Let me state from the outset that I despise taxes. I loathe them. I believe in free markets, and freedom, choice, and initiative. Taxes almost always get in the way of all of these things.
I believe in cutting taxes whenever possible. I believe in reducing the footprint of the state whenever possible. I have however come to the conclusion that I likely will not convert the world to Rothbardian libertarianism anytime soon no matter how much I would like to, and that where possible it makes sense to work people who may be opposed to many of my beliefs. In this spirit I have decided that 2011 will be the year I make a special effort to reach out to people outside of the libertarian silo.
I believe it makes sense to engage thoughtful, well intentioned people on the issues of the day even if their prescriptions for solution are very different from my own. As a believer in free markets, I believe that libertarianism rises to the top in a free market of ideas. So long as the people debating are not completely incapable of reasonable thought, or are flat out evil, liberty wins. This is why I am venturing out into the policy wilds.
I have begun working with a group interested in how best to deal with carbon emissions. That’s right, I said carbon. Trust me, I feel you, as they say. Most of my comrades in liberty would probably argue that carbon emissions are not even an issue, or at least many of them would.
Saying this, this group I am working with has an interesting take on how best to address the “problem” of carbon. It is one that makes quite a lot of sense for those of us who believe in the power of markets to change the world for the better.
First, I think it is fair to say that the carbon debate and discussion is happening without any libertarians (by and large) at the table. Most of the people discussing the future of “climate regulation” are on the modern left, with the usual cadre of statists, wordlists etc. They have little interest in the free flow of markets. In fact, in (many of) their eyes markets are the reason for the carbon “problem” in the first place.
Those of us who believe in freedom, economic and otherwise rightfully recognize that many of the policies forwarded by the climate establishment are dangerous for individuals and markets. Most of the ideas handed down from on high are heavy handed and almost feel as if they are either crafted to specifically penalize the US and reign it in, or to solidify a global elite in both government and business to the exclusion of those of us who are outside of the carbon regulation club.
This is why people fear the “climate regs,” and carbon taxation so much. It is at least why I do. For many carbon regulation on a global scale is nothing more than a Trojan horse for the comprehensive regulation of every aspect of the world economy. This would be catastrophic for nearly everyone but the regulators.
Back to my new project.
The folks I am working with are interested in reducing carbon emissions. They believe strongly that the emission of carbon dioxide into the atmosphere contributes greatly to climate change, or global warming, or whatever, and as such something must be done about it.
But they stand in relief to many of the people crafting 2000 page documents at the United Nations. This group (I know I have not said their name.) wants to reduce carbon for the sake of a better, more sustainable, planet. They are not interested in regulating the world in such a way that it rectifies all the perceived wrongs of capitalism. They want to reduce carbon, that is their real goal and they have no problem with capitalism flourishing in a cleaner more “sustainable” way.
How is their approach different?
The core tenant of their approach is that carbon must indeed be taxed, but such a tax must be offset by a reduction in restrictive taxes on business.
Now before the wailing begins, I am fully aware of the fact that tax offsets are very difficult to get right, but I am going to give them the benefit of the doubt on this at this point.
Assuming that such an idea could be reliably implemented and that it indeed was taxation neutral, this approach offers much to those of us who are liberty and market oriented.
This might be a way to in fact reduce constraints on business through the reduction of payroll and other taxes while also encouraging growth in areas of the economy that are less polluting.
I know, I know, taxation is theft. But we have to work with people who don’t think that it is. If we don’t, our cause, the cause of liberty, won’t be furthered as much as it might be.
I have more to write on this subject. Perhaps next time I will name the organization. In the mean time let me list the principals of my new collaborators as expressed on their website.
ENHANCE NATIONAL SECURITY – cut our strategic dependence on oil from sources that fund our enemies and place our sons and daughters at risk
CUT JOB TAXES – taxes proven to cut wages and destroy jobs, like the payroll tax – our most regressive tax
STOP SUBSIDIZING POLLUTION – put a simple price on pollution, and use it to pay for further tax cuts on jobs and growth
PAY DIVIDENDS TO CONSUMERS – put the dollars raised back in our pockets, not in the pockets of special interests looking for “cap-and-trade” profits
The economic crisis continues to take hold. 2 years in it continues to warp our once familiar societies. Europe is truly in trouble, and so are we of course.
I just watched a great roundtable discussion of the crisis on PressTV.
Max Keiser, one of my personal favorites was as good as ever and waxed on about the need for everyday folks to take delivery of silver. There was another guest, a former bank risk manager, who was excellent as well. But I grew frustrated with the other 3 guests and especially with the London audience which was comprised mostly it seemed of recently graduated university students. It was clear that the audience was thoroughly steeped in good old fashioned Marxist nonsense and went on and on about the need for the government to create jobs etc. Despite the horrible mismanagement of nearly everything by the state, these students still looked to the state to feed them.
It was sad, like a beaten dog that does not know where else to look for food, the audience still thought the answer to their problems lay in a more activist state. They couldn‘t even imagine themselves without a master .
As the moderator explored how to get through the crisis the audience consistently expressed their hatred for the banks and in some cases America (PressTV is Iranian BTW so this is to be expected, saying that it still has some great stuff.) but refused to embrace the only solution to the crisis that I see, and that is to let the market work. That is, stop propping the banks. Let the banks fail. Then, lets start over with real money, gold and silver based money.
One of the guests, a “street organizer,” had a clear aversion to metals. Marx of course hated gold, as did Lenin. They believed that gold was just another commodity, essentially the same as paper with no inherent value. The organizer seemed to perceive gold through this lens. Gold reins in the state. And here lay the unholy marriage between much of the left, and the banks that many of the people on the left say they hate.
The banks (And I mean the big 6) are as powerful today as they are because they have been able to convince the world that fiat currency, that is paper, and now just blips on a computer screen, are valuable. So long as they can keep this up things will be very good for them. The banks essentially need to have almost nothing on the books to lend out money at interest to you and me.
There was a time when a bank needed to have a certain amount of cash, and before that gold, on hand to stave off a bank run. If people thought the bank was lending out too much money versus it’s reserves people would go and take money out of the bank. This was how the market kept banking under control.
However the banks figured out that having a central bank from which to get new paper assets in the event of insolvency made quite a lot of sense for them. The central bank insulated the broader banking establishment in many ways (though not entirely) from the public voting with their bank books.
The banks sold the idea of a central bank to the public as necessary for the stability of a modern economy. Such an economy was just coming online in the USA when the Federal Reserve was instituted. With much influence from the Bank of England and the German Warburg family, the American central bank was resurrected. It had been killed by Andrew Jackson once before, his proudest achievement.
What the public got was in fact not economic stability, but a new thoroughly entrenched banking aristocracy based in New York City.
The progressives of the time knew that a central bank would allow for the expansion of the money supply for as long as they could imagine. This would allow them to fund the utopian state they envisioned. The banks recognized that this expansion of the money supply would also increase their power exponentially as well. A society based on debt servitude was born and the power of the purse was taken from the people and given to the Fed.
It's not because the people that run the show need to be changed and replaced with better, more thoughtful managers. Government always reverts to it’s nature which is not a nice nature whoever is involved. The only solution is to drastically cut our reliance on the state. We must look at the post WWII era as a time of hubris and foolishness. It was an anomaly.
We must embrace transparency, and entrepreneurialism. We must embrace freedom. We must embrace capitalism in its purest form.
We stand on the precipice of a huge leap in human consciousness, so long as the dung heads don’t derail things. They may still throw us into a dark age.
But to quote Cypress Hill…
“I ain’t goin’ out like that… I ain't goin out...”
The Fed it seemed just started handing out free money to every large company on the planet in 2008. Harley Davidson, Verizon, GE. "Too big to fail" apparently meant just about any public company. Meanwhile small business and the middle class were left to twist in the wind.
Just 2 months ago Charlie Munger (Warren Buffet's right hand man) made the case that it was a great thing that the Fed intervened and bailed out people like him. He then went on to say that everyday people should "suck it up" and not worry so much about their betters. He really said this, at least the "suck it up" part.
Lets be clear, these companies mismanaged their books. Yes it was a systematic implosion in fall of 2008, but the companies that the Fed bailed out were over leveraged. They took on too much risk in the good times, and when the winds shifted they were exposed. Thankfully (for them) the Fed shoveled gobs of money their way to save them from their mistakes.
Now I am against all bailouts, but on a grand karma scale, if the Fed is going to destroy the dollar anyway, why not just forgive all the mortgages out there. Just tell everyone - You're free. No more payments. Now go buy SUVs!
This is hugely unfair of course, and I am not really saying that this is any kind of viable policy, far from it, but it's slightly more fair than what the Fed really did.
We, you see are merely decorations on this planet for the people who feel they have the right to run the show. Why should they be subject to the winds of the market, as it is only we commoners who should have to deal with economic tempests. To the degree that we are living breathing annuities, buying tobacco, buying gasoline, buying loans, we are valuable. We are much less valuable to the guys that got bailed out when we are not buying.
And that's the deal. These companies got the loot from the Fed and then , especially in the case of the banks, pulled up the draw bridge and battened down the hatches leaving the commoners on the other side of the moat staring at each other and asking what had just happened.
I am a a capitalist through and through. I believe in the market and it's ability to find the real value of things. I know that capitalism makes the world a better place. But the economic system we have now led by the central planners at the Federal Reserve is anything but capitalism. I hate to say what it is.
At this moment the Dow is up 240 points on news that the IMF , with US backing (read Federal Reserve) is coming to the rescue. I guess the fact that even the Germans were staring to get really scared motivated the Fed, er, the IMF to move.
The world economy is in a tailspin. The decent has been slowed, but the massive debt that plagues the West is taking its toll, and will continue to. The end destination is still the same if we fail to repent for our fiat currency ways.
Merry Christmas Wall Street. Enjoy that weaker dollar. The American consumer which constitutes more than half of the US economy won't.