John Fund's Report on Canadian Elections

In the January 24th WSJ Political Diary, as part of his reporting on the Canadian election results, John Fund stated:

That said, Canada's election is a watershed. The Liberals have so dominated the country's politics that they were in office longer during the 20th Century than even the Communists in the Soviet Union. The country was in danger of becoming a permanent one-and-a-half party state. Having been chastened by the voters for their rampant corruption and insider dealing, the Liberals will now have a chance to clean up their act. For his part, Mr. Harper will end the gratuitous America-bashing of recent years and at least make a stab at more sensible economic policies. Grading on a Canadian curve, yesterday's result amounts to a welcome political revolution.

John’s commentary is probably intended to be light-hearted, and some of his observations have merit, but overall that paragraph reveals some serious problems with his thinking. First, to compare a voluntarily-elected government with the brutal, totalitarian regime in communist Russia erases all the vital distinctions, i.e. that the government in Canada is limited, that its electorate could have voted it out every four years, that the government didn’t use force to maintain its position, etc. -- to instead focus on an essentially perceptual level observation, i.e. how long the government was in power. Or to look at it another way: if we ever manage to elect a great government, should we vote it out after a few years, simply in the name of not having them in office for too long?

Also, there is no a priori reason to dismiss a one party state, much less a “one-and-a-half party state” (whatever that means), if that party respects rights and governs properly. Should we indict George Washington’s government simply because it was a “one party” government, or should we look at how the country was governed during his tenure and evaluate it on that basis?

Google and Privacy

This article from today's NYT is pretty amusing:
"After Subpoenas, Internet Searches Give Some Pause"

Here we have an article that surveys a bunch of completely uninformed people on how they 'feel' about the government subpoenaing Google searches. Their 'feelings' mostly border on baseless paranoia (though NYT throws in a few level-headed quotes presumably for balance).

But what I find absolutely hilarious in the story, is that one Kathryn Hanson is "frightened" that the government might discover that she googled the phrase "rent boy" (apparently a young male prostitute). Note to Kathryn: If you are so concerned about your privacy, you might want to refrain from announcing your online activities on the front page of the New York Times.

Sheryl Decker admits to composing extremely unflattering emails about the President and the government, but now she 'thinks twice' about what she writes in email, since the government might be watching. Note to Sheryl: The government also has access to the New York Times. And it doesn't need a subpoena to read it. Now they know who you are, and what you did. Perhaps you might want to 'think twice' about what you confess to reporters?

On a more serious note, it's a bit mind-boggling that the New York Times would create a front page article out of a bunch of interviews with ignoramuses regarding how they 'feel' about a topic on which they have no knowledge.

In point of fact, I don't know whether to be concerned or not about the government subpoena of Google records -- and the New York Times did nothing whatsoever to help me understand the facts and issues involved. The article quotes one commenter saying that the government will only have access to batches of search phrases, without any identifying information -- which was my guess on the matter. But could the NYT perhaps do some first-hand investigative reporting into the contents of the subpoena to see if that is true? Are there any legal or constitutional issues with the government subpoenaing information to go on what seems like a 'fishing trip'? I have no idea. And the New York Times sure didn't see fit to enlighten me on the matter.

Welfare State

Gus Van Horn has a nice post looking at the effects and psychology of the welfare state as evidenced in New Orleans and Houston since hurricane Katrina. I particularly like a formulation from the beginning of his post:

A republic whose citizenry does not regard the protection of its inalienable rights as the purpose of its government is doomed to get a government that violates those rights in some way.

Nice Title - Sad Story

This WSJ editorial initially caught my eye because of the clever title and by-line: Eat Paint, Get Rich - Welcome to Wisconsin! But the story is worth reading to get an idea of how bad the legal climate has become:

On Jan. 6, Gov. Doyle vetoed a bill that would have held manufacturers liable for damages caused only by products they'd made, in most cases. Without the bill, manufacturers that once produced lead paint, for example, can be held liable in Wisconsin for virtually any lead poisoning--a plaintiff doesn't need to prove that the paint was made by the manufacturer, or even that his lead poisoning was caused by paint, as opposed to, say, lead-contaminated soil or lead pipes.
...
The product-liability veto, though, caused the most consternation in business circles. It started with the case of J. Steven Thomas, who claimed to have eaten paint chips containing lead pigment in the early 1990s. At that time, he lived in rental housing built in the early 1900s, when the use of lead-based paint was common. Wisconsin did not ban lead-based paint until 1980.

Mr. Thomas, who had already recovered about $324,000 from his landlords' insurers nevertheless sued seven lead pigment manufacturers for more damages. The case was brought despite his admission that he could not identify which companies manufactured the lead pigment used in the paint he allegedly ingested, and that he could not even identify whether any of the seven defendants ever manufactured the pigments involved.

Historically, plaintiffs in personal injury cases have almost always had to prove a specific product manufactured by a specific defendant actually caused an injury. But the Wisconsin Supreme Court did away with this rule in another July 2005 opinion written by a liberal Doyle appointee, which held that Mr. Thomas could prevail if he could prove that the defendants manufactured and marketed lead pigments, even if the pigments were not in the paint chips he allegedly ate. The premise for this liability is that the defendants participated in the industry that contributed to the risk to the plaintiff.

"The end result of the majority opinion," argued one dissenting justice, is that "the defendants . . . can be held liable for a product they may or may not have produced, which may or may not have caused the plaintiff's injuries, based on conduct that may have occurred over 100 years ago when some of the defendants were not even part of the relevant market." Another dissenter wrote that the case "created a remedy for lead paint poisoning so sweeping and draconian that it will be nearly impossible for paint companies to defend themselves or, frankly, for plaintiffs to lose."

Entrepreneurship: America vs Europe

In catching up on some old Mauldin letters, I came across this interesting factoid:

The Washington Post this June states, "In France, not a single enterprise founded in the past 40 years has managed to break into the ranks of the 25 biggest French companies. By comparison, 19 of today's largest U.S. companies didn't exist 4 decades ago. That's why France is looking to the United States for lessons."

I think this is consistent with the general observation that Europe is mired in class and social heirarchy, while America, though much less than in its heyday, still values and rewards accomplishments and ability.

Lobbying

I agree with the gist of Walter Williams' latest article, that the real problem with respect to lobbying is that government has the (unconstitutional) power to grant favors and interfere in the economy, which forces businesses and others to seek favors from Congress. Getting the government out of the economy is the only real way to solve the problem. From Williams' piece:

You ask what can be done? Campaign finance and lobby reform will only change the method of influence-peddling. If Congress did only what's specifically enumerated in our Constitution, influence-peddling would be a non-issue simply because the Constitution contains no authority for Congress to grant favors and special privileges.

Embarrassing Weekend for the NFL

I have always maintained that the NFL is by far the best run sports league -- its playoff structure keeps almost every regular season game meaningful, the coaching is incredible, the strategy and intensity of the game second to none. But I almost quit watching after the officiating in the Steelers-Colts game (especially since the other AFC game was also so poorly refereed). I mean it would be much better just to spot the Colts a 7 point lead rather than officiate to make it happen ... at least that way everyone would know where they stood. And that the Colts and officials couldn't team up to beat the Steelers, should give everyone pause before they proclaim the Colts the best team in the league, much less a great team. (I know this is way off topic for this blog, but I had to get it off my chest ;-))

Bird Flu

This may not be of general interest, but for anyone who follows all the news on potential epidemics and pandemics, stratfor presents some good information on why the 1918 catastrophe is unlikely to be repeated. The most important point:

But the fourth factor, which will pull some of the strength out of any new pandemic, is even more basic than starting health: antibiotics. The 1918 pandemic virus was similar to the more standard influenza virus in that the majority of those who perished died not from the primary attack of the flu but from secondary infections -- typically bacteria or fungal -- that triggered pneumonia. While antibiotics are hardly a silver bullet and they are useless against viruses, they raise the simple possibility of treatment for bacterial or fungal illnesses. Penicillin -- the first commercialized antibiotic -- was not discovered until 1929, 11 years too late to help when panic gripped the world in 1918.

Democracy and the Right to Vote

From claims that we’ve won the wars in Afghanistan and Iraq simply because locals there can now vote, to recent “Get Out the Vote” campaigns, our leaders -- democrats and republicans alike -- consistently imply that the most fundamental American political idea is that of democracy.

But is it really? Is the form of government we advocate really best denoted by the term “democracy” and is the freedom to vote truly a citizen’s most important right?

Our Founding Fathers certainly didn’t think so.

In its root sense, democracy refers to a form of government in which the majority rules. There are no limits placed on the issues which fall under the voters’ control, so if the majority wishes something done, it is done, regardless of who is sacrificed along the way. (The most famous illustration of this is Socrates’ execution at the hands of Athenian democracy.)

Since democracy offers no legal protection to individuals or minorities, the Founding Fathers rejected it, and in its place chose a form of government which could do so: a constitutional republic. In such a system, the government’s role is clearly defined and delimited by a written constitution -- a document which cannot be trumped by the momentary whims of any emotional majority.

Moreover, in their genius, the Founding Fathers recognized that it is not enough to simply have a constitution -- rather, to fulfill its purpose, a valid constitution must be based on a respect for, and a defense of, every individual citizen’s rights. Only when it is so based is each man protected, and only then does the role of the government become strictly limited (e.g. to such functions as military, police and judiciary).

To properly implement such a constitutional system, it is essential to understand the hierarchy of man’s rights. As Locke and others helped show, man’s most fundamental right is to his own life and freedom, with all other rights flowing from it. Thus it is no accident that in the Declaration of Independence, Jefferson identifies only three rights, those of “life, liberty and the pursuit of happiness”, because these are the most basic of rights, from which all others are derived.

Yet it is precisely this hierarchical view that our leaders have lost. And while it is true that the rights they so often cite, most notably the right to vote, are valid, they are only so when subordinate to the fundamental right of each man to his own life.

Thus freedom of association is an important right, but it cannot be used to justify gathering in a lynch mob; freedom of speech is vital to a free society, but it cannot justify libel or defamation. Similarly, the right to vote is important, but no vote can override any individual’s rights. In a proper representative form of a constitutional republic, voting is used to decide who fills certain positions in government, but the power of those positions is restricted by written law protecting every individual -- regardless of anyone’s vote to the contrary.

Now clearly our politicians and intellectuals do not advocate something so crass as unlimited mob rule. But by continuing to hold democracy as the end-all be-all of national policy, they obfuscate and undermine the proper goal of protecting individual rights.

For instance, their pointing to free elections and democratically-adopted constitutions in Iraq and Afghanistan is of itself meaningless. After all, Hitler rose to power largely through democratic and constitutional processes.

Rather, the only valid standard for American policy is whether or not Americans’ rights are being protected. As such, foreign nations must be judged by their respect for rights and freedom, since only nations which do so can be peaceful. Yet our leaders, by their misplaced emphasis on democracy, imply that even if a foreign nation is explicitly and violently hostile to the US, it’s fine as long as their government is duly elected!

To avoid such potentially catastrophic errors, both in foreign and domestic policies, we must dispense with our focus on democracy and voting -- to instead champion the proper form of government: a constitutional republic; and its guiding principle: the defense of each individual’s right to life.

More on Housing Prices

This is a long analysis of the current housing market by Gary Shilling (from Mauldin's Outside the Box Letter). I found much of the data interesting, though I have yet to form a definitive prediction on future prices (I lean towards the idea that in three years prices will be lower than they are now). In particular, this data was new to me:

The subprime mortgage market, into which many lenders have rushed as they strain for yields, is also showing strains. The rise in delinquencies is actually worse than it appears. Delinquencies for new subprime ARMs in the first nine months of 2005 were 6.2% compared with 3.7% for the same period in 2004. The more recent borrowers have proved to be the worst re-payers. And since many of these ARMs will adjust up in several years, even a flat house price pattern will spike delinquencies since refinancings won't work without price appreciation for many. Note that among 2003 subprime mortgages with ARMs that reset up after two years, delinquencies leaped from 10.2% right before resets to 16.6% six months later. Note also that there were about $220 billion in two-year ARMS in 2003 but $440 billion in 2005.

If you're interested in the subject, I recommend reading the whole piece.

Rob's Letter to the Editor

Rob has had a number of LtoE's published in national newspapers, but in my opinion this one, published in Dec 16's WSJ, is his best to date:

To the Editor:

Arthur C. Brooks notes that empirical data shows a correlation between
the level of a person's income, and his level of expressed subjective
happiness ("Money Buys Happiness", 12/8/05). Contrary to the cliche,
Professor Brooks concludes that money *can* buy happiness.

In fact, the causality runs the other way. It's not that "money buys
happiness", but rather that "happiness buys money". More precisely, the
very virtues and habits that lead to happiness--goal-focus, rational
discipline, creative thought, optimism--are the same ones that lead to
success in any endeavour, including in the financial realm.

To quote Ayn Rand's famous "money speech" from her novel Atlas Shrugged:
"Money is the product of virtue, but it will not give you
virtue...[M]oney is the creation of the best power within you."


Sincerely,

Robert Tarr

Back Soon

I've been busy during the holidays but hope to be back blogging regularly soon. In the meantime here is an excellent editorial by Max Boot on Hollywood's moral ambivalence (also available here).

From the article:

Yet for 60 years, Hollywood has had no problem making movies that depict World War II as a struggle of good versus evil. Rightly so. Because for all the Allies' faults, they were the good guys.

For some reason, Hollywood can't take an equally clear-eyed view of the war on terrorism. The current conflict, pitting the forces of freedom against those of Islamo-fascism, is every bit as clear cut as World War II. Yet fashionable filmmakers insist on painting both sides in shades of gray, as if Israeli secret agents or American soldiers were comparable to Al Qaeda killers. Two of the most serious holiday flicks — "Syriana" and "Munich" — are case studies in mindless moral relativism and pathetic pseudo-sophistication.

Hat tip: MC