Bootleggers and Baptists Revisited

Regulatory economist Bruce Yandle invented the catch-phrase “Bootleggers and Baptists” to describe how regulations are supported by seemingly opposing groups when both profit from the regulation.  The theory is that Bootleggers like laws against alcohol consumption because it keeps them in business and limits competition, and Baptists like alcohol laws because it gives them the moral high ground.  A similar situation is unfolding with the Dodd-Frank banking regulations and the political ascension of Elizabeth Warren.  She reaps huge political capital from railing against the big banks and their greedy executives and proposing ever increasing legislation to control the banks, while at the same time, Lloyd Blankfein, the CEO of Goldman Sachs, stated publicly that “More intense regulatory and technology requirements have raised the barriers to entry higher than at any other time in modern history,” and “only a handful of players” will be able to compete on a global scale.  So, Ms. Warren makes political hay by limiting the competition that Goldman has to face.  Isn’t it wonderful to see the cooperation between the public and private sectors?

The Root of Crony Capitalism…Human Nature.

The Root of Crony Capitalism…Human Nature.

The basic unit of the human species is the individual.  All groups, organizations and societies are made up of individuals.  Political groups and business groups are made up of individuals, and these individuals are all guided by basic human nature, the most basic of which is self-interest.  The individuals who control the Democratic Party, the Republican Party, Walmart, Exxon, the House of Representatives, the Sierra Club, the Interstate Commerce Commission, the Small Business Administration, Monsanto, the EPA, GlaxoSmithKline, the Federal Executive Branch, your local barber shop, and any other group or organization you can name, are all motivated by the same basic human urge…self-interest.  If all these groups are made up of individuals acting in their own self-interest, is there any difference between the groups and organizations listed?  The most obvious difference is this.  In the case of the governmental agencies listed, they have the power, using force, to impose their will on all the individuals under their power.  The private companies and private groups, on the other hand, can only offer goods and services to individuals, and the individuals can voluntarily choose to use or not use those goods or services.  Individuals in private entities, when given the opportunity, will purchase the influence from the individuals who control the power of government, to force the individuals under the control of the government to utilize the goods or services they offer, and this is called crony capitalism.  It is rampant in our political system today, and it cannot be stopped no matter how many laws are written to prevent it.  The only way to limit crony capitalism is to limit the power of government to those essential tasks which only government can provide and limit the areas where they will have power and influence to sell. If we continue to allow government power in all areas of our lives with the power to sell favors and to pick winners and losers, the individuals in government will use that power for their own self-interest…that is human nature at work.  It seems so simple to understand.  Those who wrote and ratified the Constitution knew this.  It would behoove us to rediscover this truth.

How do we keep America strong and its citizens free?

How do we keep America strong and its citizens free?  There is only one way…adherence to the Constitution.  The Constitution is not a dreamy eyed document of how we wish things to be.  It is a well thought out structure of government that protects us from human nature.  No other system has proven to provide both long-term stability and individual freedom.  Only by limiting the concentration of power can we assure continued freedom and liberty.  To limit the concentration of power, our Founding Fathers established three branches for the Federal Government, each branch with different roles, freely elected on a regular basis.  A Federal Government of limited and enumerated powers, with the rest of the power dispersed among the States, which States must honor the Constitution’s guarantee of individual freedom and property rights.  But, its continued success is dependent on a citizenry with the will to hold the Federal Government to those limits.  Certainly, long term, the path that America has been on for the last half century has resulted in, and will continue to increasingly result in, reduced individual freedom and reduced property rights.  Our path has increasingly allowed a concentration of power in the Federal Government, effective tyranny over its citizens by a bureaucracy that increasingly, with no end in sight, tells what we can and can’t do with our lives and our property, and more and more national laws that are made ad hoc without regard to the Constitution, written in a way that they are nearly impossible to understand or follow, and then arbitrarily and selectively enforced or ignored at the whim of those in power.  We still have time to correct our direction, but there will come a time when the tipping point is reached, and the entrenched interests who have a stake in an all-powerful Federal Government will gain such power that it will be impossible to peacefully turn back to the Constitution.  Perhaps in 2014 we can begin to have a serious national debate regarding these issues.  Sadly, we debate myriad issues…minimum wage, core curriculum, gun laws, drug legalization, income inequality, national mandated healthcare, environmental laws, etc., without first asking the basic question “What is the proper role of the Federal Government?”  It is as if that question has already been answered, and the answer is “Whatever the Federal Government wants to do.”  If that is already settled, then not only will our grandchildren suffer the consequences, but the world will indeed lose a “shining city on a hill” and the last great hope of the world for a major power to set the standard for individual liberty, and stand strong against the huge forces around the world that want to snuff out individual liberty for a collectivist agenda that will ultimately result in tyranny and global conflict.  As this new year dawns, my hope and prayer is that Americans will wake up and rediscover the reason that we broke away from the British Empire and risked all for freedom.  Our American Founders, as articulated by Frederick Douglass, “preferred revolution to peaceful submission to bondage.”  We still have time for a peaceful revolution at the ballot box, but only if we will elect individuals who will promise and deliver a return of power to the States, and a return to the Spirit and Words of the Constitution.  It is that simple…it is the only way to preserve America as a land of freedom, prosperity and opportunity.  There is no other way.

THINK YOU ARE "ENTITLED" TO SOCIAL SECURITY?

In reality, there is no legal right to Social Security benefits, no matter how much you have paid into it. The government encourages this myth by referring to Social Security taxes as "contributions."  In the 1937 Supreme Court case, Helvering v. Davis, the Court ruled that Social Security was not a contributory insurance program, saying, "The proceeds of both [employee and employer] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way."  In the 1960 case of Flemming v. Nestor the U.S. Supreme Court ruled that workers have no legally binding contractual rights to their Social Security benefits and that those benefits can be cut or even eliminated at any time.  In other words, Social Security is simply another payroll tax that has been collected by the government and spent as the money came in.  When there are not enough young people to continue this Ponzi scheme, it will come crashing down and we, who have paid into the system for the last (in my case 45) years will lose the benefits under the guise of “means testing” which means only those people who have lived off the government for decades and have not prepared for their retirement will collect it. 

Capitalism, serving others…Political Force, enslaving others.

“Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man. Capitalism made it possible to become wealthy by serving your fellow man.” (Walter E. Williams).  For the past 70 years, the Federal political/bureaucracy class has increasingly looted, plundered and enslaved the rest of America under the guise of serving us.  Today, we must obtain their permission to do just about anything we want to do.  Capitalism is dependent on voluntary transactions between parties.  The politicians/bureaucrats use force to take our money, control our property and our actions, and decide how to redistribute our wealth to create a dependent class who will keep them in power.  And, sadly, we have allowed them to do it, by sending politicians to Washington who choose to ignore the Constitution.

UNDERSTANDING THE COLLECTIVIST MIND

I have tried over many years to understand the mind-set of individuals who live off the riches of free enterprise while at the same time condemning free enterprise.  Instead they appear to seek to destroy free enterprise and replace it with what might be called collectivism, whereby we have a utopia in which all wealth goes into a common pot and we are ladled out our portion by some “fair” method (the method yet to be determined).  I recently read a quote by Spanish philosopher José Ortega y Gasset, from “The Revolt of the Masses” (1929), who watched Spain veer from Monarchy to Socialism to Civil War to Dictatorship.  This is the best explanation I have seen to explain the mind-set of those who would replace free enterprise.  I have taken the liberty of rewriting his quote to make it a little easier to understand.  His original quote follows my rewrite. 

My thesis, therefore, is this: the very efficiency with which goods and services are delivered to the masses cause the masses to not only take the goods and services for granted, but to consider the highly organized structure that delivers them as a natural system, rather than a cooperative system of voluntary transactions, largely free from government interference. Thus is explained the absurd state of mind revealed by these masses; while concerned only with their own well-being, they remain clueless to the cause of that well-being. They do not see what is behind the wealth of goods and services from which they benefit. Instead, they demand these benefits peremptorily, as if they were natural rights and will always be there, no matter how many restrictions they place on those who voluntarily create and deliver these goods and services. A scarcity of food results in the mob going in search of bread, and the means it employs is generally to wreck the bakeries. This may serve as a symbol of the attitude adopted, on a greater and more complicated scale, by the masses of today towards the system of free enterprise by which they are supported.

The original quote:  Spanish philosopher José Ortega y Gasset, “The Revolt of the Masses” (1929):

My thesis, therefore, is this: the very perfection with which the 19th century gave an organization to certain orders of existence has caused the masses benefited thereby to consider it, not as an organized, but as a natural system. Thus is explained and defined the absurd state of mind revealed by these masses; they are only concerned with their own well-being, and at the same time they remain alien to the cause of that well-being. As they do not see, behind the benefits of civilization, marvels of invention and construction which can only be maintained by great effort and foresight, they imagine that their role is limited to demanding these benefits peremptorily, as if they were natural rights.

In the disturbances caused by scarcity of food, the mob goes in search of bread, and the means it employs is generally to wreck the bakeries. This may serve as a symbol of the attitude adopted, on a greater and more complicated scale, by the masses of today towards the civilization by which they are supported.

Consumers Are The Ultimate Polluters

Those of you who complain about industrial pollution continue to drive your cars far more than necessary, continue to purchase clothes when you have a closet full of clothes, continue to air condition your homes when you could live without air conditioning (I grew up in a non-air conditioned house), continue to take unnecessary vacations, continue to consume fruits and vegetables shipped from around the world, use the internet (a data center for handling, storing and processing internet data can consume 250 megawatts of power), and enjoy a thousand other luxuries that you could live without.  Then, you complain that the ones who produce those goods and services, solely for your consumption, are the ones guilty of “polluting” the earth.  Consumers are the problem…producers simply respond to the demands of the billions of individuals who consume the goods and services they produce.   Without consumption there would be no production.