Paul Krugman sees lots of villains in the current downturn. Of course, there are those people who think that free markets are a good thing, so they obviously are to blame. Then there are the Bushites, who did not believe enough in the wonder and majesty of governmental powers, so they failed to create Paradise on Earth.
But there is more. Krugman on other occasions has blamed the Chinese for our economic malaise, but now he has another culprit: those "socially useless" speculators.
I find it most interesting that Krugman resorts to the Last Refuge of an Economic Scoundrel when he points the finger at those people who do not have everlasting trust in the promises made by politicians. Now, there are times when Krugman rejects the "speculators are at fault" argument. For example, I don't recall Krugman agreeing with Ken Lay's contention that the short sellers brought down Enron, although given Krugman's explanations of the downturn, Lay's point would be as legitimate as anything from Krugman.
(Note: I believe that Lay was wrong. Short-sellers by themselves cannot make a stock price plunge and stay down permanently any more than they can bring down an entire economy.)
When the government of Great Britain 40 years ago was inflating like mad and engaging in all sorts of accounting trickery, currency buyers began to short the Pound. Of course, the officials of Britain's Labor government did not blame their reckless policies; no, it was the fault of the "Gnomes of Zurich." Yes, those bad men in Switzerland were conspiring to bring down the Pound.
Unfortunately, that mentality exists today, and I am not surprised that it is Krugman leading the anti-speculation charge. Anyone familiar with finance know that speculators and short-sellers do not control markets; they expose the shortcomings of market participants. Speculators did not short Enron stock because they thought it would be fun; they shorted it because they believed (correctly) that it was overpriced.
In his column today, Krugman declares that a lot of financial transactions are "socially useless," and should be taxed. My guess is that he would include short-selling among those transactions, and in that he is aping his spiritual mentor, John Maynard Keynes, who believed that the sale of stock in secondary markets also was "socially useless."
Krugman, in his condemnation of the "speculators," ignores the 800-pound gorilla sitting in the room: the moral hazard that government created in the financial markets that ultimately led to the financial meltdown. Why does he ignore things like the "Greenspan Put" and the various bailouts? Easy, government-caused moral hazard does not fit his socialist worldview.
In Krugman's world, private enterprise itself is the cause of instability, and government (as long as the Right People are in Charge) is the white knight. Thus, it hardly surprises me that he resorts to the "Gnomes of Zurich" nonsense.
Friday, November 27, 2009
Thursday, November 26, 2009
Happy Thanksgiving!
I wish all of my readers a happy Thanksgiving day, complete with all the usual fare. As a Christian, I believe every day should be a day of thanksgiving, but nonetheless it always is nice to have a day here and there in which we can celebrate by eating (and eating) good food and enjoying family and friends.
A few years ago, I wrote this piece, reminding the readers that a day in which we are supposed to offer prayers of thanks to God has been co-opted by the state. Yes, it is not exactly the kind of thing we are supposed to say on Thanksgiving, but I also will say that I am grateful the government has not destroyed all of our liberties, at least not yet.
So, Happy Thanksgiving!
A few years ago, I wrote this piece, reminding the readers that a day in which we are supposed to offer prayers of thanks to God has been co-opted by the state. Yes, it is not exactly the kind of thing we are supposed to say on Thanksgiving, but I also will say that I am grateful the government has not destroyed all of our liberties, at least not yet.
So, Happy Thanksgiving!
Wednesday, November 25, 2009
Bowman: Law is a Weapon, Not a Shield
Besides inheriting the English language, Americans also enjoyed the fruits of the legal system developed in Great Britain which, over time, was to be known as a "shield for the innocent," according to the great jurist William Blackstone. This view of law was reflected in our own Declaration of Independence in which the purpose of government was not to lord it over subjects, but rather to protect the God-given rights that people already owned.
Fast forward to 2009 in which very few people in power believe this about law, and nowhere is contempt for the legal principles of Blackstone and Thomas Jefferson more evident than in American law schools. As prosecutors become the living dictators of criminal law, the very concept of law has been perverted to become something other than a "shield" to protect the rights of the innocent. Law today -- and especially federal criminal law -- is nothing more than a weapon that federal prosecutors wield against people supposedly to keep them in line. As the Great Harvey Silverglate has written in his wonderful book, Three Felonies a Day, federal criminal law today more reflects the law of the old Soviet Union with its "crimes of analogy" than anything we inherited from Great Britain more than two centuries ago.
An unfortunate legacy of this terrible development has been the matriculation of federal prosecutors into law schools, where their own perverted views of law are now taught as being morally and legally legitimate. One such person is Frank O. Bowman, a law professor at the University of Missouri. I came upon this man through an interesting article in The New York Times in which the paper noted in a surprised manner that both leftists and conservatives have joined forces to oppose the abuses that federal criminal law has wrought.
Of course, being that the Times served as the main cheerleader for the disgraced Michael B. Nifong, the now-disbarred prosecutor who pursued charges in the infamous Duke Lacrosse Case that he knew were false, it is not surprising to see the "Newspaper of Record" take the side of the prosecutors. They interviewed Bowman, and he clearly did not disappoint:
First, and most important, the notion that "corporate power" is equal to the power of the state is laughable. I don't recall any "corporate" forces from Wal-Mart gunning down innocent people (and paying no price) and Wal-Mart does not enjoy the immunity from being punished for criminal acts, as do the people championed by Bowman and his ilk. Corporations cannot engage in home invasions like your friendly police force, and if someone from a corporation guns you down, the killer -- unlike your friendly police protectors -- is likely to be prosecuted.
In fact, Bowman's former employer, the federal government, recently argued in the Pottawattamie case that prosecutors should be absolutely immune from any legal consequences, even when it is clear that they knowingly tried to frame innocent people. Instead, the government argued that no one has a Constitutional right not to be framed.
Second, the view of law being a "counterweight" violates every foundation upon which Anglo-American law was built. This "counterweight" view is a backdoor way of approving the tactics which prosecutors use to gain convictions of innocent people. As Harvey Silverglate has noted, federal criminal law is so abusive and prosecutors are so powerful (there is no "counterweight" to their power, and they are demanding even more power) that innocent people find it in their own best interests to plead guilty to something because the alternative is too terrible.
Third, as I note in an upcoming article on federal criminal law in Regulation Magazine, the very basis for "white collar crime" law is the elimination of the Constitutional protections that we supposedly enjoy, including presumption of innocence, and the establishment of the mens rea principle. As LSU law professor John Baker noted in an article about the "father of white-collar crime laws," Edwin Sutherland, the law specifically targets people for what they are, not for what they do.
(Sutherland and his followers believed that almost all business transactions should be viewed inherently as being "criminal." It is clear that Bowman follows in that tradition.)
As former Supreme Court justice Robert Jackson pointed out in a 1940 speech, federal criminal law is written in a way that permits prosecutors to target and individual, and then look for crimes with which to charge that person. Keep in mind that in 1940, prosecutors did not have the RICO statutes and most of the "fraud" laws that they can bundle into just about anything.
Thus, Bowman and many other law professors of his ilk are arguing that we in reality need to do away with the Constitution -- and the Rule of Law -- altogether. Instead, they want us to depend upon the good will of prosecutors and, at the same time, give them unlimited power over our lives.
No doubt, Bowman believes that he is morally superior to the rest of us and would make a wonderful and benevolent and fair dictator. However, I prefer the words of Lord Acton, who was a far more learned and good man than Bowman ever could hope to be: Power corrupts, and absolute power corrupts absolutely.
Fast forward to 2009 in which very few people in power believe this about law, and nowhere is contempt for the legal principles of Blackstone and Thomas Jefferson more evident than in American law schools. As prosecutors become the living dictators of criminal law, the very concept of law has been perverted to become something other than a "shield" to protect the rights of the innocent. Law today -- and especially federal criminal law -- is nothing more than a weapon that federal prosecutors wield against people supposedly to keep them in line. As the Great Harvey Silverglate has written in his wonderful book, Three Felonies a Day, federal criminal law today more reflects the law of the old Soviet Union with its "crimes of analogy" than anything we inherited from Great Britain more than two centuries ago.
An unfortunate legacy of this terrible development has been the matriculation of federal prosecutors into law schools, where their own perverted views of law are now taught as being morally and legally legitimate. One such person is Frank O. Bowman, a law professor at the University of Missouri. I came upon this man through an interesting article in The New York Times in which the paper noted in a surprised manner that both leftists and conservatives have joined forces to oppose the abuses that federal criminal law has wrought.
Of course, being that the Times served as the main cheerleader for the disgraced Michael B. Nifong, the now-disbarred prosecutor who pursued charges in the infamous Duke Lacrosse Case that he knew were false, it is not surprising to see the "Newspaper of Record" take the side of the prosecutors. They interviewed Bowman, and he clearly did not disappoint:
Some scholars are skeptical about conservatives’ timing and motives, noting that their voices are rising during a Democratic administration and amid demands for accountability for the economic crisis.
“The Justice Department now acts as a kind of counterweight to corporate power,” said Frank O. Bowman, a law professor at the University of Missouri. “On the other side is an alliance between two strands of conservative thinking, the libertarian point of view and the corporate wing of the Republican Party.”
First, and most important, the notion that "corporate power" is equal to the power of the state is laughable. I don't recall any "corporate" forces from Wal-Mart gunning down innocent people (and paying no price) and Wal-Mart does not enjoy the immunity from being punished for criminal acts, as do the people championed by Bowman and his ilk. Corporations cannot engage in home invasions like your friendly police force, and if someone from a corporation guns you down, the killer -- unlike your friendly police protectors -- is likely to be prosecuted.
In fact, Bowman's former employer, the federal government, recently argued in the Pottawattamie case that prosecutors should be absolutely immune from any legal consequences, even when it is clear that they knowingly tried to frame innocent people. Instead, the government argued that no one has a Constitutional right not to be framed.
Second, the view of law being a "counterweight" violates every foundation upon which Anglo-American law was built. This "counterweight" view is a backdoor way of approving the tactics which prosecutors use to gain convictions of innocent people. As Harvey Silverglate has noted, federal criminal law is so abusive and prosecutors are so powerful (there is no "counterweight" to their power, and they are demanding even more power) that innocent people find it in their own best interests to plead guilty to something because the alternative is too terrible.
Third, as I note in an upcoming article on federal criminal law in Regulation Magazine, the very basis for "white collar crime" law is the elimination of the Constitutional protections that we supposedly enjoy, including presumption of innocence, and the establishment of the mens rea principle. As LSU law professor John Baker noted in an article about the "father of white-collar crime laws," Edwin Sutherland, the law specifically targets people for what they are, not for what they do.
(Sutherland and his followers believed that almost all business transactions should be viewed inherently as being "criminal." It is clear that Bowman follows in that tradition.)
As former Supreme Court justice Robert Jackson pointed out in a 1940 speech, federal criminal law is written in a way that permits prosecutors to target and individual, and then look for crimes with which to charge that person. Keep in mind that in 1940, prosecutors did not have the RICO statutes and most of the "fraud" laws that they can bundle into just about anything.
Thus, Bowman and many other law professors of his ilk are arguing that we in reality need to do away with the Constitution -- and the Rule of Law -- altogether. Instead, they want us to depend upon the good will of prosecutors and, at the same time, give them unlimited power over our lives.
No doubt, Bowman believes that he is morally superior to the rest of us and would make a wonderful and benevolent and fair dictator. However, I prefer the words of Lord Acton, who was a far more learned and good man than Bowman ever could hope to be: Power corrupts, and absolute power corrupts absolutely.
Tuesday, November 24, 2009
Even the New York Times takes notice of our efforts
Over the past several years, I have been part of a movement of people of many backgrounds challenging the near-dictatorship that we have of prosecutors, and especially federal prosecutors. One of the worst offenders of supporting the abuses of prosecutors has been the "Newspaper of Record," a.k.a. the New York Times. However, today the Times has a different take, and has publicized the efforts of people like the Great Harvey Silverglate and Radley Balko in exposing the abuses committed by this untouchable class of prosecutors.
While the Times piece mostly is sympathetic, at the end it quotes former federal prosecutor and now law professor Frank O. Bowman as basically saying that any of us who oppose this federal abuse, especially in the area of "white-collar crimes," is a corporate stooge. The article is worth reading, but I will be dealing with Prof. Bowman in a future post, as his are fighting words, and I am up to the fight.
While the Times piece mostly is sympathetic, at the end it quotes former federal prosecutor and now law professor Frank O. Bowman as basically saying that any of us who oppose this federal abuse, especially in the area of "white-collar crimes," is a corporate stooge. The article is worth reading, but I will be dealing with Prof. Bowman in a future post, as his are fighting words, and I am up to the fight.
Sunday, November 22, 2009
Unemployment Nation
The rate of unemployment in this country continues to grow, and in response the government is trying to bankrupt us with even more spending. This map outlines the growth of unemployment county-by-county since January 2007.
Of course, Paul Krugman will claim that this "proves" that the government must print even more money, as all True Keynesians believe that printing money is how an economy generates wealth. For those who wish to learn more about the man who gave us the "Keynesian solution," here is a great piece by Murray Rothbard about John Maynard Keynes.
Of course, Paul Krugman will claim that this "proves" that the government must print even more money, as all True Keynesians believe that printing money is how an economy generates wealth. For those who wish to learn more about the man who gave us the "Keynesian solution," here is a great piece by Murray Rothbard about John Maynard Keynes.
Saturday, November 21, 2009
ObamaCare: It will be an unmitigated disaster
It now seems inevitable that the Congress will pass the "healthcare" bill, and we are going to be stuck with a huge financial disaster. I wrote commentary for the website of the Foundation for Economic Education, in which I compare this moment to the 1938 disaster at Munich.
One thing we need to understand is this: the government of the United States is broke. It is as broke as the government of California, of Michigan, and of nearly every other state. The notion that the Federal Reserve and Congress have "stopped" the recession by pouring newly-printed money everywhere is pure foolishness. This government cannot take on a new, multi-trillion-dollar program for which the means to pay is going to be invoking confiscatory taxation.
This will be disaster for the U.S. economy. Americans have come to believe that the government can order anything, and it will be done. That is not how an economy works; if that were true, North Korea would be the world's wealthiest nation, and the Iron Curtain never would have fallen.
Furthermore, we can look for massive numbers of new criminal penalties in this "law," and that means that increasing numbers of medical providers will be arrested and imprisoned. Don't think this won't affect you and your family; as the government criminalizes more and more actions that formerly were legal, an increasing number of people will be caught in the federal maw and have their lives destroyed.
What people forget is that when government criminalizes activity that should be legal, we will see less and less medical care provided, and fewer people willing to risk medical careers. Now, most Americans now approve of the fact that the USA has one quarter of the world's prisoners, but some of them will change their tunes when either they or their friends and loved ones will be paraded before the TV cameras wearing chains and orange jumpsuits.
This will be touted as a huge political victory for Obama and the Democrats. However, I predict that as the reality of this horrible bill comes to the fore, there are going to be some Democrats next year who are going to wish they had voted against it.
One thing we need to understand is this: the government of the United States is broke. It is as broke as the government of California, of Michigan, and of nearly every other state. The notion that the Federal Reserve and Congress have "stopped" the recession by pouring newly-printed money everywhere is pure foolishness. This government cannot take on a new, multi-trillion-dollar program for which the means to pay is going to be invoking confiscatory taxation.
This will be disaster for the U.S. economy. Americans have come to believe that the government can order anything, and it will be done. That is not how an economy works; if that were true, North Korea would be the world's wealthiest nation, and the Iron Curtain never would have fallen.
Furthermore, we can look for massive numbers of new criminal penalties in this "law," and that means that increasing numbers of medical providers will be arrested and imprisoned. Don't think this won't affect you and your family; as the government criminalizes more and more actions that formerly were legal, an increasing number of people will be caught in the federal maw and have their lives destroyed.
What people forget is that when government criminalizes activity that should be legal, we will see less and less medical care provided, and fewer people willing to risk medical careers. Now, most Americans now approve of the fact that the USA has one quarter of the world's prisoners, but some of them will change their tunes when either they or their friends and loved ones will be paraded before the TV cameras wearing chains and orange jumpsuits.
This will be touted as a huge political victory for Obama and the Democrats. However, I predict that as the reality of this horrible bill comes to the fore, there are going to be some Democrats next year who are going to wish they had voted against it.
Thursday, November 19, 2009
Third World Dictators and the Pottawattamie Case
We saw a most extraordinary thing recently in the chambers of the U.S. Supreme Court, where lawyers representing the prosecutors of this country demanded absolute immunity no matter how outrageous and dishonest their conduct. (The Pottawattamie County v. McGee case involves prosecutors who knowingly framed two innocent people for a murder, forcing those men to spend more than two decades in prison before being released.)
As I read through the information, I have come to realize that what prosecutors want is a court system in which they can operate like Third World dictators. In such a system, they are absolute rulers, and whatever they want, they get, and if they are found to have lied, engaged in lawbreaking, suborning perjury, whatever, well, "sh*t happens."
Guess what? If the U.S. Supreme Court grants their wish, look for prosecutors to be even more emboldened in their lying and lawbreaking. From what I can tell, there are a lot of people in this country who want our system of "justice" to reflect what happens in places like Zimbabwe and North Korea.
More than one person has told me something akin to, "I have traveled all over the world and can say that ours is the best system of justice out there." Maybe that is true, but I have a question in reply: If our system is the best in the world, why do so many people want to change it into something from the Third World?
I will say up front that I have absolutely no confidence in the U.S. Supreme Court to do the right thing and affirm the rule of law. Instead, they will tell us what great guys the cops and prosecutors really are and how we need to protect them from the "bad guys."
As I read through the information, I have come to realize that what prosecutors want is a court system in which they can operate like Third World dictators. In such a system, they are absolute rulers, and whatever they want, they get, and if they are found to have lied, engaged in lawbreaking, suborning perjury, whatever, well, "sh*t happens."
Guess what? If the U.S. Supreme Court grants their wish, look for prosecutors to be even more emboldened in their lying and lawbreaking. From what I can tell, there are a lot of people in this country who want our system of "justice" to reflect what happens in places like Zimbabwe and North Korea.
More than one person has told me something akin to, "I have traveled all over the world and can say that ours is the best system of justice out there." Maybe that is true, but I have a question in reply: If our system is the best in the world, why do so many people want to change it into something from the Third World?
I will say up front that I have absolutely no confidence in the U.S. Supreme Court to do the right thing and affirm the rule of law. Instead, they will tell us what great guys the cops and prosecutors really are and how we need to protect them from the "bad guys."
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