Category Archives: Current Events

The Trade-Offs of Bailout

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There is an extensive belief that: if the government can hand out money in a crisis, why it can’t do more of that during normal times? It’s quite a common belief because nobody learns that economics is the study of trade-offs. A former student delighted the nerd in me and emailed me to help understand the consequences of such a policy of direct cash “stimulus” to alleviate the crisis. Here was my response:

The idea should raise red flags, but how harmful the results are can depend on a variety of other factors.

The basic economic logic is that because money is not wealth, simply injecting money into the economy (if there are no other mitigating factors) will increase price inflation.

However, the Keynesian explanation (the economic theory behind this sort of stimulus/bail out) does seem plausible on first glance. Advocates of this would say something like:

“Because business are not able to keep staff productive and working (both because they stay home for safety, and because their clients are staying home and not buying stuff), a direct cash payment to people will both help them survive financially, but will also encourage people to spend that money, which means that the coffee shop actually has more money coming in again, which means that they are then able to hire more workers, and so forth.”

Again, that seems to be plausible. It seems both benevolent to individuals and is alleged to spur economic growth more generally. I’ll tackle both of those two things in turn.

First…

The problem is that in economics there are always trade-offs. First of all, where is the money coming from? Well, it’s coming from either…

1) current taxpayers (“here’s your money back”)

2) from future taxpayers (debt)

3) from printing money out of “thin air” (which is a tax on people’s money because it causes the value of money to decrease…inflation).

I could argue about the problems with the first source, but I don’t think I need to. The problem is, of course, that the bailout money will have to come from the latter two because the U.S. government already spends (annually) all its tax revenue and then another half-trillion on top of that. So it will borrow (which transfers a debt burden to future generations) or print (which causes price inflation).

Actually, the latter two will be essentially the exact same thing. When the government borrows money, it gets it out of thin air from the Federal Reserve, which then “buys” the debt by “making” the money (adding zeros to the Treasury’s balance). The Fed may or may not then sell those bonds to a bank, which would pull already existing money out of circulation and mitigate price inflation, but it doesn’t have to. It almost certainly won’t in this case, since their goal is more money in the economy.

So the inflationary effects are caused by either option 2 or 3 above.

Of course, many people will likely be legitimately helped in the short run. Again, there are benefits, and there are costs.

As for the inflation issue, there is legitimate concern.

In the 2008 crisis, there were bailouts, but most of the newly created money went straight to banks, which then held on to it because they were worried about more instability, which I think really restricted the price inflation we saw then (money doesn’t cause price inflation if it doesn’t circulate into the economy). This time, if they give so much directly to Americans, I’d be concerned of at least a short run of rapid inflation (probably not hyper inflation). I can’t predict the future, because there may be forces at work I don’t see. For example, if Americans hold on to a lot of that cash for a while and don’t spend it, you may not see the price inflation right away, it may just cause a slightly higher inflation rate in the mid- to longer- term. But historically, times when governments have started injecting money into the economy directly has always caused a period of rapid, or even hyper inflation, especially when the economy is contracting the production of goods and services (producing less), as it is right now with so many people staying home. The more they give, the worse the potential consequences. Worse case in history: the Weimar government paying German workers in the Ruhr not to go to work in 1923–that caused hyperinflation worse than anything the world has ever seen. Do I think it’d be that bad here? I highly doubt it, but obviously any price inflation affects the very people intended to be helped.

And that gives us the framework for understanding the second part:

Second…

On the broader goal that this is supposed to stimulate economic growth (the Keynesian idea of “priming the pump”—technically called creating “liquidity”), or, at least, slow the economic recession, that goal is offset by inflationary effects. People aren’t made better off when prices increase, for obvious reasons.

But what about keeping businesses open and so forth? Well, yes, some business may stay open that might have closed. Some workers might remain hired that would have been fired. I grant that. Again, economics is about trade-offs.

Fundamentally, however, you have to look at other costs–what is given up. We’ve looked at inflation. Let’s look at another one, and this gets at the very core of the matter:

People buying things isn’t what causes economic growth or a rising standard of living. You could give everyone 100 oz of gold in the Middle Ages, and sure, they could all go buy more shoes, clothes, horses, etc, right away before prices caught up and the gold became less valuable. The blacksmiths and cobblers and seamstresses would have been delighted…for just a little while. But what actually causes the standard of living to rise? It was the saving and investing that allowed for innovative technological advances. When saving is channeled into research and development to create new capital (machinery, computers, etc), that’s what creates more economic efficiency and raises real (inflation-adjusted) wages.

If everyone is out spending a lot of money, they are saving less money, which means there is less available for those investments that take a while to develop or invent. Imagine if Thomas Edison had just spent all the money on fancy clothes and shoes and nice homes that sustained him and financed his research while he worked on the light bulb! No light bulb, at least from him.

Back to our previous medieval example… let’s say one person chooses to take 100 oz of gold and use it to pay for his basic necessities for a year while he works on a new fertilizer that will ultimately quadruple agricultural output, making food cheaper and less labor-intensive for everyone. That one person has done more for everyone else because he invested his money rather than spent it. That’s how the economy grows.

A couple final points:
– Inflation encourages spending rather than saving. If you know your money is going to buy less in the future, are you more likely to buy stuff now or wait to buy stuff later?
– Spending reduces the amount of money that goes into investment.

Long story short: cash like that might really help some individuals and small businesses in the short run (and who’s complaining about getting an unexpected check?). In the short run, it might also cause some serious price inflation, but even if it doesn’t (and I certainly hope not), you will certainly see higher price inflation in the mid to longer run. And ultimately a bunch of spending makes it look like there’s a flurry of economic activity, but under the surface, it’s like a college student getting a bunch of extra money and going out and spending it all. Things seem really good for a time–nice car, nice TV, etc–but really, he is no better off economically in the long term.

(And none of this looks at the consequences of adding that amount onto the federal debt. But this is way too long already.)

The Public Service of “Price Gouging”

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Every time another natural disaster threatens havoc, media and layman alike come prepared with their rhetorical scourge for the price gougers: those who would dare take advantage of severe shortages to rake in a windfall in times of crisis at the expense of the helpless. Surely, it must be the most selfish of mankind who would stoop to such deplorable practices. Government, come the cries, must stop this public menace with price controls and steep penalties for violations.

Selfish desire to take advantage of a crisis may indeed be the motive of the so-called price gouger, but a focus on motives in crisis should not divert our attention from very real economic incentives and consequences. Contrary to popular opinion, the price gouger, in fact, serves as an important step in alleviating a food and supply crisis. And to stop him only encourages hoarding and delays a return to normalcy.

How can this be? To charge $10 for a bottle of water forces households to spend possibly hundreds on such an essential resource. And $500 hotel rooms inland from a hurricane’s path may cripple a low-income family’s savings. The pain felt by “price gouging”, especially by those of less means, is too obvious to ignore.

But we need not ignore it. We must instead understand the positive effects of “price gouging” and the negative impacts of price controls to prevent it. That is just my intent.

First, price gouging encourages rationing in the most equitable way.  In times of crisis, severe scarcity is inevitable; there is no way around this. Resources in crisis become a product in high-demand, which is exactly why prices rise so quickly. Fewer resources relative to the demand for those resources push prices upward, and steeply in crises. Such high prices then cause people to limit purchases of such vital resources and goods to just what they need. This, in turn, leaves more for everyone else.

To impose price controls, on the other hand, encourages hoarding. What’s to stop the first people who get to the store from purchasing far and above what is absolutely essential for their needs, leaving less for everyone else?[1] And of course, those with the greatest difficulty of reaching stores—the elderly, sick, or disabled without adequate family support, or those without transportation—are those who will end up being hurt the worst. “Appeals to people to limit their purchases during an emergency,” Economist Thomas Sowell writes, “are seldom as effective as raising prices.”[2]

In times where mass evacuations may otherwise drive up hotel room prices, price controls encourage less efficient use of space. A large family may rent two rooms for comfort rather than uncomfortably squeezing into one if prices are not allowed to rise, leaving fewer available rooms for others. At a time when space is at a premium, its most efficient use and rationing should be encouraged, not discouraged. Sowell writes, “The role of prices in allocating scarce resources is even more urgently needed when local resources have suddenly become more scarce than usual.” Likewise, he adds, “When the local population wants more hotel rooms than there are available locally, these rooms will have to rationed, one way or another, whether by prices or in some other way.”[3]

Second, so-called price gouging will be the most effective means of alleviating a shortage. If a single bottle of water in a crisis area can earn a massive profit margin, and thousands or millions of such bottles windfall profits for a water bottle company, then water bottle companies will go through great lengths to be the first to bring supplies into a disaster area. And to take a slice of the earnings, they must be one of the first, for they know that competition will soon also rush into the area and very quickly drive prices down to normal levels. (Of course, the same is true for batteries, flashlights, gasoline, et cetera.)

It is just this competition to be the first to capitalize on the high prices that drops prices again and brings vital supplies into a disaster area. Yes, there will always be a praiseworthy effort by many individuals, businesses and charities to bring in supplies, but to remove the profit-incentive from high prices necessarily delays a complete re-supply of the necessary resources needed to alleviate the shortage of a severe disaster.

In cases such as Hurricane Florence where the disaster zone is more or less predictable, the opportunities for high prices would draw in more resources even before the disaster. Sowell makes this case:

“Supplies of all sorts of things that are usually needed after a hurricane strikes…are more likely to be rushed to the area where the hurricane is likely to strike, before the hurricane actually gets there, if suppliers anticipate higher prices. This means that shortages can be mitigated in advance. But if only the usual prices in normal times can be expected, there is less incentive to incur the extra costs of rushing things to an area where disaster is expected to strike.”[4]

Sadly, the political gains of a ban on “price gouging” derived from the public praise of such policies deprives disaster areas of important economic incentives that would otherwise alleviate such a crisis faster or perhaps even in advance. The politician has much to lose from ignoring price spikes and much to gain from stopping them. Those impacted by the disaster, on the other hand, miss out on the public service provided by so-called “price gouging”, a service more equitably rationing much-needed supplies and more quickly alleviating a shortage.

[1] This is not just logical deduction, but is what has consistently been recorded as happening in cases like Hurricane Katrina and Sandy. For example, in the aftermath of Hurricane Sandy in 2012, the Wall Street Journal reported the following: “At one New Jersey surpermarket, shoppers barely paused for a public loudspeaker announcement urging them to buy only the provisions needed for a couple of days of suburban paralysis. None seemed to be deterred as they loaded their carts to the gunwales with enough canned tuna to last six weeks. … Shoppers take no risk in buying out a store’s entire supply at the normal price.” 

[2] Sowell, Thomas. Basic Economics. © 2015, Basic Books, New York, NY. Page 63.

[3] Ibid, 61.

[4]Ibid, 62.

Thumbnail photo credit goes to the Foundation for Economic Education.

A “Sort Of” Win for the Cake Baker

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A “win” for the Colorado Christian cake baker?

Yes.

Sort of.

(This originally was sent out as an email. While I typically reserve special additional content like this just for subscribers, I decided this one would become a blog post.)

As I teach my Government students, it is often not the immediate decision of the Supreme Court that matters in the long run, but the implications of the decision.

On the surface, the Court might seem to be a significant win for religious (and specifically Christian) liberty supporters, like myself. After all, the Court claimed that the Colorado Civil Rights Commission, which brought the original charge against the cake bakers, had expressed extreme anti-religious bias against the cake-baker, and accordingly not ruled fairly.

The ruling declares that “as the record shows, some of the commissioners at the Commission’s formal, public hearings endorsed the view that religious beliefs cannot be carried into the public sphere or commercial domain, disparaged Phillips’ faith as despicable and … compared his invocation of his sincerely held religious beliefs to defenses of slavery and the Holocaust.”

So far, so good. Right?

What the opinion says here is factually correct, and for us Christians, the charge against the cake baker by the Commission is concerning. So shouldn’t we sigh a sigh of relief if the Commission is not allowed to get away with this based on their anti-Christian sentiments?

Justice Kagan, in a concurring opinion, confirmed that the Civil Rights Commission was not being neutral enough.

Does anyone see the problem with this, however?

The Court was saying, in essence that, “because the Civil Rights Commission was too biased against something we think they should not have been biased against, we will not allow them to force the bakers to bake a cake for a gay wedding.”

Or, in other words, “pick something that we feel is more neutral or a more just cause, and next time we will let you control the labor of another person.”

So, while I agree with the ruling, it leaves the door wide open, based on the values of the Court majority. And even though I firmly agree with that value in this ruling, all it takes is another Court composition to find a slightly modified decision and use the brilliantly tangled language of legalese to declare similar cases to be not too-biased. “Just be nicer,” says the Court, “don’t be so mean, and next time we might rule in your favor.” Or, “we feel like the bigoted behavior of the Commission was worse than the alleged ‘bigoted’ behavior of the cake baker.”

In other words, it missed the whole issue, which is one of property rights, as I lay out in my post, “Bake the Cake…? Property and Discrimination.”It’s a subjective weighing of the Commission’s bigotry against the alleged ‘bigotry’ of the cake baker that only takes a later court to “feel” differently about.

I have studied law and jurisprudence long enough to know that this case will not serve as a protection against similar lawsuits in the future with a more progressive Supreme Court. The language of the decision alone is hardly enough to prevent future Court decisions from getting around it easily. And, on top of that, it’s squishy enough that other Civil Rights Commissions will be happy to “give it another go”, spend plenty of money putting Christians businesses out of business and casting a chilling effect for those who might just refuse to serve someone with whom they choose not to association. More such charges will be forthcoming.

To some readers, of course, this will bolster the justification for electing presidents who appoint legally-conservative justices, such as the recent appointment of Gorsuch (who I have very-much liked, so far). That is fine as far as it goes, but that’s a band aid on a hemorrhage. The real issue is one of property rights. Unless that black-and-white and principled position becomes the topic of debate, this case is necessarily a temporary win.

It is more than likely that, as culture changes and the state becomes more powerful, more of this sort of thing will happen. Don’t forget that litigation takes years and millions of dollars. So let me change the tone right here before the end of my email.

Will we Christians be bold enough to face the legal persecution anyway? Will we fight to persuade those around of the truth of God’s love and standards? Or will we cave to “respectable opinion” in order to avoid ostracism and possible legal battles?

I’ll leave you with two articles. The first is an eye-opener and not to be read lightly; it’s not an easy read, but I think very important for my Christian readers (but not for younger readers).

“State Enforced Paganism in America” (from The American Thinker)

The second is also important. If you haven’t, give it a look. (This one is safe for younger readers.) As I continue with this education and thought-provocation project, I am led more and more away from just clarifying the issues, but to challenging Christians, in light of the dismal realities, to be bold witnesses for Christ. That is what is truly important:

“Will They Know We Are Christians?”

Thumbnail photo credit goes to foxnews.com.

Reflections on Possible War in Syria

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As many Americans, led in part by advisers closest to the president (and celebrated by the media), begin to itch for another war to overthrow Assad in Syria, there will be many among my peers and friends who disagree with me. So let me clear a few items.

First, I may be adamantly opposed to your position on the matter, but I will still treat you respectfully and respect our friendship.

Second, there is a moral contradiction in any war that attempts to “export American freedom and democracy.” Nations like Syria have virtually no tradition of democracy. And even the great visionaries of the world must deal with the cultural realities of the places in which they seek to intervene.

Third, U.S. interventionist policy in the Middle East, from replacing the semi-democratically elected prime minister of Iran in 1953 and bolstering the power of the king, to supporting the Taliban and Al Qaeda in the 1980s, to supporting Saddam Hussein that same decade in war against Iran, to then throwing him out and placing Iran’s allies in power in Iraq, to throwing out Ghadaffi in Libya… have all resulted in serious unintended (to give the benefit of the doubt) consequences. Fighting against Assad is, in effect, fighting with Salafist (Islamic extremists) groups such as ISIS.

Fourth, the number of people killed in nations where the U.S. has intervened is far higher since these interventions (see video in the comments). Especially for Christians, moral consistency means that while we are pro-life of the unborn here, we are also pro-life globally. American bombs and drones have also killed thousands of men, women and children. That doesn’t mean we must be pacifists, but the Christian view of war ought to be considerably more aligned with what Augustine and later thinkers developed into the Just War Theory (which I discuss here), or the theories of modern conservatives of the 1940s, such as Russell Kirk.

Fifth, strikes against Russian-backed Assad lure the U.S. closer to direct conflict with Russia, which has also been strengthening ties with China and Iran. Given points three through five, even if we abandon principle and do a simple and pragmatic “cost-benefit” analysis, intervention still has a far less-than-stellar record. Is it worth the risk?

Sixth, if you have not, PLEASE read up on the history of the Middle East and the history of American interventionism. Here is my series on the modern Middle East, well worth the time to read if you want to understand what is going on much better:

Modern Middle East Series

Part 1: Under the Ottomans

Part 2: Protectorates to Military Rule

Part 3: Roots of Radical Islamic Movements

Part 4: The Current Mess in Syria

 

Also, Watch the Following:

Sanctions and the People of North Korea

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Sanctions are one of the most commonly used passive aggressive weapons by the United States government against regimes acting against its interests. These come in many kinds, from basic trade embargos to restrictions on access to international banking, et cetera.

And President Trump has recently announced a new wave of sweeping sanctions that are, as claimed, tougher than any previous against what he calls the “rogue regime”—North Korea.

While he is right with the adjective of choice regarding Kim Jong Un’s government, he—and his predecessors—overlook a key reality about the people of North Korea that render these sanctions virtually powerless.

To explain this, we need to understand the lives of the people of North Korea (and by extension, the people living under other repressive regimes, such as in Cuba or Venezuela). This may be an especially challenging task, given our lack of similar circumstances, but let us start with this basic assumption. That is, that the people of North Korea are attempting to live as normal lives as is possible given the circumstances. In the video interview at the bottom of this post, Michael Malice shares his unique insight on just this reality. Normal life in North Korea is a far cry from that of a middle-class American, of course. But North Koreans—those not attached directly to the regime—are largely doing their best to live as normal lives as they are able.

Even more significant in our understanding is this. They have also been—for three, almost four generations now—“educated” by a regime that preaches the glory of their great leaders. Their reality—what they truly believe—is that the United States, collaborating with their allies in the south, invaded Korea as an expansionist and imperial empire, seeking to replace the brutal previous Japanese occupation with their own. The gallant North Korean army firmly resisted and—in heroism paralleled by the Greek victories over the Persians—ultimately prevented the great and tyrannical United States from conquering their homeland. And from that day onward, their great leaders have valiantly defied the world and maintained the independence of North Korea. How much worse, they are told, would things be, without the unbending courage of their leaders?

And when three generations have been taught this, with so little real information trickling in from the outside, what else do we expect them to believe?

With that as the context, then, let’s examine the effect of sanctions.

First, what is the intent of these sanctions? In this case, the consequences caused by the various restrictions are meant to pressure Kim Jong Un’s regime to halt their program of expanding the distance capacity of their long-range missiles and reducing the weight and size of their nuclear warheads. The idea: keep them from developing a nuclear missile that can reach American shores.

But will they work?

Given the context we have already described, it is easy to draw a few simple conclusions. The regime itself may be hardly affected by these sanctions; of everyone in North Korea, the politically connected will not lack for food or comfort. To the extent that sanctions harm anyone, it is the average, every-day, not politically connected North Korean. The ones struggling to live normal lives in one of the most terrible places to live on earth.

So why should we expect different when the narrative structure is already in place for their government’s message to be readily believed? That message? That the great evil of the world—the United States—is seeking once again to crush their nation for its own expansionist agenda.

It does not matter that the regime itself is to blame for the misery of the people within its security fences and guard towers. What matters is what the people believe. To the extent that sanctions cause greater suffering by restricting some goods entering the nation that might otherwise make their way in, it is cause for the people to see their stalwart government as ever more valiant in their defense. And it does not matter if these sanctions add more suffering to the people; the very presence of sanctions gives their own government a handy scapegoat.

Don’t get me wrong; I intend no insult to the North Korean people. It is pity and compassion, rather, that would look at this indoctrination and understand it for what it is. And it is the same pity and compassion that understand the detriment of sanctions that feed into this very indoctrination.

On top of this, Kim Jong Un understands something crucial. Without nuclear weapons that can reach American shores, he is at risk of going the way of Sadam Hussein, Mohamar Ghadaffi and others. To be a nuclear power and a threat to Israel (in the case of Iran) or the United States is to have a seat at the international table of diplomacy. In effect, to be taken seriously. It is not without reason the U.S. has avoided full-scale military deployment in Pakistan–a nuclear power–to round up the Taliban. Does this make Kim Jong Un’s goal noble? Of course not! But it does help us understand how determined he is; sanctions that harm his people more than they harm him will hardly serve as deterrent.

There is hope. As Michael Malice makes clear, the black market for food may be too pricy for many, but there is no such premium on the black market of information. Information is getting in. Perhaps the people of North Korea may be ever more privy to the reality that it is their own government most to blame.

But it is not sanctions that will get the work done.

Perhaps—and I may bring the scorn of all who share the moral vision that justifies sanctions—but just perhaps, it may be better to open all possible trade with North Korea. To extend the arm of diplomacy. To offer dialogue, not wield the economic sword. To do the opposite of feeding the narrative of lies that most North Koreans have only ever heard.

There are two roads that will bring down the North Korean regime (and with it, their aim of nuclear weapons), if anything can. The first is a direct American attack on the small country, resulting in the death, no doubt, of many Americans and many more North Koreans, South Koreans and perhaps even Japanese.

The second is sufficient dissent within the country, as happened in Poland in 1980. Or in Berlin in 1989. Of course, these could be brutally put down; there is no illusion about that.

But what is certain is that there is already a belief system within North Korea that the United States government has to accept. And sanctions—or even direct military action—already have a place in that narrative. The lies are too far engrained.

Thumbnail (and internal) photo credit: nedhardy.com

Photo at top of article credit: The Washington Post

Jerusalem the Capital? Here’s the History

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A few weeks ago, in the immediate wake of President Trump’s decision to move the U.S. embassy to Jerusalem, I filmed a brief lecture of the last 100 or so years of Israeli history–history that so few people are actually taught– condensed into 14 minutes.

You can learn even more about the history of the modern Middle East in my series on that subject, starting with this post.

Bake the Cake…?! Property & Discrimination

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“It’s a violation of religious freedom!”

“How dare you discriminate against gay people; that’s a violation of their civil rights!”

So which is it? Is forcing the cake baker to bake a cake for a gay wedding a violation of their religious rights? Or is refusing to serve a gay couple a violation of their civil rights? Which is the real issue?

Neither.

I’m speaking, of course, of the recent case, Masterpiece Cakeshop v. Colorado Civil Rights Commission, a class action suit challenging business discrimination of services for gay events (or gay people more generally).

Let me break this down as concisely as I can in a series of points that will, I hope, give a clear picture of what the real issue is here, and the implications.

  1. First, is this a religious liberties issue? Yes and no. The first amendment of the Constitution contains five major protections: speech, religion, press, assembly and petition. Regarding religion, there are two clauses. The first states that government may not infringe on the “free exercise of religion,” and the second bars the government from “establishing” a religion. So it is my contention that the first amendment alone is not enough to argue this case. The real argument carries far more leverage. The 9th amendment alone does a better job.

 

  1. Is this a civil rights issue? Well, again, I will refrain from answering this directly; stick with me to the end as I make my case. Still, what would be the constitutional argument for this position? The argument for this would be premised on the 14th Amendment, an often misinterpreted amendment that protects peoples’ rights to the “equal protection of the laws.” This has been the Amendment used to argue for an end to discrimination based on race, gender, et cetera. The ACLU will certainly disagree, but I find it hard to make the connection between ensuring that all people are treated equally under the law (ie, the law cannot make different provisions for different classes of people) and give the government the power to force an individual to serve another individual against their wishes.

 

  1. So if the real issue isn’t either of these, what is the real issue? This is an issue of property rights. Who owns you and your labor? A Facebook critic and debater claimed that, while I own my own labor, the government can force me to use that labor equally for those they believe I should serve, effectively preventing me from discriminating. But if I can be forced to use my labor to serve someone I choose not to—for whatever reason—is that not, in so far as it goes—government owning my labor?

 

  1. Or you can look at it another way. To force a person to sell their labor to another is to say that the customer owns the labor of the other. Do you really own your own labor? To the extent that someone must use their time, resources and labor to serve you, is that not a violation of their property—themselves and their labor? In most places, we’d call that servitude.

 

  1. If someone says they refuse to serve balding red-heads, I may be upset and offended. But I am not entitled to their labor. On what moral basis can my demand that they serve me overrule their right to their own time, labor and resources? They may be foolish, petty and even morally stunted, but that does not give me title to force them to serve me or quit work altogether.

 

  1. But what about the argument: “You’re not forced to offer that labor; you can go out of business instead.” Yes, this is a frequently-used argument, though it’s put in more humanitarian terms: “We only ask [demand] that if you choose to sell your labor, you sell it equally to everyone [who we chose].” Okay, okay, so I put in my interpretation. Well, isn’t it re-assuring that our labor is only owned by the government (or the person being served) if we choose to … work? Catch the sarcasm.

 

  1. And the other argument. “It’s only servitude if it’s uncompensated. The cake-baker would still have been compensated, so it’s not actually servitude if we tell him how to use his labor and resources.” So we can choose to work or not. If we choose to work, we are forced to use our resources and labor to serve whoever the government says we should. But not to worry; we’ll get paid for it. Argument settled, they say. Really?

 

  1. “But discrimination is terrible! We must use the power of the state to end it!” Well, discrimination can be terrible. It can be morally reprehensible. It can be immature. It can be rather benign and inconsequential. And many times, it can be quite prudent. Not serve someone because of the pigment in their skin? Not serve someone because you’re supporting a lifestyle you believe is immoral? Not serve someone because you think they’re dangerous? Not serve someone because you don’t like them? The rationale for discrimination can run from idiotic to prudent, to a mere question of moral belief.

 

  1. We all discriminate all the time. Discrimination has become a deeply negative word due to its historical association with racial discrimination. But discrimination is simply freedom of association: there are people we would rather associate with and there are those we don’t. As I said, unfortunately, some people have foolish and morally decrepit rational for their choices of association. Sometimes its quite prudent (I won’t employ a child molester to babysit). Sometimes, it’s a question of moral belief, such as the case with the cake baker refusing to use their time, money and labor to make a cake for a gay wedding.

 

  1. Exchanging your goods and services with others (ie, starting a business) does not suddenly remove your property rights and give control over your labor to the government or society at large. This point addressed again a bit later.

 

  1. Consider my response to a Facebook debater who spouted many of these arguments I’ve discussed: “Are you okay with the logical extension of that argument? On that line of reasoning, anyone who exchanges goods or services with anyone else may no longer choose who to exchange those goods or services with… I presume here that you wouldn’t make exceptions [in order to remain consistent]. For example, you must also offer your services to pedophiles, Nazis, child porn marketers, et cetera, according to your argument, if the government saw fit. Either that or quit offering goods or services to anyone. … My point is that it doesn’t really matter what the reasoning is for discrimination. If you force someone to offer their (even compensated) labor to someone they disagree with, you have to equalize it everywhere and to EVERYONE. Unless, of course, using the power of the state to force people to offer their services to people they would rather not is really just subjective and based on whoever the state (and their constituents) want to.” I later reiterated my question: “So, you’re okay with the government forcing you to sell your labor to Nazis, pedophiles, people who sell child porn (so long as you’re not assisting them in something illegal, as you said), et cetera, fill-in-the-blank? You never and would never discriminate for any reason, and if you did, you’d be okay with the government using force to stop you?” He never answered.

 

  1. I was finally able to get my debater to cede something: After claiming multiple times that we do own our labor, but not offering for a justification on why we could be forced to use that labor against our wishes, he finally admitted that we really don’t own our labor 100% because we are in “contract” with society, and thereby have already agreed to give up full power over our labor because of this. In his words, “entering that contract [offering services for sale] does give the government some say in how you distribute and sell your labor. “ What I couldn’t get from him was how, in fact, we agree to any such “contract” simply by exchanging goods or services with others.

 

  1. Besides, do we really want to equip the government with the subjective power of determining who has a right to your time, labor and resources?

 

  1. If you haven’t, yet, there are two other key posts you have to read related to this: “Negative v. Positive Rights” and “The Tale of the Slave.”

 

  1. A couple of closing points. First, it is the trademark of progressivism to use the power of the state to force whatever change on society that its adherents see fit. This was true during the French Revolution, during which Robespierre and others thought anyone who did not actively (even beyond passively) support “the civil state” were guilty of treason and ought to face capital punishment. It is still seen today when Progressives destroy property in their attempt to silence speech that they do not like. Or try to create “safe spaces” on college campuses where “offensive” things cannot be said.

 

  1. On that last point and as my final point, that is why arguing a case like Masterpiece on religion alone is insufficient. If your religious views do not align with the vision of progressivism, there is no moral or religious argument that can satisfy. But when it is understood correctly that the real issue is the violation of property rights (which is the basis of religious liberty, anyway), then the argument in favor of refusing the gay couple the services of the cake-maker are property bolstered and understood.

Thumbnail photo credit goes to bustle.com. 

 

Catalonia & Secession

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As the Catalan pursuit of independence crisis heats up and edges ever closer toward significant violence in that pursuit, it seems a prime time to share some thoughts on secession.

To premise, I have a strong patriotic streak for both my countries–the United States and Peru. And so that may premise (and hopefully alleviate opposition to) what many people might find radical. Not that I care primarily about alleviating strong opposition; I expect to come across plenty of it in this and other posts.

But nevertheless, here are five key points I want to point out in the discussion of Catalan secession/independence. As usual, I am not here on a soap box, but rather hope to provoke thought.

First, the notion that we are one nation, rather than a collection of nations, wasn’t the original vision of the United States held by the Founders (with perhaps a few exceptions), and yet I don’t think anyone would accuse them of lack of patriotism. It’s just that their patriotism lie first with their country (state) (or perhaps even moreso with their local communities) and then with the federal union of their states, and last of all with Great Britain, even though nearly 1/3rd of all Americans were still quite patriotic to Great Britain and opposed secession. (That means fewer Americans were for secession from GB, and yet even more–apparently–prepared to fight, die and kill to gain it, than those in Catalonia.)

Second, true and historical conservatism emphasizes the natural, organic and (traditionally, as it were) Biblical concepts of loyalty and relationship. Whereas political boundaries are fundamentally arbitrary (from a human standpoint), as the case in Spain points out (the Catalans don’t even speak Spanish as their primary language), the true and valuable relationship and groups and bonds have nothing to do with political boundaries. The Father of Conservatism and English politician, Edmund Burke (who I discuss here), supported the American Revolution because he believed they were fighting to preserve their political, legal and economic traditions of localism and self-government. If California seceded, my relationship with people in California (where most of my extended family lives) remains unchanged (it may take a few more steps to visit them, but then, should we have a one-world government so I can more easily visit my family members who live all over the world?) For myself, per Philippians 4, I am a citizen of heaven, loyal first to the Lord (at least, that is my striving), then my family, my local church, my associations (ie, the school where I teach), and the global church. Only after those come my town, state, and country. That’s a large part of what it meant originally to be conservative. True, meaningful and genuine relationship does not change based on where we draw a political boundary.

Third, large centralized states are the antithesis to liberty. Take the one-world government example. The more distant the seat of power and the larger the jurisdiction, the less important an impact the local regions and the people in them hold. Hitler hated states rights, and writes openly so in Mein Kampf, because he understood that he could not achieve his agenda if he did not have absolute and total control. Germany had been a federation of sovereign nations until unification in 1870-1, but even then the German states still had numerous elements of sovereignty that Hitler sought to dissolve entirely. Consider the contrast between the words of British Politician Lord Acton and German Nazi Leader Adolph Hitler.

“I saw in States’ rights the only availing check upon the absolutism of the sovereign will…. ” – Lord Acton

Nearly 60 years later, Hitler would write:

“[The Nazis] would totally eliminate states’ rights altogether: Since for us the state as such is only a form, but the essential is its content, the nation, the people, it is clear that everything else must be subordinated to its sovereign interests.” – Adolph Hitler

In addition to the last point, smaller political jurisdictions are more prone to facilitate liberty for the same reason Hitler hated them. Don’t like the system here? Move over there. That’s obviously easier said than done (though the smaller the units, the easier it is), but it’s certainly easier than escaping the oppression of a distant government, such as the Tibetans in China.

Fourth, there is no need for a change in political boundaries to have a long-term negative effect on economics, so long as people can trade freely across political lines. You see this clearly in the European Union, the Pacific Free Trade Zone, et cetera. If Catalonia secedes, for example, there would be no natural reason (though there could be artificial ones) that they couldn’t continue to trade with Spain and the rest of Europe, in or out of the EU. The same goes, in theory, for Great Britain with regard to Brexit, though the EU may impose various tariffs as a way to “punish” them. There will be temporary economic decisions to be made that might unsettle the waters for a bit, but is that enough justification to force a people–against their will–to remain within a certain political boundary? The same argument could be made of the American Revolutionaries, who openly declared they would go to war for what the Catalan people have so far tried to achieve through peaceful referendum (the violence there a tragic result, but not intent, yet). If California seceded and no artificial barriers were imposed, resources would flow across the border just as before and we would still get much of our produce from California, just like we do from Mexico, Guatemala, Chile, et cetera.

Fifth, where do we place the burden of proof? One social media comment raised an interesting point: our perspective tends to change when we consider our own country.  This person made the point that it’s easy to sympathize with the Catalan people, but reject any such notions shared by our neighbors. “I favor Catalan independence, but heaven forbid Texan independence.” But how do we justify he discrepancy? If the U.N. suddenly becomes more powerful and declares all countries involved to be the U.N. Nation, for example, does the burden of proof suddenly fall on the U.S. to demonstrate overwhelmingly why it has a right to secede? Do you assume that the central government always has a right to maintain the peoples within its borders unless they can either fight for or 100% prove “why” they should be independent? Is there any objective measure that can be used to say, “this group has the right to secede and this group doesn’t”? Where do you draw the line? On economic grounds? On grounds of patriotism? At what point does the larger political unit no longer get to subordinate the smaller to its control? Can we both favor Kurdish secession because of the oppression they have experienced under the Iraqi Arabs and at the same time oppose Catalan secession, or Californian secession, because we don’t think they have a good enough reason? Or is any form of disallowing political secession a form of oppression?

Thumbnail photo credit: bbc.com

Trump’s “Historic” Budget Proposal…?

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For those who missed it, I decided to turn my recent email about Trump’s Budget Proposal into a blog post.

…

“Trump seeks historic cuts to government,” the headline reads.

And then proceeds to say, “The Trump Administration on Tuesday will propose the deepest cuts to government programs in a generation.”

So which is it? Historic cuts? Or the deepest cuts in a generation? Or have we gotten so accustomed to massive budgets (which the Congressional Budget Office predicts will run at an annual average of a half-trillion dollar deficit fiscal years 2017-2021) that the largest cuts in a generation are considered “historic”?

The article I am referring is a headline on TheHill.com, which you can read here.

As you read on, it is based on three points: “cuts to anti-poverty programs, optimistic economic forecasting and deep cuts to nondefense discretionary funding.” At he same time, the coming budget is intended to leave Medicare and Social Security alone, and increase the Defense budget.

Let’s examine this a bit closer:

First of all, major anti-poverty programs began with Lyndon Johnson. Interesting statistic: By modern standards, the U.S. poverty rate fell from 95% in 1900 to around 14% by the mid/late 1960s (when the “War on Poverty” and its spending programs began), where it has consistently hovered. In inflation adjusted dollars, spending on anti-poverty went increased by 8.1 times from 1964 to 1996 alone (in-depth analysis at “The Legacy of Johnson’s War on Poverty”). Surely, even if you favor the social safety net, the cost/benefit analysis ought to at least be re-considered.

Second, regarding optimistic economic forecasting, the most recent recession was the 2008 Great Recession. For a century, recessions have happened on average no less than every 7 years. Now, I believe there are rather clear reasons for economic recessions other than “it’s just a downside of capitalism” (which I’ll get to eventually), but whether you rely on historical pattern or economic theory, there are plenty of reasons to think that recession may be around the corner. I wish I had time to get into all of them here.

Third, non-military discretionary spending is a fraction of the budget, ranging from around 9-13% of the total budget, years 2011-2017.

Fourth, Social Security and Medicare are the two largest current and coming budget black holes. As of today, the total unfunded liabilities (unfunded planned payments due to be paid out at existing rates and with projected population trends) for these programs is estimated to be $106 trillion, and some studies have put it as high as $200 trillion. That’s a tax liability of $884,037 per taxpayer (source: usdebtclock.org).

Let’s just say that whatever this “historic” budget proposal is, you will have it decried as some evil hatred of the poor and progress, or praised as some remarkable achievement for which to shower praise. Either way, it’s a bare drop in the fiscal bucket of liabilities.

What do you think? Is this a step in the right direction? Harmful? Join the new Facebook discussion group at the LCKeagy Forum and let’s discuss it, or anything else of interest.

Race vs. Culture

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Culture is different than race, and yet, the two are often confused.

Warning. I am about to enter politically incorrect territory. Ironically, it may even earn me the accusation, “racist” (which I’m not). But I have a very simple point to make, albeit it one that won’t win me any brownie points in today’s PC society, and one that I have not observed made virtually anywhere, let alone among the regular information sources or media.

Allow me to begin with a practical and personal qualifier.

First, let’s define racism and clarify what we mean by race. A google search turns up this definition of racism: “prejudice, discrimination, or antagonism directed against someone of a different race based on the belief that one’s own race is superior.” Race is often (although not always), especially in the United States, considered correlative to a person’s skin color, but the basics of race don’t preclude various differences among peoples of similar pigmentation, such as the historical Franks, Germans or Slavs of Europe, among whom differences in physical appearance were minimal.

At best, the idea of “race” is a loose description of a person’s biological heritage . At worst, race is a pathetically invented and gross distortion of biological heritage, whereby people with various amounts of pigment in their skin are “grouped” in a category of “race.” (I have written on the dangers of collectivism here.)

Race is a meaningless concept to me insofar as it has no impact on any conceptions I have about people. To have pre- or post-conceived ideas about someone, let alone condemn them as inferior, because of their skin color or their biological heritage is—forgive the unprofessional language here—stupid. Period. Still, that genuine racism seems entirely irrational and illogical (not to mention immoral) does not make it any less real, and I don’t intend to pretend otherwise. To do so would require ignoring historical and present (if overstated) realities. Many Nazis truly believed in the superiority of the “Aryan race.” Many Americans in U.S. history really did believe in the inferiority of the “African race.”

But I didn’t come to write a sermon on the topic. And while that is a rather long qualifier that some readers will think I simply put in there for the purpose of remaining politically correct (despite my initial warning), I really don’t mind ensuring that I am not misunderstood. My main point is not compromised.

And we’ll get to that now.

Culture is different than race. Culture is the vast array of traditions, norms and features of a society. And while cultures are vastly nuanced and complex, there are distinct differences between them. Given my own aversions about collectivist thinking, I do not believe that any individual should be viewed first and foremost for any cultural tendencies; this is as irrational and wrong as racism. They are an individual first and foremost.

And so long as we understand that norms and tendencies are laden with exceptions and must be held very loosely, we can still evaluate the aggregate. Cultures differ. It is common in “U.S. culture” (good luck trying to tie that down!) for people to ensure that aging parents are entrusted to an elderly care facility, whereas in “Central and South American cultures”, you will often find extended family, parents and grandparents all living under one roof. Whether this is the product of wealth disparity or other factors are entirely beside the point. I’m not playing anthropologist here, simply making an external observation that helps demonstrate cultural differences.

This is my key point: The problem is that many people confuse culture and race. Many people fail to recognize that a cultural critique is not racist simply because there is a correlation between people of that “race” and people who share that culture. The only way you make that connection is on the assumption that a person’s cultural norms are the result of their biological heritage or race. This has no scientific or logical defense.

How do you jump to the conclusion that a person is racist simply because they take issue with an aspect of a culture different from theirs?

Here’s an example that will get me slandered in politically correct groups. It is a cultural norm in Islam that men have complete political and personal authority. Women are not given legal representation, and in moral matters pertaining to Islam, many men are given the responsibility to stone their wives if there has been any real or alleged infidelity. Many men in Islamic culture are prone to this position of dominance over women (and this is not unique to this culture), a cultural difference that is currently causing cultural clashes in Europe. None of this has anything to do with race. And yet somebody out there is ready with the label “racist”.

But some will recognize my logic and go for “ready-to-use” insult #2: bigot. A bigot is defined as someone who “is obstinately or intolerantly devoted to his or her own opinions and prejudices” (Merriam-Webster). Still, how did you reach that conclusion? I made an observation regarding cultural tendencies in one specific area.

So, if cultural observations are often confused as racist remarks (a logical fallacy), and those who make such observations are often considered racists and/or bigots, then what can we draw from this?

First, prejudice, regardless of the reason, is a tragic and natural tendency of human nature. I’m not digging into the reasons for this here. Nevertheless, I believe adamantly that it is wrong for me (or anyone) to hold prejudice of any kind, whether I exalt myself and degrade others for my gender, my “race”, my intellect, my level of education, my culture, my skin color (or lack of it), et cetera. If I think less of Muslim men generally because of the cultural tendencies from which they come, that is the real issue, not the observation made. I believe equally adamantly that charity and compassion should always describe our view and action toward any individual.

Second, and as I have said before, recognize the individual first. Collectivist thinking is a logical fallacy, and the individual should be recognized for who he or she is, not for his or her biological heritage or their cultural tendencies.

Third, don’t get confused by the tendency to confuse cultural observations as racist remarks. Recognize the skewed reality that is perpetuated around us, sometimes by habit and sometimes deliberately. To call someone racist for a particular commentary on something that is cultural is, in and of itself, an empty argument that merely perpetuates the collectivist thinking that is so problematic in the first place.  It’s a non-argument.

Sadly, there is truth in the words of economist Thomas Sowell: “Some things are believed because they are demonstrably true, but other things are believed simply because they have been asserted repeatedly.”*

*Video link here.