Saturday, August 23, 2008

Four Terrorists Blown Away

Tom, a former Marine, just forwarded this video of four terrorists being blown away. Tom writes:

>What surprises me most about this A-10 attack…the pilot did not kill any of our people!

>This is a video taken inside the cockpit of an A-10 by the pilot and it was a night view. What you see is from 9700 feet away (almost two miles). The four terrorists had no clue there was someone watching them from almost 2 miles away. The A-10 was using a 30 mm cannon WITHOUT injuring the dog nearby who escaped unharmed. You can see the gun camera shake a bit as the pilot fires; then count about 4 seconds for the rounds to travel 2 miles. Every tenth round is a tracer, so the bullets you actually see are every tenth; they are getting hit with hundreds of rounds, but the dog is unscathed. Muzzle velocity on the 30mm is 2430 feet per second. Four fewer guys to blow up women and children!

I'll throw in my two cents: These guys are awesome!


video

Postcards from the Edge of America's Election System

Click on the jpg images to enlarge. James A. Walsh, Elizabeth C. Hogan and New York say "we'll think about it". Daniel W. White, Steven J. Sturm and Illinois say "No, the Chicago way".


New Ad on Obama/Ayers

No Quarter USA notes that the Obama campaign has been objecting to a new Republican ad covering Obama's relationship with Bill Ayers. I think the ad ought to get a great deal of coverage. The matter is not just one of Obama's association with an extremist, but also that Ayers advocates failed progressive education methods that have crippled America's school children, and Obama has supported these same programs.

Friday, August 22, 2008

Pennsylvania Attorney Sues to Remove Obama Candidacy

Philip J. Berg (also see Texas Darlin), a Lafayette Hill and Philadelphia, Pennsylvania attorney and former deputy attorney general, has filed a law suit ( Berg vs. Obama, Civil Action No. 08-cv-4083)questioning Mr. Obama's candidacy on three grounds:

1. he is not a natural born citizen
2. he lost his citizenship when he was adopted in Indonesia and
3. he has dual loyalties because of citizenship in Kenya or Indonesia.

Questions Berg raises in his press release include:

Where was Obama born? Hawaii; an island off of Hawaii; Kenya; Canada; or ?

2. Was he a citizen of Kenya, Indonesia and/or Canada?

3. What was the early childhood of Obama in Hawaii; in Kenya; in Indonesia when he was adopted; and later, back to Hawaii?

4. An explanation as to the various names utilized by Obama that include: Barack Hussein Obama; Barry Soetoro; Barry Obama; Barack Dunham; and Barry Dunham.

5. Illinois Bar Application – Obama fails to acknowledge use of names other than Barack Hussein Obama, a blatant lie.

Berg's complaint is here.

On Saturday morning I heard Berg on the George Noory show that runs at 1:00 AM. Several bloggers have pointed out that Berg is previously associated with a 9/11 conspiracy suit, which is a drawback. But it is great that someone has taken the initiative to file a lawsuit as this is certainly one way that the various documentation questions that Andy Martin, Pamela Geller of Atlas Shrugs, Texas Darlin and Larry Johnson of No Quarter USA have raised.

I sent Mr. Berg the following e-mail:

----- Original Message -----
From: Mitchell Langbert
To: philjberg@gmail.com
Sent: Friday, August 22, 2008 10:47 PM
Subject: Fw: Obama Birth Certificate I sent FEC Petition with 5,400 signatures on Monday


Dear Mr. Berg-- I had forwarded a petition with 5,400 signatures on Monday asking the FEC to investigate Mr. Obama's birth certificate. I just heard about your upcoming appearance on the radio and your press release via a source in Washington. I would be delighted to assist you in your effort. I have listed some of the urls relevant to what I have done below. My phone number is xxx-xxx-xxxx (Woodstock, NY area). Best wishes, Mitchell Langbert, Ph.D.

Economic Change in the Civil War Era

David T. Gilchrist and W. David Lewis. Economic Change in the Civil War Era. Greenvile, Del.: Eleutherian-Mills-Hagley Foundation, 1965. 180 pages. Out of print, available from Amazon.com used.

God bless Amazon.com for making scholarly books available to a national market with little fuss or muss. Economic Change in the Civil War Era is a conference proceedings of a 1964 conference that the Eleutherian Mills-Hagley Foundation put together in 1964. Several of the leading historians of the late twentieth century, to include Alfred D. Chandler, Jr., Daniel J. Elazar, and Fritz Redlich were in attendance and/or presented papers.

Robert P. Sharkey's paper on commercial banking coupled with Fritz Redlich's response was fascinating. Louis Hartz's paper, "Government-Business Relations" is brilliant as is Alfred D. Chandler's paper on the transformation of the "Organization of Manufacturing" as was George Rogers Taylor's "National Economy Before and After the Civil War".

Taylor points out that the "extension of settlement in rural New England" in the pre-Civil War period was largely unprofitable because the lands being settled in northern New England and upstate New York were not so fertile as the land the first settlers occupied. Thus, "most of the hill towns of New England had reached their population peaks by 1830 or earlier." The railroads made it "easier to migrate to Illinois or Wisconsin" so that New England rural population began to decrease in the 1850s. The population of the Western states was growing, in part due to emigration from New England. Western settlers needed a market. Shipping to New Orleans via the Mississippi River was expensive and risky. Canals allowed eastward shipment of grain and by the 1840s eastward shipments equalled the the shipments to New Orleans, and the railroads enhanced this trend. Railroads were in part a response to westward migration. Thus, argues Taylor, eastern demand for western agricultural output plus immigration led to demand for railroads. New Englanders migrated from farms westward and to cities like Boston. "Eventually migrants to the frontier produced the food consumed by migrants to the cities" (p. 14). Immigrants from Europe provided an abundant labor supply and low labor costs in the ante-bellum period. But "trained workmen or skilled mechanics were often in short supply and had to be brought in from England or Scotland at considerable expense".

According to Robert P. Sharkey, who treated the subject of banking:

"In 1850 the banking network of the country consisted of some 824 state-chartered banks operating in all the thirty-one states except Texas, Arkansas and Iowa, which prohibited the chartering of banks altogether. The laws which governed banking varied from the extreme permissiveness of the statutes in Illinois, where "wildcatting" was in vogue, to the stringent provisions of the enactments in Louisiana, where reserve and lending practices were conservative in the extreme....Twenty-three years later, in 1873, this anarchic condition had totally disappeared. The number of banks had quadrupled to some 3,298, but of this number, 1,968 were national banks chartered under the National Banking Act of 1864. . Instead of hundreds of different kinds of currency, whose varying values were known only to the most avid readers of the Bank Note Reporter, there was now a national bank-note currency secured by the deposit of US bonds with the Treasurer of the United States and passing at par throughout the country. The state banks were showing a great renaissance at this time, their number having more than doubled from less than 600 in 1872 to more than 1,300 in 1873. Despite this resurgent vitality, state banks were no longer feared by most contemporaries, since their currency-issuing powers had been effectively curtailed by the punitive tax of 10 per cent on state bank issues levied by the act of Marc 3, 1865."

Among the important changes with respect to money and banking was the "ever growing volume of demand-deposit money...the growing volume of demand deposits which could be transferred by check mitigated to some extent the deflationary effects of the rapid currency contraction which followed the Civil War."

Private clearing houses, a kind of regional private central bank, were established in New York, Boston and Philadelphia between 1853 and 1858 (p. 25).

The National Banking Act was, in Sharkey's estimate, the result of the Civil War. "The Civil War created a great mass of government securities which the National Banking Act required national banks to buy as collateral for the national currency." New York Bankers did not like the monetary expansion. Sharkey quotes James Gallatin in 1868 (p. 26): "Not content with a large volume of government paper money, we made it the basis of another volume of auxiliary money in the form of bank issues. We built paper upon paper. Our paper house topples to its foundation, yet we are advised to build it higher, with more paper..." Sharkey adds (p. 27):

"For those who savor historical ironies, these divergent attitudes are not without their delights, for, as the National Banking System took shape after the War, it was apparent that human ingenuity would have had difficulty contriving a more perfect engine for class and sectional exploitation: creditors finally obtaining the upper hand as opposed to debtors, and the developed East holding the whip over the undeveloped West and South...The fundamental purposes of the National Banking Acts were to provide an adequate bank-note currency as well as a wartime market for government bonds...providing a bond-secured national bank currency...As the price for his support of the original act of 1863, John Sherman had insisted that the total volume of the national currency be limited to $300,000,000"

He adds (p. 28):

"The excesses of state banking as the existed prior to the Civil War have been widely condemned. Bray Hammond has performed a great service in demonstrating that the craze for easy money was no agrarian aberration but rather one peculiar to the enterprisers. Insofar as outright frauds were sometimes perpetrated by issuers of bank notes, these practices deserve the criticism that they have received. But what about the loans made by good and not-so-good banks to the 'enterprisers' who wanted to improve lands, develop mines, open factories, etc.?...To the extent that capital was purchased through the issue of depreciating bank notes which passed through the ands of inhabitants of the less developed regions, such depreciation was in essence a form of taxation...To the extent that such notes could be made to circulate the urban East, they constituted a kind of capital levy by the less developed upon the more developed regions...It is quite understandable that politicians of the Whig persuasion, such as Daniel Webster and William Seward, were concerned about the infiltration of doubtful bank notes and forcefully plead the case of the creditor section for what Seward called a 'sound, equal, uniform' currency."

"...The general thesis here is that the laissez faire conditions of enterprise in pre-Civil War America--in which the entrepreneur thrived and the position of the creditor was none too secure--gave way in the post-Civil War period to a new situation in which the creditor interest was dominant, large-scale instead of small-scale enterprise was favored and the East held the whip hand over the less developed regions of the country...The Civil War years...were in fact the culmination of the great age of free and unrestricted enterprise. On the great crest of inflation thousands of businesses saw the light of day and thrived. The entrepreneur flourished, but meanwhile the creditor interest languished as debts were repaid in money of constantly diminishing value. Between 1860 and 1864 the capital invested in New York banks actually fell, a good indication that banking was not very profitable under inflationary conditions. But meanwhile, the seeds of decay had been planted. The National Baning System, with its yet unsuspected exploitative potentialities, had been established..."

After the Civil War, "the stock of money was rapidly contracted. Prices fell steadily. Loans and discounts, the life blood of small enterprise, rose only $9,000,000 between 1860 and 1867 despite the great increase in population and production, while the banks' holdings of corporate and government securities rose from $70,000,000 to $536,000,000. What this meant was that access to the money market was becoming ever easier for the proprietors of the great corporations with their well-known issues, and increasingly difficult for the small enterprisers and farmers of the hinterland...New York became the great magnet for money. Even the reserves of the country banks found their way to Wall Street where they helped meet the insatiable demands of the call-money market. In place of the illiquid mortgage loans made in the hinterland before the Civil War, there was now the illiquidity of stock-secured loans in New York, further reducing the ability of country banks to serve their customers. Is it any wonder that the true advocates of free non-corporate enterprise such as Henry Carey screamed so unrestrainedly at what they called the 'money monopolies' of New York?..It was in this type of environment that the Vanderbilts, Carnegies, Rockefellers and Armours consolidated their gains, swallowing up their smaller competitors in time of crisis, moving ever forward to the nirvana of rationalization and oligopoly. The ground rules had been changed by many factors, but in this process banking and government finance played significant roles."

Fritz Redlich adds (p. 32):

"the problem was to create a market for government loans...Its solution led concomitantly to the creation of the National Banking System, which in the end revolutionized American commercial banking, although it was not devised to that end." The National Banking Act established "free banking" under general law rather than specific charter. "Free banking acts already in effect across the country had introduced into American practice the government-bond-backed bank note...this brought into existence, on a national scale, a market for government bonds."

There were sectional differences in inflation so that in the east there were frequent complaints of too much inflation in the post Civil War era, and in the south and west there were complaints of too little.

I am somewhat skeptical of Redlich's argument that small businessmen depended on bank loans because in our era banks have not been sources of capital to start ups.

In Louis Hartz's essay "Government Business Relations" Hartz notes (p. 89):

"It is a matter of War producing an efflorescence of egalitarian thought in Whiggery, and now a strong corporate Whiggery was able to dip its ambitions...Freedom from state control went hand in hand with the religion of opportunity, which in the broadest sense democratized economic power and made it acceptable to the egalitarian ethos of a liberal society. Technically, of course, this correlation was not essential. One could have the Horatio Alger dream functioning in the context of the old Whig paternalism: Ragged Dick could dream of making his million in a business fostered by the federal government itself, and we cannot excuse Hamilton from his failure to grasp the Alger secret by referring to the state of the American economy. There was sheer blindness, sheer failure to understand America, in the Hamiltonian attitude. At the same time the capacity of Whiggery to dispense with the state, or at least with a portion of the state, did make certain things possible...."

Daniel J. Elazar discusses the implications of land grant programs to aid in the construction of the railroads; the expansion of federal technical assistance to the states and the emergence of large-scale federal domestic programs. "The largest land-grant program of the period was deigned to aid in the construction of railroads under state supervision and, after 1862, under direct federal supervision in the western territories. Federal technical assistance to the states and localities was oriented toward improving state and local programs that were, themselves, designed to encourage economic growth.l In the decades immediately preceding the War, this technical assistance was largely confined to such tasks as helping city officials plan harbor-improvement projects...After the war, technical assistance expanded into other fields, particularly those relating to agricultural improvements and the geological surveys designed to uncover new mineral wealth...All this government expansion was accomplished in the generation between 1847 and 1877...

"...With all the expansion of government programs between 1847 and 1877, the character of government efforts remained substantially the same-supportive of private enterprise and industrialization, through government subsidization for developmental purposes...Beginning with the mid 1870's, however, government began to assume an active regulatory role as well...

"The expansion of federal domestic programs, which began around the middle of the century, reached such a point during the War years that one could easily call Lincoln's presidency the "New Deal" of the 1860's (a term used, curiously enough, by a Raleigh, North Carolina editor in march 1865 as an argument to encourage his state to voluntarily rejoin the Union. In the space of four years, the President and Congress created a bundle of programs whose central effect was to reassert an American conception of the role of government in the economy in a manner consonant with the new industrialization.

"Among the measures enacted between 1861 and 1865were (1) the National Banking Act of 18643 (with amending acts in 1864, 1865 and 1866), which created a national banking system and a national currency; (2) the Morrill Land-Grant College Act of 1862, which by providing for the establishment of college specifically devoted to education n 'agriculture and the mechanic arts' was ultimately to play a major role in developing the pool of skilled personnel needed to man the institutions of the new economy; (3) the great transcontinental railroad land grants of 1862, 1863 and 1864, which were to bind the continent together and make possible the postwar conquest of the last of the land frontier and (4) the Homestead Act of 1862, which by providing virtually free land in the greater West for all takers, shaped the character of the last great agricultural frontier. An income tax was levied for the first time in 1861 and national paper currency was first issued that same year, setting the stage for reformer-conservative conflicts over national tax and fiscal policies for the next generation. In 1864 the Contract Labor Act was passed, providing for licensed recruitment of European laborers to man the nation's new industrial plant. That same year congress granted California the Yosemite lands for the express purpose of creating a public nature preserve..A number of new federal bureaus were created, among them the Department of Agriculture (1862), the Bureau of Printing and Engraving (1862), the Office of Comptroller of the Currency (1863) and the Office of Immigration (1864). In 1863 Congress created the National Academy of Sciences, initially to screen technological innovations to ascertain their usefulness for the war effort...The Morrill Tariff of 1861 restored the protectionist approach to tariff policy and inaugurated two generations of federal subsidy for domestic manufacturing via the high tariff...Though the bulk of the new federal programs were inaugurated during the War years, the last actions of this "New Deal" came in the postwar period. In 1866 the Mining Claims Act was passed, opening the public domain to mining claims."

State government also expanded in the Civil War era. "Construction of the transcontinental railroads also began in earnest after the War in conjunction with redoubled state efforts to build connecting lines both in the Mississippi Valley and on the West Coast, utilizing other Federal land grants couple with local bond issues to accomplish the task. The federal-state partnership in railroad construction had developed in the 1850's in Michigan, Illinois, Alabama and points west, but it was not until the postwar period that this partnership was to bear its greatest fruit. Though new land grants were made by Congress after 1871, the implementation of the program inaugurated by the grants made between 1850 and that year occupied the next thirty years

"(D)uring this period...several of the larger northeastern states began to experiment in new areas of government economic regulation. Again let me cite some random examples. In 1867 New York enacted the first of several tenement house laws designed to ameliorate the terrible living conditions in parts of New York City. These laws, ineffectual as they turned out to be, represented the first effort in the nation to come to grips with the problem of urban housing. That city, two years earlier, had established the nation's first professional fire department...

"In 1869 Massachusetts created the nation's first state board of health and first bureau of labor. During the 1860s the Bay State was in the vanguard of regulation pioneers, experimenting with government intervention in the fields of insurance, banking and railroads. These three fields also attracted the attention of states in other parts of the country and were the first to be regulated on anything like a nationwide basis...

"The increase in the over-all scope of local activity is nowhere better illustrated than in the great rise in municipal debt between 1866 and 1876...In 1866 the total debt of the nation's 130 largest cities was $221,300,000. Ten years later it was $644,400,000...

"It is likely that the Civil War was most helpful in adjusting American public opinion to government expenditure of large sums of money. Teaching the American people that government could legitimately spend on a grand scale..was extremely important in the short run and in the long run...the changes that took place in the Civil War generation did not so much lead to an increase in the role of the federal government as they did to an increase in the role of all levels of government in the nation's economy..."

Louis Hartz, however, took issue with Elazar's argument (p. 109): "Are you to extract form this evidence the conclusion that in fact the concept and the experience of state action in the economic sphere expanded in and through and after the Civil War as compared to the pre-Civil War period? I would reject that proposition even in the face of your evidence...The period before the Civil War, the period of the 1820s and the 1830s, took it as an accepted fact that most states could regulate working conditions on a broad scale. The Colonial period, under mercantilist regulations, took it for granted that an invasion of the sphere of economic enterprise by the state was legitimate, and indeed the state did implement such an invasion. Now after the Civil War, as a result of certain judicial decisions, this was held to be illegitimate, and much regulation which had been accepted before was dodged...

Elazar responds to Hartz: "I was confirming your point that there was almost a derogration of government activity at this time, although in fact government was actually increasing. However, it was supportive activity rather than regulatory activity...It was not until after the Civil War generation--after Justice Waite, for example left the Court in the late 1880s--that the notions of the Fourteenth Amendment emobided in the Slaughterhouse Cases were adjusted by the new majority on the Court so as to write the new corporation-endorsed doctrine of laissez faire nto consitutional law. Up until this period, of course, it was still assumed that regulation was permissible...

The final article in this fine book that I will discuss is Alfrd D. Chandler's "Organziation of Manufacturing and Transportation". Chandler argues that "the simulataneous adoption of three methods of communication in the dozen or so years before the Civil War did make an enormous difference and so become an initiator of important institutional changes. I would like to substantiate this thesis--that is, of the signficance of the transportation revolution in the dozen or so years before the Civil War--by focusing on the coming ot two important institutional forms: one, the use of the factory for the mass production of durable goods, and the other, the use of the corporation as an administrative device for the managing and controlling of large amounts of men, money and materials."

The transportation revolution involved the widespread adoption of the railroad, telegraph and steamship, which expanded the market between 1847 and 1854. "Beside increasing the volume and regularity of transportation, adding to the national income and beocming a brand new market for American industry, they created new patterns of economic an dbusiness action and new institutional forms...The massive financial requirements of the railroads caused the centralizing and institutionalizing of the nation's investment market in New York City...sudden demand for a large number of new railroads in the 1850s, rather than the financial needs of the Civil War created modern Wall Street, with its national stock exchange, its international investment-banking houses, its brokers' offices and its speculative techniques."

Chandler's arguments are excellent and parallel those he makes elsewhere, as in his book Visible Hand.

Overall, the conference concluded that the Civil War itself did not change the economy much. Rather, it was the population, technological, banking, monetary and other shifts that were occurring independently of the War that made the nineteenth century one of rapid change.

Why Politics Leaves You Cold

The American political ideology is Progressive in the early twentieth century sense. Both political parties, the Democratic and the Republican, are heirs to Progressivism. But Progressivism was and is alien to at least two of the three primary American political belief systems. It is in part derived from European social democracy, and its emphasis on centralization is alien to all American political culture that is rooted in agrarian and small town life. Progressivism was brought to America in the late nineteenth century when many Americans (as many as ten thousand), such as John Dewey, attended German universities as graduate students. Progressivism was in part a reaction to the growth and power of large companies. It reflected an impulse to substitute government and centralized planning for free market processes. The argument that dominated the Progressive era was that big business had too much monopoly power and government was necessary to manage that power. Progressivism also emphasized local economic improvement such as housing reform and, as well, reflected professional interests in fields like law and medicine. Progressivism denied the viability of the small community because corporations had become international and small business could no longer compete with big. It argued for an activist federal government and ultimately the transfer of economic power from villages, towns and states to the federal government in order to better manage big business. Progressivism elaborated on many traditional themes in American culture, such as its emphasis on efficiency and morality, but it modified them by arguing that national legislation was needed to achieve them. The Republican Progressives, such as Herbert Hoover and to a lesser degree William Howard Taft, emphasized efficiency. Taft focused on application of the Sherman Anti-Trust Act to big business. Hoover favored the use of governmentally guided but voluntary cartels to restrict production and eliminate waste. In contrast, the Democratic Progressives, Woodrow Wilson and Franklin D. Roosevelt, emphasized the moral aspect of Progressivism, Wilson with respect to international relations and the League of Nations and Roosevelt with respect to labor relations, work relief, business regulation and social security. Wilson cartelized American industry during World War I, but dismantled the cartels after the war. Like Wilson, Roosevelt attempted to cartelize industry under the National Industrial Recovery Act, but this 1933 law was declared unconstitutional. Thus, today's Democrats favor more government at the federal level, believe that government is more efficient than the market and advocate regulatory systems that cost small firms more than large firms to comply as a proportion of sales. The Republicans say they favor less government, but inevitably expand it, argue that markets are more efficient than government but increase the intensity of regulation anyway. Both parties favor monetary expansion that transfers wealth from workers to business owners and stock holders. Where monetary expansion does not provide a sufficient subsidy, direct bounties are increasingly available to big, but not to small, firms that fail.

Thus, both Democrats and Republicans favor a corporate-centered economy. Democrats use the Progressive rhetoric of morality while Republicans use the Progressive rhetoric of efficiency. But the Democrats are not particularly supportive of morality and the Republicans are not particularly supportive of efficiency. Both favor subsidies to big business; both favor a central bank that provides subsidies through inflation; both favor offering a privileged position to business; and both are responsive to the university ideology of elite America--the urban, collectivist, morally skeptical and issue-oriented culture of the news media, the mass-conformist urban culture and of universities.

American political culture at most loosely conforms to Progressivism, and it is puzzling as to why Americans have favored the modernist, large scale programs that Progressivism has to offer. It may be that the expansionist ethos of the frontier finds expression in the government expansionism of Progressivism. But government solutions reduce efficiency and have led to declining real hourly wages.

In a wonderful book, American Federalism: A View from the States*, Daniel Elazar argues (p. 113) that there are four key values in American culture: efficiency, commerce, legitimacy and agrarianism. The four values generate three underlying political cultures: individualistic, moralistic and traditionalistic. It is evident that although Progressivism stood for efficiency early in the twentieth century, today's economy has evolved past its chief solutions, scale, bureaucracy and hierarchy. Likewise, The evolution of technology has rendered the centralized media less relevant to public policy debate. Governments cannot manage large scale programs efficiently because the flexibility needed to organize an agency runs up against conflicts of interest and moral hazard, and the absence of incentives to encourage efficient operation. Progressivism leads not to efficiency but to inefficiency.

The three political cultures that Elazar describes, individualistic, moralistic and traditionalistic (p. 115) are as follows. "The individualistic political culture emphasizes the conception of the democratic order as a marketplace. In this view, government is instituted for strictly utilitarian reasons...politics is a business...politicians are interested in office as a means of controlling the distribution of the favors or rewards of government rather than as a means of exercising governmental power for programmatic ends..."

The individualistic world view does not lend itself to Progressivism unless there is widespread popular demand for Progressive reform. It encourages private initiative and is ambivalent about bureaucracy.

Elazar writes that "(t)he moralistic political culture emphasizes the commonwealth conception as the basis for democratic government. Politics, to the moralistic political culture, is considered one of the great activities of humanity...Consequently, in the moralistic political culture both the general public and the politicians conceive of politics as a public activity centered on some notion of the public good and properly devoted to the advancement of the public interest."

Elazar does not distinguish between moralists who advocate individualist solutions, such as the Libertarians, and moralists who advocate Progressive solutions. It would seem that increasingly the Progressives do not have a corner on this.

The Progressives built on the moralistic impulse, but there are some crucial differences. "The moralistic culture is localistic: the strong commitment to communitarianism characteristic of moralistic political culture leads to channel the interest in government intervention into highly localistic paths. A willingness to encourage local government intervention to set public standards does not necessarily reflect a concomitant willingness to allow outside governments equal opportunity to intervene...The moralistic political culture's major difficulty in adjusting bureaucracy to the political order is tied to the potential conflict between communitarian principles and the necessity for large-scale organization to increase bureaucractic efficiency, a problem that could affect the attitudes of moralistic culture states toward federal activity of certain kinds" (p. 118).

Finally, "(t)he traditionalistic political culture is rooted in an ambivalent attitude toward the marketplace coupled with a paternalistic and elitist conception of the commonwealth...Like its moralistic counterpart, the traditionalistic political culture accepts government as an actor with a positive role in the community, but it tries to limit that role in securing the continued maintenance of the existing social order" (p. 118). Government is viewed as a means of maintaining the existing order and a governing elite re enforces its own position. Participation in politics is viewed as a privilege and competition between elite-dominated factions characterizes party competition.

Elazar argues that centuries-long migration patterns from New England, which was characterized by the moralistic commonwealth culture; the Middle Atlantic, which was characterized by the individualistic culture; and the South, which was characterized by the traditional culture determined the political cultures of states in the 1980s. Elazar traces the migration patterns across the country, and argues that the Western states had cultures that combined the cultural values of the settlers.

Of the three cultural values, the one that is closest to Progressivism is the moralistic. In particular, the moralistic culture is issue-oriented and favors bureaucracy and government intervention. But Progressivism dispensed with the Puritan religious values that infused the early New England communities, and many Americans have not. Moreover, the attempt to impose a commonwealth culture on Americans who deviate sharply from the value system suggests problems, such as alienation. Moreover, the value system that Progressives advocate deviates sharply between Democrats and Republicans. Within the Democratic Party there are more mainstream and more elitist elements, who introduce a culture that does not correspond to the three cultures. Political correctness, identity politics and group rights, progressive education and dislike of the United States have become institutionalized cultural values among American elites but have little to do with legitimacy, agrarianism, efficiency or commerce. University trained elites have tended to view communities as clay to be molded rather than as ecological systems composed of human beings who are ends to themselves.

The mechanics of Progressive government necessarily deviate from the differentiated American political cultures. A single government that accrues substantial economic power must develop specific policies. And as the three cultures plus the elite, university culture, all have distance from each other, the single Progressive culture must as well have distance from all the others. As the complexity of policies and the size of government expands, the sum of the distances from the various American political cultures must also expand. Politics no longer reflects human values, but rather the views of the media, university elites and the outcome of struggle among moralists, individualists and traditionalists. The result may be said to be representative government, but it is an increasingly distant government. Progressivism placed too much Federal in Federalism.






*Daniel Elazar, American Federalism: A View From the States: New York, Harper and Row, 1984.

Wednesday, August 20, 2008

The Paradox of Economies of Scale and Government Bounties to Big Business

One of the key arguments that economists and historians have traditionally made in favor of big business, and one that the public has generally accepted, is that it is necessary because of economies of scale. This image was exemplified by the Ford production plants of the 1920s, which could produce thousands of cars per week. The reason that economists and the general public have traditionally believed that economies of scale are important is that the fixed costs of production, costs that will be there whether one or a million units are produced such as advertising, rent, and administrative staff costs, when spread over a large number of units of output become lower per unit. The argument for scale amounted to an argument for centrally planned economies. In his book "Managerial Revolution", written in the 1930s before the murderous nature of Nazism had been fully revealed, James Burnham argued that a new managerial class was independent of owners and he cheered the advent of national socialism in Germany because government control and guidance of large industry reflected the realities of the new managerial power. Thirty years later, in the early 1960s, John Kenneth Galbraith described the economy of big business as based on planning by a "technocratic" elite in his book New Industrial State.

But while the public has accepted the argument that big business is necessary for consumerism because only large firms can produce large numbers of outputs, big business has tactically demanded and likely required government subsidies in order to survive. And there is a paradox. For if big business is most efficient, then why does it need subsidies? In his 1977 book Politics and Markets Charles Lindblom argued that business occupies a "privileged position". More fundamentally, ever since the days of Hamilton, and with the exception of some business interests in the late nineteenth century, much of American business has asked for two crucial kinds of subsidies: protectionist tariffs and monetary expansion. When Jackson abolished the Second Bank in the early 1830s he limited the degree of monetary expansion. That period, from the 1830s to 1900, was the period of greatest innovation in technology and strongest gains in real hourly wages of workers of any in American history. It was also a period of uncertainty, volatility and conflict between labor and management. However, even in the nineteenth century monetary expansion associated with the Civil War facilitated expansion of credit and therefore enhanced the size of business. By the late nineteenth century the Mugwumps, traditional, mostly Protestant (there were some Catholics and Jews as well in their ranks) Yankee elites in Boston and New York protested the support to speculators like Jay Gould that the monetary expansion had provided, coupled with erosion of their annuities and bank accounts.

The expansion of the railroads contributed mightily to the expansion of US markets into a single whole, and were the crucial step in making big business economically viable and efficient. But the railroads were largely the product of subsidy, and the canals that preceded them were government public works projects, not private enterprise. Neither the railroads or canals were entirely responses to market demand. Rather, they were made possible by land grants and rights of way granted by often corrupt state and local governments. An example is New York, where Jay Gould was so indebted to Boss Tweed that he paid Tweed's bail when Tweed was arrested for corruption. Thus, the Civil War inflation and government subsidies to railroads made expansion of the railroads possible. In turn, the railroads coupled with high tariffs made expansion of business possible. In turn, business enjoying both these supports and economies of scale, consolidated in the nineteenth century.

Late nineteenth century big business was poorly managed. It is likely that the labor conflicts and inefficiencies of the large firms were due to their too-rapid expansion. In management, experience is the foundation on which expansion depends. In a laissez-faire market, a firm becomes large as its managers gain expertise in one market and then duplicate the success in subsequent markets. An example is McDonald's. The founders of McDonald's, Dick and Mac MacDonald owned a single store in San Beranardino, California. Ray Kroc, a multi-mixer distributor, read about their success and visited the store. Kroc's vision of a national chain of stores led to his agreement with the McDonald brothers. But it took Kroc many years to make McDonald's a success. He had to learn the importance of standardization through multiple false starts in California. He had to learn the importance of professionalization of the franchisee relationship through mismanagement of franchises by his friends from his country club who did not focus on managing the stores. He had to learn how to use real estate investment to help finance store expansion and contribute to profit margins from Harry J. Sonneborn. He had to learn how to standardize equipment and the size of French Fries. Kroc did not conceptualize almost any of the food offerings, most of which were the result of suggestions from franchisees. He did not create the clown, which was the result of a local advertising campaign by one of his large Washington, DC franchisees.

Would any of the steps that McDonald's took have been made had there been a massive tariff on hamburgers or if state governments, in return for bribes, had offered exclusive distributorships to Ray Kroc, or if credit expansion through the Federal Reserve Bank had benefited McDonald's as it does Wall Street today? Would any of the innovation in McDonald's have occurred?

In the early 1960s Ronald Coase wrote about the reason that organizations reach a given scale or size. He argued that, like much else in economics, it is due to an equilibration of costs and benefits. The costs of scale include ability to manage, incentives to top management, conflicts between labor and management, difficulties in obtaining information about operations, inflexibility in changing direction when markets change and office politics. The advantages of scale include economies of scale and economies of scope, i.e., the ability to share information learned in one business to a different business, much as Time Warner's AOL unit was able to share information with Roadrunner (that's a joke; the Time Warner and AOL units were in constant conflict after their ill-advised and incompetently executed merger).

The subsidies to big business have increased, not diminished, over time. The Democrats have inadvertently or not, been big business's best friend by demanding regulation, supposedly in support of big labor, that squelches smaller firms by further increasing the advantages of scale economies. They have also established the Federal Reserve Bank, which once the Republicans realized was actually the most important of all the subsidies to big business went on a binge and nearly doubled the rate at which the money supply grew after 1971. The Democrats have never complained, and have follwed the same course since. Thus, both parties have seen subsidization of Wall Street and big business at public expense as the cornerstone of their economic policies. The Democrats came up with the idea and the Republicans enhanced it. I became a Republican because the Democrats are better at initiating big government programs that subsidize big business. They do it by telling everyone that they support the poor and that the regulation supports the poor. But there were no segregated inner cities before the Democrats began to "support" the poor.

Which will outbalance the other--office politics or economies of scale and scope? Clearly, if government is providing support to big business, the amount of support needs to be subtracted from the gains from economies of scale.

Moreover, time has revealed that scale is not the most important factor in management. The Japanese were able to defeat big American business not because of scale but because of skill. Wal-Mart was able to defeat K-Mart not because of scale (it was a smaller firm until the 1990s) but because of skill. In particular, management of information, incentives, labor relations, inventory, factory management, total quality management, technology, product design and marketing, and similar factors can generate competitive advantages. Large firms like Nike have found it necessary to emulate small firms. They outsource their manufacturing and reserve the product design and marketing for themselves. In effect, they are consultants who control the business. These ideas have been circulating for many years. Yet, they bring into question whether scale provides much of an advantage. Coca Cola has found that local manufacturers can out-think them with respect to understanding local tastes, and has had to scramble to decentralize in order to compete globally. Its original vision of a one-world market drinking trillions of gallons of Coca-Cola was illusory.

Thus, the American idea, rooted in the expansion into the frontier, that scale and the expansion of markets is necessary results in a paradox. If scale is the source of economic gains, then why are such extensive subsidies to big business necessary? And if scale is crucial, why has there been so much volatility in world business?

Anti-Obama Protest in Denver

I just received this e-mail release from Andy Martin, who is going to the Denver convention to protest. Andy's group needs to use Saul Alinsky tactics to attract media attention, otherwise the media are in the grip of the big business-Soros-Obama machine.

The Stop Obama Coalition
http://StopObamaCoalition.com

ANDY MARTIN
Executive Director

FOR IMMEDIATE RELEASE:

ATTENTION DAYBOOK/ASSIGNMENT EDITORS

ANNOUNCEMENT OF NEW YORK NEWS CONFERENCE August 20, 2008

NATIONAL ANTI-OBAMA MOVEMENT LEADER ANDY MARTIN UNVEILS PLANS FOR A "FIGHTING CAMP" IN DENVER

(NEW YORK)(August 20, 2008) The leader of the national anti-Obama movement, Andy Martin, will hold a New York news conference Wednesday, August 20th to announce that the Stop Obama Coalition plans a "fighting camp" in Denver during the Democratic National Convention.

"We are ramping up for the battle against Barack Obama," says Martin. "Our goal is to serve as a clearing house for everyone who wants some guidance on how to oppose Barack Obama for the presidency. We are nonpartisan, accepting Republicans, Democrats and independents. We are not 'extreme' in any direction. We are here to offer guidance to groups across the United States who want to oppose Barack Obama.

"And we are not mudslingers. On the contrary we believe the truth and the facts are our most potent weapons to defeat Obama. Unlike competing authors, my own book, Obama: The Man Behind The Mask, is the only one that has not been attacked for factual errors.

"In Denver we will be holding 'truth squad' sessions, interviews, news conferences and book signing events for my book Obama: The Man Behind The Mask. We will also be issuing new challenges to Obama through columns specially prepared for the National Convention. We have reserved a suite in Denver as our headquarters.

"As near as I can determine, I will be the only anti-Obama author actually in Denver.

"We obviously do not have equivalent resources to fight the billion dollar man, Senator Obama, who is supported by George Soros-financed tax exempt foundations and operatives who use tax exemptions to conduct their illegal pro-Obama political activity. But we can draw on a nationwide cadre of highly motivated anti-Obama voters. All volunteers.

"And we are organizers. By seeking to bring all of Obama's opponents-Republicans, Democrats and independents--together under a 'big tent,' we help implement democratic change in the Democratic Party while defeating Obama, the false prophet of change.

"We will fight Obama as long as our funds hold out," Martin states. "Depending on the fund raising of the Committee of One Million to Defeat Barack Obama, we hope to be players in the race right through Election Day in November.

"We will be setting up in Denver Sunday evening, August 24th, when we plan to announce our location and local contact information."

Please read the Stop Obama Coalition's Palm Beach Declaration at http://StopObamaCoalition.com.

URGENT APPEAL: The Committee of One Million to Defeat Barack Obama is now raising money to fight Barack Obama. http://CommitteeofOneMilliontoDefeatBarackObama.com. Please give generously up to the maximum of $100. Our ability to fight and defeat Barack Obama is directly dependent on the generosity of every American.

"The Committee of One Million to Defeat Barack Obama limits itself to $100 maximum contributions; there are no bundlers, fat cats or illegal contributions. Obama is opposed to everything America stands for," says Executive Director Andy Martin. "But while Obama has raised a third of a BILLION dollars, his opponents have raised nothing. They can either contribute now, or pay later. If we do not succeed, Obama will."

E-mail: contact@CommitteeofOneMilliontoDefeatBarackObama.com
NEWS CONFERENCE DETAILS:

WHO:

The Stop Obama Coalition, Executive Director Andy Martin

WHAT:

National anti-Obama leader Andy Martin unveils plans for "fighting camp" in Denver during the Democratic National Convention
WHERE:

909 Third Avenue, public sidewalk in front of FDR Station, New York

WHEN: Wednesday, August 20, 4:00 P. M.

MEDIA CONTACT: (866) 706-2639; Cell (917) 664-9329

TO PURCHASE BOOK: http://www.OrangeStatePress.com

ANDY DIRECT E-MAIL: AndyMart20@aol.com
---------------------------------------------------------
Source: The Stop Obama Coalition
Website: http://StopObamaCoalition.com
Media contact: Andy Martin, Executive Director
Tel. (866) 706-2639 Cell (917) 664-9329
E-mail: contact@StopObamaCoalition.com
Blog: www.StopObamaCoalition.blogspot.com
----------------------------------------------------------
Readers of Obama: The Man Behind The Mask, can rest assured it is the only gold standard and practical handbook on Barack Obama's unfitness for the presidency. Buy it.
Book orders: http://OrangeStatePress.com. Immediate shipment from the publisher or Amazon.com is now available.
----------------------------------------------------------
FULL DISCLOSURE: I have decided to oppose Barack Obama's election and have become Executive Director of The Stop Obama Coalition, http://StopObamaCoalition.com. By default, I have become the national leader of the anti-Obama movement. I am not acting as either a Democrat or Republican. I have had no contact whatsoever with the McCain Campaign. The views expressed are entirely independent of McCain. I am not a member of any political organization. I am acting as an American citizen who sincerely believes Obama is not the man we need in the Oval Office. We are running a very dynamic and aggressive campaign against Obama. We know how. We are the recognized experts in the field. I will, however, continue to write my columns for ContrarianCommentary.com. /s/ Andy Martin
----------------------------------------------------------
Andy Martin is a legendary Chicago muckraker, author, Internet columnist, radio talk show host, broadcaster and media critic. Andy is the Executive Editor and publisher of www.ContrarianCommentary.com. © Copyright by Andy Martin 2008. Martin comments on regional, national and world events with over forty years of experience. He holds a Juris Doctor degree from the University of Illinois College of Law. His columns are also posted at ContrarianCommentary.blogspot.com; contrariancommentary.wordpress.com. Andy is the author of Obama: The Man Behind The Mask, published in July 2008, see http://www.OrangeStatePress.com. MEDIA CONTACT: (866) 706-2639 E-MAIL: AndyMart20@aol.com [NOTE: We frequently correct typographical errors and additions/subtractions on our blogs, where you can find the latest edition of this release.]

Tuesday, August 19, 2008

Two New York Sun Articles on Women

Today's New York Sun carries two amusing articles about women. First, the Sun reports that Den Hollander, a Manhattan attorney, is suing Columbia University because it offers women's studies courses. Mr. Hollander attended my alma mater, Columbia Business School, and he seems to be arguing that women's studies courses "teach girls unfairly" while there are no equivalent courses for guys. Too bad there's no legal cause of action for intellectual vacuity. Women's Studies Departments would lose that suit every time. (Uh oh, there goes my promotion...)

Second, Lenore Skenazy has an article "Wanted Ugly Women". John Molony, the mayor of Mount Isa, Australia, a mining town where there are five males to every female (and based on my experience with mining towns they are probably a young, rowdy bunch) has extended a public invitation: "With five blokes to every girl, may I suggest that beauty disadvantaged women should proceed to Mount Isa".

Feminists in Mount Isa and around Australia have leaped to attack Mayor Molony, and Askenazy asks: "Who is being abused?" by Molony's frank invitation.

What really made me laugh about the article is that instead of showing pictures of two of Mayor Maloney's invitees, the Sun attached pictures of Halle Barry and Christie Brinkley to the article! What a way to sell newspapers!

Mayor Molony and Den Hollander might strike up an alliance. Maybe the faculty and students of Columbia's women's studies department wish to emigrate to Mount Isa. I'm sure that the miners would find themselves enlightened.

My wife and I have had access to an apartment here in the city but sadly we will be leaving this fall or winter. One of the things I will truly miss is my daily New York Sun.

Hamilton on Federalism: The Federalist Papers No. 32-34

The Federalist Nos. 32 and 33 concern taxation. The constitution did not aim to consolidate the states into a single whole. Rather, "the plan of the convention aims only at a partial union or consolidation". State sovereignty would be "alienated" only when the Constitution granted an exclusive authority to the Union; where it gave authority to the Union but prohibited the States from exercising similar authority; and where a power granted expressly to the Union would be contradicted if similar authority were given to the states. The states and the federal government have coequal powers to tax except for exports and imports. Under the constitution the federal government has all powers that are "necessary and proper" for implementing the powers that the Constitution grants it, and "the Constitution and the laws of the United States...shall be the supreme law of the land."

Hamilton asks in No. 33: "Who is to judge of the necessity and propriety of the laws to be passed for executing the powers of the Union?" The national government "must judge in the first instance of the proper exercise of its powers...If the federal government should overpass the just bounds of its authority and make a tyrannical use of its powers, the people, whose creature it is, must appeal to the standard they have formed, and take such measures to redress the injury done to the Constitution as hte exigency may suggest and prudence justify." Hamilton does not introduce the Supreme Court in this discussion.

"...a law (passed by the Union) for abrogating or preventing the collection of a tax laid by the authority of a State (unless upon exports and imports) would not be the supreme law of the land, but a usurpation of power not granted by the Constitution...It is to be hoped and presumed, however ,that mutual interest would dictate a concert in this respect which would avoid any material inconvenience. The inference from the whole is that the individual States would, under the proposed Constitution, retain an independent and uncontrollable authority to raise revenue to any extent..."

In No. 34 Hamilton reemphasizes that "the particular states under the proposed Constitution, would have coequal authority with the Union in the article of revenue, except for duties on imports." But the states have more limited needs for revenue than does the federal government, in Hamilton's view. Future contingencies respecting the federal government would be unlimited, especially because of the threat of European wars. State budgets would likely be no greater than 200,000 pounds, but the potential exigencies of the union were likely unlimited.

He got the the 200,000 pounds part wrong, but forecasted the federal budget with uncanny accuracy. The point is that there is a partnership between state and federal governments, and in Hamilton's elitist view, the central government was to be more dominant than the states. The states need from one tenth to one twentieth of the resources, the federal government from nine tenths to nineteen twentieths. The ratio isn't as lopsided as Hamilton thought it would be, but he anticipated Progressivism nicely.

Thus, he argues for a concurrent jurisdiction in the article of taxation, a partnership between the States and the Union.

Monday, August 18, 2008

Alexander Hamilton on the Second Amendment

Hamilton's Federalist No. 29 is about the issue of regulating militias. On the one hand, it was necessary to form a "well regulated" militia in order to reduce the need for a standing army. Thus, an armed population was necessary in order to form a militia. As well, Hamilton argued that a select corps of militia ought to be formed, and that in order to eliminate the threat that the militia might pose to freedom, it was necessary for the public to be able to stop any attempt of the government to suppress freedom and therefore important that the public at large should hold firearms. This argument is clear in the Federalist 29. Those who argue just one half of the equation, that the arms were necessary to form the militia and deny that they were necessary to defend against the potential for a government assault on freedom are simply uninformed about the history of Federalism and the liberal spirit in which the United States was founded. Arguably the public can and ought to, in the view of the founders, confront attempts to suppress the ownership of firearms. A Supreme Court that adjudicates in favor of the suppression of the right to bear arms has completely lost touch with the Constitution and is no longer a constitutional body.

Hamilton writes in Federalist 29:

"The attention of the government ought particularly to be directed to the formation of a select corps of moderate size, upon such principles as will really fit it for service in case of need. By thus circumscribing the plan, it will be possible to have an excellent body of well-trained militia ready to take the field whenever the defense of the State shall require it. This will not only lessen the call for military establishments, but if circumstances should at any time oblige the government to form an army of any magnitude that army can never be formidable to the liberties of the people while there is a large body of citizens, little if at all inferior to them in discipline and the use of arms, who stand ready to defend their own rights and those of their fellow-citizens. This appears to me the only substitute that can be devised for a standing army, and the best possible security against it, if it should exist."

Those historians and political scientists who argue against American exceptionalism would do well to consider that few other major polities have respected the individual sufficiently to consider private ownership of firearms a bulwark against tyranny. In nations like Russia, France, Germany and Italy, guns are routinely regulated. Backward-thinking mercantilists who have cheered Hitler and Stalin, now advocate for a botched interpretation of the Second Amendment that would enhance their own power and the power of government that represents economic elites to suppress freedom.

WHAT's IN A NAME?

Howard S. Katz wrote this blog here.
8-18-08

In commenting upon the recent (July-August) decline in commodity prices, Bloomberg news service recently reported:

"Commodities, measured by the CRB, are down 20 percent….”

Bloomberg, 8-15-08

This would seem to be an unobjectionable statement, mathematical in its precision. There is, alas, one problem. What is the CRB?

The Commodity Research Bureau was an organization founded in the 1930s by a group of economic types to study the commodity markets. In the mid-1950s, they started to compile an index of the most prominent commodities to do for commodity traders what the Dow Jones Index had done for stock traders. This index was called the Commodity Research Bureau (CRB) Index, and for half a century it served its function well. It told commodity traders what commodities as a whole were doing.

But in 2004, with the founding generation gone, the CRB, now a successful and established organization, had passed into the hands of a new generation. A generation educated in the new way of gathering knowledge. The new generation sought knowledge by hiring a group of authority figures with long and impressive titles to rework the CRB.

I will save you a lot of complicated mathematics and say that the new index they came up with was half crude oil. Each commodity was given a special weighting, and when all the calculations were in, crude oil and its associated commodities (heating oil, unleaded gasoline and natural gas) had a weighting of close to 50%. Since there was a high probability that the other commodities in the index would cancel each other out, the new index pretty much moved up and down with crude oil. The authority figures with their impressive titles had taken away the CRB index and in its place put in its place one commodity. It would have been like taking away the Dow Jones Index and substituting a new index based on GM. GM may be an important stock, but it isn’t a proxy for the market.

Fortunately, the new Commodity Research Bureau knew that they could not just throw out the old CRB Index. That would risk another group picking it up and taking their business away from them. So they kept the CRB Index and changed its name to the Continuous Commodity Index. The new index they called the Reuters/Jeffries CRB Index (hoping that it would be abbreviated to CRB Index and thus confused with the old index).

Of course, if one wants an objective record of what commodities have been doing for the past half century, then one needs to track the same index over that period. It would not be valid to track the DJI from 1956 to 2004 and then switch to GM all the while calling the whole thing the DJI.

In short, the new Reuters/Jeffries CRB is a worthless piece of garbage, and any commodities trader with half a brain will give it no further thought. It was to head off this kind of thinking that the modern CRB gave the new index the name of the old one and changed the old one’s name.

Now perhaps you might say, “Well, these people originated the index. They named it in the first place. They have the right to change the name to anything they want.” The problem, however, is that a name stands for an object. If a young couple has a child, they have the right to call him “Bill.” But if they have a second child 20 years later, they do not have the right to call this second child Bill and rename the first. The character of the first child has become associated with the name “Bill.” People who know him will become confused, and his reputation may (undeservedly) suffer. This is the kind of confusion inherent in the idea that definitions are arbitrary.

Let me take another example. Ever since there has been a science of economics, economists have known what money is. Money was the economic good with which you could buy things. For example, if you want to buy a car and go to the dealer, the dealer will only accept one thing in exchange. If you bring a famous painting to exchange for the car, you will be refused. They will tell you, “Sell the painting for money, and come back and give us money for the car.”

But in the 1980s, Milton Friedman announced a new “money” (which he called M-2), which included short term loans (bank certificates of deposit). This has the same problem as the painting above. It cannot be used to buy things. If you take a bank CD to the car dealer, he will tell you politely to turn it in for money and come back. Soon M-2 had spawned a dozen brothers, up to M-13.

To come up with something like this takes a Nobel Prize winner. Oh, excuse me. I forgot that there is no such thing as the Nobel Prize in economics. It was not one of the 6 prizes described in Alfred Nobel’s will. Indeed, it came along more than 70 years later. Somebody just announced that they were giving a prize in honor of Alfred Nobel. By calling their prize by this name, they were trying to give it the distinction and honor which the prize had acquired over the years. The world press fell for it hook, line and sinker.

The creation of M-2 is a serious problem because in trying to predict a rise in prices, one must take account of any rise in the money supply. If two people cannot agree on what money is, then they cannot predict when prices will rise. Prices only rise as a result of an increase in the economic good which is used to buy things.

Another of my favorite examples is the concept of capitalism. This concept was first used by Karl Marx, and he never defined what capitalism was. For the next century, Marx’s followers would call anything they did not like “capitalism.” For example, Hitler called himself a socialist (as in National Socialist – NAZI), but his leftist enemies called him a capitalist. Adam Smith never used the word. Neither did the classical economists (including Herbert Spencer). I have learned from bitter experience that whenever I hear the word, I am sure to be served up a pastry of confused gobbledegook.

The advantage of simply making up one’s own definition is that you can prove pretty much anything you want. But this is a big disadvantage in the honest search for truth. If you want your ideas to correspond to reality, then you must have accurate definitions of the concepts you use. And since any society has intuitive definitions for all its concepts, intuitive definitions which capture our minds and in terms of which we think, your explicit definitions have to correspond to these intuitive definitions. Otherwise you will confuse the two. Pretty soon you have won the argument and lost the search for truth. (The intellectual world is full of people who “cleverly” start out with formal definitions they know will lead to the conclusion they wish to reach. But these definitions do not correspond to the concept. For example, some sound money types, with whom I am in basic sympathy, defined inflation as an increase in the money supply. They did this so that they could “prove” that inflation is caused by an increase in the money supply. They have been hammering away at this point for over half a century and have still not convinced any of their opponents. If they define inflation as a general rise in prices, they will have a bit more success.)

For example, I define a witch as a woman who has magical powers used for evil. I don’t believe that witches exist. But when I define the concept, I have to put into words the (intuitive) idea of the people in my culture even if they do believe in witches. If I don’t do that much, then I will never be able to convince them that witches don’t exist.

The problem is that modern intellectuals support the arbitrary nature of definitions. It creeps into our culture, and it makes (most) people stupid. For example, do you remember being told early in the year 2000 that the DJI was going to 35,000? It was in all the papers. The New York Times and the Wall Street Journal cooperated in shoving that idea down our throat. Did you buy stocks just before the horrific bear market of 2000-2002? Well, you are allowed a few mistakes, but you are expected to learn from them.

When I first took philosophy courses at Harvard, I was told that all they could teach me was that they didn’t know anything. Hey, wait a minute. The reason I went there in the first place was that they told me they knew more than anyone else. If they couldn’t teach me anything, then what was I paying them money for? How about a class action suit to get my tuition money back?

One of the things I learned about Harvard was that of all the things I learned there, nothing worked. I couldn’t do anything with my “knowledge.” Fortunately, I studied on my own before going to college, and this gave me some ability to question my professors. After college, I continued to study on my own, and now I realize that they are nothing but a collection of frauds.

Unfortunately, this collection of frauds continues to corrupt our youth and dominate our society. They make everybody dumb. We are so dumb that we even buy Books for Dummies. In a previous generation, any book reader would have been offended by such a title, and a book with such a title would not have sold. Today’s book buyer meekly accepts it because he feels himself to be a dummy.

Unlike my college professors, readers of this blog are expected to admit and learn from their mistakes. If it doesn’t work, then it isn’t true.

If you do nothing more than read The Federalist Papers or some of the other works of the Founding Fathers, you realize that the intellectual level has collapsed over the past 2 centuries. We are now seeing the cultural and economic collapses which are the result of this. And if nothing is done to stop it, we will eventually follow the path of ancient Rome.

# # #

Howard S. Katz can be visited at http://www.thegoldbug.net.

The Federalists' Error: National Size and the Evolution of Faction: Progressivism's Hamiltonian Root

Montesquieu had argued that only small republics are possible, but Madison and Hamilton argued the reverse. Their claim was that small republics lead to conflict among factions, but that large size reduces factional conflict. In the Federalist No. 10 Madison argues:

"The question resulting is whether small or extensive republics are most favorable to the election of proper guardians of the public weal; and it is clearly decided in favor of the latter by two obvious considerations..."

The first, in Madison's view, is that because there is a greater absolute number of capable representatives in a large than in a small republic but because legislatures are limited in size, "the number of representatives in the two cases not being in proportion to that of the constituents, and being proportionally greatest in the samll republic, it follows that if the proportion of fit characters be not less in the large than in the small republic the former will present a greater option and consequently a greater possibility of a fit choice."

Also, in Madison's view, "as each representative will be chosen by a greater number of citizens in the large than in the small republic, it will be more difficult for unworthy candidates to practise with success the vicious arts by which elections are too often carried; and the suffrages of the people being more free, will be more likely to center on men who possess the most attractive merit and the most diffusive nad established characters."

However, Madison tempers his argument in the next paragraph by noting that "by enlarging too much the number of electors, you render the representative too little acquainted with all their local circumstances...as by reducing it too much you render him unduly attached to these, and too little fit to comprehend and pursue great and national objects.."

The second factor favoring large scale or size, in Madison's view is "the greater number of citizens and extent of territory which may be brought within the compass of republican than of democratic government; and it is this circumstance principally which renders factious combinations less to be dreaded in the former than in the latter. The smaller the society, the fewer probably will be the distinct parties and interests composing it; the fewer the distinct parties and interest, the more frequently will a majority be found of the same party; and the smaller the number of individuals composing a majority, and the smaller the compass within which they are placed, the more easily they will concert and execute their plans of oppression. Extend the sphere and you take in a greater variety of parties and interests; you make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens."

In the Federalist No. 27, Hamilton argues:

"Unless we presume at the same time that the powers of the general government will be worse administered than those of the State governments, there seems to be no room for the presumption of ill will, disaffection or opposition in the people. I believe it may be laid down as a general rule that their confidence in and obedience to a government will commonly be proportioned to the goodness or badness of its administration. ..the general government will be better administered than the particular governments: the principal of which are that the extension of the spheres of election will present a greater option, or latitude of choice, to the people...And that on account of the extent of the country from which those, to whose direction they will be committed, will be drawn, they will be less apt to be tainted by the spirit of faction, and more out of the reach of those occasional ill humors or temporary prejudices and propensities which in smaller societies frequently contaminate the public deliberations, beget injustice and oppression of a part of the community, and engender schemes which, though they gratify a momentary inclination or desire, terminate in general distress, dissatisfaction and disgust."

First, notice that Hamilton's argument in favor of the expertise of the federal government is precisely the one used by the Progressives from the 1890s through the 1930s in arguing for enhancement of federal power. Hamilton argued that central government would be more rational, and the Progressives argued that centrally placed experts would be able to administer anti-trust and other regulatory systems more rationally.

Naturally, the federalist system works much better than the Anti-Federalists of the 1780s feared. However, it is also true that as the Progressives' centralizing strategy of enhancing the federal government has developed, faction has played an increasing role. Not necessarily the kind of faction about which the Federalists and the Progressives through Herbert Hoover were often concerned such as agricultural versus manufacturing interests, or labor versus management, i.e., broad social groupings, but rather special interests.

Mancur Olson* posed the argument that small rather than large factions or groups are effective in the regulatory process. Large size stimulates special interest involvement in the legal and regulatory process to the benefit of small factions. The is counter-intuitive, and Hamilton and Madison did not have the advantage of as much historical evidence as Olson had. The reason is that as the scope of the republic gets larger, the benefit from special interest lobbying also gets larger. The larger the benefit, the greater the incentive for specific firms and industries to form factions and lobby. Larger size reduces the cost per citizen of rent extraction. Large size makes the formulation for scattered and poorly coordinated factions difficult, but corporations are compact. Corporations did not exist in the Federalist era. Thus, history revealed the opposite trend: the centralization of power in the Federalist era led to special interest factions having greater power than they had in the more decentralized nineteenth century. Of course, the corporate form of organization, which flowered in the late nineteenth century contributed to this, but so did the Progressives emphasis on expertise in a centrally situated state. The economic incentives are powerful enough that special interests are able to overcome the best efforts (if there are indeed such efforts) of centrally placed experts. Moreover, the factions are able to employ experts that are superior to the government's resulting in all too fequent cases of regulatory capture by corporations.

Decentralizing the economy would reduce the incentives for lobbying and raise the costs of lobbying. As a result, the advantage that corporations and small groups that face high benefits from lobbying gain in a more centralized federal system is likely to be reversed. First, the benefit will be on average 1/50th the size it currently is for each lobbying episode. Second, the costs of lobbying will be 50 times greater because there are 50 states. Clearly, lobbying will become more expensive and more complex, making regulatory influence more difficult.

Although Hamilton and Madison may have been right in the environment in which they lived, where there were no large corporations, where the entire US population was less than four million and where benefits from lobbying were negligible by today's standards, in today's world lobbying functions like a competitive auction. To the extent that it interferes with democracy, raising the transaction costs of lobbying and reducing the benefit from each lobbying episode will enhance democracy and limit the private gains at public expense that lobbyists can accrue.

Hamilton on the Limits of Decentralization

Federalism has always meant a partnership among the states and between the states and the federal government. Just as there are certain public goods that are indivisible so that individuals cannot purchase them and so devolve upon government, so there are federal goods that the states cannot divide and pay for individually and so must devolve upon the federal government. Defense and foreign policy are indivisible not only among individuals but also among the states. In an economy with an enhanced level of decentralization as existed in the late 18th and 19th centuries it is beneficial for defense and foreign policy to be handled by the federal government. In the Federalist Papers No. 25 Hamilton wrote this:


"It happens that some States, from local situation, are more directly exposed. New York is of this class. Upon the plan of separate provisions (of defense), New York would have to sustain the whole weight of the establishments requisite to her immediate safety, and to the mediate or ultimate protection of her neighbors. This would neither be equitable as it respected New York, nor safe as it respected the other States. Various inconveniences would attend such a system. The States, to whose lot it might fall to support the necessary establishments, would be as little able as willing for a considerable time to come to bear the burden of competent provisions. The security of all would thus be subjected to the parsimony, improvidence or inability of a part. If the resources of such part becoming more abundant and extensive, its provisions should be proportionally enlarged, the other States would quickly take the alarm at seeing the whole military force of the Union in the hands of two or three of its members...Reasons have been already given to induce a supposition that the State governments will too naturally be prone to a rivalship with that of the Union, the foundation of which will be the love of power; and that in any contest between the federal head and one of its members, the people will be most apt to unite with their local government..."

Thinking of subsequent events, the Civil War and 9/11 for instance, Hamilton's vision was accurate, not just about federalism but about New York as well.

Velvet Hammer of Ironic Surrealism Posts

Mitchell

Just in case you weren't aware. Jerome Corsi brought up the fraudulent COLB on Fox and Friends yesterday morning.

A Freeper posted a transcription.

[Corsi on Fox News 8/15/08]
Jerome Corsi...There are substantive issues...They said I got the incorrect date of Senator Obama’s marriage...what would be really helpful is if Senator Obama would release primary documents like his birth certificate. The campaign has a false, fake birth certificate posted on their website. How is anyone supposed to piece together...

Steve Doocy - What do you mean they have a false birth certificate???

J - The original birth certificate of Obama has never been released and the campaign refuses to release it...

S - couldn’t that just be a state of Hawaii produced duplicate...?

J - No, it’s a, there’s been a good analysis of it on the internet, it’s been shown to have watermarks from photoshop, it’s a fake document that’s on the webs site right now and the original birth certificate, the campaign refuses to produce.

http://freerepublic.com/focus/f-news/2062283/posts?page=30#30

Isn't that rich? ;) From his mouth to the MSM's ears. And of course since Media Matters is all over 'The Obama Nation' story they have published the rumor on their website.

- Velvet Hammer
Ironic Surrealism II

FEDEX TRACKING NUMBER FOR FEC PETITION

The following is the FEDEX tracking number for the petition I have mailed to Donald McGahan, chief of the FEC:

8668 4531 1020

The following is the FEDEX tracking number for the letter I sent to Ms. Janice Okubo concerning her misinterpretation of the Hawaii Revised Statutes and to which she did not respond:

8665 5102 3295

Petition with over 5,400 Signatures Sent to Donald McGahan, Federal Elections Commission

The Federal Election Commission (FEC) petition has over 5,450 signatures. I removed a couple of signatures and comments that were inappropriate or included inappropriate remarks. I am fedexing the petition to Mr. Donald McGahan, Commissioner of the FEC and copying the cover letter to the other members of the commission.

The Fedex Tracking Number for the petition is: 8668 4531 1020

My transmittal letter is as follows:

PO Box 130
West Shokan, New York 12494
mlangbert@hvc.rr.com
http://www.mitchell-langbert.blogspot.com
August 6, 2008

Mr. Donald F. McGahan, II, Chairman
Federal Election Commission
999 E Street, NW, Washington, DC 20463

Dear Mr. McGahan:

I enclose herewith a petition with 5,451 signatures that I circulated 10 days ago. The petition is available for public view at:

http://www.ipetitions.com/petition/Federal-Elections-Commssion/index.html

In addition, the signatures can be viewed online at:

http://www.ipetitions.com/petition/Federal-Elections-Commssion/signatures.html

I called your office on Friday and your secretary informed me that you had not responded to my letter of more than one week ago.

Much of the concern of the 5,450 plus signers of the enclosed petition is the lack of responsiveness and attention that the Federal Elections Commission and the state boards of election have paid to verification of candidates’ identities. There seems to be no governmental body, including the Federal Elections Commission, that is willing to step forward and say that it is responsible for the competent administration of elections. In particular, you should be requiring fingerprint, birth certificate, passport, criminal record, driver record and insurance, credit history and similar information of all candidates under your jurisdiction. I do not understand how you can verify the financial information about and ethics of candidates if the same candidates may be committing identity theft and may not legally be candidates at all as defined under federal elections law. Are you certain that no federal candidate at present has engaged in identity theft?

The petition reads as follows:

The signers of this petition request the Federal Elections Commission and Mr. Donald McGahan, FEC chairman, to take responsibility to verify the eligibility of Mr. Barack H. Obama to be President of the United States. Mr. Obama has refused to produce a physical certified, stamped copy of his birth certificate. An electronically-displayed image displayed by his official campaign website has been alleged to be a forgery. We request that the FEC require Mr. Obama to authorize the FEC to obtain an official copy of his birth certificate and if he does not produce the authorization that the FEC reject his registration as a presidential candidate; that the FEC not monitor his campaign finances during the primary or election; that votes cast for Mr. Obama and reported by the states' boards of elections not be recorded and displayed by the FEC; and that Mr. Obama be considered in violation of 2 USC 437g for filing a false statement on FEC Form 2, as specified on that form.

This letter and my earlier letter, like the petition, have been posted on the World Wide Web at http://www.mitchell-langbert.blogspot.com

Sincerely,


Mitchell Langbert
PO Box 130
West Shokan, New York 12494
mlangbert@hvc.rr.com
http://www.mitchell-langbert.blogspot.com

Cc: Steven T. Walther, Vice Chairman
Cynthia L. Bauerly, Commissioner
Matthew S. Petersen, Commissioner
Caroline C. Hunter, Commissioner
Ellen L. Weintraub, Commissioner

Additional Message to the New York State Board of Elections

Last, week, New York State's Secretary of State forwarded my letter to New York's Board of Elections. I wrote a follow up letter to the Board (James A. Walsh, Douglas A. Kellner, Evelyn J. Aquila and Gregory, P. Peterson) and included the following message:

PS—This letter has been posted on my blog since last week. In addition, I am forwarding a petition with more than 5,400 signatures from around the country to the Federal Elections Commission requesting them to take responsibility to verify candidates’ identities. There seems to be no governmental body, including the Board of Elections of New York State, that is willing to step forward and say that it is responsible for the competent administration of elections. In particular, you should be requiring fingerprint, birth certificate, passport, criminal record, driver record and insurance, credit history and similar information of all candidates for office, state and federal, on any ballot in New York State, and this information should be public record. So far, I know of no body involved in the administration of elections that is willing to require of political candidates the same information that many employers require of their employees, who are also voters. Are you certain that no New York candidate has engaged in identity theft?

Obama's Abortion Lie

Brutally honest (h/t Rick) has a blog about Barack Obama's position on abortion. The gist is that Obama lied about his position on abortion. What? I can't believe it. Obama really lied?

>"So Obama's goal is to reduce the number of abortions, a goal he deems worthy of pursuing:

"'Because the fact is that although we’ve had a president who is opposed to abortions the last eight years, abortions have not gone down.'

"Really?

"The number of abortions performed in the United States dropped to 1.2 million in 2005 -- the lowest level since 1976, according to a new report.

"The number of abortions fell at least in part because the proportion of women ending their pregnancies with an abortion dropped 9 percent between 2000 and 2005, hitting the lowest level since 1975, according to a nationwide survey.

"Well... I'm sure Barack simply made a mistake, after all there's nothing in his history that would suggest that he has anything in mind but to reduce the number of abortions...

"Last week Doug Johnson of the National Right to Life Committee drew my attention to a previously unnoticed January 2008 article by Terence Jeffrey stating Barack Obama actually did vote against a version of the IL Born Alive Infants Protection Act that was identical to the federal version, contrary to multiple public statements Obama or his surrogates have made to rationalize his opposition thttp://www.blogger.com/post-create.g?blogID=2555123713188257297o the IL bill for the past 4 years.

"Since then we have found 2 separate documents proving Barack Obama has been misrepresenting facts...

Read the whole thing here.

Sunday, August 17, 2008

Andy Martin on Barack Obama

I just received the following press release from Andy Martin. Although it is out of date, it makes some interesting claims. Andy Martin accuses Barack Obama of repeated lying. What do you know? :

NEW YORK News Conference:

Obama Panics: Andy Martin's book forces Obama to admit he is illegitimate
ANDY MARTIN
Executive Editor
ContrarianCommentary.com

“Factually Correct, Not Politically Correct”

FOR IMMEDIATE RELEASE:
ATTENTION DAYBOOK/ASSIGNMENT EDITORS
ANNOUNCEMENT OF NEW YORK NEWS CONFERENCE JULY 14, 2008
OBAMA AUTHOR ANDY MARTIN FORCES OBAMA TO ADMIT HE'S ILLEGITIMATE
MARTIN SAYS RELEASE OF HIS BEST-SELLING BOOK PROMPTS OBAMA TO PANIC, MAKE ADMISSION OF ILLEGITIMACY
MARTIN ACCUSES OBAMA OF KNOWINGLY AND PERSISTENTLY LYING TO THE AMERICAN PEOPLE FOR DECADES OVER HIS PARENTS' "NON-MARRIAGE"
MARTIN'S CONTROVERSIAL BEST SELLER STARTS TO IMPACT THE PRESIDENTIAL CAMPAIGN
MARTIN CALLS OBAMA A "GIRLY MAN" FOR USING HIS WIFE TO ADMIT HE'S ILLEGITIMATE; OBAMA'S NO COMMANDER-IN-CHIEF ANDY SAYS
(NEW YORK)(July 14, 2008) Legendary Chicago Internet columnist and Obama author Andy Martin will hold a New York news conference Monday, July 14th to drop the first of several bombs on the Obama campaign: Obama is illegitimate and his parents were never married.

For the past four years one man has made Obama miserable: Chicago writer Andy Martin. Martin's accurate original article is cited as the source of later rumors concerning Obama's Islamic family roots. Martin has relentlessly and accurately investigated Barack Obama's lies.

"Obama knew we were working the 'illegitimate' story, and we were preparing a series of news conferences in conjunction with my book Obama: The Man Behind The Mask," Martin will state. "The Obama campaign also knew we were planning a lawsuit over his illegitimate birth. So they tried to use Obama's wife to do damage control. It was one of the most cowardly gestures in American political history.

"Jesse Jackson does not have to perform surgery. Obama is a 'girly man' who used his wife to ooze out the truth about his lies and his parents' lies. What kind of a commander-in-chief would the cowardly Obama be? Who would follow a leader into battle that was afraid to admit his parents were not married?

"Barack Obama, Senior, and Anne Dunham never married. Obama knows this fact. This is also why he keeps his white grandmother a virtual prisoner; she knows too, and she won't lie.

"Through the past several decades Obama has pretended he 'didn't know' the facts about his illegitimate birth. He thought he could get away with the big lie. And he almost did get away with it. But we kept digging. And we are still digging. We have more to come.

"We plan two weeks of news conferences and other Obama-related disclosures, all timed to coincide with release of my book. The book was mailed to some Washington media last Friday, and Monday afternoon it will be delivered in Midtown to Fox News, MSNBC and others. Demand for review copies has been so heavy we have already had to reorder. We expect the first truckload of Obama books to reach the warehouse early next week, depending on production schedules at the printer.

"The release of my book and attendant publicity has prompted Obama to panic. My book is the literary equivalent of a bone-jarring tackle in football, causing the ball carrier to fumble. Obama has been forced to drop the pretense his parents were married. It is time he told us the truth. His parents were never married, he knew his parents were never married; he repeatedly lied about his lack of knowledge concerning his parents' non-marriage. He should admit that is why he keeps his white grandmother virtually imprisoned and away from any media contact. He should beg the American people for forgiveness. Otherwise, his campaign is bakacht.

"If Obama had simply told the truth, the matter would probably be forgiven. But he repeatedly lies and pretends he 'doesn't know.' The cover-up is always worse than the crime. Jesse knows the truth. That is why Jackson has contempt for Obama.

"I criticized Obama for running a bogus campaign ad saying he grew up with a 'strong family and strong values.' The whole commercial was a lie. His father was a rake who never married his mother, and his mother showed abysmally poor judgment in being impregnated by a married man. Hardly a 'strong family' and certainly not 'strong values.' Quite the contrary. Shameful values is more like it.

"His mother was promiscuous and had a child out of wedlock, in 1961, when that was still scandalous behavior. Is this Obama's idea of 'family values?' Obviously, he has been deceiving the American people and hoping his advertising lies could overcome the truth. He has failed. My book is only the first step in our organized effort to deconstruct the mirage Obama created for the Democratic Party, and is now trying to re-create for the American people. Ironically, we're running a better and more focused campaign against Obama than John McCain is.

"We will have more to say about Obama later in the week," Martin will state.

TO PURCHASE BOOK: http://www.OrangeStatePress.com

ANDY E-MAIL: AndyMart20@aol.com