Ron Paul vs. Paul Krugman

Bloomberg held a short economic debate between Ron Paul and Paul Krugman. OK, calling it a debate is a stretch, it was more like a slaughter with Ron Paul absolutely devastating Paul “we need more inflation” Krugman:

You know what? I almost felt bad for Krugman. Honestly, he seems like a nice enough guy and I do believe he actually does care about people. It’s unfortunate that he’s such an idiot when it comes to economic matter and it’s even more unfortunate that people take him seriously on economic matters.

Also, good on Ron Paul pleading his allegiance to the Republican Party if Romney gets the nomination. I know a lot of people will criticize Ron Paul refusing to be a good little obedient dog to the Republican Party but I give him a great deal of respect for standing by his principles. His competition is a violent psychopath who wants to reign over the American people and denizens of foreign lands. I won’t support such violence and it’s good to hear Ron Paul say he won’t either.

Regarding the Supreme Court

With the upcoming election the most common scare tactic being used by those who advocate gun owners support Romney are possible upcoming Supreme Court nominations. For those who don’t know the president of the United States gets the privilege of nominating Supreme Court justices and those justices serve a lifelong term. Currently Romney’s camp are trying to scare people into voting for Romney by saying Obama will likely nominate Eric Holder as a Supreme Court justice. Honestly, if possible Supreme Court nominations weren’t on the horizon these people would likely come up with some of justification of why you should vote for Romney.

I’m not going to sit here and tell you who to vote for, that’s your business if you even bother to vote at all. What I want to consider is the Supreme Court itself and its implications for liberty. Many of the same people encouraging gun owners to vote for Romney are also individuals who think the Constitution is some kind of biblical document that was brought down by Moses from Mount Sinai. I hold a different view, I don’t actually like the Constitution all that much. Yes, it is better than most constitutions but I find the Article of Confederation far more desirable than the United States Constitution. Part of the reason I dislike the Constitution involves the judicial branch and the Supreme Court itself. The United States Constitution establishes the judicial branch in Article III:

Section. 1.

The judicial Power of the United States shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services a Compensation, which shall not be diminished during their Continuance in Office.

Section. 2.

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;–to all Cases affecting Ambassadors, other public Ministers and Consuls;–to all Cases of admiralty and maritime Jurisdiction;–to Controversies to which the United States shall be a Party;–to Controversies between two or more States;– between a State and Citizens of another State,–between Citizens of different States,–between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact, with such Exceptions, and under such Regulations as the Congress shall make.

The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed.

Section. 3.

Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort. No Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court.

The Congress shall have Power to declare the Punishment of Treason, but no Attainder of Treason shall work Corruption of Blood, or Forfeiture except during the Life of the Person attainted.

From this single article of the Constitution has arisen a court that has the power to rule what rights individuals do and do not have. For example, the Second Amendment guarantees “the right of the people to keep and bear Arms, shall not be infringed.” To laymen that wording seems very straightforward, everybody enjoys the right to own and use firearms without any infringement agains that right. The Supreme Court has ruled otherwise, allowing restrictions against this supposed right.

When the Supreme Court makes a ruling it becomes the law of the land. If the Supreme Court ruled that the state held the right to confiscate any firearm at any time would people role over and submit to the state agents going from house to house taking arms? Those who subscribe to the idea that the Supreme Court is the ultimate authority of the matter of individual rights should, less they be hypocrites. To individuals like myself, who believe in the absolute right of self-ownership, the idea that nine men wearing robes can determine what my rights are is comical.

What if the Supreme Court did rule that the right to keep and bear arms was a collective right that could be violated by the state? It’s an interesting thing to consider. If you don’t recognize the state’s authority the ruling of the Supreme Court becomes irrelevant outside of the fact violence will be brought against your person if you should violated their decree. If you do recognize the state’s authority then you must also accept their ruling and comply with it believing it is right.

Those who recognize the absolute authority of the Supreme Court must then admit that they believe rights are not rights but state granted privileges. At any point these privileges could be taken away by the ruling of a mere five people (since Supreme Court rulings are always based on the majority out of nine). If one judge had ruled against incorporation of the Second Amendment every state would have the right to prohibit the ownership of firearms. If that had been the case then the Second Amendment, which states the right to keep and bear arms can not be infringed, would have been a temporary right stripped by a single Supreme Court ruling. In essence, the five judges who ruled in favor of incorporation each held the power to strip a supposed right from the people of the United States. Think about that for a minute, five people in this country held the power to determine whether or not those of us living in the United States had a right.

To me, the idea that five individual can legitimately determine what my rights are is absurd. Could the Supreme Court then rule that the First Amendment isn’t actually applicable? They did, in seven court cases. If the Supreme Court had rules opposing in any single mentioned case we would not enjoy the supposed rights we do today.

Believing that the Supreme Court holds some kind of authority necessarily means you believe rights are not only privileges but temporary privileges. Even though the Second Amendment has been incorporated by the Supreme Court people are afraid that one of Obama’s nominees may reverse that decision in another case. Stop and think about that for a moment. The Supreme Court holds the power to determine what rights you do and don’t have and that determination can be changed at any time. Why isn’t anybody pissed about that? Aren’t rights supposed to be absolute? Doesn’t the Constitution protect our rights? What happens when a clause in the Bill or Rights opposes a ruling by a court established by the Constitution?

I don’t think people spend enough time considering topics like this. Perhaps we should spend less time worrying about Supreme Court nominations and more time getting pissed off at the fact our rights are temporary privileges that can be granted to taken by the state whenever five individuals in robes decide so. Frankly I don’t give a shit who is on the Supreme Court because I find that entire court to be a sham. They no more hold a right to determine what my rights are than I have a right to determine what your rights are.

Before somebody posts a comment saying, “Yeah the situation sucks but it is what it is so you have to vote for Romney” let me just say this: no I don’t. The situation sucks because people kept voting for the “lesser” or two evils. Every time somebody justified voting for the “lesser” evil they have been responsible for the situation we face today. I’m not going to be part of the problem and I sure as the hell am not going to be the guy who has to explain to his children why their life sucks so much. Do you know what really sucks? People who cow to the state. Something isn’t so just because the state says it. If the state said you had to kill your neighbor would you kill your neighbor? What if the state decided to reverse its decision on abolishing slavery, would you help round up fellow human beings to be sold as slaves? How far are you willing to be pushed until you finally say “No?” I’ve already reached that point, I’m down cowing to the state, and I’m no longer going to be an obedient little dog whose only decision is whether I should put a checkmark next to the (R) or (D). I urge those of you reading this to join me. Whether you vote for the Libertarian Party, Constitution Part, Green Party, Independent Party, or don’t vote at all is irrelevant to me. My only request is that you think and stop relying on the state to do your thinking for you.

If the Supreme Court rules that I no longer have the right to keep and bear arms I will disregard that ruling just as I would disregard any ruling stating I no longer have the freedom of speech. Because of this I don’t care who the justices are nor will allow myself to be suckered into voting for Romney based on what amounts to a ghost story.

Government Monopolies are Malinvestments

Since the turn of the century it has become common practice for the state to use its monopoly on force to expand its monopoly on natural resources. Canada and Norway both maintain a monopoly on minerals through state ownership of extraction companies and required licensing for any extraction by third-parties. Even the State of Minnesota has maintained mineral rights on most property sold after the state of the 20th century. Unfortunately the state, lacking the market feedback system, is unable to extract resources efficiently and usually squander any monetary gains from resource extraction on nonproductive uses such as expanding bureaucracy, maintaining a powerful military, and giving handouts to cronies. In fact many countries with abundant natural resources end up in worse positions than countries without such resources, a happening so common the term resource curse was coined to describe it.

Peru is a perfect example of this. During the 1840s an island off of Peru was discovered than held a great deal of guano:

In 1839, Peru was a devastated nation. Debt and destruction in the aftermath of both the War of the Confederation (1836–1839) and the War of Independence (1822–1825), a crushing debt default in 1826, and several hundred years as a Spanish colony had left its economy small and craft dominated, without even a banking system.

But in the early 1840s, explorers made an exciting discovery. Due to an uncharacteristic lack of rainfall and the unique variety of birds nesting there, Peru’s Chincha Islands were found to be covered by mountains of bird excrement several hundred feet high in places, which had accumulated over many centuries. They were thought to be the most enormous guano deposits in the world — and of a particularly high quality — at a time when guano was used worldwide for fertilizer. So, out of nowhere, a valuable natural resource was found, one which promised — if managed properly — to produce wealth that could “stagger the dreams of Oriental imagination,” possibly ushering in a new era of development and progress.

At the time guano was almost like gold since it was used by almost everybody as fertilizer. Guano was so valuable that the United States passed the Guano Islands Act:

Whenever any citizen of the United States discovers a deposit of guano on any island, rock, or key, not within the lawful jurisdiction of any other Government, and not occupied by the citizens of any other Government, and takes peaceable possession thereof, and occupies the same, such island, rock, or key may, at the discretion of the President, be considered as appertaining to the United States.

The act was used by the United States to lay claim to some 100 islands, so this wasn’t a law used sparingly to claim one or two islands. Needless to say with guano being such a valuable resource at the time the Peruvian government decided to law monopoly claim to their newly discovered treasure trove. Money made from selling the guano was used as money obtained by a state is usually used, for mostly frivolous projects:

Public works and private prebends remade the city … with stately museums, parks, plazas, academies, boulevards, mansions, and theaters, not to mention the latest in potable water systems and Italian opera. Imports — everything from workaday textiles to lavish accessories and vintage French wines [arrived in the city].

Since the state doesn’t have to concern itself with market feedback it is always apt to dump great deals of money into unwanted projects. How useful is a museum, mansion, or theater in a country where a majority of the population live in poverty? No very useful, which is noted by the fact no entrepreneur invested money in any of those enterprises. Unfortunately the more of those things a country has the longer its political dick is and countries love political dick measure competitions.

As these investments never return any profit they lead to economic ruin. We see this in the United States today with all the spending on Medicare, Medicaid, offense defense, bailouts, etc. have failed to return any profit and are leading to the slow collapse of our sham economy. When you keep dumping money into failed enterprises the only possible outcome is total failure, something Peru experienced when that state’s meddling in the guano market lead to other sources of fertilizer being sought out. At some point all resources become more expensive than people are willing to pay and at those times alternatives are researched by individuals wanting a piece of the pie from currently disgruntled consumers. When you can pay $5.00 for a pound of fertilizer or $50.00 for a pound of fertilize the choice of which one to choose becomes obvious:

The European crisis hammered the Peruvian economy in two ways: first, because the Peruvian government had incrementally (and with disregard for competitive substitutions) increased guano prices so much, stricken farmers turned to other, lower-priced fertilizers; demand for shipments from the Chincha Islands dried up. Second, with London money and commodity markets frozen, lenders had little appetite for extending additional credit to once-again-debt-encumbered Peru.

Peru’s gravy train came to a screeching halt. All of the sudden the worthless investments being made by the state became impossible to continue as money was drying up. What’s a state to do in such a situation? The only thing a state knows how to do, use violence in an attempt to maintain its monopoly:

In response to the economic crisis, in 1875, Pardo — now president of Peru — ordered the military to seize the southern nitrate fields on the border with Chile in an effort to offset the decline of the guano business with another source of fertilizer revenues. Even though the state hastily expropriated land and facilities from private investors, it was too little too late. Work on the railroad projects halted in August of 1875. Over the next few months, a variety of other government projects defaulted amid a widening financial contagion culminating in January 1876, as Peru defaulted on its sovereign debt for the second time in a century: mountains of loans from European banks in stark juxtaposition against diminished avian dung heaps.

This should be a familiar formula for anybody who pays attention to foreign affairs. Saddam Hussein ordered the invasion of Kuwait because their cheap oil flooded the market and challenge Iraq’s primary source of income. The United States has a history of invading or otherwise intervening in countries with vast natural resources including Iran, Iraq, Afghanistan. In fact the British and United States lead overthrow of the Iranian government in 1953 happened shortly after the country nationalized its oil resources (which was previously controlled by Anglo-Iranian Oil Company, a British owned company). Peru demonstrates such tactics are nothing new, the state has a long history of military invasions to seize natural resources.

Meanwhile the free market allows for peaceful distribution of natural resources to productive uses, since entities that invest resources into unproductive uses face insolvency in a hurry. On top of that the threat of insolvency prevents private entities from squandering resources on massive frivolous endeavors. The state, being free of market feedback, has no such worries and thus ends up dumping massive amounts of money into enriching itself:

In hindsight, “guano … proved a great ‘lost opportunity’ for [Peruvian] development … [as] state investments stymied possibilities for national entrepreneurs, diversification, and gains in domestic productivity.” In roughly four decades, under the supervision and at the direction of the government, between 11 and 12 million tons of excrement fertilizer were shipped, earning $500 million in revenues. (Another estimate holds the number at more than 20 million tons shipped and $2 billion in revenue.) But in the end, 53 percent of all of the guano revenue was spent on expanding the bureaucracy and the military, 12 percent on direct transfer payments, and 7 percent on reducing tributary impositions. Twenty percent had been spent on railroads.

Peru’s politicians spent 53 percent of all guano revenues on enriching themselves, creating more dependency on the state, and enhancing the military so they could steal other country’s stuff. None of these things are valuable for anybody besides the state and its cronies. That’s what states do and we should keep it in mind. It doesn’t matter where the money comes from either. Whether the state gets money from a monopoly on resources, taxation, or tariffs it will be spent mostly on worthless things. If we listen to those demanding the rich be taxed heavier where do you think that additional money will go? It won’t be Medicare, Medicaid, or Social Security; it’ll go to funding the military, hiring more government employees, and lining the pockets of state cronies.

When the state gets money it’s lose/lose unless you’re tied to the state. This is because any money obtained by the state is stolen. In the case of Peru’s claim of the guano filled island the property was stolen from individuals who could have put the guano to productive uses in the free market.