Saturday, May 8, 2010

How to Cut State Government

Gus Murphy of Brooklyn had written to our local newspaper, the Olive Press, asking how to cut government. Here is my response:
Dear Editor:
Gus Murphy asks for specifics as to how to cut government spending (May 6) and the Wicks Law is one of many.   
30-50% of New York State's budget is waste.  Medicaid and other health-related fraud amounts to billions.  A nurse at the Kingston/Rhinebeck Tea Party told me that in her opinion nearly half of Medicaid spending is for waste. Until this year New York's per capita spending on Medicaid was double that of California's. If she is even half right, the savings from Medicaid fraud and waste alone amount to ten percent of the state's budget.  
One national statistic is that the average public sector employee's pay is $39.22 per hour and the average private sector employee's pay is $27.42 per hour.   How about if public sector employees, starting with school teachers, earned parity with the equivalent work in the private sector using comparable worth (pay evaluation) methods?
Moreover, why can't school teachers be paid for productivity?  School vouchers would do this through competition.  Too many public schools have become ideological brainwashing centers and have failed to teach the three 'rs.  Diane Ravitch shows in her book Left Back: A Century of Battles over School Reform that "Progressive" education techniques have demonstrably failed, yet education schools, school districts and teachers insist on them.  Vouchers could cure this, and cure excessive administration and pay levels.
Procurement is a problem.  The balance of quality and low bid practices depends on management knowledge that government cannot develop because it depends on annual budgets rather than long term performance measures.  Leasing decisions are made that make this year's budget look good at the expense of next year's. Infrastructure repairs cost money this year but save money over the long term.  Bridges and roads become more expensive to repair as time passes. Vehicle fleets are allowed to fall apart, in part because public perception favors state employees driving older cars, but the older cars are more expensive because of repair bills. 
As of the early 1990s the state did not know and could not value its own land holdings. Land was being given away to various parties such as charities without knowing the land's value.  The Erie Canal was a major tract and the state had to do a major survey just to figure out what it owned before it could start re-development. 
Because public sector accounting remains obfuscatory, it is difficult to compare state operations across states, which is essential to good management. Rather than fighting for coherent budget and financial statement categories that can be compared across states, and for integrated accounting system within the state, the Governmental Accounting Standards Board was set up in the mid 1990s and created half-way measures.  Depreciation still is not charged against state buildings, for instance.  Programs cannot be compared to programs across states.   Budgets for construction are backcharged to agencies and made difficult to compare because they are co-mingled with other program costs.
The bottom line is that no one can look at the operation of a program, say a commission on banking, and compare its costs to a comparable commission in other states. That is no accident.  No media source has raised the desirability of having this. No media source has discussed the effects of annual budgeting on long term costs.  No media source has made an issue of accounting practices since the 1970s.  The attitude in New York is: if it's broken, don't fix it; and if money is wasted, so what? 
After decades of Democratic Party rule in this state, millions have fled, services are dismal, and the economy is in steep decline. Here we see the result of the ideologically driven school system, because the public cannot figure out that if you keep raising taxes and squandering the money, the state will become poorer and decline.  New Yorkers are going to need to learn for themselves what the Greeks are learning for themselves. And like the Greeks, given 12 years of brainwashing that they went through in school, New Yorkers will blame everyone else in the world and will call them "racists" but will not blame the true culprit: the voters and public of New York State that has voted for self-destructive policies and the Democratic Party. 
Mitchell Langbert

Friday, May 7, 2010

Corrupt Obama Administration Bribes American Medical Association

The Ways and Means Republicans forwarded Hal Sherz's Wall Street Journal article, according to which the health care law includes a provision facilitating large payments to the American Medical Association from now on.  In return, the AMA has supported Obama's moronic health reform.  Here is what Sherz says:

"It is essential to understand the primary reason the AMA stands alongside President Obama on health-care reform. The organization wants to protect a monopoly that the federal government has created for it—a medical coding system administered by the AMA that every health-care professional and hospital must use if they wish to get paid for the services they provide. This monopoly generates income of $70 million to $100 million annually for the AMA. That makes the AMA less an association looking out for doctors and more a special-interest group beholden to Congress and the White House."

One thinks of the creation of monopolies for privileged businesses as a Republican pattern.  But the Democrats seem to excel the GOP in every branch of corruption, inlcuding subsidies to special business interests.

Farmers Find Hayseed (Really) Solution to Oil Spill

Contrairimairi sent me the video below.  The Department of Energy employs more than 16,000 full time bureaucrats and 100,000 contractors.  CW Roberts and his colleague show how to solve the oil spill problem.  We can replace the entire Department of Energy with these two guys. They've produced more value in this video than 16,000 bureaucrats and 100,000 contractors. 

Check out Mitchell Langbert's blog:

Thursday, May 6, 2010

Explosive Solution

I just received this message from Contrairimairi who received it in turn from Mark.

The Airport Solution 

Here's a solution to all the controversy over full-body scanners at the airports. 

Have a booth that you can step into that will not X-ray you, but will detonate any explosive device you may have on you.

It would be a win-win for everyone, and there would be none of this crap about racial profiling and this method would eliminate a long and expensive trial.  Justice would be quick and swift.  Case closed!

This is so simple that it's brilliant.  I can see it now: you're in the airport terminal and you hear a muffled explosion.

Shortly thereafter an announcement comes over the PA system, "Attention standby passengers we now have a seat available on flight number..."

Jim Crum on the Greek Welfare State: Civic Not Official Corruption Leads to Decline

I wonder how long it will be before we see similar kinds of riots in our more civilly corrupt states like New York, California and Illinois.  Jim Crum writes:
I watched with interest the riots going on in Athens and Thessaloniki this morning.  During interviews there were the typical efforts to blame corrupt politicians. Is this correct?  The answer is both yes and no.Official corruption did not lead to this.  Civic corruption did.
Apparently, this unavoidable and quite profound irony is lost on thousands of Greeks and nearly every reporter.The welfare state corrupts both the spirit and the soul.   Left in place long enough and the fires of industry will also slowly die out.  
The country is financially exhausted due to bloated public unions that run nearly everything from hospitals, to taxis, to cleaning services.  Such unions punished hard work and rewarded poor behavior.  Left unchecked for over a generation, it has led to enormous misallocation of resources that have literally drained the treasury of money and the national psyche of civic virtue.
Now the piper has called the tune that no one wishes to dance to.Sadly there seems to be an accepted concept that there is a right to be supported by someone else.  But we are now seeing what happens when socialism “runs out of other people’s money”.  It’s right there on our TV screens, rampaging through the streets of Athens.
So far, those rioting and the political liberals seem willfully ignorant of the forces at work.How long will it be until they wake up?

Michelle Obama Describes Barack as a Kenyan in 2007

Article II, section I of the US Constitution states that the president must be a natural born citizen.  The meaning of natural born is subject to numerous interpretations.  These have been debated elsewhere.  In the video below (h/t Contrairimairi) at around 2:00 minutes (fast forward because the speech is painfully dull and the tape is of poor quality) Michelle Obama describes Barack as a "Kenyan."  This is intriguing because he had spent several years in Indonesia, not Kenya.

Perhaps the Democratic Party media's indifference to Mr. Obama's citizenship originates from its ignorance of basic facts.  Recently, a professor I know who reads the New York Times and scoffed at "birther conspiracy theories" was surprised to learn that the Constitution mandates that the president be a natural born citizen.  In other words, this individual has a master's in law from Harvard; reads the New York Times and other Democratic Party media; but was ignorant of basic information, information that any decent high school student should know, about the Constitution

Given the media's incompetence and their readers' poor information base and dismal lack of citizenship skills, it is not surprising that the New York Times's readers can be convinced that it is not constitutionally mandated that the president be a US citizen.  Woe is us.


How the New Health Care Law Affects Your Accounting Firm

I just submitted my monthly column to the American Institute of Certified Public Accountants' Career Insider newsletter.

How the New Health Care Law Affects Your Accounting Firm

Mitchell Langbert, Ph.D.

The debate concerning health reform and national health insurance began after World War I.  There have been half a dozen presidential attempts to reform or nationalize health care since the days of Woodrow Wilson, and Barack H. Obama has succeeded where Franklin D. Roosevelt feared to tread.  But the new law reflects the health field’s political complexities and has ramifications that are difficult to predict.  Rest assured that your firm and you personally will be affected.

One way to consider what the effects of the two sister laws, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (“the health care act”), will be is to recall a great book on the art of economics, Henry Hazlitt’s 1946 Economics in One Lesson.  Hazlitt’s one lesson is spelled out in 25 chapters, but he states it in one sentence in the first chapter:  “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

Key Provisions

The law’s most important social welfare improvement is to extend care to 35 million uncovered Americans.  This fall, people who lack coverage now can purchase insurance through a high risk pool.  Premiums will be limited to approximately $500 per month for single insureds, $1,000 per month for families.  State exchanges will be set up by 2014 to facilitate small firms’ purchase of health insurance and purchases by people earning up to four times the poverty line. Starting in 2014, most Americans would be required to purchase health insurance unless there is hardship. Those whose income is more than four times the poverty line must purchase insurance or pay a $695 tax.  Tax credits will subsidize middle-class taxpayers and small businesses.  Medicaid will be extended.  

Insurance companies will not be allowed to rescind coverage of people who become ill.  Several insurance companies have done so.  Pre-existing conditions can no longer be used to exclude children from coverage, and pre-existing conditions cannot exclude adults by 2014.   The law eliminates caps on coverage, both annual and lifetime.  Children will be allowed to remain on their parents’ policies until age 26.  

The law adds some new burdens on highly paid employees to help pay for the plan.  It limits pre-tax flexible spending accounts to $2,500.  It extends the Medicare Payroll tax to unearned income for families that earn more than $250,000 and for individuals who earn more than $200,000.  Also, beginning in 2018 insurance companies must pay a 40 percent tax on health insurance plans valued at a $27,500 threshold for families and $10,200 for individuals (not including vision and dental benefits).  A “health care cost adjustment percentage” multiplies the threshold and it is adjusted for age and gender.  As well, there will be $500 billion in Medicare cuts.  The minimum for itemized deductions for medical expenses increases to 10% in 2012.  The hospitalization tax in FICA will increase from 1.45% to 2.35% for a married couple earning over $250,000.  Fees will be charged to health plans.  
 As well, Section 3403 of the Patient Protection and Affordable Care Act establishes an Independent Medicare Payment Advisory Board.  The Board’s purpose is to reduce Medicare costs by making recommendations as to management improvements such as reducing payments for pharmaceuticals, reducing administrative expenses and reducing high bids for services.  The law states that the Board’s proposals “shall not include any recommendation to ration health care.”  But any serious claim that such a Board will effectuate cost reductions hinges on one or another form of rationing.  A government board will not function competently as a quality circle.  

Unforeseen Implications

The law’s proponents claim that the best-run providers such as the Mayo clinic will provide models for change for smaller, more expensive and worse-managed providers.  But that is akin to claiming that a government board can tell General Motors to adopt the quality practices of Toyota, and then count on GM to run with the ball.  High quality certainly is associated with low cost in many industries.  The reason is what Edward I. Deming calls the “profound knowledge” of the high quality producer.  But a government board lacks such knowledge, and government edict cannot transfer it.  To insist that Margaretville Hospital in Arkville, NY adopt the quality of practice in the Mayo Clinic or the UCLA Medical Center sets hope before reason.  

There is widespread agreement that a large number of additional physicians will be necessary to provide care in response to the extension of coverage.  Anna Fifield of the Financial Times writes that physicians’ organizations predict that 50,000 additional physicians will be needed.

On April 22, National Public Radio reported that the Health and Human Services Department’s Office of the Medicare Actuary found that the law will increase spending by one percent over the next decade.   As well, the report predicted that as much as 15 percent of providers could be thrown into the red because of the Medicare cuts.  But these estimates cannot be considered reliable.  No one, for example, predicted that the baby bust of the 1960s and 1970s would lead to shortfalls and reductions in Social Security benefits.  But it did.

One of the subjects that Henry Hazlitt treats in his book is how the unforeseen effects of government-induced demand include shortages.  Publicly administered health plans from Sweden to Canada are characterized by long waits for care and limitations on care.  Given the predictions of physician shortages, we may count on less flexibility in the system.

Last month, Dr. Marc Siegel wrote in USA Today that Medicare is already insufficient to cover his and other physicians’ costs and that he has been seeing a significant number of his patients pro bono.  Siegel quotes the Association of American Medical Colleges as predicting a shortage of 160,000 doctors by 2025.  He notes that New York has eliminated pre-existing conditions exclusions since 1992 and premium costs have skyrocketed, the reverse of what the health care law’s proponents claimed they would do.  Hence, there may be unforeseeable cost effects.  Siegel writes that he is planning to refuse to see Medicare recipients. 

Separately, I traced the trajectory of federal government spending since 1948.  There was a statistically significant upsurge in 2009.   In effect, all federal spending cuts from 1980 to 2008 (which had already been eroded by the Bush administration) were completely wiped out in a single year, 2009.  The health care act will add to federal spending, pushing the current spending outlier further off the charts.   Excessive demand will increase waiting times and lead to rationing through one route or another.  Americans may find that they can obtain superior quality care in foreign countries.  Medical tourism is already on the upsurge, and I predict it will increase dramatically over the coming 35 years.  Who would have thought that a trip to an Indian hospital would be a key effect of health reform?

Monday, May 3, 2010

An Open Letter to Lloyd Blankfein, Chairman, Goldman Sachs

Mr. Lloyd Blankfein, Chairman
Goldman Sachs
85 Broad Street
New York, NY 10004
May 3, 2010

Dear Mr. Blankfein:

I have been following your firm since 2008 and have a suggestion.  Goldman Sachs should move to Greece. Your values and competence parallel Greece's.  The employees of Goldman, accustomed to living off welfare, would feel at home.  And, of course,we productive citizens here in the US would see our welfare-and-inflation bill reduced.

Please consider a move.  Athens would suit you, and your departure would suit America. 


Mitchell Langbert, Ph.D.

Greek Economy

According to the Financial Times the Greeks have had rising expectations and lifestyles even though their public sector is inefficient and, I would guess, they do not produce enough to live at the level they do. The FT reports that under its recent agreement with the European Union, Greece will reduce it budget deficit from 13.6% to 3% of GDP, and public debt will "stabilize" at 140-150% of GDP. Eager to stabilize the Euro, the Europeans, especially Germany, are lending Greece 110 billion Euros ($146 billion).  The result of the massive loans and spending cuts will be a contraction of the Greek economy of between 2 and 4 percent.

The German people are unhappy with the large loans.  As nasty as the US bailout was, at least it was mostly paid to US firms, although I am not certain that I would like to remain in the same country as the bailout recipients like Goldman Sachs.  Indeed, I would like to see the Fed shut down, which would curtail if not close most of Wall Street.  But in any case, the Germans must feel like fools for seeing their wealth be squandered not for incompetents of their own tribe, but of a different tribe.

Be that as it may, the big question is whether this frittering of $146 billion will work.  Perhaps in the short run, perhaps not.  In the long run, are you kidding?  They lend $146 billion to profligate clowns, and then expect what?  Isn't this just another version of sub-prime lending?  If the Greeks want to live as though they have economic freedom, might they consider adopting economic freedom as a policy instead of mooching off others?

The quicker the US can disassociate itself from the Fed, the better.  For the political use of the nation's money supply is but a way to divert wealth from productive Americans to thieves of various kinds. Wall Street, the federal government, incompetently run businesses, public contractors, foreign governments, all will benefit at the expense of hard working Americans under the authoritarian yoke of the Federal Reserve Bank.  And how effective has the Fed been at generating long term full employment? 

Raising Arizona: The New Immigration Law

I would have liked to see Arizona pass a different kind of law, a much more aggressive law, such as a law saying that Arizona citizens do not have to pay federal income tax. That really would have caused all hell to break loose.  The anti-immigration law is too tame to pose much of a challenge to the thugs in Washington, although perhaps a case can be made that Arizona has the right to refuse the Supreme Court's illegal power grab in Mapp v. Ohio, when the power freaks on the Supreme Court bench claimed to have the authority to force the states to obey the Fourth Amendment.

I reviewed the text of the Arizona law (part 1 is here and that links to the other parts) and found it a tad authoritarian.  The law prohibits state officials from refusing to enforce federal immigration laws. It says that where law enforcement officials stop or arrest someone, a "reasonable attempt shall be made, when practicable, to determine the immigration status of the person."  In doing this race, color or national origin cannot be considered.  Drivers' license, an id card or other government-issued identification can be used for proof of citizenship in a stop-and-id situation.  State offices are allowed to exchange information about someone's immigration status.  Aliens who illegally fail to register are held guilty of a misdemeanor and if they carry contraband like drugs or weapons they are guilty of a felony.  The law illegalizes blocking traffic to pick up day laborers.  Employers have to verify employment eligibility through something called "e-verify".

There is already a federal law on the books that requires proof of citizenship when someone is hired, which I recall considering an encroachment on liberty when it was passed in the early 1990s.  I do not think this law is any more extreme than that, which I think should be repealed.  I wish Arizona had picked a different area to make a test case of the 10th Amendment because the US government does have the right to regulate immigration. Article I, Section 8 of the Constitution gives Congress the power to naturalize immigrants (too bad President Obama missed out).  Regulation of immigration is not at issue under the 10th Amendment.

I dislike the power that Arizona grants to its law enforcement officials to demand an identity card.  This is not the America that I know.  However, I do think that this is a valid area for state legislation.  The US Supreme Court illegitimately arrogated regulation of search and seizure to the federal government in the 1961 case of Mapp v. Ohio, in which it claimed that the Fourth Amendment applies to the states. That is ridiculous.   The federal government, including the Supreme Court, has no authority to tell the states whether they have the right to search or seize, and any state has the right to tell the federal government to shove that US Supreme Court decision up its derriere.  That decision amounted to violent illegality. F*ck them.

Hence, although I don't like the stop and id  component of the Arizona law, I am glad of two things about it. (1) It really ticked off people in the People's Republic of Frisco, the land of fruit and nuts, and (2) It puts Arizona in the potential position of defying the goosestepping judicial Nazis at One First Street, NE.

Will the US Hyper-Inflate?

Kitco's James Turk  cites a useful report by by Stephen G Cecchetti, M S Mohanty and Fabrizio Zampolli published as a working paper of the Bank of International Settlements. The report is entitled "The Future of Public Debt: Prospects and Implications."  The report concludes:

"Our examination of the future of public debt leads us to several important conclusions. First, fiscal problems confronting industrial economies are bigger than suggested by official debt figures that show the implications of the financial crisis and recession for fiscal balances. As frightening as it is to consider public debt increasing to more than 100% of GDP, an even greater danger arises from a rapidly ageing population. The related unfunded liabilities are large and growing, and should be a central part of today’s long-term fiscal planning.
It is essential that governments not be lulled into complacency by the ease with which they have financed their deficits thus far. In the aftermath of the financial crisis, the path of future output is likely to be permanently below where we thought it would be just several years ago. As a result, government revenues will be lower and expenditures higher, making consolidation even more difficult. But, unless action is taken to place fiscal policy on a sustainable footing, these costs could easily rise sharply and suddenly."

One may wonder whether the Obama administration, the European Union or the New World Order is capable of increasing productivity, innovation and output to cover rapidly increasing old age liabilities (including medical as well as pension benefits).  The only system that would have been capable of doing this was the laissez-faire capitalism of the 19th century.  But the Obama administration is busily placing the final nails in that system's coffin. The European Union is a form of institutionalized econo-sclerosis. And the "new world order" touted by Obama and his greedy socialist billionaire friends is dumber than a Three Stooges act.

So buy gold, my friends.  The horse is out of the stable. America is in a self-inflicted decline, motivated by greedy socialist billionaires and their media marionettes with cabezas de madera.

Sunday, May 2, 2010

Origins of the Three Branches of Government in the US Constitution

A friend asked me to review the antecedents of the three branches of government in the US constitution.  This was not a new idea at the time of the founding.  In general, the best book to read to understand what the founders were thinking is the Federalist Papers by Alexander Hamilton, James Madison and John Jay.  It is evident in reviewing the Federalist Papers that the founders were students of the Enlightenment and in particular the ideas of Charles de Secondat, Baron de Montesquieu, who in 1748 finished one of the greatest works of political science, Spirit of Laws.  But Montesquieu was not the only important political scientist who informed the founders.  Aristotle, who wrote in the fourth century BC and whom the Englightenment famously rejected was still read.  It is important to understand that the education of that period and through the 19th century was religious in nature and emphasized the classics in the original Greek and Latin.  In political science and ethics students read Aristotle as part of the curriculum.  The founders were mostly knowledgable in Latin and Greek, and were certainly familiar with Aristotle's Politics.

Aristotle was one of the most important advocates of freedom in the history of ideas.  Unlike some of his Athenian contemporaries, he was not an abolitionist.  However, he responds thoroughly to the communist ideas of his professor, Plato.  He makes clear that it is fundamental to a state to have plurality and openness of exchange, and that excessive unity is deleterious.  He begins Book IV, Chapter 13 of his Politics as follows:
"Having thus gained an appropriate basis of discussion we will proceed to speak of the points which follow next in order...All constitutions have three elements, concerning which the good lawgiver has to regard what is expedient for each constitution.  When they are well-ordered, the constitution is well-ordered, and as they differ from one another, constitutions differ. There is (1) one element which deliberates about public affairs; secondly (2) that concerned with the magistracies--the questions being, what they should be over what they should exercise authority, and what should be the mode of electing to them; and thirdy (3) that which has judicial power."
Aristotle there refers to the three branches of government that correspond to the US Constitution, the deliberative or legislative; the magistracy or executive; and the judicial.  Aristotle was not unkind to democracy, but he saw it as flawed unless it contained elements of aristocracy, by which he meant selection of the most virtuous to rule. This could be done using republican methods. 

Montesquieu relies on Aristotle's framework in writing his monumental Spirit of Laws. The scope and scholarship of Montesquieu's book is still awe inspiring today. In Book XI Section 6 Montesquieu discusses the Constitution of England. England at that time was the freest country, and he admired it greatly.  He writes:
"In every government there are three sorts of power: the legislative; the executive in respect to things dependent on the law of nations; and the executive in regard to matters that depend on the civil law.  By virtue of the first, the prince or magistrate enacts temporary or perpetual laws, and amends or abrogates those that have been already enacted.  By the second, he makes peace or war, sends or receives embassies, establishes the public security, and provides against invasions.  By the third, he punishes criminals or determines the disputes that arise between individuals..."
In the Federalist Papers, which Hamilton and Madison published in several newspapers to drum up public support for the Consitution, Montesquieu is referred to numerous times. In general, the founding fathers were students of the Enlightenment and applied their understanding of Montesquieu, Locke, Hobbes, Smith and other Enlightenment thinkers to their conceptualization of the Constitution. 

The United States had been founded by religious sects fleeing persecution in Europe.  At least several of the original 13 colonies were founded by religious groups.  New York was not (it was founded by a commercial enterprise, the Dutch West India Company), nor was Virginia.  The founders differed considerably as to their religious orientations.  All were trained religiously, for education in those days was a religious enterprise.  However, not all were religious. George Washington was an observant church goer.  Benjamin Franklin was an atheist. Jefferson and Adams were Deists, which is not quite being a full Christian.  Jefferson re-wrote the Bible, taking out all of the miracles.  The Jefferson Bible is available to read.  Jefferson was an enlightenment rationlist. Deism is something like Unitarianism. On his grave Jefferson had three achievements listed:  (1) author of the Declaration of Indepdence; (2) author of the Virginia Statute of Religious freedom and (3) founder of the University of Virginia.  He did not list President or Governor of Virginia.  The Virginia Statute on Religious freedom concludes:
"Be it enacted by General Assembly that no man shall be compelled to frequent or support any religious worship, place, or ministry whatsoever, nor shall be enforced, restrained, molested, or burthened in his body or goods, nor shall otherwise suffer on account of his religious opinions or belief, but that all men shall be free to profess, and by argument to maintain, their opinions in matters of Religion, and that the same shall in no wise diminish, enlarge or affect their civil capacities. And though we well know that this Assembly elected by the people for the ordinary purposes of Legislation only, have no power to restrain the acts of succeeding Assemblies constituted with powers equal to our own, and that therefore to declare this act irrevocable would be of no effect in law; yet we are free to declare, and do declare that the rights hereby asserted, are of the natural rights of mankind, and that if any act shall be hereafter passed to repeal the present or to narrow its operation, such act will be an infringement of natural right."

Affirmative Action in the Village of Woodstock*

I just wrote the following letter to Brian Hollander, Editor of the Woodstock Times.

Dear Editor:

In response to allegations of racism in the local Tea Parties, I did an informal survey of the Town of Woodstock's representation of various minorities.  I counted the number of African-Americans, Native Americans, Mexicans, Asians and South Americans entering and leaving seven local stores.  My finding is that the proportion of minorities who live in the Town of Woodstock is not statistically different from the proportion of minorities in the local Tea Parties. It is, however, significantly lower than the proportion of minorities living in the State of New York and in Ulster County.  A fair assessment is that the Town of Woodstock is racist.

More than the Tea Parties, which do not use expensive house prices to exclude minority group members, Woodstock is a racist Town.  Fewer than five percent of the inhabitants are African American, Latin American, Native American or Asian.

My affirmative action plan is straightforward. The Town of Woodstock needs to mandate that all homes to be sold within its borders must be sold to minority group members until such point that the minority group members are proportionately represented.  This will force prices of many Woodstock homes to fall since such an ordinance would restrict demand.  However, in the name of equity, equality, affirmative action, and to redress the harm that the people of Woodstock have done to under-represented ethnic and racial groups, homeowners should be grateful for the opportunity to sell to them, even at a loss, to redress social wrongs that the people of Woodstock have perpetrated.   Anyone who does not support this proposal is a greedy and selfish racist.


Mitchell Langbert

*Woodstock, NY is located about 100 miles from New York City.  It is famous for the Woodstock concert of 1969 (although the actual concert took place about 30 miles away); for artists' and musicians' colonies that go back for over 100 years; and as a weekend home center for Upper West Side "liberals."

Aristotle on the Middle Class and the Socialist Banking Oligarchy

Aristotle is the most prominent ancient advocate of freedom. However, his argument is imperfect because he supports the institution of slavery and opposes equality of women.  It is asking much of a philosopher to overcome the prejudices of his era.  Certainly no philosopher did so perfectly.  But the fundamentals of the argument for freedom are in Aristotle's Politics. In this he differs markedly from Plato, who was a totalitarian.  Aristotle's arguments against Plato's Republic suggest the arguments that the Austrian economists used nearly a century ago to show why socialism inevitably fails to operate efficiently.

One of the points that Aristotle emphasizes is the importance of the middle class to the functioning of constitutional government.  As well, he notes that kingly government was characteristic of "barbaric" Europeans.  He writes:

"For barbarians, being more servile in character than Hellenes, and Asiatics than Europeans, do not rebel against a despotic government.  Such royalties have the nature of tyrannies because the people are by nature slaves; but there is no danger of their being overthrown, for they are heditary and legal.  Wherefore also their guards are such as a king and not such as a tyrant would employ, that is to say, they are composed of citizens, whereas the guards of tyrants are mercenaries. For kings rule according to law over voluntary subjects, but tyrants are involuntary..."

Thus, writing in the fourth century BC, Aristotle outlined the nature of medieval Europe.  For following the decline of Rome in the fifth century AD, 900 years later, the same European barbarians conquered the former Roman Empire and established barbaric kingly rule across Europe, which remained intact until the 1800s (and in several cases is still intact today).  Today's socialist Europe reflects the evolution of the servility of Europeans to the kingly state that goes back for millennia.

The claim of some conservatives that retention of the barbaric kingships is "conservative" is a matter of perception.  For it would have been more "conservative" to re-institute the dictatorial Roman Empire than to retain barbaric kingly rule, or more conservative still to re-institute the kings of the other primitive barbarians such as the Celts that go back further.  Democracy would be the conservative path for someone wishing to "conserve" Athenian culture.  Personally, I prefer the "conservatism" of Aristotle, who believed in pluralism, freedom and constitutional rule, to the conservatism of barbarians or the reactionary socialist primitivism of Plato and Marx.

Aristotle's Politics  anticipated Book I of Karl Popper's Open Society and Its Enemies by 2,400 years.  For like Aristotle, Popper outlines the totalitarian nature of Plato's Republic, fleshing out Aristotle's argument in the opening chapters of Politics.  

Concerning the middle class, in Politics Book IV, chapter 11 (1296) Aristotle writes:

" is manifest that the best political community is formed by citizens of the middle class, and that those states are likely to be well administered in which the middle class is large, and stronger if possible than both the other classes, or at any rate than either singly; for the addition of the middle class turns the scale, and prevents either of the extremes from being dominant.  Great then is the good fortune of a state in which the citizens have a moderate and sufficient property; for where some possess much, and the others nothing, there may arise an extreme democracy, or a pure oligarchy; or a tyranny may grow out of either extreme--either out of the most rampant democracy or out of an oligarchy; but it is not so likely to arise out of the middle constitutions and those akin to them...The mean condition of states is clearly best, for no other is free from faction; and where the middle class is large, there are least likely to be factions and dissensions.  For a similar reason large states are less liable to faction than small ones, because in them the middle class is large; whereas in small states it is easy to divide all the citizens..."

The considerable harm that the Federal Reserve Bank's and the illegitimate socialist federal government does to democracy and to freedom.  For in creating money and distributing it to wealthy investment bankers, the Fed harms the middle class; and in taxing the middle class further and redistributing the wealth to the lumpenproletariat, the middle class is harmed further still.  As America is pushed into a two-tier society, dominated by wealthy socialists who provide just enough to the lumpenproletariat to keep them happy, fewer and fewer can sustain a middle class lifestyle; the lumpenproletariat grows; and the socialist banking elite becomes an oligarchy.