10 Reasons Gary Johnson is Not a libertarian

Gary Johnson is the Libertarian Party’s presidential nominee for 2016.  But just because he is a Libertarian, it does not mean that he is a libertarian (small l).

In 2012, Johnson was also the nominee.  At that time, I think many hardcore libertarians thought of Johnson as a nice guy, but somewhat of an intellectual lightweight.  Over the last 4 years, instead of reading up and learning about libertarianism, Johnson has become less libertarian, probably for political reasons.

Some libertarians will insist on voting for Johnson just to get the libertarian name out there.  The problem is that it is misleading to non-libertarians who don’t understand the philosophy.

Here are 10 reasons that Gary Johnson is not a libertarian.  The list could go longer though.

  1. Gary Johnson does not believe in freedom of association.  He originally stated that a baker should be compelled to sell a cake to a gay couple for a wedding.  He later said that just because the baker has to sell the cake, it does not mean he has to decorate it.  While there is likely only a small percentage of Americans who believe in freedom of association, it is a cornerstone of libertarianism.
  2. Gary Johnson picked Bill Weld as his running mate.  While the Libertarian Party ultimately nominates the vice presidential candidate, Johnson pushed hard for Weld, the former governor of Massachusetts.  Weld is not even close to being a libertarian, as he recently endorsed John Kasich for president.  This choice by Johnson alone tells you that he is not dedicated to libertarian principles.
  3. Gary Johnson surrounds himself by non-libertarians.  Johnson and Weld recently said that Mitt Romney would have a place in their cabinet, if he was willing to accept.  One of the positions mentioned was Secretary of State.  Is there any true libertarian that could possibly consider Romney for such a position?
  4. Gary Johnson does not oppose the federal war on drugs.  He continually says that marijuana should be legalized, but this is a long way from saying that the federal government should not be prohibiting any drugs.  He does not support the legalization of other recreational drugs.  It is unconstitutional and should be left to the states.  From a libertarian standpoint, drug laws are immoral as they establish victimless crimes.
  5. Gary Johnson was not really fiscally conservative as a governor.  He likes to brag about his record as governor of New Mexico.  But the fact of the matter is that the state budget was far higher when he left office as compared to when he entered office.  He may have been better than average as governor, but this is not really saying much.  He did not change anything fundamentally in terms of getting rid of major government programs or taxes.
  6. Gary Johnson cited Milton Friedman as an influential libertarian for him.  He stated this in an interview in 2012.  While Friedman was good on some issues regarding the free market, he was quite weak from a libertarian standpoint when it came to central banking and school vouchers.  Friedman also helped institute the withholding tax.  But it isn’t just Johnson’s endorsement of Friedman that is troubling; it is his complete lack of knowledge of well-known figures within the libertarian movement.
  7. Gary Johnson does not believe in a non-interventionist foreign policy.  He is certainly much better on this issue than Hillary Clinton, but we can’t be certain that he is better than Donald Trump.  When Johnson was asked about ISIS, he said he would get Congress involved.  But as president, he could withdraw troops almost immediately from around the world.  He does not take a bold stance like this.  It is easy for him to say that he will be more cautious, but we really need a radical change in our foreign policy.  If Johnson is getting advice from Bill Weld and Mitt Romney, you can be certain of more war and interventions.
  8. Gary Johnson believes in man-made climate change and favors carbon taxes.  He can insist that these are not taxes, but this is exactly what they are if people and businesses are not free to do business without buying these so-called carbon credits.
  9. Gary Johnson does not explicitly advocate ending the Federal Reserve.  To be fair, when asked about this, he has said that he would not veto a bill to end the Fed, but he mostly focuses on auditing the Fed and reviewing its efficiency.  If ending the Fed is not on his agenda now, we can be certain that it would not come up for discussion if he were actually president.  The issue of central banking is not listed as an issue on his website.
  10. Gary Johnson does not know how to properly define “libertarian”.  When he is asked what a libertarian is, he typically responds that he takes the best of both worlds from both parties.  He says that libertarians are socially liberal and fiscally conservative.  He does not ever bring up the non-aggression principle or voluntarism.  He does not state that government officials should not be allowed to do what is illegal for everyone else.  He does not discuss the idea of not encroaching on the person or property of others.  Libertarianism goes far beyond being fiscally conservative and socially liberal, which isn’t even true.  For example, you don’t have to be socially liberal to be a libertarian.  You just have to not want to use government force to impose your views on others.  If Johnson cannot even provide a good definition of the term libertarian, then it will be tough for him to defend libertarianism.  Perhaps Johnson is a libertarian according to his own definition.

Gary Johnson is not a libertarian.  He may take a libertarian or libertarian-leaning position on some issues, but he is far from the complete package.  And even here, we cannot be certain that he is not just playing politics.

He called Hillary Clinton “a wonderful public servant” (call this reason number 11).  He goes after Donald Trump personally.  His pitch right now is mostly that he is not Trump or Clinton, so you should vote for Johnson/ Weld.  Because of the nature of the race and the candidates, Johnson may end up with the highest vote total ever for the Libertarian Party.

But what will this accomplish?  Will he actually convert anyone to libertarianism (outside of his own definition)?  Will he advance the cause of liberty in any significant way?  Will he get people enthusiastic about libertarianism?

In the remote chance that Johnson were actually elected to the presidency, we can’t even trust that he would reduce government power in any significant way.  When most people are elected, they typically enact all of their bad policies that favor bigger government, while they ignore most of the things they said about reducing the size and scope of government.  If you don’t go in with firm principles and specific details on how government will be cut, then a reduction in government power is not likely.

Gary Johnson is not a libertarian.  You can use this information in the way you deem best.

Will This Country Implode Economically?

When you look at government debt, government spending, and central bank inflation, it is sometimes amazing that things can putter along as long as they do.  In many ways, it is a testament to the free market.

Libertarians often focus on the bad things that government does, thinking this will overwhelm society.  Yet, despite the massive interference, markets often find a way around things.  Technology and growth continue, despite the intervention.  Growth is a lot slower than it would be otherwise, but it still continues to some degree.

There is one country in particular though that puzzles me, because it seems that things have just hummed along for far too long.  This is the story of Japan.

The stock market in Japan (the Nikkei) topped out at almost 39,000 in 1989.  It is now around 16,500, just 27 years later.  For anyone who says that stocks always go up over the long run, talk to a Japanese investor from the late 1980s.  I guess if you think long term is 50 years or more, then maybe this is still accurate.

The Japanese central bank did maintain a relatively tight monetary policy throughout the 1990s and 2000s.  It is more recently that massive monetary inflation has been tried.

Despite the claims, there was never any severe deflation in Japan.  There may have been years with very minor price declines, but it was really mostly flat.  When you live in a world of ever-increasing prices, stable prices look like deflation.

Yet, during this time of relative monetary stability, the national debt continued to grow.  And interest rates stayed low.  This means that Japanese government debt was being bought up by private investors, and perhaps foreign central banks.  It is only in recent years that the Bank of Japan has been buying most of the Japanese government’s debt.  This is why they have been able to maintain negative interest rates.

It is just ridiculous how much the debt has grown in Japan.  According to this site, the debt-to-GDP ratio in 2015 was 229%.  To put this in context, the U.S. is considered very high with a ratio of just over 100%.

This is still serviceable with the low (including negative) interest rates.  You probably get tired of hearing the question asked, “What happens if interest rates rise?”  But this is a legitimate question.

Things can fall apart really quickly.  Due to some crazy loyalty or blindness by Japanese investors, this game has already gone on way too long.  You could see some kind of an economic implosion in Japan, with a depression that hasn’t been seen in a modern-day first-world country.

I actually hope it happens sooner rather than later for the sake of the Japanese people.  The longer things draw out, the more pain there will be in the future.  Things are already looking bleak as they are.

We should also hope this happens so that things don’t continue to get worse in the U.S. and elsewhere.  The U.S. Congress continues to run massive deficits, and this is during the time of a supposed recovery, along with a time of low interest rates.  It will not take much for the annual deficits to explode above $1 trillion again.  This is with the national debt getting ready to go past the $20 trillion mark.  It is also during a time when baby boomers are retiring and the unfunded liabilities of Medicare and Social Security continue to increase.

There is going to be a massive worldwide correction at some point.  It is hard to see exactly how things will play out.  My suspicions are that Japan will be one of the leaders, if not China or Western Europe.

Japan makes Greece look solvent by comparison though.  Japan is still far richer from the previous wealth built up from the last few generations.  But it seems they are consuming more than they are producing now, and resources are being misallocated on an unprecedented scale.

Japan may be the big story to watch over the next few years.  It is Keynesianism on steroids.  It is almost as if Paul Krugman had taken over the economy for the last few years.  It isn’t going to end well.

We can only hope that Americans learn the lessons that we will soon witness coming out of the Japanese economy.

CPI Update – August 2016

The latest Consumer Price Index (CPI) numbers are out for July.  While the CPI came in flat, the median CPI was up by 0.2%.

Over the last 12 months, the CPI rose 0.8%.  The median CPI was up by 2.6%.

I always have to give the qualifying statement that the CPI numbers are not necessarily an accurate measure for price inflation.  If anything, they are probably understated.  Still, these are the numbers that many economists use, including Federal Reserve officials, and they are also useful in determining trends.

I like to follow the median CPI because it is less volatile.  Year-over-year, it was coming in at 2.5% for the last three months.  Before that, it was 2.4%.  With it now hitting 2.6%, this shows an upward trend, although it is nothing to get too excited about.

I believe there continue to be strong forces on both sides of the price inflation tug-of-war.  It is amazing that the CPI has remained as stable as it has.

There was a lot of monetary inflation from the Fed from 2008 to 2014.  While much of this new money is bottled up in excess reserves held by banks, it is still inflationary nonetheless.  We just don’t get the dramatic effect of fractional reserve lending.

The Fed stopped its QE3 program in October 2014.  It is approaching 2 years now.  This will mean that the dislocations from the previous monetary inflation will get revealed as malinvestment.  This will have a recessionary effect.

However, there is a time lag for everything.  While the market will attempt to price in certain events, even upon announcements or expectations, the actual flow of money through the economy takes some time.  Prices don’t instantly rise when the Fed monetizes debt.  Prices don’t instantly fall when the Fed stabilizes the monetary base, or even sells off assets.

The expectations for significant price inflation remain low, at least according to bond investors.  With interest rates so low, even on long-term bonds, it is an indication that investors are not demanding any significant extra compensation for dollar depreciation.

I continue to recommend being mostly conservative in this environment.  There is strong potential for a major downturn, but it is hard to predict the timing.

As long as the price inflation numbers are coming in relatively low, the Fed will not likely hesitate in printing more money (digitally speaking) when a downturn hits.  It will be QE4, or whatever it is called.  The government deficits will also get worse, and Congress will rely on the Fed to monetize some of the debt.

Even though Congress is still running huge deficits (in a supposed recovery), the Treasuries are being bought up by foreigners or private investors.  Rates are remaining low, or even going down, despite the Fed not currently buying assets (except for rolling over maturing debt).

As long as the CPI numbers stay low, the Fed will not feel inhibited in being aggressive with its monetary policy should the need arise.  Of course, this is the wrong policy, as it just prolongs the problems and misallocates more resources.

Since we can’t depend on the Fed or the federal government to do the right things, we have to prepare based on reality.  And the reality is that we should expect more monetary inflation in the future.  This will ultimately benefit those invested in commodities, but it will hurt virtually everyone in terms of living standards.

Libertarian Opinions on the Olympics

As the Olympics close in Brazil, it is interesting to reflect on the games and the politics involved.  As a libertarian, I would like to share my opinions, with the realization that some libertarians simply despise the Olympic games.

From a libertarian standpoint, there are obviously several things to not like about the Olympics.  The first thing is that much of it is funded through the taxpayers (i.e., through the threat of force).

It was especially hard to watch the Olympics take place in Rio De Janeiro, Brazil because it is a third-world country.  The government is spending billions of dollars while millions of Brazilians live in poverty, perhaps some on the brink of starvation.

Every country has its poverty, but it is especially bad in Brazil.  Even in comparison to China, it just seems far worse.  We know there is poverty in China, especially in the rural parts.  The state controls almost everything in China, yet leaves parts of the market economy to somewhat function.  Still, China has well over a billion people and the overall poverty is not quite as grinding as in a place like Brazil.

As a libertarian, I don’t think taxpayers anywhere should have to pay for the Olympics.  There is no reason it could not be 100% funded (including the facilities) through voluntary donations.  There are plenty of corporations and rich individuals who would contribute, perhaps for a little advertisement.

There are other political elements that are disappointing as well.  It was probably a corrupt process that led to Rio being the host city in the first place.  And then we nearly saw the entire Russian team banned because some were using banned substances.

In addition to the host city (and country) having to seize taxpayer funds in order to host the events, it is also well-known that governments pay huge sums in order to train their athletes.

This article discusses the economics of it, and also points out that the United States is one of the few countries that does not have its government subsidizing the Olympians.  Yet, the U.S. collected the most medals, despite China having a population about four times as great.

This is a great economic example of where voluntarism works better than the use of force.  There is no denying that the Chinese now, and the Soviets in the past, have had some great success at winning Olympic medals.  But at what expense?

The Chinese (and others) are trying to train tens of thousands of athletes in the hopes that a few of them will win medals.  Is it for national pride?  Is it for prestige?  Meanwhile, the ones who don’t make it get cut with nothing to show for it, all of a sudden finding themselves looking for work with few skills outside of their specialized sport.  And this is all funded at the expense of the general population, most of whom are living in poverty.  Talk about a misallocation of resources.

From this perspective, I actually do cheer for the Americans.  I also understand that people generally will cheer for those whom they identify with.  If you live in Topeka Kansas, you are more likely to cheer for someone from Topeka than someone from Los Angeles.  You are definitely more likely to cheer for that person than someone from South Korea.

Unfortunately, I also don’t find it that appealing watching NBC when everything is revolved around the greatness of the Americans.  Many of these sports are individual events, and I see nothing wrong with acknowledging individual greatness, even if the person is from another country.

I know some Americans will disagree with me on this, but I did not at all care for Lilly King, one of the American swimmers.  She was obnoxious and rude and kept going after the Russian swimmer for supposedly not being clean.  Of course, the story is far more complicated than that.  I was actually cheering against King because I found her too obnoxious.

I know some libertarians find the whole Olympic games objectionable, but I personally enjoy watching the sports and the competition.  I also enjoy watching the generally good sportsmanship, especially between individuals from different countries.

When Michael Phelps was getting ready to swim one of his races, the media was blowing up the story about one of his competitors stretching (and sort of taunting) in front of Phelps before the race, as Phelps sat there with an angry look.  But when the race was over, they congratulated each other.  And overall, I found more competitors were humble and gracious at the end, as opposed to not.

I will continue to enjoy the Olympics in the future, despite the political elements.  Let’s just try to convince the world to stop stealing from poor people (or any people) in order to fund these games.  It can be done voluntarily.

Liberty in the U.S. as Compared to Brazil and Others

The current mix of political and Olympics news involves swimmer Ryan Lochte and 3 of his swim teammates. They claim they were robbed at gunpoint, and now Brazilian authorities have prevented two of the swimmers from leaving the country due to possible inconsistencies in their stories. Lochte was also supposed to have his passport seized, but he had already left the country.

I typically don’t like commenting on fresh stories because there will inevitably be more details that come to light. My initial reaction is that I doubt that four Olympic swimmers would make up such a story. It’s possible they could have embellished certain things or not recalled certain details. They were returning from partying late into the early morning and were all likely intoxicated.

The crime is really bad in Brazil. It was a concern about having the Olympics in Rio di Janeiro. The swimmers were probably stupid for leaving the Olympic village. But the Brazilian officials wanting to question the swimmers more and possibly bring charges against the athletes, only makes Brazil look worse.

The Brazilian officials don’t want to look bad, so they are, in effect, punishing these swimmers for reporting on this crime. But they are just going to make the Brazilian government look more corrupt than it already is. This is a high-profile story and public opinion will be against the Brazilian government. It will be interesting to see what the U.S. government does if they try to extradite Lochte. I think American public opinion will keep him here in the U.S.

This is a good reminder for Americans that they really should be thankful for what they have. I know that libertarians get hung up on injustices. And to be sure, there are many. But the U.S. is still far ahead of most other countries in certain key areas. There are three areas where I see American individualism and liberty coming in far ahead of other supposedly free countries.

The first area is free speech. Again, I understand things are not perfect in the U.S. Dinesh D’Souza was sent to prison for essentially making a movie critical of Obama. The charges were for illegal political contributions, but the handwriting is easy to see.

For the most part though, Americans can say pretty much whatever they want, as long as it isn’t threatening violence. There is harsh criticism of politicians and other government officials. This is not tolerated in other countries. And it isn’t so much that it is tolerated by those in power in the U.S.; it is just that public opinion protects free speech in most cases.

The second area where the U.S. is far better than most other places is homeschooling. Perhaps this is more symbolic, but it is important nonetheless. It is a view that children belong to their parents and not the state. In the supposedly free country of Germany, homeschooling is essentially illegal.

The third area is gun ownership. The American public owns more guns than anybody else in the world. The Swiss supposedly have widespread gun ownership, but this is basically mandated by the government for their militia. Voluntary gun ownership in the U.S. is by far the highest in the world on a per capita basis. Despite the attempts by some to institute further gun control, the public support just isn’t there. Americans don’t trust their government to be the sole owners of guns.

In conclusion, the U.S. has certainly declined in many areas in terms of liberty. But there are areas where things have gotten better. And compared to a third-world country such as Brazil, the U.S. really is a paradise.

10 Reasons We Will See a Recession Soon

We can’t predict the markets with any absolute certainty, and we certainly can’t predict the timing of events.  Still, there are signals we can pay attention to that indicate a possible recession in the near future.  Here are 10 reasons that a recession is likely close at hand.

  1. The yields on long-term U.S. government debt are near all-time lows.  The 10-year yield is around 1.5%.  Bond investors are indicating fear, as they lock in long-term rates, even at low levels.
  2. The yields on short-term U.S. government debt have gone up, even if slightly.  Although these rates are still low, they are no longer right near zero.  When you couple this with the fact that long-term rates are falling (see point number 1), there is a flattening yield curve, which is a classic indicator of a recession.
  3. All three major U.S. stock indices recently hit all-time highs on the same day.  This was the first time this happened since 1999, which was right before the tech bubble came crashing down.
  4. The last two major recessions happened right before or right after a presidential election.  Both Bush and Obama entered office with a recessionary economy.  While this by itself does not guarantee a recession, it seems to be the trend of one president leaving a mess for the next.
  5. The Federal Reserve has only hiked its key interest rate once since setting its target near zero in late 2008.  When the Fed hiked the federal funds rate by a quarter of a percent in December 2015, stocks went down in January, temporarily providing some fear for stock investors.
  6. The Fed now comes up with a new excuse every time it fails to raise its target interest rate, despite continually promising to raise it in the future.  Is there something these Fed officials know that they aren’t telling us?  Why are they so scared to raise the federal funds rate from historic lows, when the economy has supposedly recovered?
  7. Despite low interest rates, banks have piled up massive amounts of excess reserves.  While this has helped keep a lid on price inflation, it is telling that the banks would prefer to collect 0.5% (previously 0.25%) interest from the Fed on their reserves rather than lend out the money.
  8. The misallocations that resulted in the recession in 2008 were never allowed to be cleared out.  The financial institutions were bailed out, along with the car companies.  This just prolongs the inevitable, unless the Fed and government plan to bail out these companies forever.  Since General Motors and Chrysler were bailed out, it just means that they were allowed to continue making the same mistakes.  This is a massive misallocation of resources.
  9. Since the fall of 2008, the Fed has approximately quintupled the adjusted monetary base from about $800 billion to $4 trillion.  This money creation produces a massive misallocation of resources.  So while the misallocations were never fully allowed to correct from the last recession, this massive monetary inflation has only made things worse.
  10. Since the huge monetary inflation from 2008 to 2014 (see above), the Fed has actually maintained a tight monetary policy.  The Fed ended QE3 in October 2014.  The Fed pumped up its asset bubbles with its so-called quantitative easing programs, but now we have had almost two years of relatively tight money.  The Austrian Business Cycle Theory tells us that this tightening is going to lead to an inevitable bust.

So while we can’t guarantee a recession is going to happen in the near future, there are many reasons that it looks likely.  You should prepare yourself accordingly.

Central Bank Buying of Corporate Bonds

The Bank of England (BOE) recently announced a cut in its key interest rate, along with a new round of so-called quantitative easing.  This is nothing new amongst major central banks over the last several years.

The only major central bank with a tight monetary policy right now is the Federal Reserve.  It ended its QE3 program in October 2014.

One thing that caught my attention in the BOE’s announcement was what it will be buying.  Included in its asset purchases is corporate bonds.

Historically, central banks have bought government debt.  In the case of the U.S., the Fed’s policy was to buy U.S. government debt in the form of Treasuries and bonds.  It was only until after the fall of 2008 that the Fed went outside of this historical norm and started purchasing mortgage-backed securities (MBS).  The purchase of MBS was a pure bank bailout.

Now the BOE is buying corporate debt, and not just its own government’s debt.  This just further distorts markets and resources.

It is bad enough when these central banks tamper with the money supply and interest rates.  The buying of corporate bonds just adds to the cronyism and corruption.  At least in this case it might be a little more obvious.

These central banks have literally unlimited amounts of money.  That is how they purchase these assets.  They create money (or digits) out of thin air.

When you have a major central bank buying corporate debt, it is really going to drive prices in the market.  The interest rates on corporate debt should go down.

It would be hard to imagine that there won’t be any favoritism/ cronyism from such a setup.  Imagine if the Fed had such a program.  Any time a politically favored company had any trouble, the Fed could just buy corporate debt from the company to keep it afloat.  This could include car companies, financial institutions, “green” companies, etc.  The companies with the most lobbyists and political connections never have to worry about going under.  The Fed could just always buy more debt to keep operations running.

And if a company is not in favor, then the Fed can just let it sink.  It can pick the winners and losers.

This would be a terrible misallocation of resources.  It would allow for virtually endless bailouts.  It means that companies could operate at a loss and continue to keep their doors open.  They would be just like government entities in a sense, where there is no profit or loss system.

The Fed is not doing this now (except with the banks in the form of interest on reserves), as it is keeping its monetary base flat and just rolling over maturing debt.  But if the economy stumbles and the Fed announces another round of QE, it would not be surprising for the Fed to include this in its arsenal.  It is an easy and direct way to bail out any company that it wants to help.

The Bank of England may just be doing a test run for the other central banks right now.  It is just more potential cronyism that we have to look forward to in the future.

Why Doesn’t Your Toilet Work?

Are you ever frustrated that your toilet just doesn’t work like it should?  Are you constantly facing clogged toilets?  Do you ever wonder why something like a toilet would work so poorly in the 21st century with our advanced technologies?

The lack of properly working toilets is not due to a lack of innovation in the toilet industry.  It is due to us living in something of a nanny state.

There is virtually nothing in our world today where the government does not interfere.  This includes our trips to the toilet.

In 1992, George H. W. Bush signed the Energy Policy Act into law.  Part of this law mandated that new toilets meet a standard maximum of 1.6 gallons per flush.  This ushered in the era of low-flush toilets.

The law went into effect on January 1, 1994 for residential buildings and January 1, 1997 for commercial buildings.

Just as with Obamacare, the federal mandate followed a similar law in Massachusetts that had passed a few years earlier.

If you live in a house with toilets from 1994 or later, then you probably understand the problem here.  My kids have even been capable of clogging the toilets, and that it without shoving huge wads of toilet paper in there.

So if you want to blame anyone for your lack of properly working toilets, you can point the finger to George H. W. Bush and the 1992 Congress.  Of course, any Congress and president could have easily repealed this since that time, but they have failed to do so.

One thing that libertarians quickly realize about government laws is that they almost never fulfill their stated objectives.  In fact, it is typical for laws, especially at the federal level, to accomplish the exact opposite of their stated purposes.

You can see this all around.  The government wages a war on poverty, and they end up creating more poverty.  They wage a war on drugs and now you have drug dealers pushing drugs on kids in school.  The government passes laws to make healthcare more affordable (the “Affordable” Care Act), only to make it more expensive.  The government subsidizes student loans to make college more affordable, which ends up making it more expensive.  The list goes on and on.

With the implementation of low-flush toilets, this is no exception.  Not only do your toilets not work, but the objectives of the law aren’t met either.  In fact, you end up with the opposite.

It was reported in 2011 that San Francisco’s sewers were backed up with waste sludge because of the low volume of water.  Then the city reportedly used chlorine bleach in the sewers, which then causes its own set of environmental issues.

Of course, the stated objective of the low-flush toilets was to save water.  For the more cynical, the actual objective was for politicians and bureaucrats to have more control over your life.

Congress ignores economics and supply and demand.  Water does cost money, which means that people pay more if they use more, at least typically.  This is an incentive for people to use less water.  If it were simply a matter of buying a toilet that saved water, then the marketplace would fulfill this demand.

However, this law in many ways accomplishes the exact opposite of its stated purpose.  When you have to flush before using toilet paper just to make sure it doesn’t clog, then the double or triple flush really defeats the whole purpose of using less water per flush.

It gets even worse if the toilet clogs.  What happens when you have to flush it several times to plunge it, or to hope everything goes down?  And then you may have to flush it a couple of more times to clean it.  If you end up flushing the toilet six times, it sure does defeat the purpose of the low-flush toilet.  You  may end up actually using more water as a result.  It is just one more example of a law doing the exact opposite of its stated purpose.

This legislation, like so much other, needs to be flushed down a toilet, and a strong one at that.

The next time you are griping about your toilets not working well, just think of Congress.  Whenever you think of sewer waste, Congress should come straight to your mind.

What Should a Libertarian Do in This Election?

I have heard many complain about the terrible candidates in this year’s presidential election.  My response is, “Compared to what?”

Were the choices really that great when it was Romney against Obama?  How about McCain against Obama?  How about Kerry against Bush?

At least this year is mildly exciting with Donald Trump upsetting the establishment so much.

Let’s take a look at the candidates from a libertarian perspective.  I think we can safely skip over Hillary Clinton.

While I don’t support Trump, I have been sympathetic towards him on several occasions.  His economic proposals are abysmal, which just goes to show that being a businessman means nothing when it comes to politics.  However, his lack of political correctness at times is actually refreshing in our time of hyper-sensitivity.

Most of all, Trump has shown signs of being good on foreign policy, or at least better than any major nominee in a long time.  He suggests getting out of NATO.  He says he wants to talk to Putin (instead of going to war).  He says that the war in Iraq has been a disaster.  It is these stances that has got the establishment so worried.

Unfortunately, Trump just endorsed Paul Ryan (going against a Trump supporter in his primary).  Trump also essentially endorsed John McCain.  This, coupled with his VP pick of Mike Pence, shows that the Republican establishment has rattled him.  Trump thinks he needs to play ball with them.  For this reason, I simply cannot vote for Trump unless something dramatic changes.

If I thought Trump would end the wars overseas and return the U.S. to a non-interventionist foreign policy, then I might actually vote for him, despite my other disagreements.  Foreign policy is the biggest issue and it is the one issue where the president could actually make a difference.  But since I don’t trust Trump on this issue any longer, I cannot even vote for him as the lesser of two evils.

So what about a third-party candidate?

Let’s start with Jill Stein, the nominee of the Green Party.  She is probably the best on the war issue.  She is more anti-war than Bernie Sanders.  I realize this isn’t saying much, but I am not sure that Sanders supporters realize that he is not anti-war.  Sanders is just less hawkish than Hillary Clinton, which isn’t hard.  Sanders is nothing compared to Ron Paul on the war issue and interventionism.

If foreign policy were the only issue, maybe I would consider Jill Stein.  But it is terribly difficult to vote for someone who promotes hardcore socialism.  She can call herself the peace candidate, but the bedrock of socialism is government violence.  Her other policies require violence to the extreme.

Are the people of Venezuela happy that they supported Hugo Chavez because he kept them out of war?  If that person is a brutal thug dictator, then the lack of a foreign interventionist policy doesn’t help too much, except perhaps for those on the receiving end of drone bombings overseas.

Now let’s consider the non-libertarian Libertarian Gary Johnson.  This is the man who personally chose Bill Weld as his running mate.  I know that the Libertarian Party selects the VP candidate, but it was because Johnson pushed for him.

Weld is what some would call a liberal Republican.  He is a member of the Council on Foreign Relations.  He is as establishment as they come.  He is just about the opposite of libertarian when it comes to many issues.

Meanwhile, Johnson himself is terrible.  He was a little more tolerable 4 years ago when he ran.  Now he just sounds ridiculous.  He is campaigning on the fact that he is not Clinton or Trump.  He claims to be the reasonable person at the table.

On his latest appearance on CNN, he was asked about whether a baker should be forced to bake a cake for a gay couple’s wedding.  (He had previously stated that the baker should be forced to do so.)

Johnson responded that although  the baker has to sell him the cake, it doesn’t mean he has to frost it for the couple.

Is this guy serious?  This just makes him sound even dumber than before.  This is not only trying to play both sides of the fence and missing; it is falling between the cracks of the fence.  How could anyone sound any more ridiculous on this issue?

As Bob Murphy pointed out, most (or all) of these bakers are not refusing gay customers who want to buy pre-made items.  The bakers just aren’t specializing cakes for ceremonies that they do not agree with.

The libertarian position is that it is the baker’s business (his property) and he should be able to use it or not use it how he wants, so long as he doesn’t infringe on others.  People should be free to associate or not associate with whom they want.  This is part of a free society.  It doesn’t mean you have to agree with the bakers who make this choice not to serve certain customers.

I realize that probably 95% of the American population do not agree with the libertarian position on this.  That is why Johnson is trying to play both sides, instead of actually attempting to educate people on the issue.  And that is really the main problem with Johnson.

Some libertarians say that we should support Johnson even if he is not a pure libertarian.  They say it helps to get the libertarian name out there.  But I don’t want the name to get out there if it is being misrepresented.

And this isn’t on just one issue.  It is on virtually everything.  He does not take a hardcore principled stand on anything.  He wants to legalize marijuana, but he never says he wants to get rid of the federal war on drugs.  He wants to audit the Fed, not end it.  Even on foreign policy, he is weak and I do not trust him at all.

It is funny that many libertarians say that you shouldn’t vote for the lesser of two evils.  Yet, isn’t that essentially what they are asking us to do with Johnson?  In this case, it is the lesser of three evils (or more if you count other third-party candidates).

At this point, if I were forced to vote for somebody on the ballot (not a write-in), I would have to go with Darrell Castle.  Who?

Darrell Castle is the nominee for the Constitution Party.  The Constitution Party is not well-known, but it isn’t completely insignificant either.

Chuck Baldwin was the nominee in 2008, and there is no question that he was the most libertarian (small l) candidate in that race.

The Constitution Party tends to promote Christianity to a high degree.  Castle himself served as a deacon.  I have no issue with this except it shouldn’t really be part of a campaign platform.  I understand certain people will take certain positions because of their religious beliefs, and that is fine.  It is just that I believe promoting your own religion should not play a significant role in the campaign.

In an interview last month, Darrell Castle stated that he is the most libertarian candidate in the race.  And by looking at his stance on the issues, he is correct.

He wants to end the Fed.  He wants a non-interventionist foreign policy.  He wants to end the federal war on drugs, which is the proper constitutional position on this subject.

Some libertarians may disagree with Castle on abortion and border control.  Castle is pro-life and wants secure borders.  But libertarians will always disagree on these two issues.

Even though Castle is firm in his Christian faith, he does not believe the federal government should play a role in gambling, prostitution, or polygamy.  He says that states should be free to regulate these things, but he sees no Constitutional role.

I don’t know if I will vote for Darrell Castle in November.  I may do some more research on him.  But there is no question that he is by far the most libertarian candidate in this race.  Perhaps I will not vote at all.  Perhaps I will write in someone’s name.  Or perhaps I will vote for Castle.

I am certain that I won’t be voting for the disastrous non-libertarian Libertarian Gary Johnson.

Bank of England Pursues Looser Money

The Bank of England (BOE) just announced a cut in its benchmark rate from 0.5% to 0.25%.  The rate had been at 0.5% since March 2009, when the economy was still reeling from a recession.

Does this mean that the BOE thinks the economy is weaker now than it was in March 2009?

The BOE also said it will purchase an additional 60 billion pounds (about $80 billion) of U.K. government debt over the next 6 months.  It will also buy 10 billion pounds of corporate debt over the course of 18 months.

This isn’t quite on the level of the Federal Reserve during QE3 when it was purchasing $85 billion per month in new assets, but the U.S. is quite a bit bigger than the U.K. both economically and in terms of population.

Perhaps the most significant thing is that the BOE has indicated that there could be more rate cuts in the future.  This means it will likely go to zero or beyond.

And why not?  That is the world trend.  The European Central Bank and the Bank of Japan have engaged in massive monetary pumping and a policy of negative interest rates (NIRP).

The major central banks have done (or are doing) almost the exact opposite of what a libertarian/ free market proponent would recommend.  I would say it is straight Keynesian economics, but I am not even sure that Keynes would have supported this insanity.

On this news, the British pound fell in relation to the dollar and other major currencies.

Since the Fed does not want the dollar to strengthen too much, it makes it less likely now that the Fed will hike its own target rate.  Many think the Fed will not hike at all in 2016.

These central bankers have this goal of increasing price inflation.  It is an absurd goal, which only makes us poorer in the long run.  It is also rather ironic in that these moves just tend to increase fear amongst the public, which can oftentimes just leads to an increased demand for money, despite the monetary inflation.  This means a decline in velocity and lower price inflation, at least in the short run.

Despite the Fed not raising its target rate, other than 25 basis points back in December, it is the only major central bank that is anywhere close to a sane policy right now.  Sure, it approximately quintupled the monetary base from 2008 to 2014, but at least its monetary policy has been tight for almost two years now.

This is all a disaster that is just getting built up.  The more these central banks inflate, the more that resources are misallocated.  At some point, there is going to be a major correction.

And a correction is really what we need.  We need a return to sanity. We need for resources to properly align with consumer demand.  We need for the asset bubbles to pop so that prices are no longer distorted.

While a major correction will be painful, it is basically inevitable at this point.  This includes the U.S.  But the U.S. is in far better shape than Japan and parts of Western Europe.

The only thing worse than the correction itself is the possible responses from central banks and central governments.  It could bring more authoritarianism.  It could bring even more money creation and more debt, if that is even possible.

While the Brexit vote was a small positive step towards liberty, it doesn’t change the fact that the British people are just as much under the thumb of central bankers as everyone else.  And the BOE is doing virtually the opposite of what it should be doing.

Janet Yellen and company now have another excuse not to raise its target rate.  They probably don’t want to change anything right now anyway, at least until the election is over.  If the economy were to tank before November, it could mean a Trump victory, which they do not want.

This will all be entertaining in a sick kind of way.  It is important to watch Japan, as I see the Japanese getting hit the hardest of all when everything implodes.

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