Sunday, August 12, 2018

Appeal to Investigate New York State for Abandonment of Republican Form of Government

The Honorable Paul Ryan
Speaker of the House
H-232 The Capitol
Washington, DC 20515

Dear President Trump, Speaker Ryan, and Majority Leader McConnell:

I appeal to you to investigate whether New York State under Governor Andrew Cuomo has abandoned a republican form of government.  According to the Heritage Foundation,  the cases of Pacific States Telephone & Telegraph Co. v. Oregon (1912) and Baker v Carr (1962) have held that citizens may petition Congress to hold such an investigation under Article IV, Section 4 of the US Constitution. There is no reason that the president cannot hold an investigation as well.

The recent contretemps between Mr. Cuomo and the National Rifle Association is an example of such abandonment. (See Seth Lipsky's New York Post op-ed.The National Rifle Association alleges that that the Cuomo administration has pressured administrative agencies to harass it because it is his political opponent.

Such pressure may not be unique. Mr. Cuomo may be routinely involved in quid pro quo with respect to campaign contributions.  His quashing of the Preet Bharara investigation; the conviction of Sheldon Silver; the Kaloyeros case, which may well reach to Cuomo's office; and Mr. Cuomo's insistence that the state does not welcome conservatives, likely all whose political beliefs deviate from his, intimate a state that has abandoned the rule of law, a key element of republican government.  


Mitchell Langbert, Ph.D.

Monday, August 6, 2018

Trump's Fake Fix for a Bad Economic Policy

Last week, Walter Block, who has come to my classes to speak, published an excellent New York Times piece about Donald Trump's tariff-and-farm-subsidy policies.  I have heretofore been a Times skeptic, and this may just be a case of politics makes strange bedfellows.  The Times, however, has also taken an interest in Heterodox Academy.  Is there reason for hope?

Andrew Cuomo Pardons Violent Felons So They Can Vote for Him

The Albany Times Union  (paid access) reports that New York's Republican-controlled state Senate is investigating Governor Andrew Cuomo's pardons of paroled criminals. Pardons enable parolees to vote, and the Senate believes that, when pardoned, parolees will mostly register and vote as Democrats.

What is the link between criminality and Democratic affiliation?

Both criminals and Democrats believe in wealth redistribution, although most Democrats are not as direct as ordinary criminals. Most Democrats claim that wealth should be redistributed to others, not to themselves, but their claims often involve quid pro quo.  School teachers support welfare, but they expect that welfare recipients will support higher pay for school teachers. Welfare recipients support higher pay for school teachers, but they expect that school teachers will support higher welfare benefits. A supports redistribution to B while B supports redistribution to A.

Much of the support for the 2009 bailout was likely of this nature. Wall Street provides financing for much of what the federal government does, so all special interests indirectly benefit from it. As a result, favoring redistribution to the super rich of Wall Street is equivalent to favoring redistribution to all special interests. A 2012 Huffington Post piece says that by 2012 just 23% of the public supported the bailout.  That was better than three years after the massive media propaganda program in its favor.  A well-known principle in public choice theory is that concentrated special interests will outmaneuver public preference. 

Another difference may be that Democrats base their belief in redistribution on claims of morality. "It is only fair and moral that others should be forced to pay higher taxes to subsidize public-private partnership housing."  Nevertheless, many criminals, if pressed, also will claim that it is fair that they receive spoils because they have been mistreated in the past or because others have unjustly taken the money in the first place.  Left-wing Democrats even justify mass murder in communist countries on putative moral grounds.  That does not differ much from a murderer who justifies his killing of individuals on some fantasized interpretation of justice.

The Times Union piece says that parolees whom Governor Cuomo has pardoned have committed repeat crimes, including rape.

The Democrats are a coalition not of the needy or deserving but of the rapacious. Parolees fit right in.   They are just more direct, but in an era of crude Twitter posts and tasteless, empty-headed television news, politicians like Andrew Cuomo see little difference.

Saturday, July 28, 2018

The Tendency toward Self-Destructive False Equivalence

During the past year, I have heard many advocates of protectionism claim that without tariffs trade is not fair.  The Chinese have tariffs, so we need to have tariffs as well in order to make trade fair.  Trade must be equivalent. If they buy from us, we need to buy from them.

This reasoning makes as much sense as this:   Since I buy from Wal-Mart but Wal-Mart doesn't buy from me, I should stop buying from Wal-Mart.  It isn't fair that trade is one way.

That is mistaken, of course. If we buy from the Chinese, but they do not buy from us, the dollar will become weak, and the Chinese currency, the yuan renminbi, will become strong. The Chinese goods will become expensive, and Americans will stop buying them. That has not occurred because of the policies of China's communist dictators.

China's communist dictators believe that if they do not subsidize demand for their manufactured products, then their regime may collapse.  If rural inland farmers who have migrated to the cities find themselves unemployed, then they will riot.  As a result, the communists depress wages.  In accordance with the law of supply and demand, low wages stimulate employment.  The migrant farmers do not realize that their $8,000-a-year paycheck is small.  They do not know that Americans who are less productive than they are earn $40,000 a year.  

The Chinese use a few methods to keep wages low and to make their urban migrants suffer in exchange for social passivity.  These include printing ever-larger amounts of yuan; using much of the printed yuan for valueless real estate, ghost cities, and pet projects;  suppression of the yuan by directly purchasing US dollars; purchasing treasury bonds with purchased US dollars; and tariffs. 

These are self-impoverishment strategies: They make the average citizen poorer because they weaken the yuan.  At poorer wages, employment is stimulated, and citizens are too busy to riot, but most are poorer.

In exchange, Americans benefit from the option to purchase inexpensive merchandise that is cheaper than we could purchase without China's self-impoverishment strategies.  The cost of that is that some manufacturing plants close, but the benefit outweighs the cost.  If every American spends more on manufactured goods, the cost is enormous; if there is a 20% increase in manufacturing employment, the benefit is small. 

Americans follow similar but more moderate self-impoverishment strategies.  For instance, America's Federal Reserve Bank prints lots of paper money and hands it to unproductive Wall Street stock jobbers, investors who are so incompetent that they required a $29 trillion bailout ten years ago and continue to require ongoing monetary subsidization.  

The ongoing subsidization of Wall Street makes Americans poorer, of course, because someone has to pay.  At poorer wages, Americans enjoy full employment, but we don't go as far as the Chinese because our farms have been integrated into the modern economy.

Nevertheless, Wall Street benefits from other self-impoverishment policies. The subprime crisis and excessive investment in technology both have benefited investors at the expense of American workers. However, Wall Street does not benefit from tariffs and trade impediments, which are also a self-impoverishment strategy.

The decision to establish tariffs would ordinarily make Americans poorer; however, do not underestimate the stupidity of the Chinese.  They may decide to make their citizens poorer still by further purchasing additional dollars.  This may result in Americans' becoming richer as the dollar strengthens; however, there will be further disinvestment in domestically produced importable merchandise--the opposite result of what Trump's supporters want.

The tendency toward self-destructive false equivalence is seen on the left as well as among Trump's supporters. Many leftists make this argument: America is the only country to have a political commitment to freedom; isn't that a reason to end the political commitment to freedom?  Well, yes, the rest of the world has a history of gassing dissenters and Jews, and left-wing, social democratic regimes are in that long tradition.  The left has a long history of self-destructive, delusional false equivalence. It is sad that the majority of Trump's supporters have adopted it as well.