Tuesday, October 29, 2013

Liberty Amendments vs. Localist Solutions on Limiting Federal Bureaucracy

I have been reading "The Liberty Amendments" by Mark Levin.   I can't help it.  It is like trying to take one's eyes off of a train wreck.   He is quite good at outlining the problems, many are.   It's his so-called "solutions" which reek.   Though the way he sells it makes them sound superficially plausible, when scrutinized it becomes clear that they would be a massive amount of wasted effort.  Even if they could be implemented risk-free, and they can't, they would not solve the problems which Levin claims they would solve.

What I would like to do here is compare his "solutions" for curbing federal bureaucracy with the more subtle, elegant, and effective solutions found in Localism, A Philosophy of Government.   I have done the same comparison with the approach each work has to Judicial Tyranny, Federal Government Spending, and Federal Taxation.   These articles demonstrate that in many ways we would actually be worse off than we are now if we adopted what Levin claims are solutions.

As it concerns the federal bureaucracy, Levin does a fine job of outlining the problem- that Congress has given up much of its law-making responsibility to executive branch bureaucrats.  They write laws with very vague definitions and then allow the regulators to fill in the blanks.  As he does with all of the problems he writes about in The Liberty Amendments,on this issue Levin rushes for a superficial, hamfisted non-solution without ever addressing the root causes of the problem.  Why has Congress done this?   What is the root cause of this problem?  Instead of trying to treat the symptoms as Levin does, Localism treats the root causes.

Why does Congress abdicate its authority to make law to Executive Branch bureaucracies? What is maddening is that Levin correctly answers this question- then suggests non-solutions which don't address the "why" which he acknowledges.  Levin writes:
"It would seem counterintuitive for Congress to surrender its own power to executive branch entities of its own making, and for a President to surrender his own decision-making authority to an administrative state.  But if the purpose is to centralize and concentrate power in the federal government, in defiance of our founding principles and the Constitution,- as the Statists have preached and promoted actively for over a century- then the frequent and broad delegation of lawmaking power to a permanent, ever-present federal bureaucracy, insulated from public influence, makes perfect sense."

Yes, that's it exactly.  Both parties are bought and paid for by global corporate interests.   Congressmen and Senators of both parties don't much care about turf battles with the executive branch, because both are there to consolidate various legislative powers into the executive branch.  They are there to consolidate power on behalf of their respective hierarchy, so that government can "get things done" on behalf of the interests which fund their political club.     The President is also the titular leader of one of the two parties anyway, so half the legislature always wants to get more power to the captain of "their team."

Levin complains that "Congress seems more than willing to abandon its core function to the executive branch and accept the status quo....."   Yes it does, and nothing Levin suggests as a solution will change that.  He admits the purpose of Congress giving away its rule-making authority is to centralize power, but does not say anything about why congress works like that.  Why have they abandoned their instituted function and chosen near-irrelevancy?   It's a result of the party system.   Throwing up a couple of amendments to try and make congress take its job back won't help, because the root problem is that Congress does not wish to do the job the Founders assigned it.  They want to empower the executives, and fund-raisers, of their respective parties.

We need to reform our candidate election system so that it is easier to get good people in office and easier for them to stand against these forces and institutions which facilitate, neigh compel even, centralization.  The unified party system is the flywheel of this monstrous system.  Corporate money spins it.

Levin does not even address the harm that the unified party system has done to our former representative Constitutional Republic.   When I say an "unified party system" I mean that the same political machine through which state candidates are run is also the machine through which federal candidates are run.  And that same machine backs candidates for both legislative offices and executive offices.  

This undermines the intent of the Founding Fathers when they set up our government of checks and balances.   The states were supposed to check and balance the federal government, and at both levels the Legislative branch was supposed to check the Executive branch.   This is the root cause, the reason why our legislative branch is giving away its authority, becoming more despised and more irrelevant.  The unified party system undermines the defining features of our political system, but Levin does not talk about it.  No one wants to talk about it except the localists.

Localism not only mandates institutional separation of political parties by state, it places reasonable limits on incorporation so that they do not become so large as to swallow up our economy and political system.    It also advocates run-offs (preferably instant run-offs) for all elections so that citizens no longer fear "splitting the vote" and electing their least preferred alternative.  This and other measures will empower regional groups within a state to directly sponsor independent candidates for office.  Political parties will get decentralized and de-emphasised in a localist nation.

Regulatory capture becomes a serious issue when giant corporate entities gain too much influence over the agencies which are supposed to be regulating them.  The bureaucracy then serves the biggest players in the industry, and erects barriers to entry for potential competitors.

Corporations in a localist nation can only be owned by real persons, not other corporations.   This prevents the abuse of incorporation to off-load risk into a subsidiary that can be left holding the bag when a giant liability issue arises.   Many regulatory agencies have grown up around managing the risks which grow around that practice- localism would ban the practice, thus eliminating the need for any bureaucracy to manage it.

Regulatory agencies do not have full sovereign immunity in a localist society.   They are liable for their actions in that those bureaucrats who run the agencies can be removed from their jobs by a judicial ruling should an agency be found culpable for exceeding their authority, becoming captured by players in the industry, or other malfeasance.

Not that they would be common at any rate.  In localism, the interstate commerce power of Congress would be extremely curtailed, and that is the source of authority for most regulations.   States can even agree among themselves to suspend a federal regulation based on the interstate commerce clause as it applies to commerce between them.   And suits at common law are preferred over regulatory solutions at any rate.

Compare these measures, which strike at the very root and heart of the problem, with the heavy-handed attempt to bludgeon the symptoms away in Levin's book.   He wants an amendment which says that every agency has to be renewed by a vote of Congress every three years.   How will that help until you first address the root cause that we have a Congress full of people who want to abdicate their responsibilities?

He also wants the amendment to say that all new regulations that will cost over $100 million dollars to comply with  (according to FEDGOV) would have to be approved by a special congressional panel.    In Arkansas, we had a law which said that all school purchases over $5,000 had to be bid out.   Of course what happened is that superintendents split their orders up so that they would have five, ten, or twenty individual orders all under $5,000.   This system would be gamed the same way.  They will just break one regulation into two parts.

That's if they even need to.  The special panel members would be picked by the House Speaker and the Minority Leader.   The most inside of the insiders would be picking trustworthy minions from safe seats to keep up business as usual.  Can you think of a worse way?   These amendments look like window dressing to me- they have the superficial appearance of trying to fix the problem while actually leaving the worst of our system in place.

In conclusion, the problem of federal bureaucracy taking over the legislative function is real.  Nothing in The Liberty Amendments will fix it though, because it attempts to address symptoms, not root causes.   We must go deeper, systemically and intellectually, to the philosophy of Localism in order to return our Republic to the Founders' vision of a just, limited, and decentralized government.

Sunday, October 27, 2013

Answers on Defense Spending: Voluntary, Mandatory, or Considered?

"The Free Rider Problem" is, whether admitted or not, problematic for advocates of most forms of libertarian society, particularly the various forms of voluntarism. The idea that no government on any level should have the power to coerce tax revenues means that any "taxes" paid will be more like donations.
The difficulty with removing the power to collect coercive taxes for anything is that "public use" goods such as national defense will be greatly under-consumed in a voluntary system. This will lead to not only a miss-allocation of resources, but in some cases a loss of the very freedom libertarians and others hold so dear.
National Defense is a prime example of a public good. You benefit from national defense (note: this argument applies to true national defense, not militarism masquerading as such) whether you contribute to the national defense or not. It would be impossible to exclude you from the benefits of national defense. That's the profile of a "public use" good. You can obtain full benefits even if you did not contribute toward the purchase.
Suppose the volunteer tax collector comes around and asks you how much you want to spend on defense this year. To reflect our real defense budget, excluding the wars in Iraq and Afghanistan, the share for the average family of four would be about $9,000 per year (you might not have known the burden was so high). The fellow tells you that to keep defense spending where it is, he needs you to write a check for $9,000, or actually $18,000 since your humble author decided things were a little tight in my household this year so I told them I didn't want to pay anything.
Who among you will honestly tell me that you will keep writing that check, year after year, knowing that it will just be one drop in a very big bucket that won't even notice that "drop" which is such a sacrifice for you?
I have heard it said that giant corporations like Coca-Cola, with so much to lose, would step up and pay the bills. Please, corporations don't care which set of government parasites is looting them, only how much they loot. "Meet the new boss, same as the old boss" would be their motto, unless the enemy nation made a deal with them, as China has done with many companies in other contexts.
Jefferson was right, merchants have no country. Corporations may even look on the unity of the two nations as an opportunity to expand their markets. Besides, if corporations were paying the bills, they'd be calling the literal "shots" even more than they do now- sending our troops overseas to protect their foreign property as a condition of their continued support. Don't count on them to defend your freedom, because that is not what they are there for. They have their own interests.
In a voluntary society, if we just go around asking everyone how much they want to pay for national defense, the answer would be "X", even when a citizen really thought the prudent level would be 2X, or 10X or even infinityX. Defense will be woefully under-consumed in a voluntary society, even dangerously so. It has been said, short of the Kingdom of God those who beat their swords into plowshares will plow for those who don't.
A society which funds its national defense this way will lose its freedom to a society which does not. The American revolution was not supported by the entire population, but the entire population was taxed to pay for it. Had we not done so, we would have lost and still be subjects of England. Could either side have won the first world war with such a tactic? How about the Second World War? That's the problem with voluntarism and public goods such as police protection and national defense. Resources are not rationally allocated because we all know we can be a free rider when things are tight, and things tend to always be tight!
But of course, it is not fair to compare a voluntary society with perfection. Comparing it to what we have now would be a much fairer comparison, and in that comparison it looks a lot better. Because what we have now is a massive over-consumption of goods- the opposite problem of the free-rider problem in public use goods.
That too is a result of the way defense is funded. The people paying for it are only distantly connected to those who decide how much to pay. And between them is a military-industrial complex which lobbies the people who pay. It lobbies them intensely. The Complex is focused on only one issue- how much money the defense industry is getting. For the general voter, a Congressman who spends too much on defense can make up for it in other areas. But for the Military-Industrial Complex, there are no other areas. Breaking it down to incentives for politicians, they have more incentive to overspend defense dollars than under spend them.
If that were the only economic incentive, it could be overcome. After all, they would just be another special interest group in Washington with few boots on the ground back home. Two things have enabled this special interest to successfully get America to overspend on defense, or really just one thing that has two components. Defense is over-consumed in our society today because the cost for it is shifted to others.
One way this is done is through the use of fiat currency debt to fund the purchases. This allows the politicians to essentially buy the favor of the special interest while shifting the costs unto the backs of the unborn. Taxing the next generation to buy support is a favorite tactic of politicians lacking in moral character. Since we don't have to write the check for it today, its all on easy, easy credit terms, we choose to tackle more immediate problems, and the debt bomb just keeps ticking.
The other way costs are shifted is that specific defense spending, which benefits specific localities where such systems are built, is paid for from general revenues. In other words, the politicians are taxing all the other states to pay for spending in their state. This is the old "if you are paying, I'll have the filet mignon" problem. When costs are shared evenly no matter how the benefits are divided, people tend to consume more than they would if they had to pay all of the costs themselves.
And of course, when you have all this excess military hanging around, there are a lot of interests that can find work for it- precipitating more "defense" spending on wars, bases, occupations, nation building, and "kinetic actions" which have more to do with protecting the foreign property of some global corporation than the actual country.
So while we could look down our long noses at voluntarism and castigate it for risking the freedom it claims to be protecting by under-consuming defense spending, we'd better be careful - because the way we are doing business now has just as big a problem- we are spending ourselves into debt slavery.
How can we find balance? If we place a mandatory tax on people for a public good, we put in place several factors which will insure we over-consume that good, in particular once a specialized industry has grown up around it. If we make taxes voluntary for a public good, we virtually guarantee that it will be irrationally under-consumed, risking our freedom to those less scrupulous about how they fund their military.
I believe the answer presented in Localism (e-book on Barnes and Noblehttp://www.barnesandnoble.com/w/localism-a-philosophy-of-gov...) (e-book on Amazon Kindle http://www.amazon.com/Localism-A-Philosophy-Government-ebook...) represents the best possible answer in a very imperfect world.
Neither the Voluntary answer on defense nor the Mandatory answer, in my view, adequately consider the unintended economic consequences of their policy. We need an integrated, and considered approach which balances the extremes of these two methods in a way that will produce optimal allocation of resources and maximization of liberty. Localism does that.
Yes, in Localism taxes are mandatory for public use goods (even here there are some possible ways around it in some places), but due to the manner in which the philosophy decentralizes not only the military, but money, debt, and corporations, the perverse incentives to over-consume defense spending are attenuated and balanced with the free rider problem which would under-consume such spending.
If sustaining liberty were easy, we'd have more of it. I urge readers to deeply consider how liberty is maximized.

Wednesday, October 23, 2013

The Pharisees of our Post-Modern Age

When I was a young man I heard it said, and repeated it myself, that when Christ walked the earth His enemies were not sinners and the unchurched, but religious people.   By now I have realized the error of this view.   The common thread of those who opposed Christ was not their religiosity, but their self-righteousness.   Christ's enemies were those who, for various reasons, felt that they had no need of God.  Their response to His message that they did was anger, outrage, intrigue and eventually, violence.

The Pharisees for example, had their own man-created code. In Mark Chapter 7 the Pharisees question Jesus as to why His disciples don't follow the traditions of the elders as regards to outward cleanliness.   Jesus answers them by describing the Pharisees relationship with God thusly:
7 'BUT IN VAIN DO THEY WORSHIP ME, TEACHING AS DOCTRINES THE PRECEPTS OF MEN.' 8 "Neglecting the commandment of God, you hold to the tradition of men." 9 He was also saying to them, "You nicely set aside the commandment of God in order to keep your tradition.'
They had their own rules, their own system, and their own program, which they were trying to shoe-horn God into.    But God was not interested in being an icon for their program, He had His own, and this fact outraged them.     This Pharisaical spirit is not limited to any part of the political spectrum.  It can be found anywhere people are so self-righteous that they are just sure it is OK to put their own agenda ahead of God's as revealed in scripture, sometimes even while trying to use Him as a figurehead.

The left for example, is just so sure that "social-justice" is the gospel that they don't even want to talk about the actual gospel in the scriptures.    Never mind that scripture never advocates the use of government force to re-distribute wealth.  Charity is always presented as an individual and voluntary admonition, never something for which God prescribes civil penalties.   This is so even in the Old Testament, where there were stringent civil penalties for all sorts of things most of us would not favor punishing people for now.  Yet proponents of socialism re-branded as "social justice" are just so sure they are right that they brush aside the biblical context for charity and use the name of God to advocate for more government force.

The same is true of environmental questions.   The left is so adamant about protecting the physical earth from perceived threats that they set aside the actual commandments of God in favor of a new set of commandments that they consider "earth friendly".   They cast aside the eternal in favor of the temporal.   It is more important in this new doctrine to love "mother earth" than it is to love one's own actual mother!

These and other trendy cause celebres have been taken up by leftist churches, but notice that one does not even have to be "religious" in the conventional sense to make these causes the basis for one's self-righteousness.   Even atheists use these and other issues as the basis for claims to be morally superior to those who hold other views.   Again, Christ's enemies were not necessarily religious people, the common thread is that they were people who felt that they had no need for God, other than perhaps as a mascot to sell their own program. In their own eyes they had nothing to repent of and thus no need for cleansing. In this case of the New Pharisees it was because they had their own code which effectively replaced God.

This code might not even pose as a spiritual code.  Secularists also set up their own standards for "righteousness" which are separate and apart from God's. The Romans for example were not Pharisees, but they shared with the Pharisees the idea that God was not the highest entity in creation.  In their case, they worshiped the state. Religion was of value only when it served the state.  What glorified the state was good, and what weakened it was bad.    If the Pharisees were an early form of the post-modern trendy churches of today then the Romans were a preview of today's secular pragmatists.  

While they may not have had the visceral revulsion toward Christ that the Pharisees had, the Romans were not going to let Him get in the way of State Business.   Justice, even justice to God, was secondary to the political needs of the state.    If an innocent Man had to be thrown to the wolves to preserve the Status Quo, then they would toss Him to the wolves.   We find their spiritual descendants today in the D.C. beltway, and in the associated business interests who want to keep our present financial system going, no matter how crooked and unsustainable it might be.   Today's New Romans, like the Romans of old, will cut a deal with the post-modern Pharisees in order to advance their mutual interests.

And make no mistake, their interests do coincide.   Since the New Pharisees have given up on repentance and renewal of the inner man through faith in God, they are left only with a focus on external behavior and material circumstances.   This dovetails nicely with the interests of the New Romans who are desirous of the further expansion of state power.    Thus the New Pharisees constantly call for more government intervention to compel the desired external behaviors and bring about their preferred material circumstances, much to the delight of the New Romans.   Big business funds them both, because they find it is more profitable to lobby government to mandate that people purchase your products rather than use traditional marketing which appeals to people to buy what you are selling of their own free will.

The last category of Christ's true enemies are the railers and mockers.  These are those who have no agenda at all beyond their own appetites.   They don't worship the state, or some code of their own making, but only their own immediate needs and desires.   The closest they have to a god is themselves and their own bellies.

The second thief on the cross, the one who joined in railing against Christ once he realized that Christ was not going to save Himself and them as well, is an example of this type.  These people are in our culture, messing up their own lives and the lives of others.   They don't control anything though, not even themselves.  They are used by the other two factions for "rent a mob" functions.   They are reliable votes for socialism because they are very quick to vote to have the government take stuff from other people, including the unborn via deficit spending, in hopes that they might get in on some of the loot.

These three groups were the enemies of Christ when He walked the earth, and their spiritual descendants oppose Him still.   These are the New Pharisees, the New Romans, and those whose god is their own belly (GITOBs).   The call for forgiveness through repentance and faith is lost on them, for they are offended at the idea that there might even be anything which they need to repent of.  While they don't see any need for themselves to repent, they do have some things in mind for you to do.

What "duties" will those who reject the duty of God attempt to place on you their fellow man? If the New Pharisees, they will want you to "save the planet" or support political candidates who advance their idea of compulsory redistributive programs in the name of "social justice."  And the New Romans will be all too glad to "serve" as the administrators of those programs, deciding who should get what. And the GITOBs?  They will expect you, or someone, to provide them with "Free Stuff."    They will continue to demand bread an circuses from the state, thus serving as a client base for both groups.

This is not to say that one must be a Christian to be a localist.  Rather, I am saying these three groups are incompatible with both Christ and Localism.    The New Pharisees have a works-based moral code, and like the old Pharisees, they are so sure that their self-created set of grand ideas is correct that they are willing to encourage the government to impose them by force nation-wide.   The New Romans don't care for any moral code that claims to be higher than the state, but are quite partial to those which are of use in expanding state power, such as environmentalism as an excuse to regulate private property or "social justice" as an excuse to re-distribute it.  And the gitobs?  They are a threat to whatever free society they are in, because they cannot or will not morally govern themselves.   When they become a voting majority, self-rule will vanish along with all rule of law.

These three classifications of persons were Christ's opponents when He walked the earth.  They are also the types of persons one is best protected from in Localism.   Interventionist government programs posing as a new religious morality will be stymied by government decentralization.   So will would-be New Romans.   In Localism, men who dream of building vast empires will be frustrated, while those working to build good communities will be rewarded.  And of course, the down-sizing of political units and other features of the philosophy will mean that the gitobs will very much sooner butt up against what Margaret Thatcher described as the true problem of socialism- that pretty soon, you run out of other people's money.

Friday, October 4, 2013

Liberty Amendments vs. Localist Solutions for Taxation

So I am reading "The Liberty Amendments" by radio talk show host Mark Levin.   My conclusion is that his "solutions" won't work, and that the solutions from Localism, A Philosophy of Government for the same issues are far superior.  This article is a comparison of his answers on the issue of federal taxation.   I have done the same comparison with the "Liberty Amendments" vs. Localist solutions for judicial over-reach and federal spending.  Basically I am going down the list because I think such a comparison will demonstrate just how much better localist answers are to what others are offering.  But my opinion doesn't matter, its yours that counts, so read on...

Levin's solution is to limit by amendment taxes on American citizens (corporate and real) to 15% of their annual income, and a limitation on other taxes with these words "Congress shall not institute a value-added tax or a national sales tax or any other tax in kind or form."

Your loop-hole seeking eye might notice that numerous taxes of almost every kind have already been "instituted" and that the wording does not seem to address the issue of what to do with other taxes that Congress has already instituted.    And of course, there are other labels Congress can put on their extraction of revenue, such as "fee".  

If you think that they won't resort to such stratagems, here is a bit of history for you: Here in my home state of Arkansas, we have a state constitution which says a 3/4ths majority vote of the legislature is required to raise taxes.  The courts ruled that applied only to taxes which were in place at the time the amendment was written, so that any new tax needs only a majority vote! Since sales taxes were not in existence at that time, the legislature has raised our sales taxes so that they are above 9% in most of the state!  The ruling class always finds a way to end-run the restrictions constitutions place on them when they are the only enforcement mechanism against themselves.

My point is one that I made at length in the previous two articles on this subject, that you can't make enough rules to force bad men to be good ones.  Bad men will abuse whatever jurisdiction they oversee, and in order to stop them you must take away all jurisdiction in a given area away from them, not lay enough rules on them so that they are forced to be good.  We must also make it much easier to replace them altogether.

But let's be absurdly generous and pretend Washington will stick by the 15% of annual income cap.   Levin's own statistics show why this would be a disaster.  As of 2009 he says the bottom quintile (20%) of the population had a negative income tax rate of -9.3%.   That is to say almost one dollar of every ten they get comes from welfare via the tax code.   The next quintile of Americans, who are in the 20-40% range of income earners, have a negative 1.3% tax rate.   Only when you get to the 40-60% range of income earners do you find a group which pays more in taxes than it gets from various welfare programs hidden in the tax code, and they only have a tax rate of 1.3%.

The slice of the population in the 60% to 80% range of income earners has an average tax rate of 4.6%.  The top 20% of wage earners pay 13.4% of income in taxes.  Only when you get to the top two or three percent of wage earners do you find tax payments significantly above 15% of income.  For example the average for the top 1% is 21% of income.  

So taxes for the top 1% would get a huge tax reduction under Levin's amendment, which would have to paid for by increasing taxes on the other groups.   The primary beneficiaries of Levin's amendment would be giant corporations.   The biggest losers would be the middle class and upper middle class- the people who tend to buy Levin's book!   He is setting up his audience to be taxed far worse than they are in the name of "fixing" the income tax problem.

His amendment would not fix our tax problem.  Since only the top few percent pay total taxes above 15% of annual income, our  tax system could stay just like it is after his amendment passed.   The one exception being that the taxes paid by the very richest in the nation (including global corporations) would be shifted unto the backs of the only ones left who would be able to pay them - the middle class and upper middle class.

He also claims that this would somehow simplify the tax code and reign in the IRS.  None of this is true.  As I just showed you by the numbers, even if his amendment passed the tax code could stay exactly like it is except for the fact that those at the very top of the heap (mostly giant corporations) would get a significant tax cut which would have to be paid by the rest of us.

The Localist solution goes back to the vision of the Founders.   The central government would be prohibited from laying any direct tax on individual citizens.    The states would be interposed between citizens and the central government.  It would no longer be their business as to how much income each citizen earned and from where.     If the feds could not meet their budgetary needs through modest tariffs and taxes on interstate corporations then they would have to approach the states for the difference.   Each state would then decide how to raise the money needed to pay its share of the federal bill.

This is a solution which would really simplify the tax code, or if not, at least it would not apply to individual persons, but only to large corporations with the resources to sift through it.   Individual citizens would also be shielded from the IRS in such a system, much more so than under Levin's proposals which as I say leave the current system pretty much in place despite the posturing that they would do otherwise.

Of course, Localism is an integrated philosophy.   It would be hard to fund our current fedgov off of reasonable tariffs and moderate taxes on interstate corporations.    Most things that fedgov is trying to handle now must be either pushed down to the states, or eliminated.     For states where people want big government, they can still have it, but they should not expect people from states who want less government to pay for it.   In addition, Localism's policies on limiting foreign corporations must be adhered to in order to, among other benefits, make these tax policies work long-term.

If you haven't read "Localism, A Philosophy of Government" yet but are interested in government policy, you should.  The way it approaches the problem is far more satisfactory than anything else I have heard out there, "The Liberty Amendments" being a case in point.