Archive for February, 2011

LVMI's curious blindness to corporate statism and the rot caused by limited liability, or, Jeffrey Tucker has fun with central planning

February 10th, 2011 No comments

Jeffrey Tucker‘s February 9 Mises Daily post, Obama on Auto-Defrosting Refrigerators, is perfectly fine and unobjectionable (quibbles aside about Jeffrey’s startling misunderstanding of Obama’s claims regarding the entirely voluntary EnergyStar program), spokesmen for government always oversell government’s accomplishments).

But being an ornery and objectionable cuss, I couldn’t resist commenting on what Jeffrey left out. (Where’s the beef?!, as I believe some old lady famously asked).(emphasis and minor tweeks added):

TokyoTom February 10, 2011 at 12:49 am

Government regulations have made a mess of our daily lives. Whether it is banning effective products or mandating inferior functionality in our appliances and fixtures, government’s role here is indisputably to degrade our quality of life.

Jeffrey, I’m sorry, but while you are certainly correct that government regulations have made a mess of our daily lives, your conclusion that “government’s role here is indisputably to degrade our quality of life” is extremely shallow, and the rest of your discussion suffers as a result.

While a great deal of stupidity accompanies government, why do you ignore the cupidity that DRIVES government? You know, the cupidity that drives the elites who always dominate the use of government, the self-interest that influences the decision-making of administrators, bureaucrats and employees, and the cupidity that drives the rent-farming by politicians? Are not the powerful corporations that use government to pick consumers’ pockets and to create barriers to entry worthy of mention?

And why no discussion of dynamics? We have a regulatory state not simply because we have elites, politicians and bureaucrats who wish to extend their control and purview, but because we have governments that create risk-shifting corporate machines whose owners have no downside liability for corporate misdeeds. By the simple act of granting corporate status, governments have set off cycles of social damage, growing demands for government action by citizens to “do something”, a growing “agency problem” as government interventions increase management independence from shareholders, growing opportunities for a socially irresponsible corporate elite, bureaucratic and political manipulation, and growing partisanship battle for control of the wheel (including fights over CSR and tort reform) and of the spoils of our increasingly top-heavy system.

Yes, we still have competition in the marketplace. But the reason we don’t have MORE freedom is not just “stupid government” by self-serving central planners who don’t understand the marketplace; the real reason is that that we have elites who used the grant of limited liability corporate status to avoid personal responsibility and to mask their depredations, and then further use their concentrated power to control government.

More thoughts here:

Merely pointing out the stupidity of our court intellectuals does nothing to strike at the roots of our problems, and certainly is not persuasive to leftists who think that more government is the only solution to corporate risk-shifting and rent-seeking.

Kind regards,


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George Carlin was correctly cynical about ‘the American Dream’, but are our elites monolithic?

February 9th, 2011 No comments

I recently ran across (again) the below clip by our now deceased comedian cum truth-teller, George Carlin. While he offers some refreshingly bitter criticism, Carlin is too simplistic and too black, and offers no particular avenues by which informed American sheep can seek to regain control over their lives.

There is no monolithic “them”. Our ‘Left’ and ‘Right’ politics both mask and manifest the very real power struggles among our governing elites — there is hope in this, but the real problem is not that none of them cares about making the world a better place, but that all of our elites seem to be statists who think that the struggle over the wheel of government is the only way to a better future.

Few of them seem to understand the centralization of power, parasitism and rot that have resulted from fractional-reserve banking and the subsequent capture of it by the Federal government — and none appears to understand that the very grant of legal entity status to corporations whose owners have no personal liability for what these entities do drives an even more pervasive socialization of risks, destruction of community and a snowballing growth of the regulatory state and the fight to control and profit from it.

Really improving our societies will require us really to understand and strike at, and not ignore, the roots of the problems that are strangling us.

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BBC's naive 'Meet the Climate Sceptics' ignores that our governments today richly deserve the mistrust that makes collective action impossible

February 6th, 2011 No comments

In the not-unsympathetic hour-long presentation that BBC broadcast on January 31 (after surviving a legal challenge), climate ‘skeptic’ Christopher Monckton (the Viscount Monckton of Brenchley) says something about climate science that I can agree with and that is important:

The central question is this: it’s not whether CO2 or other greenhouse gases can cause warming, because we’ve known for 200 years that they can.

It’s not whether we are causing the CO2 in the atmosphere to rise, because we are.

The only question that really matters is, given the rate that we are adding CO2 to the atmosphere, is how much warming that will cause, if it continues.

In other words, Monckton is correct that the core climate science issue is about what is known as “climate sensitivity”; that is, how much warming is going to be triggered by the rapid ramping up in atmospheric CO2 as we use fossil fuels.

Climate science skeptics like MIT’s Richard Lindzen and company adviser Pat Michaels agree and suggest that climate sensivity will be low (though in this film Lindzen rather jaw-droppingly suggests that “I can live with 5 degrees; you can live with a degrees” Fahrenheit increase in avergage global temperatures!).

The producer, Rupert Murray, suggests that the skeptics wrongly overstate their case and underplay the risks. Murray leaves unstated his premise (and that of the climate scientists he includes) that, if one accepts more conventional views of climate science, then one must also agree that government-imposed restrictions on personal freedom are necessary in order to moderate the threats posed by our use of fossil fuels.

Interestingly and sadly, rather than examining whether there may be common ground in policies that reduce climate risks, Monckton and other prominent skeptics like Lindzen and Michaels (and British commentator James Delingpole), all also appear to make the same assumption that the only possible policy responses are those that reduce personal freedom. Thus, rather than a focus on the content and merits of policy alternatives, we have a rather frantic search to find reasons to dismiss climate risks, and to question the motives and sanity of those who are concerned about them – all, of course, while ignoring the question of what economic interests benefit from the status quo. This behavior is, of course, also mirrored by many of the “warmers”; both sides have their own “Bootleggers and Baptists” coalitions lined up.

Not surprising when so much is at stake, and all are fighting over the use of government. Thoughtful people among the skeptics will acknowledge that the climate is a shared commons that can only be managed via collective action; thoughtful people among the “warmers” likewise should recognize that government itself is a commons that continues to be mismanaged for the benefit of elites and the expense of most citizens (witness our financial crisis and the BP disaster).

As Nobel Prize-winner Elinor Ostrom coninues to point out, trust is a sine qua non for effective management of common resources. Unfortunately, however, that trust is precisely what we are missing the most – and for good reason, as our politicians, bureaucrats and leading corporations have proven themselves unworthy of it.

It should not go unnoticed, however, that a policy to destroy public trust and foster our love of partisan acrimony is one that would be very effective in protecting the interests of those who benefit from the status quo. Creaming the commons while socializing risks is an inherent aspect of corporate business models (starting with the state grant of limited liability to shareholders).

Here’s a link to the video; my apologies that I couldn’t figure out how to embed it here:

[Update: It seems that he BBC has forced the removal of all non-BBC postings of the program, and only viewable via servers located in the UK. As skeptic Anthony Watts puts it: “the BBC does not allow people outside of Britain to watch the video; some sort of cranial-rectal problem I’m told, a proxy server in the UK is needed to view it if you live elsewhere”. Here is James Delingpole’s take on the the program – prior to actually seeing it: And here is one take by a relatively perceptive viewer:]

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YouTube: Bank Bailouts Explained: the Sick Joke is on You (Thanks to Government-enabled Moral Hazard and Kleptocracy)

February 3rd, 2011 1 comment

I ran across this today and thought that you, my loyal readers, might like it too.

My favorite piece of dialogue:

A: Do these people have no shame?

B: When you constantly get the bailouts, you don’t care about the shame.

Just a small example of how government and statist corporations are destroying wealth and community.

More here on Moral Hazard and Limited Liability in banking and elsewhere; let’s not forget BPAvatar and CorpSpeak, too!


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Resources on gold, fractional reserve banking, money manipulation/inflation, central planning and kleptocracy

February 1st, 2011 1 comment

 This is a modest start; more suggestions appreciated!


Jacques Rueff, “The Monetary Sin of the West”, 1972

The Origin of Money and Its Value, Mises Daily: Monday, September 29, 2003 by

Can Gold Cause the Boom-Bust Cycle? Mises Daily: Monday, June 28, 2010 by

The Gold Standard and the Great Depression, Mises Daily: Friday, October 30, 2009 by

The Meaning of Gold in the News, Mises Daily: Thursday, September 30, 2010 by


Greenspan’s Bogus Defense, Mises Daily: Monday, April 06, 2009 by

Brad DeLong’s Erroneous Defense of Greenspan, Mises Daily: Monday, August 03, 2009 by

The Fed as Giant Counterfeiter, Mises Daily: Monday, February 01, 2010 by

Is Our Money Based on Debt? Mises Daily: Monday, August 16, 2010 by

Fiat Money: How Else You Gonna Kill 600,000 Americans? Mises Daily: Friday, September 11, 2009 by

My Reply to Krugman on Austrian Business-Cycle Theory, Mises Daily: Monday, January 24, 2011 by


The Nuttiness of Negative Interest Rates, Mises Daily: Monday, April 27, 2009 by

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