Monthly Archives: December 2008

Happy Repeal Day !

History, The Nanny State

It was 75 years ago today that America’s incredibly stupid experiment in alcohol prohibition finally ended:

asset_upload_file998_12215Prohibition was the pièce de résistance of the early 20th-century progressive’s grand social engineering agenda. It failed, of course. Miserably.

It did reduce overall consumption of alcohol in the U.S., but that reduction came largely among those who consumed alcohol responsibly. The actual harm caused by alcohol abuse was made worse, thanks to the economics of prohibitions.

Black market alcohol was of dubious origin, unregulated by market forces. The price premium that attaches to banned substances made the alcohol that made it to consumers more potent and more dangerous. And, of course, organized crime rose and flourished thanks to the new market created by the 18th Amendment and the Volstead Act.

So hospitalizations related to alcohol soared. And so did violent crime. Corruption flourished, as law enforcement officials in charge of enforcing prohibition went on the take, from beat cops all the way up to the office of the United States Attorney General. Even the U.S. Senate had a secret, illegal stash of booze for its members and their staffs.

In 1924, the great social critic H.L. Mencken wrote of prohibition:

Five years of Prohibition have had, at least, this one benign effect: they have completely disposed of all the favourite arguments of the Prohibitionists. None of the great boons and usufructs that were to follow the passage of the Eighteenth Amendment has come to pass. There is not less drunkenness in the Republic, but more. There is not less crime, but more. There is not less insanity, but more. The cost of government is not smaller, but vastly greater. Respect for law has not increased, but diminished.

(…)

When he first visited the United States in 1921, Albert Einstein wrote of America’s ban on booze: “The prestige of government has undoubtedly been lowered considerably by the prohibition law … For nothing is more destructive of respect for the government and the law of the land than passing laws which cannot be enforced.”

As in many other things, Einstein was wise in this observation.

So, go out and celebrate the end of of a stupid experiment by having a drink on me !

Doug Mataconis
http://www.belowthebeltway.com

Roubini Advocates Nationalization Of Auto Industry

Credit Crisis, Economics, Free Trade, Government Regulation, Government Waste, Socialism, The Welfare State

You know, Nouriel Roubini is smart. I’ve long believed that we should never treat those in opposition* like dullards, because that leads to sloppiness in fighting them. But I just don’t know how a smart person — an economist — can advocate the nationalization of our auto industry with a straight face.

“We’re spending $2 trillion to bail out financial institutions,” the economist notes. “What’s the fairness of not giving say $50 billion of low interest loans to automakers to help them restructure?

But Roubini is no ally of the auto industry CEOs currently making their case in Congress. He says any government aid must be “highly conditional” and only occur after a prepackaged bankruptcy that includes:

  • Replacement of current management
  • Concessions from both the UAW and automakers
  • A wipeout of existing equity and debt-holders
  • Temporary nationalization of the auto industry

The appointment of a “car czar” is clearly a touch subject but Roubini says those worried about moral hazard and issues like free enterprise are fighting the last war.

“There’s already massive amounts of government intervention in the economy, we’ve [crossed] that bridge,” he says. “The question now is, what are we doing to do right? If it takes an auto czar to really structure these firms, so be it.”

Have our “drug czar” or “poverty czar” or “education czar” ever solved a damn thing in their respective fields? No? So why think that an “auto czar” would actually improve things. Who’s to say that — once they get their hands in the cookie jar — the nationalization of the industry would be “temporary”? While it may not be a de jure nationalization in the future, I could see the industry going the way of the GSE’s, nominally private but publicly regulated.

Roubini seems to be offering the argument that only nationalizing some industries while letting others fall is “unfair”, as if nationalizing anything is fair. He wants the government to come in and bail out the automakers — throwing their owners [the shareholders] out the door — and take over… Just like Fannie… And he actually thinks this is a good idea?!

I’m sticking with my original instinct — let them survive or fail, hit bankruptcy if necessary, and go through the painful but required reorganization according to market economic principles. If you put an auto czar in charge, the reorganization will be done according to political principles, and we taxpayers will be saddled with these industries — and all the protectionism that goes with state-owned industries — for perpetuity.

* Of course, I wouldn’t necessarily consider Roubini in “opposition”, as an academic economist. He was rather prescient about not only the cause but the shape of our current financial meltdown. However, when someone suggests that we should have Washington appointees try to fix our ailing auto industry, I consider that a point worth opposing.

Brad Warbiany
https://thelibertypapers.org/

Is It Time To Take “Under God” Out Of The Pledge Of Allegiance ?

Constitution, Founding Fathers, Individual Rights, Religious Liberty, The Bill Of Rights

A writer at The Washington Post says the answer is yes:

First, it isn’t the 1950s anymore. As religion scholar Will Herberg noted in his influential 1955 essay “Protestant-Catholic-Jew,” at that time 68 percent of Americans were Protestant, 23 percent Catholic, and 4 percent Jewish. (The remaining 5 percent expressed no religious preference.) “Not to be a Catholic, a Protestant, or a Jew today is, for increasing numbers of American people, not to be anything.”

According to a recent Pew report, those figures have declined to 51, 23 and 2. The remaining 20+ percent express plenty of preferences, including Mormon, Muslim, Buddhist, Hindu, Atheist and Agnostic. Not to be a Catholic, a Protestant, or a Jew today is, for increasing numbers of American people, to be something else just as worthy of citizenship.

Second, the greatest threat to American freedom is no longer godless communism but “godly” terrorism — people who pledge their allegiance to God. Docherty noted that even Stalin’s Soviet Union could claim to be “one nation, indivisible, with liberty and justice for all.” Today, even a Taliban-led Afghanistan could claim to be “one nation, under God.”

In his 1954 sermon, Docherty argued that Judeo-Christian America was engaged in “mortal combat against modern, secularized, godless humanity.” Today, pluralistic America is engaged in mortal combat against anti-modern, fundamentalist, religionized humanity.

It isn’t our belief in God that makes us different. It’s our belief in the liberties (religious and other) enshrined in the Constitution. The American creed is faith in liberty for all, not the religion of most.

On some level, Waters is absolutely correct but he misses the most important reason why claiming that the United States is a “nation, under God” is inappropriate. It was expressed by America’s Third President:

Believing with you that religion is a matter which lies solely between man & his god, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, and not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should make no law respecting an establishment of religion, or prohibiting the free exercise thereof, thus building a wall of separation between church and state. [Congress thus inhibited from acts respecting religion, and the Executive authorised only to execute their acts, I have refrained from presenting even occasional performances of devotion presented indeed legally where an Executive is the legal head of a national church, but subject here, as religious exercises only to the voluntary regulations and discipline of each respective sect.] Adhering to this expression of the supreme will of the nation in behalf of the rights of conscience, I shall see with sincere satisfaction the progress of those sentiments which tend to restore to man all his natural rights, convinced he has no natural right in opposition to his social duties.

America, as Jefferson noted, is not a nation founded on a specific set of religious beliefs, but on the belief in the natural rights of man, from whatever source those rights are derived.

Doug Mataconis
http://www.belowthebeltway.com

Gohmert’s Bailout Alternative: My Letter To John Campbell (R-CA)

Activism, Credit Crisis, Economics, Strategies For Advancing Liberty

Earlier this morning, Stephen Littau posted a novel idea by Rep. Louie Gohmert (R-TX) to use the $350B set aside for the 2nd half of the TARP program for a two-month tax holiday early in 2009. This would eliminate the income and payroll taxes for the months of January and February, allowing workers to keep their own money.

I know, letting us keep our own money shouldn’t be declared as that much of a “novel” idea, but that’s what Congress has come to.

I personally like this idea, as I like most ideas that keep Congress’ hands out of my pocket. So I decided to let my elected representative, John Campbell (R-CA) know about it.

Below is my letter to Rep. Campbell. I highly recommend sending* similar letters to your own representatives, in order to at least propel this idea to the level of something they actually think about. Feel free to use my letter as a template, although obviously some of the aspects in there are written with the understanding that I’m speaking a Republican with some fiscal conservative street cred, so a few points may need to be massaged based on who it is sent to.

Dear Congressman Campbell,

I am writing to request your support for your colleague, Louie Gohmert (R-TX). He is currently preparing a new “bailout” bill that would declare an income and payroll tax holiday for the months of Jan-Feb 2009. For more information, see his press release at (http://gohmert.house.gov/Article.aspx?NewsID=1355).

This bill will allocate roughly $330B, an amount Congress already has available through the remainder of the original TARP program, to be used for a tax holiday. The bailout would put people’s own money back in their pockets during a time of severe economic hardship, and the expectation of extra money in the Jan/Feb time period would be sure to spur retail spending during this Christmas season.

In addition, the inclusion of the FICA tax in the proposal ensures the extra funds will go disproportionately to those of lower income, who will be more likely to spend the money rather than immediately save it, encouraging domestic consumer demand.

Finally, as a libertarian, one thing that I know you and I have in common is a desire for tax relief. Allowing workers to see, even if only for two months, what their paychecks would be like without the greedy hands of IRS withholding would go a long way towards generating political support for the extension of the 2001/2003 tax cuts. This would again help our economy.

I would love to see you work with Rep. Gohmert on his proposal, and perhaps even become a co-sponsor. It would help your constituents, the economy, and potentially even improve the chances that we can enact a more permanent tax relief in the future.

Thank you for your time.

Regards,
Brad Warbiany

Good luck, and if you send letters or receive responses, let me know.
» Read more

Brad Warbiany
https://thelibertypapers.org/

Big Three CEO’s Molt Before Congress — Reveal Same Snakes Inside

Credit Crisis, Economics, Government Waste, Politics

Just look at all the sacrifices they’ll make!

Humbled and fighting for survival, the country’s once-mighty automakers went to Congress with new promises to change their ways in return for a bailout as large as $34 billion.

They said they would sell the corporate jets. The CEOs will work for $1 a year (Chrysler boss Bob Nardelli already does). They would cancel executive bonuses and freeze raises. And, the heads of Ford, General Motors and Chrysler pledged to remake their companies by slashing their workforces, making smaller cars and fewer trucks, reducing the number of dealerships and improving fuel efficiency.

…

Congress will hold hearings Thursday and Friday, and the CEOs of Ford, GM and Chrysler will make the 525-mile road trip from Detroit — in hybrid cars.

Uh oh… Their wives are going to have to start making mimosas with Korbel instead of Dom Perignon, and they might even be going for their steaks at Outback instead of Ruth’s Chris! The horror!

What is this, they take one measly road trip and we’re supposed to believe they’re contrite? That’s the least they should do for $30B+ of taxpayer money. You offer me just a billion, and I’ll walk from Detroit to Washington!

Now, I don’t begrudge any CEO for their wealth. And normally I’d criticize any CEO for such a silly publicity stunt when their time would be far better spent at productive endeavors. But that’s the thing… These guys aren’t producing, they’re losing money hand over fist. I don’t begrudge their wealth, but I begrudge the fact that they’ve put themselves in a position, by following policies any intelligent person could see would lead here, and now they have the audacity to appear contrite and beg at the public trough.

All the while telling us that letting them fail will result in a Depression. Am I the only person who think it might be time to call their bluff? Bankruptcy might be bad, but let’s give it a try.

Brad Warbiany
https://thelibertypapers.org/
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