Monthly Archives: August 2014

Religion in Government Schools

A high school student in Tennessee is claiming that she was suspended because she said “bless you” when one of her classmates sneezed.  After Kendra Turner uttered those words, her teacher confronted her, saying she had broken class rules.
Turner fought back saying, “It’s all right to defend God and it’s our constitutional right, because we have a freedom of religion and freedom of speech.”  Turner ended up in the administrator’s office where she finished out the rest of the class with an in-school suspension.
Many students claim that the teacher was demeaning towards the religious views of others, even including the term “bless you” as one of her banned phrases in class.
The first thing that came to my mind when reading about this was that it happened in Tennessee, where religion is still common.  I was expecting something like this to happen in California.
It is good that the student stood up for herself and her beliefs, although I do believe she got it wrong in citing freedom of speech and freedom of religion.  She is far from alone in making this mistake.
Property Rights and Government
The 1st Amendment is cited a bit too often.  It does not grant you any rights.  It says that “Congress shall make no law…”  Ironically, for someone who is deeply religious, she shouldn’t be citing the Constitution for her rights.  She should be saying that her rights come from God.
But this isn’t really a matter of freedom of speech or freedom of religion.  It is a property rights issue.  And the problem here is the lack of property rights.  More specifically, the problem is government schools.
If this young lady really wants to cite the Constitution, she should really cite the 9th and 10th Amendments.  They basically say that the Constitution is a document of enumerated powers.  Any powers not listed in the Constitution should be left to the states or the people.
The federal government continually violates the Constitution, including with its funding of education.  Nowhere in the Constitution does it say that Congress has the power to fund education or get itself involved in any way.
But even if the government schools were just funded by the state and local governments, it would not change the fact that this is a property rights issue.  Because of the existence of government schools, these things become political.  They become political battles.
Can anyone imagine this happening in a private school?  First, most schools are quite forthright in what they will promote and tolerate.  Most parents know if religion will be taught.  But it is hard to picture a private school coming down on a student for saying “bless you”.  If it did happen, then the parents and child could make a choice on whether to keep paying for that school or to find somewhere else.
The battles occur because of the use of taxpayer funds.  Those who have strong religious beliefs do not want their tax money going towards an institution that is hostile to their beliefs.  Meanwhile, there are some people who are not only not religious, but they are against others who are.  They do not want their tax money going somewhere that will preach any religion, or even allow it spoken.
These are political battles.  They are battles over the power of who gets to determine how tax money is spent.  We usually don’t hear of a third side, which is that maybe tax money shouldn’t be spent in the first place.  The religious parents can choose a religious school.  Others can choose a school that doesn’t teach religion, or even tolerate any mention of it.
When you take the tax money out of the scenario and put in property rights, then there are no longer any political battles.  Customers (the parents and children) can do business with whomever they want.  They can choose any company (the school owners).  There is no need for fighting.  We don’t have to fight over whether the grocery stores should sell Coke or Pepsi.  You can choose to buy either, or both, or none of the above.
In conclusion, as long as government schools exist, then there will be ridiculous situations occurring such as this one in Tennessee.  There will continue to be political battles and there will continue to be ridiculous teachers who can’t stand to hear anything related to religion that might offend them.

Voting as a Lottery

An advisory board in Los Angeles is urging the city council to consider a lottery prize for those showing up at the polls during elections.  Voter turnout has been low, so the Los Angeles Ethics Commission has come up with this idea to encourage higher voter turnout.
Some recent elections in Los Angeles have seen turnout as low as 8%.  In the 2013 mayoral election, only 23% of registered voters showed up at the polls to vote.
The plan would give a chance to win a good sum of money for anyone showing up to vote at election time.  The president of the advisory board suggested it could be $25,000 or $50,000.  I guess this would give a whole new meaning to the term “buying votes”.
Usually politicians try to give enough incentive for voters to show up through their plunder.  The politicians will announce something free or something subsidized.  Sometimes they suggest that if they vote for the other guy, then their currently free goodies will be taken away from them.  And then there are some who show up at the polls in an attempt to defend their property from being taken.
When Thomas Jefferson wrote about governments “deriving their just powers from the consent of the governed”, I suppose he didn’t realize that the consent could be gained by offering a remote chance to win a lottery.
Voting
On the subject of voting, I tend to go along with that old quote attributed to Emma Goldman: “If voting changed anything, they’d make it illegal.”
But even though voting doesn’t usually change much, it is interesting that this advisory board in Los Angeles is so interested in getting voters to show up at the polls.  It is interesting that we will often see campaigns for “getting out the vote” and we hear slogans that it is your patriotic duty to vote.  Better yet, I hear that “if you don’t vote, you can’t complain”.
In reality, not voting in itself can be a vote.  It is a vote of no confidence.  It is a vote for none of the above.  It is a vote of not consenting to the government’s dictates.
While Republicans and Democrats fight it out for votes, there is one thing that both major parties can’t stand.  They can’t stand to see low voter turnout.  It makes them fearful.
The reason is because all government power rests on the consent of the governed.  It doesn’t mean that people have to explicitly sign a contract or say out loud that they consent.  But an acceptance of the system is enough for consent.
Republicans will challenge Democrats and Democrats will challenge Republicans, but you will almost never hear either side challenge the system as a whole.
When registered voters don’t show up at the polls, it means that they don’t care, or they don’t like any of the candidates, or they don’t endorse the system.  This bothers politicians more than anything.  The establishment doesn’t care that much who actually wins, as long as the people think they are making a choice.
For some reason, there is a false notion that having the right to vote is synonymous with being free.  If people can vote, then they think they are free.  Or at least that is what the people in power want them to believe.
But freedom and liberty are based on property rights and natural law.  Voting oftentimes opposes these things.  Voting serves to make things seem legitimate that otherwise wouldn’t be.  You can’t go to your neighbor and steal his money, but you can vote for a politician to do it for you.  If it is done through a vote, then it is somehow seen as being legitimate.
In conclusion, I am happy to see this proposal in Los Angeles.  I hope it happens elsewhere.  It means that the establishment is scared that they are losing legitimacy.

Lobbyist Ban Gets Banned

In 2010, the Obama administration adopted new rules to ban registered lobbyists from serving on some federal advisory boards.  After a group of lobbyists sued the government and won in federal court, the Office of Management and Budget (OMB) issued new guidelines, which has forced the Obama administration to reverse its ban on lobbyists.
While I am usually all in favor of getting rid of government regulations and repealing federal rules, this is an exception to the rule.  Why?  Because this is regulation against politicians and lobbyists.  It is no surprise that these are the regulations that actually get repealed.
This just shows the futility in trying to change the federal government, particularly from the inside.  Obama promised more transparency in his original campaign for president.  Now we know that the NSA is spying on almost every American who is using electronic communications.  Obama does not oppose this.  He supports it.  Even if Obama did oppose it, there is probably nothing he could do about it.
Obama also campaigned to stop cronyism and corruption.  He still has rhetoric to this effect, even though his policies and the policies of the Fed have reaped huge gains for Wall Street and corporate America at the expense of everyone else.
Perhaps this 2010 rule was Obama’s attempt at fulfilling one of his promises, even if just a little bit.  Maybe it was all politics and he was just trying to placate his voter base.  But this one token move could not even hold up.
Now lobbyists can go back to their positions on advisory boards, which means even more corruption and cronyism.
The Bigger Problem
Of course, even if the Obama administration’s rule had held up, it was just a little band-aid.  There would still continue to be corruption, political favors, and peddling.  It might have slowed things down a tiny bit, but Washington DC would have continued its political business as usual.
The problem is that Washington DC is one giant bureaucracy with a lot of money and power.  The government spends close to $4 trillion per year, almost one-quarter of the entire economy.  That is why there was never a bust in Washington DC from 2008 to today, even though the rest of the American economy suffered terribly.
As long as there is so much money and power to be had in DC, then there is always going to be lobbying and cronyism.  As F.A. Hayek said, the worst get on top.  The money and power attracts the worst elements of society.  It is people who seek power over others.  It is people who seek money, but not by serving others.
It really is futile to try to change Washington DC.  The only thing liberty advocates can hope for is to persuade others that government is far too big and that liberty is the moral path and the prosperous path.  When things fall apart and Washington DC is getting much of the blame, it is only then that we can hope for real change.  But that will only happen if a good foundation is there, meaning that people are educated on the benefits of liberty.
For now, the lobbying and political favors inside the beltway will continue.  It is not going to slow down until we see a massive reduction in government spending and regulation.
When the national debt and unfunded liabilities get so bad as to force the politicians and bureaucrats in DC to renege on promises and to actually cut spending, then maybe we will have some hope.  Until then, it is business as usual in DC.  The lobbyists are running the show just as much as the politicians.  And oftentimes they are interchangeable.

Tampering With Crime Statistics

The Los Angeles Times recently reported that crime statistics were being improperly reported by the Los Angeles Police Department.  For a one-year time period ending in September 2013, there were about 1,200 violent crimes that were misclassified as minor crimes.
This means that there were serious crimes such as stabbings and robberies that ended up being classified as minor offenses.  When a review was done on misclassifying crimes, most of the misclassifications were reporting a serious crime as a minor one and not the other way around.
Not surprisingly, incentives have consequences.  The LAPD sets statistical goals at the beginning of each year.  Each division has targets.  The department wants to show a reduction in serious crime.
One retired police officer stated that they were spending a lot of time trying to classify crimes instead of actually dealing with the crimes.
With promotions and good public relations on the line, it is not surprising that there would be abuse here.  As with almost any abuse with government, you should follow the money.
This is probably a typical case in government where bad people are given more power to do bad things, while good people are put in a position of having to stay quiet and go along, or else risk losing their job, or at least any chance of moving up.
When the LA Times interviewed people, some current police officers were afraid to speak out due to fear of retribution.  Their fears were probably correct.
Who is Watching the Watchers?
There is always a problem in government, no matter what it involves.  The government has a monopoly on the use of force in a given area.  There isn’t competition in government the way there is competition in business.
If you don’t like what your government is doing, then your only realistic choice is to move.  You will probably have to move somewhere else that has an overbearing government.  And we can talk about elections, but most elections don’t really change anything.  And much of the problem is that power is given to unelected bureaucrats.
It doesn’t matter if it is the FDA, the military, the Department of Education, or the local police department.  They have power and they are going to use that power.  We can talk about a system of checks and balances, but is this really the case?
In the case of the federal government, there is a legislative branch, an executive branch, and a judicial branch.  It is supposed to be a system of checks and balances.  But they are all still a part of the federal government and they all thrive based on the system of big government and power.  And when you think about it, Supreme Court judges get nominated by the executive and approved by the Senate (legislative).  How much balance can there be?
In the case of the LAPD (or any other police department), you’ve got the department setting crime reduction goals.  Then the police officers themselves get to determine what constitutes a serious crime and they get to report the statistics.  What would you expect them to do?  Who would be so naïve as to think that there wouldn’t be abuses here?
Perhaps some blame should go on the people.  When problems exist in society (often because of government itself), then many people turn to the government for answers and solutions.  If there is high crime, they demand crime reduction by the police department.  But the only way the police department is going to stop crime is if they stop enforcing the ridiculous victimless crimes on the books, particularly drug laws.  Aside form that, the police can’t be everywhere at all times to ensure that crime is stopped.  It is also naïve to expect the police to have such a great presence as to significantly reduce crime.
In conclusion, almost every government agency is going to act for its own benefit.  When there is power to be used, it will inevitably be used and abused.
If people stop expecting government to solve all of the problems in society, then this will automatically reduce government power.  It will also mean that police departments will not feel compelled to reduce crime.  It will mean that police departments will have less incentive to lie about statistics.

The NSA Violates Free Speech

While the National Security Agency (NSA) infringes on our privacy through its spying, it also infringes on free speech.  The ACLU and Human Rights Watch have released a joint report stating that U.S. surveillance is hampering the work of journalists and lawyers.
Based on in-depth interviews with journalists, lawyers, and government officials, the report documents how these professions are having to change the way they do business.  The NSA is really infringing on press freedom and the right to counsel, in addition to free speech.  The NSA’s spying program may violate at least half of the Bill of Rights.
I have previously warned about the extreme danger of the NSA.  Even if some politicians were actually looking out for the public’s best interest, many would have difficulty opposing the NSA due to fear of extortion.  If some high-level government official announces his opposition to the NSA, then he will instantly become a target of the NSA.
This report reveals the same problem with journalism.  Many journalists are saying that sources for stories are intimidated by U.S. surveillance.  They fear being fired or becoming the target for a criminal investigation.  I’m sure that many also fear exposure of their personal lives if they have anything to hide, which most people do.
I’m sure the journalists themselves think about the NSA.  Do you think that Glenn Greenwald has any privacy now?  He is one of the biggest and well-known opponents of the NSA, so we can be certain that he is a target of the NSA.
Free Speech
This is why opposing the NSA is one of the most important political issues that we face.  The U.S. faces a lot of problems politically.  The government has become a monstrosity.  This includes militarily, economically, and socially.  The government is involved in virtually every facet of life today.
The most important thing that Americans have is free speech.  If you have the freedom to speak, then you can always change things through ideas.  Some would argue that it is gun rights, but gun rights won’t do you much good if you can’t speak and you can’t organize.
The only way to beat back the federal government is with ideas.  It is not with weapons.  The only way to win with ideas is by having the ability to share those ideas with others.
While I criticize the so-called mainstream media, there are some honest and decent journalists out there who want to report on what the government is doing.  But it is now evident that many journalists and their potential sources are being deterred from speaking freely.
The only way to stop the NSA at this point is by having an overwhelming number of Americans demanding a stop to the spying.  They need to demand the complete abolition of the NSA.  This seems unlikely considering that Congress can’t even cut the NSA’s budget.
Interestingly, there is something of a race going on between the growth of government and the growth of technology.  This holds true in many aspects, but the technology of spying is included.
While the NSA seems to hold the upper hand right now, I expect that free market technological forces will begin to fight back more.  Some will be in the form of spying prevention by using more encryption.  Some people may get bold enough to start spying on the NSA members to give them a taste of their own medicine.
We can’t really be certain where all of this will go and who will win out.  But it is important that Americans begin to realize the great threat that the NSA poses.  It is already hampering free speech and free press.  It is better to speak out now than to wait for even more tyranny down the road.

Human Rights in Gaza

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There was a vote on a United Nations resolution that calls for an investigation of human rights violations in Gaza.  Just in the last month alone, it is estimated that more than one thousand Palestinians have been killed and thousands more injured.  This includes many civilians, including children, who are not engaged in fighting.
The U.N. resolution passed with 29 nations favoring it, along with 17 abstentions.  There was one “no” vote though.  That belongs to the U.S. government.
This should not be surprising, considering that U.S. politicians are in the back pocket of the Israeli lobby.  It sometimes seems as though U.S. politicians in Washington DC are trying to represent Israel more than the U.S.
This “no” vote is also not surprising considering the U.S. government is responsible for hundreds of thousands of innocent deaths just in the last 12 years, from Iraq, to Afghanistan, to Libya, and elsewhere.  And we also can’t forget about the detention centers and torture.
The U.N. resolution condemned all violence against civilians, including the killing of two Israeli civilians from rocket fire.
Still, the pro-war politicians in the U.S. will not condemn violence if it is committed by one of their own, which includes Israel.
Stop the Police State
Violence rarely solves anything.  Violence usually just leads to more violence.  Will this madness ever stop?
Of course it is wrong and criminal for Palestinians to launch rockets into Israel.  Even if these people are desperate, it is no excuse.  Not everyone living in Israel is guilty of abusing Palestinians.  Many Israelis even oppose the policies of their own government.
The Israeli government is wrong and criminal for the bombs they drop.  The actions are not defensive, despite the rhetoric.  It is only defensive if the bombs and other weapons are being deployed on those directly responsible for the initial attacks.
In the U.S., if a criminal runs in to a crowded building, the police don’t just drop a bomb on the building to kill the criminal while calling all of the other deaths collateral damage.  They don’t do this because it would be seen as wrong.  Americans don’t want to live in such a society.
It is just as wrong in Gaza.  When innocent young children are dying, we can’t just write this off as collateral damage.  These children didn’t launch rockets.  In most cases, their parents didn’t launch rockets either.
One thing that most Americans don’t realize is that Israel is a police state.  But it is a particularly bad police state because it specifically targets one group of people, which is the Palestinians.
While some people talk of a police state in the U.S., it is nothing compared to what goes on in Israel.  Palestinians really are treated like third-class citizens.  They cannot travel about freely.  They are searched at checkpoints.  They are not allowed to travel on certain roads during certain times.  They truly live in a police state that is worse than most Americans can imagine.  Yet the American people fork over their tax money to be sent over to Israel, all in the name of good and justice.
The only way that violence is going to be reduced in the region is for more liberty to prevail.  This means that the Israelis must demand that their government stop abusing the rights of others.  It means a much smaller government and a much less militaristic government.  It means allowing people to be free.
There will never be 100% security one way or the other.  There are always risks.  But as long as there is a police state in Israel, there is going to be continued violence from disgruntled people.
The U.S. government should immediately stop all foreign aid to all sides.  The Israeli state must stop bombing people and it must stop its vicious police state.  Humanitarian aid should be allowed to enter.  It should be voluntarily funded.
We must condemn violence in all aspects on all sides, unless it is self-defense only against the individuals initiating the violence.  If the Israeli state is severely diminished in power, then I believe it is possible that Israelis and Palestinians can one day live in peace together.

FOMC Statement – July 30, 2014

The FOMC released its latest statement on monetary policy on July 30, 2014.  There were no major surprises.  The Fed will be reducing asset purchases by another $10 billion.  It will now be inflating by “only” $25 billion per month, which would have been unprecedented 6 years ago.

If everything goes as planned, it will announce another reduction in its purchases by another $10 billion in September.  In the meeting at the end of October, it should announce an end to the final $15 billion.

Again, this is only if everything goes as planned.  This means that we won’t see a major stock market crash or some other signal of a major economic downturn.

I am still not sure why most everyone is so focused on interest rates, which is really just the federal funds rate.  This is the overnight borrowing rate for banks.  It has been near zero since late 2008.

It made sense for people to obsess over this rate in the past.  That’s because it was an indication of monetary policy.  If the Fed wanted a lower federal funds rate, then it would usually have to inflate the money supply.  If it wanted to raise the rate, it would have to stop inflating, or maybe even contract the money supply.

But over the last 5 and a half years, the rate has meant little.  Commercial banks have piled up massive excess reserves and mostly do not require overnight borrowing to meet reserve requirements.  It hasn’t mattered whether the Fed has been inflating or not.  The rate has stayed near zero.

The Fed could certainly raise this rate if it really wants to.  It can increase the interest paid on excess reserves.  But this has no immediate effect on whether the Fed creates more monetary inflation.

Again, I don’t understand why people are obsessing over the federal funds rate.  This is not driving the monetary inflation.  We know what the monetary inflation is.  The FOMC statements tell us every time.  The Fed is now currently adding about $25 billion per month to the monetary base.

While the Fed is still inflating as of right now, I believe there is a much higher risk of a recession or major economic downturn.  The Austrian Business Cycle Theory teaches us that malinvestments can become exposed just by not increasing the rate of monetary inflation.  The misallocated resources certainly can become exposed when the rate of monetary inflation is decreasing, as it is now.  This can take some time, but if the Fed does not ramp up the digital printing presses again soon, then we will likely see a downturn in the economy.  The previous mistakes will be revealed.

Let’s see if the economy holds together long enough for Yellen and the Fed to complete its so-called tapering.

When things start to fall apart, I expect the Fed to taper its taper, if that makes sense.  I expect it will go back to more digital money printing.