Who Are The Cronies Part III: Prisons


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 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


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


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


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.


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Who Are The Cronies Part II: Bankers


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


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


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


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


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


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?


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Doctor Libertarians


Travis Hallman 2/1/2018

Many of our most vocal activists within the Libertarian Party are current and former doctors. Doctors have an inside perspective of the healthcare industry as well as how decisions that negatively affect one’s life, i.e. drugs, also affect the body. On healthcare and self-ownership, the official Libertarian Platform states:

Libertarian Platform 2.10: Health Care

“We favor a free-market health care system. We recognize the freedom of individuals to determine the level of health insurance they want (if any), the level of health care they want, the care providers they want, the medicines and treatments they will use and all other aspects of their medical care, including end-of-life decisions. People should be free to purchase health insurance across state lines.”

Please click this link if you’re interested in understanding why Libertarians support a free-market health care system.

Libertarian Platform 1.1: Self-Ownership

“Individuals own their bodies and have rights over them that other individuals, groups, and governments may not violate. Individuals have the freedom and responsibility to decide what they knowingly and voluntarily consume, and what risks they accept to their own health, finances, safety, or life.”

Please click this link if you’re interested in understanding why libertarians support self-ownership.

When the Affordable Care Act was being hotly debated, it was apparent the AMA supported the bill. Even today one is left with the impression that, generally speaking, doctors support Obamacare. The following is a list of of doctors who not only oppose the ACA, but who are also outright libertarians.


Dr. Ron Paul


“In his last year of college, Ron Paul married Carol. After he graduated in 1957, the couple moved to Durham, North Carolina, where Ron attended the Duke University School of Medicine. Finishing his degree in 1961, he and his young family then moved to Detroit, Michigan. There Paul did his internship and residency at Henry Ford Hospital. Serving his country, he was as a doctor in the United States Air Force from 1963 to 1965 and then with the United States Air National Guard from 1965 to 1968.”

“Specializing in obstetrics and gynecology, Paul opened his own practice in Texas. During the course of his career, he is said to have delivered more than 4,000 babies.”


“Ron Paul is America’s leading voice for liberty, prosperity and peace. As a former member of the U.S. House of Representatives and three-time presidential candidate, Ron Paul tirelessly works for limited, constitutional government, low taxes, free markets, and a return to sound monetary policies. Ron Paul never voted for legislation unless the proposed measure was expressly authorized by the Constitution.”



Dr. Rand Paul


“Paul attended Baylor University and then the Duke University Medical School, his father’s alma mater. After receiving a medical degree in 1988, Paul pursued a general surgery internship at the Georgia Baptist Medical Center in Atlanta, Georgia. While there, he met Kentucky native Kelley Ashby. The couple dated for a couple of years and married in 1991, and when Paul finished his ophthalmology residency at Duke two years later, they moved to Bowling Green, Kentucky to start a family and Paul’s medical practice. They soon had three sons, William, Duncan and Robert.

A longtime member of the service organization Lions Club International, Paul founded the Southern Kentucky Lions Eye Clinic, a nonprofit offering free eye care to patients in need, in 1995. He also performed free eye surgeries for impoverished children in developing countries through the Children of the Americas program.”

“A lifelong Republican with Libertarian leanings, Paul became involved in political causes in 1994, when he founded Kentucky Taxpayers United, a watchdog group tracking taxation and spending issues in the Kentucky state legislature, until it disbanded in 2000. Rand was inspired to become involved in politics, in part due to his father, Ron Paul, who was the first member of the Paul family to run for and win political office.”



Dr. Marc Allan Feldman


“Dr. Feldman was born in October of 1959. He was a 1980 graduate of Northwestern University with a major in Philosophy, Phi Beta Kappa. He received his Doctorate of Medicine from Johns Hopkins University School of Medicine in 1984. He practiced anesthesiology at Johns Hopkins for 11 years. He is survived by his wife Anne and his sons Aaron, Abram and Andrew. His son Alec passed away from cancer at age 16. He worked at the Cleveland Clinic in Ohio.”

“Dr. Feldman was a candidate for the Libertarian presidential nomination this year. His campaign was one of the most inspirational in the field as a result of his sincerity, warmth, messaging, and his closing statement during the Libertarian National Convention’s final presidential debate.”



Dr. Mary J. Ruwart


“Dr. Mary J. Ruwart is a research scientist, ethicist, and a libertarian author/activist. She received her B.S. in biochemistry in 1970 and her Ph.D. in Biophysics in 1974 (both from Michigan State University).  She subsequently joined the Department of Surgery at St. Louis University and left her Assistant Professorship there to accept a position with The Upjohn Company of Kalamazoo, Michigan in 1976.  As a senior research scientist, Dr. Ruwart was involved in developing new therapies for a variety of diseases, including liver cirrhosis and AIDS.

Dr. Ruwart left Upjohn in 1995 to devote her time to consulting and writing. Her communications course for scientists (www.speakingforscientists.com), covering written, oral, and poster presentations has received high praise from attendees. She also provides consulting services for nutraceutical companies, clinical research organizations, and universities.

Between 2003 and 2006, Dr. Ruwart was an adjunct Associate Professor of Biology at the University of North Carolina in Charlotte.  During that time, she served with the Center for Applied and Professional Ethics, designing a medical research ethics course for the University.  Her radical application of ethics to medical regulation, especially regulations regarding pharmaceuticals, has life-and-death-implications.”

“Mary J. Ruwart, Ph.D. Dr. Mary J. Ruwart is a research scientist, ethicist, and a libertarian author/activist. She has worked extensively with the disadvantaged in low-income housing and was a contender for the 2008 Libertarian Party Vice-Presidential nomination. Her scientific, political, and community activities have been profiled in several prestigious biographical works, including American Men and Women of Sciences, World’s Who’s Who of Women, International Leaders in Achievement, and Community Leaders of America.”

Healing Our World: The Compassion of Libertarianism


Dr. Keith Smith

Dr. Keith Smith

“Dr. Keith Smith, co-founder and managing partner of the Surgery Center of Oklahoma, took an initiative that would only be considered radical in the healthcare industry: He posted online a list of prices for 112 common surgical procedures. The 51-year-old Smith, a self-described libertarian, and his business partner, Dr. Steve Lantier, founded the Surgery Center 15 years ago, after they became disillusioned with the way patients were treated at St. Anthony Hospital in Oklahoma City, where the two men worked as anesthesiologists. In 1997, Smith and Lantier bought the shell of a former surgical center with the aim of creating a for-profit facility that could deliver first-rate care at a fraction of what traditional hospitals charge.”

Oklahoma Doctors vs. Obamacare


Dr. Kyle Varner


“Dr. Kyle Varner practices hospital medicine in Washington State and Maine. He earned his BA from St. John’s College, his MD from American University of Antigua College of Medicine, and completed his residency in Internal Medicine at Tripler Army Medical Center in Honolulu, Hawaii.

He has been a member of the Libertarian Party since 1999 and currently serves as the treasurer of the Libertarian Party of Hawaii. He has spoken at events around the United States promoting health care freedom.”

Libertarian Solutions for the Health Care Crisis


Joshua James, Founder, CEO,
& Industry Consultant of James Healthcare


“Joshua owes his life to chemotherapy and innovations in modern medicine. Joshua founded a healthcare marketing LLC and co-founded telemedicine provider networks in Texas and Nevada. His network and LLC are focused on veteran transitions of care and the growing population of those in need of social, mental, and medical intervention/supervision. He is building a virtual privatized healthcare system for veterans and civilians alike. He apprenticed beside his father, a pharmacist and former Bexar County Pharmacy Association president. He has a background as a pharmacist intern at the Cancer Research & therapy Center in San Antonio, TX. Joshua has extensive experience as compounding pharmacist intern at a regional independent pharmacy system. Joshua has a compassion for veterans and their success in transitions of care.”

“JJHC is devoted to innovative healthcare, development of original brands, marketing solutions, and networking opportunities, while focusing on veterans affairs, telemedicine, and transitions of care. JJHC is facilitates a Voluntary Provider Network (VPN). Clients and providers communicate through a mutually convenient, HIPAA credentialed interface. Our network of providers work in an outcomes focused, collaborative, free market, voluntary, and affordable environment. JJHC offers contemporary marketing, through a variety of resources. If you would like to grow your practice and network with providers from various areas of practice; JJHC has a solution for you.”



Republicans historically have been known to support free-market health care, but surely as we see their representatives compromising their principles, we also see their member registrations decreasingHowever, Libertarian Party member registrations are increasing and Libertarian representatives have championed a free-market health care system consistently.

Democrats have been known to support legalizing decisions which have negative consequences, but again, as we see their member registrations decreasing we simultaneously see their representatives compromising their principles. On the other hand, Libertarian representatives have championed legalizing personal decision-making across the board. The LP has remained true to its principles in both self-ownership and healthcare freedom.


In liberty,



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Why Marx Was (Almost) Right


Kris Morgan 1/25/18

Karl Marx is one of history’s most controversial figures. Those of us who are politically engaged will inevitably have to resolve his ideas with our own beliefs, whether we reject or accept them. Not only was he a staunch nemesis of capitalism, he and Friedrich Engels developed a competing economic system that does not rely on private property, capital investments, or entrepreneurship. Since we do live in a capitalist society, it is beneficial to revisit his critiques of capitalism, which were rolled out in the late 19th century in Das Kapital.  

In 2014 Sean McElwee of Rolling Stone wrote an article based on Marx’s analysis of capitalism titled “Why Marx Was Right: Five Surprising Ways Marx Predicted 2014”. These included the chaotic nature of capitalism, imaginary appetites, globalization, monopoly, and the impoverishment of the middle class. On the surface, there is plenty of evidence that suggests Marx was correct. The middle class is diminishing, we are still recovering from the real estate collapse, and it’s safe to say we all have things we don’t need. Additionally, WalMart dominates and presently operates stores in 44 countries. However, in spite of proving correct in his long-term economic predictions, Marx was wrong on every point.

On the chaos of capitalism, McElwee’s argument in favor of Marx went as follows: “Broadly speaking, it’s what made the housing market crash in 2008. Decades of deepening inequality reduced incomes, which led more and more Americans to take on debt. When there were no subprime borrows (sic) left to scheme, the whole façade fell apart, just as Marx knew it would.” This is true, but what is also apparent is the domination of the financial system by the Federal Reserve, through Act of Congress, since 1913. With the ability to offer loans at lower-than-market rates, combined with Fannie Mae and Freddie Mac (chartered by Congress in 1938 and 1970 respectively) and the Community Reinvestment Act, we can safely say we have not had a free market for quite some time. The chaos we experience is the result of central planning, not free markets.

Of imaginary appetites, Marx stated capitalism would lead to “a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites.” McElwee then surmises that though cell phones change very little with each progression, we purchase the latest anyways. But this is more a statement about human demands than the capitalist system of private property. The capitalist economy is nothing more than the notion that if left alone, people will store a supply of goods to satisfy perceived demand. Should our preferences change, production and marketing strategies will change as well. That is the strength of markets. The fact that so many have the means and time to focus on the latest and greatest advances, rather than whether we will eat, is a sign that we have surpassed basic subsistence.

In 1848 Marx predicted globalization, arguing “It must nestle everywhere, settle everywhere, establish connections everywhere.” It is undeniable that capitalists want to trade with as many people as possible, however, is this not true of every economic organization? Communism itself is an international force the same way capitalism is. Neither ideology can be said to be a complete reality so long as the global community is mixed. Each will strive for what they perceive as the liberation of others as well as the advancement of its own agenda.

Monopoly is also a part of his critique of the market economy. According to the article, “Marx, however, argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other.” Wal Mart’s success is then used as an example. While we can agree Wal Mart has controlled the market, we cannot agree it is entirely due to market forces. Since the Progressive Era industry has turned to government for cartelization and other benefits. According to Forbes, Walmart cost taxpayers $6.2bn in public assistance. It is officially safe to stop pretending Walmart is an example of out-of-control free trade.

As Murray Rothbard pointed out, “The government interventions of the Progressive Era were systemic devices to restrict competition and cartelize industry… Just as other industries turned to the government to impose cartelization that could not be maintained on the market, so the banks turned to government to enable them to expand money and credit without being held back by the demands for redemption by competing banks.” Do we honestly believe the rich fund political campaigns and lobby politicians to make sure things are always fair?

Finally, we address the diminishing middle class. With the aforementioned interventions, dispelling this myth should be a piece of cake. The central bank disrupting the economy and causing malinvestments and subsequent bailouts, devaluation of currency, and cartelization of industry, we have an obvious recipe for corporate oligarchy.

Marx would have been right on all points had he simply used the phrase ‘state capitalism’ or ‘crony capitalism’. The only way one can conclude Marx was correct in his analysis of the market economy is by completely ignoring all state interventions. Free market economists, such as viewed by the Austrian School, do not consider central bans, whimsical regulations, nor any other infringements on property as part of capitalism. There is simply no basis to attribute flaws in society under the broad umbrella of free market deficiencies.

These predictions under the conditions of our current political system are obvious. Of course big business pays for favors from big government. Even Obamacare worked to enrich the health insurance industry as well as big pharma, while our premiums skyrocket. The alliance between industry and politics is unholy, damaging, and has nothing at all to do with free trade. Indeed, Free Market economists not only made the same predictions, but in his latest work The Progressive Era, Murray Rothbard offers a historical record of it! When the extreme rich use their money to influence politicians, politics itself becomes nothing more than one massive marketing campaign.


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Helping The Poor: Markets vs. Charity and Welfare


Kris Morgan 1/15/18

There is much debate on the best means to help the poor. The left trusts welfare programs with the task, while their adversaries offer charities as a viable alternative. Too few point out that the market economy is empirically and logically the best overall choice. Crony capitalism and a general lack in understanding of economics have created an environment where the very idea is met with disgust. Despite that attitude, the market economy is the greatest arena to improve conditions for the poor.

Welfare programs operate to redistribute income from one person to another. While it’s true this makes it possible for the recipients to consume more, in the long run we are only working to subsidize inactivity. It doesn’t matter whether a welfare recipient works or not. Money given for nothing is always money that could have been traded for something. Taxing production to subsidize idleness diverts resources which could otherwise be used to make investments and create jobs, withholding opportunities from the very people we are trying to help. In essence, we create a welfare trap and permanent underclass.

Charity is a cousin of welfare. Although it’s perfectly within the confines of private property rights, it too is not the best way to help the poor. Resources are given to the needy at the behest of their proper owners. Some do help people by offering or finding them work, but such actions represent market activity. Charity, absent investment to meet economic demands, is no more stabilizing than welfare. No wealth is created, nor is anything done to make the receiver more marketable for future or better employment.

The only way to provide the poor with greater stability and wealth in the long run is through capital investment and entrepreneurship. For low wage earners, investment in capital goods makes labor more productive. Increased productivity leads to increased earnings by the business and opens the door for higher wages. When a society boosts production, prices fall. Even if employers refuse to offer raises, material well-being increases for everyone.

Entrepreneurship is the force for creating jobs. Though new businesses usually offer lower pay, entry level jobs help us gain experience and make connections. Building a positive reputation is a building block towards advancement and/or finding a better employer. If one is lucky enough to apply at a new establishment early, they may also attain a leadership role. It’s safe to say most of us look back on our first jobs as providing a template for proper workplace etiquette; knowledge that is expected of all adults in any organization.

Whatever one may think about the market as a mechanism for helping the poor, it’s telling that both charity and welfare attempt to hold people over until they are able to find a stable source of income. A welfare/charity case is not considered turned around until they find good paying employment; which the market provides. Additionally, resources offered by charities and programs alike are first generated by the productive market.

Steve Patterson made this point clear when he wrote: “Without this initial creation of wealth, charities would have nothing to distribute. In the developed world, it’s easy to forget that poverty is the default state of human existence. Wealth is not found in nature; it must be created, which is precisely the role of businesses and entrepreneurs.”

Whatever you think about living standards during the Industrial Revolution, can we imagine where we would be had it not taken place? One of the hottest topics of debate is what to do about America’s decline in factory jobs (though our output is actually up). Without the revolution there would be no factory job issue today, nor would we be in the middle of a technological revolution that gives us access to almost anything we want to learn.

When it comes to welfare, charity, and markets, there is no question as to which is the best method for helping the poor. Creating new jobs and investing in capital equipment is how economic growth occurs. Not only are more jobs available, but each unit of labor is more productive. Real wages rise, and the well-being of all sees a net gain as a result.

Next time you consider giving to a charity, or perhaps a person in need whom you happen to see in your city, consider paying them to do something. Anything. No matter how small. By offering a trade rather than a handout, you give them something to build on (including their self-esteem), much better than a few bucks that will tide them over until the next meal.


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47 Years of a Paper Dollar


Kris Morgan  12/28/17

On August 15, 1971 Former President Richard Nixon formally closed the Gold Window to foreign governments and banks, ending the dollar’s tie to the metal completely. The Federal Reserve, with its creative financing and ability to add media to the economy, is trusted with the responsibility of carefully controlling the money supply. Those 47 years have given us plenty of data to analyze and determine if that has been the case.

We begin by looking at signs of price stability. What better measure than the price of gold itself? Prior to ’71, gold was $35 an ounce and presently sits at $1,289 (almost a 3700% price increase). In 1971 the median income was $9,030, which equated to 258 oz of gold per year. By the end of 2016, the median income rose to $59,039; only 46 oz of gold annually. While nominal wages have risen, real wages have clearly dropped.

In 1971 minimum wage was just $1.60 per hour, making one ounce of gold affordable after just under 22 hours of labor. Today, with the price of gold at $1,289 and minimum wage at $7.25, it would take an employee almost 178 hours of work to earn a single ounce. While critics may assert that federal minimum wage hasn’t kept up with the rate of inflation, we must remember that using paper currency is what makes inflation possible. This loss in purchasing power is not limited to gold. It also affects us where we live.

The median cost of a home in 1971 was $24,000, less than three years median wages, as noted above. In November 2017 the median cost of a home was over $318,000, the price of nearly six years median wage. Again, the numbers show a decrease in dollar value. The cause is the inflation of the money supply. It has gone from $800bn to almost $14tn since 1971. Having made the case that purchasing power has been negatively impacted by paper currency, we can turn our attention to overall economic stability.

All things being equal, interest rates are complex prices which reflect several key economic circumstances, including the amount of capital available and the demand for funds. Austrian Economists use the phrase “Time Preference.” Fiat currency gives those empowered with the distribution of money, namely the Federal Reserve, the ability to disrupt this balance.

When money can be printed or created electronically, loans can be issued even when the available resources don’t support it. Investment towards capital projects that wouldn’t be feasible under real conditions seem sound under altered circumstances. The result is an economic boom in production, which is inevitably followed by a bust, as the true availability of resources becomes exposed and capital goods must be reallocated. This was clearly demonstrated during the real estate collapse of 2007, as major projects went unfinished.

The current boom/bust cycle should be fresh in all our minds. The 1990s saw a great economic boom. According to study.com, “The economic boom of the 1990s began in the second quarter of 1991 when the total value of all goods and services produced in the economy, or gross domestic product (GDP) increased from -1.8% to 3.14%. From that point forward, for the next ten years, GDP growth was positive, with the highest quarter being the second quarter of 2000 when GDP was 7.7%! From 1990 – 1991, GDP grew from $5.5 trillion to $9.8 trillion.”

The boom in the 1990s was at least aided by Fannie Mae and Freddie Mac, who according to Forbes, profited by issuing subprime loans. The 2008 article spelled it out: “The government has promoted bad loans not just through the stick of the CRA (Community Reinvestment Act) but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to promote homeownership, not to apply sound lending standards.”

In 2001 we had the dot-com slowdown, and in 2007 the infamous housing bubble popped. Mark Thornton wrote about the real estate collapse years before it occured, in an article called “Housing: Too Good to Be True”. He remarked: “Higher price inflation should not have been a surprise given that the Fed has increased the money supply by 25% during the period 2001–2003. In addition, the price of basic commodities has been rising for many months and these higher commodity prices eventually turn up in the price of goods and services. One leading indicator of higher commodity prices is the Dow Jones Commodity Index (stock prices of major commodity producers). It has been rising since the fourth quarter of 2001 and has doubled in value since that time. This stock index is now higher than it has ever been, outside of the blip that occurred in mid-2002.”

There is no reason society has to use paper currency nor be riddled with boom and bust cycles and currency debasement. Repealing legal tender laws could create an environment by which the market decides the currency. This would happen organically over time, after countless transactions. The outcome would be a sound currency by which to gauge economic activity, participate in economic calculation, and secure rising real wages for ourselves and future generations. With a more fixed money supply, prices would fall as the amount of goods and services available grow and limiting the power of the central bank’s ability to distort the economy.
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Unlocking Your Inner Sociopath


Kris Morgan 12/8/17

Most people find the thought of committing acts of violence repugnant. According to the FBI, in 2015 the violent crime rate was just 372 per 100,000 citizens, a 50% drop since 1993. It seems we are on the right track in our private lives, as far as the numbers are concerned. However, the gains we are making in our personal lives are being lost by our political pursuits. About two-thirds of Americans support free college, over half support universal-basic-income (UBI), and most want universal healthcare. Some even believe the democratic nomination was stolen from self-defined socialist Bernie Sanders.

For libertarians, this trend is alarming. Society’s plan, as far as politics is concerned, is to point policemen, jail cells, and courts at productive people and demand they pay for these programs under penalty of law. How is it we are becoming more peaceful in private life yet exceedingly vicious in political? There are a number of angles to analyze this, but they all lead to the same inevitable conclusion. Politics encourages ordinary citizens to unlock their inner sociopath.

The DSM-5 defines antisocial personality disorder (the phrase for sociopathy) as “[a] pervasive pattern of disregard for and violation of the rights of others, occurring since age 15 years…” Several personality traits are then listed. Consistently displaying three out of seven is the criteria for sociopathic behavior. Of the seven, politics brings out at least five:

  1. Impulsivity
  2. Irritability and aggressiveness
  3. Reckless disregard for safety of self or others
  4. Consistent irresponsibility and
  5. Lack of remorse.

Most of us generally don’t express these patterns in our daily lives, but when it comes to politics, not only do we embrace them, we often eschew those who don’t.

Numbers three and five go together. Whenever we support laws which are designed to control others, rather than protect us from predation, we invite a confrontation involving an armed person in uniform and a peaceful person. When our actions create such a dangerous environment, we can safely define it as reckless disregard for safety. When we blame the perpetrator of the victimless crime with phrases like “they shouldn’t have broken the law,” we prove we have no remorse for them.

Impulsivity and irresponsibility are almost the same thing. When we are impulsive, we don’t think through our decisions. We react to a gut feeling without any conscious screening. Our nation’s finances are a prime example, as we have never failed to raise the debt ceiling, and owe over $20 trillion. In spite of the numbers we show absolutely no sign of slowing down.

The final aspects to analyze are irritability and aggressiveness. Facebook debates aside, this attitude towards others may be the most important to counteract. It fuels our hatred for anyone living outside our borders, who disagrees with us, or who breaks any law. A moment’s reflection is all it takes to realize those outside American borders are just as human as any of us. Deep down, we know not all laws are just. Finally, everyone is entitled to their own opinion. What causes our anxiety to flare is the knowledge that a group of politicians are going to have power and they will be able to force the country to abide by their opinions on these and all other matters.

When we support the use of politics to provide UBI, universal healthcare, and education (among other things), we essentially support the jailing of people who would rather not hand over their money for these programs. Libertarians often speak of charities as a means to provide for the less fortunate, but the sad truth is it’s just not guaranteed. If people are free to choose what to do with their own money, they might say no, so the coercive nature of politics gets ignored, or much worse, it gets accepted as necessary. Nevertheless, there is no right to a political establishment that forces people to do what we please.

Being free to make choices with our own money can be uncomfortable to those wanting certain services. We have debates about how economies grow, how wealth is created, and how society can find alternatives to government power, seemingly with the goal of appeasing those who want law to govern everything. It’s well past the time we take a stand, point out the inherent sociopathy that comes with the use of power over others, and just say no. We don’t have to explain how all of society can work through consensual relationships in order to stand firmly against the use of power. We don’t accept that excuse from private criminals, there’s no reason to pretend it’s valid when dealing with the state.
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Taxation is Theft


Kris Morgan 10/23/17

“Taxation is Theft” captures the essence of libertarian political philosophy more accurately than any other phrase.  Libertarians believe that basic moral rules should apply to our rulers to the same degree they do private citizens.  In the case of taxation, we maintain that since the threat of force is a key feature, it is a form of theft.  Skeptics of this conclusion have several arguments that seem plausible on the surface, but we quickly see that on the fundamental level libertarians are correct.

The easiest argument to dispose of is the belief that since governments provide services, taxation is just.  One example is charity.  Most of us have room in our hearts to help those in need.  Nevertheless, that does not justify forcing us to fund the welfare state through progressive taxation.  Wanting to be charitable is not the same was wanting the government to take our money through the threat of imprisonment and distribute it as they see fit.  The same logic holds true for all government services. Demand for a good is not a license for a third party to coerce you into giving them money to provide it.  There are other objections that require more attention.

Philip Goff, writing for taxjustice.net, believes there is no moral nor legal right to our income.  The legality of taxation is a matter of fact and law, nothing more.  The moral question is what interests us.  He wrote “there is no justice in the fact that the pre-tax income of a city banker is many hundreds of times the pre-tax income of scientists working on a cure for cancer.”  This is a statement about human preferences and the organization of our financial system, but it is not a comment on the use of force to extract money from people.  Mr. Goff is little more than a tax apologist, using human imperfection to justify coercion.

Robert Nielson at whistlinginthewind.org took the approach of comparing taxation to rent.  “The state owns the land and if you want to live on the land you must pay rent. The state is like a shopping centre (or shopping mall for my American readers). If you want to enter it you must agree to abide by its rules.”  The issue with this position is the operant assumption that the state owns the land through honorable means.  Just ownership of property comes about through homesteading, trade, or gift.  This is not how governments acquire property.  They form hierarchies, draw borders, and assume ownership by fiat.  In contrast, shopping malls do not declare ownership of pre-owned property by force, then threaten to lock up people who refuse to pay tribute.  Mr. Nielson’s proposal serves only to remind us that land has been stolen as well.

Scott Tibbs at Conservatibbs.com declared “Government does need to do certain things. The most obvious Biblical reason is to bear the sword against criminals, which requires a criminal justice system complete with lawyers, police and judges and the support staff for all of them. We also need to defend our nation against foreign aggression…”  If protection from those who wish to do us harm is the goal, threatening people with jail time and economic hardship is a contradiction to the stated objective.  We fail before we even begin.  Like the others above, Mr. Tibbs does not address the act of threatening imprisonment for tax evasion;  he is simply another apologist.  The question is how do we fill the vacuum if we end taxation, not whether taxation is theft.

There are those who believe our consent may be assumed until we decide to leave the country.  This is not true.  Not only is it more patriotic to fight for what’s right, it is inconsistent with justice to demand victims of power leave if they don’t like it. Indeed, if refusing to leave the country is the same as accepting everything our rulers do, there are far fewer tyrants around than it would seem.  Only when dealing with government power do people tell the victims to leave the area if they don’t like the injustices they are suffering.

The fact that taxation is theft is precisely what makes politics so hostile.  The left is usually not interested in funding conservative projects.  The right would prefer not to fund left-wing programs like the welfare state, and the left does not favor our interventionist foreign policy.  Libertarians do not wish to be party to anything outside the confines of security and national-defense.  Both our support for government spending on the things we like and our resistance to it for the things we despise indicate the criminal nature of taxation.  This is why Hans Hermann Hoppe called democracy a soft variant of communism.

Human morality is a universal concept that does not disappear because your organization names itself “The Government.”  Since they are nothing more than groups of people, they should be bound by the same rules as any other group or individual. When governments enforce laws against tax evasion, possessing drug paraphernalia, or any other victimless crime, they are allocating themselves authority which is denied any other group.  This is wrong.

What is most telling when it comes to those who proclaim taxation to be just is their statements only apply to governments.  Defense attorneys would never dream of asserting that a client’s actions were justified because they used the money they stole in a socially beneficial way.  It would be very entertaining to see a criminal in court use social contract theory as a means of defense.  It would be laughable if a suspect seriously suggested they’ve committed no crime because the victim could move to a new neighborhood if they don’t accept being robbed.  

Those wishing to promote the validity of taxation without addressing the well founded threats of imprisonment can be immediately dismissed.  Pointing out services provided, and ignoring the coercion and removal of choice in the matter, is a tactic designed to deflect from the central issues and prey on our shared anxieties about the future.  There are those, such as Mr. Nielson, who intelligently highlight the issue of property ownership.  However, when we look at the full picture, we see such claims are not as well founded as they seem.  If we are honest enough to admit the foul nature of taxation, and follow it up with “you can leave the country”, we consciously choose the side of evil.

There is no doubt taxation is theft.  Not even consent makes it legit, as the compliant individual has no freedom to change their mind and withdraw their money.  If we are to have any chance at real justice, liberty, peace, and a truly civil society, admitting taxation is theft and either limiting it to what’s needed to sustain a secure state and/or eventually eliminating it entirely would be a fantastic step.  We would all be much more open to each other’s thoughts and feelings if the constant threat of government power was removed from the equation.
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UBI Part III: Alternatives


Kris Morgan   September 21, 2017

Universal Basic Income (UBI) comes with high costs.  Economically, it will inhibit growth by placing a tax burden on production, making it more difficult to start new businesses and for small ones to compete.  Taxation also detracts from funds which could be used for reinvestment.  Monetizing more debt would put heavier pressure on our already weak dollar, as well as cause malinvestments.  Our government is not only 20 trillion dollars in debt, but it presently holds over 127 trillion dollars in unfunded liabilities, in addition to wartime spending.  If we do not reject the UBI on our own terms, basic economics will force the issue.  That does not mean we must embark on the future without a plan.

Fortunately, plenty of economic reforms have been presented which are worthy of support.  Regulations that do not directly protect the property rights of others can be discarded.  Overtime rules, wage floors, truth in advertising, licensing requirements, and others restrict market forces from allocating resources to meet demand efficiently.  For example, the operant assumption in truth in advertising is that a particular business has engaged in false advertising, until proven otherwise.  By pushing back harmful regulations, we give ourselves a fighting chance to build.  It is unwise to face an uncertain future with our hands tied.  

Support for UBI indicates people have empathy for those who are unable to adequately adapt.  UBI is a means of expressing this feeling.  The alternative to government power is the conduit of civil society.  Entrepreneurs could market goods and services as products which support jobs.  Consumers can use purchasing power to reinforce such ventures, and philanthropists could fill in the remaining vacuum.  

UBI has brought attention to significant defects in our education system.  Its original intent may have been to create a labor force suitable for factory work, rather than enlightened critical thinkers.  In 1903, when John D. Rockefeller founded the General Education Board, his advisor Frederick Gates informed “…We shall not try to make these people or any of their children into philosophers or men of learning of science. We are not to raise among them authors, orators, poets, or men of letters.  We shall not search for embryo great artists, painters, musicians…”  

This design was confirmed in 1990 by New York Teacher of the Year John Taylor Gatto, who said the following during his acceptance speech: “…Schools are intended to produce through the application of formulae, formulaic human beings whose behavior can be predicted and controlled.  To a very great extent, schools succeed in doing this. But our society is disintegrating, and in such a society, the only successful people are self-reliant, confident, and individualistic…”  

Education to induce conformity may have worked in the past, but it will not suffice any longer.  According to careerfaqs.com, the skills needed in the future include cognitive flexibility, creativity, critical thinking, and complex problem solving, among a few others. We should be pressuring our local school boards to focus on building skill sets, such as these, which are projected for future success.

As parents, we should not leave the task entirely to school.  Computer competence can be taught in our homes.  By teaching our kids a programming language, we could give them a head start in facing the future with a marketable skill.  If need be, we could find someone to act as a tutor.  

It is clear that the areas which need the most reform are our economy and our education system.  Our children must be able to exercise their creative muscles, and it is fundamental they be economically free to adapt.  Anyone supporting the idea of UBI without considering our weak financial position should consider what is addressed in this article.  It is not a question of whether we will have to take responsibility for ourselves, it is whether a severe economic crash will be the cause.


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UBI Part II: Education


Kris Morgan, September 15, 2017

Since Universal Basic Income (UBI) in the United States would potentially fill in for wages lost to automation, it is wise to get a snapshot of where American education stands in terms of science and technology. Presumably, the labor market will be reoriented towards developing software and other tasks workers are presently unqualified to perform.  What do we know about science?  Per ultratechlife:  “According to an MIT report, at least 216 million Americans are scientifically illiterate. There are several other reports that seem to highlight this assessment of US ignorance. There appears to be a failure in American culture and the educational system especially when an adult cannot understand basic science concepts.  Where did we go wrong and what can be done about this? Believe it or not, science literacy is a matter of national security, critical for our economy and future as a competitive nation.”  

By solving the mystery of our ignorance, and closing the gap, we can cultivate logical alternatives to the UBI.  Perhaps the explanation of American ignorance can be solved by taking a glance at our school curriculums.

The Atlantic reported that just half of children between seventh and 12th grades attend schools that offer computer science courses, which are typically electives. It is noteworthy that according to the article, minorities are less likely to have access to computer classes, and males are more encouraged to take Computer Science courses than females.

The scientific community is not silent about this issue.  Renowned physicist, cosmologist, futurist, professor, and author Dr. Michio Kaku made the following comments on education in 2016: “The United States has the worst educational system known to science.  Our graduates routinely compete at the level of third world countries.” Referring to our tech sector specifically, he remarked “Without the H1B (visa), the scientific establishment of this country would collapse!  Forget about Google.  Forget about Silicon Valley, there would be no Silicon Valley without H1B.”  The visa allows non-immigrants to work for American businesses if they have “theoretical or technical expertise in specialized fields such as in IT, finance, accounting, architecture, engineering, mathematics, science, medicine, etc.”

This lack of education is precisely what is causing many of our anxieties and support for UBI. At present, 50% of the population surveyed already favor it.  It is reasonable to expect this number to grow as we see our economy decline due to war spending, quantitative easing, inflation, and the rest of government inflicted hardships.  Indeed, we are facing automation earlier than we would had it not been for wage floors, regulations, and political involvement in the hiring and firing processes.  

Fortunately, we have more tools than ever for self-directed education.  Khan Academy, Rosetta Stone, iTunes U, books on pdf, and of course libraries, are all excellent supplemental educational resources.  We can teach ourselves skills. We can hire tutors to help us and our kids learn basic programming. We can pressure our local schools to do a better job of preparing our children for the future.  Many businesses offer programs for their employees to earn certificates and degrees in areas such as robotics and programming, as they do for maintenance personnel and other departments.

We need not always focus on where we disagree on education, i.e. religion’s place, or how much money teachers are being paid.  The coming of automation and whether we need to be prepared for it is a completely bi-partisan issue.  We all share the responsibility of making this transition easier for future generations, even if that means it is hard for us today.  We should get involved in our local schools and ask “What is being done to ensure our kids have the necessary skills to thrive in the future?”  

People avoid growth often times because it is time consuming, means making mistakes, and invites the possibility of embarrassment. Growth is often painful.  What gets ignored due to these fears is how much better off we will be when we succeed.  Within a generation, mental labor will be the norm and physical labor will be rare.  We have the opportunity to permanently change humanity for the better.  We either fight for a future that revolves around subsidies, with little to show for it in the long run, and remain absent from history; Or we fight for a future dependent on growth, enrich society for generations to come, and go down as one of the great generations in human history.


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