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Drifting Sideways in Afghanistan

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This weekend, the Taliban killed five members of an American delegation with a roadside bomb – including a young diplomat, 25-year old Anne Smedinghoff – while the delegation was en route to deliver donated textbooks to schoolchildren to inaugurate a new school in rural Afghanistan.

Secretary of State John Kerry eulogized Ms. Smedinghoff while justifying our presence there:

“Our State Department family is grieving over the loss of one of our own, an exceptional young Foreign Service Officer, killed today in an IED attack in Zabul province, along with service members, a Department of Defense civilian, and Afghan civilians..

“Just last week in Kabul, I met our fallen officer when she was selected to support me during my visit to Afghanistan. She was everything a Foreign Service Officer should be: smart, capable, eager to serve, and deeply committed to our country and the difference she was making for the Afghan people. She tragically gave her young life working to give young Afghans the opportunity to have a better future.”

The United States seems to be committed in Afghanistan – now our nation’s longest war - until at least 2015. Beginning in 2009, President Obama began surging troops into Afghanistan, and then again in 2011, doubling our presence there. (As a consequence, troop deaths in Afghanistan under Obama also doubled.) Now at 66,000, our troops still outnumber al Qaeda in Afghanistan 1000-to-1. What’s more, the US has gone through 15 commanders in Afghanistan in 11 years; this staggering rate of turnover impedes effective leadership of our efforts there.

This morning in Afghanistan, while we lost two more of our troops in a helicopter crash, our British allies withdrew the last Royal Marines after spending a decade there. Troop security in Afghanistan deteriorates as the lines drawn on who we are fighting continue to blur. Lest we forget, the Taliban – whom Hamid Karzai still calls “brothers” – shot down a Chinook helicopter in August 2011, killing 38 onboard, including 22 Navy SEALs, many of whom were involved in the assassination of Osama bin Laden three months earlier.

Karzai is torn: while he is an ally of the United States – he condemned the strike that killed our diplomat while ordering a probe into the killing of 11 Afghani children in its aftermath by NATO airstrike - he cannot shake his allegiance to his countrymen. Knowing the Taliban will likely reclaim control of the country when all NATO forces leave, he has to appease both sides to save his own neck. But the longer he can do this, the longer he stays in power, and the more foreign aid he receives. So it’s little wonder that Afghanistan is referred to as the “Graveyard of Empires.”

Chris Preble, vice president for defense and foreign policy studies at of the Cato Institute, sums up our situation in Afghanistan – and Karzai – thusly:

“The war has ground to an inconclusive, unsatisfying conclusion. Nation-building missions usually fail, and Afghanistan proved a particularly unsuitable place for testing new nation-building doctrines. Our ally, the Hamid Karzai-led government that Americans have supported to the tune of many tens of billions of dollars – nearly $100 billion, according to the Special Inspector General for Afghanistan Reconstruction – is corrupt and ineffectual. To make matters worse, the mercurial Karzai could demand a one-sided status-of-forces agreement that would subject the U.S. troops who remain in his country beyond 2014 to the whims of the Afghan justice system, although he suggested last month that he was willing to allow U.S. troops to be covered by U.S. laws. Obama should demand full legal protections for a small residual force, fewer than 10,000 troops total, focused solely on counterterrorism. If Karzai refuses, Obama should opt for a full withdrawal, and choose to hunt down and destroy what remains of al Qaeda from more hospitable locations.”

Karzai hopes America will keep 9,000 troops there past 2014 to train Afghani soldiers – training them to do what, exactly, I don’ t know. In 2011, to show that Afghanistan is ready to assume control of their own nation, Karzai notably threatened to conscript troops to “forge national unity and reduce costs.”

But troops cannot be trained nor coerced to be amenable. As Frédéric Bastiat noted two centuries earlier:

“We have not been shown that fraternity can be imposed. If, indeed, wherever it appears, it excites our sympathy so keenly, that is because it acts outside of all legal constraint. Either fraternity is spontaneous, or it does not exist. To decree it is to annihilate it. The law can indeed force men to remain just; in vain would it try to force them to be self-sacrificing.”

According to Pew Research Center, public support for the war in Afghanistan has been upside down since December 2010. The American public, however, has not been challenging their hawkish representatives, on both the Left and the Right, who advocate using the same COIN strategy in Afghanistan that was used in Iraq. Afghanistan, though, is unlike Iraq, in that its people cannot be colonized; they are decidedly an uncivilized people, and we should allow them to remain so, through a strategy of containment

America needs to analyze the gap between “what we set out to do” and “what we are doing now” in Afghanistan. Is delivering books to Afghani schoolchildren – however admirable that may be - an activity worthy enough to send our kids to die for?  It’s also time for the American public, at the polls, to hold our government officials accountable for the more than 2000 troops dead in Afghanistan; declare victory with the assassination of Osama bin Laden and the dismantling of al Qaeda; and finally, bring our troops home.

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Apr 9, 2013

The Specter of Internet Taxation

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As the U.S. Postal Service closes 53 processing plants to trim $2 billion from its bloated budget, government officials – who earlier floated ideas to suspend Saturday service - look for other ideas to balance their budget. While USPS handles 40 percent of all the mail delivered in the world, it lost $15.9 billion last year with revenues of $65 billion. What’s more, its unfunded pension liabilities are nearly $50 billion.

Instead of privatizing the postal service – which would allow it to compete with FedEx and UPS, who seem to be able to make profits even up against a subsidized postal service - a California city councilman is proposing a tax on email as a fix:

Berkeley City Councilman Gordon Wozniak brought up taxing emails during a recent council meeting. He suggested the money collected, which would be part of a wider-reaching Internet tax, could be used in Berkeley’s case to save the local post office.

“There should be something like a bit tax,” he said during the March 5 meeting. “I mean, a bit tax could be a cent per gigabit and they would make, probably, billions of dollars a year.”

Plus, he said, there should be a “very tiny tax on email.”

The idea is basically this: The coming electronic age of communication is making the Post Office obsolete, so let’s tax electronic communication to make up for lost revenues.  But since you can’t email things like prescription medication and carburetors, there will always be a market for physical mail, and the Post Office should adapt to this changing environment.

In itself, taxing email is a goofy proposal by one city councilman in arguably the most leftist city in the United States, with tremendous logistical challenges, and should therefore be ignored. But the idea garnered much media attention, and considering that Marketplace Fairness Act – which Forbes calls an “ineveitable” online sale tax - passed the Senate last week, the idea should give us pause. Former Congressman Ron Paul, writing this week, calls the Act an “Internet Tax Mandate.” Indeed, other nations – most notably France – are proposing similar Internet taxes.

Luckily, a prescient Congress passed a federal ban on such a taxation in the 1998 Internet Tax Freedom Act, which has been expanded thrice. But as this law expires November 1, 2014, special interests will undoubtedly line up on either side in the “nonmarket,” the way they did over UPS’ “Brown Bailout,” aka the 2010 FAA Reauthorization Act, which you can read about at FedEx’s website, brownbailout.com.

Lobbyists will likely join the fight, the way they did with Internet wine sales, which placed a sales tax on wine in the state in which it is ordered. Ever wonder why you can buy wine online, but not beer? That’s because beer has no such lobby.

I digress. As a society, we know what kind of information is sloshing around the Internet: when, where, and how much. The metering of data by private companies is evidence that monitoring volumes of email traffic is now easier than it ever has been.

But of any sector of the economy, it makes the least sense for Congress to try to be involved in Internet technologies, as innovation often outpaces even the reactive nature of Congress. However, because of the market capitalization of all firms across the space, Congress – as always – sees dollar signs with new activity.

Ultimately, taxing an activity is no way to fix it. Why not, instead of taxing email and/or the Internet, do what Professor Stephen Carter recommends, and sell advertising space on postal stamps? This would allow at least some market forces to intervene so the Post Office can begin righting itself without altering the regulatory environment, while leaving. The Internet. ALONE.

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Mar 29, 2013

The Constitutional Case for Same Sex Marriage

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As the Supreme Court will hear oral arguments this week on both Hollingsworth v. Perry - the challenge to California’s Proposition 8, which banned gay marriage in the state - and U.S. v. Windsor - the challenge to the 1996 Defense of Marriage Act (DOMA), which recognized marriage at the federal level as between a man and a woman – state and federal laws effecting marriage equality face their first legal confrontation with the Judicial Branch. Herein I make the Constitutional case for marriage equality that respects both individual and religious liberties.

Last week, Senator Rand Paul proposed removing federal recognition of marriage - for everyone – telling Bob Costa at the National Review:

“I’m an old-fashioned traditionalist. I believe in the historic and religious definition of marriage. That being said, I’m not for eliminating contracts between adults. I think there are ways to make the tax code more neutral, so it doesn’t mention marriage. Then we don’t have to redefine what marriage is; we just don’t have marriage in the tax code.”

Senator Paul elaborated his position yesterday on Fox News Sunday, saying he has “always said that the states have the right to decide.” Senator Rob Portman – one of DOMA’s original co-sponsors - went a step further than Senator Paul last week in support of Same Sex Marriage, at the revelation that his son is gay, stating:

“I have come to believe that if two people are prepared to make a lifetime commitment to love and care for each other in good times and in bad, the government shouldn’t deny them the opportunity to get married.”

There is a difference here: essentially Paul’s proposal regards all marriages as civil unions, and Portman’s proposal is to recognize same sex unions as marriage… Which brings us to the belabored argument over two differing definitions of marriage.

Portman’s proposal honors marriages as equal, whereas in Paul’s proposal, marriage is a sacred institution, and a union is a secular one. This is aligned with the position I used to hold: that is, civil unions everywhere and marriages in states that allowed them. Basically, I supported the same status quo our President recently evolved to support. While I always understood that granting benefits to one group while denying them to another was both morally wrong and unconstitutional, it took a while to fully understand how that applied to marriage.

Evolving Back to the Constitution

The states are wonderful laboratories for policy, and matters not covered in Article 1, Section 8 of the U.S. Constitution are left to the states, in accordance with the 10th Amendment – indeed, most matters can be handled at even lower levels, as de Tocqueville described in Democracy in America.

But Article 1, Section 8 enumerates what powers Congress has, not what rights we the people retain, and the 10th Amendment grants delegation of powers – not rights – to the states. The 9th Amendment protects certain rights of the people, stating:

“The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

States have powers of law, not rights; individuals have rights. Having different rights under the law for different groups of people becomes a “separate but equal” status, with “marriage for straights and unions for gays” basically constituting a Jim Crow law. If the Supreme Court finds that “equal protection of the laws” as described in the 14th Amendment extends to consenting adults wishing to enter into marriage at religious institutions that permit it, both DOMA and state laws defining marriage might be overturned, as Same Sex Marriage will be considered a civil right. It should be noted here that the Supreme Court has referred to marriage as a ‘right’ 14 times since 1880.

By outlawing Same Sex Marriage, the states are essentially forbidding religious institutions to marry whom they wish. Furthermore, any claims the states make to outlaw marriage on religious terms violates the first ten words of the 1st Amendment: “Congress shall make no law respecting an establishment of religion.” As Congress - restrained by Article 1, Section 8 and the 1st and 14th Amendments - has no power to say who can marry whom, it’s hard to justify – considering the 9th and 10th Amendments - how the states can, either. Bear in mind, states also once claimed the right to say who could attend certain schools based on race.

Considering all this, a second class status for marriage is untenable, and such divisions of freedom should not be maintained, even if marriage equality under law is offensive to some.

Boundaries Protecting Liberty

I would like to see government completely out of marriage, leaving these matters totally up to religious institutions; but until it is, two tiers of rights should not exist under law. I don’t believe, as Rand Paul suggests, that government can totally work itself out of marriage; for more on this, see this outstanding piece by Doug Mataconis. Society must deal with the reality it has, not the ideal society it envisions; most of civil society would welcome and honor new contracts between consenting adults - with the proper boundaries – to protect both individual and religious liberties.

Same Sex Marriage occupies a gray area where civil rights and civil liberties collide, with civil liberties defined by what government cannot do to you, and civil rights defined by what government should do to protect those civil liberties. We should not be afraid of government protecting the civil liberties of certain groups liable to discrimination. But I neither recommend a Constitutional Amendment that provides any definition of marriage, as I believe that would be a usurpation of federal power.

At the far end on the civil rights side of the spectrum is pure egalitarianism, something we should avoid.  The most fervent proponents of same sex marriage want gays to be able to get married anywhere straights can, thereby coercing churches to marry everyone who wishes to be married; this is also untenable. While this debate is an old one, these protections were codified in Title II of the Civil Rights Act; if churches are considered private clubs under the law, they are exempt from anti-discrimination laws, and will continue to have discretion over whom they marry.

At the end of the day, either religious institutions have marriage discretion, or they don’t. Protecting the religious liberties of churches applies both to churches who want to marry same sex couples, and those that don’t.

***

Finally, on a personal note: Supporting government acquiescence in marriage is not equivalent to supporting Same Sex Marriage. I believe religious beliefs are not persuasive if evangelized by force of law, thrust upon the general population, whether in support or opposition of other beliefs… And neither did Jesus. I do not, and would not, attend a church that conducts Same Sex Marriages. But I will respect Same Sex Marriages as equal, in earthly terms, to my own.

This was prayerfully written, and I pray it is thoughtfully received.  For a comprehensive collection of the arguments being made both for and against Same Sex Marriage, see the Scorecard on Same Sex Marriage by Walter Olson at the Cato Institute.

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Mar 25, 2013

The Choice

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The debates are over.  In one week, we will know who our President will be for the next four years.  The votes – and an endless onslaught of polls – now await.

As opposed to 2008, I have avoided writing about the 2012 Presidential election, as I’m frankly unexcited about the whole thing.  That’s not to say I haven’t been paying attention.  America is pretending it has a choice in direction with Obama and Romney, when it does not.  The phenomenon here is that the Right demonstrably acquiesced fighting for America’s center, posing as some uber-conservative movement, when all the while Romney’s campaign promises are not much different from Obama’s actions.

Romney’s choice of Paul Ryan as his VP nominee shook things up for me a bit, as I see the national debt as the number one issue our country faces.  While Ryan talks a good game on fiscal matters, his voting record fails to impress.  As some of you know, I supported Ron Paul in the Republican primary, as he was the only one seriously talking boldly about our debt, our broken monetary system, our backwards foreign policy, or the executive and legislative branches trampling the US Constitution.  None of these issues have been discussed adequately in the general election.

Instead of being bold, and instead of capitalizing on the Tea Party successes of 2010, the Republican establishment chose to run an admittedly weak candidate who’s only saving grace is he’s Not Obama.  The resounding argument to vote for Romney is to “stop Obama.”  So I ask, what exactly would Romney be stopping?  There are no significant policy differences between the two, in both foreign and domestic policy proposals.  So I am prepared for another four years of Obama, because even if Romney wins, that’s what we get.

The Same Foreign Policy

There is a misconception that President Obama is an antiwar foreign policy minimalist who “ended the war in Iraq” and is drawing down in Afghanistan.  The War in Iraq actually ended according to the Bush timetable, a fact oft-forgotten as the Status of Forces Agreement was signed the day Bush had shoes thrown at his head.  In fact, many within the Obama Administration were negotiating to stay in Iraq this time last year.  When those negotiations failed, Obama falsely claims to have “ended the war.”

With regards to Afghanistan, Obama doubled the number of troops there, with no clear mission, while restricting the rules of engagement, wasting both lives and money in a war effort without defined goals.  American troops now outnumber al Qaeda 1000-to-1 in Afghanistan, where extremism is reportedly growing, which begs the question: Which group is responsible for the presence of the other?  For the record, I advocated a victory declaration and immediate withdrawal the week Bin Laden was killed.

On the whole, Barack Obama has been a picky-choosy interventionist, bypassing Congress to assist in conflicts at his – and only his – discretion.  In the past four years, Obama has unilaterally authorized additional military action in Libya, Yemen, and Pakistan, and Uganda, to go after Joseph Kony.  This is a full reversal of what was he said in 2007, in a Boston Globe interview:

“The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”

In his most notable unilateral military move, Obama assisted rebels in the assassination of Muammar Gaddafi, the sovereign leader in Libya, after putting $750 million worth of Cruise Missiles into that country during the Arab Spring.  In case you missed it, our presence in Libya backfired last month with the assassination of our Ambassador.

Where has the Obama Administration been with regard to Egypt?  Tunisia?  The Syrian civil war?  The Iranian Green Revolution?  It just depends.  Depends on what?  Who knows.  It certainly does not depend, however, on the Congress.  All we really know about the President’s foreign policy decision-making methodology is that he operates off a Secret Kill List; which:

“In effect counts all military-age males in a strike zone as combatants, according to several administration officials, unless there is explicit intelligence posthumously proving them innocent.”

It is with the Secret Kill List that Obama assassinated Anwar Al-Awlaki, the American-born Internet cleric essentially guilty of speech crimes, in Yemen.  What’s more, Obama used the Secret Kill List to assassinate his 16-year old son, Abdulrahman - also an American citizen – two weeks later when he was headed to a barbeque in Yemen.  Both assassinations were carried out by Drone attack; in fact, the Obama Administration has launched five times as many Drone attacks than the Bush Administration did, because, as comedian Steven Colbert pointed out, ”He doesn’t have to worry about habeas corpus, because after a drone strike sometimes you can’t even find the corpus.”  And the antiwar movement?  Silent.

On some of these points, Romney is no different from Obama; on others, I have not heard anything from Romney about them, which gives me little promise there will be any change.  As Plato said, “Silence gives consent.”  What we do know is Romney supports Obama’s drone wars and prolonging our presence in our current wars.  While hitting Obama for his perceived silence during Iran’s Green Revolution, Romney calls for more crippling sanctions, and his desire to prevent Iran from obtaining not just a nuclear weapon, but a nuclear weapons capability, which is something completely different.  Romney also wants to try Mahmoud Ahmadinejad for speech crimes inciting genocide, preemptively, before the UN.  And this is “conservative?”

The Same Domestic Policy 

Under Obama, the US government added a record $6 Trillion of debt in 4 years.  This out-of-control spending is to blame for our loose monetary policy, a phantom issue with which we will be dealing with for decades.  We overspend to the point where 40 cents of every dollar spent is borrowed, forcing the Treasury to print bonds, which the Federal Reserve purchases and stockpiles with money it prints “out of thin air.”  By undertaking these policies, since 2007, we have tripled our monetary base.  As well as future tax increases, future inflation results from increasing the monetary base, so get ready.  We are already seeing commodity prices rise.  Although the Fed reports 2% inflation, when calculated with the older method, we see grocery prices inflated 9% in 2011.  Did you see a 9% return on your savings and investments?  How about a 9% wage increase?  As price increases are regressive in their damaging effects, our overspending is directly responsible for our increased income inequality under Barack Obama, for which the Left prescribes more spending.

With QE3, the Fed will be spending $40 billion/month on Mortgage-Backed Securities in perpetuity.  To put this into scope, the War in Afghanistan costs $8 billion/month.  The automatic Defense budget cuts known as “sequestration” would cut only $4 billion/month.  As you’d guess, Wall Street profits have skyrocketed since then, as they are offloading their balance sheets of so-called “toxic assets.”

Our markets are policy-driven now, because we have refused to do the hard things.  We are at a point where we must cut spending to balance the budget.  Tax increases will never get us there.  Most agree that cutting taxes and spending simultaneously is the best way to spur economic growth, but cutting taxes without cutting spending only encourages bad behavior, as government gets to enjoy the benefits of spending “at a discount.”  That’s another reason why taxes and spending must reflect one another; it keeps us in check with reality.

The proposed Romney budget, however, doesn’t balance for 30 years.  As Romney has been nondescript about what he will cut, you should not expect any real change in spending under a Romney Administration.  In fact, Romney has pledged not to cut our top three budget items, Medicare, Social Security, and Defense, comprising 70% of government spending.  To put spending into perspective, the Ryan Budget – seen as Draconian by even some on the right – would spend $40 trillion over the next ten years, whereas Obama’s “socialist” plan would spend $46 trillion.

While I appreciate much of Ryan’s rhetoric, it’s different from his voting record:  Ryan supported the $700 billion Bank Bailout known as TARP, the unpaid for Medicare Part D, No Child Left Behind, certain stimulus spending, auto bailouts, and military expansion.  Make no mistake, these policies contributed to the Federal Reserve’s tripling of the monetary base.

With social issues, there is a perception of difference, but again, there is no real choice between the two candidates.  There is a misconception that Obama is “liberal” on social issues, but Obama has conducted more raids on marijuana dispensaries than Bush, has conducted more deportations of illegal immigrants than Bush, has merely adopted Dick Cheney’s moderate view on marriage equality, and has furthered the reach of executive power and expanded the police state signing the 2012 National Defense Authorization Act, which, in Section 1021, allows for the indefinite detention of American citizens captured on American soil without due process, thereby neutering the 4th Amendment.  Romney has indicated he will be more aggressive on all referenced social issues, and – worst of all – supports indefinite detention.

Romney has also indicated reigning in executive overreach would not happen under his Administration.  While Obama is guilty of usurping the same executive power he criticized Bush for using – whether to pass certain DREAM Act provisions by executive order, or by invoking executive privilege to protect Eric Holder in the Fast and Furious scandal – Romney wants to use an executive order to allow states to opt out of Obamacare.  As you may remember, the model for Obamacare was Romneycare, with the individual mandate idea coming from a so-called conservative think tank, the Heritage Foundation.

My Choice

As there is no real choice, I’m left to vote my conscience in the 2012 election.  Unlike the Tea Party – or Occupy Wall Street for the matter – I will not silently hold my nose to vote in 2012, for the reasons stated above.  I have voted in every presidential election since I was of voting age, and this marks the first election in which (a) I am a registered Republican, and (b) I will not be voting Republican.  I will be voting for Gary Johnson, whose record I encourage you to investigate.

I’m left with the question posed by David Boaz of the Cato Institute: “Is it better to vote for what you don’t want and get it, or vote for what you want and not get it?”  If I want politics to change in my lifetime, for a better governing structure for my children, I need to let my vote register in the affirmative, starting now.  At the same time, I have, regrettably, abandoned any hope for a libertarian revival within the Republican Party, at least in the near term.  Libertarians are disjointed, and, I believe, always will be.  That’s our nature.  We hate the status quo, but we hate structured politics as well.  So I hope for a better way forward in 2016, but I’m not holding my breath.

Although he’s ahead in the popular vote now, I’m predicting Romney will lose, as the electoral math is simply not in his favor.  Politics are cyclical.  The 2012 election compares nicely to 2004, with Obama as Bush, and Romney as Kerry.  Like Bush, Obama’s popularity is waning into a tough election.  But Kerry was weaker, leading to a Bush victory.  Therefore, I predict Obama’s second term will be as unpopular as Bush’s, and the GOP, as the opposition party, will rebound and run a new face in 2016, such as Marco Rubio, as the Democrats did with Obama in 2008.  And so the cycle continues.

Robert Heinlein once said, “The human race divides politically into those who want people to be controlled, and those who have no such desire.”  The question I’m left with is how do I want to treat people, and how do I want to be treated?  It’s a question answered by the Golden Rule, and in the second commandment given by Jesus Christ, in Matthew 22:39: “Love your neighbor as yourself.”  I’m voting accordingly.

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Nov 1, 2012

What is Meritocracy?

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I am writing this short response to the premise of Chris Hayes’ new book Twilight of the Elites: America After Meritocracy.  I only want to address one word here – “Meritocracy” – and dispel where this group of elites comes from.

The use of the term “Meritocracy” as a product of the free market is misguided.  The free market cares not what merit is brought to the market by the products in exchange.  The free market only rewards individuals (and groups) by what value their products add to the market.  Any reward of “merit” is either out of consumer altruism, or by regulator coercion.  Hybrid vehicle purchases come to mind.

To summarize Adam Smith, a market economy depends upon transactions, where neither buyers nor sellers are superior.  Both depend on the other to survive.  There is, therefore, no need for force or coercion.  If you want to “stick it to the man,” stop purchasing products with which you disagree on “merit.”  This, however, requires efficient use of vital information.

The only way for businesses to short circuit our freedom of transaction (or the information needed to make an informed transaction) is with government intrusion.  This is force: government favoritism becomes corporatism through regulations.

A meritocratic market is not a product of the free market.  In a free market, the “elites” of the private sector are not invincible.  They become invincible through their collusion with the public sector.

Where does inequality come from?

To determine where income inequality comes from, keep in mind that this collusion merely sets the rules of the game.  Incomes of the private sector elites have risen as new money has entered the system.  Upon analyzing the mechanics of how new money enters are economic system, there is little wonder why funds don’t “trickle down.”

The Federal Reserve buys Treasury Bonds from the Big Banks so new money enters the system, which works its way through the financial system, to the productive sectors of our society, and, supposedly, to the service sectors.  This new money results in weakened purchasing power of the Dollar, which results in higher prices.  Therefore, prices rise faster than wages for those not “at the top.”  Is it any wonder the wages of the librarians, police officers, do not rise as fast as prices do?

Higher prices are the reason for so many of the economic pains our middle and lower classes feel today.  Blaming higher prices on higher profits misses the truth: our central bank, the Federal Reserves devalues every current dollar with every new dollar it introduces.  Our income inequality directly correlates with debt accumulation.  Bailouts, stimulus, and the easier credit of looser monetary policy under Obama have contributed to worsening income inequality, as the chart below shows:

As long as our government borrows 40 cents for every dollar it spends, our central bank has two choices: 1) print more money to make up the difference, or 2) declare bankruptcy.  Admittedly, imposing a 40% cut across the board to the federal government tomorrow will not solve the problem, as Austerity in Greece has shown.  Likewise, imposing the kind of taxes needed to make up the difference will not solve the problem either, as Austerity in France and England have shown.

We must, however, begin rolling back the influence the corporate elite – quickly becoming our Meritocracy – has within our government, to prevent public funds from being siphoned off the top.  By changing the rules, we can restore the free market, and upend the Meritocracy.

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Jun 18, 2012

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