Hornberger's Blog, September 2008 – The Future of Freedom Foundation

Tuesday, September 30, 2008

Restore a Free Market to America
by Jacob G. Hornberger

The congressional rejection of President Bush’s bailout bill came as a shocker to me. As I was writing my blog yesterday about how one can always count on conservatives to cave in and abandon any semblance of a commitment to free-market principles, they went and surprised me by voting against Bush’s financial socialism. Sure, it might have had something to do with the countless telephone calls and emails they were receiving from angry and outraged citizens, but still — let’s give credit where credit is due — they stood up against Bush’s fear-mongering and his attempt to assist his Wall Street cronies before he leaves office.

Let’s clarify exactly what is going on here, especially since Bush is unlikely to give up on trying to get his friends off the hook.

The root of America’s financial and economic woes lies with the federal government and, specifically, with decades of such socialist and interventionist federal programs as Fannie Mae and Freddie Mac. There are the thousands of federal agencies and departments. There are the tens of thousands of rules and regulations. There are the armies of bureaucrats, inspectors, and regulators regulating and controlling financial and economic activity. There is the income tax, which sucks massive amounts of what ordinarily would be productive capital out of the pockets of the American people. There are the millions of dollars in welfare that is paid out to welfare recipients, both at home and abroad. There are multitudes of trade restrictions and immigration controls that interfere with people’s ability to enter into mutually beneficial trades that would increase their standard of living. There is the Federal Reserve that, decade after decade, has debased our currency, induced enormous misallocations of investment, and nurtured a culture of spending rather than saving among the American people. There is the massive, out-of-control federal spending to fund the welfare, the regulatory enforcement, the drug war, and imperial adventurism, including the invasions and occupations of Iraq and Afghanistan. There is the ever-growing national debt.

All this is bound to bring about financial crises. There is no way to avoid it. After all, don’t forget what conservatives used to say about how Ronald Reagan supposedly brought down the Soviet Empire — by making the Soviet government spend the nation into bankruptcy. The longer they try to prop up all this junk to avoid small crises, the bigger the later crises will be.

Of course, it is impossible to say how major the current financial crisis will be. But what’s important to keep in mind is that Bush’s bailout could not solve the crisis simply because the roots of the crises are being left intact. Instead, all that Bush’s plan could accomplish is to ensure that Wall Street cronies wouldn’t have to share in the pain of it. Under Bush’s plan, his cronies’ financial losses would simply be transferred to the American people.

The bailout is actually no different from the commutation of sentence that Bush gave to Dick Cheney’s loyal aide Scooter Libby or the civil immunity that Bush and Congress gave the telecoms who illegally spied on their customers. In the one case, Bush is giving his friends immunity from the criminal and civil law. In the other, he is immunizing his friends from financial losses by ensuring that those losses are suffered by the American taxpayer rather than by Bush’s Wall Street friends.

Let’s not forget that as long as our nation remains in the grip of the welfare-warfare paradigm, the crises will continue regardless of what socialist-interventionist plans are put into place to address them. Thus, the only real solution to America’s financial and economic woes is the restoration of a free-market paradigm, one in which people’s economic activities are free of government control, regulation, and intervention.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Monday, September 29, 2008

Libertarians vs. Statists
by Jacob G. Hornberger

It’s not surprising that many conservative House Republicans, after railing against socialism and interventionism, are caving in and embracing the $700,000 billion (probably more like $1.5 trillion after all is said and done) bailout of their Wall Street friends and cronies who fund their campaigns and political party. Isn’t this what conservatives have done ever since the New Deal? Hasn’t their game been to employ libertarian mantras — “free enterprise, private property, free markets, limited government” — while supporting every socialist and interventionist scheme that liberals have sent down the pike? Isn’t it both amusing and tragic to see conservative leader George W. Bush and congressional liberals jointly leading the charge for the socialist bailout of the rich and influential?

As we here at The Future of Freedom Foundation have been pointing out for almost 20 years, there’s really not a dime’s worth of difference between conservatives and liberals. Yes, it’s true that conservatives employ libertarian slogans on their stationery, websites, and promotional materials while liberals do not, but no one can deny that conservatives and liberals share the same fundamental commitment to socialism, interventionism, and, yes, even imperialism.

Now, it’s true that liberals, by and large, have a much deeper appreciation of civil liberties and the principles of the Bill of Rights than conservatives. In fact, even conservatives will agree that in this area, conservatives have been a disaster. We have long seen the negative attitude among conservatives toward the Bill of Rights insofar as criminal cases are concerned. But the animosity toward such protections reared its ugly head in full force after 9/11, with conservative support of Guantanamo Bay, torture, sex abuse, rendition, kidnapping, denial of due process, denial of speedy trials, presumption of guilt, military tribunals, secret detention camps, cancelation of habeas corpus, warrantless searches, denial of right to counsel, and disappearances and murders of detainees. But let’s not forget that many liberals in Congress have also ardently supported such things.

The real battle for the future of America is between libertarians, on the one side, and statists on other side, with the statists consisting of both conservatives and liberals. Only the libertarians are consistent defenders of all aspects of liberty, including economic liberty and civil liberty.

Among the ongoing battles between libertarians and statists is with respect to cause and effect. Since they have come to view the federal government as a daddy or, even worse, a god, statists cannot bring themselves to believe that the federal government has caused their woes. Thus, their knee-jerk reaction to the failures of socialism, interventionism, and imperialism is to find a scapegoat, which more often than not turns out to be “freedom.”

For example, after 9/11 the statists immediately announced that the problem was that the terrorists hated America for its “freedom and values.” Libertarians, on the other hand, showed that freedom had nothing to do with it. Instead, the problem was anger and rage arising from U.S. foreign policy —— that is, the bad things that the U.S. government had been doing to people in the Middle East. To statists, the libertarian position was heresy or treason.

Now, we’re seeing the same type of debate play out in the financial crisis. The statists are saying that the problem is with freedom. They’re exclaiming against unfettered capitalism, laissez faire, and a lack of regulation and calling for socialism and interventionism as the solution to the crisis. Libertarians, on the other hand, are showing that the financial crisis was caused by interventionism and, therefore, that the only genuine solution lies with freedom and free markets.

Ultimately, the American people have to make up their own minds. The stakes are high. As everyone knows, if the physician gets the diagnosis wrong, he’s likely to get the prescription wrong. For the past couple of weeks, we have been linking to a multitude of articles that explain how interventionism is at the root of America’s financial woes, why more socialism and interventionism is not the answer, and why economic liberty and genuine free markets (that is, free from government control or regulation) is the solution. For those who wish to explore the libertarian analysis on the financial crisis, here is a list of the articles we have linked to during the past two weeks:

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Friday, September 26, 2008

The Market Has Its Own Regulators
by Jacob G. Hornberger

Ever since the dawn of the New Deal in the 1930s, statists have told us that government regulators are needed to “stabilize free enterprise” and protect depositors and investors. Thus, for the last 80 years or so, we’ve lived under a regime in which there is an army of government bureaucrats for the banking industry and the financial industry. If anyone thinks that banking regulators are nonexistent or lack power, all he has to do is watch the face of any bank president in the United States when a subordinate announces, “The regulators are here.” It turns white with fear. The same holds true with respect to CEOs of financial institutions with respect to SEC regulators.

Yet, what has the regulated or controlled economy accomplished? Is there stability in the financial markets? Is the banking industry solid? If so, how come federal officials are so nervous? How come they are predicting another Great Depression, which by the way was caused by another group of federal bureaucrats known as the Federal Reserve, a point that even current Fed Chairman Ben Bernanke has admitted?

The truth is that embracing the paradigm of regulation and control for the eight decades has accomplished nothing but a loss of economic liberty. Rules, regulations, and government enforcers cannot protect people from the vicissitudes of life, their follies, or their mistakes. But the siren’s song of security seduces them into making them think that their government is taking care of them, making them less cautious and less responsible. It also seduces them into giving up their economic liberty, just as it has done with respect to their civil liberties.

One of the beauties of an unhampered market economy is that it provides its own regulators. These are speculators who are motivated by profit. They are the people known as “short-sellers,” and they are oftentimes hated and reviled by big, established firms. Why? Because short-seller speculators are the ones who inform people that there are problems within particular businesses. They are the free market’s regulators.

Suppose a particular business is having financial difficulty but refuses to disclose it to the public. Investors continue to innocently invest their hard-earned in the company. The speculator learns about the problems because it’s his business to learn about such problems before anyone else. That’s the way he makes his money. He goes into the marketplace and borrows shares of the company’s stock, which he then proceeds to sell. The price of the stock tends to drop due to the speculator’s sales. That alerts investors that something might be wrong with the company. They start selling their shares. The speculator later buys the shares back at a lower price than he paid for them and delivers them to the company from which he borrowed them.

Thus, short-sellers provide a critically important service for investors. They do it not out of altruism or charity but out of self-interest. By seeking a profit for themselves, they provide a valuable service for everyone else. When you think about it, doesn’t that principle apply to most people in the marketplace?

For another insight into the importance of short-sellers, take a look at the New York Times article “Cliff Asness Is Mad as Hell.” For some humor amidst all the dreary financial news, be sure to read Aness’ disclosure statement that is appended to his article. Another good article on the important role that speculators play in an unhampered market economy is one we published back in 1993: “The Speculator as Hero” by Victor Niederhoffer, which originally appeared in the Wall Street Journal.

Also, be sure to watch the video of Jim Roger’s telephone interview with Bloomberg, which is also linked in today’s FFF Email Update. He makes the same point that we’ve been making here at FFF — that the bailout is nothing more than a welfare plan for the rich and powerful Wall Street friends of Washington politicians and bureaucrats. As Rogers points out, the longer the cleanup of all these malinvestments is delayed, the bigger the pain is going to be when the whole thing finally comes crashing down.

Also, be sure to check out the great review of Separating School & State by Sheldon Richman, a book that continues to provide the only viable solution to the education mess — a free-market solution.

Happy weekend from FFF!

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Thursday, September 25, 2008

Crony Socialism
by Jacob G. Hornberger

You’ve got to hand it to Bush and Cheney. They are loyal to their friends.

They commuted Scooter Libby’s prison sentence after a jury convicted him of perjury and obstruction of justice.

They secured criminal immunity for federal agents who tortured or sexually abused people.

They secured civil immunity for the telecoms who served as illegal snitches for the federal government.

But perhaps the most audacious act of misguided loyalty of all is the bailout of Wall Street cronies with taxpayer money.

Make no mistake about it: This bailout plan is nothing more than a way to get Wall Street friends and cronies off the hook for bad investment decisions they made. That’s it, pure and simple. And it’s all dressed up in “crisis” garb to scare Congress into enacting it and inducing the American people into supporting it.

Also, don’t forget that those cronies made their bad investment decisions while seeking federal largess. After all, Fannie Mae and Freddie Mac are creations of the federal government, not the free market. The implicit guarantee of their debts came from the federal government, not the free market. Mandating loans to bad-risk customers came from the federal government, not the free market.

Despite all the tripe we’re hearing about “deregulation” and “unfettered capitalism,” especially from the liberals, this is nothing more than a failure of interventionism.

So, now that their plan to use federal intervention to line the pockets of their buddies has failed, they turn to crony socialism to bail out their buddies, who will undoubtedly return the favor with nice campaign contributions down the line.

Don’t look to the Democrats for help. Oh, they’ll make a big fuss about Bush’s bailout plan, but their socialist predilections will ultimately cause them to cave in and go along, just as they did when Bush, Cheney, and Powell scared them with Saddam’s (nonexistent) WMDs into delegating their power to declare war on Iraq on the eve of the 2002 congressional elections. Anyway, Democrats will see the bailout bill as an opportunity to extend federal control into the private sector, another reason they will end up supporting it.

What should actually be done? They should just let all those companies that made the bad bets bear the consequences. Why shouldn’t those who made wrong investment decisions, especially in order to benefit from federal largess, be the ones to bear the responsibility? Why should people who had nothing to do with those decisions have to cover their bad bets? If they go under, so be it. As the New York Times pointed out this week, there are many young companies, which didn’t make the bad investment decisions that the crony companies made, that are ready to step in and take their place in the marketplace.

Once again, we are seeing the economic and moral bankruptcy of the welfare-state, regulated-economy way of life, to which both conservatives and liberals remain incorrigibly committed. Hopefully, this latest “crisis,” which is being used to transfer massive amounts of wealth from the poor and middle class to the wealthy, will cause more Americans to join up with us libertarians as we do our best to restore economic liberty and genuine free markets to our land.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Wednesday, September 24, 2008

The Statist Impulse to Avoid Responsibility
by Jacob G. Hornberger

One of the characteristics of the modern-day welfare state is the refusal of statists to take responsibility for the damage and destruction their philosophy has wrought on the people of the world.

Consider Iraq. How many of the statists take responsibility for the million or so people who are now dead and for the chaos and violence into which their adventure has thrown the country?

Consider Afghanistan. How many of the statists take responsibility for the deaths of so many Afghanis, including brides and children, which their adventure in that country has wrought?

Consider U.S. foreign policy in general. How many of the statists take responsibility for the blowback from the bad things that U.S. officials have done to people overseas, including the 1993 attack on the World Trade Center, the 9/11 attacks, the attacks on U.S. embassies in Kenya and Tanzania, the attack on the USS Cole, and most recently the attack on the Marriott Hotel in Pakistan?

Consider Social Security. How many of the statists take responsibility for a bankrupt retirement system in which the elderly plunder and loot young people, many of whom are having a terribly difficult time making ends meet?

Consider the drug war. How many of the statists take responsibility for the death, destruction, violence, corruption, chaos, and failure of the decades-long war on drugs?

Consider the war on immigrants. How many of the statists take responsibility for the deaths, suffering, infringements on liberty, and forcible repatriations into Cuban communist tyranny that their war has wrought?

Consider Medicare and Medicaid. How many of the statists take responsibility for the soaring health care costs their government intervention has produced?

Consider the dollar. How many of the statists take responsibility for the depreciation of the dollar resulting from out-of-control federal spending, not only for the past 8 years but also for the past several decades?

And now we have the latest example of the refusal among statists to take responsibility for their socialism and interventionism — the so-called mortgage crisis. All we hear is their railings against “unfettered capitalism,” “the free market,” “greed,” “free enterprise,” and “deregulation.”

What nonsense. It’s all just a cover to avoid taking responsibility for what their socialist and interventionist system has wrought and as a way to impose more of their socialism and interventionism on the American people.

Consider, after all, the main causes of the mortgage “crisis”: the federal government’s creation of Fannie Mae and Freddie Mac, the federal government’s encouragement of Fannie Mae and Freddie Mac to borrow money to purchase home mortgages from mortgage lenders, the federal government’s implicit guarantee of Fannie Mae and Freddie Mac debts, and the federal government’s requirement that mortgage companies make home loans to bad-risk customers.

Now, does any of that sound like “the free market” or “unfettered capitalism” to you?

Yet, how many statists have you seen confronting the real causes of the mortgage “crisis” in their articles, interviews, or speeches? Don’t hold your breath. That would mean having to take responsibility for the welfare-state, regulated-economy way of life under which Americans have suffered ever since the New Deal.

Holding up the concept of responsibility to a statist is like holding up a cross to a vampire.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Tuesday, September 23, 2008

The Looming Threat of National Bankruptcy
by Jacob G. Hornberger

During the recent crisis in Georgia, conservatives reveled in comparing Russia’s actions to those of the former Soviet Union. But did you notice that not once did they remind people of how Ronald Reagan supposedly brought down the Soviet Union? Reagan, they used to unceasingly remind us, caused the Soviet government to spend the nation into bankruptcy.

Can you guess why conservatives no longer bring that up? It’s because that’s exactly what the federal government, led by conservatives (and supported by liberals), is doing to our nation — spending us into bankruptcy.

Many Americans live under the quaint notion that the federal government is infinitely rich. They view the government as they view American businesses — as just another enterprise within the American economy. They think that the government produces wealth, just as American businesses do.

But that’s just not reality. The federal government gets its money in two ways: taxation and borrowing. Whether it is taxing or borrowing, the effect is the same — it is sucking capital out of the pockets of productive people in order to fritter the money away on welfare or grandiose government schemes, both at home and abroad.

As most everyone knows, the federal government is spending money — lots of it. There’s all the domestic welfare, including Social Security, Medicare, Medicaid, subsidies, and education grants. There is the rebuilding of Iraq and Afghanistan. There is the massive replacement of weaponry that was used in the destruction of Iraq and Afghanistan. There is the drug war. There is the enormous amount for salaries and other expenses for all the politicians and bureaucrats in the federal government, including the welfare providers, the regulators, and the troops. And now there is the trillion dollars or so (no one really knows how high the bill is going to be) in welfare for Wall Street cronies.

Where is the federal government getting all that money? You’d almost think that the federal government owns a fountain of infinite wealth, wouldn’t you?

Well, you can rest assured that they’re not going to raise taxes to cover the difference between what they’re bringing in in taxes and the amount their spending. In fact, despite the fact that the federal government is spending much more than it’s bringing in, both John McCain and Barack Obama are steadfastly maintaining that they’re going to lower taxes. That’s not surprising. The surefire way to get elected by a gullible electorate is to simply promise to spend more and tax less.

Since the amount being spent far exceeds the amount coming in through taxes, they’re going to have to continue borrowing to raise the difference, which is what they have been doing, especially since 9/11.

They continue financing and refinancing all that spending with debt, piling it onto the American people as if there were no tomorrow. Ultimately, however, the day of reckoning will arrive. That debt will have to be repaid. It’s something the American people do not want to think about, and so they don’t. But the day will come when investors, especially foreigners, will fear a default and decline to purchase U.S. government debt instruments.

How will U.S. officials pay off the debt? They won’t raise taxes to pay it off because that will get American taxpayers upset. Instead, they’ll turn to the tried-and-true method of liquidating debt that profligate government officials have turned to for eons. They’ll simply print the money to pay off the debt.

What do you think a central bank is for? That’s the main point of having a Federal Reserve — to provide the means by which the federal government can inflate the money supply to finance its ever-increasing expenditures and debt.

As the Fed embarks on that scheme, make no mistake about it — there are people who are going to get hurt — very badly hurt. Contrary to popular supposition, all this federal spending for welfare and warfare does not come free. Americans are going to pay for it all, one way or the other. It’s just a question of which Americans are going to shoulder the burden of it and in what amounts.

Of course, the benefit of using inflation, as compared to raising taxes, to finance all this welfare and warfare is that the average person won’t know that it’s federal officials who are responsible for what is happening. This is especially true for people who received their economics education in government schools, government-approved schools, and government-supported universities and colleges.

When prices of everything start rising, in response to a constantly debasing currency, people will blame the private sector — entrepreneurs, speculators, profiteers, capitalists, OPEC, illegal aliens, and whatever other scapegoats they can find. The last entity they will suspect is responsible for their economic woes will be the federal government. In fact, when the inflationary process manifests itself in rising prices, economically ignorant citizens will actually look to the federal government to take care of them and protect them from the private sector. That’s when price controls will come into play, followed by shortages and criminal prosecution of “price-gougers.”

The ancient Chinese symbol for crisis consists of two words — danger and opportunity. We can only hope that during the danger posed to our nation by out-of-control federal spending, the American people will seize the opportunity to reject the welfare-warfare paradigm that holds our nation in its grip and restore our nation’s heritage of economic liberty and free markets.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Monday, September 22, 2008

An Interventionist Crisis
by Jacob G. Hornberger

It’s amusing to see liberals exclaiming against the bailout of the Wall Street big wigs. After decades of using government to take from the rich and middle class to give to the poor, did they honestly believe that politicians and bureaucrats would not use their welfare-state powers to take from the poor and middle class to give to the rich? What’s fascinating is that some liberals are able to recognize the fundamental immorality of using government force to fleece the American people for the benefit of Wall Street friends and cronies, but they still maintain a blind spot when it comes to using government force to accomplish the same thing for the “poor, needy, and disadvantaged.”

Of course, it’s also amusing watching conservatives come up with all sorts of rationales for using taxpayer money to bail out their buddies and contributors in the financial sector. “Oh, it could be another Great Depression! Oh, we’re so worried! Oh, we’re facing a worldwide financial collapse! Oh, woe is us!”

Give me a break. Aren’t these the guys who were just recently exclaiming against Hugo Chavez’s government takeovers of Venezuelan businesses? Didn’t they call that socialism? What’s the difference in principle between what Washington politicians and bureaucrats are doing and what Chavez has been doing?

Unlike liberals and conservatives, who continue to claim that the crisis is due to “greed,” “unfettered capitalism,” or “deregulation,” we libertarians know that what has once again failed is socialism and interventionism.

The current financial crisis is a classic example of Ludwig von Mises’s point about interventionism — that one government intervention into economic activity inevitably leads to more interventions. Why? Because the initial intervention inevitably brings about a crisis, which then motivates the politicians and bureaucrats to enact a new intervention, which then causes another crisis. Ultimately, the long series of interventions lead to omnipotent government — a total control of economic affairs on the part of the federal government.

For decades, the federal government has intervened in the housing market, enacting laws, rules, regulations, agencies, and tax benefits to encourage everyone in America to own a house. That’s what Fannie Mae and Freddie Mac were all about — using the federal government to encourage banks to lend money for home ownership. That’s what all those regulations requiring banks to lend money to bad-risk customers were all about too. That’s what the mortgage deduction from income taxes is all about.

Now that the bubble from all this interventionist malinvestment has burst, what is the response of the interventionists? To enact a new comprehensive intervention entailing hundreds of billions of dollars of taxpayer money in the hopes of keeping the entire house of cards propped up for another round of interventions down the road. Moreover, the plan to vest the Treasury secretary with unprecedented powers moves our nation closer to the omnipotent, dictatorial government to which Mises referred.

What is the answer to all this socialism and interventionism? Eradicate the disease entirely with major surgery. Restore a libertarian paradigm to our nation. No more interventions and no more socialism. No more income taxation or income-tax deductions. Leave everyone free to keep his own money and do what he wants with it. No government insurance, bailouts, or welfare. No economic regulations. No more paternalism.

If someone loses his money by investing in the wrong stock or picking the wrong bank, then he bears the responsibility for his choices. He cannot expect the government to plunder others to pay for his losses. He cannot expect government to take care of him in any way, including retirement, healthcare, or education.

Replace the coercion that comes with the welfare state and regulated economy with such voluntary principles as individual responsibility, free markets, and private charity.

Finally, let all the malinvestment that has taken place over decades work its way out of the system with bankruptcies, insolvencies, or mergers.

Alas, the American people are not there yet. Hope springs eternal and they’re still hoping for the perfect socialist plan or intervention. They’re still thinking that their beloved politicians and bureaucrats are looking out for them, much as a child continues to look to his parents to take care of him no matter how abusive they are.

Maybe — just maybe — as the American people discover what this new round of socialism and interventionism is going to cost them (on top of Iraq and Afghanistan and the domestic welfare state), a sufficient number of them will achieve the breakthrough that we libertarians have achieved and will help us restore genuine free-market, libertarian principles to our nation.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Friday, September 19, 2008

The Liberal and Conservative Box
by Jacob G. Hornberger

Liberals who have operated under the quaint notion that the welfare state is only for the benefit of the poor, needy, and disadvantaged have had a rude awakening during the past week. With the bailouts of Fannie Mae, Freddie Mac, AIG, and undoubtedly more to come, liberals have learned that the welfare state exists for the sake of big powerful corporations too. All those billions of dollars sure could have purchased lots of food stamps, uh? But hey, with all the financial losses those big companies have suffered, why can’t we call them poor, needy, and disadvantaged too?

We continue to hear liberals prattle on about how the financial crisis is due to the evils of “unfettered capitalism.” Unfortunately, they’re not the only ones. Conservative leader John McCain has announced that if elected, he intends to fire Chris Cox, the head of the SEC. His crime? According to conservative McCain, Cox hasn’t sufficiently regulated the markets.

Notice something important here: Neither conservatives nor liberals question the very notion of the SEC. They both wholeheartedly subscribe to the idea that a government agency needs to exist to regulate the financial markets.

Notice something else important here: The SEC stretches all the way back to the Franklin Roosevelt regime and, therefore, has been in existence for more than 70 years. Yet, when things go wrong, where do conservatives and liberals place the blame? Not on the paradigm of a regulated and controlled economy, which Americans have had since the 1930s, but the “free market,” which Americans haven’t had since the 1930s. At the risk of belaboring the obvious, the “free” in “free market” means free of government regulation.

To understand the malady that afflicts conservatives and liberals, as compared to libertarians, think in terms of two giant boxes. One box is labeled “Socialism and Interventionism.” In that box are all the liberals and conservatives. Their system entails using the federal government to take money from people in order to give it to other people. That is what the welfare state is all about. That is what socialism is all about. Their system also entails using the federal government to regulate private economic activity. That’s what interventionism is all about.

Within the Socialist-Interventionist box, there is sometimes more socialism and more interventionism. Sometimes there is less of both. When there is less socialism and interventionism, that’s what conservatives and liberals call “free enterprise” or “unfettered capitalism.” When there’s more socialism and interventionism, that’s what they call “saving free enterprise.” Neither of them will ever call their system socialism and interventionism because in their mind, America is a “free-enterprise” country and that’s all there is to it. Even today, they are convinced that Roosevelt’s socialist and interventionist system didn’t abandon free enterprise (that is, enterprise free of government control) but rather “saved free enterprise” with its welfare and regulations.

The other box is labeled “Libertarianism.” In this box, there is an absence (not a reform) of such government programs as Social Security, Medicare, Medicaid, income taxation, welfare, economic regulations, trade restrictions, drug laws, foreign wars, empire, immigration controls, a central bank, public (i.e., government) schooling, legal-tender laws, and paper money. That’s what libertarians mean by the terms “free enterprise” or “free markets.” It’s a way of life in which economic activity is free of coercive redistribution of wealth and government control of economic activity. It’s a way of life in which people are free to make their own economic decisions and bear the responsibility for those decisions.

Is it surprising that conservatives and liberals are so spooked by libertarianism? In their box, the libertarian paradigm just doesn’t fit, precisely because it is an entirely different paradigm from socialism and interventionism. The liberal and conservative box is based on the existence of those programs, and there are incessant battles within the box over who is going to get to run them.

When along comes a libertarian and says, “I favor the repeal, not the reform, of all those government programs,” conservatives and liberals become befuddled, confused, and sometimes even angry. Their entire world-view is being shattered by libertarians because their paradigm of “free enterprise” is based on the existence, not the absence, of those programs. Dealing with a libertarian causes liberals and conservatives no small amount of discomfort and dis-ease because it makes them confront their life of the lie and their life of unreality.

Is it any wonder both conservatives and liberals sometimes wish that libertarians would just go away and leave them alone?

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Thursday, September 18, 2008

Just Blame the Crises on Freedom
by Jacob G. Hornberger

The amusing part of the current financial crisis is how liberals are blaming it all on “the free market” or on “unfettered capitalism.” Not surprisingly, their solutions call for socialist and interventionist measures, in order to “save freedom and free enterprise.”

The liberal attitude toward the financial crisis is really no different from the conservative attitude toward the terrorist crisis. That crisis, as conservatives never cease to remind us, is because we’re “free” and the terrorist hate that. Not surprisingly, their solutions call for totalitarian infringements on civil liberties, in order to preserve our “freedom.”

As everyone knows, the financial crisis and the terrorist crisis are not the only crises Americans are facing. Other crises include: the drug-war crisis, the immigration crisis, the education crisis, the Social Security crisis, the healthcare crisis, the dollar crisis, the federal-spending crisis, the Iraq crisis, the Afghanistan crisis, the rising-prices crisis, and the Latin America crisis.

Conservatives and liberals will tell you that all these crises should be blamed on “freedom and free enterprise.” It’s all just a coincidence that the federal government is the common denominator of all these crises. If only Americans weren’t so free, everything would be hunky-dory. Just turn your lives, freedoms, and fortunes over to the federal government and everyone will be prosperous, safe, and secure.

It would be difficult to find a better example of the life of the lie and denial of reality. In actuality, what is cracking are the socialistic welfare state and regulated economy and the federal government’s overseas military empire, which both liberals and conservatives love and embrace. These people simply find it too painful to accept that discomforting truth. So, they steadfastly continue believing and repeating their little fiction that it’s all the fault of “freedom and free enterprise.”

When the Franklin Roosevelt administration was abandoning America’s founding principles of economic liberty in favor of of the socialist principles of the Soviet Union and the fascist principles of Mussolini’s Italy (see here and here), advocates of economic liberty warned that in the long run such principles would have very bad consequences for the United States.

But the statists cavalierly responded, “In the long run we’re all dead.” But there was one big problem with that cavalier statement: The grandchildren of the people who adopted the socialistic welfare state and the regulatory economy would be alive in the long run. That’s us — the people living today! And we’re now paying the price for our grandparents’ abandonment of America’s founding principles of individual freedom, free markets, and limited government and their embrace of socialism and interventionism. We’re living in their long run.

Lest anyone suggest that libertarians haven’t been warning of the possible crackup of the socialistic welfare state, the regulated economy, the pro-empire foreign policy, and the out-of-control federal spending that comes with all this, here are excerpts from some of my blog posts during the past few years:

“In fact, it is quite possible that we are approaching a ‘perfect storm’ in which these socialist and interventionist federal programs all go into major crisis at the same time.” — Jacob Hornberger blog, April 2006

“As I have written before, thanks to the federal government — or federal god as many American statists choose to perceive it — Americans just might be facing a perfect storm of crises, all of which are rooted in federal socialism, interventionism, and empire-building.” —Jacob Hornberger blog, April 10, 2007

“In fact, it could well be that we’re facing a perfect storm of federal disasters on the horizon, especially given that there are so many critical federal programs in crisis — Social Security, the dollar, Iraq, the war on immigrants, the drug war, education, healthcare, the IRS and income taxation, and terrorism.” — Jacob Hornberger blog, April 16, 2007

“If America continues to move in the same direction of militarism, interventionism, war, and welfarism and if all this pushes our nation into a perfect storm of financial, monetary, and economic crises, combined with lots of caskets containing the remains of U.S. soldiers as well as victims of terrorist blowback, Americans will be left with a sad lament: ‘If only we had listened to the libertarians rather than the welfare-warfare statists who took us down this road.’” — Jacob Hornberger blog, January 11, 2008

“The welfare-warfare vise continues to squeeze the American people, especially through a constantly depreciating currency to pay ever-increasing welfare-warfare expenses. Time will tell whether this turns out to be just another recessionary blip in the history of the welfare-warfare state or whether Americans are indeed facing a perfect storm of welfare-warfare crises.” —Jacob Hornberger blog, February 4, 2008

“But what happens if there is a perfect storm of several industry-wide collapses? For example, instead of a few banks failing what happens if there are bank runs on 90 percent of the banks? How is the government going to cover everyone’s losses?” —Jacob Hornberger blog, July 25, 2008

“Time will tell whether Americans are facing a perfect storm of crises, both foreign and domestic. If so, a bit of pork and lard in an economic “stimulus” bill will be the last thing on people’s mind.” — Jacob Hornberger blog, January 28, 2008

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Wednesday, September 17, 2008

Praise the Price-Gouger
by Jacob G. Hornberger

It must be hurricane season because we’re once again being subjecting to complaints about price-gouging. In the finest communist and socialist tradition, some Americans are turning in businesses to the state that significantly raise prices of essential items, such as gasoline, water, or ice, in the midst of a hurricane. As always, state officials are threatening to prosecute the evil, greedy, profit-seeking, bourgeois swine who are taking advantage of consumers in the midst of an emergency.

What nonsense! And the irony is that some of these people — including both the snitches and the government officials — are oftentimes the first to exclaim how proud they are that America has a “free enterprise” economic system.

The price system plays a critically important role in an unhampered market economy. It transmits the important information that people need in determining whether to buy, sell, consume, or produce a certain item.

When the price of an item, say ice, soars in a local market, the following message is sent to suppliers: “Supply this item! It is in short supply. You stand to make very high profits if you do this quickly.” Simultaneously, the following message is sent to consumers: “Conserve this item! It is in short supply. Use it sparingly.”

When the state tampers with the system with such interventions as price-gouging laws, it interferes with this information-transmitting process in the market economy. If prices are maintained artificially low because of such a law, the following message is sent to suppliers: “Supplies of this item are adequate. There is no need to rush to supply this item.” The following message is sent to consumers: “Consume this product as you ordinarily would. Supplies are plentiful.”

The particular amount of ice (or other items) in the hands of owners in an area hit by an emergency is not affected by a price-gouging law. Thus, all that such a law accomplishes is a destruction of the information-transmitting process that is essential to both suppliers and consumers. Entrepreneurs fail to increase supplies, and consumers tend to over-consume. Shortages occur, which last longer than usual.

It is not a coincidence that there were long lines at gasoline service stations during the 1970s. That was when the federal government imposed price controls on gasoline, which were just a variation of a price-gouging law. By interfering with the information-transmitting process of the price system, the government guaranteed shortages of gasoline and long lines at the pump.

The best way to alleviate scarcity of essential items during a hurricane or other emergency is to leave people free to charge as much as they want, without fear of being prosecuted by the state. As the price soars, entrepreneurs see an opportunity to make a quick profit by taking extraordinary steps to get supplies into the area as soon as possible. Those additional supplies then bring about a lowering of prices, which tells consumers that the scarcity of that particular item is being alleviated.

Finally, we also must never forget that private ownership of property is a fundamental, God-given, and natural right. The purpose of government is to protect such a right, not infringe upon it. The ownership rights for ice, gasoline, or any other item do not disappear simply because a crisis occurs and consumers have a “need” for such items. As the owner of the item, the seller has the inalienable right to sell it for any price he chooses or, for that matter, not sell it at all. It belongs to him. That’s what private ownership is all about.

Thus, the moral and economic principles of private property, free markets, and limited government integrate perfectly with each other. If only government officials would leave things alone, everyone would be better off especially during a hurricane or other emergency. Or as the French would put it, “Laissez faire, laissez passer.”

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Tuesday, September 16, 2008

Freedom, Socialism, and the Truman Show
by Jacob G. Hornberger

In my September 10, 2008, blog post, I explained that one of the great benefits of public (i.e., government) schooling and government-approved schooling is the political indoctrination to which most children in society are subjected. The indoctrination is so effective that it sometimes lasts throughout a person’s life. The indoctrination, however, is not foolproof, given that thousands of people, notably libertarians, have succeeded in breaking free of it and seeing reality for what it is.

One of the best examples of this phenomenon is the widely held notion that the United States is a “free-enterprise” country while such countries as Cuba, Vietnam, and China are socialist countries. From the first grade on up, it is ingrained into the minds of American schoolchildren that Franklin Roosevelt’s New Deal was not a new and different paradigm from the free-market paradigm that had guided previous American generations. Instead, students are taught, Roosevelt’s system was actually a “free-market reform” that “saved America’s free-enterprise system.”

Examples of this mindset abound among American adults, including the well-educated. For example, consider a recent Washington Post front-page article entitled “Financial Rescues Show that Faith in Free Market Is Shaken” by Steven Pearlstein. The author expressly begins with the standard assumption that America’s economic system is based on “self-reliance, individual responsibility, and free markets.” He argues that the failure of Bear Stearns, Fannie Mae, Freddie Mac, and Lehman Brothers have shaken people’s confidence in America’s “free-enterprise” system.

The same sort of analysis appears in an editorial in today’s USA Today. The editorial states in part: “Perhaps it’s time to reconsider the ‘greed is good’ sentiment of the 1987 movie Wall Street, which has served as a mantra for the unfettered capitalism, financial market deregulation and bull markets of the past quarter-century or so.”

To better understand the mindset of these people, consider the movie “The Truman Show.” The plot revolved around Truman Burbank, who, unbeknownst to him, had been raised on a movie set since he was born. The setting provided the people of the world with a 24-hour reality show revolving around Truman’s life in an idyllic community. Everyone except Truman was an actor. For Truman, it was all real life. What everyone else knew was fake and false was reality for Truman.

Truman’s plight encapsulates those who have been victimized by the political indoctrination in government schools and government-approved schools. Like Truman, they live in a society that they’ve been taught to believe is a “free enterprise, capitalist” system. The notion that they might be living in a fake and false reality is incomprehensible to them. Since they have no doubts that America is “free enterprise,” when their system fails their solution is logical — to adopt socialist and interventionist measures to save “free enterprise.”

Yet, like Truman, they occasionally encounter things that pierce their false sense of reality. For example, they might read somewhere that such socialist countries as Cuba, Vietnam, and China have such government programs as Social Security, Medicare, Medicaid, public (i.e., government) schooling, welfare, economic regulations, income taxation, a central bank, paper money, trade restrictions, and immigration controls, which befuddles them. After all, since those are the core elements of American “free enterprise” system how could they possibly be the core elements of socialism as well? But like Truman, they simply put the matter out of their minds and go about their busy lives.

Of course, libertarians are different, which is precisely why they oftentimes make both the indoctrinated and indoctrinators so uncomfortable and even hostile. Libertarians have succeeded in breaking through the indoctrination. We know full well what American Trumans have not yet discovered — that long ago, especially during the Franklin Roosevelt regime, Americans abandoned America’s heritage of free enterprise and succumbed to the paradigm of socialism and interventionism that was sweeping the rest of the world.

Thus, when things go wrong with the system, we libertarians correctly diagnosis the problem as the inherent and inevitable defects of socialism and interventionism, while our Truman counterparts view them as the failures of “free enterprise.”

Is it any surprise that libertarians are resented by both the Trumans in society as well as those who are responsible for teaching the fake and false reality? The Trumans dislike us because we make them feel uncomfortable, given our firm commitment to reality. The indoctrinators dislike us because they know that we’re immune to their tripe and, equally important, because they know that we’re helping the Trumans in society to break free of the indoctrination and pierce through to reality.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Monday, September 15, 2008

The Drug War’s Attack on Freedom
by Jacob G. Hornberger

Mackenzie Phillips, daughter of the founder of the Mamas and Papas pop group and a former star in the television sitcom “One Day at a Time,” was arrested last week and charged with possession of narcotics. The arrest took place while Phillips was going through the security screening at Los Angeles International Airport.

There are two things wrong with this picture.

First, aren’t those airport security checkpoints intended to stop terrorists and hijackers, not drug addicts? Why should airport gendarmes have the authority to take people into custody for possession of items that are unrelated to terrorism or hijacking?

More fundamentally, why should the government have the authority to punish any person for possession of drugs? Of course, that is the central moral challenge to the drug war itself.

Why shouldn’t a person be free to possess or ingest any substance, no matter how harmful? Isn’t that a necessary part of the concept of individual freedom. If the government can send an adult to his room for ingesting non-approved substances, how can people in that society honestly be considered free?

Why shouldn’t the state simply leave people like Mackenzie Phillips alone? Sure, the woman seems to have a drug problem. According to the Associated Press, back in 1982 she lost her job at “One Day at a Time” because of drug-related charges. But isn’t that her business? What business does the state have punishing her for a drug addiction?

Why not just punish those people who violate the rights of others and leave everyone else alone? Isn’t that what we do with people who ingest alcohol?

Meanwhile, the bodies of 24 men were recently found outside Mexico City, victims of the latest battles between rival drug gangs. In other parts of Mexico, 17 other people were killed last week, some of whom had been decapitated. According to the Reforma newspaper, 3,148 people have been killed in drug-related violence just this year.

Arrests of drug addicts, gang wars, and murders and executions. Just another week in the life of the 30-year-old war on drugs. With no end in sight.

Isn’t it time to bring all this abuse, death, and destruction to a stop? Isn’t it time to simply repeal the drug war?

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Friday, September 12, 2008

Debating Lipstick and Pigs
by Jacob G. Hornberger

While people in the McCain camp are on the attack over Obama’s comment about lipstick and pigs, some of the mainstream pundits are asking why so much time is being spent on what seems to be a rather silly issue. Why not spend time focusing on the important, burning issues of our time, they’re asking?

The reason is a simple one but one that mainstream journalists simply do not wish to confront: Philosophically, there’s not a dime’s worth of difference between McCain, Obama, Palin, and Biden. Any differences over policy are over variations and degrees, not principles. You could mix and match the four candidates and it wouldn’t make any difference whatsoever. You’d end up getting the same thing.

Consider economic philosophy. All four candidates are firm advocates of the socialistic welfare state. All of them believe that the proper role of government is to take care of the citizenry, whether through Social Security, Medicare, Medicaid, education, jobs, subsidies, bailouts, and other forms of welfare. Thus, any arguments they would have would be over their own particular welfare “reform” plan.

Yawn.

Consider economic regulations. All four candidates believe that the federal government plays a proper role in regulating economic activity. When things go wrong, as they inevitably do, all four of them exclaim that the reason is because there wasn’t enough regulation. Their respective regulatory “reform” plan will supposedly cure the problem.

Yawn.

Consider the drug war. Despite 30 years of death, destruction, mayhem, and failure, all four candidates are fierce advocates of the war on drugs. They honestly believe that the federal government should have the paternalistic power to punish people for ingesting harmful substances. All four would have some “reform” plan that would be intended to finally bring “victory” in the war on drugs.

Yawn.

Consider monetary policy. All four candidates firmly believe in monetary central planning and paper money, despite decades of monetary debasement and financial chaos. The last thing they would consider is replacing the monetary socialism of the Federal Reserve with a free market monetary system.

Yawn.

Consider foreign policy. All four of them are ardent interventionists. Obama professes to be different because he opposed the Iraq War, but philosophically, he is as interventionist as the others. For example, Obama supports the intervention in Afghanistan (despite the lack of the constitutionally required congressional declaration of war) and has expressed support for a war on Iran. Let’s also not forget that Obama selected an ardent interventionist who supported Bush’s invasion of Iraq as his running mate. Any debate over foreign policy is going to be one involving where to intervene, not whether the overall U.S. policy of intervention should be ended and the U.S. overseas empire dismantled.

Yawn.

Civil liberties. All four candidates believe in torture, sex abuse, arbitrary arrests, indefinite detentions, spying on Americans, rendition, military tribunals, the enemy-combatant doctrine, and denial of due process and trial by jury — for people the military or the CIA has designated a “terrorist.” In fact, all four of them have embraced Bush’s “war on terrorism” and are ardent supporters of the CIA and the military-industrial complex. They’re just claiming that they could run the “war on terrorism” better than Bush.

Yawn.

Trade restrictions and immigration controls. All four candidates are firm believers of government control over trade and immigration. Their position is simply that no one has yet come up with the correct “reform” or intervention that will finally end the ever-growing trade and immigration “crises” They’ll be the ones who will finally come up with the perfect reform plan.

Yawn.

Gun control. All four candidates believe in gun control. The differences lie in the degree of gun control (e.g., bans on automatic weapons, registration, background checks, gun shows, concealed carry permits, etc), not in the notion of gun control itself.

Yawn.

Education. All four candidates believe that government plays an important role in the educational process. Despite the manifest failures in education, all four of them call for “reform.” None of them call for abolishing the Department of Education.

Yawn.

Given the joint commitment of all four candidates to socialism, interventionism, paternalism, and empire, what is there to debate? Whose reform plan is best? What a yawner! The debate over lipstick and pigs is much more exciting.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Thursday, September 11, 2008

A Better Way to Have Handled 9/11
by Jacob G. Hornberger

Seven years after 9/11, shouldn’t Americans ask if there was a better way to respond to those attacks? After all, look at where we are today as a result of how President Bush chose to respond to 9/11:

1. A perpetual “war on terrorism” being waged by U.S. personnel all over the world.

2. A military invasion of Afghanistan that killed countless Afghanis despite the fact that U.S. officials never provided evidence, as they promised, of complicity by Afghani government officials in the 9/11 attacks. Despite the fact that the invasion succeeded in effecting regime change in Afghanistan, it failed to accomplish its purported purpose — the capture of Osama bin Laden. The U.S. Constitution was violated with President Bush’s failure to secure the constitutionally required congressional declaration of war. The occupation of Afghanistan is indefinite. Intended to protect the U.S.-installed regime, the occupation continues to kill countless Afghanis, including innocent women and children, thereby fueling anger, antagonism, and rage, guaranteeing an indefinite supply of recruits for al-Qaeda and a perpetual threat of terrorist counterstrikes.

3. A military invasion and indefinite occupation of Iraq, a country that never attacked the United States or even threatened to do so. The Constitution was violated with the president’s failure to secure a congressional declaration of war. The invasion and occupation have killed or maimed more than a million people. Millions more have been sent into exile. The entire country is destroyed. The operation has fueled tremendous anger, antagonism, and rage, guaranteeing an indefinite supply of recruits for al-Qaeda and a perpetual threat of terrorist counterstrikes.

4. The U.S. government now wields the arbitrary and dictatorial power to take foreigners suspected of terrorism into custody as “enemy combatants” and deny them due process of law, trial by jury, and other fundamental procedural rights as well as subject them to torture, sex abuse, humiliation, and other cruel and unusual punishments.

5. The U.S. government now wields the arbitrary and dictatorial power to take Americans into custody as “enemy combatants” and treat them accordingly, including torture and sex abuse and indefinite detention.

6. The U.S. government now wields the arbitrary and dictatorial power to attack or bomb people in any country in the world, including Americans, so long as suspected “terrorists” are being targeted.

7. The U.S. government, especially through the CIA, now wields the power to enter into any country in the world, including the United States, and kidnap people and then rendition them to secret prisons or brutal foreign regimes for the purpose of torture.

8. The U.S. government, especially through the NSA and private telecommunications companies, now wields the power to spy on Americans, monitoring their emails and telephone calls and the power to grant immunity to private companies who participate in such misconduct.

Was there another way after the 9/11 attacks? Yes. U.S. officials could have handled the matter in the same way they handled the 1993 terrorist attack on the World Trade Center — as a criminal-justice matter rather than as a military matter.

Even though it took two years to bring him to justice, Ramzi Yousef was ultimately arrested in Pakistan, extradited to the United States, prosecuted in federal district court, convicted of the 1993 WTC terrorist attack, and sentenced to federal prison. No U.S. military bombing campaign was ever carried out against the Pakistani people.

If warrants for the arrest of bin Laden and other people accused of the 9/11 attacks had been publicly issued, the entire world would have been on the lookout for the suspects. While there would have been no guarantee that bin Laden would have been arrested, at least he would have been isolated and would have found recruiting to be problematic, especially given the worldwide sympathy for Americans that existed after 9/11 and before Bush embarked on his military crusades.

There would have been no invasions or occupations of Afghanistan and Iraq. The countless Afghanis and Iraqis who are now dead at the hands of the CIA and U.S. military would be alive. Those who are now maimed would be whole. Those who have fled these countries would still be in their homes. The horrible anger, animosity, and rage currently exhibited toward the U.S. government (and the United States) as a result of the invasions and occupations of Afghanistan and Iraq would be absent. Recruiting for al-Qaeda would be problematic.

There would be no Gitmo, no “war on terrorism,” no torture and sex abuse, no cancellation of habeas corpus and due process of law, no “enemy combatant” doctrine, no attacks on civil liberties, no kidnapping, no rendition, and no spying on Americans.

There would likely have been a reexamination of U.S. foreign policy by the American people, given that its pro-empire, pro-intervention policy in the Middle East was the motivating cause of the 9/11 attacks in the first place.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Wednesday, September 10, 2008

Government Bailouts and Government Schooling
by Jacob G. Hornberger

One of the great benefits of public schooling, from the standpoint of government officials, is the power to indoctrinate people with myths and false beliefs. Oftentimes, these myths and false realities retain control over a person’s mind all the way through adulthood. With the government’s bailout of Fannie Mae and Freddie Mac, we have one more example of the power of public-schooling indoctrination.

From the first grade, public-school students (and, yes, many students in government-licensed private schools) are indoctrinated into believing that that are being raised in a “free enterprise” country. People living in such countries as Vietnam, China, and Cuba suffer under socialism, American students are taught, while the American people experience the benefits of a “free-market” economy.

Thus, not surprisingly, conservatives and liberals, as well as people in the mainstream media, are suggesting that the failure of Freddie Mac and Fannie Mae reflect the failures of America’s “free-enterprise” system. We can’t let these two bastions of “free enterprise” fail, they tell us. That would be catastrophic. No, we must reluctantly adopt extraordinary government measures to save the housing market and the economy. Indeed, in the spirit of Franklin Roosevelt’s New Deal, we need to adopt such measures to “save free enterprise.”

One of the primary reasons that conservatives and liberals dislike and even fear libertarians is that we bring an element of truth and reality to this process. Unlike so many of our counterparts who also attended government schools or government-approved schools, we have broken through the years of indoctrination and see reality for what it is. Franklin Roosevelt’s New Deal didn’t “save free enterprise.” It rejected and abandoned free enterprise in favor of socialist and fascist principles that were emanating from the socialist Soviet Union and fascist Italy. Moreover, libertarians recognize that it wasn’t free enterprise that failed in 1929. Rather, it was the monetary socialism emanating from the Federal Reserve that failed.

Thus, one of the distinguishing characteristics of libertarians, as compared to conservatives and liberals, is how we view the nature of America’s economic system. Conservatives and liberals honestly believe that America has a “free enterprise” system while countries like Cuba, Vietnam, and China have socialist and interventionist economic systems. Never mind that all these countries have such programs as Social Security, Medicare, Medicaid, public schooling, income taxation, occupational licensure, welfare, subsidies, economic regulations, equalization of wealth, trade restrictions, and immigration controls. All that matters is that Americans continue believing what they’ve been taught to believe — that those other countries are socialist and interventionist while America is “free enterprise.”

Having broken free of the indoctrination they received in government schools, libertarians view the situation differently. We know that during the New Deal era, Americans rejected and abandoned the laissez-faire philosophy of our American ancestors and adopted an economic system of socialism and interventionism. The difference between the economic systems of the United States and Cuba, Vietnam, and China is simply one of degree, not one of principle. There is more socialism and interventionism in those countries than in the United States, but the underlying philosophy is the same.

Not surprisingly, Fannie Mae and Freddie Mac have their roots in FDR’s New Deal socialist and interventionist programs. Since those in the mainstream political parties and the mainstream media have been indoctrinated into believing that the New Deal “saved free enterprise,” it is perfectly natural for them to conclude that America’s “free enterprise” system has failed once again. The plight of these people is best summed up with the words of Johann Goethe: None are more hopelessly enslaved than those who falsely believe they are free.

Libertarians, having a grip on truth and reality, see things for what they are. We recognize that with the Fannie Mae and Freddie Mac bailout, it is once again socialism and interventionism that have failed. That’s why we hold that the solution to America’s economic woes lies not with more socialism and interventionism but rather with the full embrace of economic liberty and free enterprise.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Tuesday, September 9, 2008

God Is Not Responsible for Sins in Iraq
by Jacob G. Hornberger

A reader advised me that in my blog yesterday, I had misinterpreted Sarah Palin’s statement to the Assembly of God Church in Alaska. The reader said that Palin wasn’t actually saying that the Iraq invasion and occupation were part of God’s plan but instead was simply requesting people to pray that the operation is part of God’s plan.

The reader might have a point, but isn’t it a distinction without a difference? Praying that the commission of sin is part of some plan of God is ludicrous. God doesn’t have plans that involve people in the commission of sin. Sinners, not God, are responsible for their sins.

The simple, undeniable truth remains: The U.S. government did not have the right to attack a country that had not attacked the United States or even threatened to do so. Therefore, the CIA and the troops did not have the right to kill any Iraqi, much less a million of them. Hoping and praying that such killings are part of some plan of God is ridiculous. Again, God does not have plans that involve people in the violation of His sacred commandments.

The problem is that all too many religious types in America have come to believe that the U.S. government is special. They honestly believe that it operates as an agent of God. It is not. Instead, the government is nothing more than a bunch of ordinary Americans, some of whom are religious, and some of whom are engaged in wrongful behavior.

To demonstrate how many religious types in America have elevated the U.S. government to holy status, consider the following scenario:

Suppose the Russia government, rather than the U.S. government, had done everything to the Iraqi people that the U.S. government has done.

Suppose it had been the Russians who had delivered weapons of mass destruction to Saddam Hussein.

Suppose it had been the Russians who had intentionally destroyed Iraq’s water-treatment plants with the intent of spreading illnesses among the Iraqi people.

Suppose it had been the Russians who had enforced a brutal regime of sanctions against the Iraqi people for more than a decade, contributing to the deaths of hundreds of thousands of Iraqi children.

Suppose it had been the Russian ambassador to the United Nations who had proclaimed that the deaths of half-a-million Iraqi children from the sanctions had been “worth it.”

Suppose it had been the Russians who had invaded and occupied Iraq, killing and maiming hundreds of thousands of Iraqis, causing millions more to go into exile, and sending the entire nation into conflict and chaos.

Suppose it had been the Russians who had murdered, tortured, and sexually abused Iraqi detainees at Abu Ghraib prison.

Suppose it had been the Russians who had proclaimed that they had done it all for the benefit of the Iraqi people, not for the sake of installing a Russian-approved puppet into power.

What would have been the reaction of many U.S. Christians? Would they be claiming or praying that the Russian government was operating in accordance with God’s plan? No, they would be screaming like banshees, condemning what the Russians had done, and rightfully so. After all, look at how they’ve reacted to the Russian invasion of Georgia, where the death and destruction is miniscule compared to what the U.S. government has done in Iraq.

Yet, since it is the U.S. government that has done all these things, it’s all okay because everything the U.S. government does to foreigners is holy given its exalted position as God’s agent on earth.

No Christian should ever claim or pray that the commission of sin is part of God’s plan. When someone is involved in the commission of sin, there is but one proper course of action: Stop it. The proper prayer after sin is a plea for forgiveness, after genuine confession and repentance. That is what should be happening with respect to Iraq.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Monday, September 8, 2008

Palin’s Wrongheaded View of God’s Plans
by Jacob G. Hornberger

In an address to an Assembly of God Church in Alaska, Republican vice-presidential candidate Sarah Palin suggested that church members pray “that our national leaders are sending [soldiers to Iraq] on a task that is from God, that’s what we have to make sure we are praying for, that there is a plan, and that plan is God’s plan.”

It would be interesting to hear Palin explain her understanding of how God’s plans can possibly involve violations of His sacred commandments.

The commandment is simple: That shalt not murder. God did not provide exceptions to that prohibition, not even for agents of the CIA and the U.S. military.

Lest we forget: Neither the Iraqi people nor their government ever attacked the United States or threatened to do so. No matter how many contortions that Dick Cheney and George W. Bush have engaged in (e.g., WMDs, the war on terrorism, 9/11, spreading democracy, UN resolutions, and radical Islam), the simple truth remains: The U.S. government attacked Iraq, not the other way around.

Thus, we should never forget: In the Iraq War, the United States is the aggressor nation and Iraq is the defending nation. That means that no agent of the U.S. government had any moral right to kill even one single Iraqi, much less the million or so that have been killed.

Some people calculate the wrongful Iraqi deaths only in terms of civilian deaths. They have it wrong. Since the U.S. government had no right to invade Iraq, U.S. agents, including those in the CIA and the military, had no moral right to kill any Iraqi, including Iraqis who were defending against the wrongful invasion and occupation of their country.

The standard neo-con religious position is that whatever the U.S. government does overseas against foreigners is right and moral as a matter of law because the government is operating as an agent of God and simply fulfilling His plans.

The hundreds of thousands of Iraqi children killed by the pre-invasion sanctions? A million Iraqis killed in the invasion? Well, you see, those killings can’t be murder because it was the U.S. government that did the sanctioning and invading. It would only be murder if, say, the Russian government committed those acts. Since it’s the U.S. government that killed all those people, it’s all good and moral because it must be all part of God’s plan.

Moreover, keep in mind that in the neo-con mindset the U.S. government and the American people are one and the same. Since everyone knows that the American people are kind, caring, and charitable, that means that everything the U.S. government does, including kidnapping, renditioning, torturing, and sexually abusing people, is all good and moral. It’s all part of God’s plan, you know.

This attitude, of course, is what distinguishes Christian libertarians from Christian neo-cons. Christian libertarians adhere strictly to God’s commandments, refusing to draw an exception for agents of the U.S. government. Unlike them, we hold that murder is murder, even when committed by agents of the U.S. government. Since the U.S. government had no right to invade Iraq, it had no right to kill any Iraqis, much less a million of them. The same principle holds true with respect to the hundreds of thousands of Iraqi children killed by the pre-invasion sanctions. The same holds true for the murders, torture, and sex abuse committed by U.S. agents against Iraqis at Abu Ghraib prison.

Christian libertarians, unlike Christian neo-cons, do not conflate the American citizenry with the U.S. government. As such, we are capable of recognizing immorality and wrongdoing committed by the U.S. government and we are unafraid to take a stand against it. Unlike the neo-cons, we don’t try to excuse away evil and immorality by claiming that they must be part of God’s plan.

Indeed, unlike the Christian neo-cons we Christian libertarians don’t view the government as an agent of God but instead as simply a bunch of ordinary people who use government force to satisfy their self-interests, including the ever-growing lust for more power and more money.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Friday, September 5, 2008

The Reform Game
by Jacob G. Hornberger

The campaign season is abuzz with all four of the presidential and vice-presidential candidates exclaiming how they’re going to “reform” Washington. Not surprisingly, the establishment media is excited about the theme, calling on the candidates to come up with the “specifics” of their respective “reform” plans.

There are two implicit assumptions in this reform game. The first assumption is that the welfare-warfare system is now a permanent feature in American political and economic life and the American people had just better get used to it. The second assumption is that the crises associated with the welfare-warfare system are capable of being fixed through some type of not-yet-discovered “reform.”

Look at the fruits of the welfare-warfare system that McCain, Palin, Obama, and Biden believe in and embrace. Aren’t there crises everywhere? Social Security. Medicare. Medicaid. Federal spending. The dollar. Immigration. Terrorism. Drug war. Iraq. Aghanistan. Foreign policy. Gitmo. Rendition. Kidnapping.

Despite the manifest failure of their beloved welfare-warfare state, the statists continue to exclaim to the American people, “Elect me! Elect me! I’ll be the one who finally brings success and victory to the socialistic welfare state and the U.S. military empire. I’m running against Washington! I’ve got a secret reform plan, including balancing the budget by 2020.”

So, what is the presidential election really all about? It’s a vicious fight over who is going to get to control the money and wield the power that comes with the welfare-warfare state. The candidates are motivated by power and their trough-feeding supporters are motivated by the money that comes with all the government transfer programs, both for domestic welfare and military-industrial-complex welfare.

The magic word through it all is “reform.” It’s a game that both conservatives and liberals have become masters at playing. The beauty of the reform game, from their standpoint, is that it leaves the government programs in existence. Since such programs are inherently defective, they’re always in need of reform. That provides conservatives and liberals with the perpetual opportunity to carp about the failures of the programs and call on people to support their new “reform.”

Whenever you’re unsure whether a particular article, person, or organization is libertarian in philosophy, a quick test is to check their recommended solution. If they call for reform, the likelihood is that they are either conservative or liberal. If they call for repeal, abolition, or termination, the likelihood is that they are libertarian.

Libertarians, of course, are not interested in reforming the cancerous monstrosity that conservatives and liberals are devoted to reforming. We’re interested in restoring a free society to our land. By necessity, that entails the repeal, not the reform, of socialist, interventionist, and imperial government programs.

For libertarians, the issue is both moral and pragmatic. Freedom entails the right to live one’s life any way he chooses, so long as his conduct is peaceful and doesn’t violate the rights of others. Freedom also produces a peaceful, prosperous, charitable, and harmonious society.

That’s why our American ancestors chose to live without the types of programs that today’s conservatives and liberals embrace — e.g., Social Security, Medicare, Medicaid, income taxation, drug war, public (i.e., government) schooling, Federal Reserve, wars of aggression, military industrial complex, subsidies, and welfare. It’s why they also fought for bans on such things as cruel and unusual punishments, including torture and sex abuse, unreasonable searches and seizures, arbitrary arrests, and indefinite detentions. It’s also why they fought for protection of such things as due process of law, habeas corpus, right to counsel, and right of trial by jury. It’s why they fought for such things as freedom of speech, freedom of religion, right to assemble, and the right to keep and bear arms.

Our American ancestors knew what freedom means. They never confused a loss of freedom with freedom itself. And they were never willing to trade freedom for the pretense of “safety.”

Can we restore freedom to our land? Of course. But obviously it won’t come from the likes of Obama, McCain, Palin, and Biden, whose philosophy of “reform” is nothing but a desperate attempt to get their hands on the levers of power and money over a corrupt welfare-warfare system that is responsible for the morass in which our nation has been plunged.

Meaningful change — a change toward liberty — can only come from the bottom up — from Americans who discover the libertarian heritage of our nation and demand its restoration.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Thursday, September 4, 2008

Nominate Palin for President
by Jacob G. Hornberger

As I’ve watched the storm of controversy surrounding Sarah Palin, a thought ocurred to me. What the Republicans ought to do is reverse their candidates, making Palin their presidential candidate and McCain their vice-presidential candidate.

After all, the biggest concern about Palin is her lack of foreign-policy experience. Yet, when we consider the best interests of America, isn’t that her biggest asset?

Look at where the experienced people, including McCain, Obama, and Biden have brought us—an interventionist foreign policy that in turn has produced a perpetual war on terrorism that in turn has moved our nation toward medieval times with such things as toture, denial of due process and habeas corpus, spying on the citizenry, arbitrary arrests, indefinite detentions, and warrantless searches.

Even worse, the experienced candidates really believe in all this junk and are firmly committed to moving our nation in this same direction.

Now, I’m not unmindful of the fact that in her speech last night Palin embraced the war on terrorism and made the same mocking comments about civil liberties that have come to characterize Republicans.

All I’m suggesting is that with the candidates with foreign policy experience, there is no doubt that we’re going to get more of the same. With someone without such experience, we at least have the chance of moving our nation in the direction of freedom and a limited government republic before we reach the cliff.

Isn’t some chance better than no chance?

A fascinating aspect of the Republican convention last night was the surreal nature of the proceedings. The speakers spent considerable time mouthing libertarian mantras, such as freedom, free enterprise, and limited government. One speaker even exclaimed against a Big Brother government (without mentioning the NSA and telecom immunity of course). They talked about “changing Washington.”

What planet do these people live on? Bizarro World? Don’t they know who was in charge of the presidency and the Congress for several years? Didn’t they tell us throughout the 1990s that if they were just given control over both the executive and legislative branches, they would slash federal spending, abolish departments and agencies, balance the budget, and rein in big government?

Well, hello! Reality check. Given that McCain has been in Congress for several decades, why are we to assume that he would do anything different, especially since his philosophy hasn’t changed one iota?

By the way, has the statute of limitations run on filing breach of contract lawsuits with respect to the Republican Contract with America?

All this is about the biggest crock I’ve ever seen.

Hey, don’t get me wrong. I’m not suggesting that Obama and Biden are any different. As longtime, experienced members of Congress, they are as committed to the philosophy of the welfare-warfare state as McCain.

What our nation desperately needs is a heavy dose of libertarianism. No, not just libertarian mantras but, more important, the consistent application of libertarian principles.

Don’t look to experienced Washington statists for that. Instead, for the way out of the welfare-warfare morass we must look to libertarianism and to ourselves—the American people.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Wednesday, September 3, 2008

Ron Paul’s Rally for the Republic
by Jacob G. Hornberger

We just returned from Ron Paul’s Rally for the Republic at the Target Center in Minneapolis, where FFF’s program director, Bart Frazier, and I manned a booth for FFF. What an exciting event! Great speeches interspersed with great music! And best of all, a fantastic audience of 10,000 freedom-loving people! There was nothing but positive energy in that arena.

Here’s an article about the rally.

What a contrast between Ron Paul’s rally and the Republican National Convention. At the Rally for the Republic, the spirit was one of freedom and, therefore, opposition to such things as the Patriot Act, torture, spying on Americans, enemy-combatant doctrine, Iraq, war on terrorism, cancellation of habeas corpus, the Federal Reserve, and ever-growing assaults on civil liberties.

Of course, those are things that people at the Republican National Convention are most proud of and pleased with. In their minds, anything goes to keep Americans “safe,” even if it involves government officials’ breaking the law. What passes for freedom among that crowd is the “freedom” of government officials do whatever they want no matter what the Constitution says, so long as it’s part of the “war on terrorism.”

It shouldn’t surprise anyone that the people over at the RNC exacted petty revenge on Ron Paul by denying his staffers the customary access to the convention floor. It’s not just that Ron has refused to endorse John McCain and it’s not just that Ron had the temerity to hold a pro-freedom rally across town after the Republicans refused to permit him a speaking slot at the convention.

What these people are most concerned about is that the Ron Paul phenomenon is causing more and more people to discover libertarian principles. Republican politicians and their ilk (along with their Democratic counterparts) are not dumb: They know that if a critical mass of people who want a free society is reached, that would spell the end of the federal welfare-warfare empire and the vicious war for control over such empire waged every four years between the Republicans and Democrats.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Tuesday, September 2, 2008

Fearing Obama
by Jacob G. Hornberger

Conservatives and the neo-cons seem to be growing increasingly agitated over the possibility that Barack Obama is going to win the November election. Part of this agitation is, of course, over the likelihood that federal spending (and, therefore, taxation or inflation), along with domestic socialism and regulation, are going to soar even more than they have under Bush.

But my hunch is that the agitation is growing for another reason.

Ever since 9/11, conservatives and the neo-cons have steadfastly taken the position that “we’re at war” against “the terrorists.” It’s an endless war, they have repeatedly maintained, one that will last so long as there are potential terrorists threatening the American people.

Given that “we’re at war,” the conservatives and neo-cons have said that “patriotism” dictates supporting “our commander-in-chief.” Anyone who criticizes his policies in time of war is behaving unpatriotically, perhaps even treasonously. When we’re at war, “extraordinary powers” must be exercised, and in “emergencies” mistakes will be made.

So, what happens if Obama, a Democrat with a socialist and interventionist philosophy, wins the presidency? What happens if he uses the CIA, the FBI, and the military to do many of the same things that they’ve been doing under the Bush regime (e.g., torture, sex abuse, rendition, tribunals, invasions and occupations, arbitrary arrests, indefinite detentions, domestic spying, etc.), plus more?

What do conservatives and neo-cons do?

If they follow their principles to their logical conclusion, they will faithfully support the actions of their “commander in chief” given the fact that “we’re still at war” against “the terrorists.” Thus, they will need to support Obama — their new “commander in chief” during “time of war” as loyally as they have their previous “commander-in-chief.”

If they join us libertarians in condemning such actions, won’t they be exposing themselves as hypocrites for having blindly supported the actions of President Bush and for having condemned those of us who have stood steadfastly against Bush’s wrongdoing?

I suspect that this quandary is causing no small amount of unease within the hearts and minds of conservatives and neo-conservatives. What do they do if Obama becomes their new “commander-in-chief” in time of “war”?

Of course, if Obama is elected, liberals (i.e., leftists) who have been critical of Bush’s wrongdoing will undoubtedly place themselves on the other side of fence. Loyally supporting their man, they will flip-flip to the other side and come up with all sorts of rationales and justifications for supporting such things as torture, invasions, occupations, rendition, and so forth..

Through it all, libertarians will be the consistent advocates of liberty, free markets, the Constitution, and a limited-government republic. We don’t view the president as a commander in chief for the American people, only for the military. We understand that the “war on terror” is as big a sham as the “war on drugs” and “war on poverty.” We understand that the many crises facing our nation are rooted in Washington, D.C. We understand that genuine patriotism involves standing for what’s right, even if that means taking a stand against one’s own government. Our principles do not depend on who is in power.

When Americans decide they want out of the deep morass in which our nation finds itself, regardless of whether McCain or Obama is elected president, there is but one solution — libertarianism.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

Monday, September 1, 2008

Two Fantastic Books on Immigration
by Jacob G. Hornberger

I just finished reading Let Them In: The Case for Open Borders by Jason L. Riley, which is one fantastic book on the immigration debate. Riley’s book, combined with Phillipe Legrain’s book Immigrants: Your Country Needs Them, provide the definitive case for open borders as the solution to America’s immigration “crisis.” Well, okay, I’d also recommend The Future of Freedom Foundation’s book The Case for Free Trade and Open Immigration.

Riley is a member of the Wall Street Journal’s editorial board. Legrain is a British economist, journalist, and writer. The websites for the two books, which include excerpts and reviews, are:

Let Them In: The Case for Open Borders

Immigrants: Your Country Needs Them

Many pro-immigration advocates focus on the benefits that immigration brings to a society, especially in an economic sense. Making that case is fairly easy. Much more difficult is making the case for completely opening the borders to the free movements of people. Both Riley and Legrain accomplish this masterfully.

Chapter by chapter, both authors carefully show both how a free market in labor benefits a society and also how immigrants are an economic boon. The free market provides the best allocation of resources, and immigrants bring vitality, a strong work ethic, entrepreneurial spirit, and strong family values. Freedom of movement is a fundamental, inherent right, and immigrants are like a free gift to a society.

While it’s true that some workers are displaced by immigrants, the economic prosperity that the immigrants themselves produce inevitably provides better jobs for the Americans who are displaced, leaving people better off than before.

Riley provides a good way to look at this situation. Consider, for example, illegal aliens who pick crops. The anti-immigrant people say that they’re taking jobs away from Americans. Suppose U.S. officials are successful in preventing illegal aliens from taking those crop-picking jobs. Would Americans step in? Possibly, but only if the farmers offer higher wages, assuming they are able to. Let’s assume that the new wages are high enough to attract hundreds of young baristas at Starbucks to give up their coffee-making jobs to pick crops. Would that be an efficient use of resources? It’s easy to see that the answer is no.

Both Riley and Legrain also carefully take apart each of the popular anti-immigrant arguments. “They’re coming to America to get on welfare.” “They’re stealing our jobs.” “They’re committing crimes.” “They’re destroying our culture.” “They’re not assimilating.” “Sovereignty and borders are disappearing.” Each canard is carefully destroyed by both books, either through analysis or through actual studies and statistics.

For example, how logical is the notion that illegal immigrants are risking their lives to come to America in order to walk into a welfare office and fraudulently sign up for welfare, especially given that even legal immigrants are barred from getting on welfare for 5 years? And Riley asks a pointed question: If they’re coming for welfare, why are so many illegals in Arkansas and North Carolina, where welfare is relatively low compared to other states? Riley shows that they’re going to those states to work because there’s a lot of economic activity there. Moreover, the immigrants themselves are contributing to that economic activity. Riley also shows studies and statistics documenting that immigrants are a net plus in terms of taxation and costs, especially considering the “free” gift that immigrants provide elderly Americans in terms of Social Security and Medicare.

Indeed, how many immigration raids are currently taking place at welfare agencies? Answer: None. The raids are taking place at private businesses, where American employers have willingly hired people who work hard and who contribute to the prosperity of the business.

Among the great points that Legrain makes is how immigration helps the poor in foreign countries. Compared to foreign aid, which is based on government-to-government tax-funded payments and which oftentimes ends up in the pockets of government officials, immigrants send money directly to their impoverished families back home. What better way to help the poor in Third-World countries? And unlike taxation, which destroys wealth, the money earned by immigrants is based on mutually beneficial economic relationships in which wealth is being produced.

Ever since our inception, The Future of Freedom Foundation has been an uncompromising advocate of open borders. We continue to maintain steadfastly that open borders — the free movements of people across borders — is the only policy consistent with moral, religious, and free-market principles. These two books — Let Them In: The Case for Open Borders and Immigrants: Your Country Needs Them — provide the case-closed intellectual framework for resolving the decades-old immigration “crisis.” I cannot recommend them highly enough.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.