the transaction). The reason he advocates this is because printing money causes asset bubbles and inflation.</div> <div> </div> <div>"Isolationist beliefs?" Why not just call him a "child molester"? It would be just as accurate.</div> <div> </div> <div>And why do we get so angry? Because we are trying to save our country from becoming a third-world slum. This isn't "feel good" politics. We are running out of time. The regulatory/socialist state has run up at least $60 Trillion in debt and unfunded liabilities, at the Federal level alone. That is more than $500,000 for an average American family. That is a CURRENT LIABILITY. That's not: we need to pay $500,000 over the next 50 years. That's: each family would need to come up with $500,000 NOW and put it in an interest bearing account to have enough to pay the debt and unfunded liabilities that are about to start coming due. If that sounds unlikely to you, I'd ask you to do some research. Try googling statements by the Comptroller of the Currency of the United States.</div> <div> </div> <div>Ever ask yourself why your readers are generally totally oblivious to this most important of facts?</div> <div> </div> <div>The only, ONLY solution is to stop this disasterous experiment NOW, and return to a free society. That's not my opinion, that the opinion of lots of Nobel Lauriets. </div> <div> </div> <div>I have a three year old kid who is going to be inheriting a society in collapse, and I'm not happy about it.</div> <div> </div> <div>Do you know what happened after the Collapse of the Roman Empire? Look into it. Hint: Try wikipedia on "Dark Ages."</div> <div> </div> <div>If you don't want to help us, at least don't misrepresent our positions, please.</div></blockquote><div></div>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-605292774891224872007-12-28T13:07:00.000-08:002008-01-05T18:42:11.505-08:00The Case For A Third Party Ron Paul Run<div>The <span class="blsp-spelling-error" id="SPELLING_ERROR_0">bloggosphere</span>, and now the major media, is awash with discussion about the ramifications of a third party Presidential bid by Ron Paul.</div><br /><div> </div><br /><div>Mr. Paul, a ten-term congressman from Texas, is currently competing in the primaries, seeking the spot as the Republican nominee for President. Despite the astounding level of support that has <span class="blsp-spelling-corrected" id="SPELLING_ERROR_1">spontaneously</span> <span class="blsp-spelling-corrected" id="SPELLING_ERROR_2">coalesced</span> around him, it remains difficult to imagine that he could actually win the Republican nomination. The reasons underlying this unfortunate prediction have little to do with Dr. Paul, and everything to do with Republican primary voters. </div><br /><div> </div><br /><div>Dr. Paul's positions are based entirely on economics, the lessons to be <span class="blsp-spelling-corrected" id="SPELLING_ERROR_3">gleaned</span> through an objective and deep understanding of world and American history, and compelling logic and moral-based political philosophies. Republican voters do tend to have some understanding of economics (at least the economics of the business many of them run, and home economics). This leads to their generally low-tax sentiment. However, they tend to have trouble with logic (they are mostly religious, and religion requires a disciplined, global rejection of logic) and don't do much reading. Their knowledge of political philosophies consists entirely of their preachers' teachings from the Bible. They watch lots of TV. If they <span class="blsp-spelling-corrected" id="SPELLING_ERROR_4">home-school</span> their kids, its not to provide a superior classical <span class="blsp-spelling-corrected" id="SPELLING_ERROR_5">education</span>, but to indoctrinate them into Biblical notions of creationism and such. They couldn't tell you how Social Security works, let alone explain the <span class="blsp-spelling-corrected" id="SPELLING_ERROR_6">convoluted</span> fiat money creation process practiced by the Federal Reserve. They are, by and large, extremely conventional, ignorant, uneducated, and <span class="blsp-spelling-corrected" id="SPELLING_ERROR_7">stubbornly</span> unwilling to give-up any of these traits.</div><br /><div> </div><br /><div>This general disposition leads them to be <span class="blsp-spelling-corrected" id="SPELLING_ERROR_8">susceptible</span> to a hair-trigger rejection of Ron Paul based on Dr. Paul's desire to send many of their Sacred Cows off to slaughter. For example, they teach their kids that the Civil War was unambiguously good, an indisputable example of America's <span class="blsp-spelling-corrected" id="SPELLING_ERROR_9">transcendent</span> goodness. To them, Abe Lincoln is a virtual <span class="blsp-spelling-corrected" id="SPELLING_ERROR_10">deity</span>, who only wanted to end slavery. That is, of course, absurd. When Dr. Paul pointed out that the Civil War was likely unnecessary (See Recent Meet The Press Interview), he surely and <span class="blsp-spelling-corrected" id="SPELLING_ERROR_11">irrevocably</span> lost a large percentage of the Republican electorate (though most were already Romney, <span class="blsp-spelling-corrected" id="SPELLING_ERROR_12">Giuliani</span>, or <span class="blsp-spelling-error" id="SPELLING_ERROR_13">Huckabee</span> supporters anyway).</div><br /><div> </div><br /><div>Likewise, Republicans tend to <span class="blsp-spelling-corrected" id="SPELLING_ERROR_14">believe</span> that an <span class="blsp-spelling-corrected" id="SPELLING_ERROR_15">aggressive</span> foreign policy is not only preferable to a non-interventionist one, but the only imaginable course. This is because they <span class="blsp-spelling-corrected" id="SPELLING_ERROR_16">believe</span> in the notion that Islamic terrorists could actually take over America or do us significant harm, if we don't maintain a Cold War size military and attack any Islamic country that looks at us wrong. (Could Al <span class="blsp-spelling-error" id="SPELLING_ERROR_17">Queda</span>, its entire membership massed and armed, even take over Bakersfield from the local population of hicks with their deer rifles? I doubt it.) Dr. Paul's desire to bring our boys (and girls) home seems to them unthinkable, the equivalent of pulling your <span class="blsp-spelling-error" id="SPELLING_ERROR_18">NASCAR</span> out of the race a few laps early when a thorough ass-kicking victory is all but assured.</div><br /><div> </div>Many Republicans also appear to support an expansion of "regulatory socialism," as evidenced by their continuing support for President Bush. I could go on and on, but suffice it to say that Ron Paul is simply to logical and non-crazy to appeal to an average Republican.<br /><br />These observations constitute the first leg of the three-legged stool that supports the notion that Paul should undertake a third-party run: He cannot be the Republican nominee.<br /><br />The second leg is based on the notion that Mr. Paul's cause, i.e. rationalism, good <span class="blsp-spelling-corrected" id="SPELLING_ERROR_19">economic</span> and monetary policy, non-intervention, free markets, can only be advanced by educating the public at large. The concepts underlying economics often involve multi-step logic, a stark contrast to socialist ideas. Republican and Democrat regulatory-socialists have two step logic. Here is an example: Poverty is bad. <span class="blsp-spelling-corrected" id="SPELLING_ERROR_20">Therefore</span>, <span class="blsp-spelling-corrected" id="SPELLING_ERROR_21">government</span> must take money from people to give to poor people. As you'll notice, there no serious logic connecting those two propositions. Although the premise is acceptable, the immediate conclusion that government must <span class="blsp-spelling-corrected" id="SPELLING_ERROR_22">confiscate</span> money from people is essentially plucked out of the air. Any serious non-biased economist will tell you that this conclusion does not fare well under serious scrutiny, mainly because of the unintended <span class="blsp-spelling-corrected" id="SPELLING_ERROR_23">consequences</span> of providing welfare, such as <span class="blsp-spelling-error" id="SPELLING_ERROR_24">incentivising</span> poverty and fatherless households, which in turn leads to other bad outcomes like drug addiction, with the whole mess regenerating in a generational <span class="blsp-spelling-corrected" id="SPELLING_ERROR_25">cycle</span>.<br /><br />Another example would be Social Security: It's nice for people to have a minimum level of retirement security, therefore the government should confiscate people's money and put it in a retirement fund for each worker. Again, this common wisdom is flawed on several levels. First, there is simply no reason to <span class="blsp-spelling-corrected" id="SPELLING_ERROR_26">believe</span> that people would not save for their retirement if left alone. Indeed, Milton Freedman won a Nobel Prize in Economics for proving that they will. Of course, a few will not manage to save enough to survive, but that number would be so small that family, friends, <span class="blsp-spelling-corrected" id="SPELLING_ERROR_27">charity</span> or at worst a minimal welfare program could care for them. This is hardly a justification for a full scale compulsory government retirement system. And of course, the government does not "save" the <span class="blsp-spelling-corrected" id="SPELLING_ERROR_28">confiscated</span> money, but simply spends it and writes itself I.O.U.s. It's like me spending all my savings, and then when someone asks me how much I have saved, saying "I've got $100,000 in assets, all of it I.O.U.'s to myself!"<br /><br />Understanding these and most other concepts underlying Paul's libertarian philosophy requires people to have a certain level of knowledge, and to apply that knowledge logically. In short, a high-profile third party run would provide a singular opportunity to begin to educate the public about why libertarian social policy is good economics and good philosophy, and why the socialist/regulatory/populist line is bunk.<br /><br />Third, and by far most importantly, a third party run by Paul could cause the Republicans to lose. The Republican party was, at one time, a party of <span class="blsp-spelling-corrected" id="SPELLING_ERROR_29">vigorous</span> debate, where market economics, protection of civil liberties, and non-interventionist foreign policy concepts were accepted and supported by a strong wing of the party (See Taft and Goldwater). The coming of LBJ and the "Great Society" signaled the demise of this wing of the Republican Party which, although it resurfaced for a somewhat pathetic last gulp of air under Ronald Regan, has now all but <span class="blsp-spelling-corrected" id="SPELLING_ERROR_30">disappeared</span>.<br /><br />Ron Paul has the potential to lead us in establishing once and for all that there are enough of us libertarians to make or break the Republican Party. There is only one way to do it: Make them lose, and lose bad. A <span class="blsp-spelling-corrected" id="SPELLING_ERROR_31">devastating</span> loss would, with absolute certainty, force them to adopt our principles and put forth candidates that actually supported them. Why? Because the Republican electoral strategy consists of attracting votes from three main <span class="blsp-spelling-corrected" id="SPELLING_ERROR_32">constituencies</span>: Christian <span class="blsp-spelling-corrected" id="SPELLING_ERROR_33">whack</span>-jobs, aggressive war mongers, and us libertarians. But the Republicans get the Christian vote simply by acting like they are opposed to abortion. The Christians have nowhere else to go. The aggressive war mongers will, likewise, have nowhere else to go.<br /><br />At this point, you might be thinking: "Well, we don't have anywhere else to go either." I should thus amend my previous comments to state that any of these groups could <span class="blsp-spelling-corrected" id="SPELLING_ERROR_34">theoretically</span> vote for a third-party candidate and get their way too. But they are too stupid to do it. They are told by the television that "Voting for a third party is throwing away your vote." And they believe! The war mongers are just as stupid.<br /><br />But let's face it: Us libertarians are about ten million times smarter than these other groups, and we know that the "don't throw away your vote" line is a cynical lie. Indeed, it has been clearly established by people who establish such things for a living that, by far, the most powerful vote you can cast is vote for a third party candidate that supports your views.<br /><br />Ron Paul may not have a chance to win the presidency running as a third party standard bearer. But by simply running, and shaking the establishment to its foundations in the process, he would probably end up effecting the domestic and especially foreign policies of the United States more profoundly than any President in recent history. And who knows? He could just win it.<br /><br /><div> </div>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-63949529485766929572007-11-25T12:03:00.001-08:002007-11-25T12:07:51.576-08:00Nick Gillespie and Matt Welch of Reason Magizine published <a href="http://www.washingtonpost.com/wp-dyn/content/article/2007/11/23/AR2007112301299.html">this </a>fine piece, which was also published in the Washington Post, about the Ron Paul movement. I wrote them this email:<br /><br /><div></div><blockquote><div>That was the single best, most informative, article about the meaning of the Ron Paul movement that I have yet seen. It was at once objective and insightful. A true rarity in the major media. I leared a few things too.</div> <div> </div> <div>Wow.</div> <div> </div> <div>I'm really, really, really, impressed.</div> <div> </div> <div>Nick Gillespie. Matt Welch. I"m going to remember those names.</div> <div> </div> <div>Yours very truly,</div></blockquote>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-55674253114109882442007-11-25T11:59:00.001-08:002007-11-25T12:02:12.037-08:00Wall Street Journal Smear of Ron PaulThe Wall Street Journal wrote <a href="http://online.wsj.com/article/SB119587208818602847.html?mod=googlenews_wsj">this </a>smear piece on Ron Paul's supporters yesterday. I sent the email to the writer:<br /><br /><div></div><blockquote><div>Editor's comments on the Ron Paul article:</div> <div> </div> <div>1. "The Paul Brigade" Isn't a Brigade a division of a military organization? Hmmm. Not the word I would have used. Don't see too many reports about the "Clinton Brigade." Well, lets just hope you don't hint that the Paul people (who are the only peace activists around) are militant.</div> <div> </div> <div>2. "low polling Paul." Same as Regan and Clinton at this phase, and number increasing along an exponential curve. Add a contextual comment.</div> <div> </div> <div>3. "incendiary comments." Hmmm. Well, incendiary means, of course, something that causes other things to start burning. But a hint that the Paul Brigade is militant??? Naww.</div> <div> </div> <div>4. "barely registers in national polls." Second time you've mentioned it. I wonder how many more times you'll need to drive home that misleading half truth.</div> <div> </div> <div>5. Whoop! There it is! Can't get through the story without associating Ron Paul with Guy Fawkes and "viliganties" that "wage war". It would have been a bit more effective if you used the word "terrorist" though.</div> <div> </div> <div>6. "draws support from antigovernment fringe groups and 9/11 conspiracy theorists". Wow. You just lost me, darling. Question: Does Mr. Paul have MORE support from individuals in these idiotic groups than any other candidate? Why do I get the feeling you have no idea, because you haven't bothered to look for questionable donors to the Establishment candidates.</div> <div> </div> <div>7. Did you just put "Ron Paul For President" in the same sentence with "white supremicists?" Do you guys sit around laughing while you're writing this crap?</div> <div> </div> <div>I'm quitting now because this article is a fucking joke.</div></blockquote><div></div>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-78079307496490418322007-11-21T17:29:00.000-08:002007-11-21T18:14:33.274-08:00Response to Ross DouthatThis is a comment I left on The Atlantic website in response to <a href="http://rossdouthat.theatlantic.com/archives/2007/11/whos_afraid_of_ron_paul.php">this </a>article by one Ross Douthat.<br /><br /><blockquote>You are partly correct that Mr. Paul is being ridiculed (not ignored so much any more, we've moved from "ignored" to "laughed at") by the media because he opposes the War. However, its deeper than that.<br /><br />It's based on the fact that Mr. Paul is a symbol of the demise of the "Establishment".<br /><br />He is the Internet, and that is killing the Old Press.<br /><br />He is against the Federal Regulatory and Tax System, which (being written by the lawyers of multinationals) are used to maintain the status quo, to secure members of the "nobility" in their positions.<br /><br />His opposition to the War is perhaps the ultimate anti-establishment position. Using Wars to gain power and money is nothing new. Julius Caesar used the conquest of Gaul to build his influence and wealth, and that of his friends in the First Century B.C. And he was just following the lead of dozens of Romans before him. "War is the health of the state" may seem like a crazy statement, but it is supported almost invariably by history.<br /><br />His opposition to Welfare (including Social Security, Medicare, Student Loans, Farm Subsidies, Foreign Aid, etc.) is similar. Welfare payments have always been used by the "patrician" class to gain the support of the populace and other nations in their effort to expand their power, and in their attempts to maintain it. Caesar did it. Augustus did it. They all do it. Any time the aristocratic class needs popular support to maintain power, they turn first to providing welfare (which is invariably money taken from those that threaten to themselves become competing members of the aristocracy, i.e. the "rich". ).<br /><br />I could go on.<br /><br />Put simply, we should expect to observe that the entities threatened by Mr. Paul will do everything they can to discredit and ultimately remove his relevance (welfare recipients of all kinds, government employees, members of the Old Press, multinational corporations, the military industrial complex especially).<br /><br />Conversely, we should expect to observe those that would benefit from Mr. Paul's platform (i.e. everyone else) supporting him, assuming the political rhetoric coming from the Establishment can be effectively countered.<br /><br />As far as I can tell, that's exactly what is happening. As the signal breaks through the Old Media static, people hear it, and convert to the Paul cause.<br /><br />Historically, the Establishment propaganda apparatus, along with its control of the police and military, had no real counterbalance. Today it does: The Internet. (Aside: Historically, no Establishment class has tolerated threats to its dominance. One wonders if today's Establishment will be the first to do so. If they don't, we would expect to see them endeavor to regulate the Internet, and do something to try and break up the anti-Establishment citizen organizations that have already arisen.)<br /><br />I think it's very likely that the Paul movement will continue growing beyond this election, though it may abandon Mr. Paul if he does not win (and make no mistake, he very well could win).<br /><br />I think what may be considered historically most noteworthy about the Paul candidacy is that it may be the first instance of the people, via the Internet, "nominating" and advancing their chosen leader in a grassroots fashion, rather than the establishment choosing the leader it wants in a "top down" fashion. It's interesting and somewhat disturbing that the candidate chosen by the people is so incredibly repulsive to the Establishment.</blockquote>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-74412123761311481472007-11-20T14:51:00.000-08:002007-11-20T15:02:17.496-08:00Response To Another Child<div></div><div>One David Sforza wrote <a href="http://www.dailynexus.com/article.php?a=15206">this </a>article criticizing Ron Paul in the U.C. Santa Barbara daily paper. FYI, Santa Barbara is not known for attracting particularly intelligent students.<br /><br /></div><blockquote><div>Hi,</div> <div> </div> <div>Your David Sforza wrote an article about Ron Paul.</div> <div> </div> <div>He attempted to analyze U.S. History. He did a bad job.</div> <div> </div> <div>For example, he asserts that if the U.S. did not get involved in WWII, "Germany would control the world." Is he suggesting that Hitler could have conquered Russia? China? I certainly assume he's not suggesting that Germany could have EVER successfully occupied the U.S. Facially invalid rhetoric like this makes one wonder whether you have any valid arguments in your arsenal.</div> <div> </div> <div>He also asserts that 9/11 would have occurred even if the U.S. had pursued a non-interventionist foreign policy. Has he ever read the justifications provided by Al Queda for their attack? All of them were based on our occupation, interference, and attacks on and in the Middle East.</div> <div> </div> <div>Unfortunately for us, people with reasoning abilities similar to Mr. Sforza's are currently in control of our government.</div> <div> </div> <div>But at least he has an excuse: It will still be four or five years until his brain is done growing.</div></blockquote><div></div>The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com1tag:blogger.com,1999:blog-976087305985572615.post-85996209902602574642007-11-15T16:02:00.000-08:002007-11-15T16:16:01.080-08:00RealUnclearPolitics on Ron Paul's Foreign PolicyRealClearPolitics.com published <a href="http://time-blog.com/real_clear_politics/2007/11/ron_pauls_realism.html">this </a>article criticizing Ron Paul's foreign policy stance. According to the author, one Kevin Sullivan, Mr. Paul just doesn't understand the need for our world empire and membership in international organizations like the U.N.<br /><br />I wrote him this email:<br /><br /><div></div><blockquote><div>The thing you have to understand about Ron Paul and libertarian thinkers like myself is that, for years prior to 9/11, we were arguing as follows: "We're asking for it, and we're gonna get it. Maybe not today, but before long. How long would you put up with a foreign government that actively supported a totalitarian dictatorship in your country?"</div> <div> </div> <div>In the days following 9/11, I received not a few emails from Dems and Reps I know with short preemptive messages like: "I don't want to hear it." (Anticipating that I was going to go on an 'I told you so' bindge, although that would have been most distasteful at the time).</div> <div> </div> <div>I assume you can do the math and understand why people like us do not see 9/11 as evidence that we need to get more involved in policing the world.</div></blockquote><div></div>To libertarians, the Swiss policy of neutrality, nonintervention, trade, and travel seems quite rational. It has worked well for them.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0tag:blogger.com,1999:blog-976087305985572615.post-68730981443825088042007-11-15T15:57:00.000-08:002007-11-15T15:58:47.386-08:00HiI've found myself spending lots of time writing responses regarding various aspects of the libertarian movement to media outlets and youtube posters. I thought I might as well start a blog to catalog it all.The King In Exilehttp://www.blogger.com/profile/01557388862057085353noreply@blogger.com0