Four Laws: Government Cannot Reform

There are, I believe, Four Laws, scientific principles, if you like, that need to be understood in relation to all proposals for More Government.

The First Law is that Socialism cannot work because it cannot compute prices. This law was discovered in 1920 by Ludwig von Mises.

The Second Law is a corollary of the First Law. It argues that the Man in Washington cannot outperform the millions of producers and consumers: he just doesn't have the bandwidth. This law was enunciated by F.A. Hayek in The Road to Serfdom.

The Third Law is that government regulation of the economy cannot work, because of "regulatory capture" of the regulators by the regulated. It was developed by George Stigler.

The Fourth Law is mine own. It states that government programs cannot work because government can never reform them.

Why is this?

It is because every government program is a program of loot and plunder, taking money from the general population to give to the supporters of the regime.

This is obviously true in the case of Vikings in their longships sailing up the rivers of England in the autumn to kill the men, enslave the women and children, and empty the storehouses of grain and the churches of silver. It is obviously true of the Pirates of the Caribbean of yesteryear and the Somali pirates of today.

You can see it in the operation of the feudal system where the kings needed to reward their baron supporters with manors and estates that would be taken from the baronial opponents of the king.

You can see it in the various leftist ideologies from Communism to Critical Race Theory. The whole point is to rally the helpless oppressed to your banner and smash the capitalists or the racists. And then each supporter will get his share.

But the same principle obtains in every democratic election in these United States. The Democrats always offer new spending -- in the interests of Justice, of course -- and the Republicans always offer tax cuts. Donald Trump in 2016 proposed to benefit the middle class by reducing immigration and increasing tariffs on China. The middle class understood that these measures were designed to increase their wages.

But no politician is out there saying: "hey, this program doesn't work, so we better cut it back." Not if it benefits his supporters.

So you can never reform Social Security; you can never reform Medicare. You can never reform education.

Let's look at an example: the folks at AntiFa.

Here's what I read in Andy Ngo’s Unmasked: Inside Antifa’s Radical Plan to Destroy Democracy. He wrote of Antifa members that

While some are indeed highly educated and in white-collar professions ranging from law to academia to health care, those who are involved in the street violence are disproportionately individuals dealing with housing insecurity, financial instability, and mental health issues like gender dysphoria...

Grievance ideologies resonate with millennials and Gen Z because of an economic reality they experience: crushing student debt, job insecurity, and the inability to ever afford a home.

Now, I would say that "crushing student debt" is a direct result of "free money" flowing from students to universities arising out of the federal government's student loan program. You think that anyone, Democrat or Republican, is going to turn off the spigot? I'd say that "job insecurity" is a direct result of increased immigration since 1965. You think that the Democrats are ever going to agree to reduced immigration? And "inability... to afford a home" is a consequence of the subsidies for long-term mortgages that started in 1938. You think that any damn politician has the cojones to turn off the spigot for low-down payment long-term fixed-rate mortgage loans?

Notice how Democrats are perfectly happy to encourage Antifa to riot in the streets and loot mom-and-pop stores. But they are not going to do anything about the "root causes" of the grievances of the millennials and Gen Z.

The normal way in which government responds to the failure of its programs is to throw more money at them. Of course it does, because all politics is an appeal to supporters that are looking to use their vote to obtain benefits, and all government is a mechanism for the rulers to distribute loot and plunder, "free stuff," to their supporters.

You see confirmation of this in the incidence of hyperinflation, of which the marquee example is Weimar Germany after World War I. In the years before World War I Germany had been the leader in creating social democratic programs like pensions and health care. But after World War I and the Allies' demand for reparations there was No More Money. Did the post-war German government cut the programs down to match the reduced revenue? Not a bit of it. They kept the programs and printed the money until the economy completely collapsed and then the people were desperate enough to agree to anything, in the hope that some sort of life could emerge from the debris.

We see this principle operating in US politics over the last half century. Back in the day, Republicans were all for balancing the budget. So when Ronald Reagan became president, what did he do? He cut taxes, and gussied up some sort of a deal with the Democrats to cut spending. Only spending was never cut. Since then Republicans have just pushed for tax cuts and left the spending alone. Candidate Trump was specific that he would not cut Social Security and Medicare. And believe me, pensions and health care is where it's at:

Total Government Spending in the United States Federal, State, and Local Fiscal Year 2021
Government Pensions	$1.5 trillion
Government Health Care	$1.7 trillion
Government Education	$1.1 trillion
National Defense	$1.1 trillion
Government Welfare	$0.4 trillion
All Other Spending	$1.8 trillion
Total Government Spending	$7.7 trillion
Federal Deficit	$1.0 trillion

So. Nothing will be done about reforming the system until we run out of Other Peoples' Money. And maybe not even then.

Like I say. Government programs cannot work because you can never reform them.

The Eternal Misdirection of Leftist Politics

I finished Andy Ngo's Unmasked: Inside Antifa's Radical Plan to Destroy Democracy today at the gym, and my takeaway comes in the last chapter, where he describes -- after telling the story of his Vietnamese "boat people" parents -- "who they are" in Antifa.

While some are indeed highly educated and in white-collar professions ranging from law to academia to health care, those who are involved in the street violence are disproportionately individuals dealing with housing insecurity, financial instability, and mental health issues like gender dysphoria...

Grievance ideologies resonate with millennials and Gen Z because of an economic reality they experience: crushing student debt, job insecurity, and the inability to ever afford a home.

Gollygeewillikins, and I wonder how student debt and housing unaffordability came about? It couldn't be the Democratic Party shoveling cheap debt at everyone over the last 50 years, could it?

Suppose that we say that we actually are going to solve the problem of student debt. How do we do it? By making college "free?" By forgiving student debt? By regulating college fees and housing payments?

See, the basic problem is that government is always about loot and plunder. College debt started with free stuff for students, and free money (from student debt) for colleges. The net result has been that college debt and college fees have risen to meet the available demand. So the obvious solution is to stop the student debt program.

Only, of course, then the students are going to be mad, because they can't afford to go to college, and the colleges are going to be mad because they need that free student money, and the parents are going to be mad because college will cost them more. Hey, don't worry! No government is ever going to do that. Because no government ever dares to reduce the loot and plunder.

Same with home prices. High home prices came about because of the fixed 30-year loans from the New Deal era Fannie Mae. Government could afford to guarantee those loans, because it's government. Naturally, home buyers borrowed the maximum amount they had in mind, and home prices soared into the stratosphere to the benefit of existing homeowners. 

The solution is clearly to end the subsidy for mortgage loans and for low down payments. But any program to do that would result in, at best, 50 years of flat home prices and, at worst, a housing price collapse. That would not be good. And anyway, as right now, the government is often in the position of wanting to gun the economy to fight recession with low interest rates, and that usually results in a boom in housing prices.

So, if you are in education you are not going to stand for a policy that cuts the flow of Benjamins. If you have a home that has gone up by 500 percent in the last 30 years, you are not going to stand for a policy that will lower the value of your house.

If your are a millennial or a Gen Z you blame "the system," and you take to the streets.

If you are a politician then you blame "systemic racism."

If you are a corporate CEO you try to keep one step ahead of the "liberal activist groups" or "lefty racist hate groups" with occasional corporate virtue-signaling.

So the only way the madness ends is the day that the US gubmint can't sell its debt in the financial markets.

Any other ideas? I've seen the proposal that makes colleges liable for student debt. My own idea would be to replace "free" education with direct payments to students that would slowly fade away and to encourage employers to fund their employees' education.

I'd end the mortgage monster by slowly reducing the amount that could be borrowed down to about 50 percent of the home's value, and slowly reducing the maximum period of a home loan from 30 years down to 25, then 20, then 15.

But I doubt if any of these ideas are politically possible, Because the only way government works is by buying votes at the next election, and paying off the supporters with loot and plunder. The last thing government will ever dare to do is cut spending programs. That's why you get hyperinflation in Weimar Germany and today's Venezuela. Government dare not reduce its programs, because voters.

The Eternal Dilemma of a Ruler

Here are a couple of pieces that don't quite get it. Victor Davis Hanson does a take on the corporate boycott of Georgia for its new racist Jim Crow election laws in "Wealthy and Woke." Yes it's true that Delta CEO Ed Bastian thinks he's virtue-signaling by condemning those gap-toothed Republican lawmakers and staving off the liberal activist groups. And that it seems like all the corporate execs have got the message. But:

First, the corporation never harangues unless it feels it has more to lose—whether by boycotts, protests, or bad publicity—than it stands to gain in staying neutral and silent. 

Second, class concerns are never mentioned. Bastian is paid about $65,000 for each working day of the year. In a sane world, he might seem a ridiculous voice of the oppressed. 

Third, CEOs never fear offending the conservative silent majority, who are assumed not to boycott or protest. 

And Cal Thomas berates President Biden for pretending he's a capitalist. He recalls Chevy Chase's line: "I'm Chevy Chase... And you're not."

That line came to mind over President Biden's massive tax-and-spend proposals, which are unlike anything since FDR, after whom Biden appears to be modeling himself. The president thinks he's a capitalist ... but he's not.

Yes, yes. All true. And "capitalism is an economic system... made and maintained chiefly by private individuals or corporations" rather than gubmint. And socialism is "a theory or system of social organization that advocates the ownership and control of" the economy "usually through a centralized government."

But I have made it my business to make a sharper analysis of what is going on.

And what I believe is that "the only warrant for government power is existential peril." There must be Mongols or Nazis or Commies or "white supremacists" threatening to annihilate civilization as we know it. Otherwise why are we paying all these taxes? Otherwise there is no need for a rich and powerful ruling class.

And because we humans are programmed to see existential threats as a moral threat, there is usually a condominium between the political ruling class and the religious ruling class. Thus the First Estate of the clergy and the Second Estate of the nobles.

It was the genius of Marx to imagine a new existential threat, the evil capitalists who were going to "immiserate" the working class. Because science.

But in fact we live in an era when the Mongols are no longer a threat. Why? Because, as I say, the old game of conquest and loot and plunder doesn't really give the conqueror much in the way of riches, because wealth is the present value of all the production and exchange of ordinary commoners all across the world. If you destroy or steal the means of production and exchange then you evaporate that present value of all the production and exchange.

It is important to understand what a revolution in human reality this is. And how it has forced the political class to invent new existential perils to justify their power and perquisites.

Thus Climate Change. OMG, if we don't cover the world with wind turbines and solar panels and completely switch from "fossil" fuels to renewable energy and electric cars and trains the whole world will come to an end.

Thus Systemic Racism. OMG, if we don't hunt down those white supremacists and their guns then all the Sacred Negroes and Sacred Gays and Sacred Transgenders will be annihilated in mass shootings.

And the same with capitalism. OMG, if we don't keep a rigorous watch on all those capitalists they will take the last dollar from the last helpless worker and keep all the loot for themselves.

Do you see the point?

Let's put it another way. Maybe there really is serious climate change going on. But maybe, even if there is, the best strategy is to let the market and individuals respond and adapt. Maybe the temperate zone where we grow the world's grains will move northwards into Canada. Oh well. Maybe we'll run out of "fossil" fuels and the scientists will have to hurry up and develop safe fusion power. Maybe the oceans will rise a bit and all those rich corporate chieftains with their waterfront homes will have to abandon them and move.

Maybe there really is systemic racism. But then the highest income people in the US are Asians and there are several non-white races that have higher income than whites. Maybe the best way to counteract systemic racism is not to fight it but just stop talking about it all the time and for the ruling class to insist on treating people as people rather than as Sacred Relics.

Maybe capitalism does create inequality, but since per-capita income has increased by 3,000 percent in the last 200 years -- and nobody, least of all Marx, had a clue about that -- maybe we should admit that we really don't know how to control and direct capitalism. And anything we do might make things worse.

Do you see the problem? If climate isn't really such an emergency, if systemic racism isn't quite such a moral horror, if capitalism muddles along, but mostly brings people out of poverty, then what do we need a strong and purposeful ruling class for?

Needless to say, you are not allowed to ask that question.

Because the one thing all our rulers all agree on is that après nous, le déluge. That is just another word for "shut up, peasants."

I really appreciate the dilemma of our rulers. Suppose they are surplus and unneeded, despite their fervent belief?

Inconceivable. 

No, Social Democracy Started the Problem

Joel Kotkin, who writes frequently about the horrors of California, has written a Social Democracy Good, Woke Progressivism Bad piece.

He argues that social democracy back in the day advanced the interests of the workers, more or less, but that current woke progressivism does not.

Born of the radical Left in Marx’s own time, social democrats worked, sometimes with remarkable success, to improve the living standards of working people by accommodating the virtues of capitalism. Today, that kind of social democracy—learned at home from my immigrant grandparents and from the late Michael Harrington, one time head of the American Socialist Party—is all but dead.

Sorry, but I don't agree. Social Democracy, from the very beginning, imposed the political ideas of the educated youth of the 19th century on the workers.

Now, I believe that, at the time of Marx, it was understandable to think that of course the workers would be screwed by industrial capitalism. And Marx, in Das Kapital, used classical economics to argue that capitalism would "immiserate" the workers. (To a limited extent, in mature industries, it does.) So political power would be needed to curb the power of the capitalists and force a share of the bounty of capitalism towards the workers. Then, when the workers got the vote, social democrats forced government to adapt its traditional loot-and-plunder operations to benefit the workers with pension programs, child labor laws, free education, and health care. Hey, who objects to free stuff?

In my view these programs -- proposed by the educated class that would end up administering these programs -- were and are a mistake.

Suppose we had legislated, instead of Social Security, mandatory savings programs for workers, where workers actually got to own their own retirement funds?

Suppose we had legislated, instead of Medicare, mandatory savings programs to provide end-of-life health care to our grandparents. Not to mention the insurance programs developed by mutual-aid societies in the 19th century -- I am talking about everything from the Masons to the Elks to labor unions.

Suppose instead of free education and a ban on child labor we had universal apprentice programs and kids went to work as and when it made sense to them and their parents? I mean: Today, we force kids to go to school and work for free. Or at least sit in classrooms all day. And we give them unpaid "homework" to do after school hours.

Today we all mourn that the steady increase in the income of the middle class stopped during the 1970s and since then the rich have done well and the ordinary worker's income has stagnated.

Do we even begin to know why that occurred? It might have been because the artificial boost given to worker wages by social democracy had gone about as far as it could go. It might have been because ordinary industrial workers no longer delivered the value that their fathers provided. It could be because of the entry of women into the paid workforce. It could be because tech lords are beasts and snagged all the goodies for themselves. Or it could be that mass immigration, imposed by the educated class, has forced down wages and made ordinary middle class workers compete with the immigrants from beyond the seas.

Bottom line: we really do not know why middle-class wages have stagnated since the 1970s. And I would really like to know, even if I didn't like the answer.

No. I say that there is really not much difference between social democracy and today's "progressivism that focuses on gender, sexual preference, race, and climate change."

Back in the day the social democrats were proposing programs that the educated elite thought would be a good idea for the workers and not coincidentally give them power and status. Today, we have the woke progressives doing the same thing. 

The only difference is that in 1900 government was only spending about 10 percent of GDP and today it is spending 40 percent of GDP.

And I argue that the main beneficiaries of government, then and now, has been the educated class. Your mileage may vary.

It is of course, Trumpism and populism that reflects the middle class's instinct that "something is rotten in the State of Denmark." Spoken by Marcellus to his pal Horatio in Shakespeare's Hamlet.

Some things never change!

Exploiting the Power of Sacrilege

Here's a thought, from the notorious David Cole. He says that there is nothing more powerful than the sense of the sacred and defending the sacred from the profaners.

“Something sacred to you—the thing that is the very core of your identity—is being profaned and disrespected by people who value their ‘free speech’ rights over your right to protect what is hallowed. Your identity commands you to take up arms.”

Case in point, the Mohammed cartoons. You can bomb the heck out of Muslims, and meh. But draw a cartoon and the whole Muslim world explodes.

A white guy in France or the U.K. can say, “I support bombing Syrians,” and he’ll be fine. But if he draws Mohammed, some individual Muslim, acting on conditioning rather than direct orders, will murder him (or try to). 

So then Cole turns to another sacred totem: black skin in America.

Black Americans have the highest levels of self-esteem of any racial or ethnic group in the country, yet arguably (on average) they have the fewest accomplishments to back up that narcissism. What a perfect group for leftist “imams” to target with the message that it’s your skin that’s sacred. Your holy skin makes you valuable, not your accomplishments. Those who speak disrespectfully of that skin are blasphemers; it’s your duty to eradicate them. 

Earlier in the piece, Cole goes into the story of the radicalization of blacks at his high school, Alexander Hamilton High School in Manhattan. All it took was a lefty activist group, African American Parent Coalition for Education Equity (AAPCEE), funded by white educated-class foundations:

AAPCEE operated under the umbrella of a well-heeled organization called “Communities for Educational Equity,” which was funded by the James Irvine Foundation and (since the early 2000s) the Bill and Melinda Gates Foundation.

With the help of white money and black radicals the whole black majority at Hamilton High got radicalized.

Course, it didn't do the blacks any good in the long term. Hamilton High is now majority Hispanic and

Blacks barely count anymore, surrounded as they are by Latinos who don’t give two shits about their “sacredness.”  

 But there's a missing link in Daivd Cole's narrative. The global left-liberal elite.

If it weren't for the global left-liberal elite and their liberal activist groups (read lefty racist hate groups) -- because Islamophobia, darling -- nobody would give a hoot about Muslims killing cartoonists. Put 'em in jail and hang 'em high: that's what would happen.

And the same thing with sacred black skin. If it weren't for liberals -- because racism, darling -- the cops would simply arrest the perps, and the schools would tell the AAPCEEs and the BLMs and the Antifas to go pound sand.

So that's why I say that we should never talk about liberal activist groups. That's a lie. We are talking about lefty racist hate groups, straight up. Left liberal racists get their jollies by encouraging small groups to feel their innocence and sacredness and victimhood. Until the the left-liberal global elite of racist haters tires of the victim group du jour.

And we should always refer to all liberal groups, from the ACLU to the SPLC as lefty racist hate groups. Because  that's what they are.

War Correspondent Reports from Culture War Front

All I can say, reading the "White Man Faculty" piece on "Academic Hysteria Part II," is I thank God I don't live and work in the trenches of the culture war. Instead I am with the artillery, shooting off rounds every now and then, and not worrying too much where the shells will land.

And I don't seem to worry about wokey artillery shells landing on me. Maybe I should!

Of course the WMF piece is full of things like the absolutely useless and ignorant black females that teach many of the CRT courses and seminars. But what struck me was the go-along-to-get-along attitude of the whites in the academy.

I'm not too surprised, since I've just finished reading The Captive Mind by Czeslaw Milosz. It's all about artists and writers captured by the post-WWII communist governments in Poland and the Baltics. The fact is that humans are go-along-to-get-along animals. Especially artists and writers. Which is another way of saying we are social animals.

White Man Faculty writes about how many of the CRT presenters look like they belong in Seattle's CHAZ/CHOP zone, and how "presentations are incredibly illogical, inconsistent, non-factual, and disjointed."

And yet, no matter how bad the presentations are, no matter how obviously wrong the information provided is, and no matter how transparently illogical and inconsistent it all is, I note that my colleagues, with few exceptions, accept it all without question and parrot the most astonishing nonsense without the slightest hesitation or question.

He goes on:

I note as well a strong correlation between those who blindly accept non-political nonsense without question and those who swallow the political social justice nonsense also without question. Amusingly, all of these dogmatic and conformist leftists, without the slightest shred of irony or self-awareness, decry the “closeminded” and “rigid” and “unthinking” attitudes of all those dastardly (White, of course) people out there (all living in trailer parks, no doubt) who oppose the social justice agenda.  

But really this is no different than the judgments of any religious group members against other groups and churches. We all confidently expound upon the closed minds, the bigotry, the superstition of other faiths and world views.

And academics are really the modern equivalent of the universal Catholic Church. They are priests in gubmint seminaries, and gubmint expects them to support its agenda. If you don't support the pope's dicta on Christianity you don't belong as a priest in the Catholic Church. Ditto to our modern academics.

But I am not downhearted. That's because, as you know, I regard reigns of terror, purges, and cancel cultures as the sign of a religious movement failing to deal with its failure of prophecy.

When prophecy fails, humans don't abandon the faith. Not right away. Instead they amp it up. For a while.

And I think that the fundamental reality of our age is that the faith of our Wokies, from silly liberal ladies and their #WeBelieve signs to bigoted academics, is that the whole idea of a society ruled by its educated class is crumbling into dust.

And the reason it is crumbling into dust is the fundamental error at its heart, that a human society can be directed from the top by wise educated experts and ethicists. Doesn't work that way. The only thing a political elite is good for is directing a war -- and usually the war is not really about defending the people but an excuse for the rulers to flex their muscles. Hello climate change!

Did I mention my Four Laws that illustrate the truth of this?

1. Socialism cannot work because it cannot compute prices (Mises)
2. Bureaucracy cannot work because it lacks bandwidth (Hayek)
3. Regulation cannot work because "regulatory capture" (Stigler)
4. Government programs cannot work because you can never reform them (Chantrill)

There is one government program that rulers can cut. They can and do cut military spending after the end of a war. That's about it.

So, I am not downhearted. I believe we are heading into a golden age where the prestige of revolution and politics will be reduced to a dull roar. I express this by saying that the Age of Revolution is over, activists. And the Age of Politics is over, politicians and bureaucrats.

But what will this new age look like?

I have no idea.

But it won't get much of a start until our young'uns tell their teachers and CRT facilitators to go take a jump in the lake.

Derek Chauvin, Human Sacrifice

That's the title of Ann Coulter's latest. Hey, human sacrifice is as old as the hills. And its provenance is explained by René Girard's concept of the scapegoat, that societies come together after a division by sacrificing a scapegoat to the gods.

But Paul Craig Roberts simply calls the Chauvin trial a show trial.

[The prosecutor] is not going to let facts get in the way of Chauvin’s conviction. Neither does the judge want the vilification that a fair trial would bring. The jurors all understand that if they let Officer Chauvin off they will be outcasts and suffer violence to themselves and their property. The entire community knows that unless Chauvin is convicted, their city will again be looted and burned. Indeed, the many cities that experienced the George Floyd protests feel the same way.

Yeah! What better way to bring us all together, Girard-style, than by sacrificing a policeman to the Gods of the Woke?

For Roberts it's the end of the justice system.

In former times when America had a justice system and a responsible media, media was careful not to convict a suspect or defendant prior to the jury doing so. To be convicted by the media was reason for dismissing the charges on the grounds that there was no prospect of an objective jury. But in America today, it is conviction that is the focus, not innocence or guilt.

Because the whole point of a justice system is to cool the jets of the mob.

So why is our ruling class so happy to dump the justice system and encourage the mob, their own special Sturmabteiling of BLM/Antifa? Of course the day came in 1934, the Night of the Long Knives, when Hitler didn't need his SA any more. Or maybe wanted to make sure there was not going to be any trouble from his once-useful street thugs. Hey who needs street thugs when you have the Army and the police?

You would think that our ruling class would be perfectly happy to have the police to enforce their power. Why are they proposing to Defund the Police? We know, of course that the armed forces are not a problem for the regime. The recent deployment of the National Guard in Washington DC to protect Our Nance proves that.

Well, we know the answer to that. Regimes institute Reigns of Terror and witch-hunts when they think that the natives are too restless, when the regime has failed to create the promised Heaven on Earth. Trouble is that the reigns of terror and cultural revolutions and icon-busting often gets a bit out of hand, and starts to destroy the ruling class itself.

We can see that there are literally millions of people that are perfectly delighted to start beating up their fellow citizens for heresy, toppling statues, and declaring the classic music notation is colonialist.

Now, I read a while ago that witch hunts are great fun when they are stringing up crotchety old women from out of town that are living alone. But when the witch hunt starts to engulf high-status respectable women, that's when the ruler call a halt.

I wonder what will cause our present rulers to cool the jets of the Cancel Culture and BLM/Antifa. Not for a while.

For instance, in my view the Biden economic policy is going to cause serious hardship to the average person in the US, and maybe even to nice liberal ladies living in nice gentrified suburbs. So the Bidens may want to amp up the Cancel Culture in response to reports that the natives are restless.

I dunno. I just have a nasty feeling that things are not going to be too much fun in America over the next few years.

I fear that Derek Chauvin is only the first of many sacrificial scapegoats.