Sharon Gitelle of the Forbes Blog Network sent the following:
Re: The Forbes Network: December 11th interactive call: Steve Forbes
Dear Mitchell,
Please join us for an interactive call with Steve Forbes, on Friday, December 11th at 3 PM Eastern time for a discussion about his new book called How Capitalism Will Save Us. (To learn more about this book please click here: http://bit.ly/WT2Um )
The expected duration of the call is 45 minutes.
Steve Forbes will be answering your questions about capitalism—please submit your question(s) to me by e-mail by Wednesday, December 9th. You will be notified by me if your question has been selected prior to the call.
My response:
Here is my question for Steve Forbes, Sharon.
In the 1870s an investment bank, Jay Cooke and Co., failed. In many respects it was similar to Citigroup and other of the Wall Street firms in that it had been heavily subsidized by the federal government throughout its life but was so incompetently run that it failed despite the large subsidies. In the case of Jay Cooke, the subsidy resulted in part from its involvement with the Civil War greenbacks (like Henry Paulson, one of its representatives, if I recall Salmon P. Chase, had been been appointed to be Secretary of treasury). In the case of Wall Street and the money center banks today, the government subsidy has taken the form of access to large amounts of artificially created money. That is, until the socialist Bush-Obama bailout, where cash was simply handed to the incompetently run American financial institutions.
In the aftermath of the Civil War, despite the subsidies it had received, Jay Cooke failed in tandem with the crash of 1873. No one was foolish or gullible enough to believe that sustaining Cooke would have helped the economy. That would have been a fool's fantasy. Following Cooke's failure and the crash there was a depression. The depression and crash were associated with the federal government's retiring of the greenbacks and deflation. During this continual deflation there were three depressions. However, real wages grew at a much faster pace than they have since 1970. Moreover, innovation occurred at a much faster pace than at any time in the history of the world, culminating with the creation of the concepts of television and radio by Nikola Tesla in 1897 and numerous inventions that were so vibrant that they continued to subsidize the American economy through the 20th century, a century of dramatically slowed creativity.
At the same time, real wages rose at an uneven clip, roughly two percent per year, more or less until the founding of the Federal Reserve Bank in 1913. As David Ames Wells points out in Recent Economic Changes (1889) the innovation and real growth of the economy was astonishing. What Wells mistakenly calls "overproduction" (see diatribe in Hazlitt's Economics in One Lesson) resulted from the dramatic innovation, as Wells points out. Of course, corporations, banks and Wall Street disliked the intense competition and deflation, which led to declining profits and hard work, but American workers saw their wages grow rapidly, as Wells pointed out.
Since the abolition of the gold standard in 1971, real wages of American workers have grown 2% over the 40 years. That's 2% in total over 40 years. In contrast, during the deflation of the late nineteenth century, real wages rose 2% per year. Yet, today's all-thumbs economics establishment claims that deflation is a major threat. It is, of course, to the banks who provide economists with endowed chairs, but it is not to workers who wish to raise their living standards. Workers did much better under deflation from 1865 to 1913 than they have under inflation from 1970 to 2009.
Thus, the 1873 failure of the major investment bank in America and the contraction of the money supply, deflation, left American workers much better off but Wall Street and corporate America less profitable. This was the period of freest markets in American history, the closest to what might be called a libertarian economy. Of course, Wall Street and the money center banks, then like now, opposed libertarianism and free market capitalism, preferring the socialist pattern that Alexander Hamilton and the Federalists advocated (Hamilton was indeed a socialist and advocated a government owned manufacturing firm that would establish American manufacturing).
Forbes has supported the bailout of Wall Street. In addition, you have echoed the all-thumbs economics establishment's obsessive fear of deflation. When I say "all-thumbs" I mean all-thumbs as far as the public is concerned, not all-thumbs as far as the government-subsidized banking interests are concerned. Politically the economists are wise servants of power.
Forbes has been on the bailout bandwagon. The bailout does not reflect libertarian or pro-free market sentiments, but sentiments in favor of the subsidization of a specific sector of the American economy through state intervention, Wall Street and banking. As I wrote to one of your columnists, and contrary to your philosophy, a libertarian America would need Wall Street as much as I need lung cancer.
Thus, it would seem that Forbes has taken not so much a free market position, but a crony capitalist or socialist position, closer to Hamiltonian Federalism, or fascism than to libertarianism, the idea that markets should be governed by a non-judgmental, objective legal standard.
Can you reconcile Forbes's position on the bailout with the views of Presidents Andrew Jackson and Grover Cleveland?
Best wishes,
Mitchell Langbert
Sharon's reply:
Great. Thank you!
Friday, December 4, 2009
Thursday, December 3, 2009
Will Cap and Trade Abolish Your Home Equity Value?
Jim Crum had sent me a copy of the Cap and Trade bill. Notice section 202, which creates a federal regulatory authority over home energy standards. The authority could not be controlled by state or local government. What would stop the regulator from establishing insulation standards that are so expensive that your home equity is reduced or eliminated? What would stop them from establishing regulations that force homeowners in rural areas to move to cities, creating large, empty parks regions? Might Congressman Hinchey's recent proposal to turn the Hudson Valley into a federal park dovetail with section 202 of the Cap and Trade proposal?
Enviro-totalitarians Plato's Successors
Jim Crum writes
I happened to hear the NPR program on the "Climategate" or "Climaquiddick"- the scandal no one wants to mention in the old media. For them it is hardly an issue, an event only worth a brief mention as they barrel down the abyss by trying to fix an unproven planetary issue by taxing us into the stone age. It was very bizarre to listen to the report and it became quite clear that the denial tag is firmly in the court of those promoting global warming and all of its taxing and wealth redistribution programs.
If "consensus" has been reached by using falsified data, purposely distorting programming, and suppressing opposing views, then what type of consensus is that? If those with questions then find that the source data has been lost or dumped, what does that say about the scientific method being followed? It means that this endeavor has regressed from science to dogma.
It's my job to pay, their job to think. I am a moron who just works for a living to support these intellectual giants who set policy and national agenda.
Since HUGE money is involved, perhaps this is just Climatological Alchemy.
JJC.
My response
In Open Society and Its Enemies I-Plato Karl Popper shows that Plato advocated a strict totalitarian society divided among the "guardians" who had wisdom and could think, a warrior class who would enforce the guardians' views, and the workers, everyone else. Roughly, says Popper, these were equivalent to a shepherd (the guardian class), a sheep dog, the warrior class, and the sheep, the general public. Plato was reacting specifically to the change, progress, and individualism that had evolved under Athenian democracy. Plato was contemptuous of democracy and individual choice. To Plato, justice meant that the sheep should stay in their place. Plato's vision has served as a model for successive generations of totalitarians. In America, authoritarian socialists, following Plato, have used a scheme whereby they call themselves moderate or mainstream, advertise their brand of totalitarianism as "social democracy", and establish political correctness, clamp down on alternative speech, and train themselves to think in unison, guided by the Ochs Sulzbergers, their Wall Street friends, the guardian class, and, in universities.
The Democratic Party's vision of society is totalitarian but differs from Plato's in that he saw academics as comprising the guardian class, whereas the Ochs Sulzbergers and Wall Street, a business elite, comprise the guardian class in the Democratic Party's scheme. Academics and the Democratic Party media are part of the warrior class. Incidentally, much like today's Democrats, Plato strongly argued that weapons should only be in the hands of the warrior class.
The current enviro-totalitarians are one more in a long line of followers of Plato's reactionary vision of society as a single organism. Plato was interested in arresting change. His theory of forms is that an unchanging ideal is real, the changing phenomena of the sensual world are inferior, degraded versions of an unchanging reality that the forms constitute.
His prescription was to reinstate the world as it had existed in primitive times. This is the vision of the enviro-totalitarians. It is a totalitarian, reactionary and elitist position.
I happened to hear the NPR program on the "Climategate" or "Climaquiddick"- the scandal no one wants to mention in the old media. For them it is hardly an issue, an event only worth a brief mention as they barrel down the abyss by trying to fix an unproven planetary issue by taxing us into the stone age. It was very bizarre to listen to the report and it became quite clear that the denial tag is firmly in the court of those promoting global warming and all of its taxing and wealth redistribution programs.
If "consensus" has been reached by using falsified data, purposely distorting programming, and suppressing opposing views, then what type of consensus is that? If those with questions then find that the source data has been lost or dumped, what does that say about the scientific method being followed? It means that this endeavor has regressed from science to dogma.
It's my job to pay, their job to think. I am a moron who just works for a living to support these intellectual giants who set policy and national agenda.
Since HUGE money is involved, perhaps this is just Climatological Alchemy.
JJC.
My response
In Open Society and Its Enemies I-Plato Karl Popper shows that Plato advocated a strict totalitarian society divided among the "guardians" who had wisdom and could think, a warrior class who would enforce the guardians' views, and the workers, everyone else. Roughly, says Popper, these were equivalent to a shepherd (the guardian class), a sheep dog, the warrior class, and the sheep, the general public. Plato was reacting specifically to the change, progress, and individualism that had evolved under Athenian democracy. Plato was contemptuous of democracy and individual choice. To Plato, justice meant that the sheep should stay in their place. Plato's vision has served as a model for successive generations of totalitarians. In America, authoritarian socialists, following Plato, have used a scheme whereby they call themselves moderate or mainstream, advertise their brand of totalitarianism as "social democracy", and establish political correctness, clamp down on alternative speech, and train themselves to think in unison, guided by the Ochs Sulzbergers, their Wall Street friends, the guardian class, and, in universities.
The Democratic Party's vision of society is totalitarian but differs from Plato's in that he saw academics as comprising the guardian class, whereas the Ochs Sulzbergers and Wall Street, a business elite, comprise the guardian class in the Democratic Party's scheme. Academics and the Democratic Party media are part of the warrior class. Incidentally, much like today's Democrats, Plato strongly argued that weapons should only be in the hands of the warrior class.
The current enviro-totalitarians are one more in a long line of followers of Plato's reactionary vision of society as a single organism. Plato was interested in arresting change. His theory of forms is that an unchanging ideal is real, the changing phenomena of the sensual world are inferior, degraded versions of an unchanging reality that the forms constitute.
His prescription was to reinstate the world as it had existed in primitive times. This is the vision of the enviro-totalitarians. It is a totalitarian, reactionary and elitist position.
Tuesday, November 24, 2009
US Park Service: Legal Ramifications of Hudson Valley Park Unknowable
In response to the November 3rd Kingston Freeman article stating that Maurice Hinchey has proposed a bill to turn the Hudson Valley into a federal park, I have (a) contacted Congressman Hinchey's office for a copy of the bill and (b) inquired with the National Parks Service as to the legal implications of designating the Hudson Valley a national park.
In the Adirondack Park, a state park, construction of new septic tanks has been largely stopped and much residential construction is limited or illegal. New jobs rarely enter the Adirondack Park. If a citizen of Long Lake, Blue Mountain Lake or Speculator wants to start a business of any stature, they will have to move elsewhere. In the Town of Olive, New York City and State own about 70 percent of the land, so development is largely impossible. The city reservoir is located in Olive.
In the future, stricter regulations concerning wood burning, hunting and home sales are likely to ensue from various federal laws, specifically including the "cap and trade" proposal currently before Congress. Thus, law directly governing many ordinary citizens, specifically including those adhering to "alternative" lifestyles, farming, communal living and the like can easily become directly affected.
The following is an exchange I had with a representative of the US Park Service who says it is unknowable how much flexibility the Park Service will have in implementing regulation--or how responsive they will have to be to various external pressure groups. For example, Congressman Hinchey is a direct recipient of campaign contributions from numerous political action committees (PACs) in the agribusiness field. Might there be a tie-in between Hinchey's agribusiness interests and his focus on instituting park regulations?
Langbert: I live in the Catskills about 25 miles from Kingston, NY. In the November 3 issue of the Kingston Freeman, a local newspaper, there was an article that stated that Congressman Maurice Hinchey has proposed a bill to turn the Hudson Valley into a national park. I have a number of questions for you as the article was not descriptive the effects of this policy.
a. What regulations normally accompany the establishment of a federal park in a developed region? Here in New York we have the Catskill Park, in which I happen to live, and the Adirondack Park. There are regulations that apply in the Catskill and Adirondack Parks that do not apply elsewhere.
b. Do you have a model or a developed set of regulations for another park region that would be similar to the regulations that would be put into effect should the Hinchey bill pass?
c. What would be the effect of establishing a park on economic freedom in the following areas:
--building houses
--building septic tanks
--sale of real estate
--liens on property not deemed environmentally acceptable?
d. Would there be an effect on construction such as limitations on the amount of real estate development, and/or restrictions on how sewage systems are designed, and/or limits on size, drainage and other environmental effects of real estate construction?
e. Would there be effects on hunting, the introduction of wildlife, the use of firearms and/or on fishing.
Park Service: DEAR MR. LANGBERT: Thank you for your thoughtful inquiry regarding the proposed study of the suitability and feasibility of creating some form of national park system unit in the Hudson River Valley. I note that Congressman Hinchey's bill would require the NPS to examine approaches that would (1) encompass large areas of non-Federal lands within their designated boundaries, (2) foster public and private collaborative arrangements for achieving National Park Service objectives, and (3) protect and respect the rights of private land owners. I have referred your inquiry to others who have been working more closely on this particular issue, and they will respond as soon as possible to your specific questions.
Langbert: Are parks normally governed through regulation rather than law? In other words, what would you say is the ratio of regulation to law? I used to work with pension plans and the regulation/law ratio might have been 40-60 or something like that. What would you say it is in parks governance? Thanks, Mitchell.
Park Service: MR. LANGBERT: As of right now, there are 392 units in the National Park System. They range in size from less than an acre to several millions of acres. Each one has its own mission or purpose for existing, usually as defined by Congress. The parks are governed by a combination of laws, regulations, and policies that work in tandem, and I do not generally think
of them as applying in any particular ratio. The laws, regulations, and policies that would apply to a particular park will also vary, depending on the resources and values that characterize the park, and depending on any particular instructions that the law that established a park has imparted to us. I would invite you to visit the Office of Policy website at www.nps.gov/policy and browse through the wide range of laws, regulations, and policies that come into play. In particular, you might want to look at the Introduction and chapter 1 of NPS Management Policies 2006 (http://www.nps.gov/policy/mp/policies.html), which provide a pretty good context for understanding how we manage the National Park System
Langbert: Thank you very much for the information. I really appreciate it. If you hear anything else from your contacts please let me know. Thanks again.
In the Adirondack Park, a state park, construction of new septic tanks has been largely stopped and much residential construction is limited or illegal. New jobs rarely enter the Adirondack Park. If a citizen of Long Lake, Blue Mountain Lake or Speculator wants to start a business of any stature, they will have to move elsewhere. In the Town of Olive, New York City and State own about 70 percent of the land, so development is largely impossible. The city reservoir is located in Olive.
In the future, stricter regulations concerning wood burning, hunting and home sales are likely to ensue from various federal laws, specifically including the "cap and trade" proposal currently before Congress. Thus, law directly governing many ordinary citizens, specifically including those adhering to "alternative" lifestyles, farming, communal living and the like can easily become directly affected.
The following is an exchange I had with a representative of the US Park Service who says it is unknowable how much flexibility the Park Service will have in implementing regulation--or how responsive they will have to be to various external pressure groups. For example, Congressman Hinchey is a direct recipient of campaign contributions from numerous political action committees (PACs) in the agribusiness field. Might there be a tie-in between Hinchey's agribusiness interests and his focus on instituting park regulations?
Langbert: I live in the Catskills about 25 miles from Kingston, NY. In the November 3 issue of the Kingston Freeman, a local newspaper, there was an article that stated that Congressman Maurice Hinchey has proposed a bill to turn the Hudson Valley into a national park. I have a number of questions for you as the article was not descriptive the effects of this policy.
a. What regulations normally accompany the establishment of a federal park in a developed region? Here in New York we have the Catskill Park, in which I happen to live, and the Adirondack Park. There are regulations that apply in the Catskill and Adirondack Parks that do not apply elsewhere.
b. Do you have a model or a developed set of regulations for another park region that would be similar to the regulations that would be put into effect should the Hinchey bill pass?
c. What would be the effect of establishing a park on economic freedom in the following areas:
--building houses
--building septic tanks
--sale of real estate
--liens on property not deemed environmentally acceptable?
d. Would there be an effect on construction such as limitations on the amount of real estate development, and/or restrictions on how sewage systems are designed, and/or limits on size, drainage and other environmental effects of real estate construction?
e. Would there be effects on hunting, the introduction of wildlife, the use of firearms and/or on fishing.
Park Service: DEAR MR. LANGBERT: Thank you for your thoughtful inquiry regarding the proposed study of the suitability and feasibility of creating some form of national park system unit in the Hudson River Valley. I note that Congressman Hinchey's bill would require the NPS to examine approaches that would (1) encompass large areas of non-Federal lands within their designated boundaries, (2) foster public and private collaborative arrangements for achieving National Park Service objectives, and (3) protect and respect the rights of private land owners. I have referred your inquiry to others who have been working more closely on this particular issue, and they will respond as soon as possible to your specific questions.
Langbert: Are parks normally governed through regulation rather than law? In other words, what would you say is the ratio of regulation to law? I used to work with pension plans and the regulation/law ratio might have been 40-60 or something like that. What would you say it is in parks governance? Thanks, Mitchell.
Park Service: MR. LANGBERT: As of right now, there are 392 units in the National Park System. They range in size from less than an acre to several millions of acres. Each one has its own mission or purpose for existing, usually as defined by Congress. The parks are governed by a combination of laws, regulations, and policies that work in tandem, and I do not generally think
of them as applying in any particular ratio. The laws, regulations, and policies that would apply to a particular park will also vary, depending on the resources and values that characterize the park, and depending on any particular instructions that the law that established a park has imparted to us. I would invite you to visit the Office of Policy website at www.nps.gov/policy and browse through the wide range of laws, regulations, and policies that come into play. In particular, you might want to look at the Introduction and chapter 1 of NPS Management Policies 2006 (http://www.nps.gov/policy/mp/policies.html), which provide a pretty good context for understanding how we manage the National Park System
Langbert: Thank you very much for the information. I really appreciate it. If you hear anything else from your contacts please let me know. Thanks again.
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