Courts and regulatory agencies as markets

For most of us every day folk, courts are places where we want a judgment that says, “We are right.” But courts are also “rules markets.” Rules markets are where frameworks for how we engage each other going forward are produced and depending on how broad the issue is defined, those rules may be forcibly consumed by others who were not a party to the conflict that brought the original rule producers together in the first place.

The recent U.S. Supreme Court ruling in Masterpiece Cakeshop v. Colorado Civil Rights Commission provides an example. While the issue in that case focused on whether Colorado’s equal rights agency applied its civil rights rules in a neutral manner where civil rights violations were alleged, some Americans questioned why the consequences of that case should spill outside of Colorado and impact citizens and businesses in other states. The short answer is that externalities, whether positive or negative, from a court ruling enter society because of the structure of our legal system. The legal structure is centralized and the ripple effect of legal decisions spreads out to more citizens the higher up the legal rule production hierarchy you go. The interpretation as to what the rule should be for governing a relationship or conflict becomes the “law of the land” where the highest court becomes the market for producing legal rules.

I heard some of this concern from every day folk during a CSPAN session the day after the Masterpiece Cakeshop ruling. “Why did this conflict have to escalate?” some asked. It escalated because a centralized legal system provides opportunities for individuals occupying a minority class to extend its views on how society should work to the rest of America by accessing and participating in the rule making process.

Conflict is a high cost for entering this “centralized rules” market, but a higher price is paid by the rest of society where we are subjected to rules produced by a small number of participants seeking to produce rules that favor their behavior and the detriment of limiting or modifying everyone else’s.

In my opinion, the limitation of the behavior of others as a result of rules produced in a centralized market is a negative externality or negative benefit. No matter the noble intent of the rule producers, where the rule produced impacts my behavior, it impacts my liberty.

One way to limit the negative externalities of centralized rulemaking is for parties to enter into voluntary agreements, agreements limited to the parties resolving the immediate conflict. It would be a lot cheaper for parties in actual conflict or anticipating conflict if the rules were produced as a result of voluntary engagement designed to head off conflict versus the other way around. It would also be less expensive for members of society who are not direct parties to the conflict since they would not be subject to rules that they did not produce.

For the individual, the political economy is micro.

Individuals have to act like foragers even in this technology dependent society. By forager I don’t mean having to grope around in the soil looking for roots, climbing trees for fruit, or hunting for fresh game. I mean that the approach to obtaining and using resources should be a microeconomic approach versus a macroeconomic approach.

The media especially persuades individuals that attention should be paid to the macroeconomy, whether domestic or global. Is national gross domestic product improving? How many millions were employed last month? How many more people applied for unemployment benefits? Did the President’s latest tweeted announcements lead to an uptick in the financial markets?

On the ground, particularly within the black population, I don’t hear chatter about the illusionary macroeconomy. The chatter is about the nominal prices faced by a shopper, whether the costs of food fits their budget, whether an employer has reduced a consumer’s work hours, and whether a family member can help out with a few extra bucks. People are preoccupied with managing the resources that are actually on hand.

It’s probably why macroeconomists sound so ivory tower, their policy proposals so pie in the sky. The average person in my population couldn’t relate to them if they tried because the positions of the macroeconomist sound so detached.

The late James Gapinski wouldn’t take kindly to hearing one of his former students writing off his branch of the economics profession so brusquely and being a fan of Diane Swonk (yes, some economists do have groupies), I cannot say that as people or professionals that macroeconomists don’t empathize with the everyday person. I believe most do. At best they present data about changes in the prices of commodities i.e. copper, corn, wheat, cocoa, oil, etc., that directly impact an individual’s microeconomy, but if global trade were curtailed would that mean the end of my existence or simply mean seeking alternative resources within closer proximity?

So where does the “foraging” come in? What do we mean by foraging? It is my term for self-sustainability. We should consider producing our own energy at a minimum, enjoying the benefit of less reliance on the grid along with lower costs per kilowatt hour of consuming electricity. Supplementing our food purchases with food that we can grow at home would provide an additional benefit of lower food costs.

The self-sustainable approach also makes us less susceptible to not only changes in the macroeconomy, but less susceptible to the transmission of macro rhetoric. Media and politicians would have less fear and uncertainty upon which to leverage their narratives and messaging. The political landscape would either be less noisy or we may see political packages that better align with the increased freedom garnered from self-sustainability.

The second scenario is less likely, unfortunately, because providing political packages that enhance personal freedom is out of sync with the goals of the State which is to create and maintain a dependent collective. Self-sustainability and certainty is a potent competitor to fear and uncertainty and the State would rather not aid the former.

Toward a New Political Market: Rewiring Democracy to Make Entry More Expensive

Democracy has created a political market where prospective providers of political packages challenge each other for the vote and indirect control of society. The perception that democracy is about equal expression of multiple voices within society creates an opportunity for prospective providers of political packages to delineate the market by creating different packages for a variance of voter: marital rights for the LBGTQ community; increased funding for and an increased number of social welfare programs; or progressive changes in affirmative action programs where greater access is created for middle to upper income white women. The reality of democracy, where democracy is an institution that allows more factions to vie for control of society in a bloodless transfer of power, would still result in factions delineating political markets and offering more packages only because the pot has to be sweetened to garner voters into a faction’s camp.

Is this expansion of the supply-side and demand-side of the political markets a bad thing? I believe the answer is yes for the following reasons.

First, the suppliers of political packages and the voters that demand them are creating an ever increasingly expanding State.  As an instrument of the State, government has expanded way beyond what the framers of the Constitution intended.  Article I, Section 8 of the U.S. Constitution provided limited duties for the government; limited duties that included providing post offices, a national defense, the regulation of domestic and foreign commerce, the coining of money and protection against counterfeiting, the regulation of bankruptcies, the promotion of science and useful arts, and establishing courts. Any other police powers would be left to the individual states.

Today, the federal government is involved in many parts of the individual American’s personal life. The federal government has weighed in on abortion; the regulation of marriage; on the use of contraceptives; the amount of privacy for sexual acts between consenting adults; the use of radio frequencies by individuals; who a proprietor may serve or not serve in her store; whether an individual must enter the markets to buy health insurance; the amount of information businesses must share with consumers; the amount of information companies must share with investors; and the manner in which a private corporation must manage its communications networks.

For the individual who is best able to determine and promote her personal and economic self-interests, this expansion comes with administrative rules and procedures. It comes with limits on individual experience, growth, and decision-making. It comes with limits on freedom.

The mention of freedom provides a segue to the second reason: taxation. Among Congress’ powers is the power to lay taxes. Even with the limited powers of the Congress, I would expect the amount of taxes levied and collected from Americans to grow along with the population of the United States and the infrastructure and other needs the government would be expected to provide. But along with extra-Constitutional supply of political packages comes the additional costs of supplying those packages and a heftier tax bill to go along with it.

The limited enumerated powers afforded to the U.S. government per the Constitution do not support social welfare programs such as social security, Medicare, or Medicaid, yet programs like these account for a significant and growing portion of federal government expenditures.

According to the Center on Budget and Policy Priorities, in fiscal year 2016, the federal government spent $3.9 trillion.  Social security spending accounted for 24% of federal budget spending. Together, Medicare, Medicaid, Children’s Health Insurance Program, and other medical aid subsidies accounted for 26% of federal budget spending. Safety net programs such as refundable portions of the earned income tax credit, the child tax credit, supplemental security income, food stamps, school meals, and low-income housing assistance contributed nine percent of federal government spending.

For those believing that defense expenditures and aid to foreign governments take a larger share, think again. Military spending accounts for 16% of the budget. In addition, according to the Center on Budget and Policy Priorities, interest on money borrowed by the federal government amounts to six percent of the federal budget.

Approximately 84% of the fiscal year 2016 budget was financed by government revenues including taxes. Whether debt financing increases or not, Americans will still be on the hook for paying federal outlays or paying the debt as increased burdens due to increased programs and policies are crafted.

And the burdens will increase. Analysis by the Committee for a Responsible Federal Budget estimates that the federal debt load as a percentage of gross domestic product will increase from 77% today to 96% by 2029.  Spending is expected to increase over the next ten years, from 20.8% of GDP in 2017 to 28.6% of GDP in 2027.

We have a political market place that is delivering tyranny. By creating more market participants, more issues are being spawned that lead to more expensive solutions chasing in some cases problems that do not exist. For the problems that do exist, the solutions that political packages promise are not blossoming. Democracy is failing. It is creating a society built on burden creation. A growing number of individuals no longer wish to carry the financial burdens the current representative democracy creates, especially when they are seeing no returns from their expenditures.

I propose one solution here for now: reduce the number of voters which will lead to a new voter base that providers of political packages will have to adjust to. The United States should require states to impose voter registration requirements every two years, with the registration closing one year before the midterm and general elections. Just like new immigrants are required to take a civics test in order to become naturalized citizens, Americans should be required to take a rigorous civics test in order to vote. Such a test will meet three goals.

First, a civics test will move the U.S. closer to ensuring a better-informed voter is entering the voting booth. In theory, a voter becomes a more effective citizen when they stay abreast of current political events and can apply critical thinking skills to assess those events. Today, this is just not happening.

Second, the required time to prepare and take the exam along with paying a nominal fee for taking the exam will leave the door open to only the most serious and informed voters. If democracy is to have any validity, shouldn’t participants demonstrate the concept’s importance by investing the time into taking the exam? Is this not the type of voter you want making decisions on leadership and issues placed in a referendum?

Last, a civics test challenges the very notion of democracy itself. I take to heart the following quote from Winston Churchill:

“The best argument against democracy is a five-minute conversation with the average voter.”

In today’s social media world, that argument extends into perpetuity given the overwhelming level of misinformation regurgitated by users of Facebook, Twitter, and other platforms. I at times wonder why these individuals are allowed into a voting booth and indirectly cause the creation of policies that for the most part work against my freedoms and liberties.

Democracy needs a reboot. It might just need to be tossed, at least on the national level. ….

 

A reining in of the political media should be expected under a nation-state model

Forbes reported today about a statement of work issued by the U.S. Department of Homeland Security on 3 April 2018.  The statement of work seeks prospective vendors capable of providing the Department’s National Protection and Programs Acquisition Division with the capabilities to monitor traditional and social media. The specific objective of the services is:

“Services shall enable NPPD/OUS to monitor traditional news sources as well as social media, identify any and all media coverage related to the Department of Homeland Security or a particular event. Services shall provide media comparison tools, design and rebranding tools, communication tools, and the ability to identify top media influencers.”

The statement of work does not get into any specifics as to why the Department would need such a program. It could be one of three reasons. One reason could be a push back by the Trump Administration on what it calls “fake news.” Mr Trump has shown a disdain for what he terms as unfair reporting typically from media perceived to be left leaning. He has no love for CNN, a lack of love expressed with so much disdain that he came out against the Time Warner-AT&T merger, one that is now being challenged by the Trump Justice Department.

The second reason for the proposed statement of work may be to create another tool for dealing with the media attacks a Russian troll service has been accused of. By monitoring media influencers, the United States could make a preemptive strike against journalists, bloggers, broadcasters, etc., that spread fake news and set the stage for divisiveness in American politics.

The third reason I see is that the political media has to be reined in by the nation-state. Part of the nation-state’s political ordering of and for society should include keeping the collective in order by controlling the messaging. While some spin is allowed in order for news organizations to establish some type of brand differentiation, i.e., MSNBC leans liberally forward while FOX is conservatively fair and questionably balanced, the general messages issued by the nation-state via the political media must be uniform enough to keep the masses in line or distracted. Too much spin to the left or to the right creates chaos in the collective, a disturbance in the force that the nation-state cannot afford.

I believe reason three is the purpose for the Department’s statement of work. Some Americans may see the proposal as an attack on a free press, but has the press ever really been free? Except for the occasional “breaking news” (which amounts to a press secretary given their favorite reporter or a reporter they can use the first shot at a story), most political news is initiated by a state actor with the media being tasked for commercial and political reasons for distributing it.

Probably over the weekend we may see some discussion on the meaning of a “free press.” Given that this story is not even trending on Twitter anymore has me wondering how seriously the media is taking the Department’s action.

A brief history of nation-states and currency

The following brief outline on global trade, world, and U.S. history will help your children, grandchildren, nephews and nieces get through two semesters of a boring college lecture ….

“To celebrate a fiat currency is to celebrate poverty and theft. It is an acknowledgement that nation-states, central banks, merchant banks, and government treasuries were created to launder money.

Original wealth is the result of theft. When property was created, the desire to steal increased. Land means ownership of productive power. To increase your wealth, you stole land and shared some with your cohorts who would then form a moat around you and protect you from commoners and other barbarians.

Trade is a method by which you claim a stake in another tribe’s resources. As trade with peoples outside your tribe and later kingdom increased, there had to be a way to exchange value without giving another tribe direct claim to your land. The solution: issue currency. The more currency you have, the greater claims to wealth you can make.

The first mistake made was assuming that merely producing more coin by digging for more gold would lead to more wealth. The only thing that caused was inflation. Inflation erodes value and spending power and also invites war because other tribes don’t like the idea of their buying power being eroded because you went off, worked South American native inhabitants to death, and shipped home more gold. In order to slow down the erosion, tribes, now countries, created central banks and merchant banks to launder money.

In order to launder money, the king had to seek out new channels for spending and investing gold. He laundered it by issuing debt from his treasury through his central bankers at which time the original holders of wealth i.e. land holding thieves with coin backed by land, could convert gold into bonds. The king also laundered coin by granting charters and investment capital to stock companies, companies that would sail to foreign ports and establish trading posts. They would purchase raw materials and slaves in one port, transfer the raw materials and slaves to another port, and finally transfer finished product to your country. Sales and taxes on those sales would increase your treasury and pay back your bond holders.

In order to further increase your booty, you would use different types of promotions and incentives i.e. freedom to practice religion, freedom from prolonged imprisonment, freedom from a nagging wife, etc., to get more people from various tribes to move to your new colonies voluntarily where they would produce more goods and services and pay taxes, hence increasing your largesse. These colonies, filled with various free and enslaved people who other wise would not give a shit about each other, would become a nation-state, which simply boils down to a forced confederation of people who have little in common and giveth not a shit about each other.

Later on, someone, probably a disgruntled cousin, would get the ridiculous idea to form a democratic government, but even with that tweak in how the oligarchy controls the economy and currency, the model remained intact.

The takeaway. Whether slave or freed person, your being here was a manufactured event based on false premise along with the creation of an artificial country. The nation-state is the result of money laundering.

How we long for the switchboard operator and virtual spilled tea

During the tumultuous 1960s, someone reminded DARPA that the network of connected computers it created could not be turned on its own people. The guys and gals of the agency had an “a-ha” moment in the late 1980s and decided to pass it off to private sector agents who could then, via an open source technology and a consumerist market narrative, invite the nerds from Bellvue and Arkham to create an insidious surveillance mechanism that you now call the internet.

Getting Americans, who once had a distrust of the CIA and FBI for violating their privacy rights, to spill almost all their personal beings into a computer via digital bulletin boards at first was no simple feat. The first drawing board blew up during the 2000-2001 recession. Amazon was one of the very few consumer-centric companies to survive the downturn. The internet was apparently dead ….until 11 September 2001.

The internet found its two-fold purpose. In private hands under the guise of “democratic openness”, “free speech”, “innovation”, and “market capitalism”, well-off college students would drop out of their undergrad and graduate programs and do the surveillance bidding of government by creating search portals and social media alluring enough to get unsuspecting consumers to look up information they once obtained from newspapers, the barber shop, grocery stores, and Friday night tea parties in exchange for the handing over of their personal (and typically mundane, boring) information.

The second portion of its purpose would be turned outward. Making up for the lack of human intel on the ground in the Middle East, the internet could be used to leverage messaging campaigns to spur revolt, as countries such as Egypt and Libya can attest to.

One has to wonder if the chickens have come full circle to roost as the vanguard of domestic surveillance, i.e. social media, now see its faculties leveraged by Russia as The Great Bear seeks pay back for the dent in its Middle East influence, due in part to the democracy narrative spread by the FANGs.

Yes. Life was simpler when Ruth Buzzy ran the switch board and encyclopedias, radio, television, and tea time gave you all the information you needed .

A New #Republicanism: Value-based connection between tribes is all the “#diversity” we need

A friend and I were shopping at a farmers’ market in Dekalb County, Georgia yesterday. I enjoy the atmosphere in that market, an atmosphere containing multiple languages and dialects; different ethnic groups and races. The happy-go-lucky liberal would argue that what I saw was an example of people coming together as one to participate freely in commerce as one. To that I would say, bullshit.

What I saw and enjoyed was that multiple ethnic groups could go to that store and find items sold in lanes that catered to a particular culture’s tastes. There was no attempt at fusion, at trying to melt people into one pot for the purpose of creating some “universal multi-chrome of social mush.” Differences were actually respected.

I get the feeling that the left doesn’t get this. Rather than strengthening institutions that support these differences, that create the lanes that say being different is expected, the left argues that we are all “one”; that we are “equal.”  I don’t know what world liberals live in, but I would argue, based on the configuration of that store and the body language of the shoppers, that separate lanes were not only appreciated but demanded.

Saying that I am equal to or the same as a blonde white girl is insulting. The universal multi-chrome of social mush model that espouses this nonsense erases her background and my background from discussion. It ignores the different perspectives from which we view the world. The model dilutes us. As unique people spawned by unique peoples, we owe it to ourselves and our tribes to promote our uniqueness as much as possible, whether through marriage, voting, work, or art.

This runs counter to liberal government, an institution that would rather you stifle your own uniqueness than remain free. Liberals, in order to maintain a nation-state of diverse tribes, need to push a narrative of “diversity” and “equality” in order to maintain the broadest tax base possible. Liberal governments cannot afford tribes splintering off from the collective. Tribes falling for such narratives are the poorest inhabitants of a nation-state and without sufficient capital as a buffer, they are reliant on the false promises of diversity laws and equality policies.

Diversity and equality are poor substitutes for capital and when the marginalized rely on diversity and equality laws that were written by the people with capital, further failure is guaranteed.

Policy that addresses the differences in tribal or ethnic group values and provides infrastructure where different groups can exchange value without given up their uniqueness is the appropriate approach. A true republic would do just that where self-sustaining groups choosing to go their own way would be left alone to thrive without being subject to onerous rules created by people who do not even look like them.