COS Amendments – My First Five

Three years ago, before Levin published his Article V book called “The Liberty Amendments”, I published the blog below so I could see how his proposals compared to mine after they were published.  As it turns out, only two were similar – the Balanced Budget Amendment and Term Limits.  The other three are worth a look and I plan to submit write separate blogs/papers about each in the coming weeks.  I’ve said this many times – if you genuinely interested in restoring our freedoms, it is through the Article V process, and the Convention of States project is our best chance to make that a reality.

The Liberty Amendments – My First Five

We’ve been begging our leaders for specifics on what to do to make a difference. Glenn Beck’s events (Restoring Honor, Courage & Love) represent a huge step towards getting our heads & hearts straight about the morality of our cause.  Others have also made contributions, but Levin’s proposal, The Liberty Amendments, deserves specific recognition – it is the first path to restore our founding ideals, based on the Constitution itself, that we can all contribute to, that has a realistic chance– if we pledge “our lives, our Fortunes, & our sacred Honor” to the success of the Liberty Amendments.

Our kids and our country deserve no less.

It will be a difficult climb but I believe the country is ready for a tangible solution to the threats our country faces. Make no mistake; we’re in a race against time and a ruthless progressive cancer. With a $17 trillion national debt, and $60 trillion more in unfunded liabilities, cities like Detroit going bankrupt and states like California threatening, we must right the American ship as soon as possible. Once a financial crisis occurs, it may be impossible to counter calls for a more powerful central government – especially if people go hungry or start blaming the usual suspects (capitalism, tea partiers, etc.)

One last comment before I summarize my ideas for the first five amendments. I believe it’s important for the leaders of our movement to rally behind these amendments and the Article V process.  We all have a different list, but mine would include, in addition to Levin, among others, Glenn BeckYaron Brook, Sen. Rand Paul (and his father Ron), Sen. Ted Cruz (& his father Rafael), Sen. Mike Lee, Mia Love , Rev C. L. Bryant and GMU’s Walt Williams.

Everybody has different ways of contributing to the cause of freedom. I hope that all of them discuss Levin’s book, advance the idea and help pass the Liberty Amendments. Sometimes silos are created where no one wants to promote what their “competition” is doing – that must not happen.  I would encourage all of them to be generous with their comments and their air & face time.  However, so far, I haven’t heard one word of the idea, or Levin’s upcoming book, from these folks – perhaps they’re waiting for the book?

As you can see from this post, I think it’s a mistake to wait. In fact, Levin’s idea motivated me to start blogging again for the first time in years.  It will be my 100thpost, with over 26,580 visitors, and I can’t think of a better way to celebrate #100.  Not only is it fun to see if my ideas for reform match up with Levin’s, but until his book comes out on August 13, I hope and pray my ideas will encourage others to come up with their own – can there be too much engagement in the cause of freedom? Of course, Levin’s specific amendments will be very important, but just his idea has lit the torch – by urging us to look within the Constitution itself for how to repair our Constitutional Republic.

Everyone has ideas – my first five are listed below and I’ll follow-up with more details on each one – but the main thing is to jump in and start, time’s not on our side.

The Liberty Amendments – My First Five

1. Voter Campaign Finance (VCF)

  • Limit campaign contributions to those who are registered voters that can vote for the candidate. For example, I live in VA 5th Congressional District – Robert Hurt’s my congressman. If he ran for House, under this Amendment, he could only receive campaign contributions from registered 5th district voters (easily checked against existing voter rolls) – no unions, corporations, out-of-district fat cats, PACs, etc. If you don’t have a legal right to vote in 5th district, you can’t influence the 5th District election.

2. Balanced Budget Amendment (BBA)

  • Cut Cap & Balance (HR 2560) was a great idea that died in the corrupt halls of Harry Reid’s U.S Senate – but just barely (51Ds-46Rs) – a real life example of the wisdom of Levin’s idea – Congress will not reform itself, we must go around Congress. My twist on Cut Cap & Balance is this: Limit federal revenues to 18% GDP, spending to 17% GDP limit and the remaining 1% for debt relief and, after that, an “Emergency Fund”.
  • In case of war, Congress can authorize spending to exceed 18% only if two-thirds of Congress approves. The 1% of GDP (of the 18% collected for revenues) would go to pay down the national debt (about $16 Billion/yr at current GDP) and, once debt free (woohoo!!), use the 1% for an Emergency Fund – to pay for declared wars and disasters but only if two-thirds approve “withdrawals” – restoring Congress’ power to limit wars with their Constitutional funding power.

3. Term Limits

  • This has been around for a while but my version would limit service in Congress to just 12 years total. This could be three House terms (3×2=6) followed by a Senate term (1×6) or two Senate terms (2×6=12) or other combinations. The main idea is to not allow folks to make a career out of DC politics while allowing them enough time to be effective.

4. Law Limits

  • Obamacare was over 2700 pages long. The recent immigration bill was 1200 pages. Neither of these very devastating bills, that affect all of U.S., has been read by their supporters or detractors – that’s not a democracy, that’s a marketing campaign. Just vote on one or two issues at a time. I don’t know a specific # – others can work that out – but perhaps < 10 pages.

5. Pardon Accountability

  • Require Presidents to prioritize pardons (100 or less) and announce their last pardons at least 90 days before general election. Although an outgoing POTUS can’t be held accountable, voters can hold parties accountable. I predict the outrages from Obama’s pardons – both the # and who – will force this Amendment to top of list.

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Levin’s Liberty Amendments

Back in July 23, 2013, I first wrote (on a previous blog of mine) about Levin’s ambitious Article V project.  Given the recent rise of the Convention of States, I wanted to reprint the article below:

On July 10th, in the first hour of his radio show, Mark Levin (Constitutional Lawyer, A Tea Party Leader) announced the name of his new book, to be released August 13, is “The Liberty Amendments: Restoring the American Republic”. I’m taking a class on the U.S. Constitution, so I knew instantly that he was referring to Article V:

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States or by Conventions in three fourths thereof…

In America, we have what political scientists call a “democracy deficit” – this occurs when a governing body claims their legitimacy is derived from the consent of those they govern, yet the governed have lost the ability to hold their government accountable. This term usually refers to, in political science literature, the illegitimacy of the European Union because it claims broad sweeping powers –the Euro / monetary policy, for example – yet the average European is effectively disconnected from EU policymakers. THAT is exactly what the progressives have done to America. Some examples:

Obamacare passed despite the fact a) no one read it & b) 59% of public opposed it & just 39% approved it. (so why did it pass?)

Although a new GOP governor was elected in Virginia in 2009, by huge margins, both of our U.S. Senators (Democrats) maintained their support for Obamacare.
Over 84% want English to be America’s official language –no vote in Congress.
In 2010, because of the tea party surge, the GOP gained 63 seats in the U.S. House of Representatives, recapturing the majority, the largest seat change since 1948, largest for any midterm since 1938 and yet not one member of tea party caucus was elected to Speaker or given any leadership positions.

In addition, those historic 2010 victories gave the House a mandate to repeal Obamacare and cut spending – yet under Speaker Boehner, members were pressured to approve Continuing Resolutions (CRs) that dumped trillions more debt on our kids & continued funding for Obamacare, Obama’s vacations, DHS purchase of 1.6 Billion rounds of Ammo and many other bad programs Why?
So, clearly, the American people feel untethered from their elected representatives…and the feeling is mutual!! The President, Congress, leaders of both parties are ignoring the wishes of the people except, strangely, the Supreme Court seems sensitive to “changes in public opinion” – but their supposed to make decisions on the facts, the law and THE CONSTITUTION!!! So, the voice of the people matters only when they happen to line up with the political elites, which means they don’t really matter at all.

The problem that has perplexed the Tea Party, and others who wish to restore sanity to our political process, is how to “Clean out the barn!”, as Ross Perot said, when reforms of Congress must be approved by the same Congress that needs reform. Asking Congress to reform itself is like asking criminals to turn themselves in. There’s a reason that seven of wealthiest 10 counties in America are within commuting distance of Washington, D.C..  Millions make a very good living off this corrupt system and they’re not going to let anyone derail the gravy train anytime soon.

So, what to do? Many of U.S. ask our intellectual leaders and, after “call your congressman” lost all its credibility, even our leaders were stumped. We tried to “vote the bums out” in 2010 – no luck. Even worse, in a blatant act of real voter suppression, we now discovered the IRS was being used to punish tea party groups, in the run-up to the 2012 election. We also discovered the NSA is being used to gather information about US including cell phone records, emails, Facebook postings, etc.

When confronted with the ugly truth of spying on all US Citizens – talk about your general warrants – Congress circled the wagons and claimed, simultaneously, that nothing new had been revealed by Edward Snowden, and Snowden had put the country in grave danger – how can both be true? Nevertheless, because all that FSA Court & NSA activity is being done in private, President and Congress asked that we trust them. Well, we don’t – as Obama himself admitted June 7th, when asked about the revelations:

That’s not to suggest that, you know, you just say, trust me, we’re doing the right thing, we know who the bad guys are… that’s not how it works because we’ve got congressional oversight and judicial oversight. And if people can’t trust not only the executive branch but also don’t trust Congress and don’t trust federal judges to make sure that we’re abiding by the Constitution, due process and rule of law, then we’re going to have some problems here.

Yes, Mr. President, indeed, we have “some problems here”. The distrust of government – at all levels, in both parties – is creating a serious problem. Which brings us to the beautiful simplicity of Mark Levin’s idea about the Liberty Amendments: using the 2nd part of Article V, we can exclude the folks we don’t trust anymore, the President and Congress, from the solution. Look again at Article V – there are two ways to submit amendments to states for ratification: 1) approval of two-thirds of Congress (not likely) or 2) approval from two-thirds of state legislatures. So far, all post-Bill of Rights Amendments used Option #1. Mark Levin, rightly, says it’s time to use Option #2. In fact, it’s the only option that can be used for meaningful reforms.

The good news is that, as a result of the tea party work in the 2010 elections, the GOP gained over 680 state legislature seats and now have unified control — meaning both chambers — of 26 state legislatures. Two-thirds of 50 states means we need about 34 total state legislatures to “call a Convention for proposing Amendments” – let’s call it the “Proposal Convention” –others will come up with other names, but I don’t want to call it a “Constitutional Convention” – Levin has made the point, rightly, that unlike the original Constitutional Convention, the Proposal Convention will not place amendments in the Constitution, but will propose amendments for the states to consider for ratification. Only if three-fourths of the states approve each proposed amendment, separately, would that particular amendment be added to the Constitution. In his book, the Liberty Amendments, Levin says he will cover the history of the amendment process as well as the constitutional arguments related to the amendments that Levin will propose. I can’t wait – not only is Levin brilliant, but on this subject in particular, it seems he was born to do this – argue reforms to restore liberty for U.S.

Indeed, Levin, a constitutional lawyer, has indicated he has already drafted the legal language for each of his proposed amendments. Before any amendments can be considered, the Proposal Convention itself must be called from 34 state legislatures. Fortunately, the large population states that are desperate to keep feeding at the federal trough – California, Illinois, New York, Michigan, etc., can’t stop this process. As long as 34 states approve, the Proposal Convention goes forward. I predict that, once the ideas catch fire, momentum should get us to the magic number 38 for ratification.

MarkLevin_LibertyAmendments_Cover__33917.1373489734.251.374

Of course, Levin’s book will cover all this with much greater detail, citations and research than I’m capable of. In particular, I’m curious to find out, in Levin’s book, which ideas he argues would make good amendments, and what our founders, like George Mason, had to say about this process. I am very excited to dive into the new book and see which areas I can help advance. I’ve already ordered a signed “deluxe” copy for myself and a copy for my kids in anticipation of Levin’s just announced book-signing tour to promote the book and the cause of freedom over tyranny. I plan to attend the book-signing August 24th at Tyson’s Corner, VA. Maybe I’ll see you there?

Perhaps, it goes without saying that Article V Amendments represent our last best hope of “Restoring the American Republic’s” peace and prosperity.  As such, I urge all patriotic Americans to support the COS Project  (@COSProject) – one of my favorite “Liberty Projects

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An Historic Loss for Libertarians?

Back in the Fall of 1982, as a young IT student at Golden Gate University in San Francisco, I had the distinct pleasure of learning economics from Joseph Fuhrig.  Professor Fuhrig happened to be running for the U.S. Senate, as a Libertarian, and garnered 105,000 votes, including mine, that November.  Looking back, I consider myself very fortunate to learn free-market laissez-faire economics instead of the typical Keynesian government-intervention version of economics taught in the “top” schools of the day.  My professor taught us that many of the problems that major party candidates would claim justified government intervention, were actually caused by government intervention. Professor Fuhrig’s passion for free markets and freedom generally was contagious.  Later I would join the Libertarian party – five years before Ron Paul – and in 1984 cast my vote, in my first presidential election, for David Bergland, author of Libertarianism in One Lesson.

Over the following two decades, I left college to pursue success during the prosperity of the 1980s – first as a stock broker and later as an IT project manager.  I also raised two amazing kids and like most Americans did not spend much time following politics.  I usually voted for whatever candidate seemed most likely to restore the profound vision of our founding generation – what I call Tenth Amendment Federalism.  It’s a vision Alexis de Tocqueville wrote so eloquently about when he observed in the 1830s that America was ““happy and free as a small people, and glorious and strong as a great nation.”  Tocqueville understood that the Constitution, by limiting the federal government to truly national issues, all other matters are “reserved to the states respectively, or to the people”, you achieve the most important checks and balances, that between the federal and state governments.

I’ve now returned to school to complete my college education.  I major in economics and constitutional law and plan to prusue an Economics PhD/JD.  Everything I’ve learned has only confirmed the wisdom of our constitutional framework and the free market principles I learned first from Libertarian Joseph Fuhrig.   While I had great personal success, the Libertarian Party has not met those heady expectations of the early days.  Listening to professor Fuhrig, one might come away feeling like most Americans have been misled by the major parties and if someone would only point this out – a Libertarian President would shortly follow.  That has not happened.

For one thing, it’s very hard to pierce the misconceptions learned in our public school system.  The typical American high school student learns that corporations and capitalism are an evil that must be contained and nothing written by our rich, white, male founders is worth paying attention to – let alone using as a basis for national policy.  Rather, in all things, whatever the majority wants, the majority gets.  Socrates would warn us 2500 years ago of the tyranny of the majority – a lesson completely lost on modern America.  Thus, the Libertarian Party history is one of some victories but mostly a history of loss.

In 1980, Ed Clark would earn a million votes as a Libertarian Presidential candidate.  After eight years of building, Ron Paul would earn just 430,000 votes in 1988 – causing many to wonder whether a “revitalized” Republican Party might be more effective at advancing the limited government principles Libertarians were seeking.  Despite their success under Reagan, the GOP turned back again to their establishment elites.  Anger at D.C. corruption, in both parties, elevated third party candidate Ross Perot to first place (in June) during the 1992 presidential race.  Although he would later drop out – he ultimately reentered the race and earned 19% of the general election vote (19.7 million) versus 291,628 votes for the Libertarian candidate that year – despite a 20 year head start on Perot.  Speaking only for myself, I felt Libertarians were unlikely to ever break through.  It seemed that beating the elites required a billionaire candidate with a strong personality (sound familiar).  All the Libertarian emphasis on building a grass roots effort and being on all 50 ballots seemed necessary, but not sufficient.

Which brings us to Gary Johnson, who earned 1,275,951 votes in 2012 – a record for Libertarians but still less than 1% and still way, way back of Romney’s 61 million and Obama’s 65 million votes.  That is the history of the Libertarian Party – they lose elections – while many will put lipstick on that pig, that’s a fact.  Then, 2016 happened.  For the first time in U.S. history, both major party candidates have unfavorable ratings over 50%.  For a time, many held out hope that Cruz or Sanders would replace Trump and Clinton for a classic capitalism versus socialism contest this November – never happened.

The good news for the Libertarians?  Millions of #NeverTrump and #NeverHillary voters began looking for options.  Most in both camps would never dream of supporting the other so it’s really a #NeverTrumpnorNeverHillary movement – perfect for Gary Johnson – the leading 3rd party option.  Millions have now drifted over to the Libertarians and not because Americans finally “get” libertarian arguments, nor because Gary Johnson is so awesome (he’s the same guy that came in a very, very, very distant 3rd in the last election.)  Thus, even though Johnson is now polling about 8.7% in a four-way race, almost all of Johnson’s support is unearned.  Gary is still the same Gary that got less than 1% four years ago, so of the 8.7% support one might say about 90% of Johnson’s support is folks that might vote for a tennis shoe if the shoe wasn’t named “Trump” or “Clinton”.    Even in “Live Free or Die” New Hampshire, Johnson only gets 8%.

Astoundingly, given this truly historic opportunity for libertarians to begin running the greatest country on earth, Johnson and the Libertarian Party have done little to advance their own cause.  My impression is Johnson and, especially, his running mate Bill Weld, seem smug and arrogant.  It’s as if they won the lottery but now claim their new found wealth is because they’re investment wizards – no, they were just lucky.  The key is to take this lucky break and advance libertarian principles while accommodating all the new voters.  I haven’t seen polling, but my review of twitter comments tells me a huge chunk of Johnson supporters are ex-Cruz folk – what we call #CruzCrew.  Yet, Johnson seems almost as dismissive of Cruz supporters as Trump is – tragic error given the historic opportunity for libertarians.  In the few interviews I’ve seen of Johnson and Weld I saw Johnson scoff at conservatives.  Worse, Weld embraced Justice Breyer – Breyer is one of the greatest architects of the “living constitution” that progressives use to consolidate power and terrify those that care about limited government.

So, what would I do if I was running the Johnson campaign?

First of all, I’d reach out to Ted Cruz about a Cruz/Johnson ticket.  A fair examination of Cruz’s record and rhetoric suggests he’s much more Libertarian than libertarians give him credit for.  My impression is libertarians seek minimal federal power and maximum freedom.  Yet, Gary Johnson talks about preserving the right to choose – properly a state matter.  Under the tenth amendment, the states should be left to restrict abortion or marriage or drug use – but Johnson seems to feel the feds should leave states to choose their laws – as long as he agrees with them.  In effect, Johnson seems to be against the freedom to choose our laws (a focus of my academic research).  Contrast that with Cruz comments at the RNC:

And freedom means recognizing that our Constitution allows states to choose policies that reflect local values. Colorado may decide something different than Texas. New York different than Iowa. Diversity. That’s the way it’s supposed to be. If not, what’s the point of having states to begin with?

Thus, a Cruz/Johnson ticket would seem to advance libertarian principles better than a Johnson/Weld ticket.  This should not come as a shock – the libertarians have a narrow range of candidates every 4 years.  It’s possible there are many candidates, capable of advancing libertarian ideals, that did not attend the Libertarian convention.  Hard truth is that if a candidate wants to have an impact, then attending the convention of a party that gets less than 1% of the vote is not a high priority.  There could be hundreds of worthy candidates without an (L) after their name – that are better than Johnson or Weld.  I will write much more about the beneficial freedom-advancing virtues of tenth-amendment federalism and the jurisdictional competition that follows.  For now, I will simply point out that Cruz is worth another look from libertarians, would do much better than Johnson/Weld and if Cruz/Johnson wins – the VP would be a Libertarian, for the first time in history, and set up the Libertarian Party nicely for 2024.  With one change – Cruz/Johnson for Johnson/Weld – the Libertarian Party realizes the dreams of generations of libertarians.

Aside from adding Cruz to the ticket, Johnson mus recognize that most of his supporters are not libertarians and change his message as a VP to reflect that.  I’m not talking about sacrificing his principles – I’d never recommend that. Rather, Johnson should encourage policy diversity, not uniformity.  Tell Cruz supporters that if Johnson is VP, he’ll appoint justices and judges who will allow us to determine our laws at the state level.  Texans may restrict abortion, gay marriage and marijuana while Californians may allow all three.  That is not “appealing to moderates”, as many libertarians have advised Johnson to do, it is appealing to conservatives and liberals and moderates because it allows all three to choose their state laws once the reach of federal government is withdrawn – creating the space for diversity.  If Johnson will not speak for his supporters, McMullin might.

If the Libertarian party fails to take advantage of this historic opportunity, we might lose the country.  Not to take it too far, but both Trump and Clinton are so corrupt it’s possible we may not get another chance to change course for generations.  Both would likely fill the Scalia seat with a progressive – setting the stage for another dramatic expansion of federal power. We have to get 2016 right and my plan does that.  If Johnson and Weld remain smug and self-aggrandizing and ignore the policy wishes of 90% of their supporters, they may get to 11 or 12% and still lose in November.  More likely, unless they add Cruz quickly, millions of Johnson’s supporters may switch to McMullin and 8.7% will end up being a high-water mark that libertarians will never reach again. From personal experience, I was open to the Libertarian ticket until the moment I saw this Reason.com interview  – they both demonstrate complete ignorance about the significance of the Scalia seat.  Given that and the new McMullin option, I will never support Johnson/Weld without Cruz on the ticket.  Nevertheless, the Libertarian Party will be on 50 state ballots – that’s a huge advantage over McMullin.  Without a change in course, the Libertarian Party will have wasted an historic opportunity to succeed as a party and restore freedom in America.

Yes, historically, Libertarians lose.  Yet, if Johnson and libertarians fail to seize this opportunity, it will be “An Historic Loss for Libertarians” we may not recover from.

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The Benefits of Academic Scribblers – An Austrian View

In his 1936 book The General Theory of Employment, Keynes declared:

The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else…Madmen in authority, who hear voices in the air are distilling their frenzy from some academic scribbler of a few years back (1) 

In less than two weeks, I will attend a seminar at the Mercatus Center called “Advanced Austrian Economics”. I urge you to become more familiar with the Mercatus Center – their scholars are leaders in the cause of freedom and Mercatus is one of America’s most important “Liberty Projects”. Just as the American Revolution needed the intellectual foundation of Locke, Hamilton, Madison, Jefferson and others, the restoration and advancement of our founding ideals will require the intellectual foundation of groups like the Mercatus center, Cato Institute, Independent Institute and FEE – among others.

That said, I’ve been re-reading Austrian economic scholars (Menger, Mises, Hayek, Kirzner, et al) in preparation for a great conference. I started with an audio version of Israel Kirzner’s Early Austrian Economics.  Kirzner provides an excellent overview of the founders of Austrian Economics including Carl Menger (1840-1921) and Eugen von Bohm-Bawerk (1851-1914). (The audible version allows me to absorb a lot of material while I exercise every morning – very useful for books without mathematics or graphs).  For those interested in Austrian economics, what Mises called “logical economics”, I highly recommend Kirzner over others – as a student of Mises while at NYU during the 1950s, Kirzner has an inside perspective that’s hard to beat. I then re-read Mises’ Science of Human Action – the Scholar’s Edition (2).  The great economist Robert Higgs once told me that most graduate students in economics don’t understand the first 140 pages (Part I) of Human Action – but they should. It’s difficult to get through, but well worth the effort. Mises is brilliant and his insights are profoundly important.

For example, in the Introduction for Human Action, Mises makes an important observation about human progress. This observation is so important that Mises claims that, “What is wrong with our age the widespread ignorance of which…policies of economic freedom played in the technological evolution of the last two hundred years”. That’s quite a claim, but accurate once one thinks it through. Everyone can see the results of “technological evolution”. Every morning, I come downstairs to find my Starbucks coffee, expertly roasted from the Sumatra island of Indonesia, already made and waiting for me – something even King Henry VIII couldn’t make happen.  The “Top 1%” protestor in Central Park coordinates her activity using a cell phone – something that John Rockefeller – the wealthiest of the “robber barons” could never do. In 1836, Nathan Mayer Rothschild – part of a family worth over $300 billion – died of an infected abscess. Today, WebMD suggests many abscesses can be treated at home, but if you have to see a doctor, he or she will drain the abscess then:

  1. You will be given instructions about home care.
  2. Most people feel better immediately after the abscess is drained.
  3. If still experiencing pain, doctor may prescribe pain pills for home use over next 1-2 days.

Sounds simple enough, but that was beyond the reach of the richest man on earth in the 19th century. It is now within the reach of most Americans in the 21st century – in other words, almost all Americans are better off than the top 1% 200 years ago. This kind of progress was unthinkable back then – what changed? Who or what changed it? I have several points – a) life has gotten much, much better, b) most people don’t appreciate that and c) most who do, attribute it to improvements in “technology” or “natural science”. Mises claims these improvements would not be possible without first changing the laws or “political economy” in the centuries preceding these technological changes. Most are unaware of the contributions of folks like John Locke, Adam Smith, David Ricardo and Francois Quesnay but Mises wants to make sure we understand the impact these men had on laws that held us back for centuries:

  • That it is unfair and unjust to outdo a competitor by producing better and cheaper goods
  • That it is iniquitous to deviate from the traditional methods of production
  • That machines are an evil because they bring about unemployment
  • That it is the task of civil government to prevent efficient businessmen from getting rich and to protect the less efficient against the competition of the more efficient
  • That to restrict the freedom of entrepreneurs by government compulsion or by coercion on the part of other social powers is an appropriate means to promote the nation’s wellbeing

Mises then asserts that “British political economy and French Physiocracy (3)(the economists & les économistes) were the pacemakers of modern capitalism. It is they that made possible the progress of applied natural sciences that has heaped benefits on the masses”(3).

Further, on Mises original point, that “what’s wrong with our age” is that so many are ignorant of how the ideas of the political economists changed everything. If their contributions were recognized, if people gave credit to Locke and the Marquis de Condorcet for creating the intellectual environment that allows people around the world to read these words instantly – they’d seek to preserve the freedom that led to those innovations. Instead, our colleges sometimes teach that the contributions of the Economists and les économistes were coincident with, not a cause of, technological innovations. In fact, some argue that if you could just set up a more fair distribution scheme, then everyone could enjoy the benefits of technology – that’s got it backward. Contrast that with what I’ve been taught over and over, especially from two leaders at the Mercatus Center – Dr. Chris Coyne & Dr. Jayme Lemke:

“The truth is – if you really care about the well-being of others, you’ll argue for free markets.”

By MC, published February 15, 2016

Note: This is the first in a series of articles on Austrian economics – the theories of the historical leaders and of the people who articulate and advance Austrian economics today.

1 – White, Lawrence H. In The Clash of Economic Ideas: The Great Policy Debates and Experiments of the Last Hundred Years, New York, NY: Cambridge University Press, 2012. Page 5. Print.
2 – Mises, Ludwig. Human Action: The Scholar’s Edition. Hillsdale, MI: Hillsdale College, 2000. Print.
 3 – More on French Physiocrats @ http://www.economist.com/blogs/freeexchange/2013/10/economic-history-0

 

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The Obama Court

By tradition, Courts take name of the Chief Justice, thus the current court is called “The Roberts Court”, because of Chief Justice John Roberts.

However, unless Senate Republicans postpone consideration of any nominee, until next President, the U.S. Supreme Court will be known as

“The Obama Court”.

We were warned about this back in 2012 – that now seems so long ago.  It represented a brave and needed attempt to point out how important judicial appointments are – especially Supreme Court nominations – when choosing a presidential candidate.  Well, we all know how things turned out.Risk of Obama nominations

After that, all we could do is support as many pro-freedom, pro-constitution Senate candidates as we can.  When the GOP won a majority beginning in January, 2015, that seemed to convince Breyer and Ginsburg to put off retirement until (they hope) Democrats take back the Senate in the 2016 election.  However, Scalia’s very, very unfortunate death has changed everything – a huge loss for the country.  If the other 3 now resign – that will mean 6 total Obama nominees – a disaster for the country for generations.  Even one, to replace Scalia, will mean 5 left-leaning progressives – that is a game changer.  Here’s why.

Kennedy was often seen as a “swing vote” on a SCOTUS split between the four on the right (Scalia, Thomas, Alioto and Chief Justice Roberts) and four on the left (Breyer, Ginsburg, Sotomayor & Kagan).  Looking forward (no pun intended), the fact that Obama may replace two more liberal justices, the “swing vote” and now, Justice Scalia, should get the attention of everyone on the right and anyone who cares about the future of this country.  This makes very real, the possibility that Obama will have placed on the Supreme Court six of the nine justices – a majority bloc that will change this country for generations.

That’s not hyperbole.  If it happens, it will represent the largest influence on the Court since FDR – who threatened the Supreme Court.  Reagan himself, as popular as he was, serving for eight years, only nominated four of the Supreme Court Justices and one of those was the “swing-vote” Kennedy – a third choice after Judge Robert Bork was “Borked” by Ted Kennedy and Judge Douglas Ginsburg (no relation) was taken down by NPR’s Nina Totenberg for using marijuana 15 years prior – for which she won the Alfred I. duPont-Columbia University Silver Baton award for journalism (eye roll please…).

Knowing this, we must reassess the advise and consent role of the Senate.  If moderate Republicans agree to “let the President have his nominee”, then for the next thirty years, the Obama Justices will vote their way and there’s nothing we can do to stop them.  Nothing.  Nada.  Every single case that’s brought before the Court would be decided in favor of progressive ideology.   State’s rights would virtually disappear and anything a Republican President, Congress, Governor or state legislature did would be overturned within the Court system.  That amazing 2010 victory that resulted in a record 680 new GOP state house seats – nullified by, you guessed it, the Obama Justices.

For example, a few years ago, the Court decided narrowly, as they often do, that Congress could not use 45 year old data for the Voting Rights Act of 1965 – a reasonable ruling that the four liberal justices dissented from.  Right after the Obama Justices are in place, cases from all over the country challenging Voter ID laws, perhaps even citizenship requirements for voting, will be brought to the Court and decided in favor of progressives and against conservatives.  Just imagine, all those illegal immigrants that Marco Rubio wants to make legal would be given voter rights under the Obama Justices.

In fact, even if the Gang of 8 Amnesty bill doesn’t pass, illegal immigrants may be encouraged to sue for voting rights, based on residency.  Even if they’re denied at every level – Federal District Court and the Court of Appeals – it can all be overturned at the Supreme Court and, because of the supremacy clause, there is nowhere to turn – if the court rules illegals cannot be denied voting rights.

While we, who use reason, would say this is blatantly unconstitutional –judicial activists, who believe in a “Living Constitution”, would claim this is just the latest example of the Court bringing about “social justice” to make U.S. a more “perfect union”.  In fact, whether a case is heard or not only requires four Justices to agree – the so-called “Rule of Four” for granting cert.  So, conservatives don’t even have a say which case to hear – the five Obama Justices could deny certiorari to cases that favor conservatives and only hear cases that favor progressives.  That’s the end of all kinds of “Liberty Projects” for U.S.

Most shocking of all – the Obama Justices will maintain this power even if we elect a Republican President for the next twenty years.  A GOP President can only replace justices that step down.  The Obama Justices will simply remain on the court, as a governing bloc, until they grow old or another progressive is elected.  They’ve got plenty of time.  So far, Obama’s first two justices, Sotomayor and Kagan are 55 and 50 years old, respectively.  Anyone want to bet the next four will also be young?  That gives the Obama Justices a good twenty years together – plenty of time to allow Obama to keep his promise of “fundamentally transforming the United States of America”.

 

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Smith, Free Markets & Human Life

During the hunting societies of the Old Stone Age, 200 sq mi of land was needed to support each person, so there were no more than 500 people on the whole island of the paleolithic United Kingdom.  If more than that would be born, more would starve – as Adam Smith’s famous equilibrium kicks in. Agricultural was a big step but it was the division of labor, specialization, rule of law and trade that enabled Britain to ultimately support 11,000 times that in 1696 when 5.5 million occupied the same island. Despite PC pronouncements to the contrary, it is this ability to allow millions to live that makes free markets and civilization superior to other types of societies.

Smith’s argument about population is like his ideas about country’s inventory of gold – it will seek a supply & demand equilibrium, that needn’t, and shouldn’t, have government’s attention. Specifically, he’s saying when the supply of workers is low (relative to demand), wages rise and people will feel more confident bringing children into the world. This is why, in the British colonies (back then), that were “much more thriving” than England, “those who live to old age…see…50 to 100 descendants from their own body” (p81). Without growth, or where wages are declining, the population at the very bottom suffer the most, and labor supply is reduced (through starvation).

Malthus, on the contrary, unpersuaded by claims that the population had declined over 30%, since the Restoration (1660), was alarmed the population would rise so quickly that his 1798 treatise says the geometric population growth could not keep pace with the arithmetic growth of cultivable land (p89) and that “premature death must…visit the human race”.   This static view fails to account for market adjustments. Growing populations => lower wages & higher food prices => innovations in food production => higher real wages / lower food prices…(cycle continues).

Smith’s purpose seems to be to show, if left alone, markets will adjust to meet consumer needs. Malthus’ purpose seems to foster panic to spur government intervention, or to reveal his ignorance about market dynamics, or both.  Neither, according to Robert Heilbroner, anticipated the role of affluence and urbanization on limiting the number of additional offspring born by the lower classes.  But the real lesson is how dynamic free markets allocate resources to enable human life to flourish.  What other system can do that?

Works Cited

  • Heilbroner, Robert L. The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. Rev. 7th ed. New York: Simon & Schuster, 1999. Print
  • Smith, Adam, and Edwin Cannan. An Inquiry into the Nature and Causes of the Wealth of Nations. New York: Modern Library, 1994.

 

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Any Profit in the History of Economic Thought?

The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false.

UK historian Paul Johnson

At first glance, the question of whether the history of economic thought has profit – a positive “net” of benefits versus costs – seems odd. Of course it does. Besides, as Ludwig von Mises once said about the question of who’s right – “logical economists” or “mathematical economists” – Mises suggested we let the market for ideas decide. However, after reading academic papers by George Stigler, Ken Boulding, Pete Boettke et al., the question has been transformed by the changes in my perspective.   In this paper, I will explain why my perspective changed, why I believe the history of economic thought is critical to future knowledge and I’ll provide one contemporary example that speaks to this issue.

Most of us are taught that history has much to teach us, but we’re also taught that all of us, even the great ones, stand on the shoulders of previous giants. Ken Boulding says Robert Merton gave this idea an acronym (OTSOG). Yes, Einstein was amazing, but even he stood on shoulders of Newton, Descartes, et al.  A major theme of The Prince is how much new princes should learn from great princes like Romulus, Cyrus, Theseus, and others. Machiavelli believed a great prince might surpass the ancients, but “man must always follow in the footsteps of great men and imitate those who have been outstanding” (19). Lord Keynes believed the “world is ruled by little else” than the ideas of economists and political philosophers and that these ideas are more powerful than the “power of vested interests”.   Yet, as Stigler and Boulding make clear, modern economics seems dominated by the “anti-historical school” that are not “interested in the wrong opinions of dead men”.   Boettke tells us “the mainstream of economic analysis has become occupied with excessively …unrealistic models…rather than a deeper historical and institutional knowledge”.  Stigler ends his article with a challenge, which Boettke echoed 45 years later, to inspire those who properly value the role of the history of economic thought to make a strong case, change minds and, in Boettke’s bold words, “reverse the degenerative path of the discipline”.

One of the implications of Whig arguments is that there’s something inherently superior – built in – about modern economics. Let me provide one counterfactual. My textbook for Intermediate Macroeconomics, written by Charles Jones (Stanford Graduate School of Business), was an older version (2006). On page 308, in a section called, “Case Study: Oil Prices and Inflation Shocks”, that included a graph of oil prices from 1978 – 2006, Jones said: “Most economists don’t believe the high inflation of the late 1970s and the large recession that followed are likely to occur.” As we know, no high inflation but the 2008 financial crisis, one of the worst recessions in U.S. history, followed shortly thereafter. This is not Jones fault – he’s simply passing along the consensus of modern “mainstream” economists in 2006. But they had it wrong – very wrong.

The point is that for 30 years, after rejecting Bolding’s argument that we have much to learn from past thinkers, mainstream economists ignored the great thinkers and got the 2008 recession wrong. Moreover, given Lord Keynes’ claim that the economic ideas of “academic scribblers” are hugely influential, is it possible that 2008 was caused by flawed “Whig” or mainstream thinking and research? I contend it’s not just possible, it’s probable. At the very least, it’s worthy of honest, objective research – research informed by the principles of great thinkers and pioneers like Adam Smith who showed us how to break through hundreds of years of mercantilism and establish a new paradigm, what Boettke called “the theory of markets” that laid the foundation for a system of “the 3 p’s of property, prices and profit/loss” (122) that has helped transformed the world and raised millions out of poverty. If Adam Smith was right about that, perhaps he’s right about a few other things?

Works Cited

  • Boettke, Coyne, and Leeson (2010), “Earw(h)ig: I Can’t Hear You Because Your Ideas are Old.
  • Boettke, Peter J. “What Should Classical Liberal Political Economists Do?” SSRN Journal SSRN Electronic Journal 25.1 (2014): 111-22. Constitutional Political Economy. Springer Science Business Media. Web. 17 May 2015.
  • Boulding, Kenneth E. (1971), “After Samuelson, Who Needs Adam Smith?”  History of Political Economy 3(2): 225-237.
  • Jones, Charles. Macroeconomics: Economic Crisis Update. 2E ed. New York: W. W. Norton, 2010. Print.
  • Mises, Ludwig. Human Action: The Scholar’s Edition. Hillsdale, MI: Hillsdale College, 2000. Print
  • Stigler George J. (1969), “Does Economics Have a Useful Past?” History of Political Economy 1(2): 217-230

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