New Zealand, Denmark, Hong Kong, Singapore and Canada are the top 5 Countries for Business

Posted by PITHOCRATES - November 17th, 2012

Week in Review

Once upon a time the United States was the place to be if you wanted to go into business.  It was once so business-friendly in the United States that they overtook one of the world’s greatest empires.  The British Empire.  And caused great concern and consternation in Europe with their growing economic prowess.  As American became the world’s greatest economic power.

But those days are gone now.  When George W. Bush was president the US was still the best place in the world to run a business.  But in President Obama’s first year in office we slipped to the number two spot.  In 2010 we fell to number 10.  And in 2012 we slid even further to number 12.  And with President Obama winning a second term things aren’t likely to improve.  For President Obama is clearly not as good as George W. Bush.  Who kept America the number one place to do business in the world (see New Zealand Tops Our List Of The Best Countries For Business by Kurt Badenhausen posted 11/14/2012 on Forbes).

The U.S. continues to lose ground against other nations in Forbes’ annual look at the Best Countries for Business. The U.S. placed second in 2009, but it has been in a steady decline since. This year it ranks 12th, down from No. 10 last year. The U.S. trails fellow G-8 countries Canada (No. 5), United Kingdom (No. 10) and Australia (No. 11).

Corporate taxes continue to put a damper on American businesses…

It is not just the rate that hinders the U.S., but also the complexity of the tax code. The typical small or medium-size business requires 175 hours a year to comply with U.S. tax laws, according to the World Bank. Overall the U.S. ranks 55th out of the 141 countries we examined in terms of its tax regime. The world’s biggest economy at $15.1 trillion, it also scores poorly when it comes to trade freedom and monetary freedom.

New Zealand ranks first on our list of the Best Countries for Business, up from No. 2 last year, thanks to a transparent and stable business climate that encourages entrepreneurship. New Zealand is the smallest economy in our top 10 at $162 billion, but it ranks first in four of the 11 metrics we examined, including personal freedom and investor protection, as well as a lack of red tape and corruption…

We determined the Best Countries for Business by grading 141 nations on 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance…

Ranking second on our list is Denmark, on the strength of its technology, trade freedom and property rights…

Hong Kong ranks third. Its economy, highly dependent on international trade and finance, remains one of the most vibrant in the world. Credit one of the world’s lowest tax burdens and a high level of monetary freedom…

Singapore comes in at No. 4, ranking in the top 20 in all but one of the 11 metrics we measured…

Canada slid from the top of the rankings in 2011 to No. 5 this year, losing ground on innovation and technology… However Canada remains among the best countries in the world when it comes to trade freedom, investor protection and the ease of starting a new business.

Congratulations New Zealand, Denmark, Hong Kong, Singapore and Canada.  You are the 5 best in the world.  Perhaps one day the US can emulate the great things you are doing.  For we have lost our way.  Let’s hope that you don’t, too.

If there was any further proof that we need to reform our tax code this is it.  Tax compliance costs are sucking capital out of our businesses.  And hindering economic growth.  As evidenced by one of the worst economic recoveries of all time.  There’s a reason for this.  It’s the tax code.  And costly regulatory compliance costs.  Which does not encourage entrepreneurship.  But kills it.  For with today’s red tape you need an army of tax accountants and tax lawyers to start up a business.  Which doesn’t exactly encourage someone with a great idea to spend their life’s savings to go into business.

With another 4 years of pushing America down the list expect one of the worst economic recoveries of all time become even worse.  For this is not a climate to create jobs.  Expect continued high levels of unemployment.  And a worsening of the economy.  For we ain’t seen anything yet.  As President Obama told Russian president Medvedev, “This is my last election. After my election, I have more flexibility.”  Which means he’ll be able to do what he really wants to do in the next four yours.  Which means the first four years were as good as it’s going to get.  And it probably won’t get that good again.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , ,

Revolutionary War, Sovereign Debt, Report on Public Credit, Hamilton, Jefferson, Madison, Assumption and Residency Act

Posted by PITHOCRATES - August 16th, 2012

Politics 101

In 1792 the Outstanding Debt at all Levels of Government was 45% of GDP

Wars aren’t cheap.  Especially if they last awhile.  The American Revolutionary War lasted some 8 years until the British and Americans signed the Treaty of Paris (1782) officially ending all hostilities.  So the Revolutionary War was a very costly war.  The ‘national’ government (the Continental Congress) owed about $70 million.  The states owed another $25 million or so.  And the Continental Army had issued about $7 million in IOUs during the war.  Added up that comes to $102 million the new nation owed.  About 45% of GDP.  (Or about 35% without the state debt added in.)

To put that in perspective consider that the Civil War raised the debt to about 32% of GDP.  World War I raised it to about 35%.  World War II raised it to about 122%.  Following the war the debt fell to about 32% at its lowest point until it started rising again.  And quickly.  In large part due to the cost of the Vietnam War and LBJ’s Great Society.  Government spending being so great Nixon turned to printing money.  Depreciating the dollar’s purchasing power in every commodity but one.  Gold.  Which was pegged at $35/ounce.  Losing faith in our currency foreign governments traded their U.S. dollars for gold.  Until Nixon decoupled the dollar from gold in 1971.  Ushering in the era of Keynesian economics, deficit spending and growing national debts.  Because of increased spending for social programs governments everywhere now have debts approaching 100% of GDP.  And higher.  But I digress.

So 45% of GDP was huge in 1792.  And it continued to be huge.  Taking a devastating civil war and a devastating world war to even approach it.  It took an even more devastating world war to exceed it.  And now we’ve blown by that debt level in the era of Keynesian economics.  Without the devastation of another World War II.  This debt level has grown so great that for the first time ever in U.S. history Standard and Poor’s recently lowered the United States’ impeccable sovereign debt rating.  And restoring that debt rating at today’s spending levels will be a daunting task.  But imagine trying to establish a sovereign debt rating after just becoming a nation.  Already with a massive debt of 45% of GDP.

In Hamilton’s Report on Public Credit the New Government would Assume Outstanding Debt at all Levels of Government

There was only one choice for America’s first president.  The indispensible one.  George Washington.  Some delegates at the Philadelphia Convention in 1787 who were skeptical of the new Constitution only supported it because they had someone they could trust to be America’s first president.  George Washington.  Benjamin Franklin, John Adams, Thomas Jefferson and James Madison were indispensible at times.  But not as indispensible as Washington.  For without him the Continental Army would have ceased to exist after that winter at Valley Forge.  That same army would have mutinied (for back pay and promised pensions) after the war if he didn’t step in.  Our experiment in self-government would have ended if he did not relinquish his power after the war.  We wouldn’t have ratified the Constitution without having Washington to be America’s first president.  And our experiment in self-government would have ended if he did not relinquish his power.  Again.  After his second term as president.

With the state of the government’s finances after the war there was another Founding Father that was indispensible.  Not as indispensible as Washington.  But close.  For without him the Washington presidency may have failed.  As well as the new nation.  Because of that convoluted financial mess.  The Continental Congress borrowed money.  The states borrowed money.  Some of which went to the Continental Congress.  The army took stuff they needed to survive in exchange for IOUs.  There were bonds, loans and IOUs at every level of government in every state.  Complicating the matter is that most of the instruments they sold ended up in the hands of speculators who bought them for pennies on the dollar.  As the original holders of these instruments needed money.  And did not believe the Continental Congress would honor any of these obligations.  For before the Constitution the government was weak and had no taxing authority.  And no way to raise the funds to redeem these debt obligations.

A few tried to get their arms around this financial mess.  But couldn’t.  It was too great a task.  Until America’s first secretary of the treasury came along.  Alexander Hamilton.  Who could bring order to the chaos.  As well as fund the new federal government.  He submitted his plan in his Report on Public Credit (January 1790).  And the big thing in it was assumption.  The federal government would assume outstanding debt at all levels of government.  Including those IOUs.  At face value.  One hundred pennies on the dollar.  To whoever held these instruments.  Regardless of who bought them first.  “Unfair!” some said.  But what else could they do?  This was the 1700s.  There weren’t detailed computer records of bondholders.  Besides, this was a nation that, like the British, protected property rights.  These speculators took a risk buying these instruments.  Even if at pennies on the dollar.  They bought them for a price the seller thought was fair or else they wouldn’t have sold them.  So these bonds were now the property of the speculators.

Jefferson and Madison traded Hamilton’s Assumption for the Nation’s Capital

Of course to do this you needed money.  Which Hamilton wanted to raise by issuing new bonds.  To retire the old.  And to service the new.  Thus establishing good credit.  In fact, he wanted a permanent national debt.  For he said, “A national debt, if not excessive, is a national blessing.”  Because good credit would allow a nation to borrow money for economic expansion.  And it would tie the people with the money to the government.  Where the risk of a government default would harm both the nation and their creditors.  Making their interests one and the same.

That’s not how Thomas Jefferson saw it, though.  He had just returned from France where he witnessed the beginning of the French Revolution.  Brought upon by a crushing national debt.  And he didn’t want to tie the people with the money to the government.  For when they do they tend to exert influence over the government.  But Hamilton said debt was a blessing if not excessive.  He did not believe in excessive government debt.  And he wanted to pay that debt off.  As his plan called for a sinking fund to retire that debt.  Still, the Jefferson and Hamilton feud began here.  For Hamilton’s vision of the new federal government was just too big.  And too British.  Madison would join Jefferson to lead an opposition party.  Primarily in opposition to anything Hamilton.  Who used the Constitution to support his other plan.  A national bank.  Just like the British had.  Based on the “necessary and proper” clause in Article I, Section 8.  Setting a precedent that government would use again and again to expand its powers.

At the time the nation’s capital was temporarily in New York.  A final home for it, though, was a contentious issue.  Everyone wanted it in their state so they could greatly influence the national government.  Hamilton’s struggle for assumption was getting nowhere.  Until the horse-trading at the Jefferson dinner party with Hamilton and Madison.  To get the nation’s capital close to Virginia (where it is now) Jefferson offered a deal to Hamilton.  Jefferson and Madison were Virginians.  Give them the capital and they would help pass assumption.  They all agreed to the deal (though Jefferson would later regret it).  Congress passed the Residency Act putting the capital on the Potomac.  And all the good that Hamilton promised happened.  America established good credit.  Allowing it to borrow money at home and abroad.  And a decade of prosperity followed.  Hamilton even paid down the federal debt to about 17.5% of GDP near the end of America’s second president’s (John Adams) term in office (1800).  Making Hamilton indispensible in sustaining this experiment in self-government.  Keeping government small even though it was more powerful than it was ever before.  Of course his using that “necessary and proper” argument really came back to bite him in the ass.  Figuratively, of course.  As government used it time and again to expand its role into areas even Hamilton would have fought to prevent.  While Jefferson no doubt would have said with haughty contempt, “I told you so.  This is what happens when you bring money and government together.  But would you listen to me?  No.  How I hate you, Mr. Hamilton.”

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Continental Army, Continental Congress, Inflation, Wage & Price Controls, Paper Money, Specie, IOUs, Impressment and Repudiation

Posted by PITHOCRATES - May 3rd, 2012

Politics 101

The Articles of Confederation made the United States of America a Confederacy of Sovereign States that had Little Power to Raise Revenue

By the time the Continental Army left Valley Forge they could hold their own against the British Army.  The British couldn’t push them around any longer.  They became so good that they fought the war to a standstill.  They came close to some major wins on the field of battle.  But close didn’t diminish the staying power of the British Army.  And they stayed.  On the battlefield.  And in their cities.  Dragging the conflict out for a total of 8 years.  And no matter what era of warfare you use to measure war-years 8 years of war is very costly.  Someone has to pay for it.  And, ultimately, it’s the people.  Either through taxation.  Or the loss of wealth through inflation.  Or simply the loss of wealth through the losing of your stuff.  And going without.  Because the army fighting for your liberty had no choice but to take what was yours.

This made the Revolutionary War unlike other wars.  For this war was about liberty.  Property rights.  The tyranny of a distant power.  And unjust taxation.  In other words this war was against all the things that made fighting a war possible.  You can’t really draft men to fight in a country that stands for liberty.  You just can’t confiscate the things you need to wage war from your people in a country built upon the principle of property rights.  You can’t declare martial law and suspend the rule of law on people you deem not to be patriotic enough in supporting the cause when you’re fighting the tyranny of a distant power that does.  (Even the Americans gave British soldiers a fair trial for the Boston Massacre).  And taxes?  The people that dumped tea into Boston Harbor over the principle of no taxation for revenue purposes without representation in Parliament was not going to be able to tax their people on a federal level.  Which proved a big obstacle in paying for the war to win their liberty.

The Articles of Confederation made the United States of America a confederacy of sovereign states.  And those sovereign states held the real power.  Virginia.  Massachusetts.  Pennsylvania.  New York.  And the other 9 sovereign states.  Not the United States of America.  That confederation that was waging war against the mightiest power in the world.  Which made raising funds difficult.  For without the power to levy taxes all they could do was ask.  Just like George Washington did all of the time.  Especially during that horrible winter at Valley Forge when his army was naked and starving.  He asked the Continental Congress for provisions.  And the Continental Congress asked the several states for their apportioned funds raised by their state legislatures.  Per the Articles of Confederation.  If they didn’t pay these funds timely or in full (or at all) they could ask again.  And that’s all they could do.  Which is why George Washington’s army suffered through that horrible winter.  Because the funds weren’t there to buy Washington the provisions his army needed.

Thanks to Inflation the Continental Army often had No Choice but to Take what they Needed from the People they were Fighting For 

The Americans never had enough money.  Which makes it amazing that they held off losing for 8 years.  Eight very costly years.  And won.  Especially considering how bad the economy was during the war.  Unable to tax or get sufficient loans from Europe they had little choice but to print money.  Which caused a whole lot of trouble.  For the more money they printed and put into circulation the more the value of their currency fell.  And soon a Continental was “not worth a Continental.”  And when the currency lost its value it took more of it to buy things.  Which led to price inflation.  The price of material and parts grew so high that it increased the cost of American manufactured muskets over the cost of imported French muskets.  Which they had to bring in through a British blockade.  Giving what should have been a cost advantage to the Americans.  Had it not been for the inflation.

To try and keep prices under control they implemented wage and price controls.  Which didn’t work.  The continued devaluation of the currency forced sellers to raise their prices to cover their rising costs.  Forcing them to sell below their costs would just put them out of business.  Voluntarily.  Or involuntarily.  Creating shortages in the market place.  Some offered lower prices for specie (gold and silver coins).  You can’t print hard money (specie).  So it held its value.  Unlike the paper money.  So a little of specie went a long way compared to paper money.  Of course, this didn’t help their wage and price controls.  It just made the paper more worthless.  And raised prices further.

There was yet another ugly side to this sordid business.  High prices and shortages created opportunity to profit handsomely.  There was speculation and market manipulation (hoarding, cornering the market, etc.) to take advantage of those highly priced items that were in scare supply.  Further raising prices for the people.  And compounding the problems of provisioning the army.  Which infuriated the low-paid soldiers.  Who the Continental Congress paid in that worthless paper money.  Angry mobs arose to address this profiteering.  As well as new laws and enforcement.  But they helped little.  The army often had no choice but to take what they needed from the people they were fighting for.  Either outright.  Or in exchange for IOUs.   Promises that the Continental Congress of the United States of America would make good on.  Just as soon as the several states paid their apportioned funds raised by their state legislatures. 

If you Violate the Ideals you’re Fighting for while Fighting for those Ideals it can Complicate the Peace

Fighting for an ideal makes war complicated.  If you’re just a tyrannical dictator looking to rape and pillage it makes things easier.  You don’t have to worry about liberty.  Property rights.  Debt.  Or taxes.  In the short term.  Or the long term.  Which made the American Revolutionary War a very difficult war to fight.  Because at the heart of the United States of America were those ideals.  To win this war to grant liberty to the people required taking their liberty away.  A little.  To win this war to guarantee property rights you had to violate property rights.  A little.  To win this war against tyranny you had to use excessive force against your people.  A little.  To win this war to establish taxation only with representation caused the destruction or personal wealth.  A lot.  Through impressment (taking things from the people).  Borrowing from foreign countries.  Or through inflation.

When the French joined the Americans in 1778 inflation was already out of control.  They printed twice as many Continentals in 1778 as they did in the last three years combined.  And there was serious discussion about doing the unthinkable.  Repudiation.  To simply escape the inflation by escaping the currency.  To retire the bills from circulation.  At a fraction of their value.  And that’s what they did in 1780.  Issuing new currency based on specie for the old currency at a 40 to one ratio.  The states were to tax their people to raise the funds for the new currency.  So the people took a huge short-term loss.  For a stable long-term future.  Based on specie.  That they couldn’t inflate.  This hard money would come from in large part the Spanish and the French.  The Spanish in Cuba buying American flour with specie.  And French aid.  As well as their army and navy spending their hard money in the American economy.

Wars are costly.  And they are rarely nice.  Trying to make them nice can make them last longer.  Which will make them more costly.  Of course, if you violate the ideals you’re fighting for while fighting for those ideals it can complicate the peace.  Luckily, for the Americans, they won their peace.  Their allies, the French, were not so lucky in their revolution.  The French Revolution.  Fought less than a decade after the American Revolution came to a close.  And unlike the Americans the French peace that followed was a bloody one.  That would eventually replace the king they executed with an emperor.  Napoleon Bonaparte.  Who the Americans helped bring to power in part due to the crushing debt King Louis XVI incurred supporting the Americans in their revolution.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Public Goods

Posted by PITHOCRATES - April 9th, 2012

Economics 101

You can’t put a Price Tag on Units of National Defense or Sanitary Sewers and Wastewater Treatment Plants

The free market works because people only trade when buyers and sellers agree on price.  Those agreed upon prices are fair to both.  For the sellers place a higher value on the money they receive than the things they’re selling.  And the buyers place a higher value on the things they’re buying than the money they’re spending.  And because of property rights this can happen.  After these transactions the buyers have exclusive use of what they just bought.  And the sellers have exclusive use of the money they just received.  And this holds true whenever we’re buying and selling private goods.  Things people own and use exclusively.  And have the right to buy and sell.  Thanks to property rights.

There are things, though, in our everyday lives that we don’t use exclusively.  Or own exclusively.  Things that we can’t exclude others from using even if they don’t pay to use these things.  Such as the military.  You can’t put a price tag on units of national defense that people can buy.  Some people don’t like the military and would never buy units of national defense.  If the country was under attack, though, our military couldn’t exclude these people from the common defense they provide.  Because there is no way to exclude them. 

You have another problem with sanitary sewers.  Those pipes under our roads that pipe our toilets to a wastewater treatment plant.  We have to pay for our toilets and the pipes running from our houses to the common sanitary line in the street.  But developers built that common line in the street long before someone built our house.  As they built the wastewater treatment plant long before they built our house.  These go in before they build neighborhoods.  But we still have to pay for these long after we build them.  And once our streets are paved you can’t expect new homeowners to install new sewer lines from their newly built homes to the wastewater treatment plant.  And you can’t build new wastewater treatment plants for each new house built.  They tend to take up a lot of real estate.   And need a place to discharge the treated water.  Usually into a river, lake or ocean.  So it just doesn’t make any economic sense to build more than one sewer system and treatment plant in a given geographic region.

Government Typically provides Public Goods because there are no Viable Private Sector Alternatives 

The military is a public good.  Sanitary sewers and wastewater treatment plants are public goods.  Public goods share two characteristics that make them public goods.  They are non-excludable.  Like the military.  Where it’s impossible to exclude people from the common defense while providing the common defense.  Because it’s common.  Everyone benefits from our warships that protect our shores from invasion.  Whether they pay for them or not.  And public goods are non-rival.  Like sanitary sewers and wastewater treatment plants.  When my neighbor flushers his or her toilet it doesn’t prevent me from flushing my toilet.  That is, their use of the good doesn’t reduce my use of the good.

Because public goods are non-excludable and non-rival it is impossible to put a price tag on them for individual units of use.  This is why we pay for public goods with taxes.  Because we need these public goods and everyone benefits from these public goods we force people to pay for them with taxes.  Something only the government has the power to do.  So government typically provides public goods.  Because there are no viable private sector alternatives. 

There is an option to a public sanitary sewer system, though.  And we use them all the time.  For houses in the country.  Where they pipe their toilets to a septic tank that collects much of the solid waste.  The septic tank then drains the residual wastewater into a septic field.  Where it leaches back into the water table.  But if we don’t connect a house to a public wastewater system we typically don’t connect it to a public water system.  Meaning these people draw their water from a well.  That draws water from the water table.  So septic fields and wells can’t be too close together.  So you don’t end up drinking your wastewater.  Which limits how close you can build homes together.  Not a problem in the country.  But a problem in the city.  Which we can’t build without city water and sanitary sewer systems.  Public goods.  That we pay for with a water meter on every house.  That charges for each unit of water we use.  And each unit we use includes a cost for our sanitary waste.  Because all wastewater starts off being clean city water.

Health Care is NOT a Public Good because there are Viable Private Sector Alternatives

Charities can provide some goods that can appear to be public goods.  Like feeding the hungry.  Housing the homeless.  Or leaving an endowment to a university or a hospital.  But charity doesn’t pay for warships or wastewater treatment plants.  So we generally think of public goods as government-provided goods.  But not all government-provided goods are public goods.  Because they aren’t both non-excludable and non-rival.  Such as feeding the hungry.  And housing the homeless.  Charities were doing these long before government stepped in to provide them.  And continue to do so today.  Soup kitchens and homeless shelters clearly show that these aren’t true public goods.  Because there are viable private sector alternatives.

Government welfare, then, is not a public good.  But the government has taken over welfare from those who have historically provided for them.  Charities.  Churches.  And rich people wanting to give back to the country that was so generous to them.  Andrew Carnegie had a passion for knowledge and built public libraries.  John D. Rockefeller had a passion for education and public health and poured his wealth into these.  John Hopkins built hospitals.  They did these things, and others, out of the goodness of their hearts.  Becoming philanthropists after making their wealth.  To help other people.  Rich people are still doing so today.  After creating great wealth Bill Gates is planning to give pretty much all of it away through the Bill & Melinda Gates Foundation.  Like other great philanthropists before him.

And speaking of health care, health care is not a public good.  Because it is NOT non-excludable.  Your health care is exclusively yours.  There is a direct relationship between patient and health care services.  You consume hospital stays, medicines, rehabilitation, etc.  If you’re not a patient that treatment doesn’t happen.  Unlike a warship protecting our coast.  And health care is NOT non-rival.  When people consume health care services other people can’t consume those same services.  An MRI can only scan one person at a time.  A radiologist can only look at one x-ray at a time.  Hospitals can only transfer someone out of the emergency room when a bed is available elsewhere.  So when people consume these services it reduces the amount available for others to consume.  Which makes health care NOT a public good.  And one the government shouldn’t be providing.  Because there are viable private sector alternatives.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Property Rights and Contracts

Posted by PITHOCRATES - March 26th, 2012

Economics 101

We put a lot of Money and Time into Maintaining Property we Own so we can Enjoy it Exclusively

Have you ever bought the Brooklyn Bridge?  I hope not.  For if you have someone probably conned you.  Unless you bought it from the New York City Department of Transportation (DOT).  Because they currently own the Brooklyn Bridge.  And are the only ones who can sell it.  But the last I checked they weren’t selling.  So I doubt they sold it to you.  If you are about to enter into negotiations to buy the Brooklyn Bridge I suggest you do a title search first.  To verify that the seller in fact owns the property.  Has the right to sell the property.  And that the seller is selling the property ‘free and clear’.  To make sure you don’t have to pay any outstanding construction bills for work completed on the bridge that the DOT didn’t pay.  Then and only then should you buy your bridge.  So you can enjoy the pride of bridge ownership.  While charging tolls.  And getting rich.

This illustrates a central point about buying and selling things.  Property rights.  Which lets us buy things.  And sell them.  For to sell something we must first own it.  And to buy something we must know that we can own it.  Because if we’re not sure we can own it we’re not going to exchange our hard-earned money for it.  And once we own something we’re going to use it however we wish to use it.  At least that’s what we expect to do.  If we buy a house with a pool in the yard we’re going to want to use that pool exclusively.  Because we paid for it.  And keep it clean.  By maintaining the pool filters and pumps.  Adding chlorine.  Vacuuming the bottom.  We’re going to put a lot of money and time into maintaining that pool so we can enjoy it.  Our little tropical paradise in our own backyard.  But we’re not going to do all of that if just anyone can walk into our yard and use our pool whenever they damn well please.  For if that were the case we wouldn’t spend the time and money in the first place.  We’d look for a pool we could use for free.  Like everyone else who thought they could walk into our yard and use our pool whenever they damn well please.

Or would we?  Let’s say someone in your neighborhood just moved in.  They put in a nice in-the-ground pool.  Spent a fortune on it.  Kept it pristine.  And used it exclusively.  They were happy.  Until the subprime mortgage crisis hit.  And all of a sudden they owed far more on their mortgage than the house was worth.  So one night they just disappeared.  And let the bank have the house.  Once you notice their house is empty you think about that pool.  And decide what could it hurt if you went over for a swim?  You go there.  Notice they left the pumps and filters on.  And the pool is still pretty clean.  So you enjoy a swim or two.  Others find out.  And go over for a swim.  A lot of them.  The pool is crowded.  And not so clean anymore.  No one is skimming the garbage out of it.  Or maintaining the chlorine level.  Some of the kids are even peeing in the pool instead of getting out of it.  Soon the pool begins to smell bad.  Algae is growing.  The filters plug up.  With the water flow blocked the pumps strain and trip the circuit breaker.  Stopping the pumps.  And the filtering.  The crud they filtered out backs up into the pool.  Soon the water turns a greenish gray.  And looks more like a stagnant pond where dead fish float on the surface than the pristine tropical paradise it once was.

We can trace most Pollution and Environmental Damage back to the Tragedy of the Commons

Economists call this the Tragedy of the Commons.  Which is what happens when we poorly define our property rights.  In our example the pool was clean and enjoyable when someone owned the pool.  When no one owned the pool (after the previous owners abandoned it) the pool became dirty and no longer enjoyable.  Why?  Because when we own something we have an incentive to take care of it.  For our long-term enjoyment.  When no one owns it no one has an incentive to take care of it.  Some may try but others will continue to pollute.  Because they don’t own it.  And have no incentive to spend the time and money to keep it clean.  Especially when others are still polluting.  So no one tries to keep the pool clean.  They’ll enjoy it while they can.  And when the pollution gets so bad they will move on and find something else to enjoy. 

We can trace most pollution and environmental damage back to the Tragedy of the Commons.  If you love the beach so much that you buy a house on it you will keep your beach clean.  You’re not going to litter it with cigarette butts, empty bottles, food wrappers, used condoms, etc.  A public beach, on the other hand, is a different story.  Just as people will take their trash to a public field to dump it.  Because they don’t own that land and have no incentive NOT to pollute it.  And it’s cheaper than taking their trash to the private landfill that charges a fee.  Who helps to keep America beautiful by burying our trash.  And when the landfill is full someone else will buy it and make a beautiful golf course out of it.  Or something else.  As long as someone owns it something nice will happen with that land.  To maintain the value of that land to the landowner.

When you own something it has value to you.  Such as a logging company cutting down trees on land they own.  Because this land has value they will not over-log it.  And when they cut down trees they will plant new seedlings.  So the land continues to have value.  Because they will be able to cut down these seedlings after they grow into trees.  Or the future owner of that land will be able to.  Who will buy that land because it has value.  Whereas there is no incentive for a private logger working on public land NOT to over-log it.  Or to plant seedlings.  Because they don’t own that land.  Anything they don’t cut down some other logging company will.  And without any property rights to that land they won’t plant any seedlings.  Because nothing will prevent anyone else from cutting these down once they grow into trees.

Well Defined Property Rights allow Buyers and Sellers to Enter into Contracts with one Another

To do all of this buying and selling we need well defined property rights.  Clearly spelling out what the seller owns.  And what exactly the buyer is buying.  For example, a logging company buying a tree farm may want to drill an exploratory well to see if there is oil or natural gas under that land.  So he or she will want to make sure that the terms of the sale include all mineral rights.  Paying additional for these rights if necessary.  Or getting the tree farm at a lower price than other comparable tree farms because the seller wants to retain the mineral rights.

Well defined property rights allow buyers and sellers to enter into contracts with one another.  Contracts clearly state the terms of sale and any other special provisions.  Such as the seller retaining his or her right to have his or her pick of one tree anywhere on that land once a year in the month of December.  As long as buyer and seller freely enter into these agreements they expect each other to honor the terms of the contract.  And only when both parties honor the terms of the contract does the ownership of property transfer from one party to another.

Property has value.  Even the Brooklyn Bridge.  And well defined property rights protect that value.  Because the DOT owns that bridge they spend money to maintain that bridge.  A well-maintained bridge provides value for those who want to cross the East River.  Currently the various taxes they pay to the city and state make their way to the DOT.  To pay for that maintenance.  But if the city of New York found itself in serious financial trouble they could sell the Brooklyn Bridge.  To a private person.  Who wants to put up toll booths on the bridge.  The city gets a large sum of money to help with their financial trouble.  And the new private owner gets a revenue stream in the form of tolls.  And the city of New York will, of course, screw those crossing the East River.  Because they’ll now have to pay a toll to cross the Brooklyn Bridge.  But they won’t get any of their taxes back.  Because governments rarely if ever cut their taxes.  The city and the private person do well because they both have well defined property rights.  And a contract.  The people using the bridge don’t.  They had no contract with the city that clearly stated the terms for their use of that bridge.  And will continue to pay the taxes that paid their crossing fees.  As well as the new tolls.  Which is business as usual.  Because government always screws the taxpayers.  Who are always at a disadvantage when it comes to property rights and contracts when dealing with the government.  For government has the power to break contracts and take property.  Unlike private persons entering into contracts.  Who only transfer the ownership of property by mutual consent.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

When China talks about Limits and Constraints over Property Rights we need not fear the Economic Dominance of China

Posted by PITHOCRATES - December 11th, 2011

Week in Review

You know what’s funny?  People oblivious of history giving advice.  You know what’s not funny?  People lying to empower the state so they can oppress the people.  You decide which this is (see Op-Ed: The impoverished ‘Asian century’ by Chandran Nair posted 12/8/2011 on China Daily).

Western leaders concerned about climate change must understand that economic instruments like emissions trading are not a panacea. For Asia, resource management must be at the center of policymaking, which may include Draconian regulations, and even bans. Otherwise, resource shortages will push up commodity prices and create crises in food, water, fisheries, forests, land use, and housing, thereby leading to greater social injustice.

The West must help Asia to challenge the idea that consumption-led growth is the only solution, or even a solution at all. And Asia must adopt three core principles to avert environmental and social crises. First, economic activity must be secondary to maintaining resources. Second, Asian governments must take action to re-price resources and focus on increasing their productivity. Third, Asian states must recast their central role as being to defend our collective welfare by protecting natural capital and the environment.

All of this implies that Asian governments will need to play a far greater role than officials in Europe or America in managing both the macro-economy and personal consumption choices, which will require very sensitive political choices regarding individual rights, as well as policies that powerful business interests – many of them Western – will resist.

Asian governments will sometimes need to set strict limits on resource use – and have the tools to ensure that society respects these limits. They should begin, for example, by stressing that car ownership is not a human right. The debate about rights must emphasize constraints, not the utopian definitions of Western politicians.

There have been other countries that have talked like this.  In fact, they ruled like this.  The former Soviet Union.  The People’s Republic of China (China before capitalism).  North Korea.  The former communist Eastern Bloc.  All of these countries have enforced Draconian regulations and bans to re-price resources and increase productivity.  And you know what it got them?  Oppressive police states.  Chronic shortages of staple goods.  And famine.  Oh, and anyone trying to escape these socialist utopias were summarily shot.  For those who got away their families suffered.

China still has poverty and famine in the country.  It is only where they allowed capitalism that things are going well.  The eastern cities.  But all is not well there.  There’s unrest.  For these people have tasted a little freedom.  A little too much for the government.  So now they there’s talk about restricting this freedom for the good of the people.  I doubt many are buying this.

With this kind of talk the United States and Europe need not fear the economic dominance of China.  It sounds like the capitalist gravy train may be coming to an end.  For when they champion limits and constraints over property rights that’s usually when workers stop working hard.  Because when you sacrifice your wants and desires for the common good (i.e., the state), that’s when you start doing just enough to escape being punished.  And no country grew or stayed great doing that.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , ,

Free Trade

Posted by PITHOCRATES - November 28th, 2011

Economics 101

When People can Buy and Sell as they Please without Outside Interference we call it Free Trade

Agriculture advances gave us food surpluses.  Food surpluses gave us a division of labor.  The division of labor gave us trade.  Money made that trade more efficient.  Religion and the Rule of Law allowed great gatherings of people to live and work together in urban settings.  Thus unleashing human capital.  And creating a great diversity in economic output.  Because all these people with spare time could create new things.  That other people discovered.  And wanted.

The Rule of Law gave us property rights.  And it’s because of property rights that people take chances.  Then.  And now.  To create things.  Invest their labor and capital.  Because they own what they create.  And are free to trade these products of their own labor and capital.  Freely.  With whom they want to.  At the value of exchange they agree to.  Encouraging others to do the same.  So they, too, can enjoy the products of their own labor and capital.

When people can buy and sell as they please without outside interference we call it free trade.  Outside interference can include many things.  But mostly it means government interfering with market forces.  Such as taxing things differently.  Placing tariffs or quotas on imported goods.  Subsidies to certain domestic manufacturers.  Etc.  All things that complicate the exchange of goods and services.  Because you have to consider all of these other things in addition to the goods and services you wish to exchange.  Complicating the economic exchange.  Making it more costly.  Less free.  And simply less of it.

The Overregulation of a Free Market Creates a Black Market

The less free and more complicated trade gets something happens.  The overregulation of a free market creates a secondary market.  A black market.  Where economic exchanges occur free from government interference.   The black market then becomes the free market alternative to the overregulated ‘government’ market.

The former Soviet Union is a good example.  Government bureaucrats completely controlled the market.  They set the prices.  And allocated the resources.  Poorly, I might add.  And the result?  Stores full of items no one wanted to buy.  Long lines at stores selling the basic necessities of life (such as soap and toilet paper).  Where people waited to buy their allotted quota because there was so little available to sell.  And a thriving black market where you could buy the latest in Western fashion and electronics.  Which proved very handy in bribing government bureaucrats.  Because even they wanted what the Westerners traded freely.

Another good example are cigarettes.  Stores across certain state lines do very well selling cigarettes.  For these stores can sell cigarettes at steep discounts compared to those on the other side of the border.  Why?  Cigarette taxes.  And some cities and states really pile them on.  Making some people spend more money on gas as well as risking trouble with the law to get these more affordable cigarettes.  Often buying them in bulk.  And then smuggling them back home.

An Overly Regulated Market alters our Economic Decision Making, Resulting in Less Economic Activity

A free market lets us come together freely to buy and sell what we choose.  An overly regulated market alters our economic decision making.  Due to higher prices.  And regulatory costs.  A minimal amount may not affect our purchasing decisions.  Whereas an excessive amount pushes some outside the law.  Into the black market.  Back to a free market.  Which is what we all want.  To freely buy and sell what we choose.

The net effect on the economy?  The less free the market is the less economic activity there is.  Either due to higher prices.  Or higher regulatory costs.  Both of which leave us with less to spend on other economic exchanges.  And less motivation to commit labor and capital to create new things to trade.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , ,

Code of Hammurabi and the Magna Carta

Posted by PITHOCRATES - November 22nd, 2011

History 101

The Code of Hammurabi was a Precursor to a Modern Criminal Justice System

The first civilization was Sumer.  Along the fertile river valleys of the Euphrates and Tigris rivers.  In modern day Iraq.  Prime real estate in the early civilized world.  Good for growing food.  With established city-states throughout.  This land was attractive.  So attractive that many have conquered it.

Here are some who possessed this land.  The Akkadians.  Guitans.  Elamites.  Amorites.  And, of course, the Sumerians.  Who took it back a time or two.  It wasn’t a neat linear transition.  There were many bumps along the way.  And by bumps I mean power changes.  I.e., wars.  But eventually the Amorite Empire founded the city-state of Babylon.  Which brings us to the sixth king of Babylon.  Hammurabi.  And when he expanded his kingdom by conquering other city-states he became the first king of the Babylonian Empire.  And he did something spectacular in 1780 BC.  He gave us the Code of Hammurabi.  One of the first written codes of law in history.   Providing a giant leap forward for the civilized world.

Everyone has heard of “an eye for an eye, a tooth for a tooth.”  That goes back to the Code of Hammurabi.  A precursor to a modern criminal justice system.  Including trials and the presumption of innocence.  It delved into civil law.  And contract law.  Clearly setting the rules of the game for marriage, divorce, inheritance and economic exchange.  It also included rules for the government.  Sort of like a constitution.  And this was all happening in the second millennium BC.

The Magna Carta exploded the Rule of Law, Personal Liberty and Economic Development

Establishing rules for government is rarely easy.  For few welcome restraints on their power.  But there is a problem all despots have who enjoy wielding absolute power.  They are only one person.  They need others.  For food.  And for money.  Because despots like to fight wars.  Which takes a lot of soldiers.  A lot of food.  And a lot of taxes.  All of which the despot has to depend on others to provide.

King John in 13th century England was one such despot.  He fought a lot of costly wars.  Requiring a lot of taxes.  And the people supplying the soldiers and taxes for these wars were the nobility.  His Barons.    And they were getting tired of the King’s behavior as it was proving very costly.  Not to mention that he was pissing off the French who were planning to invade England.  And there were a whole host of oppressive acts against his subjects.   As well as a feud with the Pope.  Suffice it to say something had to be done.  Without having a suitable candidate ready to replace the king, the Barons instead tried to limit the king’s arbitrary power.  In writing.  What history calls the Magna Carta.

The Magna Carta did not make sweeping change at the time.  But it had a profound impact in the English speaking world.  And the development of constitutional law.  It exploded the Rule of Law.  Personal liberty.  And economic development.  It is what allowed the British Empire.  And the Industrial Revolution.  It influenced the United States Constitution.  Under which America became the leader of the free world.  Because the law ruled supreme.  Allowing no man above the law.  Even a king.  Like on the fields of Runnymede.  When King John affixed his Great Seal to the Magna Carta.

The Rule of Law gave us Property Rights and Contract Law which provided Incentive and Security

The British Empire dominated the world in the 18th century.  Her greatness was only surpassed by the United States.  Thanks to the Rule of Law.  Which unleashed human capital.  Allowing people to create great things.  Because there were property rights.  And contract law.  Giving them both incentive.  And security.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , ,

Rule of Law

Posted by PITHOCRATES - November 21st, 2011

Economics 101

To take Civilization to the Next Level required the Rule of Law

Agriculture advances gave us food surpluses.  Food surpluses gave us a division of labor.  The division of labor gave us trade.  Money made that trade more efficient.  And religion allowed great gatherings of people to live together in urban settings.  Which was a start.  But it didn’t solve all the ills of packing a lot of people together in a crowded urban setting.

Religion did bring people together.  But organized civilization needs leadership.  And having a leadership position over the masses gives one great powers.  For good.  As well as bad.  And all too often leaders have become intoxicated on that power.  Especially if that leader was also the god that the people worshipped.  Who felt they could do anything they wanted.  To anyone they wanted.  And often did.

But it’s just not leaders who failed to choose good.  A lot of the people did, too.  Some people cheated each other.  Stole from each other.  Didn’t honor their agreements.  Fights broke out.  Some harmed others.  Even killed people.  Clearly, religion alone wasn’t enough to get everyone to live in peace and harmony.  They needed something more.  Some basic ground rules.  Rules of the game.  The game being living together in a crowded urban setting.  Working together.  And entering into economic transactions.  What they needed to take civilization to the next level was the Rule of Law.

We use the Rule of Law to Clearly Identify and Protect our Private Property

The key for economic development rested on the principle of private property.  Economic activity is based on trade.  To trade you need first to create things to trade.  Often requiring costs and great personal effort to create these things.  Which people will gladly undertake.  As long as if they own what they create.  And are free to do whatever they wish with it.  Keep it.  Use it.  Or trade it.

We use the Rule of Law to clearly identify and protect our private property.  We define what is ours.  And forbid others to take what is ours without our consent.  If they do they will be punished under the law.  Which will deter some.  And those undeterred will face the consequences.  Thus producing a safer environment to live in.  Where we are safe in our persons and property.  Especially in crowded urban settings.

This encouraged greater economic activity.  With more opportunity to trade.  Sometimes we didn’t exchange things after concluding our negotiations.  Instead entering into a contract for an economic exchange.  Such as summarizing the terms for the exchange of a piece of land.  Or for a future farm crop.  Agreements we freely and consensually enter into.  Because we trust the Rule of Law to protect and enforce these agreements.

Private Property Rights and Contracts are the Indispensible Requirements of any Free Market Economy

The Rule of Law picked up where religion left off.  For those who did not wish to choose good behavior.  Whether it be people in the masses.  Or the leaders.  The Rule of Law became supreme.  Everyone was answerable to the laws of the land.  Today, government leaders often swear an oath to support and defend these laws.

And by clearly setting the ground rules for economic exchange, the Rule of Law unleashed economic activity.  Perhaps more so than any other thing.  By establishing private property rights.  And creating contracts.  The indispensible requirements of any free market economy.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , ,

The Tea Party vs. Occupy Wall Street

Posted by PITHOCRATES - October 7th, 2011

As far as Protest Movements go these Tea Party People can be Rather Boring

Everyone who follows the mainstream media knows that the Tea Party is nothing more than a bunch of radical racists out to raise hell and get into your face if you dare to disagree with them (see Glenn Beck on the Mall by Lexington posted 8/29/2010 on The Economist).

It is indeed both presumptuous and preposterous of Mr Beck to claim the mantle of Martin Luther King and the civil-rights movement for his own noxious style of politics. However, not seeing is believing: I saw no evidence at all of racism at this particular event. It was a good-natured, somewhat solemn, gathering of mostly white and well-to-do people from all over America who for some reason or other saw fit to respond to Mr Beck’s plea to show up to “restore” America’s honour. The main focus of the formal ceremony consisted of paying tribute to the country’s servicemen and veterans, of whom there were many in the crowd.

This was Glenn Beck‘s rally back in 2010.  Probably the most hated man in the Tea Party movement.  Those on the Left belittle and mock this man to no end.  Because they think he is dangerous.  Incendiary.  A racist of the first degree.  If so, where was the racism?  The radicalism?  The in your face anger?

As far as protest movements go these Tea Party people can be rather boring.

The Mark of a True Liberal is Being Generous with other People’s Private Property

So, yes, the Tea Party appears to be rather boring when they protest.  Can’t say that for the Occupy Wall Street people, though.  They’ve been pretty provocative.  Breaking the law.  Getting arrested.  And being really, really annoying (see For Some, Wall Street Is Main Street by Cara Buckley posted 10/7/2011 on The New York Times).

Panini and Company normally sells sandwiches to tourists in Lower Manhattan and the residents nearby, but in recent days its owner, Stacey Tzortzatos, has also become something of a restroom monitor. Protesters from Occupy Wall Street, who are encamped in a nearby park, have been tromping in by the scores, and not because they are hungry.

Ms. Tzortzatos’s tolerance for the newcomers finally vanished when the sink was broken and fell to the floor. She installed a $200 lock on the bathroom to thwart nonpaying customers, angering the protesters.

“I’m looked at as the enemy of the people,” she said.

I don’t recall the destruction of private party at any Tea Party rallies.

A sandwich shop is not a big corporation.  It’s a small business.  A Mom and Pop type store.  I don’t recall this demand on their list of demands.  Free access to use and destroy Mom and Pop stores everywhere for their exploitation of the working class.  All one or two that work for them.

Mothers have grown weary of navigating strollers through the maze of barricades that have sprouted along the streets. Toddlers have been roused from sleep just after bedtime by chanting and pounding drums.

Heather Amato, 35, a psychologist who lives near the protest area, said she felt disturbed by some of the conduct of the protesters. She said she had to shield her toddler from the sight of women at the park dancing topless.

I can’t understand why these people would have trouble getting a job.  Chanting and pounding drums at all hours of the night.  And girls getting so drunk that they let the Bobbsey Twins out in public.  (If you ever been on spring break you know you usually don’t see the girls come out until after vast amounts of alcohol have been consumed.  ).  If that doesn’t say responsibility and punctuality I don’t know what does.

The site of the protests, Zuccotti Park, is privately owned but open to the public. Melissa Corley, a spokeswoman for Brookfield Office Properties, which owns the park, said in a statement that sanitation conditions had reached “unacceptable levels.”

If you’ve never been to an outdoor concert let me clarify.  There’s trash everywhere.  And lots of pee.  Perhaps even some poop.  Sad to say I knew of a guy in construction that liked to leave ‘surprises’ for his coworkers.  In a trench.  In a dumpster.  In an attic.  He just thought it was funny.  He was eventually fired.  But I don’t think it was poop-related.  I believe he failed a drug test.

Several businesses said they had no choice but to respond to the influx of protesters by closing bathrooms.

Mike Keane, who owns O’Hara’s Restaurant and Pub, said that theft of bathroom soap and toilet paper had skyrocketed and that one protester used the bathroom but failed to properly use the toilet.

Both Ms. Tzortzatos, owner of Panini & Co., and Mr. Keane said that the protesters rarely bought anything, yet hurled curses when they were told that only paying customers could use their bathrooms.

Steve Zamfotis, manager of another nearby store, Steve’s Pizza, said: “They are pests. They go to the bathroom and don’t even buy a cup of coffee.”

Mr. Zamfotis said he closed his bathroom after it repeatedly flooded from protesters’ bathing there.

Stealing toilet paper?  That would explain some of the unacceptable sanitary conditions in the park.

Speaking of poop, this reminds me of another poop anecdote.  The same guy who told me about that construction worker had some port-a-johns on job site.  Apparently he pissed off some workers.  After which they, too, didn’t use the toilet facilities properly.  They didn’t lift the lids.  They just pooped on them.  Some people protest in strange and mysterious ways.  Which is what I’m guessing happened here.  Either on the toilet seat.  Or, perhaps, on the floor.  And that reminds me of yet another poop anecdote.  I knew a lawyer who did that once.  He was angry at his landlord.  So he pooped in the stairwell.  I guess that showed her.  Just like these protestors showed this restaurant owner.

Kira Annika, a spokeswoman for the protesters, wrote in an e-mail that she had not heard of such complaints. “We were under the impression that the local business community appreciated our patronage and the attention that we give them,” she wrote.

Still, in a widely distributed pamphlet, “Welcome To Liberty Plaza: Home of Occupy Wall Street,” participants were given explicit instructions on where to find relief.

“After you’ve dined,” the pamphlet reads, “feel free to refresh yourself in the restrooms of neighboring businesses like Burger King and McDonalds without feeling obligated to buy anything.”

A manager of the Burger King in question said he had no trouble with the protesters, though a maintenance worker at the McDonald’s, Deon Cook, said that in recent days he had been forced to clean the bathroom every five minutes.

How generous they are with other people’s private property.  The mark of a true liberal.  I’m sure they would be just as generous with their own private property.  And welcome strangers into their homes to use their toilets.

Yves Delva, a manager at a nearby Modell’s Sporting Goods, said sales had been brisk for sleeping bags, sweatshirts, hand warmers sweatpants and goggles — that last item presumably bought to protect the eyes from pepper spray, which has been used by police officers in response to the demonstrations. “We’ve been profiting,” Mr. Delva said.

Well this is strange.  This is capitalism.  And these are products of corporations.  I guess they’ll surrender their principles when it gets cold and wet.  Probably even be willing to go back to their parent’s house.  To a warm, dry bed.  And heat.  Once the temperatures fall.  And the rainy season sets in.  One thing for sure.  They ain’t the protestors their parents were.

The Problem with the Occupy Wall Street people is that they are not more Tea Party-Like

And it’s just not me saying this.  Even one of their supporters says this (see Tea Party Lessons for the Left by Michael Tomasky posted 10/4/2011 on Yahoo! News).

But now comes Occupy Wall Street. Is the cosmic score about to be evened? Maybe. But paradoxically, only if this new left protest movement embraces some crucial lessons from the Tea Party movement—and if it outgrows certain impulses from 1968 that continue to loom large in the left’s imagination.

… To succeed, it would have to model itself on 1963, not 1968. And I’m not confident that any left-wing protest movement today can understand that.

What do I mean? In 1963, we had the March on Washington. No one threw anything. There were no drum circles. The protesters of 1963 said to America, “We are like you; in fact, we are you.”…The protesters of 1968 said to America, “We are not like you; in fact, we hate you…”

What changed, between 1963 and 1968? This: In 1963, protest was undertaken for the purpose of winning. By 1968, protest became a carnival of self-expression. Winning was the stated goal, but deep down, emotionally, it wasn’t really the goal: sticking it to the man was. Imagine that the SCLC-led protesters of 1963 had indulged in self-expression, and ask yourself whether they would have succeeded. I think I need say no more on that.

So these protesters are getting it wrong.  They’re protesting for the fun of protesting.  Not for some deep underlying philosophical principle.  It appears you can summarize all of their grievances and demands with one word.  PARTY!  Sort of the way it was in 1968.  I guess.

And this is where today’s protesters need to steal a page from the Tea Party activists. I beg, plead, implore, importune: Get some spokespeople out there for the cause who are just regular Americans…

The genius of the Tea Party movement lies entirely in the fact that its public faces were, by and large, regular Americans. How many stories did we all read about the homemaker from Wilkes-Barre and the IT guy from Dubuque who’d never been involved in politics in their lives and never thought they would be until the Tea Party came along? These people resonate with other Americans: “She’s my neighbor; he’s just like me.” That gave the Tea Party movement incredible force and made the media take it seriously, and making the media take you seriously is, alas, at least half the battle in our age.

The OWS movement is part of the way there. The “We Are the 99 Percent” trope is powerful. It is true. But the movement has to prove that it really is the 99 percent. It has to win middle America, and the way to win middle America is to be middle America. For all the Seattle-ish longhairs down in Zucotti Park—whom the mainstream media and the right wing will undoubtedly highlight—there are, to be sure, homemakers in Wilkes-Barre and IT guys in Dubuque who sympathize. Find them. Put them out there. Get them on cable.

So if I understand this correctly, the problem with the answer to the Tea Party, the Occupy Wall Street people, is that they are not more Tea Party-like.  They’re not as polite.  As law abiding.  As clean.  As respectable (you don’t see many bare-breasted women dancing at Tea Party events).  So they need to be more like this.  And less like themselves.  More like respectable grownups.  And less like overindulgent children.  Who have but one thing on their mind.  PARTY!

The Tea Party Respects the Rule of Law and Private Property Rights

Occupy Wall Street is not the Tea Party.  For the Tea Party is interested in the Rule of Law.  The Constitution.  They are concerned that the nation is drifting too far away from the intent of the Founding Fathers.  Those guiding principles that have made the United States that shining city upon the hill.  The ultimate destination for emigrants everywhere.  Whereas the Occupy Wall Street People want bigger government and more free stuff.  And, of course, they want to do one other thing.  PARTY (see The Left’s Pathetic Tea Party by Rich Lowry posted 10/4/2011 on National Review Online)!

In the Occupy Wall Street movement, the Left thinks it might have found its own tea party…

This is a sign either of desperation to find anyone on the left still energized after three years of Hope and Change, or of a lack of standards, or both. The Left’s tea party is a juvenile rabble, a woolly-headed horde that has been laboring to come up with one concrete demand on the basis of its — in the words of one sympathetic writer — “horizontal, autonomous, leaderless, modified-consensus-based system with roots in anarchist thought.”

The Right’s tea party had its signature event at a rally at the Lincoln Memorial where everyone listened politely to patriotic exhortations and picked up their trash and went home. The Left’s tea party closed down a major thoroughfare in New York City — the Brooklyn Bridge — and saw its members arrested in the hundreds.

The Tea Party respects the Rule of Law.  And private property rights.  That’s why they’re not pigs when visiting other people’s property.  They don’t poop and pee wherever they want.  Disrupt traffic.  Or get arrested.  I mean, if you had to have either the Tea Party people or the Occupy Wall Street people be your next door neighbor, who would you choose?

What was remarkable about the Right’s tea party is that it depended on solid burghers who typically don’t have the time or inclination to protest anything. Occupy Wall Street is a project of people who do little besides protest. It’s all down to a standard operating procedure: the guitars, the drums, the street theater, the age-old chants…

The New York Times quoted one Occupy Wall Street veteran telling a newcomer: “It doesn’t matter what you’re protesting. Just protest.” That captures the coherence of the exercise, which is a giant, ideologically charged, post-adolescent sleepover complete with face paint and pizza deliveries.

Again, I think we can sum up their grievances and demands with one word.  PARTY!

Now it’s Time for Them to Stop Thinking about Themselves and Just go Home

There’s an expression that goes like this.  Don’t sh*t where you eat.  A vulgar expression, yes, but it’s kind of apropos.  It means you don’t have sex with someone at work.  Because if the relationship goes sour, as they almost always do when you fool around at work, it can become very awkward around each other after the break up.  Which can be very unpleasant.  And strain the working relationship.

Now the ‘having a job’ part of this analogy has nothing to do with the Occupy Wall Street people.  It’s more of a literal meaning.  If you’re trying to win the hearts and minds of the people around you, well, you can’t go pooping all over their private property.  Nothing says ‘I hate you more’ than an unwelcomed poop.  And strains the solidarity relationship.

Of course, these indiscriminate poopers don’t care about anyone but themselves.  They protest not for an overriding principle.  But to get free stuff for themselves.  And, of course, to PARTY!  That’s why they have long overstayed their welcome in this neighborhood.  Now it’s time for them to stop thinking about themselves.  And just go home.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , ,

« Previous Entries