Forty years ago today, communist forces seized Saigon, the capital of the Republic of South Vietnam, effectively bringing to an end the long and bloody Vietnam War. The communist victory was made possible by the Democrat Congress of the United States, which betrayed America’s South Vietnamese allies. In violation of America’s treaty obligations, the Democrat Congress denied President Ford’s January 1975 request for ammunition and equipment to enable South Vietnam to defend itself from the communists. Without the necessary supplies, South Vietnamese forces were unable to resist the communist offensive.
As a result of the communist takeover, hundreds of thousands of people were tortured and killed. In a desperate attempt to escape communist brutality, thousands of ‘boat people’ drowned on leaky rafts in the South China Sea.
Hardly anybody in America wants to talk about the loss of Vietnam and the Democrats’ betrayal. Perhaps not even one American schoolchild in a thousand has been properly taught this history. We suppose it’s too painful and embarrassing, especially for Democrats.
As a result, ignorance of the facts is ubiquitous. For instance, we recently ran across a puff piece about Hillary Clinton, a crook who apparently is running for president. The piece contains the following passage.
Clinton, then just Hillary Diane Rodham, was chosen by her peers to be the first student speaker to deliver a commencement address at Wellesley College. Clinton electrified 400 of her peers at the women’s liberal arts college with a fiery speech that captured the young generation’s disillusionment over President Richard Nixon’s war in Vietnam.
But the president responsible for America’s war in Vietnam was not Richard Nixon, a Republican, it was Lyndon Baines Johnson, a Democrat. Nixon was the president who withdrew American forces from Vietnam.
Leftists believed that communist victory would make Vietnam a kind of utopia. Instead, communism brought only poverty and oppression. As a consequence, Vietnam in recent years has turned away from communist policies, and the Vietnamese people have embraced free markets. In fact, polls show that the Vietnamese people have the world’s highest rate of support for a free market economy.
Reason magazine has chosen its Nanny of the Month, and very appropriately, the winner is California Governor Jerry Brown, for his policy of imposing draconian fines on citizens who wash their cars or water their lawns.
Controlling water use through coercion and fines is incompatible with the principles of a free society. The proper response to a drought is to allow the price of water to rise to clear the market. It is not for career politicians like Brown to tell free-born citizens how they may or may not use water.
Naming Brown Nanny of the Month actually seems insufficient condemnation for the arrogance and authoritarianism of Brown’s words and deeds. In a more just society, he’d be tarred and feathered. But short of that, we hereby officially declare Brown to be Yet, Freedom!‘s Jackass of the Month.
Many of history’s great thinkers in social science such as F. A. Hayek and Joseph Schumpeter have recognized that civil society depends on free markets and that, as a consequence, government intervention will ruin the society. The point is a difficult one to grasp intellectually, and therefore relatively few people understand it. Perhaps the easiest way to understand the point is by example, particularly with regard to government welfare programs. Welfare programs such as disability insurance and subsidies for food, health care, and housing make people dependent on government. By removing the incentive to work and the necessity of working, government dependents lose their ambition, their job skills wither, and eventually, they lose their sense of self-worth. Welfare undermines the character and self-reliance of the people; it makes them worse as citizens.
Government welfare programs also crowd out private, voluntary, organizations that exist to help the poor. In the days before welfare, a plethora of voluntary organizations worked to assist immigrants, the poor, and the sick. Poor people, for instance, often relied on Catholic charity hospitals. But those hospitals, like innumerably many other eleemosynary institutions, no longer exist, having been displaced by government programs. Big government undermines voluntary association, thereby lowering social capital. Big government will ruin the society.
Government welfare programs are very large and over the years have spent trillions of dollars. But apparently, even relatively small interventions by government can have adverse effects on civil society.
Consider for instance, what happens when government prices water below marginal cost, so that the price is too low to clear the market. When the price is too low, quantity demanded exceeds quantity supplied–the definition of a shortage. This mispricing of water is what has caused California’s current water shortage. And a shortage always gives rise to conflict among people to determine who will and who will not get to consume the good. California’s shortage has therefore pitted homeowners against almond growers, neighbor vs. neighbor. The Water War has escalated to the point where people are now spying on and snitching on their neighbors for ‘wasting’ water. And the government actively encourages the snitching, asking people to denounce their neighbors, like something out of Stalinist Russia.
Note well that this conflict among neighbors would not exist if only the government priced water to clear the market. Nobody objects to others’ consumption of a scarce resource so long as the consumer pays full value for what he consumes. Pricing at marginal cost would not only improve economic efficiency, but would civilize relationships among neighbors.
To see this, consider how a California ‘snitch’ might behave in two scenarios, differing only by the level of water prices. In the first scenario, there’s a water shortage because the government sets price too low to clear the market.
*California homeowner spies neighbor surreptitiously watering his lawn after dark*
“Oh my god, I can’t believe that guy is watering his lawn. The governor says we’re not supposed to be doing that. There’s a drought and therefore not enough water to go around. We all need to do our part to conserve water, and here is this guy wasting water by watering his lawn. He’s breaking the rules and so I’m going to report him to the authorities.” *Snitch picks up phone and drops the dime on his neighbor*
Now consider the same people in the same situation, but water is instead priced to clear the market.
“Oh my god, I can’t believe that guy is watering his lawn with water rates so high now because of the drought. His water bill must cost a fortune. Wow, to spend that much money, he must really love his lawn.” *Grabs a beer and goes back to watching the Angels lose to the Red Sox*
Notice how much more civilly people behave towards each other depending only on the level of a particular price. Almost nobody would have anticipated that a policy decision as seemingly innocuous as cheaply pricing water would adversely impact civil society, but there it is. Allowing prices to be determined in free markets is essential not only for using economic resources efficiently, but also, and perhaps more importantly, for maintaining a smoothly functioning and civil society.
Just another example in support of Paul Weyrich’s assertion, made long ago, that “too much government will ruin the society.”
Asking Americans every year to cope, under threat of criminal sanction, with a 10,000 page IRS code that nobody fully understands is an outrageous burden that free citizens should not have to endure. This year, the IRS made the burden even heavier by staging a kind of work slowdown. In an attempt to get more money from Congress, the IRS bureaucrats are faking a budget crisis by deliberately devoting fewer resources to customer service. Just another day at the office for America’s devoted public servants.
During the 2015 tax-filing season, the IRS provided what its own Commissioner described as “abysmal” customer service, blaming skyrocketing wait times for telephone and in-person assistance on agency budget cuts. The IRS even called budget cuts “a tax cut for tax cheats.” But a close review of the agency’s spending shows the IRS deliberately cut $134 million in funding for customer service to pay for other activities. Spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filling season. Other spending choices, including prioritizing employee bonuses and union activity on the taxpayer’s dime, used up resources that otherwise could have been used to assist another 10 million taxpayers.
Lessee. Assisting 10 million taxpayers, or bonuses and union activity. For the bureaucrats, that choice is a no-brainer.
The IRS’s spending choices and mismanagement of resources raise serious questions about the nature and extent of the agency’s self-described budget crisis and its commitment to serving the taxpayer.
We personally don’t believe very much uncertainty exists regarding the answers to those questions.
The behavior of the IRS is actually typical of large bureaucracies. Those bureaucracies have incentives almost diametrically opposed to a profit-seeking business firm. A firm will seek to earn profit by both keeping down costs and keeping customers happy by providing good service.
A bureau, however, has a totally different objective. The bureau seeks not to maximize profit, but its budget. The bureau therefore has the incentive to increase costs in order to argue for a larger budget allocation from Congress. The bureau also has the incentive to provide poor customer service so that the public will back a larger budget in the hope that more money will improve service. The incentives are perverse, and almost diametrically opposed to those of a for-profit business.
If you want lower costs and good service, privatize.
If you want higher costs and poor service, bureaucratize.
When people crowd into McDonald’s at lunch hour, employees open up more registers and start moving faster.
When at certain times people crowd into a U.S. Post Office, the employees keep open the same number of registers and keep moving at the same speed as the queue grows longer and longer.
If you consider objectively the poor service typically provided by large bureaucracies, you’d have to be nuts to put a large bureaucracy in charge of anything important. Like, say, healthcare. If you believe that relying on a large bureaucracy to provide you with treatment for ‘free’ would be a great deal, the first treatment you should seek is to have your head examined.
The mighty Raisin Administrative Committee, one of those quintessentially governmental institutions that are at the same time both ridiculous and sinister, is going to the Supreme Court.
The U.S. Supreme Court will hear oral arguments in a case tomorrow, Horne v. U.S. Dep’t of Agriculture, to decide whether this Committee may constitutionally confiscate–without compensation–raisins grown in excess of a quota established by the Committee. The case is being brought (finally) by brave raisin farmers Marvin and Laura Horne, who were ordered by the Committee to hand over about 300 tons (approximately 30% of their crop) of raisins that the government decided were excessive. The Committee is a vestige of the New Deal era, which in its wisdom, too often attempted to control agricultural prices by controlling supply.
The Wall Street Journal, in an editorial today, notes that at stake in the case is the important principle that government should not be able to seize, without compensation, private property solely for the purpose of manipulating a market.
This is rewriting the Fifth Amendment. Under the Ninth Circuit’s logic, why couldn’t the government demand that an auto company hand over 20% of the cars off its production line to give to the poor or sell overseas? How about pharmaceuticals or iPhones to maintain stable prices or serve another regulatory purpose?
In a given year, the government may decide that farmers are growing more raisins than Americans will want to eat. That would cause supply to outstrip demand. Raisin prices would drop. And raisin farmers might go out of business.
To prevent that, the government does something drastic. It takes away a percentage of every farmer’s raisins. Often, without paying for them.
These seized raisins are put into a government-controlled “reserve” and kept off U.S. markets. In theory, that lowers the available supply of raisins and thereby increases the price for farmers’ raisin crops. Or, at least, the part of their crops that the government didn’t just take.
So when it comes to raisins, the government has explicitly outlawed the price mechanism. If extended to most other goods and services the result would be…the Soviet Union. Or North Korea. But since it’s only raisins, not one of the ‘commanding heights’ of the economy, the economic losses are limited, and pass relatively unnoticed.
What does the Committee do with those reserved raisins?
The committee is allowed to sell off some of those reserve raisins that it took for free. It can use those proceeds to pay its own expenses and to promote raisins overseas.
And if there’s any money left over, it goes back to the farmers whose raisins were taken.
How much did they raise, and how much did the Committee return to farmers?
“We generated $65,483,211. And we pretty well spent it all,” said Gary Schulz, the committee’s president and general manager, reviewing the books for one recent year. That year, the committee spent those millions on storage fees. Overseas promotions. Administrative overhead.
So what, precisely, was left for the farmers?
“Zero,” said Schulz.
Don’t be fooled, however. This seizure without compensation might at first appear to harm farmers. But the most likely effect of the policy has been to increase farm income, at least at the time the policy was initiated in 1949, if not today. The opportunity to increase farm income was almost certainly the reason the program was created in the first place. By decreasing supply, the raisin seizures induce a higher price, and if demand is inelastic, the revenue effect of the higher price more than offsets the farmers’ loss of sales volume.
Consider also that, as mentioned in the article, raisin seizures in recent years have approached 50 percent of the total crop. If demand really is inelastic, then in this case, price must increase by at least a factor of two. That’s right; government intervention potentially causes consumers to pay twice as much or more for raisins. So that carton of Sunmaid raisins that you see in the supermarket for $4 should really cost not much more than $2, but the government props up the price. Just one more little blessing of the federal government for which we can all be thankful.
Meanwhile, farmer Marvin Horne, 68, has resisted the policy for each of the last 11 years, refusing to turn over his raisins to the authorities.
[G]et Horne talking about the national raisin reserve, and the spirit stirs. Suddenly he can’t find a metaphor hairy enough to express his contempt. It’s robbery. It’s socialism. It’s communism. It’s feudalism. It’s . . .
“You have heard of the rape of the Sabine women? This is even worse,” Horne said, referencing a legendary mass abduction from Roman mythology. “The rape of the raisin growers.”
God bless this guy. And bonus points for the learned allusion to classical mythology.
The Rape (Abduction) of the Sabines. An appropriate analogy for raisin policy?
Meanwhile, Horne’s case was recently brought before the Supreme Court, where Justice Breyer expressed astonishment at the policy.
“What it does is it takes raisins that we grow — in effect, throws them in the river,” Justice Stephen G. Breyer said, puzzling it out. Later, he said, “I can’t believe that Congress wanted the taxpayers to pay for a program that’s going to mean they have to pay higher prices” for raisins.
He can’t believe that Congress would make consumers pay higher prices? LOLZ, that right there is some pretty touching naivete by Justice Breyer. Hard to believe this guy has lived for decades in Washington, DC, and in fact started his career as an aide to one of the leading Congressional operators of his generation, Teddy Kennedy. Justice Breyer must indeed lead a charming life.
Finally, and maddeningly, the article points out that the Department of Agriculture has the power to terminate the policy at any time. Hence, every president since Truman could have stopped this madness with a simple phone call to USDA, but none did. Nice job!
But on the other hand, if the program had been terminated, we might never have had the one positive thing that the program ever delivered to the public–The California Raisins–claymation figures who attained fame in the late 1980s by singing Motown favorites. Yes, the California Raisins were an advertising campaign paid for by the Raisin Administrative Committee. Take it away…
If you can believe it, the following story is not from Soviet Russia, but from Wisconsin. You know, the supposed land of nice people and good government. Apparently, some Wisconsin citizens had the temerity to exercise their constitutional rights by engaging in political activism in support of Governor Scott Walker’s attempts to rein in the public employee unions. That political activism did not sit well with Milwaukee district attorney John Chisholm, whose wife, a teachers’-union shop steward, was reportedly “distraught” over Walker’s proposed union reforms. And so Chisholm, together with sympathetic judge Barbara Kluka, decided to go full fascist police state on his political opponents. The government’s persecution of citizens featured a wide array of classically fascist techniques, including spying, secret proceedings, and police raids on victims’ homes. The government’s actions involve potential violations of citizens’ constitutional rights to due process, as well as rights acknowledged by the First and Fourth Amendments.
Someone was pounding at her front door. It was early in the morning — very early — and it was the kind of heavy pounding that meant someone was either fleeing from — or bringing — trouble. “It was so hard. I’d never heard anything like it. I thought someone was dying outside.” She ran to the door, opened it, and then chaos. “People came pouring in. For a second I thought it was a home invasion. It was terrifying. They were yelling and running, into every room in the house. One of the men was in my face, yelling at me over and over and over.”
It was indeed a home invasion, but the people who were pouring in were Wisconsin law-enforcement officers. Armed, uniformed police swarmed into the house. Plainclothes investigators cornered her and her newly awakened family. Soon, state officials were seizing the family’s personal property, including each person’s computer and smartphone, filled with the most intimate family information. Why were the police at Anne’s home? She had no answers. The police were treating them the way they’d seen police treat drug dealers on television. In fact, TV or movies were their only points of reference, because they weren’t criminals. They were law-abiding. They didn’t buy or sell drugs. They weren’t violent. They weren’t a danger to anyone. Yet there were cops — surrounding their house on the outside, swarming the house on the inside. They even taunted the family as if they were mere “perps.”
As if the home invasion, the appropriation of private property, and the verbal abuse weren’t enough, next came ominous warnings. Don’t call your lawyer. Don’t tell anyone about this raid. Not even your mother, your father, or your closest friends.
If someone warns you not to call your lawyer, what should you do? As quickly as possible, you should call your lawyer.
[T]hey were American citizens guilty of nothing more than exercising their First Amendment rights to support Act 10 and other conservative causes in Wisconsin. Sitting there shocked and terrified, this citizen — who is still too intimidated to speak on the record — kept thinking, “Is this America?”
We’re asking ourselves that very same question. We’re also asking ourselves why this story, which should be the Story of the Year, is getting little or no attention in the major national media. The answer must be that the statist establishment has almost completely co-opted the major media outlets. And that is yet another very ominous development that does not bode well for the future of our free republic.
Dan Joseph of MRCTV.org went to the campus of George Mason University (our alma mater) to ask students to sign a petition to raise the minimum wage to $50 an hour.
The results contain good news and bad news. The bad news is that in only about 50 minutes Joseph got 21 imposters masquerading as university students to sign the petition.
The good news is that a number of students not only refused to sign, but countered the proposal with valid objections. In particular, the dude who walks in at 1:50 declares the minimum wage to be “a very, very racist law.”
In contrast, the “international politics” major at 3:05 and 3:18 did not cover herself in glory. International politics–wasn’t that Barack Obama’s major? Maybe it’s time to start requiring international politics majors to take one or two courses in economics.
Why is it that what goes on between 2 consenting adults is not the public’s or govt’s. business–except when it comes to what goes on between 2 consenting adults contracting for labor or services? Then it’s up for a public debate and vote??
Agreed. Other than public employees who work for the taxpayer, how much somebody earns is nobody’s business except that person and his employer. Everybody else can bugger off.
And in this regard, one of the main advantages of replacing the personal income tax with a consumption tax is that people would no longer be required to report their income to the government. You should never have to tell anyone how much you earn. Call it a right to privacy.
California is now suffering its fourth straight year of drought, and as a result, Governor Jerry Brown is taking ‘unprecedented’ action to ration water.
Mr. Brown, in an executive order, directed the State Water Resources Control Board to impose a 25 percent reduction on the state’s 400 local water supply agencies, which serve 90 percent of California residents, over the coming year. The agencies will be responsible for coming up with restrictions to cut back on water use and for monitoring compliance. State officials said the order would impose varying degrees of cutbacks on water use across the board — affecting homeowners, farms and other businesses, as well as the maintenance of cemeteries and golf courses.
While the specifics of how this will be accomplished are being left to the water agencies, it is certain that Californians across the state will have to cut back on watering gardens and lawns — which soak up a vast amount of the water this state uses every day — as well as washing cars and even taking showers.
The policy, of course, is imposed upon people by force. Non-compliance means fines, and failure to pay fines means the government will send armed men authorized to initiate violence.
Mark W. Cowin, the director of the California Department of Water Resources, said the state would tightly monitor compliance, in the hope that would be enough to accomplish the 25 percent reduction. If it is not, the order authorizes water suppliers to penalize offenders.
“We are looking for success, not to be punitive,” Mr. Cowin said. “In the end, if people and communities don’t comply, there will be repercussions, including fines.”
This policy is undertaken in the name of reducing waste of scarce water. But as usual, the truth is the opposite of what the government proclaims. To the extent that anybody wastes precious water in California, it is due entirely to the government’s own policy of keeping the price of water too low to clear the market.
One estimate found that consumers paid only 0.5 cents per gallon. At that rate, running a modern dishwasher every night for a whole month costs about a dollar. A standard 8-minute shower costs 10 cents. At those prices, people will overuse water because the price does not reflect the true cost. The government practically gives water away, then is appalled to find people ‘wasting’ water.
If the price were allowed to rise to the market clearing level, people would respond voluntarily to the higher price by economizing on water use, and there would be no need whatsoever for government to impose punitive rationing.
Rationing by price no only eliminates the need for coercion but eliminates waste since people would be paying for what they use, and therefore using only what they pay for.
Government rationing, in contrast, creates waste because the government’s definition of waste is arbitrary and political. Government defines ‘waste’ as car washing and lawn watering, because those are the uses that the ‘water police’ can observe. The problem is that one man’s waste is another man’s passion. For people who love a green lawn, that lawn can be very valuable indeed. In fact, it can be more valuable than what the government thinks has value.
In particular, the governor’s policy has no impact on big agriculture, even though in California most of the waste of water occurs in agriculture. The government, however, focuses on lawns.
So for example, suppose that the market would price a certain volume of water at $30, which is its true cost. The government, however, sells water to farmers at $15, which is below cost. If an almond grower can use that $15 of water to produce $20 worth of almonds, he’ll go ahead and use the water because he comes out ahead on that deal.
Meanwhile, some homeowner who loves his lawn is willing to pay $40 to keep his lawn green. But the government says, no, you can’t do that, a lawn is ‘wasteful.’ The almonds, according to the government, are not wasteful. That’s ‘productive economic activity and the backbone of California’s economy’ or some such.
The government has chosen $20 worth of almonds over $40 worth of lawn. This is a waste because the water is used for an activity that has lower value.
The market, in contrast, would produce the efficient outcome, because at a price of $30 the homeowner would buy the water but the farmer wouldn’t.
Some other homeowners, at the $30 price, might decide that keeping their lawns green isn’t worth it, so they’ll voluntarily stop watering. That’s their choice. Other people might decide instead to take quicker showers or not wash the car. Again, the choice is theirs. The advantage of rationing by price is that people can cut back on uses of water that offer them the least value, while retaining the uses that give them the most value.
The government, in contrast, rations by imposing an arbitrary ‘one size fits all’ choice on every household. As Gov. Brown put it, “The idea of your nice little green lawn getting watered every day, those days are past.”
Governor Brown doesn’t really know, however, how much your lawn is worth, or whether it’s worth more than the almonds. He doesn’t know and he doesn’t care. In California, the single biggest individual waster of water is Governor Brown.
As a follow up to our piece immediately below about the ongoing assault on campus speech, we came across the following powerful monologue on the subject by Pat Condell. This is truly an epic rant.
In the very places where the enlightened leadership of tomorrow is supposed to be germinating, you people are like a poison crop spray. You bring shame on the institutions of learning that you soil with your presence, and whose premises you occupy under false pretenses. And that applies whether you’re a student, lecturer, administrator, or professor. If you condone, facilitate, or indulge the suppression of any opinion on a university campus, you are an imposter, and you are the problem.
Pat–don’t hold back. Tell us what you really think!!