TT's Lost in Tokyo — by TokyoTom

My recent post, “Bob Murphy on climate change at Antiwar Radio; a puppet for the “King Coal” hand that feeds him?“, attracted a bit of attention, including some hostile comments from some LvMI community members who thought my comments regarding the motivations of Bob Murphy`s funders were over the line.

Since I consider the issue an important one and welcome the comments, I thought I would raise the comment thread to a post here, in the hopes that I might elicit further thoughtful commentary. 

Are cui bono inquiries off-base to Austrians when reviewing policy arguments over government policy? Or, as distasteful as such inquries may be, are they unavoidable?

I note that I have tried to have this discussion with Bob on several occasions over the past four months; for the curious reader, here, in chronological order, are my posts:

Bob Murphy, the Heritage Foundation and “green jobs” – ignore coal! We only pay attention to rent-seeking from greens/the left;

In
which I try to help Bob Murphy figure out just what the heck I`m
talking about (when I say he`s entangled in a partisan, rent-seeking
game); and

Fun with Self-Deception and Rent-Seeking: Bob Murphy`s “Man in the Mirror”.

Here is the comment thread (anonymized to avoid distractions; I am happy to add handles back in if the relevant persons prefer):

# Sunday, October 04, 2009 4:37 PM
by
TokyoTom

“A”, you`re having a tough time reading me.  

1. I think I`ve fairly clearly stated that I think that Bob`s
expressed opinions on climate change are influenced by the fact that
they are supported by a rent-seeking interest. When I said “This
doesn’t need to imply…” I was referring to whether or not he believes
what he SAYS – as opposed to what he omits to say – and expressed the
view that he probably does mean what he says (as well as that I agree
with much of what he says).

2. I don`t think I`m being evasive at all, but rather
straightforward. And I don’t consider my fairly open challenges to Bob
on this matter to be “somewhat irresponsible” within the “context of
sincere and productive debate”. Instead, I reluctantly find them to be
necessary, given the ubiquity of rent-seeking and the ways that it
perverts both legislation and the debate over it.

3. I like Bob and don`t really enjoy making this criticism, but I
think he would probably be the last to say that questioning his
entanglement with rent-seeking interests is off-limits, particularly
when rent-seeking is PRECISELY one of his chief substantive criticisms
of cap-and-trade. Bob`s personal familiarity with Austrian criticisms
of the influence of business and other interest groups on government
policy does not create immunity from criticism on the same grounds.

4. “I don’t think TT will be so forthcoming”. Care to take back your
words? In the future, perhaps you`d be good enough to leave me time to
reply before you speculate on whether I will?

5. “a sin [sic] of omission, is proof of a sin of commission.  It is
a non-sequitur.” You`re using a lot of big words, but I`m not sure I
follow you. I`ve said Bob failed to disclose something that was
relevant to the discussion. Period. (Bob may have some thoughts on if
it was a sin and what kind, but if it was deliberate I`m not sure I see
a distinction between omission and commission.)

6. “anyone can make any claim that Bob has not provided enough background”.

Sure, but there are only certain times when “full disclosure” is
relevant; on most things Bob comments on whether someone funds him is
irrelevant. But when he is talking about legislation that will have a
significant impact on someone who is paying him to speak, that fact
that he is acting as a spokesman is VERY relevant. That`s why Scott
Horton asked the question, and why Bob dodged it.

7. “by making an ad hominem”

Sorry, but if you want to split hairs, a “cui bono” argument is not
ad hominem argument. In any event, Austrian economics tells us that we
need to worry about the perversion of government via rent-seeking. If
the wheels of our worrying about rent-seeking are ever to hit the road,
it means that we have to keep asking “who benefits”.

This of course complicates debate and cuts many ways; sorry that I can`t make life simpler for you.

8. “while avoiding discussing any issues Bob may be incorrect on.”

Are you serious? I`ve had several years of substantive discussions
on climate on the LvMI blog, and argue routinely with Bob on
substantive matters, both on my blog and over at his. All you`re
showing here is an unadmirable ignorance or shortness of attention.

In any case, your attention is welcome, but we can have a more
intelligent and productive discussion if you`d check your inclination
to reflexive negativity.

The intransigence of a core of coal interests, in the face of a rebellion by firms that support legislative action on climate change, is threatening the status of the US Chamber of Commerce as the premier business council in the US, as now Apple Computer has quit the US Chamber of Commerce.

Apple`s departure, announced  on October 5 and effective immediately, came on the heels of departures in the past two weeks by the utility companies Pacific Gas & Electric, PNM Resources and Exelon. In addition, Nike has quit the Chamber’s Board, and other members such as Johnson & Johnson have voiced strong opposition to the climate stance of the Chamber and asked that it not take public positions on this issue.

It`s not clear how closely the Chamber has polled all of its wide membership on climate issue, but it`s apparent that the Chamber`s rather hard-line stance is out of step with its Board members.  According to research by the NRDC (a mainline environmentalist group) in May:

the staff of the U.S. Chamber appears to be projecting the views
held by a tiny sliver of its board of directors – just four out of 122
members on the board.

The Chamber’s oft-stated views, which question the scientific
consensus on climate change and reject the need for federal regulation
to reduce global warming pollution, stand in sharp contrast to the
views expressed by 19 members of the Chamber’s board that support
federal regulations with goals to reduce total US global warming
pollution.  

You read that right: only 23 members of the U.S. Chamber’s board have a publicly stated position on climate change and more than 80 percent are not on board with the U.S. Chamber’s “Dr. No” position on climate policy action.

So who is in the minority that has shanghaied the U.S. Chamber of
Commerce on climate policy? Be prepared to be shocked!  Three of the
four climate are coal companies:  Peabody Energy, Massey Energy Corp.,
and CONSOL Energy.  (The fourth – Con-Way Inc. – is “a freight company and logistical services company.”)

As the WaPo noted, in response to prior defections,

Last week, the group’s president, Thomas J. Donohue, said in a
statement that his group supports “strong federal legislation” to
protect the climate. But he said legislation passed by the House of
Representatives — which would use a “cap and trade” system to lower
the cost of reducing emissions — was flawed because it does not
require other polluting countries to act and does too little to spur
U.S. investment in green technologies.

In response to Apple`s departure, a spokesman for the Chamber dissed the motives of the firms quitting the Chamber:

“While we’ll continue to represent the broad majority of our membership
on this goal, we recognize that there are some companies who stand to
gain more than others with the current options on the table.”

While this may be true for the utility companies, which are members of the USCAP organization and stand to gain free allocations of carbon allowances under the cap and trade bills under consideration, it is hardly so for Apple, Nike or Johnson & Johnson. And of course it distracts from the fact that the coal firms and their shippers – including Union Pacific, which richly compensates Union Pacific board member Tom Donohue, the President of the Chamber – benefit greatly from the status quo, to an extent and in a manner quite different from other Chamber members.

It will be interesting to see what will happen next at the Chamber of Commerce, and who will be next to leave.

Anti-enviro gadfly Steven Milloy has a new blog post up that rightly skewers the green mandates that are providing a taxpayer-funded stream of business and profits to GE.  Notes Milloy:

GE announced today that utility giant American Electric Power (AEP)
will purchase 110,000 smart meters from GE. And just how is AEP
managing to buy all these smart meters? President Obama and Congress
are making us pay for them.

On Sep. 1, AEP applied to the Department of Energy for $75 million in federal stimulus money for the smart meter purchase.

It’s a good thing that GE’s Immelt sits on Barack Obama’s Economic
Recovery Advisory Board — how else would the Department of Energy know
to direct smart meter purchases to GE?

Of course, AEP isn’t the only conduit for sending federal stimulus
money to GE. So far about 50 utilities have applied to DOE for a piece
of the almost $4 billion in stimulus money earmarked for smart meter
projects.

From an Austrian perspective, what`s wrong with this post? The simple fact that Milloy isn`t interested in problem-solving, but in bashing greens, Dems and GE. If he were a problem-solver, he would be a little less partisan and would devote a little more effort to throw light on some of the underlying factors that fuel green concerns and utility mandates, such a the little problem that states have prevented the development of free power markets by granting “public utility” monopoly status to local power providers, as I have noted in a number of posts.

A problem-solver might also devote some time to examining the entanglement of the state with other rent-seeking corporations, such as the coal producers; but those trapped in partisan, rent-seeking games are often good only at seeing the flaws of those whom they criticize, while ignoring the way that they themselves are co-opted by other rent-seekers.

I left Steven the following comment:

Steven I think your criticism of GE is fair, but it`s clearly lacking in context.

Where`s your post criticizing the states for their continuing grant
of monopoly status to “public utilities”, which is the chief reason why
there is no free market in providing power to consumers? With a free
markets, we`d have seen smart meters like GE`s years ago, and there
would be no basis for all of these “green power” mandates.

I haven`t seen Michael Moore`s latest film, “Capitalism: A Love Story” – it premiered in New York last week, but who knows when it will make it to Tokyo? – but I`ve been reading some of his interviews and reviews of his film.

While Moore is confused in identifying the existing U.S. statist corporate system that he criticizes with “capitalism”, it seems to me that much of his criticisms of the U.S. political-economic system are consistent with libertarian views (even if Moore doesn`t understand the libertarian criticisms).

Accordingly, while Moore may be off on both his diagnosis of what`s wrong with America and his proposed prescriptions, his film – which appears to be resonating across the political spectrum – presents not merely a challenge to libertarians, but an teaching opportunity.  I hope that libertarians will take advantage of the opportunity to engage Moore`s concerns constructively.

I note below excerpts from media coverage (in no particular order), with a few comments of my own:

Fortune interview, September 22:

– The film covers …. “a privately run juvenile prison that paid off judges to give convicts
longer sentences, and last year’s $700 billion bailout of the banking
system.”

-　”I started out wanting to explore the premise of capitalism being
anti-American, and anti-Jesus, meaning it’s not a Democratic economy.
And it’s not run with a moral or ethical code. But when the crash
happened, it added a third plot line: not only is capitalism
anti-American and anti-Jesus, it doesn’t work.”

[The weakened moral code Moore complains of is clearly visible in political corruption (the sale of government favors to businesses and investors), which is tied to the regulatory spiral fueled by the state grant of corporate status, shifting or risks to the public and eliciting efforts from citizens groups to rein in increasingly powerful corporations. I have explored this on many posts, some directly relating to the state grant of limited liability to shareholders. I note that it is apparent from Jon Stewart`s recent interview of Ron Paul regarding Paul`s new “End the Fed” book that both Stewart and Paul share Moore`s concern about the entwining of the corporation and government (h/t Bob Murphy).]

– ”this crash exposed our economic system as a corrupt scam”.

– “instead of initially giving bailout money to a General Motors that was
never going to change or to banks so they can cover losses from crazy
betting schemes, this money should be going to helping to create jobs
in places like Detroit. People need to work.”

[Okay, but the best way to “create” jobs is for government to leave tax dollars with taxpayers, and to undo counterproductive government regulation (such as grants of monopoly powers to utilities, and the “war on drugs” and on inner cities) that benefit insiders at the collective expense of the common weal.]

– “You tried to get Hank Paulson on the phone in the film, but
weren’t successful. If you got him on the phone today, what would you
ask?”

“If I had a chance to talk to him, I’d want him to come
clean and tell me the truth about how he rigged this whole thing. Tell
us what happened because we don’t know the details. How did so many
Goldman people end up in the administration? How is it that Goldman- ‘s
chief competitors are left to die — not bailing out Lehman Bros., Bear
Stearns falls apart, Merrill Lynch is absorbed into Bank of America —
and look who’s left standing: the company that’s got all their boys
inside the administration.”

– “Capitalism is not only an economic system that legalizes greed, it also
has at its foundation a political system of capitalism that is, “We
have to buy the political system because we don’t have enough votes.”

Fortune article, September 4 (Richard Corliss, a senior writer for TIME):

– “To Moore, it’s the bureaucratic-industrial complex — the combined might of the West Wing, Wall street and Wal-Mart — that’s evil. That view was never clearer than in his broadly entertaining,
ceaselessly provocative, wildly ambitious new film. Not satisfied with
outlining and condemning the housing and banking crises of the past
year, it expands the story of the financial collapse into an epic of
malfeasance: capital crimes on a national scale.”

– “The movie seems to be setting up the disappointment many on the Left
have felt over the awarding of more billions to giant banks and
corporations, among other things, since Jan. 20. And Moore does note
that Goldman Sachs gave more than $1 million to Obama’s campaign.”

– “But he doesn’t go after this Democratic President as he surely would
have if John McCain had been elected. Instead, he argues for
participatory democracy: do-it-yourself do-gooding, through community activism and union organizing. That’s an optimistic and evasive answer to the financial problem.

“Surely
what spun out of control because of government indulgence and indolence
needs to be repaired by government regulation and ingenuity…. In “Capitalism:
A Love Story,” Moore has cogently and passionately diagnosed the
disease. But for a cure, instead of emergency surgery, he prescribes
Happy Meals.”

The Nation, describing Moore`s appearance on “The Jay Leno Show”, September 16 (John Nichols):

– “Americans who didn’t witness filmmaker Michael Moore’s appearance Tuesday night on NBC’s “The Jay Leno Show” missed one of those rare moments when the vast wasteland gives way to an oasis of realism.

Rarely since the days when author Gore Vidal regularly appeared on the
“Tonight” show with Johnny Carson has a popular television program on a
commercial broadcast channel provided such extended and respectful
treatment to a scathing critique of the corrupt status quo.

Leno hailed Moore’s new movie, “Capitalism: A Love Story,” as “the best film he’s done.”

The talk-show host described “Capitalism: A Love Story” as
“completely nonpartisan” — and he’s right: Moore goes after sold-out
Democrats and sold-out Republicans — before declaring: “I was stunned
by it, and I think it is the most fair film.”

– “Even more meaningful than Leno’s review of a movie he had obviously watched and considered seriously was this exchange:

LENO: Now it’s one year since Lehman Brothers
collapsed. We’ve had all, OK, we’ve handed out… Is Wall Street any
better? Have they learned anything?

MOORE: No, not at all. It’s, it’s probably worse. They’re still
doing these exotic derivatives. They’re now trying to do it with life
insurance. They’ve got all these crazy schemes. I mean, that’s what I’m
saying about capitalism, it’s like a beast. And no matter how many
strings or ropes you try and tie it down with that beast just wants
more and more money. And it will go anywhere. It will try to gobble up
as much as it can. The word ‘enough’ is the dirtiest word in
capitalism, ‘cuz there’s no such thing as enough with these guys. And
we haven’t stopped them. We haven’t passed the regulations that
President Obama has suggested. I mean, I think he’s really on top of
this. And he said yesterday, he told Wall Street, ‘That’s it, boys. No
more free ATM machine at the U.S. Department of Treasury.’ And I think
that’s something we all support, right?

“The audience responded with enthusiastic and sustained applause.”

[When Moore criticizes “capitalism” he seems to be focussing on the political influence by which taxpayers end up holding the bag for irresponsible risk-taking in the private sector. But his suggestion that Obama`s “really on top of
this” is wishful thinking that ignores both the influence of money on Obama and misses Austrian/public choice understandings of how rent-seeking, bureaucratic incentives and the information problem continue to contribute to a cycle of regulation and manipulation.]

– “The applause rose again when Moore explained that: “I’m actually
suggesting go back to our roots of this country, democracy. What if we
had an economy that you and I had a say in? Right now, we all don’t
have much of a say in this economy. What if we applied our democratic
principles and said, ‘We, the people, have a right to determine how
this economy is run.’ I think we’d be in much better shape than what
we’re going through right now.”

Bloomberg interview, September 15 (Rick Warner):

– “Warner: Several clergymen in the film say capitalism is
anti-Christian and that Jesus would have deplored such a dog-
eat-dog system. Yet you hear from the right that capitalism and
Christianity go hand in hand. Are they reading different Bibles?”

“Moore: The number one thing in the Bible is redemption. The
number two thing is how we treat the poor. All the great
religions talk about this. The right wing hijacked Jesus 30
years ago. It was all a big ruse, but people fell for it. I
don’t think people are falling for it so easily now.”

– “Warner: You’re not the most beloved person on Wall Street.
When you went down there with your Brink’s truck and empty bag
to collect money for the American taxpayer, were you concerned
about your safety?”

“Moore: Yes. When I started wrapping the New York Stock
Exchange with crime-scene tape, I thought for sure this was when
the police were going to jump me and haul me off to the Tombs
(prison). And it didn’t happen. One cop says to me, “Don’t
worry Mike, we’ve lost a billion dollars in our pension fund.”
They were like, “Go get ‘em.”

USA Today, September 23 (Claudia Puig):

– “No matter what side of the political fence you’re on or what you think
of Moore as an activist and provocateur, a film that explores the
economic meltdown and its historical roots is something most of us can
get our heads around.”

– “Capitalism is as entertaining as Roger & Me, and its critique skewers both major political parties, calling into question the economic policies of Bill Clinton as well as Ronald Reagan.
This is quintessential Moore, with a clear-cut
agenda: Capitalism has superseded democracy, encouraged corruption and
greed, and failed our nation. Political bigwigs and wealthy executives
may love it, but it’s not working for the majority of Americans.”

– “His rallying cry is simple: The country needs to return to its democratic roots.”

– “The recurring theme: The rich have gotten richer, and everyone else has suffered.”

– “Moore has the rare ability to present economics and history in an
engaging and comprehensive fashion. Consequently, his movies draw large
audiences and spur debate. And films that inspire contemplation and
elicit discussion are welcome relief in a medium increasingly dominated
by formulaic and mindless diversion.”

Variety, September 16 (Ted Johnson, managing editor):

– “His latest movie tries to tap into populist outrage from the left, at a
time when that anger has been channeled much more visibly by the right.
The outrage that we have seen, the town halls and the tea parties and
the birthers, have been over the fear of big government, not that there
won’t be a safety net. “They are very good at it,” he told me, adding
that conservatives’ ability to “own the bailout” is for “entirely
different reasons from me.” It is also one of the reasons he was so
anxious to get his movie out.”

– “this movie has a much larger scope, taking on the notion that
capitalism was never enshrined in the Constitution, but was sold to us
as the best possible system. In making his point he turns not just to
workers who’ve been left behind, but to Catholic priests and bishops,
who preach of capitalism as no less than evil.

“There’s ample fodder:  … Citigroup draws up a
memo for select investors, proclaiming a world “plutonomy” that can be
foiled by that pesky thing called the right to vote.

“Republicans, Ronald Reagan and George W. Bush all take their lumps,
which is to be expected, but so do House and Senate Democrats and even
President Obama, as Moore treats his election as a turning point yet
notes Goldman Sachs and Wall Street showered him with contributions,
resulting in Larry Summers and Timothy Geithner. Special mention is
reserved for Chris Dodd, who is hammered for accepting VIP treatment
from Countrywide in the form of better terms on home interest rates,
reaping $1,175,133.

“On the other hand, Rep. Marcy Kaptur (D-Ohio) is treated as a hero for
speaking out against the bailout bill, and footage is shown of her
impassioned plea, before it passed Congress. “This was almost like an
intelligence operation,” she says of the timing of the bailout so close
to the 2008 election.”

BBC Interview, September 7 (Kelly Oakes); “Michael Moore takes aim at money men”:

– “I had been wanting to do a movie about capitalism and about a year
and a half ago, I finally started,” he says. “I saw a lot of things
happening in terms of people losing their jobs and foreclosures.

“So I decided to get going on this film because I thought we had an economy built on sand, a house of cards.”

– “I think that we must change the fundamental things about how our
economy is run and how it works or we are going to continue to have
problems and it is going to get worse.”

– Capitalism: A Love
Story takes a look at the government’s multi-billion dollar bank
bail-out, and compares it with how workers in small companies found
themselves out of jobs without severance pay.

– “Moore is adamant that capitalism is not the way forward, but
struggles to offer a real alternative for how the economy could be run,
or a way to convince people they do not need so much money to buy
“stuff”.

He does advocate shared ownership of companies in the
form of co-operatives, showing a handful of businesses where this has
been a success.

So with so much information thrown at the
audience in the film, and giving only his side of the argument, what
does Moore hope people will take away from the movie?

“I hope
the people will start to wake up a bit and see that they are
participating in something that is causing them a lot of harm.”

Politico, September 28 (Michael Calderone):

– “While Michael Moore remains a scourge of the right, the filmmaker says he’s gaining some conservative fans.

“Our own testing has shown that Republicans are interested in coming
to this film more than my other films,” Moore told POLITICO by phone
this afternoon. In Capitalism: A Love Story, Moore said, “you see for the first time Republicans inviting me into their homes asking for help.”

It’s actually not too surprising, given that the government’s
taxpayer funded bailout of the banks has attracted critics on the left
and right. And along with Washington and Wall Street, Moore also
targets the media, which he describes as “major enablers” of the
financial crisis and part of the “ruling elite.”

“They have celebrated this culture of making money off money, as
opposed to making money by making things,” Moore said. “That has been
detrimental for everyone, for society, bad for the economic system.”

– “The difference is that the other side of the political fence is
trying to take advantage of people hurting now,” Moore said. “They work
to manipulate them and get them afraid. And they’re blaming all the
wrong people.”

For instance, Moore considers Fox’s Glenn Beck — who once said on the air he’d like to kill the filmmaker —  to be “a sick puppy.” …

Still, Moore said he doesn’t disparage the right for flocking to town
halls this summer, and thinks liberals should be getting out there
more. 

“I admire those Republicans who even though they’re in a small
minority now, they do not give up,” Moore said. “They have the courage
of their convictions.”

TIME interview, September 26 (Bill Saporito)

– “You’ve called the TARP program part of a financial coup d’etat. But if we
get our money back, with interest, and the banking system reverts to doing
what it should do, haven’t the citizens won?“

“If you give me $700 billion per year, hey I have some good ideas. I can make
some money with that, for me and for you. I’m going to have my best quarter
if you gave me that money. I wonder how many people in the inner cities
would love a little bailout money to get out the hole they are in and have
one of their best years ever. This wasn’t a gift; it was a theft. They stole
the people’s money by gambling with it. They took the pension funds of
working people and gambled away their money, and went back to the same
working people and asked for $700 billion more of their money.”

– “But aren’t you really a model capitalist? You raise money. You hire people.
You create a product and sell it to the public, bearing the risk and gaining
the rewards that goes along with it.“

“Capitalism would have never let me be a filmmaker, living in Flint, Michigan
with a high school education. I was going to have to make that happen
myself. My last movie, I gave it away for free on the Internet: Slacker
Uprising. If I were a capitalist I would not give my employees health
insurance with no deductible, which I do, including dental, and paid
pregnancy leave. That’s not called capitalism, that’s called being a
Christian and someone who believes in democracy, so that everyone should get
a fair slice of the pie.”

[Moore doesn`t understand what “capitalism” really is.]

The Nation, September 23 (Naomi Klein):

CNN interview, September 21

New York Times interview, September 23 (Cyrus Sanati, DealBook)

– “In “Capitalism: A Love Story,” which had its New York premiere
this week, Mr. Moore contends that capitalism has failed to create the
kind of just society the country’s founders envisioned, and that the
big banks have essentially co-opted the government.”

– “In your film you point out the deficiencies of capitalism. What economic system do you think is best and why?

“Well, we haven’t invented it yet. Here’s what I don’t think works:
An economic system that was founded in the 16th century and another
that was founded in the 19th century. I’m tired of this discussion of
capitalism and socialism; we live in the 21st century, we need an
economic system that has democracy as its underpinnings and an ethical
code.”

[Sounds like he could be talking about a more libertarian society – somebody get ahold of Moore and start talking with him!]

-“There is a scene in the film where you mention that Goldman
Sachs employees were a big source of President Obama’s contributions
during the last election cycle. Do you believe the President was wrong
to take that money?”

I really see an audience of one for that scene (President Obama). I
want him to know that we know that Goldman was his single-largest
contributor and what he does with that is his choice – he can choose to
side with them or with us.

– “It seems that a lot of the anger over the bailout and the
crisis has eased as the markets have recovered. Are you concerned that
the government will not step up and reform the financial system?

First, the market recovery is a bit of an illusion because the
other shoes haven’t dropped yet like the massive credit card debt that
can never be repaid and the commercial real-estate bubble.

Of course they are not going to revamp the system. The banking
industry and these financial institutions have been lobbying and
spending millions of dollars in the last year to guarantee that no new
regulations have been put in place.

Real change will only happen when the people demand it and the
people are going to have to demand more than a few new rules at this
point.

– “So how can the people ‘rise up’ in your view?”

– “You mention in the film that the United States may have experienced a financial coup d’etat. What did you mean?”

Wall Street, the banks, and corporate America, has been able to call
the shots here. They control our members of Congress and they get what
they want. I mean, 75 percent of this country wants universal health
care, but it looks like we aren’t going to get it again — how does that
happen? Well it happens when the health care industry spends a million
dollars a day on lobbyists. That’s how it happens.

So until we get the money out of politics, the coup d’etat that has
taken place by those with the money are really running the democracy.

New York Times, September 23 (Manohla Dargis, movie review):

– “America, in other words, is headed straight down the historical toilet, along with Nero and his fiddle (or rather Dick Cheney,
who’s anointed with a throwaway reference to the “emperor”), a thesis
that Mr. Moore continues to advance if not refine with another hour and
a half or so”

– “In the end, what is to be done? After watching “Capitalism,” it
beats me. Mr. Moore doesn’t have any real answers, either, which tends
to be true of most socially minded directors in the commercial
mainstream and speaks more to the limits of such filmmaking than to
anything else. Like most of his movies, “Capitalism” is a tragedy
disguised as a comedy; it’s also an entertainment. This isn’t the story
of capitalism as conceived by Karl Marx or Naomi Klein,
and it certainly isn’t the story of contemporary American capitalism,
which extends across the globe and far beyond Mr. Moore’s sightlines.

“Neither
is it an effective call to action: Mr. Moore would like us to vote,
which suggests a startling faith in the possibilities of social change
in the current political system. That faith appears to be due in some
part to the election of President Obama.

“As it happens, the most galvanizing words in the movie come not from
the current president but from Roosevelt, who in 1944 called for a
“second bill of rights,” asserting that “true individual freedom cannot
exist without economic security and independence.” The image of this
visibly frail president, who died the next year, appealing to our
collective conscience — and mapping out an American future that remains
elusive — is moving beyond words. And chilling: “People who are hungry
and out of a job are the stuff of which dictatorships are made.”

A reader of Bob Murphy`s recent post on climate science – “TokyoTom Moving the Goalposts?” – queried my views on whether perceptions of climate change problems themselves justified a need to establish government.  I copy below my response (with a few typo and editorial changes):

“Do you believe that averting climate catastrophe is, by itself, justification for establishing a government?”

No,
Taylor, I don`t see that a looming climate catastrophe (or other
apparent catastrophe) by itself would justify the formation of a state.
Absent governments, other voluntary responses would no doubt arise, and
more quickly than when hampered by governments and rent-seeking.

“I
am curious if you seek to use the government to solve this problem
because it already exists and thus you see it as expedient and
practical to do so”

My view is quite a bit more subtle.
First, the fact of the matter is that we HAVE a government; even if we
didn`t, we`d have to deal with the governments of other peoples on an
issue such as this. Theoretically, in negotiations with others around
the world regarding the atmosphere and climate, we might very well end
up creating forms of government. Be that as it may, we cannot ignore
that states exist; the question is in part whether we can put them to
any good use, and in part how do we avoid making them worse.

Then
again, our government has already helped screw up the issue in any number
of ways. In my view, the focus should be as much on UNDOING what has
been counterproductive and what libertarians have never supported.
Those who don`t want to see MORE government should not be closing their
minds to the fact of the status quo, and ought to see in concerns about
climate change and resources issues (irrespective if the concerns are justified or not) an OPPORTUNITY to undo existing
and damaging state actions.

See my point?

But in all this, libertarians rarely strive to be positive change agents, but instead have been almost
wholly co-opted by rent-seekers who benefit from rights to pollute for
free and barriers to entry under the status quo.

[A few lists of my many posts related to this subject can be found here, here and here.]

Lord knows I`ve got better things to do, but I can`t resist.

Rob Bradley has written extensively on energy regulation from a libertarian viewpoint and spent a number of years as an adviser to Ken Lay inside Enron – apparently seeing up-close (while conscientiously fighting a losing battle to steer Enron away from) the now well-known efforts of Enron to use the power of government to create profitable markets for it. Bradley`s energy commentary came to my attention a few years ago (on the Mises pages), and I have been observing him fairly closely over the past year, particularly after the launch of MasterResource, his “free-market energy blog”.

Unfortunately, even while Bradley has been making some very thoughtful comments on energy policy, he is now rather nakedly involved in precisely the game of
rent-seeking (Rob`s preferred term is “political capitalism”) that he
so loudly decries in practically every blog post or other piece of
“free-market” commentary that he spins out.

Bradley`s activities now include:

• his commentary and support for Institute for Energy Resources –
  a “free market” “think tank” that he founded and remains CEO of but which is
  now staffed by former Republican K Street apparatchiks Essentially the same staff as AEA, noted next), and which has moved froｍ
  Houston to DC, the better to engage in influence peddling, but whose
  cover was blown wide open last year when ExxonMobil (a firm that Bradley has made clear, in post after post, that he adores), announced that it would no longer fund
  IER and others whose activities were tied too closely to anti-climate change
  science and policies that Exxon has decided are counterproductive);

• support for the public lobbying arm of IER, the American Energy Alliance, staffed by former Republican K Street apparatchiks, which
  has been coordinating “grassroots” events to put political pressure on
  Congresscritters from coal-producing and -consuming states; and

• his relentless blogging on climate police at MasterResource –
  his chief soapbox – with co-bloggers who are generally well-regarded
  but nevertheless professionals at the climate policy influence game (such as Chip Knappenberger, who works at a self-proclaimed “advocacy science consulting firm”).

This is clearly a rent-seeker`s game, and Rob is in the thick of it, producing a steady stream of one-sided political, economic and scientific argument after another.

Bradley valiantly pretends simply to be an opponent of some possibly counterproductive government policies (of which there are plenty, to be sure) that various nefarious and/or corrupt interest groups are advancing, but in reality serves as a paid spokesman for that group of interests that have benefitted most from the status quo, and have the most to lose from any form of carbon pricing –  including “King Coal“, as Bradley so aptly names them. Coal merits unfailingly positive references – it`s clean, it`s cheap, it`s the FUTURE – but never any observations of the pollution resulting from coal (significant annual deaths, breaches of fly ash dams, court cases regarding cross-border pollution) or of the negative role of government ownership of coal reserves or of misguided federal regulations (Clean Air Act grandfathering of the oldest, dirtiest plants, and right to pollute; and the federal supplanting of private tort protections regarding air pollution and mountaintop removal practices).

It looks like a pretty good brew that Bradley serves up – he serves his clients well – but it`s always been a bit too strong for me. As a result, Rob has booted me from his bar, and I`ve been left to occasionally grumble outside. I haven`t particularly lost interest so much as run out of time and an ability to keep up, particularly as the flow of rhetoric and partial “analysis” has increased (in step with the legislative agenda).

But in a couple of recent posts by Bradley, the brew of self-righteous, self-serving and self-deceptive rhetoric has proved too rich for me to ignore.

1. The first is a naked appeal to influence the policy leanings of the natural gas industry, in Bradley`s September 8 post, the title of which lays bare Bradley`s clients: “Why Natural Gas Should Not Play the Cap-and-Trade Game (the real enemy is mandated renewables/conservation, not coal)” (geez, has he beat my record for long titles?). Why is this rich? First, because coal is the heaviest producer of GHGs per BTU, so coal is obviously most threatened by climate bills (that`s why Bradley and a legion of others can make a living at this, after all). Next, some of the reasons he trots out, such as his reference to “grassroot” citizens in Houston that Bradley and the American Petroleum Institute organized, and the more straightforward argument that, to be blunt, “Big Coal is too powerful for a Kill Coal bill on the Senate side“.  But despite all of coal`s bluster, Bradley knows that it is THEY that are on the table, not natural gas, and so he argues that it`s really natural gas “as the swing fuel in electricity generation” that loses mostly from a climate bill. Which is why Bradley closes with an appeal to natural gas to help not coal, but “capitalism in its desperate hour”.

2. The second post is a re-post of interesting earlier commentary by Bradley concerning Enron. This is rich because Bradley continually tries to draw important lessons about what went wrong at Enron (while thumping his chest about his own efforts to correct “philosophical errors” at the firm), while blindly ignoring his own present involvement in the self-same “political capitalism” that he decries. Bradley just conveniently overlooks that “political  capitalism” lies not solely in seeking CURRENT political favor, but also in PAST efforts to secure such favor, and in ongoing efforts to preserve it. One wonders whether for Bradley, reciting the lessons he learned from Enron might be serving as a salve for a guilty conscience for actually forgetting the inconvenient part of such lessons (and deeper Austrian lessons about problem solving and the frustration of preferences when government is acting heavy-handedly).

Okay, I`m all out of rants for now.

I left the following comment at a recent Mises Blog post by Stephan Kinsella, but the number of links included apparently triggered the spam filter and held up the comment.  According, I post it here, so I can re-comment with a cross-link here.

Stephan, we have extensively discussed this matter previously, focussing mainly on the point that Vincent Cook raises, namely, the consistency with libertarian principles of the state grant of limited liability as against parties who become unwilling “creditors” of the firm as a result of being injured by the actions of the firm.

You continue to dodge this point just as Block and Huebert have explicitly begged the question in their latest effort (emphasis added):

“As long as there is no fraud, as long as all those who deal with corporations know full well that in case of any dispute, they will only be able to sue for an amount up to the full capitalization of the corporation and not have access to the shareholders’ personal assets, there can be no problem with the libertarian legal code.”

It goes without saying that injured persons don`t choose ahead of time who will injure them, much less the whether the liability of their tortfeasors will be limited to corporate assets. [IOW, when it comes to limited liability corporations, there IS a fairly glaring problem with the libertarian legal code.]

Our previous discussions on the Mises Blog took place here and here: 

And an earlier related discussion on the Mises Blog was here:

I have commented extensively myself on the consequences of this grant – which I see as fuelling risky corporate behavior and a cycle of “rent-seeking” fights with private interests seeking to use the state as a check against corporations – in a number of blog posts, such as the following:

http://mises.org/Community/blogs/tokyotom/archive/2008/11/26/corporations-amp-the-state-some-criticisms-of-huebert-and-block-s-criticisms-of-long.aspx

http://mises.org/Community/blogs/tokyotom/archive/2009/03/03/when-will-tom-woods-and-other-quot-free-market-quot-intellectuals-have-second-thoughts-about-limited-liability.aspx

http://mises.org/Community/blogs/tokyotom/archive/2009/02/26/the-curse-of-limited-liability-wsj-com-executives-traders-of-big-financial-corporations-generate-risky-businesss-while-smaller-partnerships-are-much-more-risk-averse.aspx

http://mises.org/Community/blogs/tokyotom/archive/2007/10/16/fighting-over-the-wheel-of-government.aspx

http://mises.org/Community/blogs/tokyotom/search.aspx?q=limited

http://mises.org/Community/blogs/tokyotom/pages/legal-resources-on-the-state-creation-of-limited-liability-for-shareholders.aspx

Further to my preceding post, on “Confirmation bias, rent-seeking and the rush to print the latest science “scoop (Linzen-Choi)“, I note that Bob Murphy has kindly  put up a new blog post that notes and responds to my comments to him.

Since it`s late here, interested readers might want to check out Bob`s post, including and the comments that I and others have left.

On a meta-level, yes, I`m aware that on this and similar public policy issues involving science, each group of protagonists seems eager to rush into battle with the latest science that they view as favorable to their cause. My point is NOT that the latest news may not be important, but that we should be careful that we are actually seeking to understand it, instead of blindly looking for confirmation of our pre-existing notions. We should also be careful of the motivations (rent-seeking; self-justification, etc.) of those who are quick to bandy news about. 

Yes, this cuts more than one way; we are all human, after all.

I copy below (with minor changes for clarity) a further comment I made on the piece by Bob Murphy (“I’m Starting With the Man in the Mirror”) to which I referred in my prior post.  The comment on which I remarking is addressed by one commenter to Silas Barta:

cotterdan: I think the error in his view is that he will simply
dismiss everyone on the other side of the issue as some shill for the
oil companies. He doesn’t see the fact that it is the political elite
pushing for his ideas.

Can you see that you and your friends
have mirror positions and each think the other is wrong, when in fact
it is pretty clear that you are BOTH right – and that there are
rent-seekers behind each position?

Of course the firms and
investors that have been able to use the atmosphere as a free GHG dump
don`t want to start paying for the privilege (to the extent that they
have invested very heavily in protecting their current position), and
of course there are others who think that this poses risks to them and
what they value (and some who want government to make markets for them).

… I don’t mind what ideas you have on saving the planet. I just don’t want to pay for them.

I
think we all share your reluctance to see government do anything
coercive, and we share your reasons. Most commons problems are actually
much more susceptible to local solutions that would occur if
governments got out of the way and just let resource users come to
terms on them, but given that that the atmosphere is shared globally
AND there are countless other state actors that we just can`t force
from the table, there is simply no possibility of entirely voluntary
approaches arising (even though one could imagine them). Further, even
while each government will act by force of law at home, make no doubt
that any global agreements on climate change policy are in effect
large-scale Coasean bargains.

While libertarians may be entirely
unwilling to accept any state action, unfortunately the rest of the
country (and the world) does not share their compunctions. As a result,
it seems to me that the effect of a libertarian NO! is not simply to
defend the status quo ante (which in my view wrongly allows once group
of powerful rent-seekers to shift costs to the rest of society; YMMV),
but to enable the adoption of overly-costly (and heavy-handed) approaches; viz.,
cap-and-trade w/ vast pork, versus rebated carbon taxes w/immediate
capital write-offs, etc.

August 27, 2009 11:42 PM

Robert Murphy, Austrian school economist and blogger, is in my book a remarkably thoughtful and insightful commentator on current economic issues, even as I find some of his arguments on climate policy and energy to be shallow.

Bob`s balance and relatively rare introspection are on display in his recent blog post, I’m Starting With the Man in the Mirror, in which he directly addresses the way that people with differing views on health care and climate change policy tend to see their own views and actions as virtuous, while seeing “the other side” as having evil motives and acting unfairly.  Bob had started a blog post in such a vein, but then checked himself and realized that questioning the motives of all of the other side was probably unfair. 

My own thoughts are that Bob`s post is as fine as far as it goes, but that it remains partisan and fails to discuss the way that rent-seekers deliberately seek to exploit our partisan predilections. This failure is not particularly surprising, given not only Bob`s evident self-identification as a partisan, but the fact that he works for the Institute for Energy Research, a Rob Bradley-founded think tank that, along with its partner, the American Energy Alliance is a front for a particular set of rent-seekers – the fossil fuel interests.

Bob`s entire piece is worth reading, but here is the introduction:

“OK I must confess that this Wonk Room hit piece on my compatriots really ticked me off. I had originally wanted to blog it with the title, “Definition” and the comment, “If you want to know what ‘ad hominem’ means, just check out this Wonk Room piece on the AEA bus tour.”

“But then I calmed down a bit, realizing that the Wonk Room piece is really just the mirror image of what Glenn Beck did with Goldman Sachs, which I praised.”

The piece concludes in a similar vein:

“I’m just saying that, as ridiculous as Krugman’s paranoia over old people is, that’s how ridiculous some of our side’s rants against Obama fans must seem to people who know that they are really just trying to stem abuses they perceive in the health care system and so forth. They know they’re not socialists, just like we know “our guys” aren’t Nazis.”

Bob adds a brief meta-insight that I wish he had explored further:

“Don’t get me wrong, it is still perfectly consistent to think the elites in Washington are power-hungry liars. “

I left my own observations in a comment on Bob`s post, which I copy below:

Bob, on Goldman Sachs, you might enjoy this piece by Matt Taibbi at Rolling Stone.

Bob, I appreciate your attempt at even-handedness, and your implicit acknowledgment of how we are all plagued by problems of self-deception and confirmation bias, particularly with the context of battle with ideological enemies.

I hope you will continue the effort, even though it may come at a cost to effectiveness – sometimes there`s nothing like a broader understanding of the truth to get in the way of a good rant about the Truth.

The problems of self-deception, tribal division/conflict and their roles in rent-seeking are deep indeed, and you`ve barely scratched the surface.

I note, for example, that even though you try to be even-handed, you ironically identify those listed in the Wonk Room piece as your “compatriots”; if by implication the Wonk Room writers and others who support climate change action are NOT your compatriots, what country then are they citizens of?

I also note that those you call compatriots are officers of the Rob Bradley-founded American Energy Alliance, which is clearly an energy industry pressure group (and Republican-linked). You work at the free-market IER that Rob also founded, but apparently self-identify yourself with a group of fairly naked rent-seekers.

While it`s in our human nature to fall into partisanship, what`s more disturbing is the ways that rent-seekers deliberately try to take advantage of this penchant by fanning the flames of partisanship as a means of masking their own agendas while attacking others with competing preferences. This has been very clearly at work in battles over energy and environmental issues, where influence over government is the battleground.

I have made the point a number of times previously that such rent-seeking deserves much more attentions, but you have always professed puzzlement: what, ME, Bob Murphy, involved in a rent-seekers game?

To refresh your recollection, here are links to our previous discussions:

Bob Murphy, the Heritage Foundation and “green jobs” – ignore coal! We only pay attention to rent-seeking from greens/the left; and

In which I try to help Bob Murphy figure out just what the heck I`m talking about (when I say he`s entangled in a partisan, rent-seeking game).

I’m just saying that, as ridiculous as Krugman’s paranoia over old people is, that’s how ridiculous some of our side’s rants against Obama fans must seem to people who know that they are really just trying to stem abuses they perceive in the health care system and so forth. They know they’re not socialists, just like we know “our guys” aren’t Nazis.

Well said. Now how about acknowledging how the rent-seekers are busy at work trying to manipulate our partisan impulses to take everyone for a ride?

I of course am aware that rent-seeking is ubiquitous in our current political debates, and on climate and energy issues, there are many rent-seekers in addition to fossil fuel interests. My point is that it behooves us to pay attention to the manipulations of rent-seekers generally.