What's in a Birth Certificate?

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So, Barack Obama released his “long form” birth certificate and bought himself some temporary tactical advantage against Donald Trump and millions of angry conspiracy mongers out there. The document confirms, as much as any such item can, that Barack Hussein Obama II was born at 7:24 p.m. on August 4, 1961 at Kapiolani Maternity and Gynecological Hospital in Honolulu.

The lingering question of whether the man meets the constitutional requirements to be President of the United States — specifically, that he is a native-born citizen — is answered. He does. And, specifically, he is.

But, if you look a little more deeply into the hard typeface of the Certificate of Live Birth, you can see some evidence of the background that drives a person like Obama. Indulge me in a little armchair Freud.

According to the document, the president’s mother — Stanley Ann Dunham — was 18 years old when she delivered him. That’s very young by any reasonable standard, young enough to make the baby’s arrival seem reckless and ill-advised. A heavy burden to bear, especially when you were the baby in question.

And there’s the bureaucratic judgment in the Certificate’s explication that the mother’s name did not match the name of the child’s father. The 18-year-old girl signed the Certificate “Ann Dunham Obama,” a small act of revolt against the officious document’s implication of illegitimacy.

Good for her.

Many ask, now that Obama has released this Certificate, why he didn’t do it sooner. I have an idea. He’s been protecting his mother from the harsh judgment of petty tyrants.

How many bureaucratic sneers did she suffer, bearing and raising a mixed-race child in the early 1960s? How many dirty looks, when she carried him on buses or airplanes? Brought him to campus at the several universities she attended? Applied for passports? Applied for food stamps?

And how soon did little Barack II realize that authority figures judged his mother harshly? That official forms made unfriendly assumptions about her marital status? How quickly did other kids say unkind things about his . . . unconventional . . . mom? Kids in Hawaii. Kids in Kansas. Kids in Indonesia.

The facts around Stanley Ann Dunham’s life are hazy and are likely to remain so. This is the haze created by family members protecting a loved one they know needs the help. A foolish daughter. An eccentric mother.

There are different versions of when or even whether Stanley Ann and the elder Obama married. Apparently, they never lived together as husband and wife; and the President’s own wife has said that his mother was “very single when she had him.”

There’s a hard edge in that last bit, even from his wife. Young Michelle Robinson — from an intact, upright, churchgoing family headed by a father who was a civil servant — had plenty of occasions to judge foolish teenage mothers on food stamps. You can practically hear it in the very that she uses to modify single. Michelle wasn’t going to bounce around a bunch of motley state schools with a baby on her hip; she was going to Princeton.

For most of his 50 years, Barack Obama has been protecting his mother from judgments and slights. Since she passed away in the ‘90s, he’s been protecting her ghost. He’s the archetypal high-achiever from a dysfunctional family. That’ll never change.

And that archetypal sort is precisely who seeks the presidency in this dysfunctional age.

Trump and Obama’s other antagonists have already moved on to press the President to make public his transcripts from college and law school, as previous presidents have. Their assumption, which Obama himself has tacitly acknowledged in his memoirs, is that he was a mediocre student who advanced through elite academia on affirmative action preferences.

Here’s a prediction: Obama will never release those transcripts. His birth certificate — his entrance into this world — is a testament to what the Babbitts deemed his foolish mother’s recklessness and immaturity. But his Ivy League degrees are the armor he built to protect her and himself from those judgments. And slights. And dirty looks.

He’s not going to lower that.

And, in this narrow Freudian context, good for him. It isn’t a good idea, tactically — and it’s poor form, personally — to mess with a man’s coping mechanisms.




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The Healthy Society

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British Prime Minister David Cameron, speaking on February 5, deplored “state multiculturalism,” a failed doctrine of “encourag[ing] different cultures to live separate lives, apart from each other and the mainstream.” Immigrants should feel, rather, that they were living in an inclusive society, sharing a national identity, culture, curriculum, and language. Lacking such a sense of belonging and experiencing, instead, segregation and separatism, some young Muslims in Britain had turned to extreme Islamism. Cameron cited the “horror” of forced marriage in some immigrant communities. He proposed “a two-month programme to show sixteen-year-olds from different backgrounds how to live and work together.”

Earlier, on October 16, Chancellor Angela Merkel had expressed similar worries for Germany, home to some four million Muslims. The idea of people from different cultural backgrounds living happily "side by side" without a common culture did not work, she indicated: "This [multicultural] approach has failed, utterly failed." French President Sarkozy has said similar things.

Such remarks might be code words for anti-Islamism, but I am not cynical enough to think so. The worry of Cameron and others seems plausible, but it requires nuancing. It is perhaps soundest for a situation with two aspects. First, only one substantial immigrant culture, rather than several, confronts the local culture. Second, the authorities work to preserve the distinction — as, for instance, through year-by-year, not just transitional, public-school instruction in the immigrant language.

But this scenario does not necessarily recommend the opposite: different cultures melted into a homogeneous dominant one. A good society, true enough, does require consensus on ethical norms such as treating other people honestly and honorably, respecting their rights and property — not cheating, stealing, or committing aggression. Such consensus can accommodate differences in details of etiquette and lifestyles (arguably extending to same-sex and even polygamous marriages). Furthermore, a good society requires acceptance of a common legal system, without special privileges or burdens for particular groups. Consensus on the political system also rules out seeking change by violence, but it admits advocating even radical change by constitutional means.

While rejecting militaristic and imperialistic nationalism, Ludwig von Mises welcomed liberal nationalism, including movements for liberation and unity of populations speaking a common language (Nation, State, and Economy, 1919/1983). Liberal nationalism can be a bulwark of peace. Different nations should be able to respect and — to interpret a bit — even share in each one’s pride in its own culture and history. By extension, such mutual respect and celebration can extend to members of different national heritages within a single country. A healthy multiculturalism welcomes a diversity of interests and heritages without official favor or disfavor for any.

A diversity of national heritages can enrich a country’s overall culture. Quasi-native speakers of heritage languages, especially with their own publications and broadcasts, can promote language-learning and can be useful in diplomacy and in war. Diversity even of national restaurants and foods — Chinese, Mexican, Greek, German, French, and so on — multiplies options for work and for leisure. Cultural diversity can bolster a general awareness of history.

Diverse national heritages can scarcely offer benefits as great as those of the occupational division of labor and of domestic and international trade. They can, however, multiply the variety of niches in life in which a person or a family can feel comfortable and important. They can help avoid the dismal opposite, a society in which individuals must feel superior or inferior in competition on a single scale of overriding significance (money being the most obvious metric). A diverse society includes all sorts of (decent) persons, including, yes, entrepreneurs and investors obsessed with creating wealth and making money. Few people, however, can realistically expect outstanding success on the monetary scale. Pursuing an unattainable material equality would foster attitudes and politics incompatible with a quasi-equality of a more humane and more nearly attainable type.

A healthy society — to continue my amateur psychologizing — comprises many “noncomparing groups” (so called by analogy with the noncompeting groups recognized by the 19th-century economist John Elliott Cairnes). People should not be ranked according to the fields in which their accomplishments lie. Each person should have a chance to excel in something, whether craftsmanship, business, scholarship, athletics, a hobby such as collecting classic cars or rare coins, a religious group, travel and adventure, conviviality, or self-effacing service to mankind.

And, yes, cultivating a national heritage. Many kinds of excellence should be as respectable as the amassing of fortunes. A teacher could continue associating without embarrassment with former colleagues or students who had become business tycoons, not because progressive taxation had lopped off their huge incomes but because scholarly values and monetary values were regarded as incommensurate yet of equal dignity. While the approach to equality sought by left-liberal egalitarians implies measurement, true liberals need to follow Herbert W. Schneider (Three Dimensions of Public Morality, 1956, p. 97; cf. pp. 100, 118) in emphasizing "the incommensurability of human beings.”




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The Invisible Tribe

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People who say the Constitution is “living” or “invisible” usually don’t like what it says and don’t have the patience or the votes to amend it.

In February, the New York Times ran a piece by Laurence Tribe entitled "On Health Care, Justice Will Prevail," in which he argues that not only is the individual mandate in the new healthcare law constitutional, but it is both necessary and good. He also delivers what sounds like a series of short pregame pep-talks to the more conservative Supreme Court justices, seemingly trying to finagle them into joining the majority that he confidently predicts will uphold the constitutionality of the mandate.

Laurence Tribe is a professor of constitutional law at Harvard Law School and the Carl M. Loeb Professor at Harvard University. Widely considered to be the foremost current authority on the laws and Constitution of the United States, he has argued 34 cases before the Supreme Court, including Bush v.Gore, arguing for Mr. Gore. Among Tribe's former students and research assistants are Supreme Court Justice Elena Kagan, Chief Justice John Roberts, and President Barack Obama, whom he called “the best student I ever had” (The Concord Monitor, November 14, 2007).

Here I will examine four specific points in Tribe's essay in the Times: (1) an error in word choice, (2) a sentence that misleads through lack of clarity, (3) a conclusion built on a false premise, and (4) an answer that begs a question. The constitutionality of the mandate and its fate in the Court will be addressed only when they touch on these smaller points. The pep-talks will not be examined. The elusiveness of objectivity will be the subject of the conclusion.

The first and second points are in paragraph four:

"Many new provisions in the law, like the ban on discrimination based on pre-existing conditions, are also undeniably permissible. But they would be undermined if healthy or risk-prone individuals could opt out of insurance, which could lead to unacceptably high premiums for those remaining in the pool. For the system to work, all individuals — healthy and sick, risk-prone and risk-averse — must participate to the extent of their economic ability."

The first point is in second sentence, where Tribe asserts that, if “risk-prone individuals could opt out of insurance,” those remaining could be saddled with “unacceptably high premiums.” Using the same formula: If all drunks who ride motorcycles opted out of a health insurance pool, the premium paid by the people who remained would go sky-high.

It is as though Laurence Tribe has stood on a soapbox in Harvard Yard and shouted, albeit in bureaucratese, “The individual mandate is Marxist.”

This is nonsense. Only when risk-averse, not risk-prone, individuals drop out en masse do the premiums for those remaining rise. The wrong word was used. Using the corrected formula, the point that Tribe may have been trying to make can be illustrated with the same hypothetical: all teetotalers who do not ride motorcycles must be made to pay health insurance premiums high enough to cover not just their own modest health-related expenses, but also the astronomical medical bills of drunks on Harleys.

Now it makes sense; that is to say, the revised formula’s effect on the price of premiums makes sense, not the system that doesn’t permit sober people to opt out.

The second point is the wording of the final phrase, “for the system to work, all individuals . . . must participate to the extent of their economic ability.” This is the sort of vague language bureaucrats use to camouflage authoritarian unpleasantness.

If clarity had been the goal, it might have said: “Each person must be compelled to buy health insurance and to pay a price directly proportional to the amount of money he has so that medical care can be provided to each person according to his medical needs.” Sorry, that’s less clear, and too wordy. Try this: “From each according to his ability, to each according to his needs” (Marx, Karl, Critique of the Gotha Program).

If the reader pauses now, and dispassionately compares Tribe’s meaning with Marx’s, he will, if he is honest with himself, conclude that the two are, in fact, the same. It is as though Laurence Tribe has stood on a soapbox in Harvard Yard and shouted, albeit in bureaucratese, “The individual mandate is Marxist,” a term employed here not in any pejorative sense, but in an effort accurately to convey the meaning of the carefully crafted phrase “must participate to the extent of their economic ability.”

To make matters even more jarringly redistributive, equivalent amounts of medical care will not be provided under this steeply progressive pricing scheme. Because good health and wealth are positively correlated, “for the system to work,” those with the most modest medical bills will pay the most for the insurance and those with the most expensive bills will pay little or nothing. Tribe was probably trying to state this truth as plainly as he could without triggering the howls of the anticommunists among us.

Given his endorsement of the compulsory and redistributive nature of the mandate, however, it is unlikely that Tribe would deny the accuracy of the label “Marxist” or, for that matter, be offended by it. To expect either outcome would insult his intellectual honesty and integrity.

The annoying aspect of this second point is that, by cloaking the mandate’s naked Marxist core in vague language, Tribe may have been trying to strengthen his argument. A strong argument does not need camouflage.

The third point is in the last part of paragraph six, where Tribe neatly summarizes a set of premises and conclusions that is widely held to be true, but isn’t:

"Individuals who don’t purchase insurance they can afford have made a choice to take a free ride on the health care system. They know that if they need emergency-room care that they can’t pay for, the public will pick up the tab. This conscious choice carries serious economic consequences for the national health care market, which makes it a proper subject for federal regulation."

Consider the case of Mr. A, who has studied the actuarial tables and discovered that the only insurance he would be allowed to buy is priced according to the risk factors of people who almost certainly will have medical expenses many times as costly as his. He has saved enough money so he could afford to buy that insurance, if he wanted to, but he realized that actuarially it would be cheaper for him to pay his own medical bills out of pocket. In fact, he has saved enough money so he could afford to pay even catastrophic medical bills, if it came to that. Mr. A has chosen not to buy the insurance offered because, for him, it is not a good deal. He has chosen to self-insure.

So, while Mr. A did not purchase insurance he could afford, he has not “made a choice to take a free ride on the health care system.” Mr. A can and doespay for emergency room visits in full upon receipt of the bill. Unlike people covered by Medicaid, who really are taking a “free ride,” he has never asked the public or anyone else to pick up the tab, and never will. Mr. A’s “conscious choice” to self-insure carries “serious consequences for the national health care market” only to the extent that the government, having spent itself into a yawning sinkhole of debt, and finding voters reluctant to pay higher taxes, has passed a law that would strongarm Mr. A into picking up the tab not only for himself, as he has been all along, but for others as well.

That Tribe did not take into account those who choose to responsibly self-insure is odd. Surely he knows people who are successful, self-reliant, and self-insured. But whatever his reason, half-truths were used to reach a conclusion that as a result is, at best, 50% nonsense.

Fourth, and finally, in the seventh paragraph, Tribe tries to demonstrate that the constitutionality of the mandate does not depend on the commerce clause:

"Even if the interstate commerce clause did not suffice to uphold mandatory insurance, the even broader power of Congress to impose taxes would surely do so. After all, the individual mandate is enforced through taxation, even if supporters have been reluctant to point that out."

Let’s see. If the commerce clause, even in its broadest interpretation, fails to persuade a majority of the Court that the mandate is constitutional, the fact that the new healthcare law levies a fine on those who fail to comply with the mandate creates an opening. Because the law names the IRS as the collection agent for the fine, that fine takes on the coloration of taxation. Therefore (if therefore is not too strong a word in this line of reasoning), the Court can conclude that the individual mandate is constitutional because Congress is simply exercising its power to tax.

If all Congress has to do to make a law constitutional is to impose a fine for failure to comply and make the IRS the bill collector, then Congress can constitutionally make anyone do anything it wants.

Note that Tribe does not argue that the individual mandate itself is a form of taxation, but that it is “enforced through taxation.” He cannot claim that the mandate is a tax because the money is passed directly from the hands of the private citizen into the maw of the private insurance corporation. The government only oversees this unfunded individual mandate. So Tribe must be content to say that the fine itself is a tax.

Is it really that simple? If all Congress has to do to make a law constitutional is to impose a fine for failure to comply with that law, and make the IRS the bill collector so that the fine can be called a tax, then Congress can constitutionally make anyone do anything it wants by tacking a fine onto not doing it. That can’t be right.

Let us say that a law is passed that compels all obese people to lose a certain portion of their weight annually until a desirable target weight is achieved. Even though the massive weight-loss industry crosses state lines, and eliminating the scourge of obesity would benefit the national economy, an unimaginative Supreme Court stubbornly maintains that the government does not have the power to force people to lose weight. But then it is brought to the Court’s attention that the law imposes a small fine, payable to the IRS, on obese citizens who fail to meet their federally mandated weight-loss targets. Does the Court have no choice but meekly to acquiesce and uphold the law as constitutional?

Is there a legal philosopher’s stone that transmutes fines into taxes and through this magic transforms otherwise unconstitutional laws into models of constitutional compliance? Or is this an example of a more subtle proposition, “When I use a word, it means just what I choose it to mean, neither more nor less” (Dumpty, Humpty, Through the Looking Glass).

Even if either the mandate or the fine were a tax, the resulting legal axiom still wouldn’t pass the sniff test: “It is taxed, therefore, it is constitutional.” Deep in the penumbra of the Constitution that may not look like nonsense, but here on the sunny side, it certainly does. It sounds like the Red Queen channeling Descartes and Tribe simultaneously.

The fact that the Congress has the constitutional power to tax surely cannot mean that anything it chooses to tax is, as a result, constitutional. The argument begs the question. The fact that a fine is attached to the mandate does not make it constitutional.

The Times piece leaves the impression that Tribe has not given the problem of the individual mandate his full attention, which is understandable, given that his specialty is the law, not medicine, insurance, or economics. Besides, as a tenured professor at Harvard, he probably has essentially free healthcare for life as an untaxed benefit, making any concern that he has about the unfunded mandate entirely academic.

To say that “justice will prevail” if the Court upholds the mandate is easy for Tribe.He will not be asked to sacrifice anything at all, while others, many of more modest means, will be compelled to pay thousands of after-tax dollars per year to cover someone else’s higher risks.

To put this in another way, Laurence Tribe will not be picking up the tab when the Harley goes skittering across the freeway; others will.

And where is the justice in that?

***

In his 2008 book, The Invisible Constitution, Tribe explains the futility of relying on the text of the Constitution to resolve constitutional questions. He tells of what he calls the “dark matter” in the “shadow constitution” and the “ocean of ideas, propositions, recovered memories, and imagined experiences” that comprise the real mass of the “invisible” Constitution, which dwarfs the mere document. (One good review is: The Dark Matter of Our Cherished Document: What you see in the Constitution isn't what you get,Dahlia Lithwick, in Slate,Nov. 17, 2008)

If the written text of the Constitution, and its accompanying case law, which everyone can read and compare notes on, is but the tip of the iceberg, and the real mass is hidden below, in the ocean of collective consciousness, imagination, memory, or even the collective unconscious, then its truths can only be accurately interpreted by initiates specially trained to dive beneath the surface like cormorants to fathom and retrieve its complex meanings. Or, to switch metaphors, perhaps this Constitution is an ethereal entity whose cryptic messages can be divined only by oracles who breathe the heady air found in the realm above the clouds of partisanship and bring down to us the purity of its truths without relying on an old scrap of parchment.

On May 4, 2009, Laurence Tribe wrote a letter to his star pupil, assessing potential nominees to the Supreme Court. In it, he sized up Sonia Sotomayor, then a Court of Appeals judge, advising President Obama that, “Bluntly put, she’s not nearly as smart as she seems to think she is, and her reputation for being something of a bully could well make her liberal impulses backfire and simply add to the fire power of the Roberts/Alito/Scalia/Thomas wing of the Court . . .” Another of his former students, Ed Whalen, posted the letter on the website of the Ethics and Public Policy Center.

 

Perhaps this Constitution is an ethereal entity whose cryptic messages can be divined only by oracles who breathe the heady air found in the realm above the clouds of partisanship.

To interpret this letter, Sonia Sotomayor, who studied law at Yale, not Harvard, might want to take a page from The Invisible Constitution and acknowledge the futility of relying on the rows of tiny symbols strung haphazardly together that constitute the actual text. There is so much more dark matter between the lines and in the murky ocean upon which such a letter floats.

The now Associate Justice Sotomayor may be comforted if she peers into the dark waters and discerns the outline of a psychological defense mechanism, first proposed by Freud, and called projection. A person who uses this tool unconsciously denies his own negative attributes and projects them onto others. This reduces his anxiety by allowing the expression of unconscious fears and desires without letting the conscious mind recognize them as his own.

Some of the people who say that the Constitution is “living” or “invisible” become judges so they can creatively distort the parts they disagree with from the bench. They are judicial activists posing as unbiased judges. Others work from the sidelines to bend and twist those parts so that the Constitution may be forged into a weapon that adds fire power to liberal impulses in the ongoing ideological battle. These are not legal analysts; they are merely political actors striking unconvincing poses of objectivity.




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Individualism in Real Life

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Bethany Hamilton is one of those perfect libertarian heroes. When she wants something, she goes after it. When things go wrong, she looks for a way to make it right. She doesn't whine or complain, even when the thing that goes wrong is the horror of a shark taking off her arm. She relies on herself, her family, and her God.

The movie about Bethany, Soul Surfer, has its predictably maudlin moments, fueled by Marco Beltrami's heavily emotional musical score, but don't let that put you off. If you are looking for a film to demonstrate libertarian principles to your friends, take them to Soul Surfer.

The film is based on the true story of Bethany, a competitive surfer with corporate sponsorship who was on her way to professional status when a huge shark bit off her arm. She returned to competitive surfing within a matter of months, and is now a professional surfer. She also seems to be a really nice girl. I learned that not only from the film, but also from the articles I have read about her.

And the Hamiltons seem to be a model libertarian family. They ignored traditional middle-class expectations in order to follow the dreams they made for themselves. All of them, parents and children alike, live to surf. When Bethany showed a great aptitude for surfing, her parents opted out of the government school system and educated her at home so she could take advantage of daytime surfing. After her injury, they did for her only the things she absolutely could not do for herself, encouraging her quickly to find new ways of managing her "ADLs" (activities of daily living).

The film portrays the Hamiltons (Dennis Quaid and Helen Hunt, parents) as a close-knit family within a close-knit community of surfers who understand the true nature of competition. True competition isn't cutthroat or unfair. In fact, unfettered competition has the power to make every person and every product better. Even Bethany's surfing nemesis, Malina Birch (Sonya Balmores), is portrayed as competitively solid. After she paddles full out toward a wave during a competition instead of kindly slowing down to allow for Bethany's injury, Bethany (AnnaSophia Robb) thanks Malina for treating her as an equal and pushing her to be her best. It's a great example of the good that competition can accomplish.

Instead of turning to government support groups to help her deal with her injury, Bethany turns to three free-market sources: family, business, and religion. When she returns to surfing, she rejects the judges' offer to give her a head start paddling past the surf. Instead, her father designs a handle to help her "deck dive" under the waves. When finances are a problem, a news magazine offers to provide her with a prosthetic arm in exchange for a story, and a surfboard manufacturer sponsors her with equipment and clothing. The youth leader at her church (Carrie Underwood) gives her a fuller perspective on her life by taking her on a service mission to Thailand after the tsunami that hit in 2004. There she learns the joy of serving others — a kind of work that earns her psychic benefits rather than monetary rewards. She isn't "giving back"; she is "taking" happiness.

These examples of self-reliance and nongovernmental solutions to problems raise the level of this emotionally predictable film to one that is philosophically satisfying — and well worth seeing.


Editor's Note: Review of "Soul Surfer," directed by Sean McNamara. Sony Pictures Entertainment, 2011, 106 minutes.



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True for Me

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I’ve reflected before on the unintended comedy that flows from people in positions of authority or influence in our society denying the existence of objective reality. In the far future, enlightened people will look back on this era of American history and marvel at the fact that the children of a system built on reason could behave so irrationally.

A recent example: the slightly past-her-prime movie actress Ashley Judd (née Ciminella) recently made the rounds of television talk shows to promote a memoir. As expected of such a project, Judd included salacious tales of incestuous sexual abuse suffered when she was a young girl and edgy sex when she was a young woman. Also, occasional bouts of manic depression.

In the book, Judd recalls when she was in middle school and her mother — the country music singer Naomi Judd — started dating her second (and current) husband:

"Mom and pop were wildly sexually inappropriate in front of my sister and me ... a horrific reality for me was that when pop was around I would have to listen to a lot of loud sex in a house with thin walls. . . . I now know this situation is called covert sexual abuse."

It’s too bad that Judd has been reduced to this. She made some pretty good films in the 1990s and early 2000s — including my personal favorite, the surreal 1999 whodunit Eye of the Beholder.

But her deepest self-abasement doesn’t appear in her book. Asked on the Today show what her family thought of the book, Judd said:

"You know, the book is very honest [but] it’s not necessarily accurate, because everyone in my family has their own perspective and their own experiences. But it’s very true for me."

Ugh. Beware “true for me” memoirists.

Of course, some people go for this situational twaddle. One of the half-wit columnists at the website Salon.com wrote:

"Judd’s admission that her memoir is “true for me” allows for an acknowledgment of the real trauma she’s experienced while also making room in the narrative for other versions of events. Memory might not hold up in a court of law, but that doesn’t matter much to a scarred heart. One that’s suffering depression and a host of other hurts. And, by admitting that, Judd’s telling others that if it feels like abuse to you, it was abuse. And that’s good enough."

No, it’s not. As James Frey, Greg Mortenson, and a growing list of other fabulists and swindlers will attest, “true for me” memoirists are a sleazy lot. Often full of sanctimonious, politically-correct hypocrisy. Usually tripped up by undeserved self-regard.

Sadly, these same faults apply to the younger Ms. Judd. Less than three years ago, she appeared in a series of videos produced by a statist political advocacy group called Defenders Action Fund; in those videos, she castigated Sarah Palin for supporting the sport killing of wolves from helicopters. To wit: “Now back in Alaska, Palin is again casting aside science and championing the slaughter of wildlife.”

So, a woman who doesn’t hold herself to a standard of factual accuracy in her salacious memoir damns another woman for “casting aside science” when dealing with wildlife management. This selective embrace of objective reality is part of the reason that American culture is on the decline.

Statists thrive when people doubt objective reality and use terms like “true for me.”

Ashley Judd’s loud and libidinous mother probably summed up the real ethics of such people when — asked by the Today show for a response to her daughter’s stories — she said: “I love my daughter. I hope her book does well.” Cha-ching.




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Atlas at Last

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The John Galt Line has finally pulled out of the station, and is barreling across the country picking up hitchhikers who may be wondering what all the fuss is about. After a spectacular pre-release advertising campaign that included multiple premieres in major cities and pre-purchased ticket sales that encouraged nearly 300 screen owners to give the film a chance, Atlas Shrugged Part 1 opened on April 15 (Tax Day) as the third-grossing film of the weekend (looking only at screen averages, not total sales).

"Mixed" is an understatement when describing the reviews. Professional critics on RottenTomatoes give it a 6% approval rating, perhaps the lowest rating I have ever seen for a film. Meanwhile, audiences gave it an unbelievable 85%.

In fact, the film doesn’t deserve either rating. It belongs somewhere in the low middle.

It is not as good as the 85% would indicate; audiences who saw it on opening weekend are rabid fans, bent on a mission to have everyone in America see the film and learn Ayn Rand's philosophy: free markets, free thinking, and self-reliance.

But it doesn't deserve the godawful 6% usually reserved for low-budget slasher flicks, either. It is not as bad as its low budget and relatively unknown cast of actors and producers would cause one to expect. It is respectable.

The cinematic quality is quite good, especially the outdoor scenes of Colorado and the special effects used to create the train and the bridge. The acting isn't bad, but it isn't great. Often I was painfully aware of Taylor Schilling being painfully aware of where Dagny should place her arm, or how Dagny should turn her head; I never felt that she embodied Dagny. Similarly, the background cast at the Reardens' anniversary party appeared to be made up of friends and family of the cast and crew (someone needed to teach them how NOT to mug for the camera).

For fans of Ayn Rand and Atlas Shrugged Part 1, the brightest compliment for this film is that it stays true to first third of the book. (Parts 2 and 3 are expected to follow.) For fans of filmmaking, however, the biggest problem is that it stays true to the book. The film is dialogue heavy, with very little action.

I’m not a Hollywood film reviewer; but I’m a watcher and a reader. I know that books and films are two different genres, and their stories have to be presented in two different ways. Books are primarily cerebral; films are primarily visual. Books can focus on philosophy and conversation; films must focus on action. Books can take days or weeks to read; films must tell their story in a couple of hours. When adapting a book to film, streamlining is essential. Unfortunately, the words in this film are so dense that the ideas become lost.

Atlas Shrugged Part 1 contains some great quotations, but it is not a film that will convince anyone but the Rand faithful of the supremacy of the free market. It makes the same mistake that most libertarians do when espousing philosophy: it assumes that everyone already sees the problems in the way libertarians do. It does not sufficiently engage the non-business person in seeing the long-term effects for everyone when government intervenes in the market. I can hear my middle-class neighbors and colleagues saying "So what?" when Rearden (Grant Bowler) is forced to sell all but one of his businesses. "How is that going to hurt me?" they might wonder.

Even the conflict between Dagny's pure free-market economics and her brother James's (Matthew Marsden) collusion with government is insufficiently portrayed; Dagny seems to be simply getting around the stockholders when she takes over the John Galt Line. Moreover, she and Rearden can hardly be seen as icons of virtue when they violate a freely made and morally binding contract (his marriage vows) by jumping into bed together. Even more damning is Ellis Wyatt's decision to burn his oil fields rather than let anyone else enjoy the fruits of his labor. My middle-class neighbors would howl with outrage at this decision. In short, I don't see how this film will convince anyone that returning to free-market principles will improve our economy and our way of life. It seems like everyone in the film is cutting moral corners somewhere.

"Not bad" is faint praise for a movie that has been 50 years in the waiting. Unfortunately, business pressures caused it to be rushed through with only five weeks in the writing, and another five weeks in the filming. Business is often an exercise in compromise, and this film's production is a classic example. I think, however, that if The Fountainhead's Howard Roark had been the architect of this film, it would have been burned along with Ellis Wyatt's oil fields. It's good, but not good enough.


Editor's Note: Review of "Atlas Shrugged Part 1" (2011), directed by Paul Johannson. The Strike Productions, 2011, 97 minutes.



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A Surprise Hit

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Last week I attended a screening of Atlas Shrugged, Part I, and was amazed to see that the theater was literally sold out and packed full. I cannot ever recall seeing that before. After all, this is not your usual fluffy romantic farce, comic book superhero movie, or action flick. It is an honest effort to put Ayn Rand’s extremely long novel into movie format.

Producers Harmon Kaslow and John Aglialoro are expanding the release from the initial 299 theaters to 425 by this weekend, and as many as 1,000 by the end of April. This is stunning, considering that the marketing plan was considered lame by Hollywood insiders, because it used the internet rather than more traditional venues, such as TV and radio, for running ads.

Not only are ticket sales doing well, but film-related merchandise — including replicas of the bracelet Dagny Taggart (Taylor Schilling) wears in the movie (made out of “Rearden metal”) — are flying off the shelves.

Aglialoro, a businessman who put $10 million of his personal capital into the flick, as well as co-writing and co-producing it, attributes its success in great measure to fortunate timing. I think that in this he is absolutely right. Obama’s leftist regime, with its bash-the-rich and blame-the-businesses rhetoric, massive new regulations, crony capitalism, and redistributionist mindset, has created a ready market for the movie.

Ironically, Obama may prove to be the cause of a whole new wave of Rand mania. That is well worth a chuckle or two, no?




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A Whiff of Smoke

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I have oft reflected, in this place, on the fiscal fires advancing toward us.

The United States is running massive deficits, even as it creates massive new entitlement programs (e.g., Obamacare). Our national debt is about to hit $14.3 trillion. Our three main existing entitlement programs (Social Security, Medicare, and Medicaid) are underfunded by more than $100 trillion. And consider such under-the-radar unfunded liabilities as the Pension Benefit Guaranty Corporation, which "guarantees" the pensions of millions of private industry workers and is underfunded in the tens of billions. That's now. Later, as more workers retire . . . you can guess what will happen. Meanwhile, the deficits of those Twin Towers of moral hazard, Freddie Mac and Fannie Mae, continue rising.

All these are at the federal level. The states are another matter.

The states are currently running a deficit of around $125 billion, which may not sound like much in this context. But at their level there is also more than $3 trillion in outstanding bond debt (counting municipal as well as state bonds), and what we can only estimate at about $3 trillion in unfunded liabilities.

The alarming rise in this ocean of red ink has caused Standard & Poor’s to cut its outlook on the US credit rating from “stable” to “negative,” meaning that in the credit agency’s view, we have about a one-third chance of having our AAA credit rating lowered during the next two years. Should that happen, the cost of our staggering amount of borrowing will explode.

The agency’s decision reflects more than its worries about our current deficit of $1.6 trillion (about 10.8% of current GDP) and our total debt of $14.3 trillion (over 91% of our GDP). It also registers the agency's skepticism about whether the wise solons in Washington will be able to staunch the flow of red ink anytime soon.

A number of predictable events have quickly followed. First, the Obama regime immediately pooh-poohed the embarrassing announcement. Spokesman Jay Carney said, “The political process will outperform S&P’s expectations. . . . The fact is where the issues are important, history shows that both sides can come together and get things done.” Obama’s unserious budget proposals belie these words.

Also predictable was the immediate drop in the stock markets. The Dow fell by 1.1% (140 points) that day, and London’s FTSE 100 fell by 2% (126). Equally predictable was the immediate weakening of the dollar, and gold's breaking the important psychological barrier of $1,500 an ounce. (It wasn't very long ago that it broke the psychological barriers of $500, then $1,000.)

The continuing housing bust masks our increasing inflation. While the official American inflation rate remains about 3%, prices have been rising rapidly in food and energy. Commodity prices are at or near their historic highs.

The public is now receiving a small whiff of smoke from the myriad fires that endanger us. People haven’t yet seen the flames, but when they do, the reaction will be severe. This is only the first year in which baby boomers are starting to retire. When all 78 million of them are on Social Security, Medicare, SSDI, Obamacare, and so on, you can expect a fiscal firestorm — probably hyperinflation or bond defaults.

The good news is that in those fiscal flames the hubristic and vicious (in the sense of vice producing) progressive-liberal state will likely be consumed. One hopes that will mitigate the pain.




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Is Greed the Problem with Capitalism?

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With the opening last fall of Money Never Sleeps, the sequel to Wall Street, Americans were again subjected to Hollywood’s version of how the economic system works: big business is evil, and greed is at the heart of our economic problems. The original Wall Street movie was released during the Reagan administration — aperiod that initiated significant economic expansion.Nonetheless, the movie offered a stern warning about what to expect from greed run rampant. The villain of the story was Gordon Gekko (Michael Douglas), the powerful head of a mergers and acquisitions firm. Toward the end of the movie Gekko makes a now-well-known speech about why “greed is good,” a speech that is meant to highlight the pro-capitalistarguments often made by businesses and free market advocates. Gekko tells a group of shareholders of a company he is trying to acquire that,

“Greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, [for] knowledge has marked the upward surge of mankind.”

Of course, true to Hollywood form, in the end Gekko winds up implicated in a major fraud, thus revealing the true moral of the story, which is of course, that “greed is bad!”

Ironically, the current economic crisis has been an opportune time for Hollywood to make money by highlighting the immorality of greed (as in Money Never Sleeps). For many observers it was greed by the managers of financial institutions that led to easy loans with little to no down payments; greed by homeowners that led to purchases of houses they couldn’t afford; greed on Wall Street that led to the creation of such clever new financial instruments as mortgage-backed securities and credit default swaps; greed by CEOs that led to corporate extravagances and ridiculously high executive compensation packages; and greed by consumers that led to excessive use of credit cards to buy things now, rather than waiting till they earned the money to pay for it.

Tom D’Antoni in the Huffington Post declared that “the concept that ‘Greed is Good,’ is dead. It rose to its despicable zenith in tandem with the rise of Reagan, and has been the guiding principle of industry, finance and government ever since. . . . Greed brought us to this place . . . unregulated, untrammeled, vicious greed. Greed has no morals or ethics. Greed has no regard for others. Greed feeds only the greedy and feeds on every thing and everyone within grasping distance.” John Steele Gordon, author of a book on financial history, wrote, “There is no doubt at all about how we got into this mess. … Greed, as it periodically does when traders and bankers forget the lessons of the past, clouded judgments.”

 

Religion and greed

The world’s religions almost unanimously contend that greed is wrong. Although not explicitly proscribed in the Ten Commandments, greed is implicated in their command not to covet one’s neighbor’s property or spouse. The Bible contends that “the love of money is the root of all evil” (Timothy 6:10). In the year 590, Pope Gregory declared greed to be one of the seven deadly sins, along with lust, pride, gluttony, sloth, envy, and wrath. Among the seven, greed is often considered one of the worst, if not the worst, mostly because greed can inspire many of the other sins.

In almost every major religious tradition, greed is condemned unequivocally. The Qu’ran states, “Anyone who is protected from his own stinginess, these are the successful ones.” (64:16) The Tao Te Ching states, “When there is no desire, all things are at peace” (Chapter 37). In the Bhagavad Gita, Lord Krishna declares, “There are three gates leading to this hell — lust, anger and greed. Every sane man should give these up, for they lead to the degradation of the soul” (16:21). Sulak Sivaraksa, a leading Buddhist writer, states that “Buddhism condemns greed, which can easily lead to aggression and hatred.”

We do not appeal to other peoples’ humanity when we seek our sustenance, but rather to their self-interest, or in this case their greed.

Reacting to the recent economic crisis, Dr. John Sentamu, Archbishop of York, attacked exploitative moneylenders who pursued "ruthless gain"; he urged banks not to "enrich themselves at their poor neighbours' expense." Pope Benedict, in his 2008 Christmas message, said, “If people look only to their own interests, our world will certainly fall apart.” The Dalai Lama asked, “What is the real cause of this sort of economic crisis?” His answer: “Too much speculation and ultimately greed.”

 

Greed as a necessity

Greed is an easy target. It is not hard to convince most people that greed is the primary source of many of our economic woes. But is it really?

Stephen Pearlstein points out what many economists believe. He writes, “In a capitalist economy like ours, the basic premise is that everyone is motivated by a healthy dose of economic self-interest. . . . Without some measure of greed and the tension it brings to most economic transactions, capitalism wouldn't be as good as it is in allocating resources and spurring innovation.”

This is the central idea behind Adam Smith’s oft-quoted line about the butcher, the brewer, and the baker in The Wealth of Nations:

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.” (Wealth of Nations, Book 1, Chapter 2)

Smith is arguing that the economic system provides for our wants and needs because, first and foremost, people are trying to help themselves, and they do so by producing and selling meat, beer, and bread to others. These market outcomes are not achieved because of charity. We do not appeal to other peoples’ humanity when we seek our sustenance, but rather to their self-interest, or in this case their greed.Nonetheless the modern economist’s acceptance of greed as a positive force in society has not been readily accepted, given centuries of moral teachings to the contrary.

 

Seeking a middle way

Is there a resolution to the greed paradox? Is greed evil? Is it a necessary evil? Is greed something that humankind should seek to eliminate, perhaps replacing it with altruism? Or is greed something so ingrained in the human psyche that there is no hope of eliminating it?

Perhaps we simply need to learn how to live with greed. Perhaps there is a middle way, a method of channeling greed in good rather than bad ways.

Aristotle argued that “virtue is concerned with passions and actions, in which excess is a form of failure, and so is defect, while the intermediate is praised and is a form of success” (Nicomachean Ethics, Book 2, Chapter 6). It is the middle way that is the goal. Indeed, dictionary definitions of greed highlight not only self-interest but an “intense, selfish desire” (New Oxford American) or “an excessive desire to acquire or possess more than one needs or deserves” (American Heritage). Greed is usually not implicated if someone’s desires are average or if one achieves a moderate standard of living.

Religious writings sometimes take account of this. Thus, one hadith, or saying of the prophet Muhammad, states, "Eat what you want and dress up as you desire, as long as extravagance and pride do not mislead you” (Hadith as reported by Abd’allah ibn Abbas, 1:645). In Judaism too, one Midrashic interpretation asserts, “Were it not for the yetzer hara [the evil urge], a man would not build a house, take a wife, beget children, or engage in commerce” (Bereishis Rabbah 9:7).

There is no community or society in the world that fails to benefit from the voluntary exchanges and market activities that occur in abundance in everyday life.

Returning to the issue of our current financial crisis, some observers recognize that greed cannot be eliminated. Michael Lewis and David Einhorn of the New York Times write, “ ‘Greed’ doesn’t cut it as a satisfying explanation for the current financial crisis. Greed was necessary but insufficient; in any case, we are as likely to eliminate greed from our national character, as we are lust and envy.” Robert Sidelsky writes that John Maynard Keynes “believed that material well being is a necessary condition of the good life, but that beyond a certain standard of comfort, its pursuit can produce corruption, both for the individual and for society.”

Steven Pearlstein suggests a different perspective, that greed may not be about the degree of desire, or how much one acquires, but about how one acquires wealth: “Even before they decided to give away most of their money, nobody seemed to begrudge Bill Gates or Warren Buffett their billions or criticize them for their ‘unbridled’ greed. That seems to have a lot to do with the fact that Gates and Buffett made their money on the basis of their own ingenuity, skill and hard work.”

 

Methods of satisfying greed

The American economist Henry George (1839–1897) is mostly famous for his theory of the Single Tax, but in his book Protection or Free Trade there is a passage that can help resolve some of the tension about greed and profit seeking: “Is it not true, as has been said, that the three great orders of society are ‘working-men, beggar-men, and thieves’?” (pp. 21–22).

Prima facie this passage may seem unremarkable, or at worst confusing: after all, what exactly is an “order of society?” But if we think about it carefully in light of the current discussion, it actually provides the seeds, or kernels, for understanding “greed.”

First, let’s recognize that what George has in mind are three primary ways in which people obtain benefits for themselves, or in other words “profit.” As I’ll argue, how a person ultimately judges profit-seeking activities and whether he views greed as good or bad will depend largely on which one of George’s “great orders” he believes to be most prominent in society. But first let’s discuss each of these profit acquisition methods, beginning with the last one, “thief.”

 

Thieves: involuntary transfers

One of the simplest methods a person can use to satisfy his greed for food, clothing, automobiles, cameras, computers, or the money to acquire these things is simply to take them away from someone else. Theft has been a part of life since the beginning of society, and it is likely to remain a part of society for a long time to come.

When the rightful owner of something has it stolen by another, the thief clearly benefits. He is now in possession of the valued item. The victim suffers a loss, since he does not possess and can no longer receive benefits from the product. The victim will surely feel that an injustice has occurred and will demand the return of the stolen property and the punishment of the perpetrator, if those responses are at all possible. But regardless of what happens afterward, theft involves a transfer of an item from a legitimate possessor to an illegitimate possessor, and the transfer always occurs involuntarily. Thus the term “involuntary transfer” offers a better moniker, especially because in many situations the transfers may technically not be considered theft, but will have similar characteristics.

Around the world societies evaluate outrighttheft in similar ways. It is generally considered bad, or wrong, or perhaps evil, with perhaps only a few exceptions tolerated. These exceptions are rare, and societies have put into place an elaborate system of laws that prohibit theft in a variety of situations while providing penalties for those found guilty of having violated these laws. Suffice to say that the acquisition of benefits by means of theft is unacceptable in all societies around the world. Although this is a seemingly obvious point, it forms the basis for most of the cry-outs about injustices around the world. In brief, people claim an injustice whenever they perceive that someone is getting “ripped off” in some way.

 

Beggar-men: voluntary transfers

The second of George’s orders of society — that is, another major way in which people acquire the goods and services that their greed desire — consists of those who are given the items voluntarily by someone else. A beggar stands on the street corner and solicits money from passersby. The money they give him represents a transfer of goods and services from the giver to the recipient. Although the giver loses, the money obtained by the beggar is not ill-gotten, in a traditional legal sense, because it has been given to him willingly; it is a voluntary transfer.

From the giver’s perspective this action is called charity and the action is held in high esteem in most societies in the world. Charity is not self-serving; it is in the service of others. It is not consideredharmful, but helpful. Charity is encouraged and promoted in all of the major religions. Some people, such as Mother Teresa, who have spent their lives giving to needy people, are respected or even beatified by their religious groups.

 

Working-men: voluntary exchange

The third order of society that George mentions is “working-men.” This is another method an individual can use to acquire the goods and services that his greed may inspire. Work generates an income that can be used to purchase consumption goods, but it is important to recognize the underlying process. Work in a commercial societyis an activity devoted to producing a good or service that someone else will wish to purchase; a product that is desirable. Through the free voluntary exchange of the product for money in the marketplace, a business generates the revenue that is used to pay its workers. That money, or income, is then used by the workers to purchase other goods and services produced by other workers. In the end, when you strip away the money part of the transactions, what is really taking place in market activity is the voluntary exchange of one good for another. And since both parties to a trade exchange their goods voluntarily, it must be that both benefit from the transaction, for if not, why trade?

Voluntary exchange is the cornerstone of the world’s economic prosperity. The very first lesson in Smith’s Wealth of Nations is the principle of the division of labor: productivity can increase as the production process becomes more specialized; that is, as labor or workers are divided into more specialized tasks. But the only way to take advantage of these benefits afterwards is through exchange. If you cannot exchange, there is no incentive for specialization.

We should never portray greed in general as good or bad, right or wrong, but as something that can be satisfied in either acceptable or unacceptable ways.

Based in part on this fundamental principle, economists have long supported the free market, which essentially means allowing free and voluntary exchanges, without social or governmental impediments. Indeed, societies everywhere generally accept and promote trade both within and beyond their borders. There is no community or society in the world that fails to benefit from the voluntary exchanges and market activities that occur in abundance in everyday life. To summarize: if greed inspires work that in turn inspires voluntary exchanges in the marketplace, then the outcome is mostly good for everyone involved.

 

Distinguishing “good” greed from “bad” greed

Greed can generate either good or bad outcomes, depending on which great order of society, or in other words which method, is involved in its satisfaction. If greed inspires a person to work long hours in a business providing valuable goods and services to others in order to satisfy the needs of himself and his family, then greed should be perfectly acceptable on pragmatic grounds. If greed inspires a person to innovate and create new products that others will desire in the market, then greed is good. In each of these cases greed is satisfied through voluntary exchange. However, if greed inspires a person to acquire what he desires by taking the rightful possessions of another person without that person’s consent, then greed is not good. In this case greed does not encourage useful behavior in the marketplace, but rather fear that one’s marketable goods will be appropriated by others. For similar reasons, greed is also wrong when it inspires someone to put roadblocks in the way of others who are trying to sell their products in the marketplace. In both these cases greed is satisfied by means of involuntary transfers and is rightly condemned. Yet if greed urges one to beg for food and clothing, or to seek the charitable contributions of others, and if those items are given voluntarily, then greed is satisfied in an acceptable manner; that is, a manner that has no deleterious effects on other people’s ability to benefit themselves by means of free exchange. The compassion of charitable people, helping those less fortunate, engaging in voluntary transfers, is clearly unobjectionable.

We should never portray greed in general as good or bad, right or wrong, but as something that can be satisfied in either acceptable or unacceptable ways. The distinguishing feature isn’t the presence of greed itself or even the intensity of the greed, but the way in which greed is satisfied. Following the suggestion of George’s great orders, the greed satisfied by a working man is commendable, the greed of a beggar-man is unfortunate but acceptable when necessary, and the greed satisfied by thievery is the primary source of injustice in the world.

 

Greed and the economic crisis

Many criticisms about greed’s role in the current economic crisis are really complaints about involuntary transfers. Hollywood and liberal Democrats look at the crisis and see injustice in the high salaries of CEOs, the comparativelylow wages paid to average workers, the excessive loans made to people who could not afford the homes they were buying, and the political clout of business insiders who got rules written on their behalf. But the reason people see injustice is mostly because they believe that someone is getting ripped off. It may be the consumer or the taxpayer or the low-paid worker at the company, but in any case, the perception is that one group is receiving less because someone else is receiving more.

Frequently these complaints are correct. Big business does sometimes engage in fraud. Consider the recent scandal involving Bernie Madoff. Madoff offered investors better than average returns largely by fabricating them in financial statements and by using the principal deposited by new investors to pay the returns of investors lucky enough to get out early. His setup was a classic Ponzi scheme that inevitably collapsed when too many people demanded their money back at the same time. Clearly Madoff was greedy — as were the investors who were looking for better returns than they had any reason to expect from an honest investment scheme. However, this case is a clear example of greed fueling involuntary transfers rather than valuable production and trade. The investors were led to believe that their money was wisely invested in companies making above average profit when in reality new investor money was transferred to exiting investors as needed. As long as deposits exceeded withdrawals the Ponzi scheme could continue.

Many other prominent examples of insider trading, accounting scams, and other shady dealings have been uncovered over the years and have resulted in prosecution and jail sentences. Yes, businesses may be exploitative. Cries of injustice by the general public rang out when huge bonuses were announced for executives at the financial firms that were bailed out by the government. After the billions of TARP dollars were transferred to these failing institutions, many of the banks were quickly out of trouble and the systemic crisis was averted. However, announcements that these same companies would pay millions of dollars in overdue bonuses to executives touched off a wave of indignation.

Many companies profit both by selling desirable goods and by taking advantage of involuntary transfers.

The source of the anger is obvious. In the midst of the crisis these institutions laid off a large portion of their work forces. Meanwhile, their overextended positions on loans, with effects multiplied by their own enormous size, contributed to the crisis. Since bonuses are typically made to reward good behavior, it seemed inappropriate for executives who were implicated in the crisis and were “saved” by a taxpayer-financed bailout to be able to walk away a few months later with hefty bonuses. Reward appeared to be disconnected from achievement. Most observers would contend that these companies were restored to profitability, not by the skill and hard work of executives producing a superior product for their customers, but by involuntary transfers from taxpayers. So again, there is a sense that involuntary transfers helped to satisfy the greed of a few individuals.

The key for high salaries to be viewed as equitable, or just, is that they are deserved. As mentioned earlier, relatively few people seem to begrudge the high salaries and enormous wealth of Bill Gates, or popular figures in sport. Their earnings are generally recognized as a result of the voluntary exchange process. These people earn money by providing valuable goods and services to others around the world.

Basketball stars seldom lobby to advance their interests, but big business often does, and this is a large source of complaints about greed. Robert Reich goes so far as to describe lobbying as political corruption:

“If we define political corruption as actions causing the public to lose confidence that politicians make decisions in the public's interest rather than in the special interest of those who give them financial support, the biggest corruption of our political process is entirely legal. It comes in the form of campaign contributions that would not be made were it not for implicit quid pro quos by politicians, bestowing favors of one sort or another on the contributors.”

But what sort of favors does he mean? He continues:

“The fights that actually preoccupy Congress day by day, which consume weeks or months of congressional staffers' time and which are often the most hotly contested by squadrons of Washington lobbyists and public-relations professionals, are typically contests between competing companies or competing sectors of an industry or, occasionally, competing industries. . . . Many of these battles (e.g. over health care reform) continue but have moved into the regulatory process, where different companies, sectors, and industries are seeking rules that advantage them and disadvantage their competitors.”

Reich is arguing that the business of government has become the provision of rules and regulations that favor some over others. In other words, he is describing a completely legal, but involuntary, transfer process promulgated by government. The winners are those who have the most clout among legislators. Often they are the ones (big business and big labor) who can offer the most in campaign contributions. The losers are either the less influential competitors, or the taxpayers who must provide funding for the subsidies provided, or the consumers who pay higher prices produced by taxes or regulations.

The same process of involuntary transfer appears in connection with financial sector reform. Again, greed is said to be the source of corruption, but it is just a smokescreen. People demand that something be done; they demand that government prevent financial crises, such as occurred in 2008. Unfortunately, no one quite knows how to do that. Nevertheless, lack of knowledge won’t prevent changes from being made. That’s because there are plenty of influential organizations standing in the wings with suggestions. While all of these suggestions will be presented as important to the national interest, the changes will be particularly helpful to the organizations themselves.

Even more likely is that good ideas for regulatory reform will be paired with ideas that serve particular corporate interests. This is one of the reasons that so many pieces of legislation are thousands of pages long these days: to buy political support, commonsensical reforms must be combined with favors for powerful interests. It is no wonder that, after decades of rule writing like this, our regulatory system is a twisted web that requires companies to hire huge teams of experts and consultants simply to untangle.

 

So is greed the problem with capitalism?

Liberal Democrats and conservative Republicans ought to find these examples of involuntary transfers equally objectionable. Confusion arises because of the focus on greed as the culprit. Critics of business and free markets see the greed that is satisfied through fraud and other involuntary transfers, and therefore condemn all efficientprofitseeking activities. But what about businesses that are making money and paying high salaries to their executives because of the desirable goods and services they are selling to their customers — doesn’t greed inspire their activities? And if we could stamp out greed from our psyches, wouldn’t we also be eliminating a motive that makes the modern economy work? Of course the answer is yes to those questions, which is why supporters of free markets are quick to condemn the “greed” arguments made by the Left.

One apparent problem is that many companies profit both by selling desirable goods and by taking advantage of involuntary transfers. The two activities are often confounded within the same business. For instance, executives at Enron perpetrated an accounting scam that prevented shareholders from knowing that the company was sinking deeply into the red, but at the same time the company provided valuable energy services to its customers. Although some portion of the riches made by Enron executives were fraudulent, some other portion was not. Similarly, some companies that use political influence to gain favorable regulatory treatment — treatment that effectively transfers money in their direction — simultaneously produce and sell legitimate products in the marketplace. Their high salaries and profits, no doubt sought and achieved by greed, are partly due to acceptable voluntary exchanges and partly due to objectionable involuntary transfers.

This confounding effect leads to many problems of interpretation. For example, high CEO salaries are often explained by using marginal productivity theory, according to which competition in the CEO market drives the prices for those positions to the levels observed. Under this interpretation, CEO salaries are the deserved share of production in a voluntary exchange market system and thus are acceptable. On the other hand, one could interpret high CEO salaries as the consequence of an exploitative process, in which CEOs are rewarded in the competitive market because they have effectively increased their companies’ shares of wealth by means of involuntary transfers from taxpayers or consumers. Since it is very difficult to measure which portion of a large company’s income is attributable to which kind of process, different interpretations are possible. However, here the disagreement is not about principle but about the interpretation of data.

 

Conclusion

Unfortunately, the right lessons about greed and capitalism are unlikely to be found either in recent Hollywood productions (which indiscriminately condemn all products of greed) or in recent economic theory. For theory, it may be best to revert to the old classics: read Smith’s Wealth of Nations and Theory of Moral Sentiments; read Frédéric Bastiat’s The Law; read Friedrich Hayek’s The Road to Serfdom; read Henry George’s Protection or Free Trade.

In movies, the classics are also best. I mean, for example, a movie from 1954 entitled Executive Suite (starring William Holden and Frederic March). The film explores two different approaches to business; one based on reverence for the bottom line no matter what methods are used to achieve it; the other based on hard work, innovation, and the production of superior goods that the workers themselves can be proud of. By the end of the movie, the moral superiority of one over the other is obvious. The greed that inspires work, innovation, and pride (voluntary exchange) wins out over the greed that inspires fraud, blackmail, and accounting tricks (involuntary transfers).

We need to resurrect this understanding of business. We need to remember how aspiration, inspiration, and greed, appropriately directed, can create a workplace filled with well-treated, well-motivated workers striving to produce a superior product for their customers. Indeed, Hollywood can show us a way out of the current economic crisis; only it is not today’s Hollywood.

 

Works Cited

D’Antoni, Tom, “Finally the Death of Greed,” online at The Huffington Post, Dec. 11, 2008.

George, Henry (1949), Protection or Free Trade, Robert Schalkenbach Foundation, New York.

Gordon, John Steele, “Greed, Stupidity, Delusion — and Some More Greed,” online at the New York Times, Sept. 22, 2008.

Lewis, Michael, and David Einhorn, “The End of the Financial World as We Know It,” New York Times, Jan. 3, 2009.

Pearlstein, Steven, “Greed Is Fine. It's Stupidity That Hurts,” Washington Post, Oct. 2, 2008.

Reich, Robert, “Everyday Corruption,” The American Prospect, June 21, 2010.

Sivaraksa, Sulak, “Buddhism Nationalism and Ethnic Conflict,” an interview conducted in July 1993, published in the Tamil Times. Online at http://federalidea.com/focus/archives/112.




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The News About the News

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When I was a child, we subscribed to two newspapers a day. The Los Angeles Times arrived early in the morning, and the Herald-Examiner plopped onto our doorstep in the late afternoon, usually thrown by my friend Dennis Miller, who had a paper route. (Back then, moms felt safe letting their young boys ride their bikes by themselves every day and knock on doors asking for money once a month.) I always liked the Examiner better, because the photos were a little larger, the stories a little racier, the features a little more entertaining. I didn't realize back then that it was intentional: morning papers contained cold gray news for people in a hurry; evening papers provided lighter fare and racier storytelling for readers who wanted to relax and unwind after a hard day.

With the advent of television news, then cable news, then electronic news, print news has become less and less profitable. Newspapers around the country are cutting back on stories, letting staffers go, and just plan folding up. When documentarian Andrew Rossi received permission to hang out with a video camera at the New York Times offices for a whole year, he didn't know that the demise of print journalism would become the focus of the story; no good documentarian ever knows exactly where the film will end up. But that's where Page One: Inside the New York Times went, and the result is a sometimes lively, sometimes somber, mostly interesting story about the past, present, and future of journalism.

Page One is a bit character heavy in the beginning as it introduces several side stories at once. The character who shines with the most luster is David Carr, the eccentric Monday columnist for the Business section of the Times who focuses primarily on media issues. One of the ironies pointed out in the film is the fact that the Times found it necessary to open a desk in 2008 to cover the demise of the media, and Carr does it in this film with a protective vengeance.

What's cool about Carr is that he lived first, and became a respected journalist second. A self-described cokehead in his youth, he spent some time in jail before becoming a respected writer. He wrote for a number of alternative publications before joining the Times when he was approaching 50. As a result, his voice, both written and spoken, is often unfiltered and unabashed, providing most of the humor in what is often a gray documentary.

But what is killing print journalism? First is the need for profits. Subscription rates will never be able to cover the costs of writing, printing, and delivering the news. Advertising revenue is the true source of support for newspapers, and ad revenue in print media is down everywhere. As a result, coverage is down, and serious coverage is down even more. Who's going to cover city hall when readers only want to know what Lindsay Lohan is up to? And since readership determines advertising rates, more fluff is passing for news these days.

Second is the need for speed. People used to be willing to wait for the scheduled newspapers, with an occasional "Extra" in which to "read all about it" when breaking news called for the editor to "Stop the presses!" Today's tech-savvy consumers, by contrast, are constantly in touch with breaking news, through texting, Twitter, Facebook, and other instant news feeds. They expect to know what's going on, moments after it happens.

On the other hand, the blogosphere's post-now, check-facts-later mentality gives print media the edge in accuracy and credibility. Carr wryly disparages the "caco-phony" of Twitter, even though he grudgingly admits that Twitter is a "wired collective voice" that gives him a sense of what people are talking about. One important scene in the documentary demonstrates a typical 10 a.m. meeting at the Times, where several editors and reporters sit around a table discussing stories currently in progress. There is an air of calm as they take the time to check facts, discuss context, consider reader interest, and check facts again.

Nevertheless, the documentary pulls no punches in reporting on the Times' gross mistakes, including the Jayson Blair scandal and Judith Miller's 2002 articles reporting weapons of mass destruction in Iraq that turned out not to exist. Miller defends herself by saying, "If your sources are wrong, you're going to be wrong." Blair was simply lying. I'm not sure which is worse — being naively hoodwinked or being deliberately devious.

One of the most shocking revelations in the film is the "end of the war" in Iraq that was neatly choreographed by NBC execs to coincide with the 6:30 news. The documentary claims that NBC simply wanted to give viewers a "mission accomplished" closure to the story. So they filmed their reporter accompanying "the final combat troops leaving Iraq" and broadcast it live on the evening news, even though the Pentagon had made no such announcement. It reminded me of the ending of Ray Bradbury's Fahrenheit 451, when protagonist Guy Montag watches an innocent pedestrian being chased down, caught, and killed in his stead, just to give viewers the satisfaction of "closure" on the evening news.

The film touches on dozens of areas affecting journalism today. All of them are interesting and important, but the film's own cacophony of information prevents it from having a strong central storyline. In a way, this presentation is more real and honest than a neatly tied story with a beginning, middle, and end. Life doesn't always have a climax on page 72. Nevertheless, it's a fascinating film, well worth viewing.


Editor's Note: Review of "Page One: Inside the New York Times," directed by Andrew Rossi. Magnolia Pictures, 88 minutes.



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