Category Archives: Theory and Ideas

Today’s Nasdaq Illustrates the Phenomenon of Creative Destruction

Those of you who are old enough to remember the dot com bubble bursting some 15 years ago might also remember the handwringing about how Microsoft was becoming a monopoly. Microsoft was the juggernaut that could only be taken down with antitrust suits by the federal government. Other companies simply could not compete with such a well-established corporation; the free market was inadequate.

Fast forward to where Microsoft stands today. The once seemingly invincible company has succumbed to the realities of competition and now finds itself in third place on the Nasdaq index.

James B. Stewart writing for The New York Times explains:

The Nasdaq composite that peaked at 5,048.62 on March 10, 2000, in what turned out to be the height of the technology bubble, bears little resemblance to today’s Nasdaq index. Of the top 20 Nasdaq companies by market capitalization in 2000, only four — Microsoft, Cisco Systems, Intel and Qualcomm — remain in the top 20 today. Eight no longer exist as independent companies, most as a result of bankruptcy or acquisition, and several are shadows of their former selves. The current Nasdaq composite index has only about half as many companies as it did in 2000.

“Joseph Schumpeter was spot on when he said capitalism is all about creative destruction,” said Richard Sylla, an economics professor at New York University’s Stern School of Business and a specialist in the history of markets, referring to the Austrian-American economist who described the phenomenon in 1942 in “Capitalism, Socialism and Democracy.”

In the intervening 15 years, a new generation of entrepreneurs, newly public companies and entire industries have emerged and seized the dominant positions in the Nasdaq index even as their predecessors faltered. Apple, now the world’s largest company by market capitalization, barely registered in 2000, and the first iPhone was not announced until 2007. Over a billion smartphones were shipped in 2014.

The chart below which accompanies the article illustrates this creative destruction of the past decade and a half quite clearly.
Capture

What this tells me is that no matter how large these corporations get, they cannot rest on their laurels. They cannot assume that just because consumers like their product(s) more than the competition today that the same will be true tomorrow. How many people use Myspace today as opposed to Facebook?

It’s the creative destruction of the free market – not additional regulations which ultimately allow consumers to have more choices.

Moral Authority

There is a very important distinction I think we need to make clear.

Government, as expressed in law, should have no moral system. Morals are not embodied in law. Ethics, are the province of laws.

The men who create laws, and who enforce them, need to be guided by morals in their conscience; and these morals should roughly accord with the laws they create and enforce, to the extent possible.

Further, these laws should roughly accord with the morals of those expected to live under them, to the extent possible.

NOT, to reflect in law all that which any may believe to be moral or immoral.

Our nation exists for the sole purpose of, and with the sole authority and validity of, preserving the fundamental rights of man against those who would abrogate them.

The day we forcibly encode a specific religious moral system into law, is the day we cease to have any validity as a nation.

We were created, chartered, and draw our authority to be a nation, and execute those powers delegated by our citizens; from a constitution which specifically prohibits us from doing so.

If you believe we already do, or seek to prove we have always done so, you are a fool at best, and a danger at worst.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Sympathy for Paranoia

cat in the tin foil hat

The moon landing was faked by the U.S. government for propaganda purposes to win the Cold War. The terrorist attacks of 9/11 was actually an inside job as a pretext to go to war. Space aliens landed in Roswell, NM but the government has been covering it up. The Sandy Hook massacre was faked to increase support for new gun control laws; the “victims” were actually actors who are all alive and well today. The Illuminati is the secret entity which actually governs the whole world…

The natural response to these statements is to say “these people are mad barking moonbats” and to keep ourselves as distant as possible from the people making them. Those of us in the liberty movement who want to be taken seriously are very quick to renounce anyone who is within six degrees of Alex Jones or anyone else who states any of the above. It’s difficult enough to be taken seriously about legalizing drugs, the non-aggression principle, free markets, and freedom of association; the last thing we need is to be lumped in with “those people.”

While it is very important to defend the “brand” of the liberty movement, it’s also important to recognize the reasons why people believe some rather nutty things.

[W]hen I say virtually everyone is capable of paranoid thinking, I really do mean virtually everyone, including you, me, and the founding fathers. As the sixties scare about the radical Right demonstrates, it is even possible to be paranoid about paranoids. – Jesse Walker, The United States of Paranoia: A Conspiracy Theory, (p. 24) (Read my book review here)

Once one learns about some of the activities governments been proven to have been involved in, some conspiracy theories no longer seem as outlandish. I used to refer to conspiracy theories and wacky beliefs as “black helicopter” stories and I’m fairly certain that others used the same terminology. Once I learned that black unmarked helicopters were used in the assault by the FBI on the Branch Davidians in Waco, TX,(Napolitano, p.110) I stopped calling such ideas “black helicopter.”

Not everything that sounds crazy is.
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An Article V Convention Is A Great Idea……If You Want To Destroy The Republic

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Article V to the U.S. Constitution lays out two methods for amending the Constitution:

  1. Congress passes an amendment by two-thirds vote and sends it to the states for ratification
  2. Two-thirds of state legislatures pass a resolution call for a convention to propose amendments, that would be sent to the states for ratification.

Amendments proposed either way have to be ratified by three-fourths of the states. All 27 amendments to the Constitution have been proposed by the first way. However, many conservatives are calling for an Article V Convention of The States to curb what they see is a Federal government that refuses to deal with a debt crisis, regulatory overreach, infringements upon state sovereignty, and Federal government overreach. Other Article V proposals include the “liberty amendments” that were proposed in 2013 by conservative talk show host and constitutional attorney Mark Levin.

However, without dealing with the specifics of the proposals laid out by those who are supporting an Article V convention, I believe that an Article V convention is a terrible approach to amending the constitution and in fact will likely result in a less free America.

The first problem with the Article V convention is that it’s never been tried before, with good reason. Matthew Spalding wrote this for the Daily Signal:

The requirement that amendments proposed by such a convention must be ratified by three-fourths of the states is a significant limit on the process and would likely prevent a true “runaway” convention from fundamentally altering the Constitution. But we don’t think it is at all clear, for instance, that two-thirds of the states calling for an amendments convention can limit the power of all the states assembled in that convention to propose amendments to the Constitution. Other questions include the many practical aspects of how an amending convention would operate and whether any aspects of such a convention (including going beyond its instructions) would be subject to judicial review.

 

 

Which leads to the second problem with an Article V convention, which is that everything will be on the table. The New American magazine reports that at least one progressive PAC is calling for an Article V convention in order to pass an amendment to overturn the Citizens United decision. In addition, progressive Supreme Court Justice John Paul Stevens has released a wish list of amendments. In an Article V convention, all of these things can be considered and what may result if a series of proposed of amendments reflecting a populist smorgasbord of proposals designed to cobble together the support of 37 states.

The third reason why an Article V convention should be rejected is that all of these proposed changes can be accomplished through the normal Congressional amendment process. An Article V convention should be reserved just for national emergencies given all the inherent unknowns that would be involved. No one in their right minds can credibly argue that any issue we’re facing right now that an Article V convention would remedy is truly a national crisis that needs to be solved with the dramatic step of a constitutional amendment, let alone one passed in this measure.

The final reason why liberty-lovers should reject an Article V convention is that it essentially is a shortcut to doing the hard work of persuading fellow Americans and our representatives that we need to make these changes. What the Article V proponents are essentially trying to do is to overturn 80 years of election results without actually putting in the hard work of persuading fellow Americans that they should make the changes. If they could not convince the American people to endorse this agenda in an election, how are they going to convince 37 states to endorse these ideas?

An Article V convention is a radical measure that will, unfortunately, provide a platform for populist demagogues to promote their agenda to the detriment of liberty. Need I remind everyone that the original mandate of what became the Constitutional Convention in Philadelphia in 1787 was merely to revise the Articles of Confederation. Instead, it produced a brand new governing document. It’s just as likely that an Article V convention will produce a constitution that will radically different than what its proponents advocate.

In the end, there’s just simply too much risk and too many unknowns surrounding the Article V convention to go down that road.

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at The Hayride.com and Rare. You can also find me over at the R Street Institute.

Georgia Legislature to Consider Modest Reforms for ‘No-Knock’ Raids

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On May 28th, 2014 around 3:00 a.m. in Habersham County, Georgia a SWAT team raided a house the police believed to be occupied by Wanis Thonetheva, an alleged drug dealer. In the chaos of the raid instead were four children and up to four adults. The youngest of the children, 19 month-old “Bou Bou” Phonesavanh was burned and permanently disfigured from a flash-bang grenade which set the play pen he was sleeping in ablaze.

No drugs or contraband of any kind was found in the home. Also absent from the residence was the man they were looking for.

Bou Bou was taken to Grady Memorial Hospital in Atlanta where he was put into a medically induced coma. Doctors were not sure if the toddler would ever wake up but fortunately, he did.

This is not by any means, the end of the Phonesavanh family’s problems with Bou Bou’s medical expenses around $1.6 million and surgeries into adulthood. These expenses, by the way, that will not be paid by the county or the departments responsible for severely injuring this child.

In the aftermath of this botched SWAT raid, several Georgia legislators are looking to reform the use of “no-knock” raids. Sen. Vincent Fort (D-Atlanta) introduced a bill he’s calling “Bou Bou’s Law” which would require a slightly higher standard for no-knock raids than required by SCOTUS. Bou Bou’s Law would require “the affidavit or testimony supporting such warrant establishes by probable cause that if an officer were to knock and announce identity and purpose before entry, such act of knocking and announcing would likely pose a significant and imminent danger to human life or imminent danger of evidence being destroyed.”

In the House, Rep. Kevin Tanner (R-Dawsonville) introduced a similar bill which would go even further by requiring that no-knock raids be conducted between the hours of 6 a.m. and 10 p.m. unless the judge issuing the warrant “expressly authorizes” another time. Tanner’s bill also requires that each department keep records of each raid which would be compiled with all the other records around the state into an annual report which would be sent to the Governor, Lieutenant Governor, and the Speaker of the House.

While these are laudable reforms which I would hope would pass any state legislature, these reforms do not go nearly far enough. Several of the articles I read in preparing this post had titles like “No Knock Warrants Could be a Thing of the Past.” In reading over these bills, I’m not quite that optimistic. As Jacob Sullum pointed out at Reason, its not at all clear that Bou Bou’s Law would have prevented the raid from happening. The police at the time thought their suspect was probably armed; it probably wouldn’t take much to convince a judge to issue the no-knock warrant.

As I took another look at Rep. Tanner’s bill, I saw no language that would restrict the hours of the standard knock and announce raids. His bill seems incredibly vague to my lay reading “all necessary and reasonable force may be used to effect an entry into any building or property or part thereof to execute such search warrant if, after verbal notice or an attempt in good faith to give verbal notice by the officer directed to execute the same of his or her authority and purpose”.

Its human nature to stretch and bend language in such a way that is favorable to one’s objectives. I can imagine the police “interpreting” this law to mean they could gently knock on the door at 3 a.m., speaking in a barely audible voice “Police, search warrant open up,” counting 1 Mississippi, 2 Mississippi, 3 Mississippi, CRASH!

There is some concern by those who think that even these modest reforms put the police in unnecessary danger – police lives matter. I’m of the opinion that ALL lives matter and propose some (admittedly) radical ideas as to how and when SWAT tactics and/or police searches should be used to protect the life and liberty of all concerned:

– If the reason for a surprise raid on a residence is that the evidence could be quickly flushed down a toilet or easily destroyed by other means, then this isn’t enough reason for such a raid in the first place. A couple of ounces of any drug flushed down a toilet is not sufficient reason to put the lives of those in the residence or the police at risk.

– SWAT should not be used at all unless its an active shooter situation, a hostage situation, or credible reason to believe there will be active, armed resistance to the search. Unless there is a very real clear and present danger, leave your military grade toys at the station.

– Each and every police officer involved in the search wears a camera (preferably on the head to have a true POV). All video from the search would be made available to the suspect’s defense attorney.

– The police departments involved are responsible for any and all “collateral damage” to life and property. In the event an innocent life is taken, the individual officer(s) responsible should be treated as anyone else who takes a life. Investigation/prosecution would be conducted by an independent investigators and prosecutors.

– Absolutely no raids or searches of any kind between 9 p.m. and 9 a.m. (though stakeouts and other activity which does not require interaction with the suspect(s) during these hours is permissible).

I’m sure that some if not all of these ideas are too radical for many lawmakers. If we really believe that “all lives matter”, however; these proposals should be thoughtfully considered.

If you would like to make a small donation to help pay Bou Bou’s medical expenses, go to this GoFundMe page which has raised nearly $43k so far.

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