There Needs to Be a Revolution Every 240 Years

Thomas Jefferson wrote to William Stephens Smith:  "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.  It is its natural manure."   He was fond of adding that there needs to be a revolution every 20 years. 

The human mind is rarely able to forecast the future with precision.  In the case of the Federalist government instituted at the state constitutional conventions in the 1780s and the national Constitutional Convention, Jefferson overstated the  case by 220 years.

From its beginning the federal government fulfilled the anti-Federalists' fears. It always has subsidized the wealthy and well placed, and it frequently has instituted elements of tyranny that have waxed and waned with popular opinion. In the 1790s the Federalists passed the Alien and Sedition Act, a direct attack on the Bill of Rights upon which the anti-Federalists had insisted.  During the Civil War Lincoln closed Democratic newspapers and attempted to arrest Chief Justice Roger Taney.  After World War I anarchists and socialists were exiled.  During World War II, Japanese-Americans were confined to concentration camps.  In the post-war period the FBI harassed communists.

Those incursions on civil liberties are small compared to the federal incursions on economic liberties that have escalated since the Civil War.  Until the 1920s, America's had been a limited state, a concept little understood before the 18th century.  Popular ideological commitment to liberty and the limited state allowed democracy to coexist with economic stability.

The American laissez faire, free market approach was able to accomplish several objectives previously unknown to humankind:

(1) an explosion of innovation,
(2) a rising standard of living for all Americans, especially workers, despite erroneous public belief that living standards were falling,
(3) an opportunity for all Americans to start businesses,
(4) a greater degree of freedom than ever previously known to mankind because economic liberty begets civil liberty.

As well, (5), the American economic and constitutional system overcame the natural flaw of democratic systems, class warfare and self-aggrandizement through special interests' capture of regulatory mechanisms, because of public commitment to the limited state and liberty.  In the 19th century government was less than five percent of the economy; today it is more than 40 percent.

In Rise and Decline of Nations Mancur Olson makes clear why democracy leads to special interest lobbying that imposes high public costs.  It may be that there are periods when the public can say no to special interests' influence on the state, but mass movements are fragile and do not last.  Ultimately, the economy's innovative capacity and living standards decline as special interests extract ever greater shares of wealth through regulation, taxation, and monetary expansion.

Olson shows that the reason special interests are successful in a democracy is that the incentive to lobby favors small groups. A given benefit divided among a small number of group members is larger per capita than a given benefit divided among a large number.  With a million group members benefits need to be divided among the million members.  With a single corporation or a single union, benefits need to be divided among a small set of interest groups. This makes organization of the interests easier and cheaper.

The transactions costs of organization and the larger benefit per capita make interests that can be easily organized more effective. This can change over time. For example, the environmental movement has been able to establish special interest groups that have worked in tandem with the United Nations and federal regulatory authorities. Nevertheless, they have done so by forging corporatist alliances.  Without those alliances the current push toward state-enforced, corporatist environmentalism could not have proceeded so far.  

The wealthy have always been small in number, have had greater resources, and have been able to communicate among themselves because they have been concentrated in specific geographic areas like New York and Los Angeles.  From the beginning of American history institutions like the central bank and slavery reflected the ability of the wealthy  to divide a large benefit among a relatively small group.

In his Anti-Federalists, Jackson Turner Main shows that the anti-Federalists were poorer and less organized than the Federalists.   Although the Federalists claimed to be in favor of decentralization and federalism (thus their name), once in power they attempted to centralize the state through the First Bank of the United States, a standing army, and the Alien and Sedition Act. As well, the Constitution broadened slavery (compared to the level that would have existed without the Constitution) by making the Fugitive Slave Law possible.

What prevented special interest capture of the economy was public commitment to limited government.  The American government always reflected the interests of the wealthy, but because its scope was limited, the American economy has been the most successful in history. Progressivism, though, discarded the 19th century commitment to the limited state. Progressives like Richard T. Ely viewed expansion of the state as a good in itself; John Dewey saw democracy itself as an ultimate good.  The administrations of Theodore Roosevelt and Woodrow Wilson discarded the limitations on special interest extraction.  In the Progressives' minds they were saving America from trusts, but the ultimate effect has been to allow full sway to the dynamic Mancur Olson describes, so the trusts have expanded.

The result has been that for the past 40 years the American economy has been dismal, and it is getting worse.  As well, the Obama administration has demonstrated that it is capable of worse tyranny that that of Senator Joseph McCarthy, which the American public has so far accepted with indifference.  These include use of state power to financially harass dissenting political organizations, illegal investigation of more than 100 million telephone records, and a cover-up about President Obama's self-destructive decisions with respect to Benghazi.  Hardly a day goes by without evidence of an additional tyrannical initiative at the federal level.

Americans tend to believe that they have a great political and economic system, but that is no longer true.  My ancestors wisely chose emigration from their eastern European homes, and if you are smart, you are thinking of foreign real estate investment.  Enough Americans favor freedom that a revolutionary movement is possible here. After 240 years, the liberty tree needs refreshment.  

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Letter to Congressman Chris Gibson Re Immigration Reform

Mike Marnell forwarded Betsy McCaughey's video about the gang of eight's immigration reform proposal. 

PO Box 130

West Shokan, NY 12494

June 22, 2013

The Honorable Chris Gibson

1708 Longworth HOB
Washington, D.C. 20515

Dear Congressman Gibson:

The proposed immigration law being put forward by the gang of eight is flawed and should be scotched.  Betsy McCaughey makes several points.  First, community organizations should have no role in the processing of citizenship applications, including those of immigrants seeking asylum.  Community organizations are partisan.  Marco Rubio and John McCain are committing direct partisan suicide by supporting this bill; I was skeptical of Mr. Rubio's conservative credentials before, and they have been discredited now.  

Second, the bill's proposed US Citizenship Foundation is a Trojan horse. It is outrageous that potentially partisan groups like this are being proposed to receive government funding.  Community organizations are fine as long as they are privately funded. They should not receive sanctions of law.  

Third, the Office of Civil Rights should not be involved in border security and enforcement.   

The America I once knew and that you defended is gone.  This is no longer the land of the free.  A government that regulates what you eat, forces you buy insurance, and, like this bill, uses soviets or community organizations to perform government functions is not the government of a free people.   Washington has failed America.  America's can no longer be called a great government.   

Have you thought about transforming the federal government into a defense-and-tariff treaty and downloading all other federal responsibilities to the states?   In its current form, from the Fed's garish monetary policy to social security to immigration regulation to the crackpot environmental proposals being put forth to federal gun control, the federal government is a failure.  I see massive net losses to the public from Washington. The federal government's only useful responsibilities are defense and tariff coordination. 

Sincerely,

Mitchell Langbert

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Engage Mid-Hudson: Bad for You, Bad for Me

 I sent this email to David Church, Orange County (New York) commissioner of planning, and Thomas Madden, planner for the Town of Greenburgh.  Church and Madden led an Agenda-21-inspired regional planning charade called "Engage Mid-Hudson." The plan is packed with lies and superstition.  Church and Madden are front men for Andrew Cuomo and Barack Obama, who are pushing for regional plans that aim to destroy Americans' living standards through ill-considered environmental regulation.  Cutting carbon emissions by some predetermined amount is based on ignorant, junk science advocated in places like The New York Times by badly educated "environmental scientists" who are ill equipped to evaluate the limits of their own training.  Ms. Muller is the public relations officer for the New York State Energy Research and Development Authority, which funded 10 regional organizations with $10 million each to draft half-baked regional environmental plans. The Engage Mid-Hudson plan is here.

Dear Messrs. Church and Madden and Ms. Muller:

I am writing an article for The Lincoln Eagle, an 18,000-circulation monthly paper in Kingston, NY, concerning Engage Mid-Hudson’s regional green plan (executive summary attached) that was released in May.  I have a few questions for you.  Please address these concerns either in writing or by telephone:

(1)    “(The plan) was developed through a consensus-building process. “  At the initial meeting there were a number of protestors who voiced concerns about the plan. The plan does not address their concerns. At one point in the initial meeting you threatened to evict those who were disagreeing, although you rescinded that threat.  You did not appoint any who disagreed to officer positions, reserving your organization’s formal appointments  for connected retired IBM employees like Herb Oringel and other corporate-and-government insiders.  Although you ultimately were cordial in the initial meeting, the plan is misleading because it does not mention the sharp disagreement that was made evident to you and that you have failed to address.  This is also evident on your group’s website, which asks for reactions to the plan but does not permit a negative reaction. 

There is no consensus, and your plan’s claim that there is is a falsehood.  In particular Lynn Teger’s group Citizens for the Protection of Property Rights in the Mid Hudson Region was excluded from the process. If you wish to contact Ms. Teger, she can be reached at teger.lynn@gmail.com . If you do not wish to contact her for her group’s input, I would appreciate an explanation as to your selective choices as to who got to be invited to your charade.  IBMers, yes. Property rights activists, no.  There is no consensus because major opponents of your “non-binding”  plan were excluded.

(2)    You claim that carbon emissions cause global warming.  Yet, here is a graph of 5 million years of climate change, and current temperatures are well below those of five million years ago, when there were no human carbon emissions.  How is it possible that the climate is now cooler than it was before humans existed if climate warming  is anthropogenic?  If you do not know the answer, please explain why you claim to know the sources of climate change in your report, but really you, your consulting firm, Francis Murray, Andrew Cuomo,  climate scientists, and the environmental movement are ignorant about it.

(3)    You make the claim that you aim to “reduce the region’s overall contribution to climate change.” Please produce empirical evidence of any kind that specifically shows that the Catskills and Hudson Valley region make any significant contribution to climate change.  On what factual evidence other than hearsay from your consulting firm and the ignorant parties previously noted do you base this claim?

(4)    How much did you pay Ecology and Environment, Inc. to frame this plan?  The plan is a knock-off of other ICLEI-and-Agenda 21-based plans; a monkey could have copied it off other plans for free.  Please explain why 300 people who supposedly participated in this planning process came up with a model that already exists in hundreds of plans around the world.
 

(5)    In the 1930s, there were the dust bowl storms, which were worse than any storms occurring now.  Please provide me with evidence of this claim: “Critically, climate change can impact the frequency and severity of extreme weather events. The Mid-Hudson Region is already challenged by extreme weather events, particularly flooding, as evidenced in the recent hurricanes Irene and Sandy. “  Was Sandy the first hurricane or storm to affect the region? I think not.  In 1821 a hurricane made landfall in New York, flooding Manhattan to Canal Street. 

(6)    Your report lacks evidence of an understanding of cost-benefit tradeoffs.  Even if windstorms increase by 50%, is that a rationale to curtail living standards by 50%? Please clarify how you calculated the tradeoffs in the report’s many far-fetched, extreme claims, such as that there is a need to reduce automobile use or to force people in rural settings to move to urban ones.

(7)    You write that the region needs to “become radically less energy and fossil fuel intensive while strengthening the regional economy.” Please provide data or empirical evidence that the region needs to become less energy and fuel intensive.   There is no evidence that the regional economy can become stronger without fossil fuels. You implicitly make the claim that it is possible, but there is no empirical evidence that it is.  Please provide some.  You wild, unverified claims amount to superstition, not intelligent policy making.

(8)    The reduction in available farmland was caused by a massive building binge that was funded through sub-prime mortgage lending.  Earlier, the Federal Reserve Bank expanded the money supply over a century, in part to fund energy-intensive centralized agriculture, suburban development, and the automobile industry.  Could you please mention that Andrew Cuomo in 1993 had proposed expansion of home building to include sub-prime borrowers, which led to increased use of farmland for home building and ultimately harmed the financial industry? First, Cuomo advocated massive expansion of private home ownership.  Now he is attacking private home ownership.  Can you please reconcile these wild vacillations in the direction of Mr. Cuomo’s maelstrom?

(9)     You write that you aim to “foster economic development” and “make all growth smart growth.”  The term “smart growth" is vacuous and nonsensical.  Historically, economic growth occurs in the absence of government regulation.  I do not believe that you or your crew of IBM bureaucrats have the slightest idea as to how to foster economic growth.

The best way for New York to grow is to abolish Engage Mid-Hudson and fire three quarters of New York’s vampire government.  Would you please explain your track record in fostering economic development in a state that has lagged the national economic performance for decades? To be precise: What do you know about economic development?  Is Orange County successful in developing economically compared to North Dakota or other carbon energy-developing states?

(10) You make the claim that tourism can strengthen the area’s economy. Do you have any evidence that you know how to develop tourism?  You remind me of the film Roger and Me in which Flint, Michigan attempts to turn itself into a tourist mecca. They succeeded in further damaging their blighted economy--which was not as blighted as New York’s.

(11) Engage Mid-Hudson has no authority to pass legislation or regulation, yet you write in terms of targets. How can you implement targets if you have no authority?

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Wikipedia: Five Million Years of Climate Change

Source: http://en.wikipedia.org/wiki/File:Five_Myr_Climate_Change.png

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How to Profit from Green Starvation

Engage Mid Hudson has released its ICLEI-based environmental plan while  President Obama continues to push for environmental regulation.  Although America can become energy self-sufficient and cut greenhouse gases through exploitation of its massive natural gas reserves, the environmentalist movement, the Democratic Party, and the New York Times push for  regulation and government-sponsored alternative energy schemes that fail at public expense. It is unclear whether they will be successful at inhibiting natural gas exploration because the public cost of reducing energy output will be enormous, and the American public may react at the ballot box as their living standard falls. This is not necessarily true, though, because the public has been made ignorant and foolish by the education system and the media.  Americans are now so dumbed down that they might accept a 50% reduction in their standard of living because of an implanted fear of windstorms. America got through the Great Depression and the dust bowl, but we must impoverish ourselves because of Hurricane Sandy, according to environmental extremists and the American media. 
 
 The situation is worse , though, because environmentalist regulation will lead to mass starvation in the third world.  The left invented the use of junk science to justify destructive economic policies that lead to mass murder, so the mass starvation that may result from today's  green movement is part of a great, bloody tradition.

The Times's complicity with the Stalinist mass starvation in Ukraine through the propaganda and lies of Pulitzer prize-winning reporter Walter Duranty is well documented. (Duranty won his Pulitzer at the Times based on falsified reporting that implicitly denied mass starvation.) During the 1930s Gunnar Myrdal, Swedish, Nobel prize-winning socialist economist, was a leading supporter of Nazism and Hitler.  During the post-World War II era, American universities often apologized for the socialist mass murders occurring in the Soviet Union and in China. In the 1960s American academics like psychologist David McClelland claimed that the Soviet Union's industrial development was so rapid that it would overtake  the United States by 1999--ten years after the real-world Soviet collapse.  McClelland used a "scientific" regression model to prove his point, and who could argue with science? 

In 1972, at a time when the Chinese regime had murdered over 25 million people, the Times ran John Kenneth Galbraith's article about his and fellow economists Wassily Leontieff and James Tobin's trip to China.  Galbraith praised the Chinese system, which by then had committed worse abuses than Hitler had.  Galbraith did not mention mass murder once; mass killing of Chinese dissenters was a matter of indifference to him and the Times.  Subsequently, left-wing linguist Noam Chomsky denied the existence of mass murder in Cambodia, claiming that the commonly accepted numbers of victims of Pol Pot's genocide had been overstated.  Just as the Nazis deny that the holocaust occurred, so did Chomsky argue that there was a less serious mass murder in Cambodia than people thought.

Environmentalism is the latest junk science to pique the left's genocidal lust.  

What do green policies have to do with mass starvation?  The green development scenario aims to reduce carbon energy use, but agricultural productivity depends on carbon energy. Therefore, a reduction in carbon energy will reduce agricultural efficiency and increase hunger. This has the most extreme effect in poor countries.  This is a classic level curve tradeoff taught in elementary economics classes.   Repeated proposals based on UN Agenda 21 to reduce carbon emissions by 30% in places like Great Britain are only the beginning.

In agriculture the less energy used the more land used. Yet the amount of land used has been reduced significantly in recent years because of Federal Reserve, European Bank, and other central banks' monetary policies, which led to the real estate bubble.  Scarcity of agricultural land is most extreme in the third world, where food represents a significant share of the peoples' budget.  Green restrictions on carbon energy production will affect third world agriculture.  The green movement is very much in the left-wing tradition:  its policies will come to the same end as the Times's did in 1930s Ukraine.

College professors, who are on the forefront of green advocacy, will not starve.  Indeed, we intend to profit.  This morning I thought of three strategies to profit from green starvation.  I am not selling my investments in natural gas and energy infrastructure, but I view the following investments as a partial hedge. They will do well in any case.

1.  Agricultural real estate.  There are few real estate investment trusts that specialize in agricultural land.  The only one I could find is Gladstone Land Corporation (NASDAQ: LAND).  It yields a 9% dividend.  It is falling today along with other high-yield securities.  It is a new REIT with a small capitalization; therefore, it is risky.

2. Potash Corp.  Fertilizer will be in demand as land becomes more important to agriculture.  Potash, one of the most important fertilizers, is a scarce commodity (NYSE: POT).  Potash is a Canadian firm, but it trades on the NYSE as well as on the TSX.  Its dividend is over 3%, and its risk (beta) is higher than the market average.

3. Canadian or Australian real estate.  I'm holding off on actually buying a home in one of these places, but they have the highest farmland per capita among all the nations.  It might be nice to know that you can live near an ample food supply.

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Book Review: China's Silent Army

China's Silent Army:  The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing's Image.  By Juan Pablo Cardenal and Heriberto Arajúo. Translated by Catherine Mansfield.  New York: Crown Publishers, 2013. $26.00.

China's Silent Army is a tour de force.  Cardenal and Arajúo have written, and Catherine Mansfield has translated, an exceptional book based on around-the-world journalism from Beijing to the Democratic Republic of Congo to Costa Rica.  Their vivid, beautifully panoramic descriptions of their journeys to suffering third world countries, to Burma's jade mines and to Peru's iron mines, will fascinate any reader, but their great contribution is in their book's on-the-spot reportage about the complex role that the Chinese have played with respect to resource-and-human exploitation in mining, logging, construction, other extractive industries, and, in a few instances, vice.
 

There are at least three levels of implications of the rapid expansion of China's silent army, i.e., the increasing involvement of the Chinese state, Chinese nationals, and foreign citizens of Chinese extraction, with the economies of third world countries.   

First, the silent army is involved in distribution as well as resource exploitation.   The Chinese diaspora-- businessmen and businesswomen who have, since the 19th century, left China but retained links to their homeland--serves as a distribution system for Chinese merchandise and development of Chinese retail investments. These can be seen in massive distribution centers that have been built in places like Dubai.

Second, the Chinese have developed a formula for exploiting third world human-and-natural resources; the book carefully recounts it.  The Chinese formula is this:  offer infrastructure and financial subsidies, as well as graft, to third world politicians and dictators in exchange for much more valuable natural resource rights.  The infrastructure subsidies include Chinese construction of stadiums, roads, and public works.  In exchange for, say, $5 or $10 billion in such projects, which are presented to the host countries' rulers as completed or turnkey ones--which they can use to garner public support--the governments sign away resources worth, say, $50 or $60 billion.

Put another way, third world rulers who have short time horizons, who are corrupt, and who are unconcerned about future generations, are willing to trade $5 billion in football stadiums and roads for $50 billion in natural resources.  Moreover, there is frequently a cognitive issue: the third world rulers are not adept negotiators and may not do the math, as seems to have been the case with respect to Hugo Chavez's oil deal with the Chinese.   

Moreover,  in the third world countries some Chinese firms often maintain racially based pay differentials between Chinese and indigenous workers that they justify (in accordance with simple free market models)  in terms of signaling or compensating differentials: Chinese workers are more reliable, in the view of some Chinese firms.   This kind of pay differential is illegal in most of the world for obvious social equity reasons. It is remarkable that the economic endeavors of a socialist state frequently witness racial and ethnic discrimination.

 

According to the Chinese imperialist formula, indigenous workers are underpaid and subjected to serious health-and-safety risks, often for a small increment in profit to Chinese firms.  The authors point out that the Chinese themselves, even within China, are also typically underpaid and subjected to health-and-safety risks. Indeed, there are cases, recounted in the book, where Chinese nationals are duped to take jobs in Africa and then treated as little more than slaves.   This pattern raises a question as to the real meaning of the Chinese economic miracle:  Is it a primitive, unsustainable form of mercantilism based on human and environmental exploitation?  The authors present a balanced view, and there is no doubt that the buyers of cheap Chinese merchandise around the world, including the third world as well as the United States and Europe, benefit.  But is the benefit of cheap manufactured goods going to last forever?  If it does, will the low wages to Chinese and third world workers continue forever?  

One of the downsides to mercantilism is that it does not emphasize innovation.  In The Power of Productivity William Lewis emphasizes the importance of the organization of work and free market innovation to increasing productivity.  The Chinese invited the world's best manufacturing firms to open up shop in China, but it seems that the Chinese have continued along the path of what Lewis calls resource-intensive development, which cannot sustainably elevate the world's standards of living.   Because the Chinese mercantilist model rests on cheap labor and natural resources and not technological innovation, it may not lead to progress.   In the US, 40 years of wage stagnation has run parallel to the Chinese economic miracle, and the incentive for breakthrough innovation seems to have been reduced (but not eliminated) by the ease of moving factories to low-wage China.

The third level of implications is that when it comes to military and social issues, there is a long-term versus short-term paradox.  While the Chinese claim to think long-term with respect to investments in third-world countries' infrastructure in exchange for longer term payouts in the form of oil, iron, jade, and other resources, when it comes to adopting risky strategies with respect to transfer of nuclear technology to Iran or threatening Taiwan and other countries located near the South China Sea or on the Mekong River, the Chinese seem to think short-term.  The same is true of their attitudes toward labor relations and the environment.  They are remorseless polluters;  for example, they are willing to defoliate the Siberian forests without concern for replanting or sustainable harvesting.  The West learned these lessons a century ago; China's short-term thinking about pointless risk taking with respect to transfer of nuclear materials and technology, labor relations, and the environment,  should benefit from the West's recent errors, but it does not.   

China's Silent Army  is first and foremost a human drama that hearkens back to Dickens and even  further back to the era of mercantilism in Spain, Britain, Holland, and France and to the imperialism that is concomitant with the mercantilist, resource-based model of economic development.  An irony that runs throughout the book is that the Chinese state, which adopted socialism, an ideology based on rectifying human exploitation, has become exploitative on the level of the most rapacious periods of European state capitalism.  

 In the end, I wondered whether the Chinese economic miracle is not about, more than anything else, the narcissism of the Chinese communist leaders.  The Chinese people suffer and the third world workers suffer.  In exchange, the world gets cheap consumer goods, the profit from which the Chinese state uses primarily to enhance its own--and its leaders'-- power. The world seems to have struck a bargain with Chinese socialism to unsustainably ravage the environment in illogical deals that provide us with cheap t shirts and watches.

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Just Say No to King Hussein's Crank Environmental Policies

King Hussein's administration doesn't know sh*t from shinola about climate change, but his army of scientists on the take don't shy from making politically motivated predictions.

I just sent this email to King Hussein:

Dear King Hussein:

You should fire Energy Secretary Ernest Moniz and Agriculture Secretary Tom Vilsak, and, because you are factually wrong, you might  reconsider your claim that global warming is accelerating.  Going around saying  “the science is settled” confirms that you, Moniz, and Vilsak are badly educated.  Science is never settled; ignorant people think that it can be.

Claims of extremely rapid global warming are  nonsense.  The dust bowl in the 1930s was a worse storm period than now.  Someone recently compared the models used by your ideologically motivated "scientists" with observed mean temperature increases. The reality is one fourth of the projections, so the models are wrong.  

Your scientists' models are 75% off target.  In economics that is excusable (although no competent economist would claim to be able to predict the future), but in physics a 75% error is junk.  You sound ignorant, bub, when you go around making predictions based on junk models.  

King Hussein, you aim to cripple our economy based on scientific newspeak.  Your administration is a destructive maelstrom.

Sincerely,

Mitchell Langbert, Ph.D.

Political Editor, Lincoln Eagle

PO Box 130

West Shokan, NY 12494

Ubi libertas, ibi patria

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