Contrairimairi sent me this video. Ezra Klein, a guy who works as a reporter for the Washington Post, apparently thought that the Constitution was written over a hundred years ago when it was written over 200 years ago. The thing that gets me isn't that Ezra Klein is ignorant or that the Washington Post hires ignorant reporters, but rather that anyone bothers to watch a television program on which ignoramuses like Klein appear.
Klein not only lacks basic historical knowledge. His claim that the Constitution is not binding might come as a surprise to his friends at the American Civil Liberties Union, and, for that matter, Barack Obama, who derives the authority for his criminal administration from that tattered document. If Mr. Klein and his Progressive comrades think that the central state is going to continue to be taken seriously, perhaps they might consider looking to the Constitution for the few shreds of remaining legitimacy that the sorry-ass government thugs in Washington can claim.
Friday, December 31, 2010
Wednesday, December 29, 2010
Why Participate in the Political Process?
Two economists have discussed why people participate in political processes. Both books were published in 1970, around when college students were demonstrating at Columbia, Kent State and elsewhere. The first, Albert O. Hirschman in his book Exit, Voice and Loyalty suggests that there are two alternative methods of expressing dissatisfaction. Exit is market behavior. If you don't like a pizzeria's pizza, stop going. You exit without voicing disapproval. In contrast, people often voice complaints. For instance, my sister was unhappy with her phone service. She complained. When that didn't work she went to the Public Service Commission. Would she have gone to the Public Service Commission about a pizza? I doubt it because there is a free market in pizza but a monopoly in her phone service.
Hirschman outlines the times when voice supersedes exit, one of which is monopoly. Labor theorists have applied this to labor unions. By establishing elements of monopoly in the workplace, unions have two faces, a monopoly face and a voice face (see What Do Unions Do? by R. Freeman and J. Medoff). In Hirschman's view, creation of loyalty makes people more likely to use voice rather than exit. Loyalty is equivalent to what business strategists call differentiation. If you're loyal you protest because protest costs resources and loyalty increases protest's benefits.
Kenneth E. Boulding's idea with respect to protest hasn't received as much publicity as Hirschman's. In Economics as a Science (pp. 82-5) Boulding claims that there are two kinds of discontent, personal and political. "Personal discontent with a location drives a man to migrate rather than to press for urban renewal. Personal discontent with existing income drives a man to try new occupations." Political discontent, in contrast, involves effort to change the political system.
Boulding argues the person with personal discontent is not likely to be politically active and is likely to see political activity as detrimental to his ambition. In contrast, the politically active person "the revolutionary, the alienated, the dissident, whether of left or right, is apt to be either a middle aged person who has failed in the satisfaction of his personal discontent and become stuck in a location, an occupation or even a marriage from which he cannot escape and which he finds undesirable, or a young person who has found the competitive 'rat race' of the educational and economic establishment too much for him and has decided hat he wil get more satisfaction out of trying to change the system. It is at least a plausible hypothesis that in social situations where personal discontent is frequently frustrated, economic development is slow and there are rigid class structures and caste structures that prohibit upward mobility, discontent is more likely to take a political form. On the other hand, it is also true that in rigid and oppressive societies in which political discontent is brutally suppressed and the chances of political change seem poor people get discouraged from political action and tend to express their discontent in private mobility."
Hirschman's model predicts that those most loyal to the US will protest its decline. Boulding's model suggests that as opportunity declines protests will be more frequent as more and more Americans face, as I did in New York City in the 1970s and 1980s, declining economic opportunity as the more vibrant firms exit a United States increasingly dominated by privileged special interests and financial institutions.
Hirschman outlines the times when voice supersedes exit, one of which is monopoly. Labor theorists have applied this to labor unions. By establishing elements of monopoly in the workplace, unions have two faces, a monopoly face and a voice face (see What Do Unions Do? by R. Freeman and J. Medoff). In Hirschman's view, creation of loyalty makes people more likely to use voice rather than exit. Loyalty is equivalent to what business strategists call differentiation. If you're loyal you protest because protest costs resources and loyalty increases protest's benefits.
Kenneth E. Boulding's idea with respect to protest hasn't received as much publicity as Hirschman's. In Economics as a Science (pp. 82-5) Boulding claims that there are two kinds of discontent, personal and political. "Personal discontent with a location drives a man to migrate rather than to press for urban renewal. Personal discontent with existing income drives a man to try new occupations." Political discontent, in contrast, involves effort to change the political system.
Boulding argues the person with personal discontent is not likely to be politically active and is likely to see political activity as detrimental to his ambition. In contrast, the politically active person "the revolutionary, the alienated, the dissident, whether of left or right, is apt to be either a middle aged person who has failed in the satisfaction of his personal discontent and become stuck in a location, an occupation or even a marriage from which he cannot escape and which he finds undesirable, or a young person who has found the competitive 'rat race' of the educational and economic establishment too much for him and has decided hat he wil get more satisfaction out of trying to change the system. It is at least a plausible hypothesis that in social situations where personal discontent is frequently frustrated, economic development is slow and there are rigid class structures and caste structures that prohibit upward mobility, discontent is more likely to take a political form. On the other hand, it is also true that in rigid and oppressive societies in which political discontent is brutally suppressed and the chances of political change seem poor people get discouraged from political action and tend to express their discontent in private mobility."
Hirschman's model predicts that those most loyal to the US will protest its decline. Boulding's model suggests that as opportunity declines protests will be more frequent as more and more Americans face, as I did in New York City in the 1970s and 1980s, declining economic opportunity as the more vibrant firms exit a United States increasingly dominated by privileged special interests and financial institutions.
Understanding Ownership of the Fed
A reader has been communicating with me about the ownership of the Fed. He or she points out that the President and the Congress have the right to appoint the chairman and board of governors of the Fed. Therefore, the member banks' subscription to Fed stock does not mean that they own the Fed. Power, in this view, is the President's, Congress's and the public's.
This argument overlooks the implications of stock ownership. By definition, ownership of stock in a corporation constitutes ownership of the corporation. It is true that the President's appointment of the board of governors and the chairman modifies some implications. However, there is another point that is more important. The stock ownership creates a fiduciary relationship. Any corporation must be operated in its owners' interests. Therefore, calling the member banks' holdings in the Fed "stock" rather than "loans" or "subscription fees" suggests that the framers meant to vest the crucial aspect of ownership in the banks, namely, that the Fed should be operated in their interest and not the public interest.
Bankers work with trusts all the time. The basic relationship of banks to their depositors is fiduciary. Hence, they instinctively understand what the reader has trouble accepting, that appointment of a trustee on behalf of a beneficiary does not change the beneficiary's underlying ownership. The appoint of a guardian for a minor orphan's assets does not change the orphan's owning the assets. Likewise, the president's appointment of a Fed chairman does not change the fiduciary relationship the Fed bears to its stockholders, the commercial banks.
Recently, Congress voted down Ron Paul's bill that would have required public audits of the Fed. This is significant evidence that Congress and the public have never believed (to believe that two groups of knuckleheads have any beliefs at all on the subject) that the Fed serves the public interests. What owner would refuse information about his assets? One of the fundamental rules about trusts is that the trustee must disclose all relevant information. That Congress does not want the information means that Congress does not think it or the public would benefit from the information. Hence, Congress and the public do not think that they are the Fed's beneficiaries.
This argument overlooks the implications of stock ownership. By definition, ownership of stock in a corporation constitutes ownership of the corporation. It is true that the President's appointment of the board of governors and the chairman modifies some implications. However, there is another point that is more important. The stock ownership creates a fiduciary relationship. Any corporation must be operated in its owners' interests. Therefore, calling the member banks' holdings in the Fed "stock" rather than "loans" or "subscription fees" suggests that the framers meant to vest the crucial aspect of ownership in the banks, namely, that the Fed should be operated in their interest and not the public interest.
Bankers work with trusts all the time. The basic relationship of banks to their depositors is fiduciary. Hence, they instinctively understand what the reader has trouble accepting, that appointment of a trustee on behalf of a beneficiary does not change the beneficiary's underlying ownership. The appoint of a guardian for a minor orphan's assets does not change the orphan's owning the assets. Likewise, the president's appointment of a Fed chairman does not change the fiduciary relationship the Fed bears to its stockholders, the commercial banks.
Recently, Congress voted down Ron Paul's bill that would have required public audits of the Fed. This is significant evidence that Congress and the public have never believed (to believe that two groups of knuckleheads have any beliefs at all on the subject) that the Fed serves the public interests. What owner would refuse information about his assets? One of the fundamental rules about trusts is that the trustee must disclose all relevant information. That Congress does not want the information means that Congress does not think it or the public would benefit from the information. Hence, Congress and the public do not think that they are the Fed's beneficiaries.
Monday, December 27, 2010
New York and the Legacy Media
In a recent e-mail, Jim Crum uses an excellent moniker for the Democratic Party media: the legacy media. The phrase is embedded in Jim's important discussion about demographic trends that may undermine the legacy media's influence. Jim links to a LifeSiteNews.com article which notes that the Republican states are growing in population relative to the Democratic states:
"...states that went for Obama saw population declines that will result in fewer electoral votes and states that did not support Obama in 2008 saw their population increase and, as a result, the number of electoral votes they will allocate to a presidential candidate next time.
"The census found the United States population bumped up from approximately 281 million in 2000 to 308,745,538 as of April 1. Regionally, the northeast grew 3.2 percent while the Midwest grew 3.9 percent, the South grew 14.3 percent and the West grew 13.8 percent — making it so states that typically go Republican experienced more growth than predominantly Democratic areas.
"On the Republican side, Texas picked up four seats, Arizona, Georgia, South Carolina, and Utah will gain one seat each while Louisiana loses one thanks to population declines following Hurricane Katrina and Missouri loses one as well. On the Democratic side, New York and Ohio lose two electoral votes each while the Obama-supporting states of Illinois, Iowa, Massachusetts, Michigan, New Jersey, and Pennsylvania lose one and the pro-Obama states Nevada, and Washington gain one and Florida gains two.
"Ultimately, states voting against Obama in 2012 gained six electoral votes while states supporting him in 2008 lost six — a total shift of 12 electoral votes."
Jim contends that one-sided, pro-Obama media coverage will counteract the population trend in the presidential election. While this may be, I'm not convinced that the Republicans in '12 will do better than they did with John McCain in '08. McCain would not have been much better than Obama. As we stand now, the nation is putting band aids on the dike which, Jim notes quoting Edmund Burke, is being eaten away by rats. Many Republicans are as much rats as Democrats and, besides, the Republican band aids are too small.
For instance, New Yorkers for Growth forwarded to me John Faso's Op Ed in the New York Post, a Republican newspaper. I met Faso at a fundraiser last spring. Faso makes some good points but fails to address the underlying cause. Faso observes that New York is going to lose two congressional seats (I hope my Congressman, Maurice Hinchey, is one of them) because of the census. As well, he notes that more than one million New Yorkers have exited during the past ten years. He says that Governor Cuomo (once more that horrible sound) ought to declare a fiscal emergency. He notes that the Tax Foundation ranked New York 50th in hospitality to business.
I wonder what that does to my students' job prospects...the same students who support regulation 10 to 1. And there's the rub. New York's problems are so psychologically entrenched that the economic wizardry that Faso proposes will not help. My students, like the majority of New Yorkers, are brainwashed to believe in socialism. The population believes that economic goods like health care and housing are rights. Therefore, anyone who works must be taxed to subsidize anyone who doesn't. New Yorkers will favor that to the maximum extent possible until they learn that there is no such thing as a "positive right." A right can only exist in nature. You do not have a right to housing in nature. You have to build housing. If you dig your spot in a cave, I don't have the right to force you to dig my spot in my cave. But New Yorkers believe that I do. Therefore, there is no hope for New York until it collapses or until the education system is revamped.
I wonder what that does to my students' job prospects...the same students who support regulation 10 to 1. And there's the rub. New York's problems are so psychologically entrenched that the economic wizardry that Faso proposes will not help. My students, like the majority of New Yorkers, are brainwashed to believe in socialism. The population believes that economic goods like health care and housing are rights. Therefore, anyone who works must be taxed to subsidize anyone who doesn't. New Yorkers will favor that to the maximum extent possible until they learn that there is no such thing as a "positive right." A right can only exist in nature. You do not have a right to housing in nature. You have to build housing. If you dig your spot in a cave, I don't have the right to force you to dig my spot in my cave. But New Yorkers believe that I do. Therefore, there is no hope for New York until it collapses or until the education system is revamped.
Even many brainwashed ideologues among New Yorkers find that the positive rights theory in which they have been indoctrinated does not work. Some of those who work leave the ones who don't. But I suspect they take their socialist ideologies with them and then aim to destroy the states to which they move. Thus, New York has become a state made up of people who don't work: welfare cheats; Wall Street stock jobbers; lawyers and college professors. Those who leave aim to destroy the futures of states around the country. New York is a venomous disease.
As far as the legacy media, the value of not consuming it cannot be overstated. The reason is framing. A frame is how you conceptualize a situation. If you listen to the Wall Street-owned legacy media you are induced to frame issues as they wish. They do not wish you to frame issues in realistic terms of monetary policy and special interest brokerage. The issues in the United States revolve around these two concerns. If you believe the news media there is no such thing as a special interest lobby and no such thing as the Federal Reserve Bank. Putting Americans to sleep intellectually is necessary to manipulate them.
Framing determines how you think and therefore the decisions you make. The legacy media frames issues in a certain way. It claims that there is a national consensus, when in fact few Americans have the first idea of what the issues are. Consuming the legacy media is a sure way to lose track of the real issues. Why waste your time?
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