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Archive for August, 2011

Reforming FannieMae and FreddieMac with Marx: Rotarian Socialist rent-seekers of the world unite! You have nothing to lose but your brains!

Totally cool. An actual newspaper article about America’s favorite welfare program, government subsidized mortgages — and in The Boston Globe, no less:

Amid all the clamor about entitlement reform during the struggle to raise the debt ceiling, one enormous cost – and potential source of future savings – largely escaped scrutiny: the billions of dollars the United States spends to support the mortgage market. Even before the 2008 financial crisis, the government assumed the credit risk on most loans, which allowed banks to offer better rates, but ultimately left taxpayers footing the bill when the housing market collapsed: $138 billion and counting.

During the crisis, the government became even more involved in the mortgage market by rescuing Fannie Mae and Freddie Mac and agreeing to backstop larger loans. This furnished enough liquidity to prop up the housing market and helped bring about the low mortgage rates of the last three years. But getting in has proved much easier than getting out. Today, the government backs 95 percent of new loans, leaving taxpayers more exposed than ever.

That could finally be about to change. After next month, federal loan limits in expensive areas like Boston, New York, and Los Angeles are set to decline from $729,750 to $625,500. Had the lower limits applied last year, the government would have backed 50,000 fewer loans. But even this modest pullback may not happen. At the urging of homebuilders and realtors, lawmakers in both parties want to extend the higher limits, possibly for good. It’s an early skirmish in the larger battle over the government’s proper role in the mortgage market. And the issue isn’t just when to pull back, but whether to do so at all: Many Americans have come to regard cheap mortgages as an entitlement.

I am so ecstatic to see Fannie, Freddie, Ginnie and FHAVAUSDA properly identified as welfare programs — invented by rent-seeking Rotarian Socialists for the benefit of other rent-seeking Rotarian Socialists — that I’m finding it hard to kvetch.

Well, maybe not too hard. Look at this:

Liberals tend to support government intervention as a means of subsidizing home ownership for the poor and middle class; most conservatives would prefer to let private markets take over.

I cannot imagine who “most conservatives” might mean. The American economy has descended to a level where virtually every transaction is corrupted by rent-seeking — the payment of unearned compensation to some people, effected by the imposition of undeserved costs on others. Arguably, the actual ClowardPivenish strategy in post-war America has been to get everybody into the welfare system, in one way or another. But mortgage subsidies and the mortgage income tax deduction — nearly-universal welfare for the rich — don’t seem to have very many enemies, period, neither from the “liberal” nor “conservative” wings of the Rotarian Socialist party.

Want proof? Here’s a “conservative,” whose proposal outdoes even Karl Marx for being anti-economic:

[A] good idea for what to do next comes from Representative Gary Miller, a California Republican.

Miller is a real-estate developer and former builder, so his conservatism is leavened with actual experience. He’d like to merge Fannie and Freddie and keep them under the government’s auspices, while removing the profit imperative that got them into so much trouble. The merged companies would continue to buy mortgages and resell them to investors with explicit government backing. But that’s all they’d do. From the standpoint of someone buying a home, things wouldn’t seem much different.

Holy cow! It’s Manfred Fanfred of the Department of Motor Vehicles! What should we do about a mortgage subsidy system that is corrupt from the top down? Reorganize it to be corrupt from the bottom up, instead! Do you want to make big money in database mining? Mine mortgage bundles. Or mine the track records of particular loan officers or underwriters. You can take a piece of every bribe paid on your advice, maybe another piece on each resale as your predictions hold up. May god spare us from “experienced” Rotarian Socialists!

But: Here’s how you can tell that they are all Rotarian Socialists: Because they cannot even conceive of a free-market alternative to pandemic rent-seeking. It is completely beyond their ken that there is money to be made in lending (duh!) and any support system needed to keep money available — that is, a private secondary mortgage market — will arise spontaneously just as soon as it is profitable — as soon as it is permitted to be profitable by the elimination of government subsidies.

Will prosperous people get their interest rates subsidized by the tax-payers — that is, ultimately, by means of the auto-cannibalistic vampirism of their own money? No. Will rates be higher or lower? Hide and watch. Will opportunities for graft vanish? You betcha. Will this, just by itself, have a salutary effect on the real estate market, and on markets as a whole. Oh, yes! You can’t over-build if you can’t over-borrow.

An even better question: Does anything other than economic harm ever result from any sort of rent-seeking?

Other than Ron Paul, I don’t see much evidence that anyone in Washington knows anything at all about how — and why — free markets work. There could not be a better time to get governments at all levels out of real estate. There would be a shake out, of course, but given that state intrusions have already wrecked the real estate market, it’s hard to imagine that the shake-out could be much worse than the collapse has already been.

Oh, well. Tomorrow is another day. At least for today, mortgage subsidies have been loudly and publicly identified as welfare programs. If you don’t like the idea of being a rent-seeker, a welfare slave, a vampire feeding on your neighbors’ blood, now would be a good time to take a stand against them. If there really are congresscreeps who want to return at least some part of the free market to the residential real estate business, they need to hear from you.

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Amazing world…

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Seasteading: Galt’s Gulch for a new century?

If Galt’s Gulch is going to exist in this century, might it be called Seasteading?

Peter Thiel has given $1.25 million to an initiative to create floating libertarian countries in international waters, according to a profile of the billionaire in Details magazine.

Thiel has been a big backer of the Seasteading Institute, which seeks to build sovereign nations on oil rig-like platforms to occupy waters beyond the reach of law-of-the-sea treaties. The idea is for these countries to start from scratch–free from the laws, regulations, and moral codes of any existing place. Details says the experiment would be “a kind of floating petri dish for implementing policies that libertarians, stymied by indifference at the voting booths, have been unable to advance: no welfare, looser building codes, no minimum wage, and few restrictions on weapons.” – Yahoo.com

A floating haven for Libertarians.  It sounds like freedom.  I wonder where they could find real estate expertise for such a venture?

Galt’s Gulch had one big advantage over Seasteading, it was beyond detection of government.

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Full price wheel barrel of money and a lost client; Realtor gets tko’d.

When the going gets tough, the tough gets going.  I scheduled an appointment to see a home in a nice community.  The school districts are great as well as the neighborhood.  The price was right and this home was not a short sale, not an easy find in South Florida.  After getting four appointments cancelled by the seller, my buyer was getting rather desperate as his moving date was only 4 weeks away, as his landlord was kicking him out because he would not sign a one year lease.

The buyer decides to write an offer sight unseen.  The offer was full price, cash, with zero contingencies.  The urgency was high, as this buyer wanted to be in a home and have the sweat heart school district.  Surprisingly the offer offer was never even looked at by the seller, because she had a change of heart on selling.  Besides the fact that I was owned a commission and deciding not to waste my time to chase it down, the buyer then ends up firing me because I was unable to pull this deal off.

Hence the title, full price wheel barrel of money and a lost client: Realtor gets tko’d.  What has your experience been in situations like this?  Reporting live from the trenches of a warm muggy humid South Florida, I’m Robert Worthington, and I promise to have yet another doozy to report on soon!  I’m keeping my head up, ears up, tail waging,  and I’m sniffing out my next deal!  When your part of the bloodhound pack, you never quit!

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Are you sick of all the bad news in the Sunday newspaper? You’re reading the wrong sections.

The Sunday paper is full of wonderful news, provided you know where to look for it.

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Mark Steyn: “If Charlton Heston was horrified to discover the Planet of the Apes was his own, Britons are beginning to realize that the remote desert island of ‘Lord Of The Flies’ is, in fact, located just off the coast of Europe in the northeast Atlantic.”

I’m getting quit of bitching at people, but I confess, always, to taking delight in well-written castigation. For eloquent excoriation, none surpasses that of Mark Steyn:

Within two generations of the Blitz and the Battle of Britain, a significant proportion of the once-free British people entrusted themselves to social rewiring by liberal compassionate Big Government and thereby rendered themselves paralytic and unemployable save for nonspeaking parts in “Rise of The Planet Of The Apes.” And even that would likely be too much like hard work.

Give the man your mind. He’ll give it back to you wittier, at least, if not wiser.

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“This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: The ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”

Dang. There goes the NAR’s chance to force every American to buy three or four more houses, thus to save the starving real estate brokers.

As President Obama himself has noted, there is something wrong with our politics when perfectly reliable campaign donors cannot despoil the taxpayers at will, without judicial interference…

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Say “Cheese!” It’s time to play Business Card Monte

We’ve all seen them. The usual suspects on a line-up across a counter in an empty kitchen. Gathering dust on a convenient window sill. Spread out like an abandoned poker game on a dining table. Ah yes, the real estate business cards left behind at showings. Black, white, red, blue, cheap, shiny, standard issue, each one with a Friendly Neighborhood Expert (FNE) smiling earnestly or stupidly grinning, depending (see tiny mug shot, above). My clients notice them too and they kind of scowl over the line up. When I toss mine onto the pile they say, “Hmm. Yours is different.” At which point I flash my own killerwatt smile and say, “Because I am.” They grin back, we move along.

Business cards are pretty awesome when you think about it. Palm-sized advertisements that you can carry about. A potentially effective way to get your message across, but it seems mostly wasted in the world of real estate.

Recently I saw a business card that was left behind with a printed thank you message: “Thank you for allowing us to show your property.” That’s nice. The message was printed next to the full length image of Mr and Mrs FNE. I wonder if it would be useful to have a showing-specific business card, with space to write a note on it? “Love the floor plan!” “Great job with the kitchen.” “Sorry we accidentally let the cat out.” “What the hell is that smell?” You get my point. Someone more experienced can fill me in on why that would be a disastrous idea for their client.

I’ve had property-specific business cards printed up, that’s an easy item to hand across a threshold if you are door knocking, and I have all purpose business cards I use, (see blurry photo, below) they feature The Brick Ranch logo from my website, and it does stand out in a sea of tiny FNEs splashed across the Formica, but business cards are so cheap, why not have a few on hand for a multitude of purposes?

I remember Russell Shaw commenting on one of the BHB business card posts that your face had better be on the card at Realtor networking events. Okay. I can get those printed for cheap at $18.00/thousand. Done. And at the rate I attend real estate networking events, they’ll still have to throw out the bulk after my funeral.

If I worked heavily in short sales, I’d have all sorts of info on the back of a Short Sale specific card. First-time buyers, luxury market, property management, anything could have its own card with information pertaining to that segment of the real estate world.

For the record, here’s my all-purpose business card, but I’m thinking of diversifying. Real estate business cards are notoriously boring, but tremendously cheap so why not? What about you? Done anything interesting with your business card lately?

 

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What could be worse than Uncle Sam as the nation’s mortgage monopolist? How about Uncle Sam the monopoly landlord?

From the Associated Press:

The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices.

The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent roughly 250,000 homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration. All of the homes are foreclosures.

The U.S. government rescued the two mortgage giants in September 2008 and has funded them since the financial crisis. Fannie and Freddie own or guarantee about half of the nation’s mortgages and nearly all new mortgages.

Converting the homes into rentals may reduce “credit losses and help stabilize neighborhoods and home values,” said Edward DeMarco, acting director of the Federal Housing Finance Agency, which oversees Fannie and Freddie.

Fannie and Freddie have been hoarding foreclosure inventory in Phoenix for months. Now I know why. Witness:

It also might meet the growing demand for rentals.

So would selling them, except then they would be owned and managed by people who are working for profit, not political functionaries.

But wait. There’s more:

Private investors could also be allowed to oversee the conversions.

That is to say, all the best Fed-friendly butt-buddies will be cut in on the graft.

And you thought the Federal government could not screw the housing market up any worse…

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They don’t know them as the world’s most elite warriors.They know them as “Dad”.

The last 48 hours has been kind of a blur for me. My friend Gary Lundholm, who is a broker with about 160 agents in a couple of offices in Virginia Beach and Chesapeake VA emailed me on Monday am with an unexpected need. (I am going to tell you more about Gary in a future post…he is a Bloodhound and his office is thriving in this economy).

The SEAL Team that was killed in the helicopter crash in Afghanistan was based in his area. Among the agents in his office are many Navy Veterans (Gary is as well.) and spouses of active duty personnel. He wanted to do something to help the families.

He purchased SEALKids.com and wanted a site built so that his agents could all help gather donations from the local community as well as the real estate community for the children of these fallen warriors. Their goal is lofty. $100,000 for the kids of these fallen soldiers. Starting tomorrow morning, they will be sending this online to their friends locally.

If you know Gary at all, this is exactly the type of thing he is known for. (He’d never admit that, which is further proof.) So for the last couple of days on and off, we put together a site to help be a collection for funds to be donated to the Navy SEAL Foundation which will go to aid the families, who often cannot ask for help because they need to protect their identities. It is a close knit community.

It has been an honor to donate some time to work on this. I have cried often as I thought of my own kids and as I have thought of these families’ sacrifices.

I am not asking for donations unless you have it and want to give. I AM asking that you share this around with others so that those who can and want to give have the opportunity. I gave. I would not have posted that unless I had. My family and I decided together that it was something we needed to do.

One more thing that I would ask as a favor.

There is a section of the site for Paying our Respects to the families.
As I type this, these same families are seeing the remains of their loved ones be brought home. These children of these SEALs will likely grow up not hearing anywhere near the full impact that their father had on protecting our freedoms. If you could, whether you donate or not, please drop by and leave these families our respects for their sacrifice, I would appreciate it. Years from now, when these children read some kind words of respect for their fathers, I can only hope that it will bring some comfort for their loss.

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Reasons to be cheerful: Defying the specter of ugly fates.

I’m kicking this back to the top from June, 2010. I had occasion to re-read my thoughts on sex earlier today, and then I went back and looked at this essay. I like it better today than I did last summer, and I hope you will, too. –GSS
 

Reasons to be cheerful, part zero: The ground we stand upon is firm and the lever of the human mind grows ever stronger.

I need to take this someplace else. I am madly off-topic here more often than not, this for the past couple of years. I think I may be in the third act of this spectacle of ideas I have made of my life, and I can’t even say, yet, if it’s a farce in three acts or a tragedy in five. I would prefer an epiphany, to say the truth, a symphony, a grand opera composed of nothing but the simplest and most obvious of abstractions, an idiot’s guide to what every last idiot among us has always known forever, has never once doubted, and has always, always betrayed — until now.

But that’s why I’m cheerful, I think, despite everything. There is still so much time left to us, amidst the crush of on-rushing events. I am thrice lucky, I know it: I can see and I can understand what I am seeing. I can think and I can transcribe my thoughts. And I live in a time when the thoughts of everyone in human history who ever thought productively are instantly available to each one of us — on demand, no charge, quantities unlimited, with every taste in depth and rigor satisfied and then some.

This is an amazing thing. It’s never happened before, and it remains to be seen how deeply humanity is willing to set its roots in the boundless praries of the mind. But the simple fact that this is possible — and that people all over the world are taking advantage of it — is a profoundly important reason to be cheerful, no matter what despair might be unearthed in the day’s events.

Clearly, Barrack Obama is incompetent. That’s scary enough, but I have believed that the man is a malignant narcissist since first I paid any attention to him. This would be an ideal time not to have a boob who may well be a feral tyrant in the White House, but on top of any damage the president might do, we are confronted by the impending collapse of the European Union, the bankruptcy of California and many other states and cities, the foreseeable foundering of the U.S. economy — all this on top of predictable responses to Obama’s weakness in Iran, Korea and now Turkey. This is a good time to put your head in the sand, so I am thrilled to see so many people doing the opposite instead — striving to learn how we got ourselves into this ditch and how to dig ourselves out.

I can see three tomorrows from here, and each one of them seems to me to offer more reasons for optimism than despair. As I get time, I’ll go through them in detail, but here they are in summary:

  • Future number one: Nothing much changes in the grand scheme of things. This is the most likely scenario by far.
     
  • Future number two: We go through a sustained economic collapse, like the Great Depression or Japan’s Lost Decade.
     
  • Future number three: SHTF — The Shit Hits The Fan. A re-org, as it were, perhaps just in what had been the United States, perhaps everywhere. I consider this hugely unlikely, but it seems like something that might be worth thinking about, if only as a precaution.

Why would I be cheerful about fates like these? Because we have so much leverage. Not political power; political power has been the enemy of the human mind forever. What we have is the power of reason, when we dare to cultivate it — and the praries open to our plowing have never been more vast, never more rich, never more fertile, never more accessible to anyone who is willing to dig and husband and harvest and thrive.

We’ve spent all our lives — all our history! — clawing for things, for the tangible, the graspable, the hordeable, the hideable — the things we snatch away with an animal’s cunning and then cringe forever in animal fear that they might be snatched back. That much was wrong, and that is what we are learning at last: The things that matter most to the human mind, the things that yield up every kind of wealth, spiritual and physical, in vast uncountable cornucopian abundance — those treasures of the mind can never be pawed at or swiped.

We stand at the cliff’s edge of greatness, and, suddenly, one by one, we are daring to dive, to submerse ourselves in all the wisdom of all of human history and to come back to the surface as new men, as new minds, as the radiant and resplendent brand new thing we should always have been — had we ever once been willing to dig in and do the work.

People are doing that work now, one mind at a time, all over the world, and that alone is reason enough to be of good cheer. Our governments have screwed up very badly, but the solution to all human ills — the inconquerable human mind — is honing the blade of the plow in preparation for the cultivation we have tried so hard, as a species, never to do.

There is this: We are perched, too, on the cliff’s edge on the singularity. When will it come? What form will it take? These questions no one will be able to answer until it has already happened. But that’s the worst fate that could befall us. Wars and rumors of wars, poisoning our own habitat, financial collapse — these are nothing, really, nothing we haven’t lived through before. But if we miss the singularity, it could take us anywhere from decades to forever to climb our way back to the top of the cliff.

If you want something to worry about, it’s that — humanity so completely destroying itself that we miss out on the chance to graduate, now that we’ve almost earned the right to move on. But that’s the point: At the precise moment that we need the mind the most, people all over the world are waking up to the life of the mind.

Too few of them? Too late? Too hopelessly lost in centuries of carefully-crafted gibberish ever to find their way back to reason? Hide and watch.

Here’s my answer: If I can improve my own mind every day, I am acquiring the very leverage I will need to move the earth and to rebuild it as I would have it, as it should have been all along. I am but one man, one mind — but my name is legion. There are thousands and millions of people like me, some of them immeasurably brilliant. And we are all of us unchained in the praries of the mind at last — free to learn, free to grow, free to thrive.

Free to stare fate in the eye — and defy it.

Free to have the world our way, all the way, all the time.

It advantages you nothing to worry. But it profits you everything to think…

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Greco-Roman Rejection of Rotarian Socialism Is The Cure For What Ails the United States

Europe has tried all sorts of Statist approaches to the PIIGS problems.  Today, Europeans are considering “liberalization”:

As the European financial crisis moves into its next phase, there’s a new word to learn: “liberalization,” and it’s likely to be even more unpopular than “austerity.”

Leaders in Europe are promising to “liberalize” their economies in an effort to grow those economies, but they face an enormous wall of vested interests that don’t want anything to change.

Greg Swann talked about cutting regulations a year ago.  My comment:

There are close to 400 licensed occupations. Compile a list of half of them, introduce legislation that outlaws states (and Feds) to regulate any of these professions.  Repeat each quarter. Within a year, you’ll only have 25 regulated industries. Within two years, the unemployment rate will drop to 6%, and there will be some 2 million new businesses created

Ohmygosh, cut the licensing regulations?  Does that mean that someone, who hasn’t taken a 400-hour licensing course, will be charging money for weaving hair in their living room?  The horror.  How will the public ever be protected from bad hair-weavererers?  Reputation management is already happening in the free market.  Read Greg’s response:

Check. There’s more that can be done, much of it to the benefit of very small businesses. Consider this: When you’re trying to decide if you should take a chance on a restaurant, who do you trust more, a city inspector who may be on the take or nine fiercely independent Yelpers? The dollar cost of preventing injuries that almost never happen is half of our economy — which is nothing compared to the opportunity costs and interest value of those lost opportunities. We’ve got a dinghy loaded up with admirals and we can’t figure out why it’s slowly sinking.

Who then would stand in the way of  “liberalization”?  Let’s go back to the CNBC article:

Leaders in Europe are promising to “liberalize” their economies in an effort to grow those economies, but they face an enormous wall of vested interests that don’t want anything to change.

Take the case of Simon Galina, a 38-year-old taxi driver in Rome. His profession is one of many in Italy likely to undergo “liberalization,” and he doesn’t like it one bit.  Liberalization is a very big problem. It’s a big problem for him because he took out a $185,000 loan ten years ago to purchase a taxi license and he still has five years of payments left. He’s worried that if the government changes the rules now, it will likely be much more difficult for him to pay it back.

Right now the number of taxis in Italian cities is tightly controlled by the local governments. If liberalization really does occur there will no longer be a cap on the number of cabs, and the cost for a license will fall dramatically, if not to zero. Bottom line, it’s going to be a lot easier to get into the taxi business. (Economists call this lower barriers to entry.)

Regulation of commerce, under the guise of consumer protection, actually turns out to be BAD for the consumer.  Continue reading:

That will be good news for Italian consumers: It’s going to be easier to find a cab, and cheaper to boot. But falling fares mean less income for Galina, and there’s that monthly loan payment  he will still have to pay regardless.

The government has already begun this process in Athens, Greece, and it has led to tremendous violence as drivers protest the changes. Now imagine this change writ large across an entire society where hundreds and hundreds of professions have the same decades-old pay-to-play fee structure. Italian Prime Minister Silvio Berlusconi and Finance Minister Giulio Tremonti promised to do just that on Friday night. Berlusconi agreed to the measures in exchange for the European Central Bank buying Italian debt on the open market, and acting as a buyer of last resort.

Economists believe liberalization will lead to more jobs, which means higher economic growth and more tax revenue, exactly what countries like Italy need to pay back their debts.

There is absolutely no reason, other than Rotarian Socialism, for the State to “license” any profession, be it a hair weavererer or a physician.  Occupational licensing is a conspiracy to defraud consumers, by impeding the price discovery,  which competition affords.  I just hope we won’t wait until there are people starving in the streets to “liberalize” here.

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A practical governing strategy for the Republican party. It won’t happen, but at least it’s potentially doable, unlike everything else.

[Back to the top from November 3, 2010. –GSS]
 

Here’s what the Republicans won last night, most probably: The opportunity to be left holding the bag if the whole creaking kleptocracy crashes.

Here’s what they mostly can’t do, at least not right away: Cut spending or taxes. A huge and growing portion of the budgets at all levels of government are entitlement payments — a subsistence dole under various labels. We have taken a once-free people and turned it half-predator, half-prey — often with both halves living under one scalp, amazingly enough.

So what can Republicans actually do, right now, to deliver on their promises?

They can eliminate every form of business regulation, at all levels of government.

Civil court has always been more than adequate to deal with actual injury. Not coincidentally, statutory regulation is always anti-economic nonsense: Banning competitors (as with the real estate licensing laws), government make-work, monkey-see-monkey-do, superstition, ossified tradition, power lust, etc. If no one is getting hurt, what is being regulated out of existence is this: Human intelligence.

That’s significant for two reasons: We need for business people to get to work and to take a bunch of us along with them. If we decriminalize human intelligence, at least partially, it’s reasonable to expect to see more of it — to everyone’s benefit. But even without the innovations we currently forbid in many businesses and industries, business people need to be able to plan for the future. If they are constantly subject to a vast, unknowable array of ever-changing regulations, they will not take risks. This is news to no one.

So: I’m not talking about some kind of “temporary moratorium” on regulation. This is an old, old leftist dodge: If the cows start to look scrawny, let them fatten up a little before you take up the slaughter again. Alas, because Republicans often have no firmly-held philosophical principles, they fall for these stunts again and again — as with the Bush tax “cuts.”

No, what is needed is the complete eradication of regulation: Repeal the enabling legislation, pay off and dismiss the staff, liquidate the chattel- and real-property. (All of this will throw off enduring budgetary benefits as a happy secondary consequence.)

Not a moratorium. Not an abatement or a credit or a trade-off or a subsidy. No government in the marketplace, period.

If no one is injured, it’s none of our damn business. But by trying to mind everyone else’s business, we have totally wrecked the world’s economy — with far worse devastations on the horizon.

That’s bad, but this is good: If we stop trying to outlaw intelligence by dictating what the mind is and is not permitted to do, the human mind will produce incredible wonders overnight. Our economy is amazing, even now, despite being buried under towering snowdrifts of codified insanity.

When buyers and sellers are free to do as they choose, the economic frenzy that ensues is invariably called a “miracle” by thoughtless people and the politicians who feed on them. But the human mind is autonomous by its very nature. It should come as no surprise that acting upon people as they actually are works rather well, while trying to legislate away their identity results in progressively greater and greater catastrophes.

But, but, but… Someone could get hurt without tens of thousands of pages of regulations! That’s a topic for another essay, but this is sufficient to address the objection: Are you under the impression no one is getting hurt now? Have you looked at your retirement accounts lately?

And: If you insist that you can’t live without officially-sanctioned and therefore massive theft on Wall Street, we can deal with that later. But Bob’s Deli and Acme Cabs and Stan the Dentist can all manage to get the job done without being tied down like Gulliver.

Real growth — not just increased production but progressive improvements in productivity. Not just more jobs but greater real wealth — real things, not paper dollars — for everyone. If the market can substantially outproduce the welfare state’s wages of sloth, the vast entitlement class can gradually be weaned away from Big Mother.

This won’t happen, of course. ObamaCare can break a sweat when Republicans manage even to trim the “public” TV budget. Republicans will compromise and temporize, and we will have Socialism Lite for now — and a jackboot on your neck later.

Graft and power, sustenance and indolence, predictable profits resulting from outlawing your competition. And the predator does not care that he kills the prey — even though he is both predator and prey living under one scalp…

We have no chance to escape the tax collector, for now. But if we stop trying to enslave each other in our work, we just might someday find a way to put the taxman himself out of work.

This is something Republicans can do right now, at all levels of government, and it will deliver salutary benefits in vast abundance. They can’t cut spending and they can’t cut taxes, but they can cut regulation — as much as possible, as quickly as possible, a dramatically resounding abolition of all forms of slavery in the marketplace.

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It’s not enough for the tea party movement to throw the bums out. To contain the federal government, we have to cut its powers.

[Back to the top from January 21, 2010. –GSS]
 

What a delight it is that the citizens of Massachusetts have risen up against the federal leviathan. All across the country, the tea party movement is furiously aboil, angry Americans anxiously awaiting the opportunity to pull some levers in a voting booth.

But if the current populist uprising is nothing more than yet another throw-the-bums-out movement, it will come to nothing. We threw the bums out good and hard in 1994, and yet the federal leviathan has done nothing but grow since then. By now the national government is so huge that it threatens to crush the nation and its people and productive plant beneath its enormous weight.

It is not enough to throw the bums out. To contain the federal government, we have to cut its powers. Nothing else will stop its long-term growth.

The United States was originally conceived of as a confederation of sovereign states. The states joined together for those common purposes that seemed to make sense to them, with each state retaining is sovereignty in all other matters.

That was the theory — the federal government was to be the hand-servant of the states. In practice, the federal government has usurped the power of the states from the very beginning, with the abuses becoming more bold and more comprehensive with each passing decade.

This turns out to have been a mistake — as we are discovering. Where each state is independent of all the others, each one can try different policies. The states can become the laboratories of democracy that the founding fathers envisioned.

But to achieve this, we will have to rein in the federal leviathan. The states and the people need to reassert their ownership of and control over the national government.

How? By constitutional amendment. Probably by constitutional convention, since it seems unlikely that sitting members of Congress will vote to circumscribe their awesome and terrifying powers.

But here, in a very short summary, is what needs to be done, if the head of steam built up by the tea party movement is not to be wasted. The text within the quotation marks is proposed amendatory language, followed by a discussion of the objective to be achieved.

1. “The words ‘general welfare’ appearing in the United States Constitution or its Amendments do not create any powers of the legislative, executive or judicial branches of the government of the United States. Any legislation authorized by the words ‘general welfare’ is repealed.” This gets rid of one of the most pernicious pieces of federal elasticity. The pretext for forcing people to buy health insurance under Obamacare — now dead, one may hope — was to have been the general welfare clause.

2. “Article 1, Section 8, Clause 3 of the United States Constitution is stricken in its entirety. Any legislation authorized by that clause is repealed.” This does away with the power of the federal government to regulate commerce. The interstate commerce clause is second only to the general welfare clause as a means of enlarging the power of the national government.

3. “Amendement 16 to the United States Constitution is stricken in its entirety. Any legislation authorized by that Amendment is repealed.” Goodbye federal income tax. The federal government will have to return to taxation by capitation — the head tax.

4. “Amendement 17 to the United States Constitution is stricken in its entirety. Any legislation authorized by that Amendment is repealed.” This language puts the Senate back under the control of the states. This was a vital check on federal power. Its absence is what has permitted the most abusive usurpations of power by the federal leviathan.

5. “No governmental entity in the United States nor any office-holder or employee of any governmental entity in the United States is immune from criminal prosecution or civil litigation.” This eliminates the legal doctrine called sovereign immunity. The argument is that the people ought not be able to sue themselves. But when government officials commit crimes against citizens, they should be held fully accountable to the law. Americans fought and died so that no sovereign could tread on the rights of the people.

Taken as a whole, this language will eliminate much of the federal government. The power to defend the nation will be retained, but most of the alphabet soup agencies will be gone, as will be most of the taxes and regulations strangling our economy. The states will have to fill some gaps, but I think we will all be quietly amazed at how little value the national government brings to civic life — and how relieved we all will be to be out from under its enormous weight.

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A strategy for the Republican party that can actually win elections

[Back to the top from November 6, 2009. –GSS]
 

The national Republican party is riven by an insuperable internal contradiction.

Out of one side of their mouths, Republicans wish to portray themselves as tax cutters, red-tape slashers, champions of liberty fearlessly hacking away at the slimy tentacles of the leviathan state. Ignore for the moment that they’re spineless jellyfish when it comes time to cut, slash or hack; this is how they wish to present themselves.

Out of the other side of their mouths, Republicans offer American voters an alternate set of slimy tentacles for the same old leviathan. The state they promise to shrink will simultaneously promote a nebulous family values agenda and forbid abortion. Republicans will simultaneously dismantle the Department of Education and supplant ecosocialist indoctrination with theocratic indoctrination. The leviathan state will lose the power to ban cancer drugs but gain the power to ban rap records.

Things fall apart. The center cannot hold…

Whatever the Republican party seeks to be in the states, in the counties, in the towns, what it cannot be at the national level is the party of both smaller and larger government. It can’t because as a strategy it makes no sense, and it can’t because there is no common ground between the liberty-seeking Republicans and the theocracy-seeking Republicans. Those two wings of the party can only fly apart in the long run.

But: There is a way around this: The Tenth Amendment to the United States Constitution:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

If the national Republican party were to concentrate solely on shrinking the Federal leviathan to a strict adherence to the Constitution, devolving all of the usurped tentacular powers to the states to do with — or do away with — as they choose, the party could achieve these goals:

  • It would actually deliver on a promise, prompting universal amazement.
  • It would present to both of its contradictory wings the opportunity to achieve at the state and local levels what they cannot hope to achieve nationally.
  • It would result in something much better than campaign finance reform: A Federal government that’s not worth buying because it has nothing to sell.
  • It would result in something much better than tax reform: A massive reduction in the Federal tax burden.
  • It would give Republicans a lasting national agenda. Moreover, it would protect American voters from the predations of the Democrats even when Republicans are out of power.

I myself am a libertarian, and I suppose it’s important to answer the libertarian objection: Fifty small tyrannies is not preferable to one large one. This is false on a number of grounds.

First, the only devolution of power that can be effected by the Federal government is the devolution of Federal power. Whatever else you might hope to do at other levels of government must be done there.

Second, tyranny is most onerous where escaping it is most costly. So long as free-thinkers can easily move to New York or California, it doesn’t matter as much what happens in Iowa or Alabama. Moving from the U.S. to New Zealand is a much higher hurdle.

Third, the irrationality of bad laws is most obvious where comparison is easiest. If it turns out that the Iowans scare away their best and brightest with irrational laws, the Iowans will either change their ways or pay the consequences of failing to.

The Framers of the U.S. Constitution anticipated that the states would comprise laboratories of democracy, each seeking to find the best balance between individual rights and collective authority. Devolving political power from the Federal government to the states, and from there to the counties and municipalities, most closely mimics the grand idea expressed in the Declaration of Independence: The consent of the governed.

In effect, I am offering to the national Republican party the choicest cut of the libertarian steak, the insufferable confiscatory Federal nanny-state. What Republicans choose to do on the state and local levels is their business. What they will stop trying to do is to find a common national ground between Connecticut country-clubbers and Texas bible-thumpers. There is none.

Cut Federal agencies one by one, and cut taxes in lockstep. Sell Federal assets to reduce the national debt. Pass Constitutional amendments that clarify the meaning of the Preamble to the Constitution, the Interstate Commerce Clause and other clauses that weasel-wording lawyers have used to feed the leviathan. Repeal the Sixteenth and Seventeenth Amendments to restore to the states their power over the Federal government. Do everything necessary to give us the Federal government provided for in the Constitution, and then start whittling away at that. Ecosocialists and theocrats can impose their views on those who share them. Those of us who don’t can get on with the business of building a civilization.

That is a national Republican agenda that can win. It gives the liberty-seeking Republicans the liberty they seek. It gives the theocracy-seeking Republicans a fighting chance to achieve their goals locally. And it will appeal to many, many Democrats, Independents and Libertarians, each for their own reasons.

This can win. And nothing else will.

 
Further notice: I wrote this in November of 1998. Nothing has changed since then, alas, and nothing will now, either, I’m afraid.

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