TT's Lost in Tokyo

Note to Larry Lessig on his "Anti-Corruption Pledge": Limited liability corporations are the taproot of both growing government and anonymous rent-seeking.

TokyoTom — Sun, 04 Mar 2012 05:16:00 GMT

I refer to the very recently-launched "Anti-Corruption Pledge" here, which is the latest project by prolific Larry Lessig, now a Harvard Law prof and head of a corporate reform center there (and whom I have introduced and discussed in a number of preceding posts).

Larry further describes the purpose and motivation of the Pledge at his blog. (I note that I'm strongly in favor of pledges, as I noted in this blog post discussing the Kochs.)

I left the following comment on the discussion page of the wiki that Lessig created for The Anti-Corruption Pledge:

Larry, you aren't really attacking the chief problem, which the role that STATE-Created limited liability corporations play in centralization and aggrandizement of power in Washington, which then further attracts rent-seeking by increasingly anonymous (who owns andruns these corporations, anyway?) organizations that wish to use a bloated government to receive favorable inside deals and to raise barriers to entry in their respective markets.

Corporations drive the growth of government because their LIMITED LIABILITY aspect means government protects shareholders from liability in the event of tort damage to workers/others/society. Citizens tired of holding the bag then must continually push legislatures and courts for "reform" that perversely helps to entrench the largest firms against newcomers.

Corporations are not simply the "Health of the State", but they're created in STATES, which accordingly MUST be a main venue to seek to rein them in. States can stop creating limited liability companies, can deregulate for non-limited liability firms (where owners retain a large tail of risk), etc.

http://mises.org/Community/blogs/tokyotom/search.aspx?q=limited+liability

Anonymity is not per se bad - the Federalist Papers and Anti-Federalist Papers were written anonymously - it's the anonymity afford to those whom have already received important government privileges (viz., limited liability) that renders them and their agents unaccountable that is the problem.

Thus I don't see that public funding or limiting and requiring transparency of your broadly worded "political expenditures" (contributions? campaign ads?) really address the root problem.

Fortunately, there are 50 states in which to start campaigning for responsibility owned businesses whose owners are NOT protected by governments from the communities in which they operate.

Large, entrenched public companies are already seeing across-the-board declines in profitability and market capitalization (ask Robert Monks); they can be brought down by Schumpeter's process of "Creative Destruction".

From Orwell, Remy and Reason.tv: "Grandma Got Indefinitely Detained Now, Trying to Come Visit Christmas Eve!"

TokyoTom — Wed, 21 Dec 2011 16:36:00 GMT

Christmas fun at YouTube, from Reason.tv!

Remy: Grandma Got Indefinitely Detained (A Very TSA Christmas)

In seasons past, Grandma only had to worry about getting run over by a reindeer. With "Grandma Got Run Over by TSA," web sensation Remy gets us in the holiday mood with a song about Christmas, Homeland Security, and the joys of civil rights abuses.

(Please visit the site to view this media)

Great discussion of banking and monetary issues by Larry White of the Mercatus Center at Guatemala's "University of Free Marketers"

TokyoTom — Wed, 21 Dec 2011 06:34:00 GMT

I just ran across at George Mason University's Mercatus Center a helpful video featuring Lawrence H. White, professor of economics at GMU, discussing "Thoughts on Monetary Policy, Free Banking and Financial Crisis".

In watching the video, I noticed that White's inerviewer was Fritz Thomas, head of the School of Economics at the Universidad Francisco Marroquín, an institution I hadn't heard of. A little more digging shows this to be a relatively new (founded in 1971) but highly regarded private university in Guatemala founded by a student of Austrian economics, "Muso" Manuel Ayau.

Ayau, who died on August 4, 2010, was a businessman, educator and politician, a member and President of the Mont Pelerin Society, on the board of directors of the Liberty Fund and a trustee of the Foundation for Economic Education. In Guatemala, he was a member of congress from 1970–74, a presidential candidate in the 1990 elections, and served in other public capacities. Ayau founded Samboro,the largest tile producer in Central America, was the founding president of Guatemala’s stock exchange and served on the boards of IBM Latin America and of Guatemala’s central bank. Ayau also founded the Centro de Estudios Economico-Sociales; CEES grew into UFM, but remains extant and is now housed at the Ludwig von Mises Library on the UFM campus.

UFM, which is nicknamed the "University of Free Marketers," describes its mission as "to teach and disseminate the ethical, legal and economic principles of a society of free and responsible persons." Earlier this year Reason.tv posted a brief description of UFM and a 9 minute video: "Universidad Francisco Marroquin (aka University of Free Marketeers)" Says Reason, "In other words, the people at UFM want the people of Guatemala to be free. This is, of course, no small task in a country that has been plagued by political corruption and socialist policies for so long.

These days, the same can be said of the United States, though it is not so clear how much US citizens themselves want to be free.

More on UFM and Ayau at this 2010 article in the Latin Business Chroncle and in this 2008 article in the Los Angeles Times. Here is a link to the Manuel F. Ayau Society, which has been established to honor his memory.

Lawrence White is a distinguished expert on monetary theory and banking history. More on his background here.

And here, at last, is the link to the 41-minute video at UFM!

Great Tom Woods video addressing the unconsidered, reflexive fears by some progressives of Ron Paul

TokyoTom — Tue, 20 Dec 2011 13:32:00 GMT

On August 29, Tom Woods posted at YouTube a 9-minute video response to an AlterNet.org article "5 Reasons Progressives Should Treat Ron Paul with Extreme Caution."

Woods' video, entitled War Is Better Than Ron Paul, Say (Many) Progressives, is below.

Woods has also posted a few "resource pages" with videos and extensive links that respond to various other attacks on Ron Paul's purported positions:

http://www.tomwoods.com/democrats/

http://www.tomwoods.com/motherjones/

http://www.tomwoods.com/blog/where-to-send-ron-paul-newbies/

For more videos, subscribe to Woods' YouTube channel, and keep up with hiswriting and other activities via Facebook and Twitter.

(Please visit the site to view this media)

A movement to amend the Constitution is ALREADY underway. See Harvard Law School's Larry Lessig on why we need to call for a Constitutional Convention

TokyoTom — Sun, 18 Dec 2011 16:40:00 GMT

HLS Professor Lawrence Lessig delivered his "Keynote from the Left" at the Conference on the Constitutional Convention on Sept. 24-26, 2011. The conference was co-sponsored by the Tea Party Patriots.

Lessig presented his speech again at Google on November 16, 2011; this is the speech/presentation posted below.

Lessig is the director of the Edmond J. Safra Center for Ethics at Harvard University and the Roy L. Furman Professor of Law at Harvard Law School. He co-founded RootStrikers (originally Change Congress (2008) and Fix Congress First!), which aims to reduce the influence of private money in American politics. Lessig is very well known for his work on maintaining an open Internet, but since joining Harvard several years ago has focussed on corruption and politics.

Lessig has joined with a new organization that just launched called United Republic. It is another coalition of people from the right, center, and left tackling the problems of money in politics.

Lessig is the author of a new book, REPUBLIC, LOST; How Money Corrupts Congress — and a Plan to Stop It. The NYT reiew of his book is here; here is another review at Bloomberg

Lessig's collection of his speeches is here. His blog is here.

More on the movement to call for an Article V Convention to amend the Constitution is here.

For more, see "How to sober up Washington"—an essay by Lessig and Mark McKinnon on corruption in Washington, voters' disillusionment, and the need for an Article V convention.

(Please visit the site to view this media)

What if Cato held a conference on how the War on Drugs was a massive FAILURE, but no one noted that the Feds and others BENEFIT SPECTACULARLY from all the costs?

TokyoTom — Sun, 18 Dec 2011 06:50:00 GMT

It might be unfair to judge just from the short clip below (put together by Reason.tv) that's making the rounds, but it appears to be the case that no one at Cato's Novermber 15 conference ("Ending the Global War on Drugs") - law enforcement, politicians, journalists, liberals, conservatives, libertarians and foreign officials, all presenting a litany of damning evidence about the tremendous costs of the "War on Drugs" - little attention was paid to what should be a sad but very evident fact:

the War on Drugs has been a smash hit for our Federal government, in its 230+ year battle to wrest power from the states, fo the politicians who campaign and parade around on "Law and Order" issues, for a host of government agencies (not the least our CIA and Defense and State Departments) and for, of course, a deep pool of contractors.

How can anyone with any understanding of regulatory capture, moral hazard and "public choice" understandings of the workings of indivuduals' incentives and institutional dynamics fail to see that, for those benefitting from the steady expansion of the War on Drugs that the need to ramp-up in response to its disastrous consequences are not failures or "bugs", but "features"?

The erosion of civil liberties after 9/11 that has been justified as necessary to keep us safe during a long "War on Terror" were all already well-underway as a result of our War on Drugs.

But a Police State is not a simple necessity, but something that benefits certain groups of people, at the cost of others.

If we ever hope to rein in policies that are destructive to most of us, we need to focus on naming, blaming, shaming and otherwise standing up to and imposing costs on those who benefit from them.

We used to think that we needed a Constitutional Amendment in order to federally prohibit the use of and trade in alcohol - note that tobacco, pot, cocaine and heroin were all untouched at that time. That the Constitution now provides essentially NO check on the Federal government is a good indication of how far we've come from those days, and leave one wondering -- do we now need a Constitutional Amendment not only to overturn the ridiculous and radical Citizens United (states can create "corporations" but not limit their ability to finance elections) decision (Senator Bernie Sanders has introduced such an amendment; Larry Lessig thinks a state-convened amending process is needed), but also to prevent the Federal government from regulating certain parts of the economy?

Clearly the Federal Government and those benefitting from it have no intention to relinquish policies that enhance its power.

Here's the clip:

(Please visit the site to view this media)

Interesting piece in Al Jazeera: A continuing decline in trust in the Japanese government fuels political unrest and regionalism

TokyoTom — Sun, 18 Dec 2011 05:26:00 GMT

Trust is an essential piece of social capital; difficult to build, easier to lose, but essential to solving collective action problems.

Increasingly, in Japan and elsewhere, people are starting to see that their trust in 'governent', politiicians, bureaucrats and big business has been misplaced, that these institutions and people have instead been DAMAGING social capital, and that citizens need to hold government more accountable and to take more power back into their own hands.

I just ran across this interesting essay by Michael Cucek in Al-Jazeera (December 9, 2011) . Cucek is author of the Shisaku blog on Japanese politics and society. and a Tokyo-based Research Associate of the MIT Center for International Studies.

Excerpts below; emphasis added:

Is Japan cracking up?

Mainstream parties in Japan are losing the trust of the people as renegade politicians gain support.

Tokyo, Japan - "Is Japan cracking up?" The question seems ludicrous, regarding one of the planet's most homogenous, stable and violence-free nations. However, in the aftermath of the late-November victories of a regional party in the gubernatorial and mayoral races in Osaka, Japan's second city, the next steps in Japan's political evolution may be along regional, not national lines.

The elections of Toru Hashimoto as mayor of Osaka City and Ichiro Matsui as governor of Osaka Prefecture on the Osaka Isshin no Kai (Association for the Renewal of Osaka) ticket were predictable, given the huge proven political drawing power of Hashimoto. A former television personality and a lawyer, Hashimoto had during his time as governor built up a huge following among the voters by taking on targets of public disdain: the prefectural assembly, prefectural civil servants, the governments of the prefecture's smaller municipalities and the teachers' unions and the Board of Education.

He hacked at public salaries and reduced municipal spending, racking up the first budget surpluses in years. In the municipal elections of 2010, Osaka Isshin no Kai - a party that Hashimoto assembled at the last minute - won a plurality of seats in the prefectural assembly, shocking the large national parties.

Control of Osaka, however, was not enough for Hashimoto, who has a grandiose plan to transform the prefecture into a metropolitan district such as Tokyo. The capital's shining image is a huge psychological weight on Osakans, who are defensive about their national and international status. However, the mayors of the prefectures' cities stood in Hashimoto's way, the most prominent of which was the mayor of Osaka.

He argued that, in order for the Osaka prefecture to fulfill its destiny as a great world metropolis, the government of the city of Osaka would have to be destroyed. Hashimoto resigned as governor to run for mayor, placing himself in the position of leading the municipal government's dismantlement from within. Meanwhile, this left the governor's office open for Ichiro Matsui, the secretary-general of Hashimoto's party.

On Sunday November 26, voters handed Hashimoto the keys to the mayor's office, and elected Matsui as governor.

The battle of Osaka, however, was not just between Hashimoto and his main opponent Kunio Hiramatsu, the incumbent mayor of Osaka, a mild-mannered and avuncular former television announcer. The contest was also between Hashimoto and the national parties, particularly the ruling Democratic Party of Japan (DPJ) and the main opposition party, the Liberal Democratic Party of Japan (LDP). The LDP and the New Komeito, the political party of Japan's largest religious congregation, had supported Hashimoto when he ran for governor in 2008. But soon after his election, Hashimoto turned his back on his former political allies, attacking many of their sacred cows. As for the DPJ, it saw Hashimoto's populism as a threat to the DPJ's own reputation as a reformist party.

Decay in public's trust

So it was that the main political parties worked together to halt the Hashimoto juggernaut. Even the Communist Party of Japan, which never sides with the other parties and always runs one of its own candidates in major elections, did not put up a candidate in Osaka City, in order to increase the chances of victory for the incumbent mayor.

....

The failure of the mainstream traditional parties to elect their candidates, even when cooperating to an unprecedented degree, opens a window onto the decay in the public's trust in traditional politics. The DPJ and LDP, the two parties that can become parties of government, have seen their support sink to the level where they can each count upon receiving only 20 per cent of the vote. The New Komeito, drawing on the votes of the huge Soka Gakkai religious organisation, can count upon receiving between four and six per cent of the final vote. The other parties are really micro-parties, each with three per cent support or less.

Half the voting public does not consider itself affiliated with any party. It is this floating electorate that Hashimoto and those such as him are targeting.

The election of Hashimoto and Matsui to the main executive posts in Osaka puts Japan's three main population centres under the control of renegades. The Tokyo Metropolitan District has Ishihara Shintaro, of The Japan that Can Say "No" fame, as its governor. A former member of the LDP, he quit the party and his Diet seat, saying that he was sick of the party's policies. He struck out on his own, winning the governorship of Tokyo when he saw the traditional parties nominating grey and inoffensive candidates. He recently won his fourth election as governor, after promising he would quit after three terms, deciding to run again after he saw how bad the other candidates were.

In Aiichi Prefecture, the home of Toyota Motors and Japan's third-largest urban area, the city of Nagoya and its suburbs, independents Hideaki Omura and Takashi Kawamura are governor of Aiichi and mayor of Nagoya, respectively. Kawamura, a former member of the DPJ and a flamboyant buffoon, was in perpetual warfare with his city's assembly after his election in 2009, as the assembly resisted implementing Kawamura's reforms, including deep tax cuts. A stalemate lingered until earlier this year, when Kawamura arranged for his own re-election, the election of his ally Omura and the recall of the assembly, all in one swoop

Omura and Kawamura see Hashimoto and his Isshin no Kai colleagues as soulmates. Omura, a former LDP Diet member, has indeed promised he will formally link his supporters to Hashimoto's.

Rogue politicians

The successes of these rogue regionalist politicians have forced the main political parties to examine what they can learn from them in order to boost their own fortunes. But the traditional parties are finding out that they can't borrow very much. The emerging regional parties (for example, there is a Hokkaido party, Shinto Daichi) are basically the vehicles of larger-than-life individuals, who combine their own personal fame with a call for re-emphasis on regional identity.

On the subject of governance, they have brought the national discussion on the role of bureaucrats down to the prefectural and municipal level, promising economic improvements from radical reductions in the pay and personnel of local government. Hashimoto, for example, claims there will be great cost savings from eliminating the redundant services currently provided by both Osaka's municipal and prefectural governments.

Emulating the rogue politician's slash-and-burn governance style would undermine the patronage and election networks that underpin the support of many of the traditional parties. For the ruling DPJ, which was elected on a platform of radical reform, the rogues are reminders of what the DPJ wishes it could do on the national scale - but the realities of macroeconomics and the lack of a singular, charismatic leader prevent the party from doing so.

...

Hashimoto's political star has been rising and those of the traditional parties falling, in part because of Osaka's declining economic importance and vitality. Some 60 per cent of those who supported Hashimoto in the mayoral election said that they did so because they expect him to improve the economic climate of the city - a desire that Hashimoto will be hard-pressed to satisfy.

Despite the difficulties faced by Hashimoto and those like him, the national parties should still be worried. The electorate is clearly shopping around for persons or parties able to deliver on promises, particularly in terms of the performance of the economy, the security of the pension and health systems, and the ending of government waste. In 2009, the majority of the public thought it had found the answer in the DPJ, tossing out the LDP after the party had run Japan for more than 50 years.

The voters have since become disillusioned with their choice, for reasons both fair and unfair. National elections do not have to be held until 2013, giving the major parties some time to align themselves more closely with voters or to find a champion.

....

Post-Fukushima, signs that 'Arab Spring' and #Occupy movements have arrived as Japanese seek to wrest control of civil society from Government.

TokyoTom — Fri, 16 Dec 2011 15:26:00 GMT

Have the concatenation of the Fukushima meltdows on the heels of the Tohoku earthquaketsunami disaster FINALLY spurred ordinary Japanese to act after nearly three decades of disastrous bungling and irresponsible economic management by the Japanese government? The answer appears to be a modest yes.

The Japan Times ran an interesting article on December 1, by two policy wonks at Japan's National Graduate Institute for Policy Studies (Hiromi Murakami, assistant professor and Kiyoshi Kurokawa, M.D., an academic fellow) (emphasis added):

Fukushima crisis fueling the third opening of Japan

Prime Minister Yoshihiko Noda's announcement that Japan would join talks on a Pacific free trade agreement (FTA) triggered a nationwide debate over whether to open Japan's market.

While this is certainly a useful discussion, the issue facing Japan is far larger. The Fukushima nuclear power plants crisis further exacerbated the problems Japan already had: an aging society, the hollowing out of manufacturing industries, a huge fiscal deficit, a widening income gap, and the sustainability of its governing system.

The fundamental question is thus not one of joining FTAs. Rather it is how we Japanese can carry forward a third "opening" and depart from our aging, dysfunctional system.

The Fukushima disaster has shaken the foundations of our system as it has proven all of its fundamental assumptions false. Fukushima turned Japanese citizens from believers into skeptics of the government.

Deep disappointment in the government has transformed people from apathetic bystanders to proactive citizens, creating innovative financial schemes without relying on the government and committing themselves to energy conservation and reduced dependence on nuclear energy by shifting their priorities and preferences.

Neither the shock of the Lehman bankruptcy, the asset and stock bubble collapses, nor 20 years of stalled economic growth, have had much of an impetus to change, but Fukushima ignited in Japan a great transformation at the grass-roots level. Just as the "Spring" movements have been demanding change in the systems of Arab countries, so civil society has finally started to blossom in Japan. Because Japan's rather unhealthy one-party-dominated "democracy" has lasted over a half-century, the country is still inexperienced in translating fragmented individual voices into balanced public policies. Thanks to the spread of tools like Twitter and YouTube, and the catalyst of foreign nongovernment organizations, linking these voices may eventually lead to long-overdue domestic reform, altered voting patterns and changes in Japan's outlook.

Since the Meiji Era, we have had complete confidence in our bureaucratic system and the strong policymaking institution of the "Iron triangle," backed by strong economic growth. This iron triangle continued to survive until today partly because people continued to trust in bureaucracy and political/social institutions. This myth was completely broken after the Fukushima disaster, which revealed to everyone that there was no functioning system in place to deal with the crises. People watched as politicians produce lists of excuses for not cooperating and bureaucrats fought for jurisdiction while failing to make decisions, terrified of taking risks in such an unprecedented situation.

Instead of relying on the government, people started to act independently through grassroots and civil movements in various parts of Japan. In other words, the third opening, or the great transformation in values and social norms, is finally occurring in Japan.

Led by the governing class of samurai, Japan experienced its first opening during the Meiji Restoration, triggered by the threat posed by Commodore Matthew Perry's Black Ships. The second opening was led by Gen. Douglas MacArthur, when the Allied occupation government initiated reforms and political purges after our disastrous defeat in World War II. While the past two openings were driven by external factors in a top-down fashion, the third opening has been triggered internally by the Fukushima disaster. It is a civil-sector-driven, bottom-up transformation.

While the authorities failed to deliver substantive action, individuals started to act. Many donated money for the first time and participated in voluntary activities; scientists gathered to offer credible information and explanations via Twitter; voluntary individuals in various regional areas monitored radioactivity levels and gathered data through the Internet that they made immediately made public; and parents organized and demanded that the authorities measure ground and food radioactivity levels in kindergartens and schools, which quickly became the norm. Japanese citizens now strongly demand transparency, so that they can judge how to protect themselves.

Energy shortages due to the Fukushima disaster have had a profound impact on individuals' priorities and lifestyles. Households and corporations achieved 18 percent energy conservation last summer in Tokyo through various efforts. How to better preserve the environment for future generations has now become a part of our thinking. LED lights, expensive household fuel cells and wood-burning stoves are selling surprisingly well; and the demand for solar panels is exceeding supply.

Innovative trials are now taking place that will have even greater effects on a larger social and economic scale. The "2:46 Quakebook," promptly published online worldwide, established new ways to donate money to Tohoku. Innovative microfinancing schemes have been operating to help small businesses that are desperately in need of cash at a time when traditional financial institutions are reluctant to take risks. The Tomodachi Initiative, a public-private partnership led by the governments of Japan and the United States, whose programs include the fostering of entrepreneurship, is also making an impact.

Fukushima gave us a great opportunity to transform our way of life and recognize that individuals can make difference in the society if they act together. Long-overdue reforms are possible today as established barriers weaken and room for innovation emerges. For its democratic system to truly function, Japan's infant civil society still needs to learn from other societies by establishing horizontal links in various sectors, including NGOs, researchers and scientists. This is a chance to get globally connected and gather global expertise.

#Occupy: journalist-turned-entrepreneur Kirk Cheyfitz says "one dollar, one vote" plutocracy is mobilizing to put down what Gen. Martin Dempsey calls "our Arab Spring"

TokyoTom — Fri, 16 Dec 2011 14:52:00 GMT

I recently ran across some interesting ancedotes and thoughts on the "Occupy" movement and the response to it from elites by investigative journalist-turned-new media consultant Kirk Cheyfitz. Cheyvitz is CEO and Chief Editorial Officer of Story Worldwide, a new media ad agency he founded in 1999. He is also author of the back-to-basics business leadeship book, Thinking Inside the Box: The 12 Timeless Rules for Managing a Successful Business (2003).

With permission from the author, here is his December 5 piece at Huffington Post (emphasis added):

How Much Does America Really Love Democracy?

As police began wholesale attacks on the Occupy Wall Street protests in early November, I attended a dinner party at "the scene of the crime," as many Occupy protestors call it -- the New York Stock Exchange. Hosted by NYSE and arranged by a group called wf360, the event was billed as a night of conversations around questions beginning with "What if...?"

My 200 fellow dinner guests were mostly senior executives, mostly from the financial industry, mostly (seemingly) Republicans. A lot of what was said, however, sounded little like the empty rhetoric out of Washington or cable news. There was widespread disgust with government paralysis and both political parties. More surprising, there was widespread sympathy for the problems of ordinary Americans and a broad appreciation of a central message of the Occupy movement -- the message cable news can't seem to get -- that the US needs to get money out of politics and end corporate control of government.

Reflecting the spirit of the evening, one diner, General Martin Dempsey, chairman of the Joint Chiefs, rose to ask, "What if the Occupy Wall Street protestors are our Arab Spring?" He added, "What if they are moving the line between the governing and the governed?"

"Arab Spring" holds special meaning for Dempsey. He has spoken with palpable awe of the popular revolutions rearranging Middle East politics. He credits the downfall of Egypt's Mubarak to "Facebook and social networking, a leaderless organization that rose up and we call the Arab Spring," Agence France Presse reports. Speaking about these "viral" uprisings to world military leaders in London in June, he said, "I think our imaginations are just beginning to touch the edges of what it might mean...."

Continuing that theme back home, Dempsey stood in a private dining room of the New York Stock Exchange contemplating the rise of such a "leaderless organization" in America. In public and private conversation, he seemed to sway between his military duty to put down insurrections and his devotion to the idea that America stands for the unquestioned goodness of democracy.

When I think about the last few months in American politics, I think about the clashing themes Dempsey conjures. Our support for democracy, in the abstract, and for the growing democratic protests across the world is counterbalanced by our fear of democracy in action and our official tolerance of police violence in multiple US cities against peaceful protesters. In these and other ways, the Occupy movement confronts America with our contradictions.

Let's look at a few of those contradictions: We live in an America where the bedrock promise of opportunity for all is contradicted by the widening gap between rich and poor; the promise of democracy is contradicted by the dominance of money and corporate interests in our politics; the promise to support freedom is contradicted by our historic support of repressive dictators like Mubarak and our ambivalence about majority rule in the Middle East; our promise of free speech and free assembly is contradicted by use of rubber bullets, pepper spray, beatings and arrests to put down protesters here at home. This list could go on, but that's a start.

It is obtuse, I fear, not to interpret recent police violence in the US as a sign of intentional and coordinated opposition to the Occupy movement by official America, whether you call that group the 1%, the Establishment, the ruling class or any other name.

For those fond of obtuseness, please remember that Oakland Mayor Jean Quan told the BBC she decided to evict her city's protesters after discussing the matter with 18 mayors on a conference call. Many of these mayors executed similar evictions and mass arrests immediately after that call, all citing what they termed health and safety concerns. That same week, MSNBC's Chris Hayes reported on a memo in which a large DC lobbying firm proposed that its client, the American Association of Bankers, pony up $850,000 to create "negative narratives" about Occupy and the politicians who support the protests.

Are the rights of the Occupy movement being violated by the American establishment or are police merely enforcing the law? Assuming that the protestors were, in fact, breaking the law, how should our democracy react to non-violent civil disobedience? Isn't such lawbreaking enshrined in the founding of the nation and the modern American notion of free expression?

When considering these questions, it is important, first, to see the context. At the heart of what's going on in our politics is something that left and right broadly agree about: We are in a long-standing crisis and our government isn't doing anything about it.

In case you are in the tiny minority that disagrees with that statement, let's remember that the middle class has been shrinking for 35 years as the gap between rich and poor has been widening. There are now 100 million Americans living either in poverty or just fractionally above the poverty line while the top 1% of American earners have seen their outsized share of total wages nearly triple and they now control 40% of the country's total wealth.

Meanwhile, among the other 99%, misery spreads. Seriously delinquent mortgages started rising again in September, up to 4.9% of all mortgages, according to the New York Fed and the Office of the Comptroller of the Currency. This is roughly half what the rate was at the end of 2009, happily, but still nearly three times the delinquency average for the three decades prior to the crash of 2008. Unemployment, of course, sits at 8.6%, a recent low, after a welcome half-point drop in early December. But for youth it's double that, for Hispanics it's more than double and for African-Americans it's more than triple that. If you are a typical American, you see the majority of America in crisis while the rich keep getting richer and Congress does absolutely nothing to turn things around.

Times are so hard that most Americans now question the country's longest-running mythical narratives about hope, hard work and social mobility -- the bedrock social contract that we call the American dream. Pew's Economic Mobility Project, in fact, finds that a majority of Americans (54%) now feel the government helps the rich "a great deal," but only 6% say it helps "people like me." In short, by a 9-to-1 margin, Americans see the game is rigged against them.

It is in this context that Occupy Wall Street sprang up in Manhattan two months ago with a central message about the essential unfairness of America -- the growing disparity between rich and poor; the escalating clash between the rights of flesh-and-blood persons with the expanding rights accorded to money itself and to legal-fiction persons known as corporations. (Harold Myerson recently referred to the Citizens United decision as "one dollar, one vote.")

My point is simple: the protests are actually about something (or a set of somethings) very seriously wrong with America. The protests are about things that many of us agree deserve our serious attention. The substance of the protestors' complaints are so serious and widespread, in fact, that they have given rise to the kind of "leaderless organization" that is bringing down governments in other parts of the world; so serious that America's highest-rankling military leader wonders out loud about the similarities among Cairo, Tripoli and Oakland.

I make this point because we should acknowledge that if the First Amendment was meant to protect any kind of speech at all, it certainly was meant to cover what the Occupy movement is doing: identifying inequities, agitating for redress and dramatizing the need for change. We need to acknowledge that the First Amendment is a safety valve that actually protects the 1% from revolution by allowing for political change.

So I am troubled, to say the least, by official America's intolerance of free speech, particularly when the speech addresses subjects so central to our expressed national beliefs and so important to our political process. I think we should all be troubled.

Reclaiming Social Capital: Matt Taibbi's Nov. 10 post at Rolling Stone: Occupy is "a rejection of what our society has become."

TokyoTom — Fri, 16 Dec 2011 14:07:00 GMT

Matt Taibbi's post last month in Rolling Stone is worth a read:

How I Stopped Worrying and Learned to Love the OWS Protests

Taibbi is stiull unable to put his finger on what I think the Ocuppy movement is about - a manifestation of the desire by hopeful people to rebuild meanigful civic life and social capital in the face of erosion by corporatism, and to insist on greater accountability at a local level of both business and government - but he's at least amking an honest effort.

I recommend the whole post. but I excerpt below (emphasis added):

... The first few times I went down to Zuccotti Park, I came away with mixed feelings. I loved the energy and was amazed by the obvious organic appeal of the movement, the way it was growing on its own. But my initial impression was that it would not be taken very seriously by the Citibanks and Goldman Sachs of the world. You could put 50,000 angry protesters on Wall Street, 100,000 even, and Lloyd Blankfein is probably not going to break a sweat. He knows he's not going to wake up tomorrow and see Cornel West or Richard Trumka running the Federal Reserve. He knows modern finance is a giant mechanical parasite that only an expert surgeon can remove. Yell and scream all you want, but he and his fellow financial Frankensteins are the only ones who know how to turn the machine off.

That's what I was thinking during the first few weeks of the protests. But I'm beginning to see another angle. Occupy Wall Street was always about something much bigger than a movement against big banks and modern finance. It's about providing a forum for people to show how tired they are not just of Wall Street, but everything. This is a visceral, impassioned, deep-seated rejection of the entire direction of our society, a refusal to take even one more step forward into the shallow commercial abyss of phoniness, short-term calculation, withered idealism and intellectual bankruptcy that American mass society has become. If there is such a thing as going on strike from one's own culture, this is it. And by being so broad in scope and so elemental in its motivation, it's flown over the heads of many on both the right and the left.

The right-wing media wasted no time in cannon-blasting the movement with its usual idiotic clichés, casting Occupy Wall Street as a bunch of dirty hippies who should get a job and stop chewing up Mike Bloomberg's police overtime budget with their urban sleepovers. Just like they did a half-century ago, when the debate over the Vietnam War somehow stopped being about why we were brutally murdering millions of innocent Indochinese civilians and instead became a referendum on bralessness and long hair and flower-child rhetoric, the depraved flacks of the right-wing media have breezily blown off a generation of fraud and corruption and market-perverting bailouts, making the whole debate about the protesters themselves – their hygiene, their "envy" of the rich, their "hypocrisy."

The protesters, chirped Supreme Reichskank Ann Coulter, needed three things: "showers, jobs and a point." Her colleague Charles Krauthammer went so far as to label the protesters hypocrites for having iPhones. OWS, he said, is "Starbucks-sipping, Levi's-clad, iPhone-clutching protesters [denouncing] corporate America even as they weep for Steve Jobs, corporate titan, billionaire eight times over." Apparently, because Goldman and Citibank are corporations, no protester can ever consume a corporate product – not jeans, not cellphones and definitely not coffee – if he also wants to complain about tax money going to pay off some billionaire banker's bets against his own crappy mortgages.

Meanwhile, on the other side of the political spectrum, there were scads of progressive pundits like me who wrung our hands with worry that OWS was playing right into the hands of assholes like Krauthammer. Don't give them any ammunition! we counseled. Stay on message! Be specific! We were all playing the Rorschach-test game with OWS, trying to squint at it and see what we wanted to see in the movement. Viewed through the prism of our desire to make near-term, within-the-system changes, it was hard to see how skirmishing with cops in New York would help foreclosed-upon middle-class families in Jacksonville and San Diego.

What both sides missed is that OWS is tired of all of this. They don't care what we think they're about, or should be about. They just want something different.

We're all born wanting the freedom to imagine a better and more beautiful future. But modern America has become a place so drearily confining and predictable that it chokes the life out of that built-in desire. Everything from our pop culture to our economy to our politics feels oppressive and unresponsive. We see 10 million commercials a day, and every day is the same life-killing chase for money, money and more money; the only thing that changes from minute to minute is that every tick of the clock brings with it another space-age vendor dreaming up some new way to try to sell you something or reach into your pocket. The relentless sameness of the two-party political system is beginning to feel like a Jacob's Ladder nightmare with no end; we're entering another turn on the four-year merry-go-round, and the thought of having to try to get excited about yet another minor quadrennial shift in the direction of one or the other pole of alienating corporate full-of-shitness is enough to make anyone want to smash his own hand flat with a hammer.

If you think of it this way, Occupy Wall Street takes on another meaning. There's no better symbol of the gloom and psychological repression of modern America than the banking system, a huge heartless machine that attaches itself to you at an early age, and from which there is no escape. You fail to receive a few past-due notices about a $19 payment you missed on that TV you bought at Circuit City, and next thing you know a collector has filed a judgment against you for $3,000 in fees and interest. Or maybe you wake up one morning and your car is gone, legally repossessed by Vulture Inc., the debt-buying firm that bought your loan on the Internet from Chase for two cents on the dollar. This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it's 10,000 feet down into a vat of razor blades that you can never climb out of.

That, to me, is what Occupy Wall Street is addressing. People don't know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.

There was a lot of snickering in media circles, even by me, when I heard the protesters talking about how Liberty Square was offering a model for a new society, with free food and health care and so on. Obviously, a bunch of kids taking donations and giving away free food is not a long-term model for a new economic system.

But now, I get it. People want to go someplace for at least five minutes where no one is trying to bleed you or sell you something. It may not be a real model for anything, but it's at least a place where people are free to dream of some other way for human beings to get along, beyond auctioned "democracy," tyrannical commerce and the bottom line.

We're a nation that was built on a thousand different utopian ideas, from the Shakers to the Mormons to New Harmony, Indiana. It was possible, once, for communities to experiment with everything from free love to an end to private property. But nowadays even the palest federalism is swiftly crushed. If your state tries to place tariffs on companies doing business with some notorious human-rights-violator state – like Massachusetts did, when it sought to bar state contracts to firms doing business with Myanmar – the decision will be overturned by some distant global bureaucracy like the WTO. Even if 40 million Californians vote tomorrow to allow themselves to smoke a joint, the federal government will never permit it. And the economy is run almost entirely by an unaccountable oligarchy in Lower Manhattan that absolutely will not sanction any innovations in banking or debt forgiveness or anything else that might lessen its predatory influence.

And here's one more thing I was wrong about: I originally was very uncomfortable with the way the protesters were focusing on the NYPD as symbols of the system. After all, I thought, these are just working-class guys from the Bronx and Staten Island who have never seen the inside of a Wall Street investment firm, much less had anything to do with the corruption of our financial system.

But I was wrong. The police in their own way are symbols of the problem. All over the country, thousands of armed cops have been deployed to stand around and surveil and even assault the polite crowds of Occupy protesters. This deployment of law-enforcement resources already dwarfs the amount of money and manpower that the government "committed" to fighting crime and corruption during the financial crisis. One OWS protester steps in the wrong place, and she immediately has police roping her off like wayward cattle. But in the skyscrapers above the protests, anything goes.

This is a profound statement about who law enforcement works for in this country. What happened on Wall Street over the past decade was an unparalleled crime wave. Yet at most, maybe 1,500 federal agents were policing that beat – and that little group of financial cops barely made any cases at all. Yet when thousands of ordinary people hit the streets with the express purpose of obeying the law and demonstrating their patriotism through peaceful protest, the police response is immediate and massive. There have already been hundreds of arrests, which is hundreds more than we ever saw during the years when Wall Street bankers were stealing billions of dollars from retirees and mutual-fund holders and carpenters unions through the mass sales of fraudulent mortgage-backed securities.

It's not that the cops outside the protests are doing wrong, per se, by patrolling the parks and sidewalks. It's that they should be somewhere else. They should be heading up into those skyscrapers and going through the file cabinets to figure out who stole what, and from whom. They should be helping people get their money back. Instead, they're out on the street, helping the Blankfeins of the world avoid having to answer to the people they ripped off.

People want out of this fiendish system, rigged to inexorably circumvent every hope we have for a more balanced world. They want major changes. I think I understand now that this is what the Occupy movement is all about. It's about dropping out, if only for a moment, and trying something new, the same way that the civil rights movement of the 1960s strived to create a "beloved community" free of racial segregation. Eventually the Occupy movement will need to be specific about how it wants to change the world. But for right now, it just needs to grow. And if it wants to sleep on the streets for a while and not structure itself into a traditional campaign of grassroots organizing, it should. It doesn't need to tell the world what it wants. It is succeeding, for now, just by being something different.

The cart, or the horse? A 'bleeding-heart' libertarian (who missed Block) blames the Left for Crony Capitalism

TokyoTom — Thu, 15 Dec 2011 15:58:00 GMT

I recently ran across a blog post Jason Brennan entitled: Dear Left: Corporatism Is Your Fault, at the "Bleeding Heart Libertarians" blog. The blog hosts the writings of various libertarians, such as Roderick Long and Gary Chartier, who "believe that addressing the needs of the economically vulnerable by remedying injustice, engaging in benevolence, fostering mutual aid, and encouraging the flourishing of free markets is both practically and morally important"

The post is worth a read; no doubt quite a few of you will like it. I didn't, and left my comments at the bottom:

Brennan is Assistant Professor of Business and Philosophy at Georgetown University. He is the author of The Ethics of Voting (Princeton University Press, 2011), and co-author of A Brief History of Liberty (Wiley-Blackwell, 2010). He earned his PhD in philosophy from the University of Arizona.

I excerpt liberally from the original post (emphasis added):

1. Dear Left: Corporatism Is Your Fault

... Dear members of the moderate left,

America is suffering from rampant, run-away corporatism and crony capitalism. We are increasingly a plutocracy in which government serves the interests of elite financiers and CEOs at the expense of everyone else.

You know this and you complain loudly about it. But the problem is your fault. You caused this state of affairs. Stop it.

Unlike we libertarianish people, you people actually hold and have been holding significant political power in the US over the past 50 years. [ What have you done with this power? You’ve greased the corporatist machine every chance you’ve gotten. You’ve made things worse, not better. Our current problems are your fault. You need to stop. ...

You complain, rightly, that regulatory agencies are controlled by the very corporations they are supposed to constrain. Well, yeah, we told you that would happen. When you create power—and you people love to create power—the unscrupulous seek to capture that power for their personal benefit. Time and time again, they succeed. We told you that would happen, and we gave you an accurate account of how it would happen.

You complain, perhaps rightly, that corporations are just too big. Well, yeah, we told you that would happen. When you create complicated tax codes, complicated regulatory regimes, and complicated licensing rules, these regulations naturally select for larger and larger corporations. We told you that would happen. Of course, these increasingly large corporations then capture these rules, codes, and regulations to disadvantage their competitors and exploit the rest of us. We told you that would happen.

It’s not rocket science. It’s public choice economics. You recognized, rightly, that public choice economics was a threat to your ideology. So, you didn’t listen, because you didn’t want to be wrong. Public choice predicted that the government programs you created with the goal of fixing problems would often instead exacerbate those problems. Well, the evidence is in. You were wrong and public choice theory was right. If you have any decency, it is time to admit you were wrong and change. Stop making things worse.

You spent the past fifty years empowering corporations and the most unscrupulous of the rich. You created rampant moral hazard in the financial sector. You created the system that socializes risks but privatizes profit. You created the system that creates a revolving door between Obama’s staff and Goldman Sachs. ...

You balk: Isn’t the problem the regressive pro-market post-Reagan politics? Please, people. Let’s be serious a moment. Reagan used a bunch of pro-market, pro-liberty, anti-big government rhetoric, but the man was no libertarian, and he did little to make the country more libertarian. Reagan spent and spent, and thus ran up the debt. He doubled the number of imports with trade restrictions. He pursued militaristic foreign policy. He increased rather than decreased the size, scope, and power of government. Reagan ramped up the war on Americans civil liberties drugs. He wasn’t even a big deregulator—that was Carter. Look past rhetoric to reality. Reagan was in practice just a more militaristic version of one of you. ...

Unlike we libertarianish people, you members of the moderate left will continue to hold and exercise power. So, learn some public choice, and use what you learn in practice.

2. My comments:

Jason, your position is understandable, but unfortunately your history of corporatism is myopic and thus deeply flawed and your unwillingness to attack both the Right and the crony capitalists themselves is regrettable.

The regulatory state is a result of citizens demanding that their governments "Do Something!" about corporate abuses that arose proximately from the bestowal of favors on wealthy capitalists by states, through the creation of limited liability corporations. The limited liability served to shift risks of loss for damages to public victims and away from owners, thus creating institutionalized moral hazard, agent-principal problems and growing risk externalization.

"The Left" wrongly believes that more government is the answer to the problems created by corporatism, but you can hardly blame the Left for the creation of our corporate Frankenstein monsters in the first place.

More thoughts here:

http://mises.org/Community/blo...

http://mises.org/Community/blo...

http://mises.org/Community/blo...

http://mises.org/Community/blo...

Sincerely,

TT

12/12/2011 11:23 PM

3. As for Walter Block, see this short post regarding his views on the rise of environmentalism.

Limited Liability, Redux: As Bob Monks says, "corporate governance has failed and it’s time to move on." So what's next? Unleash the Hounds!

TokyoTom — Sat, 10 Dec 2011 16:29:00 GMT

This is a precis of my preceding post.

As I noted, veteran shareholder activist Robert A.G. Monks has concluded that - in brief (emphasis added):

the people who exercise power for the corporations need to be accountable to somebody. Over the years, it has become clear that they really are not accountable to anybody, and our experiment in self-regulation and minimal oversight has failed. In practice, this has meant that a small group of individual CEOs exercise power over financing elections and lobbying the passage and enforcement of laws. ...

Society is a give-and-take proposition but for now, the powerful take much more than they contribute and that is not sustainable.

For me, corporate governance has failed and it’s time to move on.

So what do we do? I've already discussed this in a number of posts relating to how the state grant of limited liability to corporate shareholders has released moral hazard on a massive scale, leading to pollution and labor problems, a cycle of pressure for government 'protection' and government capture. These problems have been compounded by the "Principal - Agent problem" on which Bob Monks is throwing in the towel, which problem has its roots in limited liability of shareholders and has been exacerbated by the very securities laws that purport to protect shareholders of listed companies.

I left the following response at Bob's blog (emphasis added):

Posted by TokyoTom on Nov 3, 2011 at 12:32 PM

Bob, the answer is simple:

-- Let shareholders of publicly-listed firms alone to figure out how to protect their own interests [sink or swim], and

-- Let better managed firms that don't tap public markets (and thus who have smaller numbers of more sophisticated investors who don't need the dubious 'protections' of Government) eat the lunches of the bigger, more bureaucratic and less profitable public firms.

In other words, the existing system can't be saved, and it is not worth the effort.

What we need is a whole lot more of Schumpeter's 'Creative Destruction', which we can expect from private firms -- which have been growing as Sarbanes-Oxley has helped large firms build barriers by walling off access to capital markets.

One action item that I still see as necessary is to encourage the use of alternative corporate/organization forms where shareholders/owners retain a significant tail of risk. Since it is the moral hazard and risk-shifting made possible by state-granted limited liability status that has also fuelled the growth of the regulatory state, states can also experiment with dramatically lowering regulations for smaller local firms where shareholders have unlimited liability or must pony up additional capital to pay damages for any torts.

Sincerely,

Tom

Leading Republican corporate governance expert throws in towel on shareholder oversight of listed companies, decries unaccountable CEOs, excessive corporate power and Government Capture

TokyoTom — Sat, 10 Dec 2011 16:06:00 GMT

Robert A.G. Monks is another well-known Republican now railing at runaway crony capitalism and its related corruption of government. I have referred to Monks twice previously:

More by Bob Monks on the shareholder marginalization at the core of the crisis of public corporation capitalism

WSJ: Governance guru Robert A.G. Monks blames investors for crisis (but both he and WSJ miss that irresponsible, ineffective shareholders is a consequence of limited liability and "public co" regulation)

Before embarking on a 40-year crusade as a corporate governance consultant, Monks had an extensive history in business and government. He was once the Republican candidate for Senate from Maine and corporate governance adviser in the film "The Corporation". According to Wikipedia, "Monks has written widely about corporate governance and has published more than a hundred papers in publications around the world.He was the recipient of the Award for Outstanding Financial Executive from the Financial Management Association in 2007. Monks is the subject of a biography chronicling the corporate governance movement, A Traitor to His Class by Hilary Rosenberg.

Bob Monks' 30-Year Crusade", 2003), "In the early 1980s, Monks established Institutional Shareholder Services, a leading corporate governance consulting firm, and, in the early 1990s, he opened Lens Asset Management, a fund that used shareholder activism to shake up underperforming companies. But today — in the aftermath of Enron, the corporate profligacy of Tyco International management and the like — Robert A. G. Monks appears to be a man for the moment. Monks, author of the book The New Global Investors, argues that shareholders, especially large institutional investors, have become passive, essentially abandoning their responsibility of overseeing the behavior of executives who are charged to serve them, and, Monks argues, the common good."

Monks' books include:

Power & Accountability. HarperCollins, 1991. (with Nell Minow)
Watching the Watchers. Capstone, 1996. (with Nell Minow)
The Emperor’s Nightingale. Saint Simons Island, Georgia: Brook Street, 1999.
The New Global Investors. Capstone, 2001.
Capitalism Without Owners Will Fail: A Policymaker’s Guide to Reform. London: CSFI, 2002. (with Allen Sykes)
Reel and Rout. Saint Simons Island, Georgia: Brook Street, 2004.
Corpocracy. New York; Wiley, 2007.
Corporate Valuation for Portfolio Investment. London: Wiley, 2010. (with Alexandra Lajoux)
Corporate Governance (5th Revised Edition). London: Wiley, 2011. (with Nell Minow)

His blog is here. Below I cross-post in full , with his approval, Bob Monk's October 31, 2011 post, together with the comment I left in response at his blog (emphasis added)

Corporate Power & Government Capture

Failure of CG has led to capture

For the past thirty years I have focused my energies on corporate governance and the legitimacy of corporate power. And by legitimate, I mean that the people who exercise power for the corporations need to be accountable to somebody. Over the years, it has become clear that they really are not accountable to anybody, and our experiment in self-regulation and minimal oversight has failed. In practice, this has meant that a small group of individual CEOs exercise power over financing elections and lobbying the passage and enforcement of laws.

Where are we now?

The failure of owners to be involved in overseeing the corporations they own and the failure of government to enforce rules already on the books has led to what is known as capture. Capture means, to me, the power to allocate the resources of government, in this case the U.S. federal government. We’ve seen this in the bailout, in tax leniency and in subsidies. We’ve seen it in deregulation and the failure to enforce regulations that already exist.

Capture is a very predictable and logical outcome of our failures. All the corporate governance efforts I’ve been involved with have stressed the internal accountability of those with power in a corporation. And one of the essential elements of accountability that are critical for long term credibility of sustainable corporations is that they be subject to a governing law, and that they comply with law in a full way and not in a grudging way.

So this is about corporate power – excessive corporate power. The balance of power is not only tipped but so out of skew that we’ve come to accept it as normal. We excuse it by saying that corporations need to be competitive or that they create jobs. We excuse it by saying that CEOs take risks and therefore need outsized salaries to compensate for that. But while some of that may true, corporations also take a lot from our society: educated workforce, roads, subsidies, roads, military protection, diplomatic work done by our government and more. Furthermore, they don’t take responsibility for the by-products or off-products of their work: pollution, health issues, wear and tear on the infrastructure paid for by citizens. Society is a give-and-take proposition but for now, the powerful take much more than they contribute and that is not sustainable.

For me, corporate governance has failed and it’s time to move on. These larger issues are where I see the discussion going so I’ll be writing more on this topic in the weeks to come. Please comment or send me your thoughts. There’s so much to talk about and I look forward to hearing what you think.

I left the following comment in response at Bob's blog (emphasis added):

Posted by TokyoTom on Nov 3, 2011 at 12:32 PM

Bob, the answer is simple:

-- Let shareholders of publicly-listed firms alone to figure out how to protect their own interests, and

-- Let better managed firms that don't tap public markets (and thus who have smaller numbers of more sophisticated investors who don't need the dubious 'protections' of Government) to eat the lunches of the bigger, more bureaucratic and less profitable public firms.

In other words, the existing system can't be saved, and it is not worth the effort.

Gonzalo Lira is a shrill conservative who loudly supports the "Occupy" Movement

TokyoTom — Sat, 10 Dec 2011 09:40:00 GMT

Allow me to shill for Gonzalo Lira, a Chilean-American novelist, filmmaker, founder of the Strategic Planning Group, and an economic blogger who contributes to Zero Hedge, naked capitalism, Seeking Alpha and Business Insider.

I ran across an interesting blog post by Lira that, in contrast with other pieces on LvMI (such as George Reisman's), expresses strong support for the "Occupy" movement.

Lira kindly gave me permission to cross-post his piece. (I note that I seem to be more of a classic liberal and skeptic of government than Lira, and so I don't fully endorse his 'conservative' positions.)

Why I Support The Occupy Movement (emphasis added)

I am a Conservative—and proud of it.

I am against abortion, including in the case of rape or incest. I don’t believe in any form of entitlement program, much less the concept of a welfare state. I am opposed to progressive income taxes—and in fact am against using the tax code as a vehicle to foment or discourage any social goal, as I think it inevitably leads to the tax code being gamed by interested parties (as has indeed happened with the U.S. tax code, beholden to paid lobbyists who have carved out so many loopholes that it looks more like a sieve than a tax code). Thus I’m in favor of a flat tax: Zero-percent for citizens, 20% for corporations.

I am in favor of a reduced government, a reduced military presence, compulsory military service, and a compulsory national guard system requiring 100% citizen participation, similar to the Swiss model. I am completely against foreign military adventurism, foreign military bases, and foreign military aid.

I believe that the government should be the enforcer of the law, and of a regulatory framework which—when it comes to issues affecting the common good—is strict to the point of anal.

For instance, food regulation, financial regulation, building code regulation—all of these regulations obviously serve the common good, and protect us all from unscrupulous people seeking to get an advantage by poisoning or otherwise hurting us all. Thus the government should have a tough regulatory framework—think of it like traffic laws: Tough government regulations that are simple, transparent, and which protect us all from each other, while making our interactions smooth, convenient and graceful.

I don’t have a problem with some people making boatloads of money, while others are homeless. I don’t believe it is the State’s or society’s or the government’s responsibility to take care of you in your old age—it is your responsibility.

Gun rights—yes. Gay rights—no. States’ rights—yes. Affirmative Action—no.

There are only three issues on which I don’t toe the Hard Right line: The death penalty, the war on drugs, and health care.

I am against the death penalty—not because I think that the State and society do not have the right to execute one of its members: They do, to my way of thinking, if the citizen has committed an especially heinous act. But the death penalty is permanent: You can’t take it back if you screw up. And since no justice system made by fallible men is infallible, mistakes are inevitable. So I am of the opinion that it’s better to have 1,000 murderers sit in jail at society’s expense, than allow one innocent man be put to death. Because you can free an innocent man after twenty years in jail for a crime he didn’t commit—but you can’t bring back the dead.

I am against the War On Drugs: First of all because it doesn’t stop the consumption (and thus flow) of illegal recreational drugs; second because I believe recreational drugs (up to and including cocaine, heroin, meth and acid) ought to be legalized and taxed, like booze, and its production regulated for safety standards, again like booze; third, because the “War On Drugs” has created a huge penal class—citizens who have spent time in jail for non-violent offenses, and thus are marginalized from general society because of this stigma on their record—which hurts people who have committed non-violent infractions, and enriches people who thrive on building and staffing more and more needless prisons.

I am in favor of trashing the current American health care system, and making it either entirely private, or entirely socialist: This hybrid system the United States has not only does not work, it is extraordinarily expensive. The fact that the French of all people spend less of their gross domestic product on their socialist health care system, yet have a lower infant mortality rate and a longer median and average lifespan than people in America, is a wake-up call: If the full-Commie Frenchie system is better and cheaper than the American one, then literally any health care system is better than the one that exists in the United States.

But all in all, I’m a good Conservative. (Though certainly not a Republican—a political party dominated by Neo-Conservatives, who are not Conservative at all, but rather, Corporatists.)

I believe that America should be the land of opportunity and risk: You can fly high—but you can also crash and burn. A society that eliminates risk—that tries to somehow torque risk down with “safety nets” and “systemic protections”—is begging for a Mommy Dictatorship when all is said and done.

Now, why do I go into all this detail about my political beliefs and ideas? Because I want to make clear where I stand, before I come out and say that I am in favor of, and fully support, the Occupy Movement.

The Occupy Movement is inarticulate—but not because of it nonsensical: The protestors are against the travesty that has become the American Republic. And though its origins are on the political Left, it should not be considered a “Leftist” movement.

Rather, it is an anti-Corporatist movement.

It’s core issue is the One-Percenters: As we have currently organized the American Republic, everything seems geared to protecting and enriching the top 1% of the population—to the detriment of the 99% of the population.

The One-Percenters have made huge gains in income over the last 30 years, compared to any other tranche of the population—while the standard of living of the middle and lower classes has actually gone down.

There is less opportunity for the 99%—but more opportunities for the One-Percenters to enrich themselves at the public expense, by way of manipulating the law, the tax code, or the regulatory framework.

There is a revolving door between One-Percenters in the government and the private sector—so the former government employees make it a point to “help” the private sector One-Percenters, at the expense of the public good. Think of the Obama health care “reform”—which helped no one, save Big Pharma and Big Med.

There is zero chance that a One-Percenters who breaks the law will go to prison. He can put toxic substances in food production, inject toxins into groundwater to get at some oil, bankrupt a pension fund, steal and cheat people out of their homes—and there’ll be no consequences insofar as the law is concerned.

The things he might have done might be immoral—they might be despicable—they might even be outright wicked and evil: But they are not “illegal”—because the One-Percenters change the laws by way of their bought-and-paid-for politicians, and thus never do anything “illegal”. They only do things which are immoral, and wrong—and thus not subject to legal punishment.

Yet any member of the 99% caught smoking a little weed will go to jail for 90 days—and have a permanent black mark on his record, severely curtailing his ability to find employment, get a bank account, or otherwise participate in civil society.

How bad is this lawless among the One-Percenters? To give an example: The bankers. Not one banker has been charged with fraud, for the Robo-Signing scandal; for the fraudulent securitization scandal that led to the 2008 Global Financial Crisis; or indeed, for any of the heinous acts of financial terrorism which has essentially held us all hostage, while the banksters have raped and pillaged from us all, by way of bailouts.

How did they rape and pillage our society? By telling us through their bought-and-paid for politicians and media shills, “You better bail us out—or we’ll crash the economy by the bankruptcy of our financial institutions, and put you all out of work.” So we give them literally trillions of dollars to bail them out in 2008 and after—

—and once we bail them out, do they pay us back?

No!—don’t be naive! They don’t pay us back! Instead, they use the bailout monies to pay themselves huge bonuses. After all, as is public record, in 2009, the banks paid their executives more and bigger bonuses than ever before—even though they would have been bankrupt had it not been for the lifeline that we paid for!

Are any of these bastards cooling their heels in jail? No they are not. In other words, we pay—and the banksters get a tan in Tahiti.

And this same pattern happens in every other industry and sector of our economy—in every other area and concern of our society: The One-Percenters get all the breaks, the government “of the people, by the people and for the people” bending over backwards to give this oligarchy all these phenomenal breaks—while the rest of us in the 99% pay. And pay in spades.

This is what the Occupy Movement is against.

As far as I’m concerned, the people currently protesting are a bunch of Lefty, bongo-banging hippie-dippy metro-sexual turds—but that doesn’t make their protest wrong.

And in this case, those Lefty fools are actually right.

And we on the Right should join them.

As Al Gore accurately put it (and trust me, my skin is literally trying to crawl off my flesh as the reptilian part of my brain reacts to me praising something that Al Gore, of all people, has said), the Occupy Wall Street movement is basically a primal scream of democracy.

It is a primal democratic scream that we all feel—Lefties and Righties.

Those Lefty granola-munchers have a putatively granola-munching Lefty in the White House—but they’re out on the street anyway. Why? Because Obama might munch on granola, but he’s about as Lefty as Herbert Hoover.

Don’t get me wrong—Obama ain’t on my team. He’s about as Righty as Adlai Stevenson. No, what Obama is is corporatist—as are all the Democratic politicians. That’s why the Unions and the blacks and the other “approved” Left wing interest groups haven’t been able to co-opt the Occupy Wall Street movement:

The Occupy Movement instinctively—perhaps even inarticulately but accurately—realizes that the traditional “Left” politicians aren’t politicians of principles.

Rather, they are the best politicans money can buy: Corporate politicans bought with coporate money, via K Street lobbyists, and the revolving door between corporate interests and political power.

Just look at Michael Chertoff, the former head of Homeland Security, whom I wrote about here (a piece which by the way earned me my own HSA agent, who dilligently monitors me).

Chertoff headed the HSA under George W. Bush—so he ought to be on my team, Team Right. But he’s not—he’s Team Corporate. He’s a One-Percenter.

Chertoff served as director of Homeland Security, then left for the private sector, where he formed “The Chertoff Group”—which promptly went into business with RapiScan Systems, purveyors of airport bodyscanners.

And so what did Chertoff do? He hit every talk show and media outlet, peddling the bodyscanners.

The corporate media was happy to have him—and not once did they point out that his fear-mongering would make him wealthier. Not once did the corporate media portray Chertoff as what he was—a corporate shill. Not once did the corporate media do its job of informing the citizenry of Chertoff’s conflict of interest.

Instead, the corporate media gave Chertoff a platform, from where he could sell us all on the full-body scanners—lying and saying that they were for “our protection against the terrorists”.

Were the body scanners necessary? No—they have yet to catch a single terrorist. Do they work? No—a determined terrorist can easily defeat them, as has been demonstrated. Are they safe? No—they likely cause cancer, though no one is really sure, because safety testing of the scanners has been proscribed.

Ah, but do the body-scanners pay Chertoff a big phat fee, every time one of those $100,000 machines ($100,000 each!) is deployed in an American airport?

Guess.

Someone like Chertoff isn’t on the “Right” or on the “Left”—someone like Chertoff, or Obama, is on the side of One-Percenters: The interests of the One-Percenters are their interests—versus you and me in the 99%—because they are the One-Percent. They have more in common with each other, than with any paltry political “Left/Right” difference.

Chertoff and Obama certainly have more in common with one another, than either one of them has with us, the people whom they are supposed to serve.

Now, if I have put this issue in terms of class-warfare, it sure makes it sound Marxist—which ordinarily would make me dismiss it. After all, Marx claimed that everything that was bad in a society was the result of “class warfare”—which is bullshit, as far as I’m concerned.

But a broken clock is right twice a day. To my way of seeing things, our society has fallen into an oligarchic trap: We have confused the health and welfare of the top of the social pyramid with the health and welfare of the entire pyramid—and that of course is a mistake. The top can be just fine and dandy—while the rest of society rots, crumbles, and collapses.

This, in a nutshell, is what is happening. This is what the Occupy Movement is protesting. This is something that I support. Because the health and welfare of our society as a whole should never be confused with the health and welfare of the richest 1%.

GL

David Brooks echoes Hayek's warnings on 'Market Morals' in an observant piece on our crumbling order

TokyoTom — Fri, 02 Dec 2011 06:12:00 GMT

David Brooks has an excellent op-ed piece in the December 1 New York Times that speaks to the very worrisome and ongoing destruction of crucial social capital - what Hayek called "market morals", and what Brooks calls the "spirit of enterprise".

I excerpt liberally from the op-ed (emphasis added):

Why are nations like Germany and the U.S. rich? It’s not primarily because they possess natural resources — many nations have those. It’s primarily because of habits, values and social capital.

It’s because many people in these countries, as Arthur Brooks of the American Enterprise Institute has noted, believe in a simple moral formula: effort should lead to reward as often as possible.

People who work hard and play by the rules should have a fair shot at prosperity. Money should go to people on the basis of merit and enterprise. Self-control should be rewarded while laziness and self-indulgence should not. Community institutions should nurture responsibility and fairness.

This ethos is not an immutable genetic property, which can blithely be taken for granted. It’s a precious social construct, which can be undermined and degraded.

Right now, this ethos is being undermined from all directions. People see lobbyists diverting money on the basis of connections; they see traders making millions off of short-term manipulations; they see governments stealing money from future generations to reward current voters.

The result is a crisis of legitimacy. The game is rigged. Social trust shrivels. Effort is no longer worth it. The prosperity machine winds down.

Yet the assault on these values continues, especially in Europe.

Over the past few decades, several European nations, like Germany and the Netherlands, have played by the rules and practiced good governance. They have lived within their means, undertaken painful reforms, enhanced their competitiveness and reinforced good values. Now they are being brutally browbeaten for not wanting to bail out nations like Greece, Italy and Spain, which did not do these things, which instead borrowed huge amounts of money that they are choosing not to repay.

The estimated costs of these bailouts vary enormously and may end up being greater than the cost of German reparations after World War I. Germans are being browbeaten for not wanting to bail out Greece, where even today many people are still not willing to pay their taxes. They are being browbeaten for not wanting to bail out Italy, where future growth prospects are uncertain.

They are being asked to bail out nations with vast public sectors and horrible demographics. They are being asked to paper over fundamental economic problems with a mountain of currency.

It’s true that Germans benefited enormously from the euro zone and the southern European bubble, and that German and French banks are far from blameless. It’s true that the consequences for the world would be calamitous if the euro zone cracked up. It’s true that, in a crisis, you do things you wouldn’t otherwise do; you do things that violate your everyday values.

But our sympathy should be with the German people. They are not behaving selfishly by insisting on structural reforms in exchange for bailouts. They are not imprisoned by some rigid ideology. They are not besotted with some semi-senile Weimar superstition about rampant inflation. They are defending the values, habits and social contract upon which the entire prosperity of the West is based.

The scariest thing is that many of the people browbeating the Germans seem to have very little commitment to the effort-reward formula that undergirds capitalism. On the one hand, there are the technicians who are oblivious to values. For them anything that can’t be counted and modeled is a primitive irrelevancy. On the other hand, there are people who see the European crisis through the prism of some cosmic class war. What matters is not how people conduct themselves, but whether they are a have or a have-not. The burden of proof is against the haves. The benefit of the doubt is with the have-nots. Any resistance to redistribution is greeted with outrage.

The real lesson from financial crises is that, at the pit of the crisis, you do what you have to do. You bail out the banks. You bail out the weak European governments. But, at the same time, you lock in policies that reinforce the fundamental link between effort and reward. And, as soon as the crisis passes, you move to repair the legitimacy of the system.

That didn’t happen after the American financial crisis of 2008. The people who caused the crisis were never held responsible. There never was an exit strategy to unwind the gigantic debt buildup. The structural problems plaguing the economy remain unaddressed. As a result, the United States suffers from a horrible crisis of trust that is slowing growth, restricting government action and sending our politics off in strange directions.

Europe’s challenge is not only to avert a financial meltdown but to do it in a way that doesn’t poison the seedbed of prosperity. Which values will be rewarded and reinforced? Will it be effort, productivity and self-discipline? Or will it be bad governance, now and forever?

Brooks' insights are incomplete; he fails to note how government-establish deposit insurance underwrote and capital standards (most government bonds enjoy a 0% risk-weighting under BIS standards) encouraged the irresponsibility of German and other EU banks in lending to Greek and other national governments in the first place.

Right now, the Japanese government only funds 40-45% of its budget from taxes, and so is quietly looting its citizens' banking, pension and insurance assets for the shortfall. US citizens are more fortunate, because of our dollar hegemony has mean our government has largely been looting foreign bond purchasers and their customers instead.

TT's Lost in Tokyo

Note to Larry Lessig on his "Anti-Corruption Pledge": Limited liability corporations are the taproot of both growing government and anonymous rent-seeking.

From Orwell, Remy and Reason.tv: "Grandma Got Indefinitely Detained Now, Trying to Come Visit Christmas Eve!"

Remy: Grandma Got Indefinitely Detained (A Very TSA Christmas)

Great discussion of banking and monetary issues by Larry White of the Mercatus Center at Guatemala's "University of Free Marketers"

Great Tom Woods video addressing the unconsidered, reflexive fears by some progressives of Ron Paul

A movement to amend the Constitution is ALREADY underway. See Harvard Law School's Larry Lessig on why we need to call for a Constitutional Convention

For more, see "How to sober up Washington"—an essay by Lessig and Mark McKinnon on corruption in Washington, voters' disillusionment, and the need for an Article V convention.

What if Cato held a conference on how the War on Drugs was a massive FAILURE, but no one noted that the Feds and others BENEFIT SPECTACULARLY from all the costs?

Interesting piece in Al Jazeera: A continuing decline in trust in the Japanese government fuels political unrest and regionalism

Is Japan cracking up?

Mainstream parties in Japan are losing the trust of the people as renegade politicians gain support.

Post-Fukushima, signs that 'Arab Spring' and #Occupy movements have arrived as Japanese seek to wrest control of civil society from Government.

Fukushima crisis fueling the third opening of Japan

#Occupy: journalist-turned-entrepreneur Kirk Cheyfitz says "one dollar, one vote" plutocracy is mobilizing to put down what Gen. Martin Dempsey calls "our Arab Spring"

How Much Does America Really Love Democracy?

Reclaiming Social Capital: Matt Taibbi's Nov. 10 post at Rolling Stone: Occupy is "a rejection of what our society has become."

How I Stopped Worrying and Learned to Love the OWS Protests

The cart, or the horse? A 'bleeding-heart' libertarian (who missed Block) blames the Left for Crony Capitalism

1. Dear Left: Corporatism Is Your Fault

2. My comments:

12/12/2011 11:23 PM

3. As for Walter Block, see this short post regarding his views on the rise of environmentalism.

Limited Liability, Redux: As Bob Monks says, "corporate governance has failed and it’s time to move on." So what's next? Unleash the Hounds!

Leading Republican corporate governance expert throws in towel on shareholder oversight of listed companies, decries unaccountable CEOs, excessive corporate power and Government Capture

Corporate Power & Government Capture

Gonzalo Lira is a shrill conservative who loudly supports the "Occupy" Movement

Why I Support The Occupy Movement (emphasis added)

David Brooks echoes Hayek's warnings on 'Market Morals' in an observant piece on our crumbling order