Wealth Isn’t (Just) Money, Pt 1

wealth 1.png

By Jared Miller

Inequality is a much bigger deal than most libertarians like to admit. Ignoring the gravity of the problem isn’t doing us any favors either. It undermines our credibility, but not because we are completely wrong. It weakens us because it makes us far too willing to dismiss the validity of the opposing view. Instead, we need to be able to admit that it is an issue, and then address the incorrect assumptions that lead people to incorrect answers.

The misunderstanding starts with conventional wisdom that says putting so much wealth in the hands of so few makes everyone else poorer. It does make a certain sense; there is only so much money in circulation, and the more you have, the less I can have. It is certainly the case that extreme inequality has the potential to cause obvious economic harm to those without.

People often try to fight this idea by saying that there will always be a high level of natural inequality no matter what system we have. This is true, but incomplete. We cite things like regulatory capture (which includes general cronyism, punitive tariffs, overzealous occupational licensing, targeted taxation, and other forms of economic protectionism) that make the problem worse by limiting both opportunities for personal growth, and the kind of competition that benefits workers more than employers.

We’ve covered those topics so thoroughly that halfway through that list you probably got bored and skipped to this paragraph. Don’t worry. I won’t judge. Anyway, it’s much more important to challenge our perception of inequality in general. The assumption that all inequality is harmful relies on two of the most prevalent misunderstandings in our culture: the idea that the amount of wealth is fixed, and that wealth equals money.

But wealth isn’t money. I mean, of course it is, but it isn’t only money. This isn’t just philosophical nonsense either. It’s a cold, hard, economic fact. So what is wealth? Wealth is all the things that money does. Though it seems minor, this little nitpick is all the difference in the world.

Money is a shortcut. It is a tool – like a shovel, or a ruler. We use it to measure value, and also exchange the value of labor or investment for the things we want or need. (Since investment is using the fruit of your labor to make someone else’s labor possible, labor and investment are nearly identical for the purpose of this discussion.) If you can satisfy those without money, or with less money, your wealth has increased even if your financial situation is unchanged.

if you meet your personal needs and desires with less money than you make, you are as wealthy as you ever need to be — regardless what the rest of the world tells you. So long as it is the life he wants, a man living in the mountains selling just enough moonshine to keep the lights on and the fridge full is as wealthy as any Wall Street broker. Obviously most of us aren’t content with a shack in the woods, so our desires tend to be a little more extensive.

The good news is that in the modern world, most of them can be met as easily at the low end of the economic spectrum as the top. Housing, transportation, food, electronics, leisure activities, etc… all are within the grasp of the majority of the population. With very little money, we are able to do many of the same things as those with much, much more.

So why doesn’t it feel any better for those of us who have struggled, or are struggling? What about those of us who, no matter how hard we try, can’t seem to get any further? Sure, people with less income have access to the same things, but they may be less desirable or of lower quality: like owning a used Ford Tempo vs a brand new Cadillac. Both satisfy the need for transportation, but one is notably more desirable than the other.

This is a big problem when thinking about our own lives. Typically, as our situation improves, so does the quality of our possessions. This process of slowly “trading up” can leave us feeling as if we haven’t gained a thing. “Yeah, I have a nicer phone, but I’m still living paycheck to paycheck.”  

That’s because, in a way, we haven’t improved at all. Since we are fulfilling the same desires as before with no additional savings or satisfaction of wants, we have not made real progress. We have only “upgraded.”

That’s the funny thing about wealth — it doesn’t always pay the bills. It is an indisputable fact that even the lower class in this country is considerably wealthier than previous generations. For God’s sake, most of us have one of the most powerful pieces of technology in human history in our living room and we use it to kill zombies or play fake football on a television screen the size of a Buick… But when it comes to paying the mortgage or buying groceries, we find ourselves struggling, and barely getting by.

Because of this, we tend to forget the work our money does as soon as it’s complete. This is often why the magnitude of our prosperity escapes us, and is another important opportunity to separate money from our idea of wealth.

It’s also the reason the virtue of contentment holds the key to accumulating the kind of capital associated with traditional wealth. If you can stop upgrading and focus on developing your financial future, you can start saving money immediately. You can divert resources towards retirement, buying your own home, or starting your dream business.

And yes, everything on that list takes money. But that doesn’t change the truth that the product of your labor is going further than it could have. Instead of only having a new car, you could be driving a dependable, used Toyota and saving the other 20 grand for a down payment on a house. One develops your own wealth, the other gives it away to the landlord and the car dealership.

You can even stop taking out loans and paying other people interest for the privilege of using your own property. There is no more obvious example of self inflicted wealth destruction than consumer debt. It is such a direct transfer of wealth from the bottom to the top that you can see it happening every time you get your bill.

You may say the availability of low cost alternatives is just the result of technological innovation. You’re absolutely right! But in saying that, you are already implicitly accepting the premise. If you accept that technology makes things cheaper and more accessible, you automatically accept that labor is accomplishing more while expending fewer resources. Money is doing more — in other words, wealth has increased — even though there is no more money in circulation than before.

Of course, it will be much harder (sometimes impossible) for low income households to make these changes. But the only purpose here is to encourage you to think about wealth in real terms, instead of dollars and cents.

Income and wealth inequality are only truly a problem when they cause others to do without, or when they prevent people from improving their personal situation. Someone may be able to make the claim that this is already happening. But if it is, increased inequality is a symptom, not the cause. It may be an important indicator for the state of the economy, but attacking it directly is missing the point.

In fact, as we will see in Part Two, their profit may be increasing your wealth, too.

 

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The Thanos Problem

Thanos

Kris Morgan 5/3/2018

In my opinion, Avengers: Infinity War is the best movie to come out so far this year. It has action, adventure, plot twists on top of depth, offering insights into family dynamics, war, philosophy, psychology, and lives up to the hype surrounding it. That being said, if you haven’t seen the movie, please stop reading now and go see it, as there are a few spoilers ahead. You have been warned.

While the movie reflected many aspects of our culture, and made use of interesting symbols such as the twin-tower formation found at the location of the soul stone, nothing topped the persona of the main villain, Thanos. Not only did he see his monstrous actions as benevolent, in several scenes he showed a very humane side towards his adoptive daughter, Gamora.

The plot of the movie was very simple. Thanos perceived overpopulation as being the cause of suffering throughout the universe. Resources were too scarce to sustain a comfortable life for all, so the answer was simple: collect all six infinity stones and, at the snap of a finger, eliminate half the population.

His thought process sheds light on a very serious topic. Even the best of people cannot be trusted with power. Thanos’ belief that much suffering would be alleviated if he accomplished his objective gave him all the justification he needed to commit genocide on an unimaginable scale. This seems irrelevant with respect to real life, since there are no known sources of power so great, other than in the movies. However, virtually all government provided services mirror this attitude: that it is just to use aggressive force against a population as long as the goal is humanitarian.

The war on drugs is a prime example. Most people agree that addiction is destructive and leads to crime. Users often steal to fuel their habits and the market is by definition ran by criminals. There is no shortage of information available on how to help addicts, what to do if they steal from family or friends, etc. In a sense, it is only natural for some to conclude that since drugs lead to addiction, which leads to crime, drugs should be prohibited.

Though the outcome does not lead to genocide, it does lead to plenty peaceful people being arrested. In Thanos fashion, many ignore this, in light of the chain of logic presented above. In fact, in a document titled Speaking Out Against Drug Legalization, the DEA noted in ‘fact’ 7: “Drug use, crime, and violence go hand in hand. In 2004, 17 percent of state prisoners and 18 percent of federal inmates said they committed their current offense to obtain money for drugs.”

The problem with making all drugs and use thereof illegal is it puts government in the position of being the aggressor. Using force against people because they may one day use it themselves defeats the purpose and harms those who otherwise would have not reached that point.

This ability to ignore the amount of harm one causes simply because they have good intentions reeks of narcissism. In Thanos’ case, due to the damage caused, it is obvious. He has an extreme sense of self-importance, fueled with arrogance, and was exploitative with Gamora as he sacrificed her life for the soul stone; all traits PsychologyToday defines as narcissistic. Might it also be just a little self-serving to support drug laws, in order to ‘help others’, while ignoring the damage they cause?

Since the intellectual case against Thanos’ plan was never made on screen, I do feel compelled to make it here. Like all Hollywood stories, the plot of Avengers is based loosely on reality. Specifically, the work of an economist named Thomas Malthus. In the Malthusian world, the amount of wealth society has depends on whether the population grows or shrinks. If finite resources are divided amongst fewer people, everyone can have more. Conversely, if they are divided by more, everyone gets less. Seems logical enough, right?

Of course not. Malthus completely ignored the role of the entrepreneur. Entrepreneurs find more efficient ways to use things. While supplies may be limited, there is no reason to assume they are being used in the most efficient way possible. Making production more efficient alone has helped the west to grow in population as well as wealth. Let’s also not forget technology is almost at a point where we can begin mining asteroids in space.

In addition to the role of the entrepreneur, we have that of price. Even if the world’s assets were being used at their fullest capacity, there would be no natural need for a leader to exterminate half the population. Prices rise and fall as goods become more abundant or more scarce. During times of scarcity, prices rise and consumption falls. This discourages more people from having children. On the other hand, if prices fall due to improved productivity, the population has the opportunity to expand.

This is part of the reason price controls are such a dangerous tool. If resources are low and prices are also held low by power, then a society may wake up one day and find they have abruptly consumed all there is. If prices are artificially high, the people would be outraged to find out they could have had much better and easier lives if not for their ‘benevolent leaders.’ While not always perfect, prices are much more reliable than ignorant politicians who truly believe they know what size the population ought to be. Beware anyone who thinks it is truly their choice to make.

If Thanos was benevolent, he would have simply advocated for free markets. Even if his perception on resource consumption was correct, his solution was clearly wrong. The same holds true for our drug warriors. Truly benevolent leaders accept that people must be free to direct their own destinies. The job of governments, and anyone wanting to help, is to do so without causing harm to peaceful people. Any other means is a contradiction and doomed to fail.

 

 

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Four Dead In Ohio

Kent State Shooting

By Jennifer Flower  4/23/2018

Imagine being a college student and seeing your sibling, high school classmates, or even acquaintances drafted into military service without any say in the matter. Imagine being worried you could be drafted into a war overseas you didn’t understand the reasons for fighting. Imagine then 1,000 National Guard Troops descending on your campus. It seems far-fetched today, but in reality, we are still debating, discussing and protesting many of the same issues that came to a head 48 years ago today.

A group of students were protesting the Vietnam War spreading into Cambodia. The students and police had increasing confrontations, with the police accusing some students of throwing things at them. The Ohio National Guard was called in on May 2nd. The confrontations escalated over the next two days, culminating in the tragic death of several students.

In the days leading up to the Kent State Massacre, there was vandalism in downtown Kent, Ohio. Police officers claimed to have been hit by bottles thrown by protesters. Bars had to close early and a curfew was imposed on the residents. The Kent State ROTC Building was also burned down. No one to this day knows with certainty who started the fire, but it is now believed to have been a group of radical protesters who were not students.

Governor Rhodes further inflamed tensions by calling the protesting students “the worst type of people that we harbor in America.” A group of fully equipped National Guard members using tear gas and bayonets eventually opened fire on a crowd of students. Four students were killed and nine were injured. Two of the murdered students, not even involved in the protests, were simply walking to class.

The father of one of the victims on the day after the shooting said “Is dissent a crime? Have we come to such a state in the country that a young girl has to be shot because she disagrees deeply with the actions of her government?”

No accounts indicate that the students committed violence against any person. However, It does appear that the student protesters initiated force through vandalism, violating the Non-Aggression Principle. The perpetrators should have been held responsible for the damaged property.

This option of obtaining restitution from the protesters, however, was taken off the table the moment the National Guard began firing on unarmed students. During the protests, there were up to 3,000 protesters and approximately 1,000 Guardsmen on and around Kent State University. But it’s unclear how many active protesters there were at the time of the incident, as there were students and onlookers walking around campus and simply walking to classes. There were 77 Guardsmen. 28 fired upon the crowd, shooting 70 rounds over a 13 second period.

Freedom of assembly and speech are what Libertarian theory consider Natural Rights and they are protected in the First Amendment to the Constitution. The students absolutely had a right to protest the Vietnam War and to peacefully assemble to demand their voices be heard. They did not have the right to commit vandalism.

The National Guard escalated the confrontations all the way up to shooting indiscriminately into a crowd of students. There is no justification for that and indeed the shooting did not make students at other universities around the country think twice about protesting the war. It only served to escalate and inflame the already heightened tensions of protests around the country.

The more things change, the more they stay the same. We still have tensions on college campuses as to the direction of free speech on campus. Should students be required to stay within “free speech” zones on campuses? If they’re on the grounds of a public university, should students be free to openly exercise their first amendment rights of assembly and speech without interference since it should be considered public land?

President Trump announced that the US military was bombing Syria in retaliation to an alleged chemical weapons attack on Syrian Civilians and the US Military recently killed “a couple hundred” Russians in Syria in February of 2018; which could have spiraled out of control almost instantly. Increased outcry against escalating military intervention has been seen from all ends of the political spectrum.

Those who don’t gain the wisdom of the past will repeat its mistakes. It’s ok if we, as a society, are still figuring out how to handle freedom of speech on college campuses. It’s ok to discuss exactly what that “red line” is that would require US intervention overseas. Any time we have the opportunity to learn from our past, we should strive to. It is how we will progress as a society. It should be clear that the Libertarian standard is to wage peace and speak freely, even the most unpopular opinions.

Tin Soldiers and Nixon coming
We’re finally on our own
This summer I hear the drumming
Four dead in Ohio
– Crosby, Stills, Nash & Young

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Life’s Great Balancing Act: Why True Privatization Is The Only Realistic Solution To Society’s Complexity

balancing

Kris Morgan 4/7/2018

Libertarian icon and author of The Privatization of Roads and Highways Walter Block has said “If it moves: privatize it. If it doesn’t move: privatize it. Since everything either moves or doesn’t move: privatize everything.” Many, though not all, libertarians echo this sentiment. The concept of privatizing everything from road construction to police and military service might sound far-fetched or even outlandish to many, however, before analyzing the benefits, it is prudent to present the libertarian meaning of privatization.

When liberals and conservatives use the term privatize, they are usually referring to a situation in which government outsources a service to private contractors. Funding still comes from taxation. Since the rules are different for private parties, the management style can be altered.

For example, according to the Heritage Foundation (a conservative source), states have saved money by ‘privatizing’ prisons. “By putting prisoners to work and paying them competitive wages, many private companies are reducing prison costs for the government by withholding earnings for taxes, room and board, family support, and victim’s compensation.” Beneficial as this may sound, this is not how libertarians define privatization.

For a service to be privatized there can be no government contracts, special favors, subsidies, or even stringent regulations. Monetary resources cannot be provided through taxes. Anything other than a strict enforcement of property rights places politicians in the position of either managing an entire economic sector, deciding who succeeds and who fails, or both. Under such conditions businesses appeal to the powerful rather than the people. This form of organization makes privatization a technicality rather than a truly competitive market directed at consumer preferences.

Privatizing services in the libertarian sense would mean entrepreneurs make their own capital investments and aim at satisfying consumer demand. They would not only produce the product, but they’d also have to persuade the public to purchase it freely. Failure to economize efficiently would result in bankruptcy and the reallocation of resources into the hands of more competent competitors. Since economic growth is rooted in pleasing consumers, the marketplace is not only the best strategy, it is the only realistic one. Anyone can make a profit when the public has no choice but to hand over their money.

On the other hand, politics encourages black and white thinking. Pondering economic questions in simple terms of ‘yes’ or ‘no’ is overly simplistic. Consider all the economic questions we ask ourselves on a daily basis. Even going to work often involves internal debate. “Do I feel like going to work? Can I spare taking today off? What repairs need done to my house? My car? Is there overtime available?” 

Likewise, consider the basic questions we ask when we shop: “Do I really want that? What do I miss out on if I get it? Is there another way to satisfy this need without making this purchase?”

Notice the subjective nature of most questions. No politician can answer such a query for people they have never had contact with, and even if they could, solidifying decisions into law eliminates the ability of people to change their minds. This is the basis of what F.A. Hayek called the pretense of knowledge.

To believe that a handful of bureaucrats can direct economic activity on behalf of everyone efficiently is to assume knowledge no group of people can possibly have, no matter the size or intelligence. Knowing needs and wants in terms of yes or no is not good enough. One must not only know the cost everyone is willing to pay to achieve their ends, but also foresee all future events which could cause them to rethink their choices. There is simply no way to account for all of life’s variables.  

In addition to being economically impractical, the framing of debate in such simple terms is divisive. This is most apparent when it comes to the topic of abortion. The pro-life side of the debate believes their opponents are complicit in murder. The pro-choice side portrays their antagonists as tyrants who want to force their own moral standards on everyone, since it disregards a woman’s right to her own body. What if both sides are merely being hyperbolic, and the issue is more complex than we are willing to admit?

Life is a constant balancing act. Our mortality and physical limitations make everything we do an economic decision, as everything has opportunity costs. Even leisure time is purchased with forgone productive activity. Privatizing everything empowers us all with the opportunity to balance the costs and benefits of every good or service in existence. It also has the advantage of creating an atmosphere of competition, putting pressure on producers to be efficient in their endeavors.

When people are forced to buy a product (security for example) they are robbed of their right to choose. We all want security, but what are the chances that we all want the same amount of security, from the same people, and at the same price? Everyone has their own set of genes and their own life experiences and values to reflect on, not to mention their own circumstances. Do we honestly think it’s wise to keep our most important services one-size-fits-all?

 

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Why Blame The Police For Doing Their Job?

420

Jared Miller, 4/20/18

“Sin, regardless of how someone may define it, it is not a crime. Creating a victim, regardless if it is a sin, is a crime”.    – Larry Sharpe

For many, today is an excuse to smoke weed and pretend to be edgy. For others, it is an act of civil disobedience intended to highlight the absurdity of cannabis prohibition. Others like me, who don’t personally smoke, still share a sense of excitement about eventually winning back some measure of self determination in this area. But we still have a long way to go before we can say we’ve overcome the mentality that enables prohibition in the first place.

I recently made a snarky comment on a post from a police department criticizing the bust of a huge marijuana grow operation in Cleveland, Ohio. I was poking fun at the idea that these officers were keeping our children safe.

Someone I respect very deeply took issue with it, taking the all too common stance that one should fight the law and leave the police alone. “They are just good men doing their jobs. They don’t get to decide which laws to enforce.” I understand where he’s coming from, because I used to share that sentiment. On the surface it seems like the only respectable position. But it is wrong.

First, they do decide which laws to enforce. Police departments decide how to spend their resources. They decide what leads to follow and where officers patrol. Officers decide in the field, for example at a traffic stop, whether to let it slide or find every possible violation. They choose every day and in every situation which laws are important and which laws are not — which laws are worth enforcing and which laws are garbage.

Either they can “just do their job” as stalwart defenders of the law no matter what, or they can admit that they are intentional about which cases are worth pursuing. They shouldn’t get to hide behind their job to justify their actions in one situation, and opt to let someone off the hook in another. They always choose. And that can be a good thing. But when it comes to drug law, they generally choose poorly.

Often, the law was drafted with a specific moral goal in mind. So sometimes the officer is forced to make his choice either based on his moral code, or contradictory to it. In the latter case, he can compartmentalize his guilt by “just following orders.” At that moment, justice is no longer the goal, and the officer shows that he can be made capable, as we all can, of almost any action the ruling body sees fit to carry out. The inescapable conclusion is that morality is not just a poor basis for the formation of law. As a legal standard, it lays the foundation for all manner of injustice. When morality is the goal, anything can be justified.

What else is there? That’s a longer answer… but I’ll try to keep it short. Law exists to reduce or eliminate the ability of one person or group to do direct, intentional harm to another person or group. That’s all.

A law that causes more harm than it prevents stands in direct opposition to its proper role, and should be fought. If the person enforcing it is the one who causes the harm, then law enforcement should also be held accountable.

If an officer’s actions cause direct harm because he’s “just following orders,” he’s not more virtuous than a mafia thug that whacks a guy because it’s “just business.” In that case he just works for a more socially acceptable gang.

So what harm can an officer do in the course of “just doing his job?” The immediate effect is the most obvious. Individuals who have harmed literally no one by cultivating what should be an agricultural product are now felons. For the rest of their lives, they can’t vote, can’t own a gun, can’t find the meaningful employment that might help them live a life outside of “crime,” and will likely be imprisoned at the cost of the taxpayer for something that has not harmed anyone.

You might say the growers knew the risks when they started, and fair enough. But every one of those risks has nothing to do with the product itself, or the manufacture, sale, and use of the product. Every ounce of harm done by growing marijuana is done by enforcing a bad law.

And what about the extended effects? Instead of having legitimate, legal businesses, it has to be done on the black market. The number one cash crop of every drug cartel and street gang is marijuana. If you are concerned with fighting organized crime, the very first step is to cut off their income. In this case, that means fighting this terrible, destructive law.

That is to say nothing of the people actually using marijuana who are now criminals also. Before you say, “it’s not the same thing,“ prohibition requires that the user be punished at the same time as the producer. It’s all just different pieces of the same pie.

This is not meant to be anti-cop. I’m certain these cops aren’t bad men. They don’t have to be. History is littered with good men doing terrible things to others because “it’s the law.“  That is the real crime. Remaining complicit in that is what allows it to continue. It is absolutely right to say that the problem begins with the law forcing the cop into a false dichotomy between causing harm and potentially losing his livelihood.

Which is why sometimes both fighting a bad law and drawing attention to its enforcement are necessary. If you don’t believe that, I’ll assume you never go above 55 on the highway, or that you’d never oppose a cop enforcing any law, no matter how tyrannical. Where would you draw the line? If we have determined that a law is wrong, is the enforcement thereof not also wrong? With so many states taking a stand against federal marijuana law, and a majority of US citizens believing the law to be unjust, there has never been a better time for police officers and local departments to choose to devote their resources elsewhere.

 

 

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Time To Say Goodbye To Bipartisanship

Bipartisan

By John Klear, 4/7/2018

I know this is considered unconventional thinking and will probably offend the masses, but why does it have to be called ‘bipartisan?’ In a society where people are offended if the wind blows in the wrong direction, and all are encouraged to be individuals, it is demanded that we be ‘right’ or ‘left.’ There can be no happy median, only pro or con. And once a side is chosen, DO NOT attempt to go against the party. However, this is not a sporting event where you root for either the home team or visitor, these are real life decisions that affect everyone.

Lately, I have heard the phrase ‘if our forefathers were alive today…’ tirelessly used.  Our forefathers were average citizens; farmers, shoppe owners, chemists, doctors, and lawyers who came out of the fields and stores to meet and vote on laws meant to further society, not stifle it. And that is why they created a democracy that represents the voice of the PEOPLE, not the voice of one person or party. Our system is meant to help advance, as a whole, and not just one side or the other — to represent the voices of the of majority, while allowing those whose beliefs are not aligned with the collective the freedom to enjoy their own lives as they choose.

The system, much like the Constitution, must remain solid but fluid, changing and adapting to societal needs. However, this does not mean that it should immediately change to meet the ‘complaint du jour’ (see Amendment 18). The pace of society today is quick, but changes to our laws should not follow the same tempo.

I am not a politician, nor related to any politicians. I am an average middle-aged American who grew up in this great Nation. I still believe in its principles and values. My education came from an equal mix of books and the streets. I paid MY OWN way through Masters and part of my PhD. In addition to my regular work, I give back by volunteering in a homeless shelter, am active in different charities, and teach part-time with the hope that I can still make a difference.

With the support of this party, and other ‘3rd’ party options, I believe we can break those bipartisan chains that unintentionally suppress the great freedoms that so many died to ensure. The days of the two party system must come to end. This was illustrated in the recent Presidential election. The two parties offered what I’ve heard many call ‘subpar’ candidates. For an event that should have been based on which candidate represented a continued commitment to freedom, was instead on who was least despised at the time.

Thomas Jefferson wrote, “The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite.” Continued support of a two-party system greatly limits the growth of the nation. By rewarding the elite for their decisions, we hinder progress. And for the country to thrive, we should never accept status quo.

 

 

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Who Are The Cronies Part IV: Big Pharma

pharma

Kris Morgan 3/20/2018

The media has done its part blasting the heroin epidemic but has had little success completely informing us on the abuse of prescription medication. This is likely to provoke demand on the part of the people for stronger policing measures in the failed war on drugs. As it stands, Americans consume 80% of the global supply of opioids according to CNBC. Another aspect of concern is what is happening with our children. According to PsychologyToday,  “extrapolated to the U.S. population as a whole, the consequences are stark: approximately 1.1 million children received an inappropriate diagnosis [of ADHD] and over 800,000 received stimulant medication due only to relative [im]maturity.” So who is benefitting from drugging our population?

 

Shire CEO Flemming Ornskov

ornskov

Shire is an Ireland-based company that produces Adderall, which is marketed towards children diagnosed with ADHD. Not only is is ADHD is overdiagnosed, but in 2014 Healthline outed Shire for exaggerating the benefits of Adderall. They were fined $56.14mil as a result. According to subsidy tracker, Shire received $250,543,073 in federal, state, and local grants from FY2000 to present. Mr. Ornskov has a networth of about $21mil.

 

Novartis CEO Vasant Narasimhan

Narasimhan

Novartis is a ritalin manufacturer based in Switzerland. Like Shire, they have faced a class-action lawsuit for over-promoting ritalin as an ADHD medication. FY2000 to present, Novartis received grants in the United States in the amount of $159,582,837 while Narasimhan has a salary of $8.9mil.

 

Johnson & Johnson CEO Alex Gorsky

Gorsky

Johnson & Johnson is the world’s most profitable pharmaceutical company. In 2014 the BBC reported $71.3bn in total revenue (Novartis was number two with $58.8bn). Janssen, the official name of J&J’s drug manufacturing branch, makes products ranging from Tylenol to Sylvant, a drug used by patients undergoing chemotherapy. The amount of subsidies FY2000 to present was slightly lower, at 83,613,496. Per the Chicago Tribune, the company would, not surprisingly, like the insurance industry to pay for pre-existing conditions as well as allow children to remain on their parents’ plans until age 26. Mr. Gorsky has a salary of $21.2mil.

 

Pfizer CEO Ian C. Read

IanRead

According to their website, Pfizer is involved in manufacturing both prescription and over-the-counter medications. Pfizer provides a notable example of cronyism in the area of eminent domain. As ij.org stated, “In 1998, pharmaceutical giant Pfizer built a plant next to Fort Trumbull and the City determined that someone else could make better use of the land than the Fort Trumbull residents. The City handed over its power of eminent domain—the ability to take private property for public use—to the New London Development Corporation (NLDC)… In 2009, Pfizer, the lynchpin of the disastrous economic development plan, announced that it was leaving New London for good, just as its tax breaks are set to expire.” FY2000 to present they have received a whopping $371,367,005 in US subsidies. Mr. Read receives a salary of about $24mil.

 

A big driver in pharmaceutical corporatism is intellectual property rights. The industry makes the consistent claim that intellectual property stimulates innovation, as R&D can be conducted with the expectation that one’s work will be handsomely rewarded and not ‘stolen.’ Dissent Magazine voiced a different opinion: “…while movements have grown to expand treatment access, corporations have bulked up artificial barriers through intellectual property laws. Today, 26 million people worldwide are still not getting proper treatment [for HIV/AIDS], and the WHO has recently pressed wealthy donor states for a major infusion of aid for treatment programs. Yet those same programs are sliding on a collision course with powerful pharmaceutical monopolies.

Not only does intellectual property stifle competition, it is not in line with consistent property rights. The Mises Institute published the following in an article titled “The Fight Against Intellectual Property”: “…when government grants IP rights, it’s not really granting a property right in an idea, but is instead granting a monopoly on the right to use an idea for certain profitable purposes. If you own a copyright in a book, only you (or someone to whom you give permission) can produce and sell copies of that book. If you own a patent on an invention, only you (or someone to whom you give permission) can produce and sell the invention for a certain period of time.”

No matter how beneficial it may seem to consumers and producers alike, allowing the government to grant monopolies to whomever they see fit leads to monopoly pricing, as we all witnessed when Martin Shkreli raised the price of an AIDS pill from $13.50 to $750. Parties in a sector of the economy, in this case prescription drugs, will become greedy, politicians will become corrupt, and the people/consumers will lose. Monopoly prices will rear their ugly heads as competition is cut at the neck and body-politic would lose its influence on its chosen leaders, as we have. Whatever language we wish to use; taking our country back, restoring democracy, eliminating cronyism, etc. we all know the unholy alliance between business and government has to end.

 

Part I                                                          Part II                                                                 Part III

 

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On Approach

approach

Kris Morgan   2/26/2018

If you’re a libertarian, chances are you have debated someone who seems to think you stuck your head in the sand. If you are lucky enough, you have conversed with people who stumped you by asking how services could be provided outside of politics. However, if you’re like 99.9% of us, you have also spoken to someone who just can’t seem to figure out why you would support liberty in the first place. At first your opponent may just think you are naive, but after chatting with you for a while, they are left with the impression that you are hopelessly dogmatic. The truth is we are neither naive nor dogmatic; we simply believe in a different method of approaching problems.

A perfect example of such thinking can be found in an article titled “The Libertarian Delusion” published by the American Prospect Magazine in 2015. The piece touches on a wide range of topics including pollution, income inequality, and the 2007 housing crash. It then goes on to discuss the great marvels pursued by governments which have lead to private investment, using Apple as an example. The author later suggests the market is a creature of government. While some arguments are well thought out, it is painfully obvious the writer fails to understand libertarianism.

As tempting as it is to write a point by point response, it is much more important to clarify something our critics almost always fail to grasp. Libertarianism is not an ideology revolved around results or personal gain, nor do we wish to bury our heads in the sand and pretend problems don’t exist. Instead, we hope to persuade others to approach our shared challenges within the context of free associations and individual freedom. This is in sharp contrast to other schools of thought, which rely heavily on solving problems through the force of law.

This is made more clear by reviewing the way Mr. Kuttner closed his piece: “So if we are to win the argument with the libertarians, we need to take back effective government. Friedman was wrong to argue that the cure for market failure is more market. However, the cure for weak or corrupted democracy has to be more democracy. The only way to redeem public confidence in government as a necessary check on the market is to repair faith in democracy itself. It is not difficult to prove that the claim of market efficiency is delusional.”

Critics such as Mr. Kuttner could speak about market failures and political efficiency until they are blue in the face; it is not going to make the slightest difference to any serious libertarian. What speaks to us are ideals, such as justice and peace. Prosperity is more of a bonus. The mechanism by which justice and peace are achieved is respect for legitimate property rights; legitimate property defined as that which is gained through proper homestead, received as gift, or earned through trade.

Most treat this opinion as a minor difference in politics, but there are great implications which result from this perspective. Most importantly, we are not interested in using political power nor any other form of coercion to solve problems. Rather than asking how the law should be modified to suit the circumstances we want to change, we ask ‘what can we do within the framework of liberty to make life better?’

There are many benefits to approaching society’s troubles this way. First, it is the only way to sustain a free state. Seeking new laws in order to overcome obstacles has the inevitable consequence of creating a totalitarian regime, since we will always have our imperfections. Secondly, we avoid the pitfall of pretending law can make society more secure. Seeking to increase our own safety at the expense of other people’s liberty (i.e. gun control) is a method that is sure to fail for obvious reasons, as liberty and safety are one and the same. Perhaps most importantly, we are forced to deal with the roots of our problems, whereas the use of law encourages us to focus only on the symptoms.

The next time someone demands you know every detail about how a free society would work, remind them that our message is really one about method. Don’t be scared to leave omniscience to God. Where we don’t already have answers, the logical thing to do is brainstorm. According to gallup, only 27% of Americans can be characterized as libertarian. If so, 73% of our nation’s brain power is open to, likely relying on, the passing of new laws as a panacea when facing challenges. Freedom cannot last if every problem is met with a reduction in liberty, and passing laws will never ‘fix’ humanity. We can do better. The only caveat is we need that other 73% to work with us.

 

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Who Are The Cronies Part III: Prisons

prison

Kris Morgan 2/14/2018

In parts one and two of this series we dealt with the military-industrial complex and the banking industry. The issue regarding prisons is a little less well-known, but is even more unjust than the others. Nothing is less libertarian than taking freedom from a person who has not violated another’s rights. Sadly, the United States holds 25% of the world’s prisoners despite carrying only 5% of the total world population. Perhaps by examining the beneficiaries of these conditions we can shed some light on how the ‘land of the free’ has come to this.

Corrections Corporation of America (CCA) is the fifth largest corrections organization in the country, behind the Federal Government and three states. According to their site they “specialize in the design, construction, expansion and management of prisons, jails and detention facilities, along with residential reentry services, as well as inmate transportation services through its subsidiary company TransCor America.”
Damon T. Hininger, CCA CEO and President

hininger

Hininger joined the company in 1992. He has had Vice President and Business Analysis positions as well as working in Federal and Local customer relations. According to salary.com his base pay is over $861,000 and over $2mil in stock value, and over $3mil total compensation.

 

GEO Group (previously Wackenhut) is another large prison company. Shamelessly, they very enthusiastically advertise their relation with the government on their page. “GEO’s U.S. Corrections and Detention division oversees the operation and management of approximately 75,500 beds in 71 correctional and detention facilities. GEO’s U.S. Corrections & Detention division provides services on behalf of the Federal Bureau of Prisons, U.S. Marshals Service, and U.S. Immigration and Customs Enforcement, as well as 9 state correctional clients and various county and city jurisdictions.”

George C. Zoley, CEO, Chairman of the Board, and Founder

zoley

Bloomberg ran a summary of Zoley. “Mr. Zoley founded GEO Care Inc., a wholly-owned subsidiary of The GEO Group, Inc. in 1984 and serves as its Chairman and Chief Executive Officer. He serves as Chief Executive Officer and Vice Chairman of Wackenhut Corrections of The Wackenhut Corporation. He served as the President Geo of Group Inc. since 1988.” According to the article he made $5,176,221 last year.

While managing and operating prisons has made plenty people rich, Attn.com points out money is also made providing inmate services. Ashley Nicole Black displayed her understanding of the economics involved when she wrote of the phone call service. “Few companies hold a virtual monopoly on the service and even pay the state a profit based commission. Remember, it’s the state that hires these companies. When the state is making money off these phone calls, do you think they are really interested in negotiating a fair, cost-effective phone plan for their prisoners?”

The following are examples of companies which make profit from offering services to inmates at what essentially amounts to monopoly prices.

 

Steve Rector, Corizon CEO

rector

According to their website, “as the correctional healthcare pioneer and leader for 40 years, Corizon Health provides client partners with high quality healthcare and reentry services that will improve health and safety of our patients…” In January 2018, the Kansas City Star reported Corizon had $2bn in contracts with Missouri and Kansas alone. Mr. Rector’s compensation information was unavailable.

 

Finally, we come to Global Tel-Link. According to their own site, GTL “serves approximately 2,300 facilities and 1.8 million inmates in 50 states, the District of Columbia and Puerto Rico. Our products and services are deployed in 32 state DOC contracts (including 8 of the largest 10) and over 650 counties, including many of the largest city/county run jail facilities. We also provide service to the Federal Bureau of Prisons.”

Brian D. Oliver, Global Tel-Link CEO

Oliver

Per Bloomberg, “Mr. Oliver was responsible for leading Global Tel*Link Corporation’s due diligence review with respect to new potential investments in the telecommunications and related sectors and overseeing portfolio companies once investments have been completed in those sectors. Mr. Oliver joined GTL from Gores Technology Group, LLC…” Compensation information was not available.

One can argue that these services are necessary, and the market is merely providing services, even to those in jail. However, it is clear the income generated by providing these services is stimulated by government created demand for them. Attn reminds us “the War on Drugs has also created ballooning prison populations by increasing arrests for petty offenses (such as marijuana possession). America has the longest first time drug offense sentences (5-10 years) of developed nations. …65 percent of private prison contracts require an occupancy guarantee. That means states must have a certain amount of prisoners — typically between 80 and 90 percent of occupancy — or pay companies for empty beds. Talk about bad incentives — a state throws money away if it does not have enough prisoners.” There are a lot of people with a lot of money riding on maintaining or increasing prison populations in the US and abroad.

To drive the point home, the Washington Post reported in 2015 that “several reports have documented instances when private-prison companies have indirectly supported policies that put more Americans and immigrants behind bars – such as California’s three-strikes rule and Arizona’s highly controversial anti-illegal immigration law – by donating to politicians who support them.”

Marco Rubio can be viewed as a case-study of how the relationship between prisons and politicians works. “While Rubio was leading the House, GEO was awarded a state government contract for a $110 million prison soon after Rubio hired an economic consultant who had been a trustee for a GEO real estate trust. Over his career, Rubio has received nearly $40,000 in campaign donations from GEO, making him the Senate’s top career recipient of contributions from the company.”  

The economic incentives surrounding the prison sector have clear and harsh consequences for the rest of us. The people we are supposed to trust with our security have taken that trust and twisted it into building a system which profits from our imprisonment. No private persons would ever be capable of such crimes against humanity without politics to support it. Our goal should be to reverse these trends in their tracks.

 

Part I                                                             Part II                                                         Part IV

 

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Who Are The Cronies Part II: Bankers

cronys-in-line1

Kris Morgan 2/8/2018

When President Bush and his administration bailed out banks in light of the 2007 housing collapse, the crony nature of banking was at the forefront of all our minds. The New York Times even ran a headline in 2009: “Bankers Reaped Lavish Bonuses During Bailouts.” According to the article, nine of the biggest recipients of bailouts paid about 5,000 people $1mil each in bonuses. So not only does bailing out losers undermine the market’s goal of weeding out those who fail to meet economic demand efficiently, the moral hazard involved is shocking.

CNN posted a special report listing all the banks bailed out as a result of the aforementioned 2007 crash. The list is endless, but the top three were Wells Fargo, JP Morgan Chase & Co., and Citigroup. Each received  $25bn to hold them over. Without further adieu, here is a profile of the top three banks’ CEO during the time.

 

John Stumpf – Wells Fargo CEO in 2008

stumpf

In 2008, as Wells Fargo received a $25bn bailout, Stumpf was paid $13.8mil in his first year as CEO. The bank posted a $2.66bn dollar profit in the same year. While Stumpf has had an extensive banking career, Janet Yellen’s final act as Chairman of the Fed in 2016 was to slam Wells Fargo with $185mil fine in light of the fake accounts scandal. Stumpf retired as a result. From Fiscal Year (FY) 2000 to present, Wells Fargo has received $530,481,584 in subsidies (government granted money without demand for repayment).

 

Jamie Dimon – JP Morgan Chase & Co. in 2008

jamiedimon

JP Morgan Chase & Co. received $25bn to remain afloat in 2008. Jamie Dimon was paid $19.7mil that same year (to his credit, in 2007 he made $34mil). What is troubling is the bank received a bailout, but according to Dimon’s bio, in 2008 “he steered the business clear of most of the wreckage and maintained its profitability, while also scooping up ailing Bear Stearns for $2 per share…” However, in 2013 it became apparent JP Morgan misrepresented mortgage securities it was selling prior to 2008 and was forced to pay $13bn in a settlement with regulators. JP Morgan has received $1,577,130,318 in subsidies since FY 2000.
Vikram Pandit – Citigroup in 2008

vikrampandit

Like JP Morgan Chase & Co. and Wells Fargo, Citigroup received a $25bn bailout in 2008. Pandit reported a measly $1mil salary to Congress for 2008, however, the Huffington Post reported he made almost $11mil and simply neglected to “mention his sign-on and retention awards, as well as stock and option awards.” Per the story, he originally made closer to $40mil but lost big when the stock price tumbled to under $1 per share. From FY 2000 to present, Citigroup has received $564,762,028 in subsidies.

 

No proper work on cronyism in the financial sector can even be started without mentioning the two people most in charge: Former Chairman of the Fed Ben Bernanke and Former Treasury Secretary Hank Paulson.

 

Federal Reserve Chairman Ben Bernanke in 2008

bernanke

Ben Bernanke began his career in academia. After graduating Summa-Cum-Laude in Economics from Harvard in 1975, he earned a PHD from MIT in 1979. Following that, he taught at Stanford, NYU, MIT, and Princeton. He was appointed to the Federal Reserve Board of Governors in 2002 and Chairman in 2005. Bernanke worked closely with President Bush and Hank Paulson to draft the Emergency Economic Stabilization Act, more commonly known as the 2008 bailout.

 

Hank Paulson – Treasury Secretary in 2008

hankpaulson

Henry Paulson earned a Bachelor’s in English from Dartmouth and an MBA from Harvard before going to work at the Pentagon as staff assistant to the assistant secretary of defense under President Nixon. Just after serving as Domestic Council assistant to President Nixon, he made his way to Goldman Sachs. In 1982 he made partner, in 1988 he made managing partner, and from 1990 – 1994 he operated as President and COO. In 1999 he replaced Jon Corzine as Chairman and CEO, as Corzine worked his way into politics, becoming Governor of New Jersey. In 2006 he was named Treasury Secretary by President Bush.

 

The 2007 housing crash and subsequent 2008 bank bailouts were a trying time for everyone. Perhaps every person on this list acted admirably, and in spite of that, the media found a way of viewing their actions with a touch of fraud. Even if we believe that unlikely story, do we still want the federal government determining who stays afloat and who drowns every time we enter the bust phase of the cycle? Do we want banks, with a revolving door between the private sector and high levels of government, operating under the impression they will just get bailed out? What is to stop them from approving high-risk high-reward loans to people in desperation?

 

Part I                                                              Part III                                                               Part IV

 

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