Monthly Archives: October 2008

Why I’m Voting For Bob Barr, And Why You Should Too

In a likelihood, two weeks and one day from now, I will be standing outside of my local polling place in Western Prince William County, Virginia waiting for the doors to open so I can cast my ballot in the 2008 election.

Unless the polls and electoral college projections that we’re seeing right now are remarkably bad, or there is an historically unprecedented shift in the public mood over the next two weeks, or, unless, as former Louisiana Governor Edwin Edwards once joked, one of the candidates is caught in bed with a dead girl or a live boy, it seems fairly clear that Barack Obama will win and America will have it’s first non-white President.

I’ve been voting in Presidential elections for twenty years now. In my first General Election, I was faced with a choice between George H.W. Bush and Michael Dukakis. Partly because Bush’s pandering on the flag-burning issue disgusted me, but mostly because I considered my first vote for President to be so important to me personally that I wanted to vote for the candidate that actually stood for the things I believed in, I ended up voting for the Libertarian Party nominee that year, Ron Paul. I voted Libertarian again in 1992, for Andre Marrou, and in 1996, for Harry Browne.

Then came the 2000 election between George W. Bush and Al Gore. I wasn’t entirely thrilled with Bush, but he seemed to be different from the nominees the Republicans had put up in the past and, as an added bonus, spoke out against the Clinton Administration’s policy of “nation building” in countries like Bosnia. The Libertarian Party, meanwhile, had descended in to parody — Harry Browne was nominated again but the party had quickly become little more than a vehicle for him to promote his own business ventures. Since there was no way I was going to vote for Gore based on his policies, Bush seemed like a better choice than throwing my vote away on a third-party candidate that wasn’t taking the election seriously.

By 2004, I had soured on Bush’s foreign policy but he was still a clearly better choice than the candidate the Democrats had selected, and the Libertarian Party seemed to be in more disarry than ever.

Man, do I regret those votes I made in 2000 and 2004 now.

Did I feel at the time like I was compromising my principles when I pulled the lever for George W. Bush not once, but twice ? Absolutely, but. as I think many Americans do on a regular basis, I fell hook, line, and sinker for the “lesser of two evils” argument.

That’s not happening this time.

After eight years of a Republican President who has engaged in a reckless and irresponsible war, and expanded the size, scope, and power of the Federal Government at a greater rate than any President since Lyndon Johnson, I’ve come to realize that compromising your principles in the voting both is, ultimately, just a path that will lead you to regret what you’ve done.

Back in February, I crossed party lines and voted for Barack Obama in the Virginia Democratic Primary, but my reasons for doing so then were quite clear:

What’s needed, I am convinced, is a break with the past and a new direction. In some sense, although I hate to admit it, John McCain represents that for the GOP but Barack Obama represents it even more and, more importantly, is running against the one person who, if she wins, would guarantee a return to same crap we’ve been dealing with since 1993 on both sides of the political aisle.

Defeating Hillary Clinton was, I thought then and still think today, essential to even taking the baby steps necessary to move America beyond the divisive politics that has been infecting the political system for the past twenty-odd years. If my vote for Barack Obama on February 12th helped make that happen even in the smallest degree, it was worth it.

I also noted in February:

Does this mean I would vote for Obama in November if he’s the nominee ? No, and, frankly I probably wouldn’t.

Given Obama’s positions on a variety of issues, that answer today is an emphatic no. Whether it’s the economy, education, health care, taxes, or a whole other variety of issues that face America today, it’s clear to me that Obama believes in more government, not less. He suffers from the same fatal conceit that all liberal Democrats do — the idea that they can use the power of the state to remake the world in their own image.

On the issues, John McCain isn’t much better. The difference is that McCain campaigns on rhetoric that makes you think that he believes in individual liberty, self-reliance, and small government. The reality of a hypothetical McCain Administration, though, is demonstrated quite clearly in his response to the financial crisis, his support of the bailout, and his insane idea to have the government buy-up and renegotiate distressed mortgages. These are not the policy proposals of a man who believes in the free market.

Moreover, McCain has run his campaign in a manner that is at the very least offensive and borders on an insult to the intelligence of the American voter. He selected as his Vice-Presidential running mate a woman manifestly unqualified for the job. He engaged in the pointless, some might even say reckless, stunt of pretending to suspend his in response to an economic crisis that he obviously had no real understand as to either the causes or the remedies. And, most recently, he engaged in nearly two weeks of relentlessly negative campaigning that concentrated not on the issues facing the country, but on his opponents alleged associations with someone even he admitted was a “washed up terrorist” and, in the process, brought out some of the worst in his supporters.

I said a long time ago that I would never vote for John McCain based solely on his manifest disdain for one of the fundamental freedoms in the Constitution. Now I can say that, even if he had never sponsored McCain-Feingold, his conduct during the course of this election has demonstrated to me that he is unfit to be President of the United States.

That’s why, this year, I am voting for Bob Barr for President of the United States.

Unlike any other candidate running for President this year, Bob Barr stand unequivocally in favor of the principles of individual liberty and limited government that stand at the core of America’s founding documents. He’s the only candidate who has spoken out against the evils of the Nanny State in all it’s manifestations. He’s the only candidate who has made the case against a solution to the problem of increasing health care costs that doesn’t involve more government regulation, higher taxes, and no real solution for the consumer. He’s one of the few politicians I’ve ever seen admit that he was wrong when he repudiated his previous positions on the War on Drugs. He’s spoken out on the Bush Administration’s assault on civil liberties, taken a clear and consistent position on the Second Amendment, called for the separation of government and the economy, and called for a return to a defense policy that actually involves defending the United States rather than engaging in adventures abroad. More recently, he has been the only candidate to speak out against government bailouts of private companies — whether its Fannie Mae and Freddie Mac or the entire banking industry.

Most importantly of all, though, Bob Barr is the only candidate running for President on a platform that is based upon the ideas of individual liberty and limited government that the United States was founded upon. They are ideas that have worked in the past, but they’ve been abandoned by both major political parties.

It’s time to return to the America that was meant to be. It’s time to vote for Bob Barr.

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A Coming Dark Age For Liberty ?

In a rather somber article over at Forbes, Henry Manner, former Dean at George Mason University School of Law, sees dark times ahead for freedom:

The political direction of the country is now determined for a long time to come, and it is inevitably leftward. Politicians would never resist a popular but massive demand for more government regulation (even the few with enough brainpower to recognize what is going on). The business community has never been a strong supporter of free market capitalism, and it certainly cannot be counted on to change its stance this time around. The media, the various leftist trend-setting elites and university faculties have been waiting a long time for an opportunity just like this, and we can be sure that they won’t squander it. The shrillness of their attacks on free markets will reach new heights of righteous indignation and assumed moral and intellectual superiority.

No policy issue based on private property, low taxes, small government or free trade will escape the charge that any unregulated free market will lead to disastrous excesses just as happened with the great financial crisis of 2008. This will be true for such soon to be rebuffed ideas as tuition vouchers for private schools, private health care, lower estate taxes, deregulation in its many forms, reduced use of eminent domain, tort liability restraint and free trade.

We can anticipate a new reign of mercantilism, as the protectionists among us wield this strong new weapon against globalization and open markets. And all of this is true in large degree regardless of who wins the forthcoming election.

If Sarbanes-Oxley was any indication of the kind of legislation that results from crisis, then we can be sure that even more ham-handed regulation of all kinds will be the main product of the next Congress. Henry Waxman’s grandstanding this past week about bankers’ greed has been merely the warm-up for what is to follow.

Bankers eager for federal help now will find themselves regulated not far short of total federal control of their business behavior. Banks won’t be permanently nationalized, but what we will get will differ from that result semantically more than factually. Derivatives, for all their promise of alleviating panics and distributing risk, will not now be allowed to evolve into the brave new system once predicted for them. Accounting rules will become even more convoluted as we continue to ask for more information out of double-entry bookkeeping than it can ever deliver.

And, although Manne doesn’t say it, we can expect this move toward a corporate state to be supported by members of both parties — just look at the votes for the bailout to confirm that one.

Despite this, Manne doesn’t think that all hope is lost:

[U]nlike during the New Deal, there is a substantial intellectual establishment to ride herd on leftist proclivities. There are numerous free market blog sites, which, for instance, can be properly credited with forcing modification of the recent short-sale ban. There are countless free market think tanks in Washington and all around the country exerting considerable influence on government policies. Libertarians are a small but growing political factor, and there are even a few university economics departments and law schools where sanity prevails or is at least occasionally evident.

Like it or not, these few intellectual bastions of freedom philosophy will be about the only thing that keeps these ideals alive in the coming years. But we should never underestimate the power of good ideas. Like the bad ones we are about to witness in large numbers, they may just have to bide their time until a new crisis causes the fickle and uninformed public to demand a new direction.

Unfortunately, that new crisis is likely to cause a lot of pain for everyone.

Joe The Plumber And Professional Licensing Laws

After Joe Wurzelbacher became the star of the Wednesday night’s debate, the media started looking in to his background and it didn’t take long for someone to discovery that Joe the Plumber doesn’t have a plumber’s license.

Now, Wurzelbacher admits that and say that, because he works for someone who has a license, he isn’t required to be licensed under Ohio law.

Whether that’s true or not, though, Matthew Yglesias notes it raises another question entirely:

[Wurzelbacher] raises the issue of whether or not it really serves the public interest to have so many occupational licensing rules. Like most people, if I needed to hire a plumber, I’d probably look for a recommendation. I don’t have any real confidence that these licensing schemes are tracking quality in any meaningful way, just preventing a certain number of people from earning a living and raising the general cost of plumbing services for everyone else.

Yglesias has a point, and it applies to more than just plumbers. Depending on the jurisdiction you live in you have to get a license from the state to be a plumber, carpenter, landscaper, electrician, beautician, dog groomer, dog walker, and probably a whole host of other occupations that I can’t even think of right now.

But what purpose does the licensing really serve ? Does anyone really believe that the mere fact that one of these professionals has a piece of paper from the state or local government means that they are competent to do their job, or that they’ve never cheated someone on a job ?

Of course not. That’s why you don’t just rely on whether or not someone is licensed before hiring them to, say, remodel your basement, build a deck, or fix your water heater. You do what Yglesias would do, you’d look for recommendations from friends, family or neighbors.

So if it’s not guaranteeing good or even competent service, what purpose is the licensing serving ?

Well, one of Yglesias’s commentors, probably inadvertently, stated it pretty clearly:

The problem is that when you don’t have any licensing for skilled positions you have a glut of weekend warriors who drive the price down and put professionals out of business– and that eventually lowers quality. I knew a guy who had his own landscaping business but gave it up because there were too many people with a John Deere who would do stuff for absurdly low rates because it was only a hobby for them. When it came to doing actually skilled work, of course, they sucked at it– but people want to believe they can get quality work without paying for it. So they go with an unskilled cheap guy and the actual professional suffers.

In other words, the purpose of professional licensing, more often than not, is not to “protect the public,” it’s to protect incumbent businesses by creating barriers to entry, restricting the supply of skilled labor, and making the cost of that labor more expensive to the public.

We’ll Make Them An Offer They Can’t Refuse

One person with knowledge of the meetings called it a “take it or take it offer”:

The chief executives of the nine largest banks in the United States trooped into a gilded conference room at the Treasury Department at 3 p.m. Monday. To their astonishment, they were each handed a one-page document that said they agreed to sell shares to the government, then Treasury Secretary Henry M. Paulson Jr. said they must sign it before they left.

And when the CEOs began to object, Paulson’s consigliere explained that it was ‘in their best interest’ not to protest too much:

With the discussion becoming heated, the chairman of the Federal Reserve, Ben S. Bernanke, who was seated next to Mr. Paulson, interceded. He told the bankers that the session need not be combative, since both the banks and the broader economy stood to benefit from the program. Without such measures, he added, the situation of even healthy banks could deteriorate.

As David Boaz quipped, “Nice little bank ya got there… Shame if anything happened to it.”

The strange thing is, there are still people in America who are surprised to hear that our government behaves like this…

Inflation Fears Ease — So Watch Out!

As I’ve pointed out before, the extreme leverage increases in our economy created a false inflation, and the de-leveraging is an inherently deflationary process.

There are signs that this false inflation is easing, and possibly even heading into a deflationary curve.

Consumer prices were flat in September as retreating costs for gasoline, clothes and new cars helped to offset rising prices for food, medical care and other things.

The new reading on the Consumer Price Index, the government’s most closely watched inflation barometer, came after prices actually dipped by 0.1 percent in August, the Labor Department reported Thursday.

In the inflation report, when energy and food products are stripped out, “core” prices inched up by just 0.1 percent in September, an improvement from a 0.2 percent advance in August.

The latest showing on inflation was better than economists expected. They were forecasting a 0.1 percent increase in overall prices and a 0.2 percent rise minus energy and food.

I’ve been watching locally as gas prices here in Orange County have dropped, from the $4.50/gallon range at the high points down into the $3.35/gallon range this morning. As they tend to lag the price of oil, they could drop even further. The [impending or currently existing] recession is eating into demand for most consumer goods, which puts downward pressure on prices for those as well.

Food is holding steady, but if we can get some pressure in Washington to end our silly corn ethanol program (only possible if Congressional Democrats try to punish their Midwestern Republican opponents), it could reduce prices there as well.

So why do I say watch out?

With the economy in for a period of weakness that could extend well into next year, inflation should also moderate, Bernanke and other Fed officials predict. Tamer inflation would give the Fed more leeway to slice rates again or at least keep them at low levels for some time.

“The rapidly disappearing inflation threat is providing the Federal Reserve full latitude to move to an easing bias on rates to combat the recession as well as the ongoing financial crisis,” said Brian Bethune, economist at Global Insight.

Many economists believe there’s a strong chance the Fed will lower rates at its next regularly scheduled meeting later this month. In an unprecedented assault on the financial crisis, the Fed and other major central banks together reduced rates last week. The Fed’s main rate dropped to 1.50 percent, from 2 percent.

He says this coming off a 2-week bender where the Fed, the Treasury, and our elected officials have pledged to throw liquidity at the problem to “unfreeze” this market. Now, there’s a chance that our super-intelligent always-prudent benevolent masters in Washington may lay down exactly the right amount of liquidity to forestall deflation, get markets moving, and not create inflation of their own… Yeah, that’s about as likely to happen as France adopting a 55-hour work week.

Much more likely is the scenario where our government throws dollar after dollar, rate cut after rate cut, and stimulus package after stimulus package at the problem until they see movement. After all, now that they know inflation fears are “disappearing”, they know that they have “full latitude” to act. Once they begin to see movement, they’ll finally realize that all those free dollars had a lag period and that they’ve overreached. We’ll have “booming growth” on paper as the value of our money erodes.

Sadly, only the few of us who know that these cycles are induced by a loose monetary system— those of us who saw this problem coming 2+ years ago— will accurately diagnose that the apparent growth is a chimera. And as usual, nobody will listen until it’s too late. They’ll blame the guy in office, and get ready to elect their next savior politician to take care of them. “Pay no attention to the man behind the curtain! All hail the Wizard!”

If You Live By The Petrodollar, You May Die By The Petrodollar, Right Hugo?

For the better part of a decade, Hugo Chavez has been running “La Revolución!” It’s been an attempt to remake Venezuela and then the rest of South America into a socialist powerhouse that would stand up to el Diablo del Norte.

He’s financed this movement on high oil prices. As an oil exporting nation, and as a dictator who has nationalized oil into a fully state-owned enterprise, he’s been living high on the hog for quite some time. Many of us predicted that he was wasting money that would be better spent exploring for more oil on his social programs and would eventually face the reckoning of declining production. Instead, though, he may face his fate more quickly:

According to studies prepared by PFC Consulting Limited, a Washington-based wholly owned subsidiary of Power Finance Corporation Limited, and German bank Deutsche Bank, Venezuela is the most vulnerable country to the financial crisis.

PFC considers that Venezuela needs that the price of oil averages USD 97 to balance its accounts while in 2000, the South American country required that the price of the barrel of petroleum was USD 34.

Deutsche Bank says that next year Venezuela and Iran require that the average price of oil remains at USD 95; Saudi Arabia at USD 55 and Russia at USD 70.

The Ministry of Energy and Petroleum only releases the weekly price of the Venezuelan basket of crudes, and based on the statistics, oil prices dropped 35.3 percent, from USD 126.46 on July 18 to USD 81.78 at the end of last Friday session.

Venezuela has been spending and spending, like the good times of high oil prices will never end. In a weakening economy, perhaps with oil heading downwards further, it seems likely to put a stop to his wider dreams of regional domination. I’d say that it puts his own administration in jeopardy, though, but I think he’s got enough of a lock on power at this point that very little will challenge his reign internally.

Of course, it’s not like America is without fault, as we’re reeling from the same overexuberance and feeling like the good times would never end. But we didn’t put all our eggs in one oil barrel, so I think we’re much more capable of weathering this storm than Venezuela.

Hat Tip: Cato @ Liberty

Quote Of The Day — National Greatness Conservatism

Mark over at Publius Endures discusses the current state of the Republican Party, as it has changed from the 1994 version to the 2008 version (emphasis added):

With libertarians leaving the party in droves, the remaining GOP opinion-makers are increasingly free to abandon free market rhetoric; put another way, they have become smaller and thus have to please fewer groups. The result? National Greatness Conservatism and so-called Sam’s Club Republicans, two worldviews that are 1. intellectually honest; 2. capable of appealing to the GOP base; 3. capable of eventually bringing in groups not currently in the GOP coalition; 4. are currently quite compatible with each other; and 5. are completely incompatible with any version of libertarianism.

National Greatness Conservatism isn’t new. In fact, it follows much of the line of European monarchies prior to the founding of America, and was quite forcefully advanced by folks such as Alexander Hamilton. It is now alive and well in John McCain and the Republican Party.

And as Mark points out, it is not a libertarian philosophy in any sense of the word.

Intrade — Make Money On Barr’08

Last night, I posted about the wild swings seen on the Intrade prediction market for President; wilder than anything I saw in ’04. I wanted to see how a true “long shot” was looking, so I started looking up contracts on Barr.

Barr has several contracts based on his percentage in the popular vote, and a contract on whether or not he will receive any electoral votes. There may be options to take advantage of these contracts.

The contract trading whether he will receive >2% of the popular vote is trading at about 19, which mathematically makes it about a 4:1 bet if you want to hold it until election day. The contract trading whether he will receive >3% of the popular vote is currently trading at 4. Mathematically, that’s a 24:1 bet.

I’m actually considering getting on there and laying $100 on each contract, buying 5 shares of the 2% and 25 shares of the 3% contract. Assuming that Barr makes it above 2% but not 3%, I’d walk away with $500 for a $300 profit. If he were to pass 3%, I’d walk away with $3000 for a $2800 profit.

Given that this election seems to be running away from McCain, I think there’s a good chance that the “protest vote” will be out in more force than usual. Granted, the Libertarian party candidate hasn’t earned over 1% of the popular vote nationwide in recent history, but there’s a first time for everything, right?

Intrade Update — Wild Left Hook

Before the conventions, the election was looking pretty decently to be in Obama’s hands according to Intrade, with him predicted about 60% likely to win (which was higher than Bush was predicted in 2004). After the conventions, though, I remarked how shocked I was to see the numbers come to a dead heat.

Comparing my analysis to that of the financial world, I consider myself more of a “fundamentals” guy than a “technician”. I thought it was pretty clear that the country was pretty well sick of Bush, less than impressed by McCain, and that a significant number of people would be swindled by false promises of a new hopey-changey paradigm. So I was not surprised to see Obama trending at 60% before the election.

I was surprised to see the numbers over the last few weeks, though. Intrade’s current contract has Obama trading just over 80%. Their state-by-state analysis predicts he’ll win 364 electoral votes compared to McCain’s 174.

Now, a technician with a greater understanding of futures markets would probably state that those numbers will trend closer to parity between now and the election, and I don’t disagree. But I trust prediction markets a lot more than polls, and I think it’s pretty darn clear which way this one is going to end up. And to make it worse, they predict slightly over a 90% chance for each house of Congress being retained by the Democrats.

I’ve said before that I don’t believe that either McCain nor Obama would be a positive force for liberty. But things appear to be lining up about as negative as they can go. All that in the middle of what appears to be a financial meltdown of history-making proportions, and I have my own prediction for America over the next decade.

We’re screwed.

Pretty Soon You’re Talkin’ Real Money!

$700B here, $900B there, and now another $250B on top!

The government put itself four-square into the country’s banking business Tuesday, resorting to what President Bush conceded was the unwelcome choice of buying into the system to loosen paralyzed channels of credit.

The president said the decision to buy shares in the nation’s leading banks — a kind of federal intervention not seen since the Depression era — was “not intended to take over the free market but to preserve it.”

Translation: We already broke it, now we have to buy it.

Said Paulson: “Government owning a stake in any private U.S. company is objectionable to most Americans — me included. Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

Nine major banks will participate initially, including all of the country’s largest institutions. The first bank to take advantage of the new program was Bank of New York Mellon which announced Tuesday that it would sell $3 billion in preferred shares to the Treasury.

Some of the nation’s largest banks had to be pressured by to participate by Paulson, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with banks getting bailouts.

(emphasis added) Don’t you love it? It’s objectionable to Paulson, and to the American public, and even to the banks themselves. But they have to do it anyway.

A person I know who works in the finance industry said it best: I’m not sure what to think any more. There are a lot of comparisons to 1929, except the government at that time didn’t have the capability to throw any liquiditity in the markets.”

Yep, we’re in pretty much unchartered territory here. We’re taking a situation with echoes of 1929 and throwing so much liquidity at it that we’re not sure what’s going to happen. Nobody knows what to think right now, and that’s pretty damn scary. That Paulson and Bush think they can actually manage the situation is even worse. This really could be the end of America’s financial position in the world.

UPDATE: It has been mentioned elsewhere (and alluded to in the article) that this $250B is part of the $700B bailout money. This appears to be true. So now we have a huge run-up in bank stock prices, because investors know there is a ready buyer about to toss $125B immediately into the 9 biggest banks. Great!

Personal Attack Ad…Against Myself!

Have you ever wondered what it would be like to be on the receiving end of a personal attack ad? I have. During the 2006 campaign, I thought it would be fun to write my own personal attack ad…against myself! Like many attack ads, everything I wrote about myself was (is) technically true but lacked context (the full context of each charge can be found by following the links).

I found the exercise to be very cathartic and enjoyable. I highly recommend you try it sometime! Feel free to write your own personal attack ad against yourself or write your own against me in the comments section of this post.

Now, cue the unflattering grainy black and white video with dreary music and enjoy my personal attack ad:

Who is Stephen Littau and why can’t we trust him?

For starters, he often advocates ending the war on drugs, suspending drug raids on suspected dealers, and repealing mandatory minimum sentencing laws for drug offenders. He has even gone as far as to defend a man who shot and killed a police officer who was simply serving a lawful search warrant.

But that’s not all…

Stephen Littau once wrote “Go ahead and call me an infidel, I will readily embrace this label” and that “an end of faith is way overdue.” Do we really want to put our trust in such a Godless heathen?

Not if you want to defend marriage, the flag, and traditional family values. Stephen Littau opposed the Defense of Marriage Amendment and the Flag Desecration Amendment. He also wants to take God off our currency, out of the Pledge of Allegiance, and remove religious monuments such as the Ten Commandments from government property using the tired old “wall of church and state” argument.

Stephen Littau is so morally depraved that he considers selfishness a “virtue” and wants to eliminate social welfare and entitlement programs leaving Americans to fend for themselves. Stephen Littau wants us to believe that such selfish attitudes are actually compassionate by allowing people to suffer from their poor choices.

Let’s be sure not to suffer from this bad choice. This November, send Stephen Littau a clear message:

Yes to the war on drugs!
Yes to religion in government!
Yes to defending marriage, the flag, and the Ten Commandments!
Yes to a compassionate government!
And No to the secular philosophy and dangerous ideas of Stephen Littau!

Vote for ‘N.O.T.A.’

Comrades, once a year, sometimes more, we are confronted with the question of whom to vote for. Millions of man-hours are consumed every two years in debating and discussing who is standing for elected office, the pros and cons of their policies and their past performance. Billions of dollars are spent promoting or defaming candidates. For men and women of principle, the debate often sounds like this:

The Marsh house, dinnertime. The family is gathered at table, with Grandpa at one end, Randy at the other. Sharon comes in with plates and the main course
Sharon: How was school today, Stanley?
Stan: It was ridiculous. We have to have a new school mascot and we’re supposed to vote between a giant douche and a turd sandwich.
Sharon: …What did you say?
Randy: Did you just say that… voting is ridiculous?
Stan: No, I think voting is great, but, if I have to choose between a douche and a turd, I just don’t see the point.
Randy: clenches his fists You don’t see the point!! Oh you young people just make me sick!
Sharon: Stanley, do you know how many people died so you could have the right to vote?!
Stan Mom, a-I just don’t think there’s much of a difference between a douche and a turd. I d-I don’t care.
Randy: jumps upright and plants his hands on the table You don’t care?! You really want a turd sandwich as your school mascot?! On your football helmets?! A turd?!
Sharon: Well, hold on, Randy, I think a turd sandwich is a little better than them having a giant douche on their uniforms.
Randy: You’re crazy!! A d-a douche is at least clean!
Sharon: It’s sexist is what it is!
Randy: You don’t understand the issues, Sharon!
Sharon: Are you calling me ignorant??
Randy: You think the school mascot should be a turd sandwich? Well you’re not exactly Einstein!
Sharon: I am sick of you belittling my opinion, you son of a bitch!
Sharon picks up the casserole and chucks it at Randy, who ducks and looks back at her angrily. They both leave the table in opposite directions.
Shelley: leaving the table as well I hate this family, I hate it!
Stan looks on, shocked, while Grandpa continues eating unruffled.

Notice how Sharon’s opposition to a douche is equated to supporting a turd sandwich? Notice how Sharon is supporting the turd sandwich not because she likes turds, but because she thinks the douche is so awful that anything else would be better?

The government is a violent organization.  The election is a method of choosing against whom the violence will be directed, the magnitude of the violence, and for who shall benefit from the violence.  Most people don’t want to loot others.  Rather, they are afraid they will be victims of the violence.  Fear is the motivator that drives people to the polls. Fear is what animates them.

Thus, if a turd sandwich wants to drive people to the polls to vote for him, he will emphasize what a douche the douche is.  He will point out all the unflattering consequences of voting for the douche.  In the meantime, the douche is trying to panic those who have more to lose from the election of the turd sandwich into showing up at the voting booth.

While this phenomenon explains the ubiquity of so called “negative campaigning”, it would seem that it provides an incentive for more libertarian candidates.  Why do we get such raging nutcases running for office?  Why are we stuck in a race to the bottom?  The answer is, of course, in the incentives of political economy.

To scare the voters, the turd sandwich needs money.  He needs publicists, volunteers, media support, etc.  All of this costs money.  Lots of money.  To get the money, he needs to convince people to give it to him.  This means offering people spoils or public favors.  It could be a favorable line in the tax code, an anticompetitive tariff or regulation, some law that enables rents, etc.  To provide these spoils, the candidate must execute interventionist policies – in other words, the more government violence the candidate offers, the more financial and volunteer support he gets.

This incentive is worsened by the way the political classes of votes equate votes with power.  Let us say, for example, that most people thought a turd sandwich to be far worse than a douche, and had voted for the douche in overwhelming numbers.  The douche would then go into office claiming a mandate. Other politicians will be less likely to spurn him. They will attempt to assist him so that he will throw some of his support their way.

The major mistake the voters are making is that they are assuming that they must choose between the douche and the turd sandwich – that a failure to vote for the douche is tantamount to wanting the turd sandwich to win. The only option that they consider is to refrain from entering the voting booth at all.

I think this is insufficiently imaginative for several reasons.
1) Every election has a few ballot questions. If I stay home this year, I miss my chance to vote to repeal my state’s income tax.
2) Nor can I refuse to vote on certain items in the ballot, and vote for others: ballots that don’t contain votes for all races are typically thrown out as being damaged.Update: This claim is wrong, and I withdraw it.
3) In most states, you can write in a candidate. You could vote for anybody you want to hold a position.

The problem the disgruntled voter faces is how to show up and vote against all the candidates simultaneously. The short answer is that one can accomplish this via writing in None of The Above. If one does vote that way, the ballot is counted and is included in the totals.

This is a great way to jam the system.  It pushes down the vote totals of each candidate.  It allows you to vote for freedom loving candidates where available while withholding support from non-freedom loving candidates.  You can vote in the freedom maximizing direction on ballot initiatives.  And, if enough people do it, it could even start to influence candidates.  Suppose 1/10th of those who stayed home in the last election had shown up and voted for NOTA instead.  That population consisted of 36.2% of the voting age population: 89 million people stayed home.  8.9 million people voting for NOTA would have resulted in Bush getting much less than 50% of the vote.  In fact, the 8.9 million votes would have dwarfed the difference between Bush and Kerry’s votes.

So don’t stay home on voting day.  It indicates passive acquiescence to the ruling classes.  Don’t vote for one of the two or three choices the rulers have approved for you, that encourages them.  Rather show up at the polling booth and tell them to go to hell.  Show them your contempt in a way that they cannot deny. Don’t see anyone you like? Write in NOTA.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Quote of the Day: The “That’s a Damn Good Question” Edition

John Stossel writing for Townhall.com asks a very good question in his article, Try Free Enterprise.

Everybody talked about the “freeze” in the credit markets, but why, I wonder, were the cable news programs that repeated the credit-freeze mantra pausing for commercials from companies trying to lend me money? Ditech and LendingTree still hawk mortgages at under 6 percent. Some credit freeze.

No Repeat Of The 1930s Here!

Yep… Worried of a liquidity crunch similar to that in the early 1930s, there’s been quite a bit of movement in the last week. Starting with last Friday’s $700B Treasury bailout of toxic debt, followed by yesterday’s $900B+ short-term lending backstop, markets still weren’t assuaged.

So what happened? A big drop from the Fed in short-term interest rates, to nearly the lowest levels since 2003. And this isn’t just an American move, this is worldwide:

The Federal Reserve, the European Central Bank and other central banks from Britain and Switzerland to Canada and China announced rate reductions within seconds of one another. The British government separately announced a plan to pump billions of pounds into the country’s leading banks as part of a plan that would result in considerably greater government influence over the financial sector there.

The Fed said in a statement that, because of weakening economic activity, it had cut the Federal funds target rate by half a percentage point, to 1.5 percent. It also cut its discount rate by the same amount. The vote was unanimous.

So don’t worry. We’re not going to have a depression caused by lack of liquidity. We’ll have all the problems attendant with too much liquidity instead.

Want an example? As I’ve pointed out before, the unwinding of leverage is an inherently deflationary process. Gold, in its retreat from highs during July as that credit crunch started setting in, dropped from a high very near $1000/ounce to about $840 an ounce late last week. With the news of the bailout, the short-term lending program, and the rate cuts, it has since rocketed back up over $900. I have a feeling it’s headed farther up in the very near term.

Why Libertarians Should Vote: Restoring Liberty via the Ballot Box (Part 3 of 3)

I am not a fan of direct democracy. As I pointed out in part 2 of this series, the Colorado ballot has a number of anti-liberty ballot measures from the Left and the Right. The Colorado ballot is a classic example of how democracy can be reduced to tyrannical of mob rule.

Having said that, the system is what it is; why not use the system in a way which restores the rights of life, liberty, and property?

When Democracy is used to Promote Liberty: The Compassionate Use Act of 1996

Paradoxically, direct democracy has in some ways advanced Libertarian issues in ways which would have been difficult if not impossible given the current two party power structure. Libertarian activist Steve Kubby was a key player in advocating California Prop 215 (a.k.a. the “Compassionate Use Act of 1996”) which legalized the use of cannabis for medical purposes.

Unfortunately Prop 215 has failed numerous legal challenges and patients, vendors, and doctors have suffered severe punishment at the hands of the federal government despite the state law (click here, here, and here for details). Prop 215 has, however, at the very least forced policy makers to rethink prohibition of medical marijuana.

Since the passage of Prop 215, 11 other states have passed similar laws (7 through the initiative process 4 through state legislatures). Earlier this year, Barney Frank (D) introduced HR5843 which would go even further to decriminalize use of marijuana by adults. Still, it may take some time before Washington catches up with the progress being made at the state level but if/when Washington does get over its reefer mania, it will be due in no small part to those who fought for the Compassionate Use Act of 1996.

Pro-Liberty Ballot Measures on the Colorado Ballot?

As terrible as the Colorado ballot is, there are more than a few measures which would restore liberty to Coloradans. Amendment 46 would prohibit state and city governments from using race, gender, or ethnic, based preferences (a.k.a. “affirmative action”) for hiring or promotion considerations.

Amendment 50 would take decisions regarding casino gambling away from the state and allow the local communities where the casinos are located to decide hours of operation, the games which will be played, and maximum wager.

Referendum N removes obsolete language from the Colorado Constitution as originally adopted in 1876 regarding the prohibition of the importing, manufacturing, and selling of “impure” alcohol. Proponents of N point out that the problem of impure alcohol no longer exists as it did when Colorado first became a state. The only argument against the measure in the 2008 Ballot Information Booklet is that enacting N “may diminish the historical character of the constitution.”

And perhaps the best ballot measure of all this November: Referendum O. Referendum O would improve the process of citizen-initiated state laws by raising the requirements for amending the state constitution while simultaneously lowering the requirements for citizen-initiated statutes. Currently, the requirements for statutes and amendments are identical but the state constitution is supreme when statutes conflict with the constitution.

This would encourage activist groups to focus their efforts on statutes rather than litter the state constitution with every wacko proposal the mob wishes to impose. And not only does Referendum raise the minimum number of signatures to qualify for the ballot but it also requires that 8% of the minimum required signatures are collected from each congressional district (rather than the will of people of Denver vs. the rest of the state).

Final Thoughts

When the prospects for liberty are not so good, it’s very tempting to drop out of the process. Although I am supporting Libertarian Bob Barr for president in this election, I realize that he does not have a realistic chance of winning.

But don’t tell me I’m “throwing my vote away” because I’m voting my principles. If I were to choose between “the lesser of two evils,” then I would be throwing my vote away. Beyond that, I also realize that in voting Libertarian, I can help pave the way for other Libertarians to have easier access to the ballot in future races from sheriff all the way up to president.

But even if you believe that Barr is not a “real Libertarian” and therefore, cannot support him, I would urge you to skip the presidential race and work down the ballot. Are there any other Libertarians, “Ron Paul Republicans,” or Libertarian leaning independents running? Are there any ballot measures which will either advance or reduce liberty?

As John Philpot Curran once said, “Evil prospers when good men do nothing.”

While it is true that evil may still prosper despite our best efforts, we can each at least say we did our part to resist the emotional whims of our friends, the tyrants next door.

A Failure Of Regulation

Many folks these days are blaming our current financial woes on a lack of regulation. They seem to think that an abstract term like “regulation” somehow gives government amazing powers to ensure that bad things won’t happen. Which is why this interview with Warren Buffett (c/o Coyote Blog) is telling:

QUICK: If you imagine where things will go with Fannie and Freddie, and you think about the regulators, where were the regulators for what was happening, and can something like this be prevented from happening again?

Mr. BUFFETT: Well, it’s really an incredible case study in regulation because something called OFHEO was set up in 1992 by Congress, and the sole job of OFHEO was to watch over Fannie and Freddie, someone to watch over them. And they were there to evaluate the soundness and the accounting and all of that. Two companies were all they had to regulate. OFHEO has over 200 employees now. They have a budget now that’s $65 million a year, and all they have to do is look at two companies. I mean, you know, I look at more than two companies.

QUICK: Mm-hmm.

Mr. BUFFETT: And they sat there, made reports to the Congress, you can get them on the Internet, every year. And, in fact, they reported to Sarbanes and Oxley every year. And they went–wrote 100 page reports, and they said, ‘We’ve looked at these people and their standards are fine and their directors are fine and everything was fine.’ And then all of a sudden you had two of the greatest accounting misstatements in history. You had all kinds of management malfeasance, and it all came out. And, of course, the classic thing was that after it all came out, OFHEO wrote a 350–340 page report examining what went wrong, and they blamed the management, they blamed the directors, they blamed the audit committee. They didn’t have a word in there about themselves, and they’re the ones that 200 people were going to work every day with just two companies to think about. It just shows the problems of regulation.

There are all sorts of problems with regulation, such as the Bootlegger-Baptist phenomenon, regulatory capture, and all the corruption and back-scratching associated with lobbying and rent-seeking.

It just shows that despite 200 employees put in place to oversee only two companies, they still couldn’t overcome the institutional incentives against rocking the boat. As Stephen pointed out earlier today, even when there are voices pointing out these problems, the regulators couldn’t seem to find them because they wanted to “be collegial”. Collegial could also have described the relationship between Arthur Anderson and Enron, no? But of course, I’m overreacting… These are honest government employees with only the public’s interest at heart, so I’m sure there were no conflicts of interest…

The Credit Crisis: A Bipartisan “Achievement”

First, President Bush in 2002 pushes for increased home “ownership” regardless of creditworthiness.

Second, despite what Nancy Pelosi says, the Democrats most certainly did their part to help President Bush succeed in his “ownership society.” These Democrats who scream that this credit crisis is a result of lax regulations didn’t much appreciate the regulators when they warned that Freddie and Fannie were in trouble as early as 2004.

The recent rescue package bailout was also a bipartisan “achievement.” Despite these bipartisan efforts, as of this writing, the Dow Jones Industrial Average has dropped to 9720 (-235 so far today).

In tonight’s debate we can almost certainly count on John McCain and Barack Obama talking about “bipartisanship” and how each will “reach across the aisle” to get things done. As McCain and Obama reach across the aisle, we’ll be reaching for our ankles and say “Thank you Mistress Helga, may I please have another?”

That’s exactly what we are going to do. We are going to elect one of these two collectivists into the White House in just a few weeks and we are going to send Democrats and Republicans back to the House and the Senate and ask them to abuse us more.

Make no mistake: this credit crisis is a bipartisan government achievement. What it is NOT is a failure of the free market.

Fed Opens Spigot With Up To $900B $1.3T More

With the reverberations of the Congressional fight over the $700B bailout still shaking Capitol Hill, the lingering question has been whether that $700B would be enough to do any good.

Nope. They’ll need at least double that. And Congress isn’t voting on this plan:

The Federal Reserve announced Tuesday a radical plan to buy massive amounts of short-term debt in a dramatic effort to break through a credit clog that is imperiling the economy.

The Federal Reserve, invoking Depression-era emergency powers, will buy commercial paper, a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls.

The Fed said it is creating a new entity to buy three-month unsecured and asset-backed commercial paper directly from eligible companies. It hopes to have the program up and running soon, Fed officials said.

Fed officials said they’ll buy as much of the debt as necessary to get the market functioning again. They refused to say how much that might be, but they noted that around $1.3 trillion worth of commercial paper would qualify.

And lest anyone be confused, this is not what went through Congress on Friday:

The Treasury will provide money to the Federal Reserve Bank of New York to support the new program, the Fed said. Fed officials would not say how much but believed it would be substantial. The money would not come from the $700 billion financial bailout President Bush signed into law on Friday.

Bernanke, a student of the Depression, took one lesson away from the 1930s. Never let liquidity dry up. He’s going to inject so much grease in the system that it will be FORCED away from seizure. What remains to be seen, though, is if that grease will cause it to spin right off the axle.

The current credit crunch is a largely deflationary phenomenon. Too much leverage existed in the system, and with our fractional reserve lending system, that led to too much money floating around.

The healthy way to let leverage unwind is to allow that fake wealth to evaporate. However, this is a very painful exercise. Leverage-induced inflation sends false signals to the market suggesting that natural demand for certain products (housing in this case) is increasing, and jobs and companies spring up to meet that demand. As the leverage unwinds, the money dries up, and people in those sectors are left out of a job looking for something to do.

The unhealthy way to unwind leverage is to flood the market with enough liquidity that the base of the lever expands. If you’re leveraged at 20-1, and the government steps in and loans you new capital while buying your bad assets, you can increase your capitalization and may only be levered at 10-1 while your actual holdings haven’t decreased. This is what the government is trying to do. The danger, of course, is that the new money injected into the system just adds to the leverage, and we end up in a hyperinflationary depression.

Many people I’ve spoken to who are involved in financial matters are saying things like “I’ve never seen anything like this before. The market is acting in completely unprecedented ways.” At the same time, we have a government that is so desperate to stave off another 1930s depression that they’ll sacrifice any sense of fiscal discipline or monetary stability. It sure is going to get interesting!

Just What Was The Administration Threatening Recalcitrant Representatives With? Martial Law?!?

I hope that Representative Sherman is the victim of a bad game of “telephone”. If he is not, if the administration really did threaten to impose martial law if the bill weren’t passed, then the time has come for us to cast out the vipers in Washington D.C.

Hat tip to The Crossed Pond and Dispatches from the Culture Wars

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.
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