Archive for August 2010

Misidentification

Bruce Schneier writes about how people are wrongfully convicted in Misidentification and the Court System. The Slate article that Mr. Schneier references is well worth reading.

The article describes how about half of the district attorneys and detectives that are presented with incontrovertible evidence of the innocence of someone they have convicted will stoutly defend the verdict. There are many possible reasons why government officials react to evidence with denials. However, positions of authority attract authoritarian personalities. Nobody likes to have their mistakes pointed out, but authoritarians really don’t like to have their mistakes pointed out.

Another interesting question is why do those responsible for prosecutions make so many mistakes in the first place? One factor is that government officials do not generally pay for their mistakes even when those mistakes are uncovered. When someone wins a suit for wrongful conviction, the taxpayer ends up paying. The officials involved may be embarrassed, but they suffer no real penalty. Such a system constitutes a license for abuse.

Posted August 31, 2010 by Brian Cantin in Uncategorized

The Disutility of Leaning

In the article In the Tea Party Era, Which Way Should Libertarians Lean?, three writers provide advice to libertarians. The article is a summary and discussion of the views presented in the Reason article, Where Do Libertarians Belong?.

The discussion has a number of comical elements. The idea that libertarians need to lean in any particular direction is one of the comical elements. The makeup of the panel of debaters provides other reasons for mirth. The three participants were:

* Brink Lindsey, who I have written about before, at least concentrates on a number of libertarian issues. However, Mr. Lindsey also spends considerable time criticizing the right for social conservative tendencies, and other troglodyte transgressions. If these were the only problems with the right, libertarians would be much more comfortable with the right. It is in areas of war and civil liberties, and the conservatives penchant for pressing their desires via political means, that libertarians have significant differences with the right. In any event, Mr. Lindsey, who in the past has espoused liberaltarianism(i.e., using libertarianism to further liberal goals), wants libertarians to align with the middle, and employ liberal language in doing so. Note that Mr. Lindsey supported the invasion of Iraq.

* Jonah Goldberg, neoconservative writer for National Review, wants the libertarians to align with the conservatives mostly based on economic issues. Mr. Goldberg defends the conservatives as being no worse than the centralists on civil liberties issues. Mr. Goldberg lauds the conservative for their decentralism. Mr. Goldberg somewhat disingenuously mostly sidesteps issues of war. The question of how you can have a libertarian society while supporting ongoing wars all over the world is not something within the neoconservative purview.

* Matt Kibbe wants the libertarians to align with the Tea Party movement. Mr. Kibbe emphasizes the issues where libertarians agree with the Tea Party movement: TARP, Obamacare, and some economic issues. Mr. Kibbe, like Mr. Goldberg, carefully skirts issues of war and peace. Mr. Kibbe also does not address civil liberties. Mr. Kibbe does not seem to often publicly express opinions on anything except Austrian economics, and a rather narrow range of topics favored by the Tea Party. Nothing wrong with that, but it does not provide a very good idea of Mr. Kibbe’s overall ideology.

These three gentlemen have dubious credentials as libertarians. At least two of the three supported the Iraq war. Consequently, they end up trying to sell libertarians whatever horse they are currently riding. If they can rope in a few voters, and a few dollars, so much to the good. The question is, what would the libertarians get out of aligning with any of these groups?

In basketball, a defender will sometimes employ the pull the chair trick on an offensive player that leans too much. If the defender pulls back rapidly, the offensive player may fall on the floor. A similar thing will happen to libertarians that lean too much on political groups. When the chair gets pulled, the libertarians will end up being blamed for the sins of the group they have advocated. Politicians are masters at the pull the chair trick.

It is much better to concentrate on issues than it is to worry about broad political groups. If someone commits some outrage against liberty, criticize them. If someone defends liberty, defend that person in turn. The more specific the issue and the individual, the more efficacious it is to get involved.

Posted August 27, 2010 by Brian Cantin in Uncategorized

Cato Unbound

In the Cato Unbound article Surveillance of Our Enemies During Wartime? I’m Shocked!, John Eastman responds to an article, The Digital Surveillance State: Vast, Secret, and Dangerous, by Glenn Greenwald.

Eastman provides all sorts of historical and legal precedents for surveillance. Eastman accuses Greenwald of ignoring the fact that “we are at war”. In his response, Eastman ignores the fact that Congress has not bothered to declare war. So, even if you accept the authority of the government, are we really at war?

Eastman also ignores the fact that even the proponents of the war on terror don’t expect the war to end in our life time, the life time of our children, or the life time of our grand children. Consequently, Eastman wants to provide the government with a license to spy on everyone forever.

That Eastman’s brand of drivelling sophistry got published is hardly surprising. There are plenty of neoconservative journals that specialize in publishing such fear mongering tripe. What is surprising is that Eastman’s article got published by an adjunct of the reputedly libertarian Cato Institute. Publishing a wide range of view points is good policy, but in this instance Cato was a little too unbound.

The editor of Cato Unbound at the time that Eastman’s article was published, Brink Lindsey, has apparently been made redundant. If publishing Eastman’s article is an example of Lindsey’s editorial judgement, Mr. Lindsay’s departure will likely bring an improvement to Cato Unbound.

Posted August 25, 2010 by Brian Cantin in Uncategorized

Rent Seekers Never Sleep

Having the public be forced to buy the hardware required to access your product is a great business model. Hence, the RIAA and the music labels want Congress to mandate that mobile devices, such as cell phones, PDAs, etc., have built in FM receivers.

The only cost to the RIAA and the record labels is the price of the lobbyists. Since they presumably already have lobbyists in their employ, the cost to the RIAA and the record labels is zero. That is the cost to the proponents will be zero unless the proponents have to buy members of Congress to get the mandate passed.

The overwhelming majority of the costs will be born by the public and the manufacturers of mobile devices. The public will pay higher prices for larger and heavier devices. The mobile device manufacturers will suffer the design, and manufacture headaches of producing a more complicated device. In addition, the manufacturers will have reduced sales because their devices will be more expensive.

The proponents justify the mandate based on providing increased choice to consumers, and so the government can send messages to the public during emergencies. The proponents of the mandate have a funny notion of what constitutes providing choice to the public. Is their any evidence that the public is demanding FM capabilities in mobile devices and, for some strange reason, manufacturers are ignoring that demand?

As for the government supplying emergency messages, if most people are like me, they have plenty of stationary, portable, and car FM radios. It is hard to fathom why I would need another FM capable device in order to allow the government to tell me, “Everything is under control. Be calm, and obey orders”.

When I told my youngest son about the proposed mandate, he replied, “Nobody listens to the radio anymore”. As for myself, the only time I listen to local over the air radio is when the Internet is out. Internet radio supplies orders of magnitude more choices than is available locally even in a big market like Los Angeles.

So there you have it, private interests using the political method to extract wealth from the public.

Posted August 18, 2010 by Brian Cantin in Uncategorized

Cable Television Companies

In Needed: The Separation of Cable and State, James Bovard describes how cable television operators and local governments cut deals.

The cable television operators get a monopoly, and a monopoly price. Cable companies who enjoy a monopoly charge rates 35 per cent higher per channel than cable companies who have competition.

Local politicians get channels to deliver propaganda to the public. Local politicians can also get bribes in the endless ways that a modern mixed economy can deliver bribes. Beside the time honored cash and carry method, local government officials can be cut in on business deals after they leave office.

The public ends up with inflated cable bills. The public also enjoys the dubious benefit of being subjected to propaganda on channels cable operators reserve for government use.

Many will argue that cable service is a natural monopoly. If cable service is a natural monopoly, why does that monopoly have to be protected by law?

The partnership between cable companies and local governments constitutes a particular example of the general principle that businesses embrace regulation in order to restrict competition.

Posted August 12, 2010 by Brian Cantin in Uncategorized

Income Differences

Paul Graham wrote a typically perceptive article about income disparities, Mind the Gap. Graham argues that you can’t have economic progress without income disparities. For a variety of reasons, what he says is true.

However, there is one area where Graham makes an unwarranted assumption. Prior to discussing current income disparities, Graham says, “In a free market, prices are determined by what buyers want”. True enough, but the assumption that we enjoy a free market is unwarranted.

First, Americans pay about 27 percent of their income in taxes. Depending on how you calculate taxes, other estimates are much higher. The money is extracted by force, and distributed according to political considerations. Both the extraction and the spending distort markets. CEOs of large corporations increasingly spend more and more time trying to get financial favors from the government. The CEOs who operate best in such an environment are hardly products of a free market.

Taxes make it more difficult for workers to save capital. Thus, many who would start their own business in the absence of taxes remain as employees of corporations. Without the competition that entrepreneurs would provide, corporations become richer. Thus, the marginal utility of CEOs and their salaries are correspondingly inflated.

For more than 100 years, the United States has lived under an increasing regime of regulation. Regulation, like taxation, operates on the federal, state, and local levels. The net effect of regulation on the economy is probably on the same order as the tax burden. Note that regulation favors large firms who can buy influence and more easily deal with the regulatory burden. Mr. Graham probably does think very much about the regulatory burden because he deals with startups in the computer industry where the regulatory burden is relatively light. However, even in the computer industry, regulation is becoming an increasingly import factor(e.g., Sarbanes-Oxley).

The highest CEO salaries occur in the largest corporations, which in a regulatory environment, have advantages over smaller rivals. Limited liability corporations enjoy protection against torts which increases the value of the firm. Since the corporation is worth more, it follows that the CEOs salary would be higher.

In addition, the large corporations that pay the largest CEO salaries also derive much of their wealth from copyrights and patents. Copyrights and patents are really grants of monopoly by the state. As with any grant of monopoly by the state, those who own the monopoly can extract a monopoly price. Some of the monopoly price dividend ends up in the pocket of the CEO.

Mr. Graham talks about basketball players and baseball players as examples of people who make many times the average salary. However, nearly all basketball and baseball stadiums enjoy public subsidies running into the hundreds of millions of dollars. Note that the gigantic increases in salaries in basketball and baseball arrived in recent years, at about the same time that public subsidies for stadiums became common.

Even though it can be demonstrated that many current high earners benefit from market distortions, it is impossible to say what their earnings would be in a free market. It may be that their earnings would be less. However, it is possible that they, or somebody else, would earn spectacularly high earnings in comparison to the average. Without high taxation, and without the burden of regulation, it is possible that ambitious people would do even better relative to that average than is the case now.

One thing is certain: we are not living in a free market.

Posted August 10, 2010 by Brian Cantin in Uncategorized

Apportioning the Blame

In Nixon’s Vietnam Scapegoat Finally Gets Justice, Kelley Beaucar Vlahos describes how Richard Nixon ordered Air Force Gen. John D. Lavelle to bomb North Vietnamese radar facilities. When the politically inconvenient fact of the bombing became public knowledge, Nixon conspired to make it look like Lavelle did it on his own hook. Lavelle was demoted and disgraced.

Several things are notable about the whole escapade:

* Richard Nixon had to be one of the most disgusting slime balls of all time. That the American people voted Nixon to the presidency twice is a disgrace. Nixon was not even very good at covering up his slime ball nature compared to say Franklin Delano Roosevelt or Obama. Nixon stabbed the right in the back by running as an anti-communist conservative. Then, Nixon instituted wage and price controls, and made a deal with Maoist China. Attempting to appeal to anti-war sentiment, Nixon said that he had a secret plan to end the war. Nixon’s secret plan to end the war was to feed endless Americans and Vietnamese into a meat grinder in an attempt to avoid a humiliating defeat.

* Henry Kissinger was in on the conspiracy to frame Lavelle. Kissinger and Nixon were really a pair for the ages.

* While Richard Nixon was particularly prone to back stabbing, government employees are forever in danger of being scapegoated. Kelly Vlahos sites, with good reason, Col. Janis Karpinski in the Iraq war torture scandal. Any hierarchical organization will tend to sacrifice subordinates in order to further the ambitions of those at the top. Due to their monopoly position, governments are notorious for scapegoating behavior. Another example is Rear Adm. Husband Kimmel at Peal Harbor. Kimmel was placed in a militarily impossible situation by the Roosevelt administration. When the Japanese attack came, the Roosevelt administration blamed Kimmel. In addition to any other reason why you should not work for the government, the possibility of being scapegoated should be of sufficient practical consideration to prevent such service.

Posted August 6, 2010 by Brian Cantin in Uncategorized