Monday, July 26, 2010

Racism and Us

What is racism? That’s a good question these days. It might be easier to define the meaning of life in one sentence.

Americans are already overwhelmed about race. Ethnic studies and diversity seminars are as much a part of contemporary university campuses as the football team. Every week our government and media masters inform the peasantry that we require a (new) Conversation on Race and someone the other day told me that we now have our first black president.

What we know about racism is like what George Orwell said about fascism, that it ‘has no meaning except in so far as it signifies something not desirable.’

We have been particularly bombarded with “evidence” of “racism” lately.

There is still smoke emanating from the Shirley Sherrod-firing-rehiring fiasco. New Black Panther Samir Shabazz’s clarion call to kill cracker babies still shocks anyone except those familiar with the New Black Panthers.

Everyday for awhile it seemed like another vulgar recording of Mel Gibson surfaced with Mel using another one of those words.

His rants were more painful than shocking, but they were also words in what was meant to be a private conversation.

This is bandied about by the tolerance-mongers as proof that Mel is a racist. Of course, the faster one denounces Mel and calls him a dirty racist, the more racially enlightened one is, or so the logic would seem.

Even Shirley Sherrod’s case is an exercise in silliness. Although she’s been exonerated, mostly by a liberal press embarrassed to have been snookered by some simple editing from Andrew Breitbart, the infamous video still catches her imputing racism to President Obama’s opponents. Even then, it’s hard to see how her own purported racism would affect her performance as a USDA state director of rural development, a bureaucratic post that should probably be eliminated anyway.

But there is certainly more than thought crimes going on.

A political appointee is about to be rewarded with a lifetime appointment to the highest court in the land and it seems normal. Chris Dodd, one of the chief clowns who both perpetuated and benefited from the housing scam gets to write the “financial reform bill” with nary a peep. Meanwhile, July ends as the deadliest month in a nine year war. Like racism, the national interest in Afghanistan seems to have as protean a definition.

Of particular importance to Americans should be what this all says us.

The sad truth is that charges of racism are not likely to end anytime soon. Not only is it hopeless (and bloody) to attempt perfecting mankind, but because charging someone with racism is simply too valuable, convenient, and probably fun for any of its users to surrender.

The ruling class definitely has no intention of letting racism, real or imagined, fade into memory – to its own benefit.

The fastest way to silence opposition, the race racket gets outright encouragement from our overlords. We contaminate political discussion ourselves when we launch into self-righteous diatribes. Out go questions about constitutionality - in comes whether some minutiae in a speech pandering to Muslims means President Obama is secretly a Muslim.

Democrats, who were once the party of segregation, have been the masters of this but Republicans, and many of their partisans who have joined this highly-received but poorly-written farce, are catching up.

It’s not too surprising. There are few satisfactions greater than getting to assail someone else as a racist. It’s a not-so-thinly veiled pat-on-the-back.

But it is for all these reasons that our ruling class cherishes these squabbles. Instead of Nero fiddling while Rome burned it’s the citizenry.

Maybe Americans aren’t actually interested in citizenship and civic responsibility. Maybe politics and current events are just another form of entertainment and playing the racist game is just everyone’s favorite episode.

As a game, it’s just another way for a dreadfully narcissistic culture to fall further in love with itself and where a Republican or Democrat winning office is no more impactful than which Kardashian sister is dating which sports star.

Instead of issues like the Constitution, natural rights, and peace consuming our creative energies, perhaps this is the republic we actually want.

And get.

Monday, July 12, 2010

Peter Schiff's Parallel Universe and Ours

Under discussion: How An Economy Grows And Why It Crashes by Peter D. Schiff and Andrew J. Schiff, 233 pages, $19.95, Hardcover.

In that parallel universe Peter Schiff is probably winning his race for Senate.

But here in the United States of Criminals, Celebrities, and Corporations, he barely has ballot access in the Connecticut race to replace Chris Dodd where he trails such Republican heroes as WWE First Lady Linda McMahon and former congressman Rob Simmons before Simmons dropped out.

The groundswell for a Schiff candidacy emerged in the aftermath of the 2008 financial collapse which Schiff had predicted for years, explaining that the illusion of wealth created for the housing boom could not be sustained and that the inevitable bust would spread to other sectors of the economy. A mash-up video of his appearances on various financial TV shows in 2006 and 2007, where he was openly derided and actually laughed at, is titled “Peter Schiff was Right” and has been a Youtube sensation with over one million views.

So just how did Peter Schiff, president of Euro Pacific Capital brokerage firm, know that the economy was going to crash when almost every pontificator on both sides of the aisle was promising that the good times would never end? Did he have a crystal ball? Was he imbued with special powers to see when those unpredictable financial catastrophes are barreling down the road?

Well, one thing Peter Schiff was blessed with was a father who discovered the Austrian school of economic thought after breaking out of the New Deal orbit sometime during the 1950’s.

Schiff’s father, Irwin, is well-known among anti-IRS crusaders and perpetual victim of the income tax tyranny. At 82, Irwin is currently in federal prison (not for the first time) after unsuccessfully challenging the tax code.

But when Irwin was much younger, he entertained his boys in long car rides with economic lessons disguised as stories. One such story was “The Fish Story” which Irwin turned into a book in 1979 entitled, How an Economy Grows and Why It Doesn’t. In 2010 “The Fish Story” was modified and turned into How an Economy Grows and Why It Crashes.

At first, How an Economy Grows almost seems an odd selection for a traditional review because it is so simple and straightforward. Since the inspiration for the book is a children’s story, it’s written on a level anyone can understand. And with many of the fictional characters (from Ben Barnacle to Tricky Dickson) based loosely on real people it is certainly entertaining for adults.

The narrative can really be split into two sections. The first half is about how a primitive society began on a remote island. From there the reader is introduced to basic Austrian economics through fish. Since fish is the abundant material on the island and holds real value for the islanders it is the obvious choice for currency. The fish had value everyone on the island could appreciate and understand. Someone wants a canoe? That’ll be nine fish. That might be a lot of fish, but a canoe was a luxury and cost a lot to construct.

Then as time progressed and people had more fish on hand they discovered they needed some form of fish repository – a bank!

With depositors fish could be loaned out to prospective entrepreneurs. If the would-be businessman had a good opportunity to repay the loan with interest then there was a better chance he could get the loan in the first place. The bank might have to turn people down for loans, but they had to because they were at risk themselves. What if the loan was issued to someone who couldn’t handle it and defaulted? Who would bail them out?

Here the reader learns about the basics of banking, lending, credit, and saving.

As the people of the island increased their numbers they realized they needed some form of government and so the second half of the story begins and the republic Usonia was born. Governed by 12 senators including an executive Senator in Chief, a constitution was written so that the senators would not overstep their authority.

But after a few generations, the Senate’s wise and prudential statesmen were replaced by more appealing “go-getters.” Schiff portrays the moment things changed when Senator in Chief hopeful Franky Deep came into power:

“He observed that people loved getting stuff for free. Similarly, they hated paying taxes. So, he devised a plan: if he could find a way to make it look like he was giving something to the islanders for free, then he could gain their unconditional support. Unfortunately, all the government had was what it raised in taxes. The Senate didn’t catch any fish. They could only give by taking. How could they give away more than they took?

“After a particularly bad monsoon, Franky sensed an opportunity (politicians never let a crisis go to waste).

“He preached, ‘My fellow islanders, the storm we have just been through has wrought untold hardship on our people. Many of our citizens are now hutless and fishless.

“’We cannot stand idly by and do nothing. If elected, I will institute a government reconstruction program for our neediest citizens to repair the damage.’ But he assured the citizens that the cost of the construction would be paid for by the economic activity the spending generated.

“His opponent, Grouper Cleveland, offered nothing, except wise stewardship of the island’s savings and a promise not to interfere with the liberties of the citizenry.

“Not surprisingly, Franky Deep sailed into office as Senator in Chief.” (104-105)

With the institution of paper money in the form of Fish Reserve Notes, redeemable pieces of paper backed by real fish in the vaults, the rest of the story is laid out:

“The new bank director . . . was not crazy about the new fish notes. He thought the ease in which the notes could be printed would create dangerous incentives for the senators. Yet, he could sleep soundly at night provided that the government maintained enough actual government fish in the bank to redeem all the notes.

“Not surprisingly, his confidence didn’t last long.

“Soon, Franky and his agents had handed over far more Fish Reserve Notes than the government’s account had fish to redeem.”

“’Franky, stop the presses! . . . I have only nine fish available for every 10 notes that you guys have handed out. If the savers figure out that there really aren’t enough fish to cover their deposits, there will be a run on the bank and I’ll be out of fish. . . .’” (107)

Slowly but surely all of his successors followed Franky’s lead. The newly-appointed bank chairmen, beginning with Ally Greenfin and later with Ben Barnacle, followed in giving the government what they wanted. After Franky Deep came Lindy B, promising to

“Furnish the canoe navy with bigger spears, but he would also help the sagging economy by 'providing emergency unemployment fish notes to all laid-off workers' prevailing over Buddy Goldfish who offered nothing but careful stewardship of the island’s savings and boring protection for the islander’s economic liberties. More importantly, Buddy argued that the island could not afford such an extravagant ‘spears and fish’ policy.

“Not surprisingly, Lindy won in a landslide.” (126)

And comparably broad parallels to modern America finish out the story.

Humorously illustrated, Schiff’s story is a pleasurable read. It demonstrates that basic knowledge of economics is simple and that the laws of economics apply the same to complex societies as they do for simple ones. In short, if more saving is necessary for people on a small island to recover from disaster then saving is what is necessary to rescue a large society.

Peter Schiff will certainly not win his election for U.S. Senate in Connecticut. But he has bequeathed a valuable chapter of economic education to his country.

Perhaps this time people will listen.

Thursday, July 1, 2010

Limiting the Republic

It would seem that term limits are getting a hearing in 2010.

Among the tenets of the 1994 Republican Revolution was support for term limits, many of the GOP challengers promising to serve no more than three terms and retire. Most Republicans didn’t keep the promise, although ironically it was one promise Mark Sanford could keep.

The theme might be picking up steam again as Rand Paul won his primary election on a platform of term limits and no earmarks.

The antithesis: Ninety-Two years old, the longest serving member of the Senate and reportedly the “King of Pork,” Robert Byrd’s death is a reminder about the soundness of term limits and how even in as anti-Establishment an atmosphere as 2010, any meaningful change in Washington D.C. is little more than an exercise in futility unless something deeply penetrates the American soul.

Accompanying the obligatorily fawning obituaries of Robert Byrd, longest serving senator, reformed Klansman, constitutional scholar, has been the mention of his most enduring accomplishment: pork to West Virginia.

As chairman of the Senate Appropriations Committee, Byrd secured the lion’s share of federal money for his state. Dubbed the “King of Pork” as an insult, Byrd embraced the epithet as a badge of honor. It’s tempting to chuckle about how Byrd turned the charge on its head, but it also highlights the problem of enacting term limits.

The most obvious problem is that term limits are dependent on the willingness of the authorities to voluntarily relinquish power. If there is nothing as permanent as a temporary government program then what is more permanent than the bureaucrat who never retires?

But this problem cuts two ways.

A career politician becomes such not just because he won’t retire from office. Voters have to keep electing them. William Murchison of Chronicles magazine answers an important question:

“Nearly everyone has heard Lord Acton’s axiom about power: It ‘tends to corrupt.’ Corrupt whom, though? The power-wielders alone? Just as corrupted can be the beneficiaries of the exercise of power.”

If we’re supposed to believe that West Virginians weren’t grateful for the federal money Byrd sent their way for decades then how else might we explain how one the reddest states awarded the old Democrat nine terms in the Senate? Can West Virginians, or any American, name any piece of legislation Byrd ever authored?

On the issue of earmarks and appropriation, Americans can be a little fickle.

We are aghast when we realize how much money is wasted on a certain congressman or senator’s pet project back in their home state but we aren’t as appalled when our local farmers get subsidies or the community gets a new public park, even if the sign at the entrance has to be defaced with a politician’s name.

In short, we like the pork when we’re the ones getting it.

As such, Americans cannot possibly be serious about cutting spending or reducing the size of government unless we are willing to deny ourselves some of the luxuries we’ve become accustomed to receiving from the federal government. Part of this includes the luxury of having elected representatives dedicated to getting us the goodies.

Professor and columnist Walter Williams likes to tell a story about the late Senator Jesse Helms.

On principle, both Williams and Helms were opponents of subsidies, but Helms got them for his state anyway. Why?

Helms believed the voters of North Carolina would have sent him packing in favor of someone who would give them their God-given subsidies. Considering Helms was not a legislator known for buckling to the pressures of popular opinion, his story delivers a sad message about the mentality and entitlement of American voters.

Therefore, the solution is bound up in more than just an election or a few elections. It requires a change of heart. Demanding others give up their goodies requires giving up our own.

It also means Americans must stop asking themselves, “What can government do for me?” because when the government does something for me it has to do something for everyone else. In a nation of over 300 million, a $13 trillion deficit is just the start.

Was Benjamin Franklin right when he said that republics end when the people discover they can vote themselves money from the treasury?