Saturday, October 10, 2009

Conservatism versus Libertarianism

David writes in the comments section with respect to my post on libertarianism:

>The accounts of Burke, American history, and its values posed here seem terribly flawed.

Conservatism in America pertains to the CONSERVATION of the nation's fundamental values, which inform its governmental structures, the substantive law, and the use and scope of rights. Burke himself said the American Revolution wasn't a complete revolution in the sense that the colonists were merely perpetuating English norms.

Furthermore, your account seems unable to explain the fact that 19th Century members of all parties (Dems, Repubs, Whigs) referred to themselves as dividing along 'liberal', 'moderate', or 'conservative' wings. What were these labels in reference to? True, the Dem-Repub and Federalist parties do not fall along those lines (one couldn't call the Federalists "conservative", but rather pro-business), but their demise still puts the generative period of Left and Right nearly 100 years prior to the stated era, i.e., the end of Jacksonian rule.

Even to say "there is no American conservatism because American institutions are rooted in flexibility and change" is to appeal to a discernible norm subject to alternation, replacement, or complete conservation (as conservativism may inform the nature and degree of alteration).

It is Libertarianism that has a more modern foundation. For example, how, pre-incorporation doctrine thinking, could a libertarian explanation account for some states actualizing their right to a state church?

My response:

The word liberal in the 19th century DID NOT mean what it means today. The current meaning was a bastardization by John Dewey, Herbert Croly and others in the early 20th century. Liberal in the 19th century meant what we call today "libertarian". It meant a more radical commitment to freedom.

There's a letter that Thomas Jefferson wrote where he says that there are two kinds of personalities. One, the "liberal", is robust, the other, "conservative", is phlegmatic. I read that in college and wondered for years what he was talking about. It wasn't until I read Capitalism and Freedom by Milton Friedman that I realized that the meaning of "liberal" was the opposite in the 17th to 19th centuries. Liberal meant belief in freedom, the ideas of Jefferson and Jackson. Conservative meant retaining the old world approach, the state church and monarchy. Hamilton and Adams were more along these lines.

Neither Democrat nor Federalist was conservative in the sense that Burke described it. Nor was Burke correct that Americans retained the institutions of England in the most important ways. It is true that the common law was maintained, but key areas of change were in the much greater degree of liberty of the colonists than England had ever known. The colonists "ran wild" for two centuries, established their own government on republican grounds and really lacked the training to perpetuate English institutions in detail.

In the 16th to 18th centuries, as Bertrand de Jouvenal makes clear in On Power, the English kings had centralized power considerably. Henry VIII and later kings were ruthless in their oppression of religious dissent, frequently using horrific torture and murder. These are the institutions that conservatives would need to say that they are preserving if they are to take Burke's advice. The history of the English centralization of power by the kings and Oliver Cromwell involves several early mass murders, especially of the Irish and of the Irish Protestants, who should have been on the Tudors' side.

I would most certainly call the Federalists the "conservative" party. They opposed the French revolution for economic reasons, but Hamilton was very much in favor of the economic ideas of David Hume, who today would be called a Keynesian, and supporting business. That is not libertarian and it's not socialist. He favored privilege for the rich, which is the closest tradition to the British.

The historical pattern of privilege for aristocracy arose from barbarian conquest. The British "aristocracy" were just the descendants of brute barbarian savages who had occupied Britain, killed the British king and took over land through violence. There is no moral significance to their holding power. The significance is in how the power was overcome by Cromwell and then evolved into greater laissez faire due to the work of Cobden and Bright. As well, the English had the most internal strife of any country, with the War of the Roses leading to the Tudor dynasty. In turn, the killings in Ireland that went on, the religious wars, wars with the Scots, all lead to intensified decentralization and loss of centralized power. England was the butt end of Europe until the 17th century. But the decentralization and lack of central control lead to enhanced experimentation, greater freedom and hence the industrial revolution.

I don't claim to be a great historian. But history too often suffers from extreme left-wing bias, to the point where it frequently is ideological.

In the 18th century Jefferson said that there should be a revolution every 20 years. Unless conservatives reject Jefferson, who did not say this once but virtually every day, I do not see how you can say that there is an American conservatism. The country was based on country farmers who had their own ideas, local churches, a weakly associated culture (Virginians referred to their state as "their country") and religious diversity.

Libertarianism evolved over time, reaching a climax in the 1830s, but continuing on in fairly robust form to McKinley. It is true that John Winthrop and the Puritans who ran Boston would have rejected libertarianism. But it was Jefferson who wrote on his grave the three things he did that he was most proud of (and being President of the United States wasn't one of them):

1. Author of the Declaration of Independence
2. Author of the Virginia Statute of Religious Freedom
3. Founder of the University of Virginia

Note the second. I'm curious whether you believe that the author of the Declaration believed in a state church, or that someone who says that this country had a national church is anything but a crank?

It is true that the states had established churches. But they knew that perpetuation of English quarrels and murder over religion would result from establishment. So they ended it over time.

Friday, October 9, 2009

Ulster County Republican Committee Dinner A Success

The Ulster County Republican Committee Dinner was last night. It was well organized. There were so many attendees that the Hillside Manor had to open up two banquet halls. The guest speaker was Rudy Giuliani, and the Committee was privileged to host his appearance.

Top: Rudy schmoozes with the Republican elite. Second from top: Mario Catalano was master of ceremonies and did a great job. Second from bottom: Robin Yess ponders seating arrangement. Bottom: New York's 22nd Congressional District's next Congressman, George Phillips.

Why Not the Bail Out?

In response to my letter to John McCain, suggesting that he resign, Mr. Rebel writes the following:

>WE ARE GUARANTEED A DEPRESSION IF ALL BANKS FAIL!! which happened before Great Depression.Is this what you support? I certainly do not support Wall Street Fat Cats,But I certainly do not want a depression. If giving loans to banks will advoid this I certainly support it, who wouldn't?

Dear Mr. Rebel: You are right about the depression but need to take two steps back. The problem is not to cover for the Fed's blunders but rather to eliminate the blunders before the Fed makes them. This can only be accomplished by eliminating the money creation power of the banking system and abolishing the Fed, which would end depressions and inflation and increase the productive growth of the economy.

The banking system did not exist in its current form when capitalism first evolved and did not contribute to most of the major progress that capitalism generated. The printing press, the telephone, AC electricity all came about without any need for banking.

The current form of banking was invented in the 1600s by goldsmiths who wrote more receipts for their gold than they had gold. Their receipts had started to circulate like money, and they realized that they could write fraudulent receipts. Eventually, a group of English merchants got together and convinced the king that if they could be given a monopoly on doing this (writing fraudulent receipts) they would write most of them for the king himself. Thus the Bank of England.

The Bank of England was the first central bank and its purpose was to help the king extract wealth from the general population and divert it to himself by counterfeiting, i.e., printing money. This enabled him to fight wars without taxing and tax revolts, which were more common in 16th and 17th century England than today.

There has never been any evidence that printing money "stimulates" intelligent investment. It increases economic activity such as waging war, building unnecessary buildings and the like, but there is no evidence that it accelerates innovation or contributes to the nation's real wealth.

When the Fed creates money it deposits reserves in banks and the banks lend out a multiple of the reserves. Thus, money expands because it is created by the Fed and banks. Anyone well versed in entrepreneurship knows that banks do not lend to innovative entrepreneurs. Rather, most of the banking system's countefeit is lent to the following:

-investment banks
-hedge funds and other large scale Wall Street investors
-large real estate investors
-large corporations

A much smaller amount per beneficiary is lent to small business and homeowners.

Let me give you two examples. In 1999 a firm called Long Term Capital Management almost went under, and the Fed intervened to stop it. The banks had lent LTCM ONE TRILLION dollars. That's right. One firm that employed a hundred people or so had borrowed ONE TRILLION from the money center banks. You try it.

I the early 1980s, a multi-millionaire, Bunker Hunt, was lent $100 billion to corner the silver market by commercial banks in Chicago.

These are just two examples. This kind of lending goes on every day with respect to hedge funds and the like, and it is due to the Fed. Enron would not have existed without the Fed.

Banks do not lend to the poor and therefore the poor are left out. The monetary expansion process of the Fed and the banking system thus involves a wealth transfer from poor to rich. This is necessarily the case because a side effect of the monetary expansion is reduced interest rates. Apologists for the Fed lie and claim that reduced interest rates hurt the rich because they collect less interest. But that is impossible because the chief effect of reduced interest rates is to raise stock and real estate values. Mainly the lower middle class save in money market or bank accounts. The wealthy invest in stock and real estate markets. They therefore benefit from the monetary expansion, and the chief beneficiary is Wall Street because it gains from the churning of markets that the Fed's and the banking system's monetary inflation creates.

As demand for investment bubble assets pushes up prices, the available investors in the stock and real estate investments dries up. Then, there is a crash.

At the point of the crash, banks panic and economic activity contracts. It is true that in order for people to get jobs in the short run, more stimulus would be required. But, if the Fed simply adds more investment to the overvalued stock and real estate markets, then more "mal investment" will occur. That is, the distortion in the demand for stock and real estate gets greater and a further, bigger bubble forms. Money continues to be diverted from innovation into speculation at a greater rate. Employment in non-productive industries (unnecessary real estate construction, for instance) gets greater.

The end result is hyper inflation and widespread poverty, with wealth transferred to the very wealthy. That is the end effect of "liberalism" (in the New York Times sense) and "Keynesian economics". I saw this happen in New York City, as the productive base was driven out in response to ever-escalating real estate prices and the city became a playground for investment bankers who benefit from the fresh Fed counterfeit. Good, productive jobs in industry dry up because economic resources flow to the interests who have first access to the Fed counterfeit.

The way to end this process is to allow the economy to regain its senses by providing subsidies to the unemployed and ending the inflationary monetary growth that stimulates the mal investment. Entrepreneurs, through trial and error, through experimentation, find the best uses for real capital. This takes a long time to happen, though. The pain caused to workers ought to be limited by unemployment insurance. I would have no problem with granting re-training and welfare benefits to unemployed workers hurt by the banking system and the Fed.

The worst possible thing anyone could have done was to allow the same bankers who misjudged investments in sub-prime mortgages not only to continue in their jobs but to be given large subsidies for their incompetent decisions. That is the program that you say you support. Pay trillions to bankers who made stupid investments.

I am curious what you think they will do next. Make smart investments? But they lack the know-how. Rather, they will make stupider investments and demand more support, and you and your children will become poorer than you already are subsidizing them further.

That is precisely the path on which Obama and Bush have taken you. The massive subsidy to Wall Street had the chief effect of supporting Wall Street at the expense of future generations of Americans, especially the poor and innovative entrepreneurs. It also perpetuated the mal investment. It will also ensure that workers' wages in real (inflation adjusted) dollars will continue to fall, as they have since Nixon took us off the gold standard in 1971.

The way to end the inflation/depression cycle is to end the power of the Fed and banks to create money. This would be accomplished by establishing a gold or other commodity standard and illegalizing fractional reserve banking.

In the 19th century America had a mixed commodity based and fractional reserve banking system. Jackson had abolished the Fed, which at that time was called the Bank of the United States, but allowed the state banks to continue to create money. The result was locally-induced inflation followed by depression soon after he abolished the BUS. However, the inflation cycle was not secular as it has been since 1940. Rather, there were ups and downs as local banks created too much money then went bankrupt.

Had Jackson illegalized fractional reserve banking along with abolishing the BUS and establishing the gold and silver standard, the ups and downs of the 19th century American economy would have been eliminated or reduced.

As far as the 19th century economy, there was a secular increase of wages from 1800 to 1970 of 2% per year. In 1889 David Ames Wells catalogued the innovation that had been occurring in the American economy in his book "Recent Economic Changes" and it was breathtaking.

However, in the late 19th century real estate investors (including farmers) and Wall Street as well as big business disliked the inflexible currency that was good for workers and bad for banks and big companies (because they could not get their hands on the counterfeit as Obama and Bush have made sure that they can today). Therefore, despite the public's opposing a central bank in two elections (1832 and 1896) the Wilson administration established the Fed. Wilson, who favored the gold standard and was a gold Democrat, later said it was the worst mistake he had ever made.

If you would like more information on why the theories you've been fed in school and in the media are hogwash, I urge you to investigate Murray N. Rothbard's books such as "Mystery of Banking" and "What Has Government Done to Your Money" and Hans Sennholz's "Money and Freedom". Also, take a look at Ludwig von Mises "Theory of Money and Credit".

The Fed, the boom and bust cycle and the commercial banking system are the essence of the "new deal" and the chief method by which the ultra-rich extract wealth from the productive. Pro-bank advocates have used the claim that inflation is necessary to stop depression, not mentioning that the depression is the result of the bank's inflation in the first place or that the money creation power diverts wealth to the banking system, Wall Street and the wealthy at the expense of the poor.

Well intentioned people like yourself are easily duped by the systemic lying that goes on concerning this subject. In the 19th century the public wasn't fooled by this crap (the Whigs advocated variants of Keynesian economics, and their claims were always viewed as an elitist ideology meant to steal wealth from workers, which is an accurate depiction).

I urge you to educate yourself rather than believing the lies in the newspaper and on television. I'm curious: do you actually believe that the newspapers, magazines and television stations that are controlled by Wall Street, will give you any information that is not in Wall Street's interest?

Wednesday, October 7, 2009

"Even" Libertarians?

Dennis Sevakis just sent me an article that discusses the tea party phenomenon and coming problems for the Democratic Party because of the left-wing extremism of many of its leaders. The article begins:

"The battle for the future of America is in the Republican Party. Conservatives, tea party patriots, taxpayer activists, even free market libertarians need to join the fight over whether we will have a Reagan Republican party, or a McCain Democrat party, or a dysfunctional party whose vote is hopelessly split by third party spoilers. The threat to our country is now more serious than ever. If we don't figure this out, we will lose our country, and the world will enter the New Dark Ages." (emphasis added)

Dennis misconstrues the nature of conservatism. I do not blame him because popular discussion about American ideology is almost universally confused and a-historical. There is no such thing as an American conservatism, with apologies to the late William F. Buckley. The notion that Edmund Burke proposed of retaining institutions that slowly evolve is inapplicable to America, as are the terms "left" and "right".

Burke wrote in a Europe that until the late fifth century had been Roman. Thereafter, barbarian tribes, including the Angles, conquered western Europe, but eastern Rome continued on until the 1400s. Barbarian institutions that in some ways continued Roman customs and in others represented radical breaks were put in place in western Europe. This facilitated experimentation and economic development throughout the so-called "dark ages". By the 1400s major advances in agriculture and technology had been made because of the experimentation. Notice that advances occurred in the place where there was the most decentralization, not where traditions were retained in the east or in China or Arabia, all three of which were more advanced than western Europe until the 1500s.

Burke wrote at a time when the institutions that had descended from barbaric conquest had been gradually centralized and various intellectuals had argued for rationalization of control. The Church of England, for example, had evolved from incursions on the Catholic Church, such as seizure of their land, as well as oppression of Protestant sects, many of whose practitioners fled to North America. There was a European debate between (a) radicals who did not want to preserve monarchy, the established church and aristocracy but instead rationally design new forms of state control (the left), and (b) those who wanted to retain the older forms of institutionalized state control (the right). Since there has never been an established national American church (there were regional or state-based churches but they were in conflict with each other and could not have amounted to a national church); a legally imposed aristocracy; nor an established monarchy here there cannot be a "right" and there cannot be an American "conservatism". America has rejected state control of the kinds advocated by both left and right in Europe, at least until the late nineteenth century. The terms left, right and conservative are inapplicable here. Their use is an ideological sleight of hand by advocates of state control, who pretend to have a "progressive"/"conservative" debate.

When the Protestants came here, in both Massachusetts and Virginia, they had been told to adopt the common field communist system that had evolved before and after the barbarian seizure of Roman manors. The colonists tried the notion of common ownership and learned that communism does not work and leads to starvation. Hence, they established property rights on Lockean grounds and broke with their European past. The presence of abundant free land here meant that differences of religious doctrine, such as occurred in Massachusetts when Roger Williams left Boston and founded Rhode Island, could be settled by westward expansion. There was evolution, of course, but there were frequent breaks, new establishments and radical departures throughout the colonial period.

The American experience continued the gradual decentralization and experimentation of post-Roman barbaric Europe. Socialism is an attempt to re-institute a common culture and regulation of the resulting diversity, i.e., to re-institute Roman centralization on barbarian diversity and decentralization. Socialism can take many forms. One is to select institutional characteristics prevalent in past years, say that all people should be compelled to adopt them, and then call yourself a conservative. In the American case this often has the characteristics of a fictionalized past along the lines of Washington Irving's History of New-York from the Beginning of the World to the End of the Dutch Dynasty, by Diedrich Knickerbocker. Irving created a fictionalized author and wrote a fictionalized history of Dutch New York. Similarly, "conservatives" frequently create a fictionalized past in their minds and argue that the fictionalized past should be reimposed. This is virtually the same thing as socialism, which involves invention of some new set of institutions, saying that all people should be compelled to adopt them, and then calling yourself a "progressive". Conservatism and progressivism are the same thing, especially given that most conservatives lack historical knowledge and so lack a clue as to what they think they are conserving. Both viewpoints are violent and suppressive, and both involve variants of "socialism in one country" or "national socialism" as John Lukacs points out.

Both conservatism and socialism had their birth in America in the late nineteenth century in response to the growth of big business. Before that, all Americans were libertarians. Some were less libertarian and more in favor of big government, and these were viewed as conservatives. Others were more libertarian and more in favor of small government, and these were viewed as radicals like Sam Adams. Almost all Americans agreed in (a) free markets; (b) the right to bear arms; and (c) fundamental personal freedom such as the right to property. There was disagreement about central banking, mostly until the 1830s and in the 1880s and later.

The birth of conservatism occurred at the same time as the birth of socialism. Both conservatism and left-wing socialism are invented reactions to big business. Big business posed new questions. In response to it, some advocated laissez-faire, and until the late nineteenth century this was the mainstream viewpoint. Some, like Edward Bellamy in "Looking Backward" advocated socialism. And some, like Theodore Roosevelt, argued for big government intervention in the economy to manage corporations in the corporations' and supposedly the public interest.

The "conservatism" of Roosevelt was a response to socialism and was largely socialistic in strategy and concept. Someone like Robert M. La Follette, Sr., Senator from Wisconsin, Woodrow Wilson and Ida Tarbell, muckraking author of History of the Standard Oil Company were called "progressives" but were basic libertarians who fell into the "progressive" camp because they were confused and awed by the growth of big business. When Progressivism fulfilled its socialistic premise and became the "new deal", (most of Franklin Roosevelt's policies had been advocated by Theodore Roosevelt) many of these people who were still alive, like Tarbell, pulled back from the socialist movement that came to dominate the Democratic Party. Thus, the distinction between conservatives and socialists. Conservatives are either pro-business socialists, like Theodore Roosevelt, the American Enterprise Institute, Wall Street Republicans and Nelson Rockefeller, or they are confused libertarians.

There is no American conservatism because American institutions are rooted in flexibility and change (before the meaning of the word change was corrupted by Barack Obama). To be conservative is to argue for flexibility and change. But the two concepts are contradictory.

Thus, when someone calling themselves conservative uses an adjective like "even" with respect to libertarians when discussing a future American conservativism, I must conclude that he either is ignorant and confused or a socialist.

Tuesday, October 6, 2009

An Open Letter to John McCain, Requesting His Resignation

Dear Senator McCain:

I donated $500 to your presidential campaign. I now ask you to resign from political life. Your support for the fraudulent "bail out" of Wall Street, insurance companies and commercial banks weeks before last November's election demonstrated incompetence. Common sense ought to have told you that a former Goldman Sachs employee, Henry Paulson, was not an impartial referee who had any interest in taking the side of the American people. Nor does the Federal Reserve Bank. Americans once understood that central banking is inherently corrupt. You seem to have failed to read the lessons of Jefferson and Jackson, relying instead on incompetent university economists on Wall Street's payroll.

For too long corrupt special interests have increasingly manipulated the American economy. The "bail out", which you supported weeks before your presidential election, was the most extreme pandering to corrupt interests in the nation's history. I do not consider you to be an unethical man. Your war record is magnificent and you have done extraordinary service to the nation. However, you have lost your mind or lack the judgment to play a leadership role in the Republican Party.

We moderates want to reduce the scope of government. Only extremists such as yourself can look at a 50% tax burden on the American middle class and see the current situation as "mainstream" or "moderate". When a corrupt, incompetent government, such as exists in Washington, the states and localities today, forces the mainstream of American taxpayers via threat of violence to give up 50% of their income in order to subsidize one scam after another, culminating in hundreds of billions of dollars of handouts to inept financiers who are already on the dole every year via the Federal Reserve Bank, I must conclude that the government is insane. Not just extreme, insane. Since you have supported these insane, extremist policies, I urge you to resign from office in the national interest.


Mitchell Langbert, Ph.D.

Monday, October 5, 2009

Current Projects

The National Association of Scholars called this morning and asked me to blog on their new Wordpress blog. The NAS is an organization for conservative academics. I will start blogging there. I also blog for the Republican Liberty Caucus and have been writing a column for the AI-CPA Career Insider newsletter.

Moreover, I had lunch with Robin Vaccai Yess on Saturday. Robin is the executive director of the Ulster County Republican Committee. Robin asked me to put together an e-mail newsletter for the Ulster County Republicans and I will be working on that.

I am currently finishing a paper on the tenure of university presidents. Marc Fox and I have been working on a paper on university presidents' salaries that is nearly done. I also have some additional research projects, including a book, to get cracking on.

So my plate is full.

Pondering the Imponderable

Robin Vaccai Yess's and my Op Ed "Pondering the Imponderable: Salaries of Ulster County Town Supervisors" appeared yesterday (Sunday, October 4) in the Times Herald Record:

By Robin Vaccai Yess and Mitchell Langbert
Posted: October 04, 2009 - 2:00 AM

Almost a year ago, the Times Herald-Record concluded that there is no rhyme or reason as to why certain town supervisors in the region earn more and other town supervisors earn less. In Ulster County we have uncovered a reason: Part-time town supervisors earn less than full-time. This seems like restating the obvious, but it isn't.

Why some town supervisors are part-time and others are full-time remains a mystery of imponderable proportions. Taxpayers might expect that part-time town supervisors are in smaller towns and full-time supervisors are in larger ones. But that is not so. Whether a town supervisor is full-time or part-time is the single most important determinant of Ulster County supervisors' paychecks. But part-time and full-time status is not significantly related to factors like numbers of town employees and town budgets.

There is no statistical difference in town budgets, household income or numbers of employees in towns with part-time versus full-time supervisors. But in Ulster County, in towns with part-time supervisors, supervisors earn an average of $24,775 in salary. In towns with full-time supervisors they earn $36,876. Budgets, numbers of employees and household income are all higher in towns with full-time supervisors, but at less than the margin of statistical error. Only the difference in salary is greater than the margin of error.

We obtained data on the salaries of Ulster County town supervisors as of Jan. 14 by sending Freedom of Information Act requests to all of the towns in Ulster County. The highest paid Ulster County supervisor is in the Town of New Paltz ($47,870). The lowest paid is in the Town of Kingston ($10,920).

Town supervisors' salaries do correlate with town budgets and populations. But we tested whether budgets and town populations are more important than part-time versus full-time status with a statistical model where part-time status serves as a control. We found that holding part-time/full-time status constant, population, budgets and household income do not have an effect on town supervisors' salaries in Ulster County. Only part-time versus full-time status matters significantly. Our model explains 58 percent of the variability in town supervisors' salaries but the only variable that matters is part-time versus full-time status.

Whereas Olive had a budget of $2.8 million and a population of 4,579 and Ulster had a budget of $14.0 million and a population of 12,550, Olive paid its supervisor $46,350 while Ulster paid its supervisor $45,000.

Almost as imponderable is the amount of health insurance that the towns provide their supervisors. The Town of Kingston does not offer health insurance coverage, while eight other Ulster County towns provide 100 percent of health insurance coverage. In between, five towns provide 82 to 85 percent of health insurance coverage.

We checked whether there are differences among the towns that pay 100 percent of coverage and those that do not. There are no differences in budgets, household income or the number of town employees between towns that cover 100 percent of health insurance and those that do not. However, there is a weak difference in salaries between towns that cover 100 percent of health insurance and those that do not.

We also looked at whether full-timers are more likely to have 100 percent health insurance coverage than part-timers. Half of the part-time town supervisors and 63 percent of the full-time town supervisors get 100 percent medical coverage. The difference is less than the statistical margin of error.

Town supervisors' salaries are likely to be of interest to voters during the coming election year. Many area residents are out of work, and many will have trouble footing their property tax bills. Yet, it will be difficult to get a logical answer as to why some town supervisors are paid more and others are paid less. Voters in districts with full-time town supervisors might ask why they need a full-time supervisor while other towns, equal in size, population and household income, do not need one.

Robin Vaccai Yess is a self-employed certified financial planner and is executive director of the Ulster County Republican Committee. Mitchell Langbert is an associate professor at Brooklyn College and serves on the Town of Olive Republican Committee.

The Fog of Olive's Budget

Berndt Leifeld, Town of Olive Supervisor, released the Town of Olive budget today in the Town of Olive office in West Shokan, next to Davis Park. Several members of the Town of Olive Republican Committee were present as well as Mr. Leifeld (D), Town Clerk Sylvia Rozelle (D), Town Boardsmen Peter Freidel (R)and Bruce LaMonda (D), and several concerned citizens.

In 2004 Errol Morris released Fog of War, a two-hour interview of Robert McNamara (D), co-architect of the Vietnam War. The term "fog of war" relates to the inability of military commanders to avoid error. Even the best general will inadvertently lose men because of tactical or strategic blunders.

When it comes to government budgets, there is a different kind of fog from the fog of war. In a military setting, fog is unavoidable because it results from the technical, perceptual and other difficulties associated with the use of military violence. In the case of government budgeting, the fog is deliberate. Both parties have budget fog machines that blow aplenty so that budgets barely can be seen, and the Town of Olive is no different. Berndt Leifeld and his Democratic colleagues are ethical and act in good faith within the boundaries that government permits. Mr. Leifeld and Mr. LaMonda were supportive of questions and forthright in their answers. However, the fog has set down.

In particular, and this is consistent with required practice, the amount of reserve dollars on deposit is not mentioned. I am told that the amount of reserves that the Town of Olive is holding is allegedly in the seven digits, as much as two thirds of the Town's total tax bill of $3.3 million. This would be astonishing if true. We are in an environment where holding cash poses long term risks. Interest rates are at all time lows. The Federal Reserve Bank has taken a potentially inflationary stance, doubling the nation's bank reserves a year ago. Although deflation is possible, large cash positions are as much a crap shoot as investing in commodities.

Mr. Leifeld indicates that interest rates on the reserves are down 95%. According to the revenue line item "interest and earnings" on page 18, the amount fell from $28,000 to $5,000. Is this the time to be holding a cash surplus instead of cutting taxes? Usually, investors look for high returns, not low ones.

The budget indicates a reduction in expenditure on buildings from $69,000 to $52,000. This may be a costly reduction. If buildings are not maintained, then they have to be replaced. For too long the State of New York has allowed infrastructure to deteriorate while it has played budget games, squandering future generations' birthright for short run political gain and self indulgence. It would be a pity if the Town is saving $17,000 and in exchange spends millions to build new buildings.

The construction of new buildings in the coming years hardly makes sense. It is much better for the environment and more cost effective to rehabilitate existing structures, to include new extensions, rather than greenfield. Should the town be charging ahead with (a) current high tax rates while (b) cutting services simply to (c) build new town offices?

Although appropriations for highway general repairs are increasing by $276,212 or 4.6%, I am told that not all of this year's budget has been spent. Allegedly, the highway department was told that it must not use the full budget for this year but rather return funds of as much as $200,000 to add to the new building reserve fund despite deteriorating roads. For example, Piney Point Road is a roller coaster at the intersection of Route 28.

The budget reports that personal services costs for the Town Board, Justices, Town Supervisor, Assessors and Town Clerk, have increased. This is puzzling beause according to the Democratic Party media we are in a deflationary economy. Are we mixed up, or is it the New York Times, which keeps talking about recession, depression and deflation? If there's deflation, why are costs rising? And if there's inflation, why did the Democrats spend $5 trillion on bailouts, handouts to the ultra-rich.

Mr. LaMonda states that Workers' Compensation costs have escalated due to increased claims. Mr. Leifeld notes that the Town highway employees' labor agreement forces a four percent wage increase that is unavoidable. But social security is not going to increase this year, and low-income retirees cannot necessarily afford new Town buildings.

Sunday, October 4, 2009

I Made A Mistake Donating to The McCain Campaign

Last year I donated to the McCain campaign. When I did, I did not realize that McCain is a Roosevelt-Rockefeller-Bush Republican, i.e., supporter of incompetent big business, friend of government waste, stupidity and opponent of the free market. My neighbor, Clayton, remarked today that McCain aims to take over the Republican party in order to advance his extremist views.

I made a major blunder last year contributing to McCain. I have resolved to focus on local and county elections, and possibly state elections if a reasonably enlightened candidate who aims to slash government spending by 10% or more decides to run. The current Republicans on the national level are moronic socialists, essentially Democrats, and I have no interest in them. Unless a good candidate for president appears, in three years my money will go to pay off my car loan. I can't afford to contribute to loot-and-spend reactionary extremists like McCain.

Mass Media Anxiety Syndrome: A Conservative Neurosis

For many decades conservatives have complained about media bias. Media bias is nothing new. In the early days of the republic the newspapers were affiliated with parties. There were Democratic Republican newspapers and there were Federalist newspapers. In the 19th century that continued. The New York Times was, in the 19th century, a Republican newspaper. No one complained that Republican newspapers were biased toward the Republicans and Democratic newspapers were biased toward the Democrats. Rather, it would have been strange if the newspapers tried to be objective.

In the 1890s Adolph Ochs bought the Times and claimed to have invented a new approach to news: objectivity. The Times would state the facts. Of course, as Kurosawa's classic Japanese movie Rashomon shows, there is no such thing as objectivity. There is such a thing as falsifiability, which means that it is possible to find evidence to prove a theory wrong. But asking human beings to be objective in the sense of shedding all psychological biases, selective perception, perceptual distortion, fundamental attribution error, prejudice and many other biases that riddle all perception is asking them to be gods. People are not gods, and the New York Times is not objective.

Perhaps we can say that, like many other forms of snake oil that were for sale in the 19th century, the New York Times is one. It claims to sell you objective news, but its claim is fraudulent. Either that or all of cognitive psychology, philosophy and organizational theory for the past 75 years has been mistaken.

So the New York Times, the television stations and magazines are biased in favor of the Democrats. That is not very surprising. What is curious is that at some point all of the Republican newspapers, including the Times, became Democratic, and none of the Democratic newspapers became Republican. Part of the reason may be that the Democrats assumed a majority in the 1930s, at which point the labor laws drove up costs for less successful newspapers. Because the Republican papers were less successful, labor law had the unforeseen effect of shutting down many Republican newspapers such as the New York Herald Tribune. Whether that is so or not I don't know, but one outcome of the New Deal seems to have been to strengthen the Times, which had supported the same policies. In turn, many regional newspapers either copied the Times and became Democratic or else because a majority had turned Democratic Republican papers found it difficult to survive.

A similar explanation applies to television stations. An organization theorist named Arthur Stinchcombe pointed out that when organizations form around the same time they frequently have similar structures. Like architecture, organizational policies reflect period fads. The television networks first succeeded in the 1950s (although their parent radio networks first succeeded in the 1920s). By the 1950s the nation was largely "Progressive" and social democratic. Hence, these ideas have been dominant in the television world as well.

Another explanation might be the aggressive occupation of American cultural institutions by left wingers. This has been especially true of universities. As journalists increasingly came to be trained in American universities, they began to parrot the ideology in these benighted institutions. Thus, it may be that socialist journalism parallels increasing socialism in the professions and business.

I continually hear and see conservatives and Republicans complaining about the bias in various Democratic Party organs, whether it be the Times, PBS, the networks, etc. The widespread anxiety about Democratic bias is misplaced. The media is Democratic, so bias is to be expected. Are we outraged that Ahmadinejad doesn't like us or that China is obsessed with Taiwan? I think not. Becoming agitated every day about the Democratic bias of Democratic news sources is neurotic, a neurosis that I call Mass Media Anxiety Syndrome, MMAS.

As with any anxiety-related disorder, one treatment is to act to overcome the anxiety. In other words, Republicans and conservatives should not be complaining about the Democratic bias of Democratic news sources, which are not, never have been, and cannot be objective. Rather, they should be asking themselves the following questions:

1. Why do I read Democratic Party news sources? If all Republicans stopped reading the Times, it would likely fold, or else be severely crippled. If you are a Republican or a conservative, why are you reading the Times? You help the Democrats by reading the Times.

2. Why are there so few Republican news sources? I can think of Reason Magazine, City Journal, National Review, and one or two others. Why haven't the Republicans found a way to get funding for Republican newspapers and radio stations?

One of the contributing causes of MMAS is likely intellectual laziness. I do think that the Republicans have been intellectually lazy in failing to support Republican news outlets, and lazy about finding a way to start mass media outlets of their own.

In other words, don't get mad, get even.