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Quotation of the Day…

… is from pages 1338-1339 of Robert Ellickson’s landmark 1993 Yale Law Journal article “Property in Land” (footnotes removed; Ellickson’s quotation in the third paragraph is from pages 300-301 of the 1912 Massachusetts Historical Society edition of William Bradford’s History of Plymouth Plantation):

To finance their voyage, the Pilgrims formed a joint stock company with London investors.  At the investors’ insistence, the settlers agreed to pool output, land, capital, and profits during their first seven years abroad.  From this “common stock,” residents of the colony were to receive food and other necessities, and at the end of the seven-year period, the land and other assets were to be “equally divided betwixt” the investors and the settlers.  The colonists initially complied with the spirit of this contract.  Although they planted household gardens almost from the start, they collectivized initial field and livestock operations.  The setters had some agricultural successes, but they were unable to grow corn in their common field.  Within six months of reaching Plymouth, almost one-half of the population had perished from disease.

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In 1624 the Plymouth colonists deviated from the investors’ plan and assigned each family from one to ten acres, depending on the number of family members.  This greatly increased productivity.

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[Parcelization] had very good success; for it made all hands very industrious, so as much more corne was planted then other waise. . . .  The women now wente willingly into the field, and tooke their little-ones with them to set corne, which before would aledg weaknes and inabilitie; whome to have compelled would have bene thought great tiranie and oppression.

When I first quoted these words from Ellickson (and Bradford) here at the Cafe, on the day before Thanksgiving in 2004, I closed my post with the following (which I now slightly amend from its original version):

Today, we Americans celebrate Thanksgiving.  We would be turkeys if we fail to understand the true source of our bounty.  That source is not the land itself nor any “natural” abundance of “natural resources” – it is not dumb luck – it is not god inexplicably smiling upon Europeans who occupy the North American continent: it is consistent and widespread reliance upon private-property markets as well as our general high regard for bourgeois pursuits.

And let’s not forget that we today have far more – words-fail-us-in-attempting-to-describe more – to be thankful for than did those first brave English subjects of James I who latched themselves onto the Massachusetts wilderness.

Quotation of the Day…

… is from Thomas Jefferson’s 1791 reflections on the U.S. Constitution’s delegation of powers to the national government.  Jefferson’s quotation appears in the following passage from page 165 of Noble Cunningham’s outstanding 1987 biography of Jefferson, In Pursuit of Reason (emphasis original to Jefferson; footnote added):

He [Jefferson] then considered the general phrase of the Constitution that identified the purpose of the taxing power as “to pay the Debts and provide for the common Defence and general Welfare of the United States.”*  Congress, he said, was to levy taxes only for these purposes, not for any purpose they pleased.  ”In like manner they are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose.”  To interpret this provision in any other way would reduce the Constitution to “a single phrase, that of instituting a Congress with power to do whatever would be for the good of the U.S. and as they would be the sole judges of good or evil, it would also be a power to do whatever evil they pleased.”

* This is Section 1, Article 8‘s general-welfare clause.  It, along with Art. 1, Sec. 8′s “necessary and proper” clause, is misinterpreted routinely by “Progressives” (and others seeking Constitutional justification for unconstitutional expansions of national-government power) as a broad grant of permission from the Constitution’s framers to the Congress for the latter to do pretty much whatever that assembly’s members assure the public and the courts they feel is necessary and proper to promote Americans’ general welfare.

George Bush: A Free Market Capitalist?

“Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration or the next generation.”

This is what Obama had to say to George Bush after he took office last year.  While it’s depressing to have to hear a Democrat – let alone Obama – lecture a Republican president on overspending, what is even more distressing, is that there are those who still believe Obama when he says he won’t be (and isn’t) doing the same, times a thousand.  The idea that Obama represents a “change” from the last administration is simply not correct.  Last March, the Heritage Foundation posted comparisons of the Bush deficit vs. the Obama deficit.  They demonstrate the many ways Obama is continuing down the same path as his predecessor, although in a much quicker fashion.  It’s funny, because while many on the left have plenty of praise for Obama, they never seem to extend the same to Bush, who (same as Obama) encouraged increased spending on education, health care and anti-poverty programs.

Although there are plenty of criticisms to throw at Obama, I will have to save them for another post.  I recently came out with some bumper stickers which declare Bush is NOT a Free Market Capitalist, and would like to extend a further explanation.

Why should anyone care about George Bush?

There are many reasons why we should know the truth about the Bush presidency.  The first is that it’s important to understand history so we are not destined to repeat our mistakes. The problem, however, is that we already are.  And I believe the reason is that many in America (including myself) were not given all the facts when it came to American history.  (I witnessed it recently as a student teacher for a high school History class two years ago.)

In addition to Obama, there are also many similarities that exist between George Bush and Herbert Hoover; just not for the reasons many would think.  An article by the Center for American Progress compares the two presidents, claiming they were very much alike in that they, “[b]oth believed the market would naturally self-correct, and that government intervention would be harmful.” However, even Bush himself said, “I have abandoned free market principles to save the free market system” in addition to admitting, “I went against my free market instincts“.  The problem is that both Hoover and Bush claimed to be advocates of free markets while in office and afterward.  These claims distort the ideas of liberty and capitalism.  As Ilya Somin, assistant law professor at George Mason University states, “The greatest contribution Bush can now make to free market policies is to dispel the impression that he pursued them while in office.” I couldn’t agree more.

Dr. John David Lewis, author and visiting associate professor at Duke University, points out that this issue is also a matter of principle.  When conservatives or Republicans denounce Obama but either praise Bush or ignore his shortcomings, they are not doing liberty any favors.  In an article in the Objective Standard, Dr. Lewis writes,

“President Bush doubled the national budget, doubled the deficit, added a digit to the national debt, signed the largest entitlement bill since the 1960s, ordered his cabinet to cooperate in regulating carbon dioxide as a “pollutant,” signed Sarbanes-Oxley, distributed economic “stimulus” checks, asked for $700 billion as business handouts, and never vetoed a spending bill. Where were the protesters then? If Americans were agitated primarily by the trend toward statism, what stopped thousands of them from rising up and venting their anger at these actions? The truck toward statism is only part of the reason for the reaction against Obama. What is the rest of the explanation?

The answer begins with Bush’s party affiliation: He is a Republican. This title carries the appearance of long-standing, fundamental support for the free market and for capitalism.”

If we are to persuade others of the principles of free markets and limited government, we must do so in all circumstances.  That means denouncing Republicans when they deserve it.

Many instances throughout the Bush administration should have caused an uproar amongst any lover of liberty.  I personally did not pay enough attention to what was going on (and have since regretted it), so I do not fault others who made the same mistake.  But now that our country is facing the eradication of freedom and prosperity, I think it’s time that we all took a step back to take another look at recent history.  It’s the only way we can be sure not to repeat it, come 2012.

Attack on Free Trade – Tariffs

In an attempt to appease the American steel industry early in his presidency, Bush enacted tariffs on several types of steel, ranging from 8%-30%.  To add injury to insult Bush claimed that, “An integral part of our commitment to free trade is our commitment to enforcing trade laws to make sure that America’s industries and workers compete on a level playing field.“  So we show our commitment to free trade by severely hampering it?  We endorse free market policies because they work, and these tariffs proved not to. What Bush didn’t consider, was that by shutting out competition he was raising prices for consumers and businesses involved in manufacturing.  According to this article in American Daily, many economists believe the tariffs cost more jobs than they saved, due to the high costs imposed on manufacturers.  Only with the threat of a trade war did Bush decide to lift the steel tariffs.

Expansion in Medicare Coverage

George Bush presided over the largest expansion in medicare since its creation in 1965.  Although this medicare drug prescription benefit was originally given the price tag of $400 billion over a period of 10 years, the administration had to later admit that the price was actually closer to $1.2 trillion.  According to an article by James Bovard in Lewrockwell.com, four months after Bush signed the bill, the official board of Medicare trustees warned that, “Medicare’s finances have “taken a major turn for the worse.” Thanks in large part to the new law, Medicare is now forecast to go bankrupt seven years earlier than previous projections – in 2019, instead of 2026.”  Nonetheless, Bush gave this bill his utmost support and stated, “These reforms are the act of a vibrant and compassionate government.”

Massive Spending

According to a 2004 report by the Independent Institute, “Since 2001, even with record low inflation, U.S. federal spending has increased by a massive 28.8% (19.7% in real dollars)—with non-defense discretionary growth of 35.7% (25.3% in real dollars)—the highest rate of federal government growth since the presidencies of Richard Nixon and Lyndon Johnson.” In 2004 his administration was already overseeing the largest budget deficit in history, an estimated $520 billion.  While the president does not determine how much is to be spent, Bush not only resided over a Republican controlled congress at this time (you’d think he’d have some sway?) he also vetoed fewer bills than any president since Warren G. Harding.

According to Reason Magazine, between 2000-2005 the Department of Education’s budget had grown by “a stunning 79.9%.”  This was due in part to Bush’s beloved No Child Left Behind Act of 2001, which dramatically increased the amount of spending and government authority over our public education system.  Additionally, it involved Ted Kennedy as a supporter who worked with the Bush administration on the bill.  That alone should make you nervous.  According to the Department of Education, the 2008 $24.2 billion price tag for NCLB was a 41% increase in spending on the program over FY 2001.  And according to this article by the Heritage Foundation, the past shows us that the increased amount of spending will not and cannot improve our education system.  Also see an article I posted on the Kansas City Experiment, which proves the same.

Increased Government Regulation

While many Democrats complain that there was a lack of regulation under Bush, they must not have heard of Sarbanes-Oxley.  Or of Bush’s failed attempts to regulate Freddie and Fannie in the early years of his presidency.  While some regulation by government is justifiable, much of it is not.  Especially Sarbanes-Oxley, which has been seen as a major blow to the private sector and to innovation and risk-taking.  According to the Competitive Enterprise Institute, “…the total annual costs for all public companies to comply with just the “internal controls” section of Sarbanes-Oxley is $35 billion per year, according to the American Electronics Association. And money isn’t the only cost. A single average public company also devotes 30,700 man-hours to compliance each year. That is money and time that could be devoted to developing new products, new businesses, and new jobs.”  Home Depot co-founder Bernie Marcus told Investor’s Business Daily in 2006 that Home Depot would have had a very hard time becoming as successful as it has with the increased legal and regulatory climate.  Marcus worries that public companies will be unable to make a decision “…without a lawyer on one side…and an accountant on the other…”

Federal Takeover of Fannie and Freddie

It is not only the Democrats who wish to lay claim to a legacy of helping people own their own home.  At a conference on minority home ownership in late 2002, George Bush declared, “I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families.”  Doesn’t that sound nice.  Would you say we have 5.5 million new home owners today? Or would you argue, more correctly, that more people are having their lives turned upside down by foreclosure because they bought a house they couldn’t afford? Would you also make the point that responsible homeowners (and renters) are now picking up the tab for those who acted irresponsibly?  George Bush made the mistake of declaring it was the government’s job to help people own homes.  Some people cannot afford to own their own homes.  And while it is nice to have a home to call your own, it’s even nicer to know you are not in debt up to your eyeballs.

Many Republicans give Bush credit for his warnings, which declared Freddie and Fannie posed a risk to the financial sectors and needed more regulation.  However, I would not be one to congratulate his efforts.  Someone who truly believes in the free market and limited government would see the problem and call for privatization, not set taxpayers up to take the fall.  These institutions played a major role in the housing crisis in America.  The “government guarantee” has allowed them to do whatever it is they want without the risk, because someone else is set to pay for their mistakes.  This lengthy article by the CATO Institute discusses the case for privatization.

Despite the recommendations of the Republican Study Committee (RSC) which included, “…a two-year suspension of the capital gains tax, full privatization of Freddie Mac and Fannie Mae “over a reasonable time period,” and a suspension of the “mark-to-market” regulations that forced banks to value assets at zero if they couldn’t be sold at that precise moment”, George Bush still went ahead and signed the Housing and Economic Recovery Act of 2008.  The New York Times discussed some downfalls of the bill a week after it was signed.  They wrote, “Partly to accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion. The bill also creates significant liabilities and risks for taxpayers, that are virtually impossible to calculate.”  Would a lover of free markets and liberty do something like that?

TARP & Stimulus

Whenever the Obama Administration is castigated for the American Recovery and Reinvestment Act, it’s important to remember that George Bush opened the floodgates and set the precedent.  Not to say that Obama would not have done the same without Bush doing so first, but to maintain our stance of a hands-off policy when it comes to our economic sector, we must treat all offenders the same.

Remember that $600 check you received in the spring of 2008?  That was meant to be what George Bush called a “booster shot” to the American economy.  However, many simply saved their government handout instead of spending it as the administration had hoped.

And how can we forget the Troubled Asset Relief Program (TARP)? This was how the government attempted to “save” the free market.  What they cannot figure out is that the free market has not been allowed to operate, due to  restrictions and damaging laws imposed by government.  Any free market advocate would allow the market to function, even if it resulted in a short term (or even longer term) economic recession.  This so-called economic stimulus took money from those who were responsible and/or successful and gave it to those who acted either irresponsibly or not up to par with customer standards. The constant “propping up” of the economy by the government (with taxpayer dollars) will eventually come to an end.  And when it does, the economic downturn that has been suppressed for many years will be much worse than necessary.  The Troubled Asset Relief Program, signed into law by George Bush in October of 2008, cost taxpayers $700 billion. But even worse, it created a dangerous precedent.

The famous quote from George Santayana states, “Those who cannot remember the past are condemned to repeat it.”  If we don’t look back at the way things really were throughout history (including recent history), we will not only forget the past, we will have gotten it wrong.   And when that happens, we are most surely to repeat it.

Must Evil Always Win?

We’ve all heard the phrase before.  We must vote for the “lesser of two evils” each election season.  That’s all we can do.

It is my humble opinion that this way of thinking is what has gotten us into the mess we are in today.  The mess that involves massive amounts of government spending, regulation, debt and new taxes levied on the American taxpayer.

I’d like to briefly quote a few phrases from our Declaration of Independence.

The first quote warns against complacency and the inability to change:

“Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed.”

This second quote follows the first, and sums up the reason I no longer believe politicians are the answer to any of our problems. It is us rather:

“But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

Some may argue that we do not currently have despots ruling our country.  Well perhaps not yet, but we’re headed down that path.  One example of this is shown when a majority of the members of Congress are still trying to ram through a health care bill, even though a majority of Americans oppose it.  Now I must make it clear that I am not an advocate of democracy.  As stated by Thomas Jefferson, “A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”  I am an advocate of a representative republic which is ruled by the Constitution of the United States.  However, it is a major blow to the taxpayer when a majority of Americans are demanding not to have their income taken for the purpose of crappy health care, and our so-called representatives are essentially saying “too bad, so sad” in response.  It would be perfectly legitimate if 99% of the people wanted government-run health care, and Congress voted it down.  But we all know that would never happen.

Our problem is that we are no longer ruled by the Constitution.  Neither party is following the Constitution.  Yet every four years, we jump out of our seats to vote for one of them.

I am not saying we don’t need to vote for good candidates, because we do.  But that is not the end all, be all.  We need to be fully aware of what our Congressman and State Legislators are doing all throughout each year.  And no matter what political party they are associated with, we need to unify and tell them no more new taxes, regulations or spending.

There are easy ways to give a few minutes of your time each month to find out what is going on with your Representatives.  One of which is by attending your local Liberty on the Rocks meet-up, of course!  We have plenty to learn and teach each other – so why not do it over drinks?!

The second is by locating a local organization that may keep track of all proposed bills and who in your state voted for them.  To find out if there is a free market think tank in your area, check out the directory on the State Policy Network’s website.  Many of the state-based think tanks are beginning to host sites which provide complete and precise legislative information for their respective state, so citizens can be easily updated and can then act if they feel it necessary.  These sites include Michigan Votes and New Mexico Votes.    There are also great organizations to get involved with that are nationwide, such as Americans for Prosperity, American’s for Tax Reform and America’s Future Foundation.

The bottom line is that it’s not about the politicians or the political parties, it’s about principles.  And neither side has had any for a while. It’s time we step up to the plate as the true defenders of our Constitution, and do something to clean up this mess.  I say we start by informing ourselves of the importance of free market capitalism, and then pass this information on to others.   Only then will we have numbers large enough to truly enact “change”.  And by change I mean freedom.