Wednesday, November 28, 2012

The Philosophy of Liberty

The following video is written by Ken Schoolland. It is a short (8 min) flash animation based on the prologue of Ken's book "The Adventures of Jonathan Gullible."  (Please note that there is no soundtrack):

Wednesday, November 21, 2012

Squeezy the Pension Python

Illinois Governor Pat Quinn has a solution to the Illinois unfunded pension liability crisis.  His solution is brilliant and creative.  To solve this crisis he has created an animated mascot.  Meet "Squeezy the Pension Python" by viewing this short video:


Not everyone is convinced that Squeezy will be able to solve the crisis.  Some of the comments can be found in this Chicago Tribune article:

http://www.chicagotribune.com/news/local/ct-met-governor-quinn-pension-reform-20121119,0,3422889.story

These quotes are from the Tribune article:

After months of promising a major grass-roots effort to win public support for reforming the state's government worker pension system, Gov. Pat Quinn on Sunday unveiled a plan that featured an incomplete online strategy, children wearing red plastic megaphones and an animated "Squeezy the Pension Python" mascot.

There were, however, no solutions offered on how to fix the nation's most underfunded retirement system.

The Democratic governor, known for a style that sometimes veers into the corny, attempted to jump-start the pension overhaul push by lauding the power of "the people of Illinois, good and true" through what he called the "electronic democracy" of Twitter and Facebook. Quinn went so far as to encourage families gathering at the Thanksgiving dinner table to "speak to each other" about the pension crisis.

The approach left some lawmakers questioning whether the governor demeaned the severity of one of the most pressing unresolved problems facing state government in Illinois. State Rep. Jack Franks, D-Marengo, called Quinn's strategy "juvenile."

"If he wants to do a grass-roots campaign, he should talk to the people directly about his proposal. But he doesn't even have one, which is why we can't get anything done. You can't follow someone who doesn't lead," Franks said.

"This has to be comprehensive reform. It can't be done in a vacuum and it can't be done with slogans and it certainly can't be done with cartoon characters," Franks said. "It's going to take some hard work."

The State of Illinois pension system's unfunded liability now is estimated to be at least $96 billion.  Please note that this unfunded liability is calculated using an anticipated annual return on invested pension funds of 8% per year.  Do you think it is possible that Illinois will be able to generate 8% annual returns?  If they generate less than 8% the unfunded liability goes up.  If there is another big down year for the financial markets the unfunded liability goes up dramatically.

The only solution to this crisis is to cut benefits to future retirees.  Illinois is so deep in debt that they may be forced to cut benefits to current retirees.

Sunday, November 18, 2012

I, Pencil the video

My favorite essay about free markets and the division of labor has been made into a video.  You can view this video at this link:


I think that the video is well made and will help explain this subject to many who may not be inclined to read the essay.  In my opinion the essay is more powerful than the video.  You can read the essay at this link:


Currently there are 2 additional videos on the I, Pencil movie website.  These 2 videos explain economic topics that I, Pencil briefly touches on.  I highly recommend watching both of these videos:



The extended commentary videos move rather quickly, so I recommend that you watch them more than once.

Saturday, November 17, 2012

Ron Paul's Farewell Speach

Ron Paul’s farewell address to Congress (delivered 11/14/12) can be viewed at the following link:

http://youtu.be/Zqi6paX3ong

The text of this speech is at this link:

http://www.campaignforliberty.org/national-blog/transcript-of-farewell-address/

In my opinion these are the highlights from this speech (I have added bold text to the passages that I feel most important):

This may well be the last time I speak on the House Floor.  At the end of the year I’ll leave Congress after 23 years in office over a 36 year period.  My goals in 1976 were the same as they are today:  promote peace and prosperity by a strict adherence to the principles of individual liberty.

It was my opinion, that the course the U.S. embarked on in the latter part of the 20th Century would bring us a major financial crisis and engulf us in a foreign policy that would overextend us and undermine our national security.

To achieve the goals I sought, government would have had to shrink in size and scope, reduce spending, change the monetary system, and reject the unsustainable costs of policing the world and expanding the American Empire.

The problems seemed to be overwhelming and impossible to solve, yet from my view point, just following the constraints placed on the federal government by the Constitution would have been a good place to start.

I have thought a lot about why those of us who believe in liberty, as a solution, have done so poorly in convincing others of its benefits.  If liberty is what we claim it is- the principle that protects all personal, social and economic decisions necessary for maximum prosperity and the best chance for peace- it should be an easy sell.  Yet, history has shown that the masses have been quite receptive to the promises of authoritarians which are rarely if ever fulfilled.

If authoritarianism leads to poverty and war and less freedom for all individuals and is controlled by rich special interests, the people should be begging for liberty.  There certainly was a strong enough sentiment for more freedom at the time of our founding that motivated those who were willing to fight in the revolution against the powerful British government.

During my time in Congress the appetite for liberty has been quite weak; the understanding of its significance negligible.  Yet the good news is that compared to 1976 when I first came to Congress, the desire for more freedom and less government in 2012 is much greater and growing, especially in grassroots America. Tens of thousands of teenagers and college age students are, with great enthusiasm, welcoming the message of liberty.

Without an intellectual awakening, the turning point will be driven by economic law.  A dollar crisis will bring the current out-of-control system to its knees.

If it’s not accepted that big government, fiat money, ignoring liberty, central economic planning, welfarism, and warfarism caused our crisis we can expect a continuous and dangerous march toward corporatism and even fascism with even more loss of our liberties.  Prosperity for a large middle class though will become an abstract dream.

If the underlying cause of the crisis is not understood we cannot solve our problems. The issues of warfare, welfare, deficits, inflationism, corporatism, bailouts and authoritarianism cannot be ignored.  By only expanding these policies we cannot expect good results.

Everyone claims support for freedom.  But too often it’s for one’s own freedom and not for others.  Too many believe that there must be limits on freedom. They argue that freedom must be directed and managed to achieve fairness and equality thus making it acceptable to curtail, through force, certain liberties.
Some decide what and whose freedoms are to be limited.  These are the politicians whose goal in life is power. Their success depends on gaining support from special interests.

But there is good evidence that the generation coming of age at the present time is supportive of moving in the direction of more liberty and self-reliance. The more this change in direction and the solutions become known, the quicker will be the return of optimism.

Our job, for those of us who believe that a different system than the  one that we have  had for the  last 100 years, has driven us to this unsustainable crisis, is to be more convincing that there is a wonderful, uncomplicated, and moral system that provides the answers.  We had a taste of it in our early history. We need not give up on the notion of advancing this cause.

It worked, but we allowed our leaders to concentrate on the material abundance that freedom generates, while ignoring freedom itself.  Now we have neither, but the door is open, out of necessity, for an answer.  The answer available is based on the Constitution, individual liberty and prohibiting the use of government force to provide privileges and benefits to all special interests.

Too many people have for too long placed too much confidence and trust in government and not enough in themselves.  Fortunately, many are now becoming aware of the seriousness of the gross mistakes of the past several decades.  The blame is shared by both political parties.  Many Americans now are demanding to hear the plain truth of things and want the demagoguing to stop.  Without this first step, solutions are impossible.

Seeking the truth and finding the answers in liberty and self-reliance promotes the optimism necessary for restoring prosperity.  The task is not that difficult if politics doesn't get in the way.

Humanitarian arguments are always used to justify government mandates related to the economy, monetary policy, foreign policy, and personal liberty.  This is on purpose to make it more difficult to challenge.  But, initiating violence for humanitarian reasons is still violence.  Good intentions are no excuse and are just as harmful as when people use force with bad intentions.  The results are always negative.

The immoral use of force is the source of man’s political problems.  Sadly, many religious groups, secular organizations, and psychopathic authoritarians endorse government initiated force to change the world.  Even when the desired goals are well-intentioned—or especially when well-intentioned—the results are dismal.  The good results sought never materialize.  The new problems created require even more government force as a solution.  The net result is institutionalizing government initiated violence and morally justifying it on humanitarian grounds.

This is the same fundamental reason our government  uses force  for invading other countries at will, central economic planning at home, and the regulation of personal liberty and habits of our citizens.

It is rather strange, that unless one has a criminal mind and no respect for other people and their property, no one claims it’s permissible to go into one’s neighbor’s house and tell them how to behave, what they can eat, smoke and drink or how to spend their money.

Yet, rarely is it asked why it is morally acceptable that a stranger with a badge and a gun can do the same thing in the name of law and order.  Any resistance is met with brute force, fines, taxes, arrests, and even imprisonment. This is done more frequently every day without a proper search warrant.
Government in a free society should have no authority to meddle in social activities or the economic transactions of individuals. Nor should government meddle in the affairs of other nations. All things peaceful, even when controversial, should be permitted.

Liberty can only be achieved when government is denied the aggressive use of force.  If one seeks liberty, a precise type of government is needed.  To achieve it, more than lip service is required.

Two choices are available.

1. A government designed to protect liberty—a natural right—as its sole objective.  The people are expected to care for themselves and reject the use of any force for interfering with another person’s liberty.  Government is given a strictly limited authority to enforce contracts, property ownership, settle disputes, and defend against foreign aggression.

2. A government that pretends to protect liberty but is granted power to arbitrarily use force over the people and foreign nations.  Though the grant of power many times is meant to be small and limited, it inevitably metastasizes into an omnipotent political cancer.  This is the problem for which the world has suffered throughout the ages.  Though meant to be limited it nevertheless is a 100% sacrifice of a principle that would-be-tyrants find irresistible.  It is used vigorously—though incrementally and insidiously.  Granting power to government officials always proves the adage that:  “power corrupts.”

Today’s mess is a result of Americans accepting option #2, even though the Founders attempted to give us Option #1.

Ultimately, the people have to decide which form of government they want; option #1 or option #2.  There is no other choice.  Claiming there is a choice of a “little” tyranny is like describing pregnancy as a “touch of pregnancy.”  It is a myth to believe that a mixture of free markets and government central economic planning is a worthy compromise.  What we see today is a result of that type of thinking.  And the results speak for themselves.

Some argue it’s only a matter of “fairness” that those in need are cared for. There are two problems with this. First, the principle is used to provide a greater amount of benefits to the rich than the poor. Second, no one seems to be concerned about whether or not it’s fair to those who end up paying for the benefits. The costs are usually placed on the backs of the middle class and are hidden from the public eye. Too many people believe government handouts are free, like printing money out of thin air, and there is no cost. That deception is coming to an end. The bills are coming due and that’s what the economic slowdown is all about.

Sadly, we have become accustomed to living with the illegitimate use of force by government.  It is the tool for telling the people how to live, what to eat and drink, what to read and how to spend their money.

To develop a truly free society, the issue of initiating force must be understood and rejected.  Granting to government even a small amount of force is a dangerous concession.

Productivity and creativity are the true source of personal satisfaction. Freedom, and not dependency, provides the environment needed to achieve these goals. Government cannot do this for us; it only gets in the way. When the government gets involved, the goal becomes a bailout or a subsidy and these cannot provide a sense of personal achievement.

Achieving legislative power and political influence should not be our goal. Most of the change, if it is to come, will not come from the politicians, but rather from individuals, family, friends, intellectual leaders and our religious institutions.  The solution can only come from rejecting the use of coercion, compulsion, government commands, and aggressive force, to mold social and economic behavior.  Without accepting these restraints, inevitably the consensus will be to allow the government to mandate economic equality and obedience to the politicians who gain power and promote an environment that smothers the freedoms of everyone. It is then that the responsible individuals who seek excellence and self-esteem by being self-reliance and productive, become the true victims.

The #1 responsibility for each of us is to change ourselves with hope that others will follow.  This is of greater importance than working on changing the government; that is secondary to promoting a virtuous society.  If we can achieve this, then the government will change.

To achieve liberty and peace, two powerful human emotions have to be overcome.  Number one is “envy” which leads to hate and class warfare.  Number two is “intolerance” which leads to bigoted and judgmental policies.  These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.

The problem we have faced over the years has been that economic interventionists are swayed by envy, whereas social interventionists are swayed by intolerance of habits and lifestyles. The misunderstanding that tolerance is an endorsement of certain activities, motivates many to legislate moral standards which should only be set by individuals making their own choices. Both sides use force to deal with these misplaced emotions. Both are authoritarians. Neither endorses voluntarism.  Both views ought to be rejected.

I have come to one firm conviction after these many years of trying to figure out “the plain truth of things.”  The best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of LIBERTY.

Thursday, November 15, 2012

A Man-Made Disaster

The Ludwig von Mises Institute recently published an article by George Reisman.  The subject of this article is price gouging regulations and their effects on the supply of basic necessities.  The article can be viewed at this link:


Here are some of the highlights of this article:
Hurricane Sandy caused the closing of a majority of the gasoline stations in the New York City area, did major damage to petroleum terminals, and reduced the ability of barges carrying fuel to reach their docks. All of this represented a substantial reduction in the supply of gasoline and other petroleum products in the New York metropolitan area.  In a free market, the effect of a good's becoming scarcer is not to cause a shortage of it, but a rise in its price. The rise in price serves to reduce the amount of the good buyers seek to buy to a point that is within the limit of the reduced supply available.

What all this implies is that the shortages of gasoline now being experienced in the New York metropolitan area and elsewhere in the path of destruction left by Hurricane Sandy simply do not need to exist. They could be made to disappear very quickly, within a matter of hours. All that would be necessary is to remove the threat of prosecution of gas station owners, and all others in the chain of supply of gasoline, for raising their prices to the extent necessary to reduce the quantity of gasoline demanded to conform with the reduced supply of it available.  What caused the shortages and stops them from being overcome in this way is the fact that the necessary rise in prices is illegal. It is against the law.

Thus state laws are what make it impossible for the market immediately to put an end to the shortages. It is these state laws that allowed the shortages to come into existence in the first place, by prohibiting the immediate rise in prices that would have prevented them, and that then make the shortages persist.

The same state laws make it impossible for the market speedily to restore supplies to their normal level, which would serve quickly to bring down prices from their abnormal heights.

If prices were allowed to be "unconscionably" high, it would be possible to bring in vital supplies that are more costly. For example, gasoline from more remote refineries. At prices of $10 to $20 per gallon, it would pay for tanker trucks to bring in gasoline from several hundred miles away. This would serve to spread the loss of supplies caused by the hurricane over a much wider area, with a corresponding reduction in the severity of loss experienced in the area of the hurricane's path.

The "unconscionable" rise in the retail price of gasoline that made it possible for the gas stations to pay higher prices to their wholesalers and distributors bringing in gasoline from remote refineries would also cover the high costs of speedy repairs, such as those entailed in round-the-clock repair work, using extra crews, and paying premium wage rates. Thus, in the absence of the price controls, in very short order New York/New Jersey area refineries, terminals, and docks would be repaired, and the gas stations now closed would reopen. This would serve to achieve a full restoration of supplies, along with a return of the gasoline distribution system to normal. These results would quickly bring gasoline prices down to their normal level.

All of this is prevented for no other reason than that our government officials are utterly ignorant of economic law.
In a society in which economic law was widely understood, legislators and prosecutors who sought to prevent price increases in cases of emergencies would be regarded as public enemies and barred from office. They would be barred not by a mere lack of support, but by a lack of support manifested in the utmost public contempt and ridicule for their ignorance and destructiveness.

New York and New Jersey are in an emergency situation. It is intolerable that their people be made to suffer the effects of disastrous legislation piled on top of a natural disaster and thereby needlessly enlarging and extending the effects of the natural disaster.

Monday, November 12, 2012

Meatless Mondays


The Los Angeles City Council has taken a bold step to solve one of mankind's great problems.  On Wednesday October 24, 2012 a resolution was passed that decrees:

NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of Los Angeles hereby declares all Mondays as "Meatless Mondays" in support of comprehensive sustainability efforts as well as to further encourage residents to eat a more varied plant-based diet to protect their health, protect animals and protect the environment.

The local news article is at this link (note that this resolution passed unanimously) :


If you still think that this is a joke, the original council resolution is at this link:


I bet that Mayor Michael Bloomberg of New York is angry that he did not think of this first.

Who would have thought that the LA City Council would agree with the Vatican?  For those of you who grew up in a Catholic family Friday was our “meatless” day of the week.  Too bad that the LA City Council didn't choose Friday that way the Catholics would be leading the trend.   I guess that “meatless Mondays” has a better rhyme.  Another problem with meatless Fridays is that Hollywood loves to party on Friday night.  This would have put a damper on those glamorous celebrities.  It would not be the same standing around drinking Crystal and munching on carrot sticks.

By the way, Catholics are still required to abstain from meat on “penitential days”:


Canon  1250 The penitential days and times in the universal Church are every Friday of the whole year and the season of Lent.
Canon  1251 Abstinence from meat, or from some other food as determined by the Episcopal Conference, is to be observed on all Fridays, unless a solemnity should fall on a Friday. Abstinence and fasting are to be observed on Ash Wednesday and Good Friday.

It appears that the environmental and vegetarian movements have now formally become a religion.  Now they only need to appoint a high priest (or maybe a pope).  My vote goes to Al Gore (lately he looks like he could really use the meatless days).