Category: Constitution

WHEN ECONOMISTS BECOME THE COURT MAGICIANS — PART 2

On By Citizen TomIn 2016 Election, Constitution, Donald Trump, Philosophy4 Comments

bad economySome time back I got the itch to write WHEN ECONOMISTS BECOME THE COURT MAGICIANS — PART 1. With the title I promised there would be a Part 2. So here it is. Why the lack of enthusiasm? Well, I don’t see economics as a dismal science, but I do weary of pointless argument.

Consider. Here of late I have had a debate (see here, here, and here) with Stephen. wants to redesign our entire socioeconomic system. He is smart, but he has a warped understanding of the purpose of government and how economics works. He has a very limited understanding of that thing we call money. He equates interest with usury. What can I say that would change his mind? I don’t know, but I have tried.

Am I an expert on economics? No, I am not. I actually wonder if there is such a thing.

Ask five economists and you’ll get five different answers – six if one went to Harvard. (from here) — Edgar R. Fiedler

Instead of promoting my expertise in economics, I am just writing to observe that we don’t know enough to identify an “expert” we should trust as much as the ones are trusting. Look at how we “manage” our economy. How many of us voters even have a clue as to what the “experts” are doing? Let’s see what we know about fiscal and monetary policy.

Fiscal Policy

Fiscal policy is the more transparent of the two policies.

Fiscal policy is when our government uses its spending and taxing powers to have an impact on the economy. The combination and interaction of government expenditures and revenue collection is a delicate balance that requires good timing and a little bit of luck to get it right. The direct and indirect effects of fiscal policy can influence personal spending, capital expenditure, exchange rates, deficit levels and even interest rates, which are usually associated with monetary policy. (from here)

According to some “experts”, Congress is supposed to exercise control over the economy thru taxes and spending. Instead of taxing us and spending our money just to do what the Federal Government is supposed to do, according to some economists  “good” fiscal policy requires Congress to also tax and spend to regulate economic growth. Somehow or another government spending is supposed to stimulate economic growth and taxes are supposed to bring economic growth under control.

As a practical matter,  Congress tends to use “good” fiscal policy as an excuse to tax and spend to excess. So we are in debt up to our ears. Congress has wasted huge sums that undoubtedly would have been better spent by the people who earned that money in the first place.

Want a “good” laugh? Check out some of these quotes on fiscal policy.

Monetary Policy

Almost everyone is familiar with the expression “Federal Reserve“, but what does the Fed do? Here is a brief description.

The “Fed” is an independent agency, one that is self-funded (see here). The Fed is a powerful group of economists, “experts” who regulate the banking industry. We routinely hear the Fed’s latest announcement of the Fed funds rate. The other thing we hear from the Fed these days is its latest announcement of quantitative easing. That’s a fancy way of saying the Fed is electronically “printing money” out of thin air. These two activities are the most visible aspects of the Fed’s role in monetary policy, that is, controlling the money supply.

Since the Fed also supervises and regulates banking institutions, the Fed does stuff in the background that only the financial experts notice. These activities relate to the risky nature of fractional reserve banking.

Fractional reserve banking is a banking system in which only a fraction of bank deposits are backed by actual cash on hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Many U.S. banks were forced to shut down during the Great Depression because too many people attempted to withdraw assets at the same time. (from here)

Not enough money in the vault? That is called a bank run. The bankers want us to believe that that problem is not real. I guess it depends upon one’s point-of-view. What if you want your money, and the bank says you cannot have it?

Audit the Fed

The Fed is one of the Federal Government’s most powerful institutions. It operates as an independent agency.  Some people think the Fed is too independent and needs to be audited so we can find out what it is doing. That proposal has created considerable controversy. Partly, that is because the Fed is already audited to some extent. The issue is that not everything is audited, and what is not audited is actually quite important.

Bottom Line

Our experiments in fiscal and monetary policy have failed.

  • We do not have a fiscal policy, and it is doubtful whether such a policy would be moral. Why should the government spend other people’s money to stimulate the economy? The idea doesn’t even make sense. We cannot spend our own money? Our elected officials just want to spend and spend and tax and tax. Fiscal policy is just another excuse. Unnecessary Federal Government spending diverts capital and human resources into low priority or even unnecessary projects and programs. Most Federal Government spending now goes into Social Security and Medicare. The Constitution does not even charter the Federal Government to spend money on such programs, but these programs serve to bribe voters old enough to know better.
  • Our fiscal policy is also a dubious enterprise. The Fed exists to prop up fractional reserve banking, a dubious practice that most likely would have been replaced with something less risky without government interference. In addition, the Fed works to “hide” Congress’ huge deficits by manipulating the currency and the banking industry. This puts unelected officials in control of huge sums of money, officials who can operate in relative secrecy. That is just a recipe for thievery and other sorts of trouble.

So what is the alternative? We probably ought to try reading our Constitution and doing what it says. Most of the government in this country is supposed to be at the state and local level. The Constitution does not empower the Federal Government  stimulate or regulate economic growth. The Federal Government was supposed to borrow money, if needed, and to regulate interstate commerce to keep the states from interfering in interstate commerce. In addition, the Constitution says the Federal Government is supposed to coin money.

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

…….

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; (from Article. I., Section. 8)

How did we get from that to the Federal Reserve?

The bottom line is we need to elect Donald Trump. Will he get rid of the Fed? Probably not, but who knows what might happen if we thoroughly audit it?

 

WHY WE DON’T CARE ABOUT THE PROTECTION OF OUR RIGHTS — PART 2

On By Citizen TomIn Constitution, Culture War, Declaration of Independence, Laws, Philosophy, religion27 Comments

freedomconscienceThis post is the second of a series. The first post was Why The Law Written In Our Hearts Is Not Enough. Here we discuss the nature of God-given rights.

What Are God-Given Rights?

Our Nation’s Founders Fought For God-Given Rights

Instead of just calling our rights God-given, we now call them “human rights”. Why? Well, here is the excuse.

Attributing human rights to God’s commands may give them a secure status at the metaphysical level, but in a very diverse world it does not make them practically secure. Billions of people do not believe in the God of Christianity, Islam, and Judaism. If people do not believe in God, or in the sort of god that prescribes rights, then if you want to base human rights on theological beliefs you must persuade these people of a rights-supporting theological view. This is likely to be even harder than persuading them of human rights. Legal enactment at the national and international levels provides a far more secure status for practical purposes. (from here)

Is that what happened in the United States? Were people just persuaded without the benefit of theological support to respect each others rights? No. Consider.

Natural law was deemed to pre-exist actual social and political systems. Natural rights were thereby similarly presented as rights individuals possessed independently of society or polity. Natural rights were thereby presented as ultimately valid irrespective of whether they had achieved the recognition of any given political ruler or assembly. The quintessential exponent of this position was the 17th. Century philosopher John Locke and, in particular, the argument he outlined in his Two Treatises of Government (1688). At the centre of Locke’s argument is the claim that individuals possess natural rights, independently of the political recognition granted them by the state. These natural rights are possessed independently of, and prior to, the formation of any political community. Locke argued that natural rights flowed from natural law. Natural law originated from God. (from here)

The ideas, if not the words of John Locke, found their way into our Declaration of Independence. Here is a pertinent excerpt from the SECOND TREATISE OF GOVERNMENT by JOHN LOCKE.

Man being born, as has been proved, with a title to perfect freedom, and an uncontrouled enjoyment of all the rights and privileges of the law of nature, equally with any other man, or number of men in the world, hath by nature a power, not only to preserve his property, that is, his life, liberty and estate, against the injuries and attempts of other men; but to judge of, and punish the breaches of that law in others, as he is persuaded the offence deserves, even with death itself, in crimes where the heinousness of the fact, in his opinion, requires it. But because no political society can be, nor subsist, without having in itself the power to preserve the property, and in order thereunto, punish the offences of all those of that society; there, and there only is political society, where every one of the members hath quitted this natural power, resigned it up into the hands of the community in all cases that exclude him not from appealing for protection to the law established by it. (from here)

Those who founded our nation were familiar with John Lockes ideas. Hence, these words in the Declaration of Independence.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. –That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. (from here)

Complicated “Rights”

Our “rights” are growing more and more complicated. Positive Rights, the Constitution, and Conservatives and Moderate Libertarians By provides a relatively straightforward and tolerably brief explanation of the term “rights” from a legal/academic perspective.

What Volokh focuses upon in his presentation is something called positive rights. What are positive rights?  Volokh believes “positive” rights should remain limited, but we should not deny they exist. What are “positive” rights? Wikipedia provides this distinction between positive and negative rights.

Philosophers and political scientists make a distinction between negative and positive rights (not to be confused with the distinction between negative and positive liberties). According to this view, positive rights usually oblige action, whereas negative rights usually oblige inaction. These obligations may be of either a legal or moral character. The notion of positive and negative rights may also be applied to liberty rights. (continued here)

Basically, when we observe each others negative rights, we don’t commit crimes against each other. We don’t murder, rob, and enslave our neighbors. On the other hand, when the government insists that we observe other people’s positive rights, we have to give other people something. If we did not agree to give other people something and don’t want our government to give away our life, liberty, or property, that can be especially irksome.

This distinction between positive and negative rights is a 1979 invention by the Czech jurist Karel Vasak. Still unsatisfied by the additional complexity he had added, Vasak split our “rights” into three separate generations.

There are three overarching types of human rights norms: civil-political, socio-economic, and collective-developmental (Vasek, 1977). The first two, which represent potential claims of individual persons against the state, are firmly accepted norms identified in international treaties and conventions. The final type, which represents potential claims of peoples and groups against the state, is the most debated and lacks both legal and political recognition. Each of these types includes two further subtypes. Scholar Sumner B. Twiss delineates a typology: (continued here)

Effectively, first generation rights are negative rights, and the second and third generation “rights” are positive rights.

What is the problem with “positive rights”? Since Libertarians have a pretty good understanding of this issue, let’s hear from one. See the video below.

Prof. Aeon Skoble accepts the nomenclature of “positive” and “negative” rights, but he points out a basic problem with so-called “positive” rights. Unless government infringes upon people’s “negative” rights, government cannot guarantee anyone’s so-called “positive” rights.

Here is the problem in a nutshell.

Natural rights—or, as they have been un-euphoniously dubbed, “negative rights”—pertain to freedom from the uninvited interventions of others. Respect for negative rights requires merely that we abstain from pushing one another around. Positive rights, by contrast, require that we be provided with goods or services at the expense of other persons, which can only be accomplished by systematic coercion. This idea is also known as the doctrine of entitlements; that is, some people are said to be entitled to that which is earned by other people. (from here)

Biblical Support For God-Given Rights

The first book of the Bible speaks of human rights. Genesis 1:27 says we are each made in the image of God.

The image of God in man also means that murder is a most heinous crime. “Whoever sheds the blood of man, / by man shall his blood be shed; / for in the image of God / has God made man” (Genesis 9:6). The severity of the punishment underscores the severity of the offense. The Mosaic Law is full of examples of how God expects everyone to be treated humanely. The Ten Commandments contain prohibitions against murder, theft, coveting, adultery, and bearing false testimony. These five laws promote the ethical treatment of our fellow man. Other examples in the Law include commands to treat immigrants well (Exodus 22:21; Leviticus 19:33-34), to provide for the poor (Leviticus 19:10; Deuteronomy 15:7-8), to grant interest-free loans to the poor (Exodus 22:25), and to release all indentured servants every fifty years (Leviticus 25:39-41). (from here)

Are there positive rights in the Bible? Not exactly. What the Bible speaks of is our responsibilities towards each other.  When Jesus told The Parable of the Good Samaritan, He gave us an example to follow, not a government program.

Consider this quote from John Quincy Adams.

Jesus Christ. . . . came to teach and not to compel. His law was a Law of Liberty. He left the human mind and human action free. — John Quincy Adams (from here and here)

Additional References

THE GROWING POWER OF GOVERNMENT AND THE THREAT TO LIBERTY: ELECTION 2016

On By Citizen TomIn 2016 Election, Constitution, economy, Health Care Nationalization, Hillary Clinton, Laws, Philosophy, schools, taxes, unraveling28 Comments

declaration of independence

OF A POST TO COME promised to compare the governing approaches of Donald Trump and Hillary Clinton with respect to two issues.

  • The growth of the power of government.
  • The protection of our rights.

The Growth Of The Power Of Government

Why is it a problem when government is powerful? Government exists to protect our rights. Yet the power we give our government makes government itself a threat to our rights. Therefore, we must choose between giving the government just enough power and giving it too much.

  • To give our government the resources it needs to defend our rights, we must give our leaders the authority to tax us and spend our money. Nevertheless, the more we allow our government to tax and spend, the more we work for government instead of ourselves. At some point, we risk slavery.
  • Some decisions which effect a people must be made jointly. Thus, government must sometimes make decisions we would otherwise make for ourselves. So it is that in a nation of free men and women, we have laws that restrict us from harming each other (traffic laws, for example). In a nation of slaves, however, the laws just list a few trivial decisions that the leaders permit the people to make for themselves.

Here is a table that summarizes where the candidates stand.  Not certain the information is correct? Then check their web sites. I have only provided links where their positions are not available on their own websites.

ISSUE Donald Trump Hillary Clinton
Taxing and Spending Favors tax simplification and reduction Favors increased taxation and spending (inferred from lengthy list of proposals)
Healthcare Private market solution Doubling down on Obamacare
School Choice For School Choice. Will end Common Core Against School Choice. Favors Common Core.
Immigration Favors extreme vetting Open borders/put new immigrants on the dole
Government Regulations Committed to reducing regulations Defends the current regulatory regime
Free Trade Opponent of the big trade bills Helped to craft TPP

To be continued: The Protection Of Our Rights

WHY I SUPPORT DONALD TRUMP

On By Citizen TomIn 2016 Election, candidate support, Constitution, Donald Trump, Health Care Nationalization, immigration, schools, taxes21 Comments
Trump in August 2015 (from here)
Trump in August 2015 (from here)

Why am I going to vote for Donald Trump? If you check earlier posts on my blog you will find I once supported Senator Ted Cruz. Since Trump and Cruz parted with bad feelings, I am not happy with Trump. I think Trump has a problem with keeping his ego in check, and he gets very nasty when he doesn’t.  That said, Trump’s problems ego problems look to be of the ordinary variety. He is not a political pro, and the stresses of running a political campaign are extraordinary. So there is not much reason to expect him to handle those stresses like a pro. Hopefully, he is learning. After you needlessly insult someone, it can be difficult to patch things up.

Still, I have a problem. Like every other voter I have to figure out who to vote for.  The two candidate with a serious possibility of winning are either Donald Trump or Hillary Clinton, and I vastly prefer what Donald Trump has promised to do.

Here are my key issues (See Trump’s Positions Page).

HealthCare Reform

Trump will fight for the repeal of Obamacare.

But none of these positive reforms can be accomplished without Obamacare repeal. On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare. (from here)

Trump has also promised to work to replace Obamacare.  I am not sure I will like what he and Congress cook up. Nonetheless, he promises to work for a system that uses free market principles.

Tax Reform

Trump will fight for a simpler tax system and to eliminate the death tax.

When the income tax was first introduced, just one percent of Americans had to pay it. It was never intended as a tax most Americans would pay. The Trump plan eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page form saving them time, stress, uncertainty and an average of $110 in preparation costs. Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money. (from here)

We should get rid of the income tax. As the paragraph above indicates, the people who advocated the 16th Amendment to our Constitution, created a monster that has funded the excessive growth of our government. Note that Trump’s tax reform does not address Social Security or Medicare, a major part of that 16th Amendment monster.

Trump’s plan includes tax relief for corporations and small business. That would help keep businesses from fleeing our country. Trump would also eliminate the Death Tax. That would also be a boon for small business and increase competition.

Therefore, what Trump proposes is progress. How do we get rid of the 16th Amendment. I expect that would take a Convention of the States.

Immigration Reform

This issue is the one that kicked off Trump’s campaign. I am not a big fan of the wall or Mexico paying for it. I just want to vet immigrants BEFORE they come into our country.

  • So we know each people coming into the United States is not a security threat.
  • Can speak English fluently.
  • Has a job or some means of support.

Currently, our welfare system is a draw to both legal and illegal immigrants. That’s stupid. We don’t need a welfare system so the Democratic Party can import voters.

In addition, we are allowing terrorists into the country. Instead of trying to help refugees as close to their homeland as possible, we are bringing them here, and we are not separating out the terrorists. There is no good excuse for that.

Trump is running on securing the border and securing our country again. I am happy with that.

School Choice

School Choice is my main issue. Unless we put education back under parental control, civil servants posing as teachers will continue to indoctrinate children. Am I trying to say I hate teachers? No. Of course not.

When government runs the schools, teachers are civil servants. That is a literal fact. As civil servants, teachers must teach what politicians who pay their salaries want them to teach. What politicians want children to learn very often not good for children. Politicians don’t necessarily love our children, but all them are tempted by power and prestige.

So I am disappointed Trump does not mention school choice prominently on his website, but he did say he favors school choice in his book (see my post, CAN DONALD TRUMP DELIVER ON HIS PROMISES?), Crippled America: How To Make America Great Again. In addition, Gov. Mike Pence, his running mate, apparently has an interest in the subject (see Ryan Applauds Governor Pence As Vice Presidential Choice) and Trump is on the record as being against Common Core (see DONALD J TRUMP PRESIDENTIAL ANNOUNCEMENT).

Conclusion

On the issues that matter most to me, Trump is the best choice.