Wednesday, November 2, 2016

Clinton Crime Family? Of Course

One of the benefits of the Clinton e-mail scandal and the broader Wikileaks disclosures -- not to mention books like Clinton Cash by Peter Schweizer -- is that they rip the covers off all politics.

The pay-for-play operation that Hillary Clinton seems to have run out of the State Department seems egregious, but that is the way all politics operates. It is not that way because of the particular venality of the political operators. Politics attracts that sort of person.

It is really very simple. Human communities need protection from robbers and invaders seeking loot and plunder. So communities need guardians, armed and trained to prevent anyone from looting them of their product and their savings.

But once a community has a corps of armed guardians, what is to prevent the armed guardians from taking a cue from the robbers and invaders and doing a spot of rape and pillage on their own account? Not much, except the goodness of their hearts. In fact their hearts teach the guardians that that they deserve a bit of loot here and there. That is why St. Augustine wrote
Justice being taken away, then, what are kingdoms but great robberies? For what are robberies themselves, but little kingdoms? The band itself is made of of men; it is ruled by the authority of a prince, it is knit together by the pact of confederacy; the booty is divided by the law agreed upon. If, by the admittance of abandoned men, this evil increases to such a degree that it hold places, fixes abodes, takes possession of cities, and subdues peoples, it assumes more plainly the name of a kingdom, because the reality is now manifestly conferred on it, not by the removal of covetousness, but by the addition of impunity.
That is why people write satirically about the Clinton Crime Syndicate, or the Clinton Crime Family. Just as the residents within the territory of an urban criminal gang have to pay protection money to make sure that nothing bad happens to their nice little business, so aspiring crony capitalists need to pay off the Clinton Foundation against the loot potential in a Clinton presidency. Rich donors pay good money to rising politicians. And workers pay payroll taxes for the right to work, and professionals pay license fees for the right to practice.

There is no difference between a crime family and a guerrilla insurgency and a government, except the degree of "impunity." All of these regimes occupy territory, tax the inhabitants for the right to go about their business, and all of them reward their supporters out of the product of the inhabitants they tax.

Now the great success of the Great Enrichment of the last 200 years has been in innovation, also called "permissionless innovation." Entrepreneurs have been able to initiate new products and services without asking permission and as a result they have flooded the world with prosperity before the ruling class figured out what was happening. What was the decisive element? Probably that the entrepreneurs could keep most of their profits and the customers most of the benefits of the innovation without paying off the godfathers of the various crime syndicates, from the local mob to the national ruling class.

But in the Obama era we have seen a relapse to loot and plunder. Obamacare was a carve-out to various interests including hospitals and insurance companies. The costs were borne by workers forced to buy overpriced insurance and employers that had to work overtime to figure out how to avoid the costs. Green energy has been a bonfire of the special interests, with subsidies and credits being handed out to wind and solar and electric cars. And zero interest rate policy puts innumerable warps upon the financial system, all to get the government and the banks out of a jam.

If you need to wonder why economic growth has been so slow in the Obama years, look no further.

That is the point of limited government. It proceeds on the faith that almost all use of political power and government force will be harmful, so the less of it the better.

Of course, Donald Trump is not going to end all this. Here's piece in the British center-left Independent writing about how 94 percent of steel jobs left Weirton, West Virginia, after NAFTA, and how the residents are all in for Trump.

But.

Those steel jobs were union jobs, and the union workers were getting paid way above market rate. That's because of the crony deal, decades before, to give labor unions special privileges to combine against employers as part of their "rights." Sitting on their rights they never had to adjust to market realities, until it was too late. So now their good union jobs at good wages are gone.

But there are still steel companies in the United States. We have one right here in Seattle. It is a plant operated by Nucor, with 320 jobs. They used to call the Nucors "mini mills." A 2014 Seattle Times puff piece calls the plant "efficient, agile, smart."

And that tells the story exactly. Capitalism asks -- demands -- each one of us to be efficient, agile, and smart, and not imagine that political power and connections will keep us in the money forever. Because they won't.

When you sign up with the local crime syndicate for protection you are certainly buying the right to rest on your laurels for a while. But in the end you'll have to get with the program. That is what has been happening to the folks that luxuriated in the special privileges that government gave to certain workers a couple generations ago.

But the trouble about being the "little darlings" of the local crime syndicate is that one fine day the music stops, and you have to go out and find a job. If you have been coddled for 20 years by the local Big Man, you are going to find the experience utterly demoralizing and unjust.

The solution is never to get started into a life of cronyism. Stay efficient, agile, smart, and adjust to the world and its endless changes.

And keep the Clinton Crime family down in Arkansas, where it can only do limited damage.

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