Censoring South Park

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Earlier this year I read an interview with Matt Stone and Trey Parker, the creative duo behind the hit animated comedy South Park, in conjunction with their new Broadway play The Book of Mormon. What struck me was one of them saying that in the episode of South Park in which they lambasted the cult of Scientology, they had wanted to say that Tom Cruise is in the closet. Their lawyer advised them that Cruise could sue them for defamation, so instead they put the cartoon version of Tom Cruise in a literal closet that he refused to come out of. The result was laugh-out-loud comedic gold, but it highlights one of my major peeves about legal causes of action, which is the law of defamation.

Defamation is a cause of action under which a plaintiff can sue a defendant for damage to his reputation. In For a New Liberty, Murray Rothbard wrote that he believed defamation law should be abolished, because a person’s reputation exists in the brains of other people and the plaintiff has no property right in other people’s minds. My concern is broader; I believe that defamation law scares people away from making statements that might offend those among us with the money to hire lawyers. This fear of being sued for defamation chills people's ability to say what they want. It scares them away from criticizing others, even when the criticism might be justified and deserved.

This danger is often poignant in the case of such artistic representations as South Park, which makes deep, meaningful social commentary by making jokes, often offensive ones, directed at people who could easily take offense and who generally have money. The strange thing is that the first amendment has a clause that guarantees freedom of speech. Why isn't the First Amendment regarded as making charges of defamation unconstitutional?

There is a larger and a smaller answer. The larger answer is that the members of the Supreme Court, even the supposedly “textualist” and “originalist” conservatives, do not take the words of the Constitution literally. They make interpretations that twist and mangle it into something that looks like what they want, something that deforms the meaning of the words on paper, written by the Founders. The smaller, more specific answer is that the Supreme Court has grappled with the conflict between free speech and defamation, and has chosen a middle ground that tries reconciles the two.

Why isn't the First Amendment regarded as making charges of defamation unconstitutional?

In the landmark case of New York Times v.Sullivan (1964), an overseer of Southern police officers, sued the Times and members of the civil rights movement under a defamation theory, accusing them of damaging the policemen’s reputation by publishing an ad indicating that the police had committed crimes against demonstrators. Instead of holding defamation unconstitutional, the Supreme Court found for the defendants, holding that when public officials assert defamation they must prove “actual malice,” meaning that the defendant knew his statement was false or acted with reckless disregard for truth. This is a much higher standard than the “negligence” requirement that applies to defamation against private individuals on matters of public concern or the mere “publication” requirement that applies to defamation by private citizens on a matter of private concern. However, after Sullivan the Supreme Court expanded the actual malice rule to cover “public figures” as well as public officials, so most celebrities, such Tom Cruise, must prove actual malice.

Actual malice was designed to prevent censorship. I am sure that the Court believed it was being quite generous by creating such a high barrier to recovery. But because defamation continued to exist, the fear of being sued and the expense of litigation remain a serious impediment to American free speech and to our ability to criticize people of political and social importance. Speaking freely about the flaws (real or alleged) of our political and cultural leadership is a basic requirement for democracy to function.

A more recent important case is Hustler Magazine & Larry Flynt v.Jerry Falwell, a 1988 United States Supreme Court case in which evangelist Jerry Falwell sued a pornographic magazine for printing a joke that accused him of having sex with his mother. The accusation was obviously a joke that no one could take seriously. It was also clearly an example of the use of charges of defamation to censor criticism and take revenge against people who offend you. The jury found against Falwell on his libel claim, but found against Hustler on the “intentional infliction of emotional distress” claim, which is a somewhat similar cause of action that is also used to censor criticism and punish offensive behavior. The jury awarded substantial monetary damages. The Supreme Court, however, found in favor of the magazine on the “IIED” (as lawyers call it) claim, citing the need to protect the American tradition of political satire cartoons, and held that the New York Times v.Sullivan “actual malice” standard for defamation against public figures should also be used in cases involved intentional infliction of emotional distress claims against public figures, in order to protect free speech and create breathing room for vigorous debate. Regarding the right to be offensive towards other people, the court said that offensive speech is protected by the First Amendment.

But again, the Court refused to see the truth sitting right under its nose, which is that the only real purpose of claims of defamation (or intentional infliction of emotion distress claims alleged against plaintiffs because of what they say or write) is to censor speech; and this violates the first amendment. The law of defamation has no place in a society that believes in intellectual freedom for all citizens. We libertarians are basically the only group of people in America who say that the emperor has no clothes and who criticize governmental mistakes that modern-liberals and conservatives ignore or condone. Defamation is an obvious abuse of the law and of the state’s coercive power to repress independent thinking, and we should all get angry about it.




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Office Complex

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Recently, I missed a flight and ended up in a vast airport-adjacent suburb with a few hours to kill. My first stop was at a Starbucks to do some quick work. (Although I don’t drink coffee, I travel enough to know that Starbucks outlets almost always have clean bathrooms and reliable wireless Internet connections.)

One appeared quickly, at the corner of a big box shopping center. It was larger than most of the shops in the Pacific Northwest, so I figured there’d be plenty of room near noon on a weekday. But I was mistaken. The place was packed.

It took a few minutes to find an empty table where I could set down my tea and set up my laptop. In the meantime, I noticed dozens of commercial conversations, negotiations, and meetings going on in this semi-public space. It had the feel of a Middle Eastern bazaar.

A youngish man with a carefully cultivated scraggly beard and black apparel was plugged into his laptop via elaborate headgear. He was facing me, so I couldn’t see the screen of his computer; but, from the cadence of his talk, it was evident that he was participating in some sort of video conference. He made direct eye contact with me for a few moments — which I thought might be a reproach for looking at him — but then he changed his gaze to another person and spoke into his mic.

I noticed dozens of commercial conversations, negotiations, and meetings going on in this semi-public space. It had the feel of a Middle Eastern bazaar.

Something I’d read somewhere came back to me: videoconferencing veterans suggest choosing people or things in the room around you to represent the other participants in a conference call. On video, this creates the impression that you’re responding to specific others in the “meeting,” as if they were in a real room with you. He was just using me as an eye-contact avatar.

I couldn’t make out everything the fashionable man said. He was too far away and the Starbucks had too much background noise. But a few phrases made it across the space. “Elevations.” “Build-out.” “Retrofit.” “Improvements.” Because my wife is an architect, I recognized these as terms from a construction project — and, specifically, the expansion of an existing building.

Other snippets of words he used conveyed a certain fastidiousness; he constantly asked others what they thought and if they understood what someone else had said. Sounded like he was the construction manager or coordinator on the project.

I noticed that he’d chosen a seat with a blond panel wall behind it. The small video camera atop his computer screen would frame him in a background that could be from some fashionable office. And the elaborate headgear probably filtered out the background noise. Smart. His clients would have no idea he was sitting in a coffee shop.

Closer to me, a middle-aged salesman and saleswoman huddled at a smaller café-style table and swapped office gossip. The man did most of the talking — an overweight man with an overbearing voice: “The guy is so clueless that he has no idea Everett actually hates him. And he’ll never figure that out.” “I tried to give him some advice. Live on your draw and save your commissions. Don’t count on commissions for paying bills. But he doesn’t listen.” “I told him, ‘Look, it’s not my fault it’s like this. I mean, times are hard. We’re all cutting back.’”

The woman listened and nodded agreement with most of this. But she looked tired and clearly wished she were somewhere else.

As they reached the bottoms of their lattes, the salespeople plotted their afternoon. They were sharing one rental car but had separate appointments before their flight home that evening. He sketched out a plan for dropping her off at her next call while he made his and then switching driving chores, so that she’d drop him off at his last call while she made hers.

If times were better, they’d each have rented their own car.

Just behind me, two women — one older and very sharply dressed, one younger and casually dressed — talked about graphic design work. Their conversation was more about practical matters than aesthetics. The older woman opened a nice leather portfolio and showed the younger various business forms: letterhead, contracts, purchase orders and invoices.

It wasn’t clear whether the business forms were the product of the older woman’s practice or the forms that she used to deal with clients. And the younger woman’s questions were so elementary that they didn’t make matters any more clear.

This meeting seemed to be a “Can I pick your brain?” session. Perhaps the younger woman was the daughter of one of the older woman’s friends. The younger may have read somewhere that asking an established person for “advice” is the best way to get intelligence on employment.

Corporate America can’t afford to be the babysitter that it was for most of the last century. Working people understand this.

I’ve been on the older woman’s side of the table for a few of these meetings myself. I caught a glimpse of her face. She was in her late 40s or early 50s, quite attractive and carefully appointed. But her eyes looked sad. They squinted a lot — in contempt, I think — at the younger woman, whose childish questions and cadence made her sound simple-minded.

If the meeting behind me was a job interview, the younger woman wasn’t going to be hired. As the older woman folded up her portfolio, the younger asked her about any contract work that might be available. “It would be subcontract work,” the older said ruefully. “Give me a couple of business cards. I’ll keep them handy.”

Nearly finished with my emails, I took a break to use the men’s room. There were a couple of men ahead of me. While waiting, we listened to a white-haired man pitch four or five other older men and one woman on an investment scheme.

He’d handed each of his marks letters and information printed on heavy-stock paper which had a Baroque-style firm name ending in “Capital” at the top.

“ . . . our record speaks for itself, of course. But, like everyone, we are always looking for more business. And advertising on radio or television, frankly, isn’t something that interests us.”

The others nodded eagerly. This was a job interview. The white-haired man was selling them on becoming sales representatives for his firm — which was involved in some capacity with reverse mortgages. But my turn to use the bathroom came before I could hear the details.

Reverse mortgages are, essentially, the subprime loans of the coming decade. They are legal but unwise financial vehicles that are most effective at separating gullible people from their wealth. The gullible people, in this case, are seniors with real estate that they own outright or nearly outright; with a reverse mortgage, they get a monthly stipend in exchange for leaving their property to the mortgage company when they die.

If they die after just a few years of payments, the gullible old people have effectively sold their property for a fraction of its value.

Although he had the cheap sophistication of a game-show host, the white-haired man couldn’t have been very high up on the food chain of his shady industry. Multilevel marketing schemes are usually desperate to seem established, so they aren’t usually run out of coffee shops. But, hey, times are hard. And we’re all cutting back.

Back from the bathroom, I packed up my computer and scanned the place one last time on my way out. There were at least a dozen intense conversations going on; and another dozen or so people working intensely on computers or other devices. Did any of these people have “jobs” in the sense that the Department of Labor defines them?

Statist hacks like Robert Reich, Paul Krugman, and Barack Obama think of “jobs” as compliant proles lining up at the gates of General Motors for hourly-wage work, performing clearly defined tasks in clearly defined places. But this thinking is antiquated and wrong. Corporate America can’t afford to be the babysitter that it was for most of the last century. Working people understand this.

For most people, a “job” means — and will mean, for the foreseeable future — hustling for freelance work. Contracts and subcontracts. Commission sales. Multilevel marketing. There’s money in it, but that money doesn’t come easily. And, sometimes, it doesn’t come reliably.

That’s what I saw at the suburban Starbucks freelance labor bazaar.




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New Light on a Great Libertarian

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One day in September 2011, I received the following email:

“I’ve just ordered your book on Garet Garrett, brother to my grandmother, Gertrude Garrett Graham, and my great uncle. There are a few anecdotes from his later years of retirement in Tuckahoe NJ and his relationships with his family and I’d enjoy talking with you, once I’ve read your book.”

It was signed, “Trudy Beth Bond.”

Garet Garrett (1878–1954) author of The Driver, The People’s Pottage, and The American Story, was one of the great libertarian journalists of the 20th century. I wrote a book about him, Unsanctioned Voice, published in 2008.

The book is more about Garrett as a writer than as a person and necessarily so. Most of his papers were lost. He had no children. His third wife, Dorothy Williams Garrett, had a son from a previous marriage, and he also had died, but I found his daughter. She had a few photos of Garrett but was too young to have known him.

Digging for details more than half a century after he died, I found one person who had known him: Richard Cornuelle, who had worked with Garrett in the early 1950s (and who died on April 26, 2011). Cornuelle had gone on to become an official at the National Association of Manufacturers — and had written a book, Reclaiming the American Dream, championing the nonprofit sector as an alternative to the welfare state. In 2007 I flew to New York City to meet him at his Greenwich Village townhouse and hear of his time with Garrett. Cornuelle, then 80, was delighted that someone wanted to know about the man who had been his mentor.

My book was more about Garrett as a writer than as a person and necessarily so. Most of his papers were lost.

Cornuelle gave me some personal details about Garrett, some of them incomplete. He told me one of Garrett’s sisters lived in a farmhouse on Garrett’s property at Tuckahoe. But which sister? Why was she there? What role had Garrett played in her family? He didn’t know. My book wasn’t mostly about things like that, but more personal details would have improved it.

After the book came out, I wondered whether I would hear from some lost relative. Three years went by. Then came the email from his grandniece, Trudy, who lives in the very town, Port Townsend WA, in which Liberty was founded and published for more than 20 years — a town about two hours’ drive and a ferry ride from my house.

Trudy was born in 1941. Through her, I got to talk to her brother Marshall, born 1943, and her sister Connie, born 1945. They knew Garrett as kids, aged 9 to 13. They were also part of a family that would have some stories about him. They might fill in some of the blanks in my account.

I had known that Garrett and his third wife, Dorothy, lived somewhere along the Tuckahoe River in New Jersey. From Connie, I received a satellite photo of the property.

At the beginning of the book I had listed Garrett’s siblings from Census records: Gertrude, Mary, Sarah, Thomas, and “what looks like ‘Clarra.’” But I knew nothing about them. Now I had their full names — it was “Clara” — and the dates of their births. I noticed that all but two of Garrett’s siblings were born in different towns, most of them not far from Garrett’s birthplace at Pana, in central Illinois. Garrett’s father Silas was a tinker — an itinerant tinsmith — and his family moved around.

From my new acquaintances, I heard one story of the children’s youth. Garret’s father, Silas, was a Protestant. What denomination was never said, though his funeral was in a Methodist church. According to Marshall, Garet’s mother, Alice, was a devout Catholic.

“They had made a pact when they married that their children would be allowed to make up their own minds,” Marshall said. “But the priest prevailed on Alice, and she did certain things behind her husband’s back, such as putting them in catechism class.” The effort backfired, and Clara, Gertrude, and Marie embraced the new religion of the time, Christian Science.

Then came an email from the very town, Port Townsend WA, in which Liberty was founded and published for more than 20 years.

“The Christian Science thing was a big schism in the family,” said Trudy, who was raised in that faith but abandoned it. She heard the story through her grandmother, Gertrude, who was zealous enough to become a Christian Science practitioner. Garrett was not a follower of Christian Science, and Trudy says his religious sisters disapproved of his drinking, smoking, and being married three times. But Gertrude and Marie also respected his achievement. They called him “Brother,” as if it were his name.

I learned little about Clara, who had stayed in Illinois. Sarah, whom they called Sadie, married a veterinarian and lived in Missouri and Iowa.

“I met my Aunt Sadie when I was 10,” Trudy said. “She seemed to have escaped the whole religion thing.”

Garrett’s younger brother Thomas had been an artist, and Connie has a painting of his (“landscape on the front, female nude on the back”). Thomas died young, in 1917, of somedisease. He is buried in the same cemetery as Garet and Dorothy Garrett, in Tuckahoe, which suggests that his elder brother had taken care of him — and perhaps had removed his remains, because Garrett didn’t move from Egg Harbor, NJ, to Tuckahoe until the mid-1920s.

The sister living on Garrett’s property was Marie. Trudy recalled the story that Marie had been living in Chicago. She was a man’s secretary for many years, and had become his mistress. “Supposedly his wife was sickly and when she died, he said, he would marry Marie, but he did not.”

His religious sisters disapproved of his drinking, smoking, and being married three times. But they also respected his achievement.

Trudy’s sister Connie writes: “As mother told me, Marie fell in love with a successful lawyer in Chicago. He was married and his wife was in a mental institution, and he told Marie there was some law that prevented a spouse from divorcing a spouse who is in an institution. So Marie consented to stay with him (my impression was that he paid for her apartment), something she otherwise would never have done.” Connie visited her Aunt Marie there, and recalls “Uncle Walter” stopping by with candy for the kids.

When the man’s wife died, he wouldn't marry Marie. Connie continues: “Humiliated, Marie went east to Garet’s, where she stayed on, and where Joe French, Garet’s tenant farmer, fell for her and asked her to marry him.”

French was not an educated or worldly man. His claim to fame was playing baseball in the minor leagues in San Francisco, Topeka, Sioux City, Dubuque, Peoria, and Beaumont in the years before World War I. Trudy recalls that his fingers had been broken from playing catcher.

As Connie recalls the story, Marie went to Garet and asked his advice, telling him, “Imagine. That man is no more than a tenant farmer and he wants to marry me!” To which Garet replied, “At least he wants to make an honest woman out of you.” Trudy says that Marie married French “under duress from Garrett, who didn’t want to support Marie for the rest of his life.”

In none of Garrett’s writings does he talk about taking care of his family, or the stress of an obligation to do so. Garrett left his family in Iowa in his mid-teens. Several of the characters in his fiction are without family, and none of his fiction or his vast amount of journalism focuses on family issues or champions family loyalty. He addresses other things. Yet he takes care of his sister when the gamble of her life fails. He nudges her into a marriage with a man who loves her, and he provides them both with a house.

It is what honorable people do, if they can, when there is no welfare state.

Trudy, Marshall, and Connie recall Garrett as the success, the urban sophisticate, of the family — and, of course, much older than they. As preteens and early teens, they moved with their parents from suburban Chicago to New York City in 1953. She believes they were the only relatives of her generation who lived close enough to visit Garrett, and the only ones today who remember him.

In none of Garrett’s writings does he talk about taking care of his family, or the stress of an obligation to do so.

From the summer of 1953 to Garrett’s death in late 1954, they visited Tuckahoe often, staying at Marie and Joe’s, in the farmhouse on Garrett’s property. This other building was not a farmhouse really. It was a three-story brick house, covered with ivy. It had a ship’s binnacle on the porch, and Connie remembers it as “the captain’s house.” The place was the subject of a feature story in the Atlantic City Press. (Trudy has the clipping.) Part of the Stille Homestead, the house had been built in 1795 “by slaves,” the newspaper said, using “bricks brought from England.” It had thick walls and five fireplaces, two of them in the basement, “where in the cold winter time the first families cooked, ate and kept warm.” Upstairs it had a “borning room” where mothers gave birth, and outside was a small graveyard.

One of the side buildings had been made into a glassblowing studio for Garrett’s wife, Dorothy. Connie has a small bottle that Dorothy created, with a dime in it.

Trudy turned 13 in 1954. Of the captain’s house she remembers “a wonderful attic where I spent many, many hours reading old Saturday Evening Posts” that Garrett had kept in bundles. His articles were mostly above her head, but she saw his name on them in the Post. “It wasn’t really until then that I knew what Uncle Garrett did.”

Garet and his wife lived several hundred yards from the old house in a new house he had built. “Garet and Dorothy's house was enchanting to me,” Connie recalls. “It had the biggest fireplace I had ever seen and I remember very well the bust of Nefertiti that you mention in your book, as well as the high bookshelves that flanked the fireplace.”

Trudy remembers Garrett’s room with the two-story ceiling and the big fireplace. “The room had a cozy feel to it, almost like you would feel in a log home. Garrett was the boss of that room. Really he was the boss of the whole place. Dorothy was pretty much in her cups all the time.”

I had mentioned Dorothy’s alcoholism in the book, and all three of Gertrude’s descendants remembered it. They remembered Garrett drinking, too, but not being drunk.

They also remembered the outbuilding Garrett called his “cave,” where he wrote. “He built that,” Marshall recalled. “He was proud of that. He had a little storage area underground where he kept his ink cool. He had these big bottles of Scripps ink. Four of them. He’d refill the well on his desk.”

I had quoted Richard Cornuelle in the book about how Garrett would research a topic, keeping everything in his head, “muttering and fuming quietly. Then, suddenly, he would seize an old-fashioned pen holder, jam a new point into it, and scrawl on white foolscap, often for hours, panting and sweating, jabbing the pen in the ink now and then, until he had it all down.”

Scripps ink, from big bottles.

I had said in the book that Garrett sometimes hid in his “cave” from kids, and Connie, who turned 9 in Garrett’s last year, recalls:

“Although we did often go over to Garet and Dorothy's house, and I did catch my first fish off their dock, and Garet helped me unhook it, on the whole not too much happened of a family gathering nature when we were over there. We kids generally weren't allowed in his little building where he did his writing, but sometimes we were sent out there to fetch him or take him a snack, and I would look around in awe at all the books and papers around him.”

Trudy and Marshall remember Garrett showing them his artesian well, and how he had piped the water into his house. Garrett did his own plumbing.

In Unsanctioned Voice, I quote Cornuelle saying that Garrett had buckets of silver dollars under his porch as insurance against a feared inflation. (If he had lived another 20 years, they would have paid off.) Trudy and Marshall remember the stories of buried coins, either silver or gold. Marshall recalls that silver coins were found inside the ship’s binnacle, under a layer of sand.

When Garrett died, his property went to Dorothy. She died six months or so later, willing the property to her son, James. That was a setback for Marie and Joe, because they had to move out of the captain’s house into town.

Perhaps Garrett had an influence on the family. Connie was the closest to Garrett in her career: she became a writer and editor of Smithsonian magazine. Marshall is the closest to Garrett in his philosophy.

“I don’t think anybody knew about libertarianism then, if they called it that,” he says. “Most of us are still quite conservative, maybe not to the extent of libertarianism, but pretty near.”

“When I read about the attitudes of Garet Garrett, I see my brother,” Trudy says.

Trudy was an attorney, teaching classes in how non-attorneys could file papers and defend their rights. She recalls once going out with a man who admired Ayn Rand, and telling him, “I am the grandniece of Garet Garrett.”




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Cash Poor

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In spite of Liberty contributing editor Mark Skousen’s observation that “income isn’t distributed, it’s earned,” much handwringing has followed recent reports that income distribution in the US is becoming increasingly unequal.

To a libertarian, how much one earns or owns — so long as it’s acquired honestly and honorably — is nobody’s business. But at the other extreme are the still-influential Rawlsian redistributionists. They believe that since each person’s station in life is due to little more than a roll of the existential dice, income distribution ought to cluster tightly. If it doesn’t, it’s an indication of an unjust society, and something must be done about it. That’s the ideology.

Nevertheless, there’s a pea under that ideological mattress: the fear of revolution if the rich get richer, the poor get poorer, and the middle class disappears. Though probably a reductio ad absurdum, it is nonetheless a theoretical possibility under a laissez-faire economic system.Friederich Hayek understood this, which is why — to the consternation of many libertarians — he advocated a minimal welfare state as a worst-case scenario safety net.

Whatever the chances might be that a just economic system — laissez-faire capitalism — could lead to the penury of a majority, income distribution is a concern to the inner Hobbesian in all of us. So when income inequality rears its ugly head, it bears critical investigation.

In 1912 Italian statistician and sociologist Corrado Gini devised the eponymous Gini Coefficient, a statistical formula based on the Lorenz curve, to measure variability and mutability among data in any discipline. The index is now widely accepted as a measure of income inequality in economics. Values range from 0, total equality, to 1, maximal inequality.

As of 2009, Sweden scored .23, the lowest Gini Coefficient, indicating the highest income equality; while Namibia rated a .74, indicating a large income inequality. Most first-world nations have Gini coefficients in the high point-twenties to the mid-thirties, with a .31 for the EU average. Back in 1980, the US rated a .40 Gini; today we rate around .47, a figure comparable to Russia or Turkey and a trend that is alarming to many.

The fear of revolution, though probably a reductio ad absurdum, is nonetheless a theoretical possibility under a laissez-faire economic system.

Paul Krugman, who could be considered the Linus Pauling of economics — for his previous Nobel-recognized genius, followed by descent into crankhood for his advocacy of snake-oil remedies: vitamin C in the latter case, dirigisme in the former — refers to the period after 1979 as the “Great Divergence,” because of the rapid increase in inequality that had occurred. According to a 2011 Congressional Budget Office report, “Real income (adjusted for inflation) in the US grew by 62% for all households between 1979 and 2007. However, after-tax income of households in the top 1% of earners grew by 275%, while income growth for the bottom fifth of earners was 18%.”

If, instead of income distribution, we look at wealth, the disparity is even greater. While the bottom 60% of the US population lost about 6% of its wealth, the net worth of the top 5% increased by 40% between 1983 and 2009.

Why the increasing inequality in a political and economic system deemed among the freest by classical economists?

* * *

Before addressing that question we must deal with a concept clamoring for immediate attention: fuzzy numbers.

Nearly all the figures quoted in this article come from Wikipedia compilations replete with references, from various other internet sites, The Economist,Scientific American, Money,Chris Martenson’s The Crash Course, and PuruSaxena’s Money Matters. Although these sources are ostensibly reliable, please take them with a pinch of salt. Some figures purporting to measure exactly the same thing vary wildly.

For instance, that 275% of after-tax household income growth for the top 1% earners, derived from 2011 Congressional Budget Office figures of 1979 to 2007, becomes a 176% increase — from 1979 to 2005, nearly the same time range — in a 2006 New York Times article.

Exactly what is being measured, how it is defined, over what period of time it is measured (a variable often manipulated for calculating equity returns down to the day), and what statistical tools are employed can have considerable impact on the figures. Just the difference between ‘”household” and “individual” income measurements can affect income inequality figures substantially.

Dodgy numbers can also lead to convertibility problems and out-of-this-world results — literally out of this world. Composite numbers (such as indices, among others), which are built up from subsidiary numbers, can become statistical black holes, swallowing endless data but illuminating little. As The Economist reports, “In theory, countries’ current-account balances should all sum to zero because one country’s export is another’s import. However, if you add up all countries’ current-account transactions, the world exported $331 billion more than it imported in 2010, according to the IMF. Are aliens buying Louis Vuitton handbags?”

And of course, ideology plays a big part. As the old saw goes, “He who frames the question determines the shape of the answer.”

On top of this are myriad unexamined assumptions. Statistician Joseph Locascio has identified what he calls “publication bias,” which means that academic journals “often give greater weight toward publishing articles that report statistically significant findings over those that don’t.” With this kind of review process, if out of 20 studies one shows a slight significance (perhaps because of chance), while the other 19 show none, that one will be published and the others ignored.

Not all people are driven to make the most money they can, all the time. Many earn and live below their possibilities, and spend the rest of their time pursuing their passions.

Hoover Institute economist Thomas Sowell suggests that many discussions of income equality are based on fallacious reasoning. For example, “an absolute majority of the people who were in the bottom 20% [of income] in 1975 have also been in the top 20% at some time since then. Most Americans don’t stay put in any income bracket. At different times, they are both ‘rich’ and ‘poor’ — as these terms are recklessly thrown around in the media.”

Finally, somewhere between the last two observations, lies individual choice. Not all people are driven to make the most money they can, all the time. Many earn and live below their possibilities, earning what they consider a sufficient amount, and spending the rest of their time pursuing their passions: music, rock climbing, walking around the world preaching the gospel . . . whatever.

So, to that pinch of salt, add a squeeze of lime and, what the hell, a shot of tequila.

* * *

But back to the ostensible causes of inequality, which remain unknown to many, even to theNew York Times, as proclaimed in an article onJune 5, 2005. Let’s consider these causes.

1. The rich work more than the poor. As of 2005, 42% of all US households had two or more income earners. However, in the top quintile of households, nearly twice as many (76%), had dual-earners. Among the lower class, the most common source of income is not occupation but government welfare (according to the leftish Winner-Take-All Politics by Hacker and Pierson, 2010).

2. The rich are more educated than the poor. In the top quintile, 62% of householders are college graduates; while many at the bottom half of earners hold at most a high school diploma. Educational and occupational achievement and the possession of scarce skills correlate with higher income.

3. People of modest means keep giving their money to the rich. George Mason University economist Walter E. Williams recently recognized that “the millions of people who watch LeBron James play are the direct cause of LeBron’s earning $43 million and are thereby responsible for — in Paul Krugman’s terms — ‘undermining the foundations of our democracy.’” The same can be said of the millions of Walmart and Microsoft shoppers who keep enriching the Walton and Gates families.

4. Government policies. Among the usual partisan suspects — such as decreased expenditure on social services and labor’s diminishing political clout, suffering from declining union membership — are Republican tax policies, specifically the “low” progressivity of US tax rates. Reversing these factors through government diktat is a crude cure that doesn’t address the underlying ecology (Thomas Sowell’s term) of the marketplace. The enforcement of legislation such as higher redistributive taxes and the imposition of closed shops would require force, a road down which classical liberals would prefer not to travel. Might there be another cause of the increasing income inequality that hasn’t yet been identified? One whose correction does not require coercion?

I believe there is, and that culprit is inflation — in spite of the fact that nearly all of the above statistics are adjusted for inflation. And, as Milton Friedman recognized, since “inflation is always and everywhere a monetary phenomenon,” it is a direct result of government policy. Inflation is a word often misunderstood. It is the decreased purchasing power of currency, caused by the expansion of the money supply, and not to be confused with price increases caused by scarcity.

Krugman’s “Great Divergence” begins soon after America’s divorce from the gold standard and the subsequent collapse of the Bretton Woods currency exchange system in the early 1970s. After that, the Federal Reserve instituted a Keynesian monetary expansionist policy. In 1972, the price of a new house averaged $27,600; in 2010 (despite 2008’s deflation of the housing bubble), the average price was $272,900. A 1972 Coke cost a dime; today it’s a buck. By 1973, gold hit a high of $126 per ounce; in 2009 it topped $1,212. In 1972 the Dow Jones Industrial Average hit 1,000; by 2010 it had reached 11,000 — a ten-fold increase in only four decades. A $10 Hamilton from 1972 is today’s $100 Franklin. How does this stark change affect the disparity between rich and poor?

* * *

But first, more fuzzy numbers.

Without an objective anchor such as gold, the value of money is subject to fluctuation according to the active “monetarist” policy set by the central bank. That policy is based on many variables — prominently including the consumer price index (CPI), with a nod to gross domestic product (GDP), processed through complex formulae and topped with a generous dollop of intuition. The objective is a stable currency — a very difficult goal with such a capricious policy, and one whose results always lag policy implementation.

For a variety of reasons, the central bank considers deflation a greater evil than inflation. So, wishing to avoid deflation at any cost, the Federal Reserve sets an inflation goal of 1–2%. It often misses this goal. The October 2011 rate was 3.53%, according to the Bureau of Labor Statistics (BLS), as measured by the CPI.

How reliable is this number? Not very — as it is neither accurate nor even precise. Like an aging diva afflicted with weight gain, wrinkles, fatigue, loss of figure and overexposure, the CPI has been massaged, injected with Botox, subjected to fad crash diets, over-cosmetized, face-lifted, repackaged, and rebranded. Richard Nixon, for example, bequeathed us the so-called “core inflation” measure, which strips out food and fuel — a bit like weighing yourself without your belly. In 1996 Bill Clinton implemented three oddities in the measure of inflation: substitution, weighting, and hedonics.

Krugman’s “Great Divergence” begins soon after America’s divorce from the gold standard and the Federal Reserve’s institution of a Keynesian monetary expansionist policy.

With substitution, it is now assumed (for example) that if the price of salmon goes up too much, people will switch to something cheaper, such as hot dogs. So as the price of an individual item within a representative basket of thirty goods rises, that item is removed and substituted with something cheaper, chosen by a trained bureaucrat. According to the BLS, food costs rose 4.1% from 2007 to 2008. But according to the Farm Bureau, which tracks exactly the same shopping basket of 30 goods from one year to the next without substitution, food prices rose 11.3% for the same year.

Weighting is an even sharper tool for cutting the measure of inflation. Anything that rises too quickly in price is undercounted in the CPI, under the assumption that people will use less of those things. For example, although healthcare is about 17% of the economy, it is weighted as only 6% of the CPI basket.

But the most creative way to fiddle with inflation is hedonics. This adjustment is supposed to reflect quality improvements. Here’s how it works, based on a presentation by a commodity specialist at the BLS and explained by Chris Martensen:

In 2004, the commodity specialist at the BLS noted that a 27-inch television selling for $329.99 was selling for the same price in 2007, but was later equipped with a better screen. After taking this subjective improvement into account, he adjusted the price of the TV downwards by $135, concluding that the screen improvement was the same as if the price of the TV had fallen by 29%. The price reflected in the CPI was not the actual retail store cost of $329.99, which is what it would cost you to buy, but $195. Bingo! At the BLS, TVs cost less and inflation is heading down. But at the store, they’re still selling for $329.99.

Hedonics rests on the improbable assumption that new features are always beneficial and are synonymous with falling prices (never mind that most old rotary phones still work, while modern cell phones seldom seem to last three years). Hedonics is now used to adjust as much as 46% of the total CPI.

What would the inflation rate have been for, say 2008, before all the fuzzy statistical manipulation gussied it up? John Williams of shadowstats.com, using early 1980’s formulas, computed the figure at 13%: the BLS reported a 5% inflation rate for the same year — a stunning 8% difference.

But that’s not all. During Alan Greenspan’s tenure at the Federal Reserve — particularly while the real estate bubble was growing gangbusters — some economists bemoaned that, without asset prices such as real estate and equities being included in the CPI, true inflation rates would be misleading, thereby skewing monetary policy.

While inflation has been massaged down, GDP has been steroided up, by similar sleight-of-hand manipulations — further inflating the money supply.

So, at this point, brace yourself with another shot — this time of hedonic Cuervo Añejo.

* * *

Inflation affects the poor and the rich in completely different ways, though both lose wealth. No one benefits — except for government and banks, which, having access to newly created money before it hits the streets and raises prices, can buy goods and services at the old, cheaper rate. By the time the surplus money has permeated the economy and reached the masses, prices have usually risen significantly.

Broadly speaking, the poor — for the purposes of this essay, people in the lower 40% of income distribution — have fewer assets, lack financial sophistication, and tend to hold, at most, a high school diploma. They deal in cash and its derivatives and equivalents — CD’s, bonds, and interest-bearing accounts. In an inflationary regime, these lose value. In an underreported inflationary regime, the effect is not only obviously greater but, because wages only grudgingly and loosely track the “official” inflation rate of the CPI (if at all), “much of the developed world’s workforce has been squeezed on two sides, by stagnant wages and rising costs,” as The Economist opined in its November 19, 2011 issue.

There is one factor leading to wealth disparity that Rawlsians and Marxists most seem to ignore, but classical economists believe is fundamental — productive innovation.

As if this situation were not bad enough, many of the poor were lured into buying homes by dodgy loans and government social engineering policies (such as the Community Redevelopment Act, Fannie Mae and Freddie Mac practices, and lower than historic interest rates) in the middle of a bubble. When the bubble burst, these folks lost whatever equity they had managed to cobble together, as well as ending up with ruined credit. And they couldn’t even rely on their savings (what little they might have saved between stagnant wages and rising costs), as these too had dwindled along with the higher interest rates that made savings more attractive.

So, without a doubt, the poor are getting poorer. What about the rich?

While cash loses its value, real goods such as commodities, equities, and real estate track the changing value of money and, long term — with the dips and highs of the business cycle evened out — generally keep pace. The rich, with more education, more financial sophistication, and more discretionary income, invest. The poor, on the other hand, save (if they can afford to). All other things being equal, inflation makes investments tread water, but savings lose. Without inflation, income inequality might not have become so pronounced over the last 40 years.

Though the above analysis might go a long way toward explaining the increasing income inequality in the United States, it still isn’t the full picture.

There will always be income inequality, if for no other reason than the fact that people’s work habits, education, and ambition vary tremendously. But the one factor leading to wealth disparity that Rawlsians and Marxists most seem to ignore, but classical economists believe is fundamental — productive innovation — also plays a big part.

A study done by University of Texas economists James K. Galbraith and Travis Hale found that

During the technology boom of the late 1990s, most of the gains enjoyed by the top 1% came from a small number of counties, rather than a national trend. Almost all of the richest 1%’s gains occurred in the economic hotbeds of Silicon Valley, and also New York City. If the top four counties in those regions are removed, there is almost no trend towards income inequality during the years studied (1994–2000). On this basis, the researchers ascribe the growth in income inequality in the late 1990s to the growth of information technology.

Earned income.

Definitely.




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Making Art from the History of Art

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Hollywood has a way of both following trends and creating them. We can see these trends develop whenever we look back at the course of a Hollywood year. Filmmaking is now nearly a hundred years old, and while its beginning is not specific enough to generate any "100th anniversary" hoopla, several films this year looked back at the groundbreaking artistry of filmmaking that we often take for granted. These high-quality movies have worked on two levels — as entertaining stories that stand on their own, and as tributes to filmmaking itself.

Let's look at some of these stylish 2011 films that are still making news at the awards shows in 2012.

Tinker, Tailor, Soldier, Spy (directed by Thomas Alfredson; Studio Canal, 127 minutes)

John Le Carre's novels about the Cold War era are among the finest spy thrillers. His recurring espionage agent, George Smiley, is not a caricatured James Bond or a rough-and-tumble Jason Bourne. He demonstrates the true complexity and moral conflict of a man who protects his country and her way of life by infiltrating and often breaking the laws of another. He is a man who lives a life of quiet isolation. Gary Oldman plays him brilliantly in this version.

When I saw that Tinker Tailor was being remade, my first reaction was "Why now?" The Cold War has been over for a long time. Countries that once made up the Soviet bloc are no longer our enemies, and the political and economic philosophies that separated us then don't inform the conflict we now experience in the Middle East. Agent Smiley "came in from the Cold" a long time ago, and for good reason. I wondered whether this story about a mole in the upper leadership of MI6 would be updated or modified to offer a fresh look at current moral dilemmas.

The answer to "Why now?" surprised me. Tinker Tailor isn't just a remake of a spy thriller. It is a remake of a ’70s film, and another offering in this season's retro moviemaking trend. More than a movie about the ’70s, it is a movie made like a ’70s film. Filmed in Super 16mm, which was used for filming television shows and some movies during that time, Tinker Tailor has the grainy texture of a Bullitt or a French Connection, two films that represent the era. The direction is slow, and the pacing even slower — as in those films, which we once considered so tense and exciting.

Everything about this film makes it feel like a reissue rather than a remake. Its old-school communication equipment, Wang word processors, shaggy hairstyles, and polyester clothing feel natural and unobtrusive rather than recreations designed for retro effect. It was reported that Oldman searched diligently through several vintage shops to find just the right eyeglasses for Smiley to wear. Even the outdoor scenes of London have the grimy, dusty look of the ’70s, before London was scrubbed clean and white in the ’80s and kept that way through better emissions controls.

Tinker, Tailor, Soldier, Spy isn't as thrilling as the Bourne movies or as campy as the Bond films. But it is an impressive tribute to the books and films of the ’60s and ’70s, with an impressive cast of A-list actors as well.

My Week with Marilyn (directed by Simon Curtis; Weinstein Co., 99 minutes)

Here is another 2011 film that celebrates the art of filmmaking. Anyone interested in the behind-the-scenes aspect of the movies will enjoy this one about the making of The Prince and The Show Girl (1957) as seen through the eyes of Colin Clark (Eddie Redmayne), a young aspiring filmmaker who worked on the production despite the disapproval of his aristocratic family.

In 1956 Marilyn Monroe (Michelle Williams) was the biggest star in Hollywood, if not the world. Laurence Olivier (Kenneth Branagh) was the greatest Shakespearean stage actor. They came together that summer to make The Prince and the Show Girl, starring and directed by Olivier. Through sheer will and determination (and the good fortune of having met the Oliviers at a society party), Clark secured a job on the film, as third assistant director — little more than a go-fer, really. Nevertheless, Clark caught Monroe's eye and became her boy-toy for a week, in every sense of the phrase. And Clark kept a journal.

It was not an easy shoot. Monroe was constantly late to the set, constantly muffing her lines, and constantly close to tears. She brought her own acting coach with her, Paula Strasberg (Zoe Wanamaker) of the method school of acting, and this created conflict with Olivier as the actual director of the film. As Clark tells Marilyn when he tries to comfort her after one of Olivier’s biting criticisms, "It's agony because he's a great actor who wants to be a film star, and you're a film star who wants to be a great actress. This film won't help either of you."

Kenneth Branagh, who plays Olivier in this film, has similar aspirations for mixing media. Perhaps the greatest Shakespearean actor today, or at least the best known, Branagh's goal has been to move Shakespeare from the stage to film, where the bard's plays will be more accessible to the masses. He has succeeded by bringing seven of them to the screen. His Iago in Othello (1996), with Lawrence Fishburne in the title role, is a masterpiece. Nevertheless, I had my doubts when I saw Branagh enter this film as Olivier. He just didn't look the part. But there comes a moment, as he is applying his makeup for the coming scene as the Prince, when his entire countenance changes and Olivier takes over the body they are sharing. At that moment Branagh simply disappears into the role. Remarkable.

Equally good is Dame Judi Dench as the gracious and gentle Dame Sybil Thorndike, grand dame of British stage and film in the first half of the 20th century, the actress who played the Queen Dowager in The Prince and the Show Girl. Where Olivier is critical, Thorndike is encouraging. When he reacts with exasperation to Marilyn's repeated flubs, Dame Sybil kindly praises her. She greets all the people on the crew by name and expresses genuine interest in them. Dench, the new grand dame of British film and stage, met Thorndike when she was new to acting. She said, "She came round to see us after [our presentation of Romeo and Juliet] and was so charming. We were young actors and she was lovely to us and strongly encouraging and gentle. I think they got very, very close to how Dame Sybil was in the script."

The best art and poetry can evoke an entire life in a single moment. This is the case with My Week with Marilyn. Through her affair with Clark we learn about the memories of childhood abandonment that led to Monroe' lifelong insecurity and vulnerability. We see her fears about not measuring up as an actress, her dependence on pills, and her anxiety about being alone. We see how frustrating it was to work with her, and how hard it was for her to live up to being the idolized Marilyn. And we see the magic she created on film when she felt good about herself. It’s one of the best bio-flicks I’ve seen in a long time.

Clark predicted that making The Prince and the Show Girl would not help either of the principals’ careers. But he was wrong. Olivier's next project was The Entertainer, his memorable film about Archie Rice, an aging vaudevillian actor. He received numerous accolades for the stage production and was nominated for an Oscar when the play was adapted for film in 1960. He said of that role, "I am Archie Rice. I am not Hamlet."

And Marilyn Monroe? Her next film was Some Like It Hot.

Hugo (directed by Martin Scorsese; Paramount, 126 minutes)

This film is about a young boy who lives inside a Paris train station, fixing the clocks. It appears at its outset to be a charming fantasy. Populated by cartoonish characters and centered on an impossible premise, it simply can't be true. But underneath the magic tricks of fiction is the true story of George Méliès, one of the early pioneers of filmmaking. More than a hundred years ago, Méliès developed stop-action animation techniques to create special effects. He hand painted individual cels to make color, and experimented with multiple exposures and time-lapse photography. You have probably seen snippets of his famous A Trip to the Moon, in which the man-in-the-moon is shot in the eye during a rocket ship's landing. You probably haven't seen many of his other films, because the French government confiscated most of his works during the Great War and melted the celluloid down to make boot heels for the soldiers. At the time, filmmaking was considered a timewasting entertainment. No one realized the great historical and artistic value of Méliès's work. And as far as Méliès himself knew, everything was gone.

Later, friends of Méliès set him up with a toy shop in the Montparnasse train station so that he could earn a living. Later still, a few copies of his works were recovered by journalists interested in his story. Eventually he was awarded the Legion of Honor for his work. All of this, as well as many of his groundbreaking film techniques, appear in Scorsese's marvelous film. The movie may purport to be about a fictional little boy who fixes clocks in the Paris train station, but it is no “kids’ flick.” It is one of the most satisfying films of the season.

The Artist (directed by Michael Hazanavicius; Warner Brothers, 100 minutes)

Perhaps the most significant film in this category is The Artist, which won the Golden Globe for best picture this week. It was reviewed for Liberty by Gary Jason, but it is worth mentioning again from the perspective of its tribute to the art of filmmaking itself.

The technology necessary to record sound was available to filmmakers from the very beginning; after all, Edison invented the phonograph before he invented the motion-picture camera. What these early filmmakers lacked was the ability to synchronize sound with action. So movies remained silent, substituting music to complement the action and enhance emotion on the screen. In New York, full orchestras provided that music in ornate theaters for audiences of more than 5,000 people. Small-town theaters employed organists to play the soundtrack. Actors used body language, facial expressions, and outright pantomime to communicate conflict and exposition. Obviously, complex story lines heavy with dialogue were close to impossible. Emotion and physical comedy dominated.

The Artist is a silent movie whose story is set in 1927–32, when the stock market wasn't the only thing that crashed. Silent films also came tumbling down as the problem with synchronization was resolved and talkies took over. Like the marvelous Gene Kelley-Debbie Reynolds-Donald O'Connor musical Singin' in the Rain (1952), set in the same era, The Artist follows the careers of a handsome silent film star and a bubbly young ingénue whom he has discovered — in this case George Valentin (Jean Dujardin) and the aptly named Peppy Miller (Berenice Bejo). George is the quintessential ’30s film star with his pencil thin mustache and dazzling smile. But he refuses to make the transition to talkies.

Without the dialogue and complex storyline that characterize modern filmmaking, director Hazavanicius invites the audience to focus on the rich artistry of early filmmaking — the lighting, the use of shadows and reflections, the camera angles, the elegant costumes, and the stylized sets, among other features. Silent films are often parodied for their actors' broad pantomime and "mugging" for the camera, but this criticism is deftly contradicted by the emotional range portrayed by these actors' facial expressions and body language. Yes, there was some serious overacting in early films, but The Artist reminds us that there were astounding subtlety and depth as well.

The Artist really is a silent movie; with two very short but very important exceptions, the only sound you will hear is music. The soundtrack is splendid, and even includes a tribute to Alfred Hitchcock — a long section of Bernard Herrmann's soundtrack from Vertigo at the emotional climax of the film. So be prepared, but don't let this fact keep you away from the film. It is, as its title suggests, a work of art.

Super 8 (directed by J.J. Abrams; Paramount, 112 minutes)

Super 8 rounds out the list of 2011 tributes to filmmaking with a summer blockbuster paean to both filmmaking and filmmakers. As I wrote in my June 14 review: "Super 8 is the best Steven Spielberg movie to come along in years. And it isn't even a Spielberg film."

Written and directed by J.J. Abrams, it is the most Spielbergian film to come along in many years, a veritable homage to the master of blockbuster films inhabited by preadolescent protagonists. Among the Spielberg effects that Abrams incorporates in this science-fiction coming-of-age thriller are the trademark bicycles spinning into getaway mode, the classic suburban settings, the snappy potty-mouthed dialogue among kids, and the Orwellian military bad guys, reminiscent of E.T. Best of all, Abrams employs the particular kind of coming-of-age storyline for which Spielberg is known. Yes, there's a monster out there, but the real monster is at home, in the form of an unnamed tension between parent and child that has to be resolved.

Super 8 is an homage in a different way as well. Setting aside the aliens that are attacking the city (and that might be hard to set aside in real life) is a classic “let’s put on a show” format that would have made Mickey Rooney and Judy Garland feel right at home. In movies like theirs, groups of kids were always transforming a barn into a stage in order to raise money for some worthy cause. The format gave the filmmakers an excuse to present rousing music-and-dance numbers that had nothing to do with the plot.

In Super 8, Riley (Charlie Griffiths) is trying to make a film for a teen film festival. In the spirit of Judy and Mickey, he enlists all his friends to act as makeup artists, sound technicians, camera operators, actors, and writers. And in the spirit of this article about retro themes, they do it with a vintage Super 8 camera, the kind we used to use to film three minutes of family activities before sending the cartridge out to be developed. Many of today’s directors got their start with the family Super 8, including Spielberg, on whom Riley's character is based. Spielberg won a prize at a teen film festival when he was 13. Moreover, his first Super 8 film culminated in a train wreck created by his Lionel model trains, just as Super 8 does.

Like all the films highlighted in this article, Super 8 stands on its own as a well-made, entertaining movie. But these films become even more enjoyable when one recognizes the allusions they make and understands the background of the filmmakers they honor. As we pass the hundredth year of motion pictures, universities are legitimizing the art with degrees that focus on the history of filmmaking, not just on the technical aspects of making a film. I think this trend will continue to influence the quality of filmmaking, especially in works by independent filmmakers — and the influence will be all to the good.

(directed by Thomas Alfredson; Studio Canal, 127 minutes)Clark predicted that making




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Europe: The Problem and the Prospects

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The flow of history sometimes looks so obvious in hindsight.

In 2004 the European Commission issued a formal warning to Greece, having found that it had falsified budget deficit data in advance of joining the Eurozone. That’s right, Greece had not just failed to meet the budget requirements for joining the new currency — lots of countries did that — but it had lied about it for the privilege of swapping drachmae for euros.

Over the next few years the Greek government's modest attempts to reform the coddled Greek labor market, particularly the obese public sector, met with massive protests, many of them violent.

In the late spring of 2009 I sat across from an old law school friend, drinking wine on the terrace of a Parisian bistro near the Bastille. It was a mild early evening with hours of sunlight left, yet as usual my friend was already in his cups. But then, this guy (call him “Jay”), was smarter drunk than I am sober.

As I drained my glass of Beaujolais Cru, just a few years after Greece had joined the Euro, the Greek debt crisis was in full cry. Bailout negotiations between the EU and Greece had begun. Jay is a prominent international finance lawyer, and he represented the EU on the legal side of the negotiations. So I ordered another drink and got an inside view of the proceedings.

Jay and I debated the virtues, vices, and prospects of a bailout. It was all very speculative and academic, reminding me of so many college rap sessions in which my friends and I handily remade the world to no good (or ill) effect. The curious difference here, decades later, was that Jay really was involved in remaking the world.

As an aside, think of Professor Obama noodling over, say, the constitutionality of a federal mandate that everyone buy health insurance, the kind of seemingly harmless brain game that is played all day, every day in our universities and law schools. Most of the highly accomplished students who, like Obama, attended the top schools become convinced that they know what’s good for you. And some of them attain the power to give it to you. A student’s collectivist or paternalist nonsense is harmless. But with the stroke of a pen wielded by the nerd who used to sit next to you in Social Studies, governments convulse huge sectors of the economy. The difference is that the harmless nerd, the student Obama, for example, has become the hand of power.

At that early stage of the Greek debt crisis (which became the Italian, Irish, and Portuguese debt crisis, which became the euro crisis, which became the Europe crisis, which is becoming the second dip of the Great Recession, and which may doom the European Union to diminishment or dissolution and trash the feeble recovery in the US), it was hard for me to see the historical context of the problem. Jay went straight to it, talking about the German fear of inflation and profligacy, at odds with the German fear of the consequences of a divided Europe.

With the stroke of a pen wielded by the nerd who used to sit next to you in Social Studies, governments convulse huge sectors of the economy.

I know this is remedial history, but just in case: Germany suffered three great traumas in the 20th century, and two great boons. The three traumas were the first war of Europe divided, WWI; the second war of Europe divided, WWII; and between them the hyperinflation of the Weimar Republic, which probably resulted in German National Socialism. The two boons were first, Germany’s long, vigorous period of growth and prosperity, which persisted and accelerated in conjunction with the economic, monetary, and political integration of Europe; and second, German reunification, which came with the collapse of Soviet communism.

France, the other dominant player in the current crisis, has learned much different lessons from history. Of course it fears Germany as Germany fears itself, but it trusts government in a way that Germany does not. The French ruling class favors European unity, not just because it wants to restrain Germany but also because it thinks it can harness the Germans. This has made France the serial instigator of Euro-government activism.

At the center of France’s vision of European peace and unity is an organ grinder with an elephant instead of a monkey, but the elephant does not collect peanuts and coins; it distributes them. France is the organ grinder. Germany is the elephant. The rest of Europe stands around applauding, and collecting peanuts and coins.

Later in 2009, Greece lost its credit rating. Much bad news, “reforms,” and bailouts followed in a parade of horrors that continues now more than 2.5 years later, like shit hitting a fan in super slow motion. Greece, the EU, France, and Germany made and broke a series of promises about Greek debt. Greece was solvent. There would be no second (or third) bailout. Greece would never default. Greece would reform. Etc.

More of the same, until something really breaks, is a good prediction. Sarkozy the organ grinder will play furiously. Like an Indian mahout, he will even bring out the “ankus,” the goad. At the sharp end of the ankus are reminders of Germany’s behavior in World War II. The elephant will give out more coins and peanuts in greater quantities but with greater reluctance, and greater resentment for the crowd of client states that surround the center of Europe. In exchange, the crowd, and even France, will give up freedom, sovereignty, and independence. France does not like loss of sovereignty but believes it will always call the tune. The UK will congratulate itself for staying out of the euro and will refuse to sacrifice its own sovereignty to save the newish currency.

By helping us see how people in nation states see themselves, history helps us guess what they will do. But it does not tell us the results of their choices, which they themselves always fail to predict. After all, none of the EU, France, Germany, or Greece intended the Greek crisis or predicted it early enough to do anything to avoid it. How did that happen?

Descriptions of economic crises past reveal the historian’s perspective, bias, and even philosophy. The Great Depression makes a good example, over which commentators continue to fight. Was it caused or worsened by too much trade protection, too little Keynesian stimulus, a shrinking money supply, the bursting of the credit bubble that preceded it?

Soon there will be as many descriptions of the euro crisis.

I see that crisis and America’s subprime mortgage debacle as symptoms of the same contradiction, one that has strained most of the developed economies for decades and seems to be reaching some kind of limit now. The contradiction is between the love of state largesse and the limits of governments’ ability to raise revenue. That is not a very original observation, but in diverse countries and regions, the fallout from this strain takes surprisingly diverse and original forms.

The form of the fallout seems to depend on the particular weaknesses of a country’s institutions. In Greece, they overborrowed, overspent, cheated, lied to their creditors, and chronically failed to collect taxes due. In Germany they turned a blind eye, because European profligacy spurred Germany’s exports, and exporters had the ear of the German government.

More of the same, until something really breaks, is a good prediction.

In the United States we accepted war as an excuse for big deficits, and when the electorate showed resistance to faster growth of the welfare state, Congress contrived to finance it “off balance sheet” through Freddie Mac and Fannie Mae. And now the Great Recession gives us a reason to bail out financial institutions and automobile manufacturers and to print money (“monetary easing”).

In all these cases, the severity of the crises will partly depend on how and how thoroughly a state and its people fool themselves. The exact nature and severity of the crises are hard to predict. There may be cause for real fear.

I am afraid. For the first time in years, I feel financially insecure. I thought that, through work, good fortune, and saving, I had acquired financial security. Now I don’t know. Will quantitative easing cause high inflation? Will the markets where I store my wealth behave bearishly for long enough to beggar me before I die? Will the European crisis grow so deep and severe as to badly infect the world economy? Is Greece in effect a domino? I don’t know, but it’s falling. There will be no soft landing.




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The Bureaucrat and the Cellphone Ban

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About a month ago, the National Transportation Safety Board (NTSB) chairman, Deborah A.P. Hersman, called for a “first-ever nationwide ban” on “the non-emergency use of portable electronic devices,” including hands-free cellphones, while driving. In a prepared statement introducing the proposed ban, Hersman told the story of a fatal multi-vehicle accident that had recently occurred in rural Missouri, set in motion by a pickup truck driver who’d been using a cellphone while driving:

“And it was over just like that. It happened so quickly. And, that’s what happened at Gray Summit. Two lives lost in the blink of an eye. And, it’s what happened to more than 3,000 people last year. Lives lost. In the blink of an eye. In the typing of a text. In the push of a send button.”

Quickly, critics of the Obama administration raised questions about that “3,000 lives lost” statistic. While some of these criticisms had a peevish tone, their basic point was valid. The 3,000 number was an exaggeration, based on an imprecise use of more defensible fatality numbers.

A few days later, the Washington Post published an opinion column under Hersman’s name that justified the NTSB’s proposal. (The Post’s opinion pages serve as a sort of free press-release service for columns supposedly written by high-level bureaucrats.) The column used most of the same language from Hersman’s earlier statement — but avoided specific figures:

“Washington residents remember well the 2009 Metro crash on the Red Line in which nine people were killed. The number of fatalities from distractions on U.S. roadways is the equivalent of one Metro crash every day of the year. . . . At the NTSB, our charge is to investigate accidents, learn from them and recommend changes. In Gray Summit and on highways across the United States, thousands of people were killed last year in the blink of an eye. In the typing of a text. In the push of a send button.”

There was still plenty of mendacious rhetoric at work in the column. It went on to imply that fatal accidents caused by cellphone use are a growing risk. It stated that cellphones and personal digital assistants have become “ubiquitous”; and it cited a study suggesting that 21% of drivers in the Washington, D.C., area have admitted to texting while driving.

Taken together, these emotionally fraught passages clearly implied that some 3,000 people a year are killed in motor-vehicle accidents caused by sending or receiving cellphone text messages. But that’s not true. The “3,000 lives lost” number comes from an NTSB study of “distracted driving” in general. Based on data from that study, the NTSB estimated that fewer than a third of those deaths could be connected to cellphone use. To repeat for emphasis, even that number is an estimate. (Of course, bureaucratic fiefdoms like the NTSB often issue regulatory decrees based on slight justification and without regard to practicality, effectiveness or cost.)

So, Hersman exaggerated the risk of cellphone use while driving by a factor of at least three — and repeated the exaggeration with carefully calibrated verbiage. And, most important, she used the exaggerations and imprecise rhetoric to support an invasive regulatory action.

She may have figured the mendacity was needed because the general trend has been toward greater safety on American highways. In 1990, about 44,600 people died in car crashes in the U.S.; in 2010, that number had dropped to less than 32,900. This drop is even more striking when you consider that the total number of licensed drivers in the U.S. rose significantly over the same period. According to the National Highway Traffic Safety Administration (NHTSA), there were 1.71 deaths per 100 million vehicle-miles driven in 1994 but only 1.09 in 2010. That’s a major improvement — though you’d never know it from Nanny Hersman.

Hersman exaggerated the risk of cellphone use while driving by a factor of at least three, and used the exaggerations to support an invasive regulatory action.

In significant ways, Hersman resembles other current and former Obama administration apparatchiks. Like Julius Genachowski, she is a career Beltway insider whose slavish devotion to big government overwhelms any notion of private-sector economy; like Elizabeth Warren, her background speaks more to bureaucratic credentialing than education in the classical liberal sense.

Hersman’s December decree urged state governments to prohibit text-messaging and other electronic device use while driving. (It calls, specifically, for the 50 states and the District of Columbia to ban “the non-emergency use of portable electronic devices.”) But her urgency was unnecessary: 35 states already have such rules in place.

If “distracted driving” is a problem, why are cellphones a more urgent issue than other sources of distraction — watching kids in the back seat, eating fast food, studying a GPS map, applying makeup, etc.? A cynic might say that a cellphone ban gives state agencies a broad excuse to harass citizens…and a new source of cash flow for government coffers. But statist hacks like Hersman are too earnest for that.

A more likely answer is that a ban on cellphone use in the privacy of one’s own car is a preemptive regulation. And preemptive regulations have two distinctive traits: they are often misused — and, particularly, overused — by state agencies; and they are often based on shaky logical foundations that sound good on first impression but don’t stand up well to rigorous inspection.

That second trait explains why bureaucrats like Hersman use emotional manipulations to promote pre-emptive regulations.

An important point: The feds’ own research underscored the futility of Hersman’s gesture. An NHTSA report on accidents “involving” cellphones as the cause of fatalities stated that:

“Sixteen percent of fatal crashes in 2009 involved reports of distracted driving and ... of those people killed in distracted-driving-related crashes, 995 involved reports of a cellphone as a distraction (18% of fatalities in distraction-related crashes).”

So, Nanny Hersman proposed banning cellphones in cars to reduce a risk that causes — at most — 2.9% of traffic-related deaths.

There may have been other factors affecting her thinking. A few months before Hersman’s proposal, the U.S. Senate considered a Department of Transportation spending bill that set up a $10 million grant program aimed at helping states combat “distracted driving” — and especially texting behind the wheel. According to the bill (S. 1596):

“While there is no definitive data as to how many distracted driving deaths and injuries are caused by cellphone use and texting, 20% of the drivers involved in fatal accidents in 2009 were either using or in the presence of a cellphone at the time of the crash, and there is reason to be concerned about whether the recent rise in distracted driving fatalities is linked to the increasing use of electronic devices.”

Admitting they had “no definitive data” to support their actions, the Solons would bribe states to prohibit citizens from operating a vehicle while in the “presence of a cellphone.” Maybe Hersman wanted the NTSB to administer the grants to the states.

If “distracted driving” is a problem, why are cellphones a more urgent issue than other sources of distraction — watching kids in the back seat, eating fast food, studying a GPS map, applying makeup?

The Senate bill also required $5 million to be set aside “for the development, production, and use of broadcast and print media advertising to support enforcement of State laws to prevent distracted driving.” Maybe Hersman wanted the NTSB to produce those ads . . . and its chairman to star in them.

The Obama administration has never been shy about manipulating numbers and emotions to support its various statist schemes and bureaucratic boondoggles. Specifically:

  1. According to the Census Bureau, more than 30 million Americans — one in every seven — live in poverty. And that number is growing, in part, because the Obama administration has expanded the definition of the word “poverty.” The administration has worked to delink the concepts of poverty and deprivation…and redefined poverty instead as being “about inequality.” Traditional metrics of poverty have focused on absolute purchasing power — how much food or durable goods a person can buy; the Obama administration’s metrics focus instead on comparative purchasing power — how much food or durable goods a person can buy relative to other people. This is a statistical trick designed to assure that a fixed portion of the population will always be poor.
  2. In the spring of 2011, Obama administration officials publicized the possibility that “82% of U.S. schools” could be rated as failing, according to metrics established by the No Child Left Behind program. Department of Education Secretary Arne Duncan repeated this statistic in numerous speeches — even though education experts called the number “unverified,” “likely exaggerated” and “meaningless to the schools that are being rated.” Even after several education policy groups challenged Duncan’s emotional rhetoric, he and other administration officials showed no inclination to make more precise statements. Some observers suggested the administration’s goal was, rather than issuing reliable numbers, to scare Congress into approving its spending goals.
  3. In the fall of 2011, a heated exchange between Rep. Connie Mack (R-FL) and Labor Secretary Hilda Solis made clear that tension between the Obama administration and congressional Republicans over the president’s efforts to bolster the clean energy economy was getting worse. Mack scoffed at administration projections that counted drivers of hybrid buses as “green jobs.” (This dispute occurred during the height of public outrage over Department of Energy loan guarantees — funded through Obama’s $825 billion stimulus plan — to bankrupt solar energy company Solyndra.) Some lawmakers argued that the Obama administration exaggerated the impact that its “green energy” policies had on improving the economy and creating jobs.
  4. In late 2011, immigration policy groups noted that the Obama Administration had inflated statistics to suggest that it had deported a “record-high number of illegal immigrants with criminal records.” In fact, the real deportation figure was closer to an historic low. In October 2011, Obama’s Immigration and Customs Enforcement (ICE) director had announced that nearly 55% of the record 396,906 illegal immigrants deported in FY2011 were convicted of felonies or crimes. But the real figure was less than 15%, according to federal records obtained through the Freedom of Information Act (FOIA) by the Transactional Records Access Clearinghouse (TRAC). Specifically, the average rate across the four quarters for FY 2011 was 14.9%.
  5. In October 2011, the web site FactCheck.org caught the Obama administration exaggerating the impact of a proposed additional round of “stimulus” spending. (The administration had predicted that its previous stimulus plan would “save or create” millions of jobs. Those predictions turned out to be wrong — some 1.2 million American jobs had been lost during the two years following passage of the 2009 stimulus. In 2011, Obama claimed that “independent economists” agreed that a new stimulus package would “create nearly 2 million jobs next year.” But FactCheck.org countered that the “median estimate in a survey of 34 economists showed 288,000 jobs could be saved or created over two years under the president’s plan.”

Focusing on this or that political prevarication is easy and, on a reptilian level, fun (on this topic, I commend to you Vaclav Havel’s great New Year’s Day 1990 speech on statist lies). But there’s also a bigger point raised by the meddling of bureaucratic schemers like Deborah Hersman and Barack Obama. Specifically: what burden of proof should be borne by a party who proposes a law or regulation?

The feds’ own research underscored the futility of Hersman’s gesture.

The statists who support Obama argue that the answer to that question is “none.” They argue that bureaucrats are by definition well-meaning and laws or regulations they propose should be presumed virtuous and effective. According to this peculiar logic, the burden of proof falls on those who question the proposed laws or regulations. Here’s one commenter’s defense of Nanny Hersman’s decree:

“Ms. Hersman was appointed to the NTSB in 2004. I can’t for the life of me figure out what possible political (or other nefarious) agenda she could possibly have in recommending that states ban cellphone usage while driving. I don’t see why we can’t assume that she is a conscientious officer who has looked at the question and sincerely believes that the evidence supports her recommendation. . . . I challenge you to find any study that shows that texting or mobile phone use does not impair driving ability. You won’t find any.”

So, unless citizens can prove something isn’t bad, conscientious officers can ban that thing. This is sophistry. And, in the case of Hersman’s proposed cellphone ban, it’s threadbare sophistry.

A more coherent — and liberty-friendly — approach to government regulation would be that, if a state agency proposes restricting or banning some object or action, it must first prove that:

  1. the object or action accounts directly for some demonstrable economic loss, and
  2. restricting or banning the object or action will alleviate the loss.

If the agency can’t establish both points, then its proposal would be ignored.

And even if the agency can establish both points, citizens would demand a cost-benefit analysis of the proposed regulation that establishes with some confidence that it will save more in economic losses than it will cost to enforce.

This approach would reduce the amount of statist noise generated by the present administration. And future ones, too.

Back to the point: statists claim that bureaucratic drivel like Hersman’s proposed cellphone ban should be presumed valid. And that those who question it must prove the validity of their questions.

The fruitless search for zero risk fits well into this warped thinking. Whether the particulars involve texting on cellphones, smoking cigarettes, wearing seatbelts, eating Big Macs, or anything else, statist busybodies justify their requirements, prohibitions and other petty tyrannies with good intent. And they imply that their opponents are in favor of the bad outcomes of risky behavior — or are “against safety.”

But a quick text message sent home or to work while driving on an empty country road or stopped in traffic might be as effective a safety measure as wearing a seat belt. Because text messages are time-stamped, people who care about you can know where you were at a given time; this is important, if you don’t show up as expected.

Whether the particulars involve texting on cellphones, smoking cigarettes, wearing seatbelts, eating Big Macs, or anything else, statist busybodies justify their requirements, prohibitions and other petty tyrannies with good intent.

This sort of effective communication may have something to do with the overall trend toward safer U.S. highways. (And most of the existing state laws that restrict or prohibit cellphone use while driving specifically exempt emergency use — such as calls to the highway patrol to report dangerous conditions, etc.)

As I’ve noted, Hersman’s decree was unnecessary. Most states already have laws in place restricting cellphone use by people driving cars; and all states have reckless driving laws that apply to situations in which cellphone use causes dangerous results. But, as one online commenter noted:

“Enforcing laws is so boring. Not only is it work, you get little political benefit from mundane enforcement stuff as it rarely makes the papers. And enforcement of laws may even upset people, causing political problems. But passing laws, now that’s sexy.”

Well, there’s no accounting for taste.

The most damning indictment of the proposed cellphone ban comes from a statistical study conducted by researchers at the Colorado School of Mines. They note:

“On July 1, 2008, California enacted a ban on hand-held cellphone use while driving. Using California Highway Patrol panel accident data for California freeways from January 1, 2008, to December 3, 2008, we examine whether this policy reduced the number of accidents on California highways. To control for unobserved time-varying effects that could be correlated with the ban, we use high-frequency data and a regression discontinuity design. We find no evidence that the ban on hand-held cellphone use led to a reduction in traffic accidents.”

This study is preliminary and based on limited data — but it doesn’t bode well for the cost-effectiveness of Hersman’s futile gesture.

Bureaucrats promulgate regulations. It’s their lifeblood, the air they breathe. A bureaucrat isn’t fulfilling her statist destiny unless she banning or prohibiting something.

But free citizens need to keep in mind that the United States is a country built on the philosophical premise that everything not banned is permitted instead of the tyrannical axiom that everything not permitted is banned.

It’s right there, in the Tenth Amendment to the Constitution. Nanny Hersman and her current boss should take a look.




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More Green Goblins

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The Great Green Energy Bust continues to accelerate, with new wrinkles on crony green capitalism showing up almost daily.

Let’s start with the far-from-sunny news regarding the Obama administration’s favorite industry, solar power. The Wall Street Journal reports that the whole solar industry is in trouble. The demand for solar panels is projected to be flat next year, and many of the players in the industry face plummeting stock prices or even bankruptcy.

In the last quarter of 2011, at least seven solar manufacturers hit the wall. These include the German firms Solar Millennium and Solon SE, and of course the notorious American firm Solyndra. Six of the ten biggest solar companies reported losses in the third quarter of 2011; six of the ten also showed corporate debts that exceeded their market capitalizations.

The solar industry as a whole experienced an average stock price drop of 57% during 2011.

Part of the problem is noted in the Journal article: a glut on the market of solar panels and other components, because China has expanded its solar manufacturing industry. Remember, China has the vast majority of known reserves of the rare earth minerals used in solar panels, and it still has relatively inexpensive labor.

But the article also notes that consumer demand for solar products has fallen off. During the last year, for example, German demand fell by 29%.

What the article doesn’t mention are the major reasons for the decline in demand, but these are important to understand.

First, more countries are cutting back on their massive subsidies for solar panels. Solar power requires much more subsidization than nuclear power, and vastly more than for fossil fuels such as natural gas.

Second, there has been a renaissance of fossil fuel energy, driven by the rapid rise of nonconventional fossil fuels — natural gas and oil extracted from shale and tar sand fields by such newer technologies as fracking and horizontal drilling. I have explored this renaissance elsewhere; suffice it to say that it has pushed natural gas in particular to such low prices that it is making green energy seem obviously stupid from any economic standpoint.

Next comes a report out of the Netherlands that the Dutch — for whom windmills have been part of the national ethos — are apparently starting to have regrets about wind as a power source.

Five years ago, in a burst of Green enthusiasm, the Dutch built three dozen huge wind turbines — each the size of a 30-story building — out in the North Sea. However, even the North Sea wind and the Dutch enthusiasm couldn’t change the fact that, like solar power, wind power is grotesquely inefficient, and so requires lavish taxpayer support. The Dutch had to pay $4.5 billion Euros last year to subsidize these windmills.

Consumer demand for solar products has fallen off. During the last year, for example, German demand fell by 29%.

The government there has just announced that it can no longer afford to pick up the tab. Naturally, it hopes to make consumers and businesses pick it up instead. In 2013, the government will start a billing scheme under which consumers will pay more for wind power, and investors will (supposedly) be lured into supporting it.

The government concedes, however, that the new arrangement will cover only about a third of the subsidy. So, as the article gently puts it, “The outlook for Dutch wind power projects seems bleak.”

The Dutch, those clever people — think of their achievements, from those enormous dikes to those quaint wooden shoes — have grasped the fact that land-based wind farms are hideous, costly, unsafe, and noisy, while offshore wind farms are even costlier and harder to maintain.

The Dutch government had planned to increase its current share of renewable energy (as a percentage of all energy used) from the current 4% to 14% by 2020. But that was just a green dream. The government now estimates that it will only be at 8% to 12% renewable energy by then. Of course, if it ended all subsidies, even the ones it passes on to hapless consumers, the industry probably wouldn’t grow at all — or even survive.

Let’s turn to another green energy boondoggle, one often overlooked because the scandals in solar and wind power have been so juicy and so damn numerous. Several recent reports show that the so-called “alternative biofuels” program is also rife with waste and corruption.

By the way, the misleading term “biofuels” refers to alcohol, diesel, or other liquid fuels created from plants. For many years, ethanol has been produced from sugar cane, and more recently from corn. Call that “standard biofuel.” Alternative or “cellulosic” biofuel is derived from other plants, such as switch grass, and plant wastes, such as corncobs. Now you know.

A WSJ article recounts the astonishing history of the whole biofuel program. It started as one of George Bush’s sillier ideas. So eager was he to show that he wasn’t the “oil boy” his critics accused him of being that he signed the Pelosi-crafted bill into law in 2007.

This abominable bill called for (shock and awe!) super subsidies for the super fuel. (Why do all these super energy schemes do that?) The bill provided a tax credit of $1.01 per gallon. Another Pelosi-Bush bill then required oil companies to blend this costly crap with their fossil fuels. The mandate started at 100 million gallons in 2010 and was supposed to hit 250 million in 2011, 500 million in 2012, and 16 billion in 2022. But already this preposterous program has stolen $1.5 billion from the taxpayers. I don’t need to tell you that Obama gave it his Chicago crony capitalist stamp of approval.

The Dutch, those clever people, have grasped the fact that land-based wind farms are hideous, costly, unsafe, and noisy, while offshore wind farms are even costlier and harder to maintain.

Would that Bush and Obama had both been oil boys, real ones. In that event we taxpayers would have been spared the billions of bucks pumped pointlessly into corn ethanol and cellulosic biofuels — not to mention the $70 billion Obama has pumped into the even stupider solar and wind programs.

As anyone could have predicted, cellulosic biofuel program has been a complete fiasco. Despite the billions in pelf that have been purloined from the citizenry to induce companies to produce the government-approved dreck, very little is being produced. The EPA (the agency with the power to revise the mandate) dropped the 2011 requirement from the original 250 million gallons to a risible 6.6 million. The EPA has just announced that it will set the level at 8.65 million gallons in 2012, significantly beneath the 500 million gallons called for, and will allow refiners to use corn ethanol to help meet the requirement. (Of course, corn ethanol is another corrupt boondoggle, as I have remarked elsewhere.)

The EPA thus acknowledges that the real production of cellulosic biofuels is infinitesimal. The feds are requiring refiners to buy a product that isn’t being produced in anywhere near the quantities necessary for them to comply with the requirement, and the EPA has been fining oil companies for not meeting the mandate.

The problem with alternative biofuels — indeed, all biofuels — is the same as that with solar and wind energy. As the National Academy of Science put it in a recent report on this so-called industry, it is cost, “the high cost of producing cellulosic biofuels compared with petroleum-based fuels, and uncertainties in future biofuel markets.” Read: uncertainty about how much longer a nearly bankrupt government will be able to fund such scams.

Scams? Yes, I said scams — “scams” in the sense of unworkable nonsense, at least, and sometimes “scams” in the sense of something worse.

Despite the prospect or reality of subsidies, about a half dozen of the firms that were supposed to produce alternative biofuels never got off the ground. And the company that was supposed to provide 70% of the cellulosic fuel to meet last year’s mandate, Cello Energy, went bankrupt last year.

The Cello story is cute. The company was found guilty in a 2009 civil case of making fraudulent claims. It reportedly overstated its production capabilities to investors, and — this is hilarious! — passed off some ordinary (i.e., petroleum derived) diesel as biodiesel. In fact, the company never produced much biofuel of any kind, standard or alternative.

Then there is the unsurprising news that crony green capitalism extends to biofuels as well as wind and solar energy. A recent story recounts how yet another Obama crony is at the center of yet another massive scam on the taxpayer.

It so happens that the Regime’s highly politicized Agriculture Department — you know, the one that has been waging war on non-conventional fossil fuel production — pushed the Navy to purchase nearly half a million gallons of alternative biofuels for their aircraft. This is the largest federal purchase of biofuel ever.

That’s just the beginning of the story. In an effort to create what it calls — dig this! — “the Great Green Fleet Carrier Strike Force,” the Navy is working with the Agriculture and Energy Departments to buy $510 million in biofuels, so that our seaborne fighting force, which earlier made the transition from diesel to nuclear power, can transition back to diesel fuel — but this time to biodiesel rather than fossil fuel diesel.

If that’s not funny enough, consider this: the biodiesel just purchased costs $16 per gallon, which is four times the price of normal (i.e., fossil fuel derived) diesel.

A key beneficiary of this price gouging of our Navy is a California company called Solazyme. Solazyme’s major “strategic advisor” turns out to be one T.J. Glauthier, who was a member of Obama’s transition team and crafted the energy industry section of the Obama Regime’s notorious 2009 “stimulus” bill.

Oh, and lest I forget, Glauthier made sure that Solazyme got $22 million out of that very bill.

Meanwhile, however, there is hope. The renaissance in fossil fuels, and the growing shortage of government funds to subsidize stupidly inefficient industries, is rapidly putting paid to the whole insane, overhyped, profoundly corrupt green energy program.

Thank God!




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Ron Paul at the Iowa Marker

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In Iowa, Ron Paul came in third. Four years earlier, he had come in fifth, with 10% of the party vote. Now he has more than doubled his support, to 21.5%. His new total suggests he has established libertarians as a significant faction within the Republican Party.

This is no certain thing. We will know when Paul retires, and the faction is led by someone else, perhaps his son. In either case, it is not a majority faction, and Paul is not going to be nominated.

Every time I write this, some Paul supporter rises in challenge: “Who gave you a crystal ball?” (My momma did.) When they are done hollering at me, they can holler at Intrade. As I write, on the morning after the Iowa caucuses, the gamblers on the news-prediction web page put odds of Paul’s nomination at between 2 and 2.4%, which is lower than the odds for Jon Huntsman.

In December 2011, Paul’s odds peaked at above 9%, about at the level he peaked four years earlier, in December 2007, regarding the nomination in 2008. After the Iowa caucuses then, and the New Hampshire primary, Paul’s quote fell to 1%. He is likely on the same trajectory now.

What has happened? Paul has been attacked. This was entirely predictable, and it is not just because the mainstream media is against him, though it is. The frontrunner is always attacked.

For months the national press had ignored Paul, treating him, in Andrew Sullivan’s words, like “an eccentric uncle.” Then it changed. In the last half of December anti-Paul columns appeared by Paul Krugman in the New York Times (Dec. 16), James Kirchick in the New Republic (Dec. 22), Dorothy Rabinowitz in the Wall Street Journal (Dec. 22), former New York mayor Ed Koch on NewsMax.com (Dec. 29), Michael Gerson in the Washington Post (Dec. 30), and the editorial board of the New York Times (Dec. 27).

“Who gave you a crystal ball?” My momma did.

Much of this was a regurgitation of the story about the anti-black and anti-gay tone in Paul’s newsletters of the early 1990s. Kirchick had used these to accuse Paul of “hate” in The New Republic in January 2008, and the press corps knew about them. Wrote Shikha Dalmia of Reason, Dec. 25, 2011: “It seems no one wanted to bring them up again until Paul gained so much traction that ignoring them would have been a serious dereliction of duty.”

For some it seemed that way. Others, who detested Paul, saw a chance to chuck the garbage from an open window onto Paul’s head. They had dumped on Palin, Bachmann, Perry and Cain. They had just been trashing Newt. Then, in mid-December, Paul was leading in the Iowa polls, with 23–28% among a field of seven, and he still had a clean shirt.

Then came Kirchick, fanning the “hate” issue again; many Paul supporters, seeing their man as the least hateful of the lot, were inclined to dismiss it as more mainstream media bias. Some of it was, but in a presidential race a candidate cannot ignore charges like this.

And Kirchick had a new take on it. His piece was titled, “Why Don’t Libertarians Care About Ron Paul’s Bigoted Newsletters?” In it, he said Paul’s supporters “don’t base their support on the Congressman’s years-long record of supporting racism, homophobia,” etc. The problem with libertarians, he said, is that they shut these considerations from their minds, letting the free market trump “all considerations of social empathy and historical acuity.”

If they cared about these things, Kirchick argued, libertarians would have been supporting the former governor of New Mexico, Gary Johnson, who “can boast executive experience and doesn’t have the racist and conspiratorial baggage.”

The public didn’t know Johnson. They knew Paul. He had run twice before. He had written bestselling books. He had built up a base of fans. He had mailing lists of donors for his “money bombs,” and an organization that in Iowa was stronger than any other Republican’s. He had a US senator to campaign for him: his son.

Others, who detested Paul, saw a chance to chuck the garbage from an open window onto Paul’s head.

He also has a personal aura, a Gandhian quality, different from that of any of the Republicans. On the eve of the Iowa caucuses the Des Moines Register poll found that voters ranked Paul as the least ego-driven candidate. Andrew Sullivan writes of Paul’s “decency.” Dalmia writes of his “remarkable ability to generate goodwill.” Paul is more radical than Johnson. This makes him easier to attack, but also more appealing to the hardcore.

 The Republican leadership couldn’t stand either Johnson or Paul. For Paul, it didn’t matter; he had built his own party. Johnson hadn’t. At the end of 2011 he was so sore at the Republican leadership that he joined the Libertarian Party.

Back to Kirchick: he exaggerates, but he has a point. Paul’s fans liked him so much they were willing to overlook a bad thing on his record.

How bad was it? To Kirchick, as with many liberals, racism is the most important issue there is. If you’re touched by it, you’re dead. If you care about it, but you care about other things more, that’s not good enough. You’re still dead. Any denials are assumed to be false and (especially if they are against you anyway) any mea culpa from you istoo small.

The real issue is not what Paul was then. It is what he is now. You have to judge.

One commentator who tried to think this through is Andrew Sullivan. He had supported Paul for the Republican nomination, but said he would vote for Obama in November. He liked Paul’s stand on foreign war and executive power. To Sullivan, Paul was “the best medicine for the GOP, not the best president.” After Sullivan argued for this, some readers attacked him on the matter of Paul’s newsletters, and he reconsidered. On Dec. 24, he wrote:

“I sat down and re-read some of the Ron Paul newsletters last night. I don’t think he wrote them; I don’t think they represent who he is; I do not believe the man is a racist, although seeing into men’s souls is not something any of us is very good at.”

He has a personal aura, a Gandhian quality, different from that of any of the Republicans.

There are good reasons for believing Paul is no racist. Paul’s associates — even Eric Dondero, who became his political enemy — say he is not a racist. Paul has written a bunch of books, but never a racist book. He has engaged in numerous political campaigns, but never a racist campaign. He is deeply interested in economic and political ideas, but not ideas about race. And he is not an angry person, as so many racists seem to be.

If Paul is not a racist, then what do the newsletters say about him?

The story of the newsletters was told by Julian Sanchez in Reason four years ago. In 1988 Paul had given up his seat in Congress to run for president on the Libertarian Party. After he lost, he went back to his medical practice. But he had a valuable mailing list, and he kept a side business in newsletters. To produce these letters he had several people working for him. Lew Rockwell was one. Another was Murray Rothbard. Both were right-anarchists, radical free-marketeers. At that time, they had a theory, the “paleo” strategy, that libertarians should market their philosophy to the populist Right. For Rothbard, this wasn’t the first strategy of alliance; in the 1960s he had allied with the New Left. As communism crashed, he proclaimed an alliance with the “paleoconservatives,” which ranged from Patrick Buchanan to lowbrow populists. The Ron Paul newsletters were his vehicle; the nastiness towards black welfare recipients, Martin Luther King, gay AIDS patients, etc., was part of a calculated tone.

Exactly who wrote the stuff is unclear. Rockwell is blamed most often, but he says he mainly wrote promotional copy. Rockwell now runs the libertarian website LewRockwell.com, which can be nasty to pro-war Republicans and the “beltway libertarians” at the Cato Institute, but does not market racism. Rockwell is not interested in race. When the newsletter issue came up four years ago, his contributor Karen DeCoster made the same point about him that others have made about Paul: the newsletters didn’t sound like him. She wrote, “Those excerpts making light of immigrants/blacks etc. are way too snappy and attempt to be way too humorous to have been written by Lew . . . His personality is exactly the opposite.”

Rothbard died in 1995. He could be a snappy writer, and he loved to indulge in polemics. But writing like a redneck would have been striking a pose: he was a Jew raised in the Bronx and had a doctorate in economics from Columbia University.

The critics piling on Paul won’t accept his statement that he doesn’t know who wrote the offending copy. I don’t believe it either, but I accept it, and I respect Paul for not naming names. Why does anyone need to know? It was Paul’s newsletter. He is responsible for it, and the stain is on him.

The crucial question is what kind of a stain it is. Does it mean Paul judges people by their race and that one race is to be favored over another? Based on the rest of his life, particularly the last 15 years, you have to say no. It does suggest some other things, though, starting with the Kirchickian notion that libertarians just don’t care about this stuff. Politically it suggests tone-deafness and poor judgment.

The newsletters of 20 years ago were a pose. The Paul of today is who he says he is.

That’s not racism, but it’s not what most Americans look for in a president, either. Then again, Ron Paul is not going to be president. The reason to support him is not that he can win, but that the Republicans, who are America’s nationalist party, need to be reoriented away from war, executive power, deficit spending, money creation and debt toward a more peaceful, constitutional and financially sustainable vision — and the only person who has had any success in doing this is Ron Paul.

Wrote Sullivan: “I stand by all the things I wrote about Paul’s views, his refreshing candor, his happy temperament, his support for minorities, and his vital work to undo the war on drugs and the military-industrial complex. I don’t think he’s a racist; in fact, I think he’s one of the least racially aware politicians I’ve come across in a long while.”

And Shikha Dalmia: “I have never met Paul. But everyone I know who has likes him. They can’t believe that he is capable of harboring the kind of vile sentiments expressed in the newsletters. He seems just too mild and innocuous and decent and well meaning.”

He does. Maybe it’s a pose, but I don’t think so. I think the newsletters of 20 years ago were a pose. The Paul of today is who he says he is.

That he has racked up 21.5% of Republican caucus votes after challenging some of the ruling ideas of the party, means he has achieved something, and not only for himself, and not only for 2012.




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From Ayn Rand to . . . Edward Abbey?

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Libertarians of a certain age, when reflecting on their political odyssey, usually invoke Ayn Rand as the source of their epiphany — in spite of the fact that Rand herself repudiated the libertarian movement and labeled her philosophy Objectivism. Most libertarians weren’t persuaded: they continued the one-way lovefest, though many were beginning to feel embarrassed by the dogmatism, stubborn intransigence, absence of warmth or empathy, and cultishness of her aptly-nicknamed “collective.” Gagging on Objectivist correctness, Jerome Tuccille, a former Wall Street Journal writer and libertarian child of the Goldwater campaign, hastened the split between Rand and many of her erstwhile followers with the publication of his 1971 memoir, It Usually Begins with Ayn Rand, in which he lampooned Objectivists as zombie sycophants. Nevertheless, Rand remains the most influential libertarian of the twentieth century, though less and less so as more varied paths to libertarianism open.

Libertarians are radicals. Randian libertarians have especially radical expectations of the world. Relying on a philosophy so internally consistent that its dots nearly connect themselves, they continue to proselytize, believing that exposure to self-evident tenets will result in massive conversions. Next to the Bible, Rand’s philosophical novel Atlas Shrugged remains one of the best-ever-selling books in English. But while the Bible continues to make converts, particularly of the fundamentalist sort, Rand’s oeuvre is not nearly as successful.

Evolutionary psychologists hypothesize, on a smidgen of evidence from the Human Genome Project and other sources, that both religious inclination and political persuasion have genetic bases. Perhaps. On the other hand, I place libertarians smack dab in the middle of the left-right continuum (as does the "world’s smallest political quiz") — and there is some truth to that.

My father, founding CFO of what would later become AIG, admired Lyndon Johnson’s Great Society — its attempt at eradicating poverty. My mother had favored Richard Nixon over John Kennedy — despite the fact that she was a Catholic. Before she died, she’d become a staunch Reagan supporter, despite the fact that she was opposed to the death penalty. Though both had read Atlas Shrugged and Rand’s other major novel, The Fountainhead, neither perceived them as particularly political.Their politically schizoid children became, in turn: a conservative turned Obama-backer with vague New Age inclinations (oldest brother); a seeker settling into religious-right Republicanism (older sister); a liberal attorney who later found Christ and conservatism (little sister); and a left-right flirter slouching into moderate libertarianism and radical atheism (myself). Go figure. It seems that unless chaos theory is resorted to, political hegiras are often unpredictable and the motives behind them inscrutable.

* * *

At first, Ayn Rand didn’t charm me.

Recently graduated from college, I’d joined a group of 14 friends who proposed to kayak the 600-mile length of Mexico’s Baja Peninsula — at the time, a nearly preposterous undertaking considering that back in 1972, kayaking, as a sport, didn’t really exist in the US, and Baja’s infrastructure consisted of widely dispersed fishing villages connected by 4-wheel-drive tracks. We resorted to ordering kayaks from Germany, carrying our own essentials, and fishing for protein.

It was almost more than we could handle. Averaging, at first, only ten miles per day because of winds, contrary currents, swell and some of the highest tides in the world, most of the group abandoned the expedition at Santa Rosalia, Baja’s midway mining town. Still, four of us decided to forge on. Those who departed left us whatever we could use to aid our success. Except for Tek. He insisted that we pay — if not market price, at least something,for his dry noodles, crackers, peanut butter, chocolate bars, rusty lures, and battered reading material. I stared at him incredulously and asked, “Why?”

Unless chaos theory is resorted to, political hegiras are often unpredictable and the motives behind them inscrutable.

Now, on any long expedition, reading material is essential. While I had taken John Steinbeck’s Log of the Sea of Cortez, Tek had taken Atlas Shrugged. “Because it’s my stuff and I don’t owe it to you,” he responded, adding that I’d understand once I’d read the book, which he ended up giving to me. I paid him a token price for his offerings but used the book’s pages as fire starters after reading the back-cover blurb. Not only was his arrogance insufferable, but that title seemed a pretentious conceit, and the book’s catch-phrase, “Who is John Galt?” (touted as cutting-edge slang somewhere — I don't remember where) seemed as catchy and pithy as a bad English-speaking foreigner’s attempt at neologising — which is exactly what it was. (Years later, when I finally got around to reading Rand, I appreciated her perspective, one I was already taking to.)

* * *

The strongest formative influences on my political development occurred around puberty. I grew up in Havana, Cuba, the son of a well-to-do capitalist entrepreneur who’d married his Cuban secretary. Not only had he established Cuba’s AIG branch, but he introduced Volkswagen to the island and opened Cuba’s first paper products factory.

In 1960, a year and a half after Castro’s revolution, my family was forced to abandon everything, pack one suitcase each and flee Cuba for Mexico. All of our property was expropriated. Unsure of their next move, our parents placed us children in boarding schools along the Mississippi Gulf Coast, where we perfected our English and experienced the American Civil Rights movement up close.

By the time I entered high school, my political consciousness was being forged by the Vietnam draft and the presidential campaign of 1964. The Jesuit high school I attended in Phoenix, Arizona stressed critical thinking and public involvement, going so far as to hold mock Goldwater-Johnson debates for the entire student body. English classes included up-to-date reports and discussions of the goings-on in San Francisco’s Haight-Ashbury, interspersed — at one time — with an in-depth study of Emerson’s “On Self Reliance,” a curious albeit insightful juxtaposition. I rooted for Barry, an unpretentious straight-shooter, with a solid grasp of the issues. But it wasn’t just his political values that attracted me. When I heard he’d mooned a censorious group that objected to the carousing at one of his campaign parties, he became my hero.

My friend EB and I decided to get involved. He joined YAF (Young Americans for Freedom) and introduced me to the John Birch Society’s nearby American Opinion Bookstore, which enabled me to buy and read None Dare Call it Treason. EB was sharp as a scimitar, a whiz at Latin and classical Greek, and unbeatable in debate, with a vocabulary that rivaled William F. Buckley’s. Together we joined the Model UN, a national high school mock UN project, where we hoped to be assigned to represent some important country — like France or Canada. We were assigned Ghana. Knowing nothing about Ghana — and just a tad disappointed — we decided to meet with President Kennedy’s ex-ambassador to that country, William P. Mahoney, who happened to live in Phoenix. Ambassador Mahoney was kind enough to grant us an interview just days before the conclave. True to form — and with EB’s command of parliamentary procedure — we brought little Ghana to the forefront by tabling some outrageously radical proposal in the General Assembly. That really got things going.

Later, I put together a presentation, complete with maps and photographs, on the Cuban Revolution and offered it to schools and interested groups. Nothing drives home an abstract news event to an elementary school audience like having a high schooler — only a few years older — recount how a revolution affected his family. Adult audiences, likewise, listened rapt and incredulous at what the kid lived through, always imagining the worst.

We brought little Ghana to the forefront by tabling some outrageously radical proposal in the General Assembly.

I was driven. Already president of my class, I decided to run for the Student Body Council — first for treasurer, then later for president. My libertarian inclinations were evident in my platform. I reasoned that since Student Body funds belonged to the students, my job was to maximize revenues and then return them to the students. The assembled student body had never heard such logical populism before. I could barely get through my speech for all the hollering and clapping, while the faculty members grinned nervously, wondering what their democracy had wrought. I won overwhelmingly. My opponent, Dick Mahoney (son of Ambassador Mahoney), who was later to become Arizona’s secretary of state and a Democratic candidate for governor, never stood a chance.

I kept my promise. To maximize Student Body revenues, I got the administration to fire the snacks and refreshments purveyor for varsity football games and, with a small crew of volunteers working out of the back of a pick-up truck outfitted with counters, ice chests and a till, took over the concession. The money poured in. Unable to convince the administration to issue rebate checks for each and every student at the end of the year, I decided to throw a big party with the funds. Between prom and graduation celebrations, I got Linda Rondstadt and the Stone Poneys — who’d just released their hit single “Different Drum” — to put on a dance-concert for the combined student bodies of my own Brophy Prep and our twin neighbor girls’ school, Xavier High.

* * *

EB and I ended up at different colleges, where we both broadened our horizons: me, in northern Arizona where I discovered girls, drugs, and outdoor adventure sports such as alpinism and kayaking, and acquired a knowledge base that instilled confidence in my developing opinions; EB at the University of Virginia, where he discovered boys, the law, and the power of big government to set certain injustices right. At first, EB was up to his old tricks. He and several right-wing buddies planned a takeover and subversion of the U of V branch of the SDS (Students for a Democratic Society), a firebrand, radical left-wing organization that, by 1969, was already falling apart. As he recounts,

“Our strategy was to have some of ‘our people’ attend and cause a disruption and dissention. I, then, would emerge as the voice of reason. The ‘disruptors,’ as the plan called, made impassioned speeches, attacked me viciously (of course, we all reconnoitered later for a few beers to celebrate our triumph), and then called for a massive walkout. Many people followed them. Of course, that meant that the people left in the room would be easily convinced to elect me as their leader. (Others of my ‘planning committee’ remained to make and second the nomination.) From a tactical perspective, it was very successful. The local newspaper ran an article about ‘Young Turk EB.’ After that, I did nothing. I never attended another SDS meeting. The joy was in formulating and executing our plan. We had no intention of going further.”

While at the University of Virginia, EB (with his gay, black roommate) discovered that his tastes ran counter to the norm. Appalled at the social treatment his new friend was subjected to, EB came to the conclusion that it was only through the federal government’s efforts that racial bigotry would ever begin to be eradicated in as short a time as it ultimately was. So he pursued law, a skill that, by the time he passed the bar, he used to advocate gay rights. Today he describes himself as an anti-establishmentarian.

But I was still torn between Right and Left: on the one hand, debating the merits of Nixon’s Vietnam peace plan with fellow Prescott College students Tom and Randy Udall, scions of the Stewart and Morris Udall political dynasty (Tom is now US Senator from New Mexico); and on the other hand, convincing prospective conservative donors such as the Adolph Coors Trust and nascent Goldwater Institute (not today’s Goldwater Institute) that the small, private, liberal arts “hippie” college I was attending was worth supporting. I’d been handpicked for this PR fundraising job by the college’s president as an example of the caliber of student the college was training for "tomorrow’s" leadership role in society — in spite of my Mohawk hair-do, sometimes flamboyant dress, VW van pimpmobile, and of course my outspokenness.

At the trial, Sam defended himself by arguing that "it wasn't criminal damage, it was historic preservation." The jury acquited him after deliberating for 25 minutes. 

The outdoor adventure sports that Prescott College offered as an alternative to the more traditional football, baseball, and basketball at other colleges instilled self-reliance and initiative. They also imbued a passion for the natural environment and its wild places that, over the years, has only grown stronger for me. But it was the academic pursuits that were truly formative, intellectually. I majored in anthropology. Not your garden variety, Samoan-kinship-and-Arunta-fertility studies, but "processual" archaeology, at the time a new, cutting-edge approach to history that attempted to explain the nature and fabric of civilization.

While traditional archaeology collected potsherds, studied changes in art motifs, and concentrated on dating and categorizing sites, processual archaeology studied human adaptation — mostly technological — to changing environmental conditions and increasing population densities. Its corollary in cultural anthropology is known as the "ecological" approach (without the ideological baggage that term carries in common parlance). The specific question that gripped me was, “Why did the people who would become the American Indians, initially a homogenous population at the time of the Bering Straits crossing, develop high civilizations in the Andes and Mexican highlands but remain hunters and gatherers or incipient agriculturalists in the Great Basin and Amazon rain forests?” Today the synthesis this approach yields to the study of humanity is probably best — albeit only partially — exemplified by Jared Diamond’s Guns, Germs, and Steel and its sequel Collapse, and given more scholarly exposition in the works of Karl Wittfogel, Leslie White, Gordon Willey, Marshall Sahlins and Elman Service, among others.

One elementary conclusion from the "New Archaeology" was the correlation that government power and control increases as population densities thicken and civilization becomes more technologically complex. However, correlation is not cause and effect — much less destiny — and, though the association of the two makes intuitive sense at some level, to this incipient libertarian the challenge was to analyze and discover just how much government denser and more complex societies actually required.

* * *

After graduate school I became a Mother Earth News-subscribing, back-to-the-land homesteader on a 160-acre parcel of rural Arizona land where I built my own energy-efficient home (powered by a wind generator), raised cattle, and grew a garden and orchard. I earned money doing archaeological environmental impact studies, building homes and doing some outdoor guiding. My wife made cowboy shirts and managed the local commercial truck garden. It was then that I discovered the Libertarian Party, through Karl Hess’ seminal article The Death of Politics, Roger McBride’s A New Dawn for America, and one of David Nolan’s local screeds. My wife and I both joined and decided to become politically active.

Our nearest municipality, Chino Valley, had just hired its first town manager, deciding that its exponential growth was just too much complexity for its traditional mayor-and-council government. Academically trained professional town managers often have a statist bent. Our newly hired statuesque blonde bureaucrat (with hair tickling the dimples on the backside of her knees), prided herself on her ability to extract state and federal funds through her skill at writing grant applications. Nonetheless, she was young and hip, and found us kindred souls. She hired us to write a pamphlet guide to local government for local citizens, a task we tackled with a libertarian bent. Additionally, she sponsored an Economic Development Committee to attract businesses to Chino Valley. I joined, though as something of a Trojan horse. Our little town wanted a supermarket, such as a Safeway, to locate nearby while I — not averse to the new facility — was afraid our committee members would sell their souls by imposing liens on the taxpayers (such as tax breaks for the chain), issuing industrial revenue bonds, or resorting to any number of other unfair competitive practices — or worse.

He pounced on my uncertainty about eliminating the police force, asking, “What crimes have the police ever prevented?”

1982 was a threshold year for the Arizona Libertarian Party. The popular five-term Republican Congressman, Sam Steiger, an outspokenly colorful character, declared his candidacy for governor as a Libertarian. Sam was a rancher, journalist, and Korean War hero who had twice represented Prescott in the state senate. He was plainspoken in the Goldwater mold, had a contagious smile and an outrageous sense of humor. His very public debate with his new party over conscription and his subsequent flip-flop actually helped him; it indicated that he was amenable to reasoned argument and not afraid to admit he was wrong.

When I first met him, at the offices of thePrescott Sun, the newspaper he published (and for which my wife worked), he was wearing a Stetson and cowboy boots, and was chomping on a big, lit cigar. He shook my hand, twisted his head back — as if to get a better perspective to look me over — and baited me with repartee.

“I’m all for the little guy,” he declared, pausing dramatically. “There goes one now!” he blurted in mock surprise, pointing at the floor, and stomping on the spot with an exaggerated goose step.

Sam wasn’t popular with the intelligentsia. He was once stopped by a traffic cop and the verbatim transcript of the exchange appeared as a full-page article in Prescott’s other newspaper, thePrescott Courier. To every polite request from the officer, Sam responded with a “Fuck off” or some other expletive-laden insult or an accusation of harassment. Neither a reason for, nor a conclusion to, the traffic stop was mentioned — absolutely no explanation other than the implication that Sam Steiger was not a fit citizen. Oddly too, the article was accompanied by a large, close-up picture of Sam’s face — apparently snapped from the passenger side — sardonically yet patiently putting up with the ordeal,.

But he was an active citizen. When the City Council erased a mid-block crosswalk connecting the courthouse with the bars on Whiskey Row in downtown Prescott, because a state highway ran concurrent with that street, the citizenry raised holy hell. Sam took the matter into his own hands and personally repainted the white lines. He was arrested and charged with criminal damage and disorderly conduct. At the trial, he defended himself by arguing that "it wasn't criminal damage, it was historic preservation." The jury acquited him after deliberating for 25 minutes.

Sam lost his bid for governor but garnered over 5% of the vote, crossing the magic threshold that gave the Libertarian Party ballot access. It was a sweet defeat. Years later, in 1999, he was elected mayor of Prescott.

* * *

Ballot access electrified Arizona’s Libertarians. State and county chapters organized. Precinct committeemen were appointed, elected or volunteered. I attended my first Yavapai County Libertarian Party meeting — an intense mixture of misfits, cranks, anarchists, hippies, dropouts, and nerds from both Left and Right, kitted up extremely informally (if not outrageously) — all united by instinct, intellect, and outside-the-box thinking.

There, at the meeting, I ran into Mark Davis — a close friend from high school but the last person I thought I’d run into. He recognized me and gave me a warm hug. He was big — solid and powerful (an amazing Charles Atlas-like transformation) — with long and thick, unruly strawberry blonde hair; but still freckled with his distinctive nostril slit, a scar from a tussle with a dog when he was a kid.

The last time I’d seen him was at "24th & Van Buren," Phoenicians’ euphemistic name for Arizona’s hospital for the criminally insane. I’d visited him there when I heard he’d been committed. Sitting cross-legged on the ground across from him in the thrice-fenced outdoor commons, I’d asked him what landed him there. He said he’d killed someone.

I was speechless. Aghast. Though extremely intense, Mark was no murderer. He was a minor, in the nuthouse. Who knows exactly what he meant by “I killed someone”? He could have meant anything from murder to accident to he just felt responsible for someone’s death to . . . who knows? I assumed it had all been an unfortunate accident and that he’d feigned insanity to ease his plight. (If anyone could fool a bevy of psychiatrists, Mark Davis, with his sharp intellect and determination, could.) I didn’t question him further, fearing that covert eavesdropping might pick up our conversation. I didn’t want to blow his cover. I wished him well and promised to visit again, but never got around to it.

It was now apparent that he’d survived the ordeal. We caught up.

Much had happened. In 1969, he had cofounded Terros, an extremely successful — albeit, at the time, controversial (both for its unconventional methods and staff) — crisis intervention program in Phoenix and had received a citation from the mayor for talking a man out of suicide. (Today Terros is a multimillion dollar enterprise that specializes in drug rehabilitation.) He’d also taken up martial arts and become a Sikh. He'd taken to riding a Harley and trolling for rednecks that didn’t like his long hair, beard, and turban, so he could teach them tolerance. Afterward he’d married and was now raising two daughters, whom he supported as a master craftsman, building high-end, lacquered, exotic-wood, shoji-screened cabinets for rich clients in, among other places, Santa Barbara, California. While there, he’d taken up some sort of Maoist revolutionary ideology. Surprised, I asked him if he hadn’t had a bit of a conflict between his political views and his employment. He responded that he was volatile, his thinking was always evolving, and that his convictions followed his conscience. But now, he was a libertarian — and he was raring to act.

Abbey’s point is that compared to industrial magnitude pollution, which kills people and animals, empty cans along a roadway are not only harmless; they provide income for homeless scavengers.

We discussed political philosophy. Mark’s libertarianism burned with the faith of the newly converted — it gravitated toward anarchy. Mine, tempered by experience, was more moderate. He ran down the list of government functions that could be privatized or eliminated. Mark being Mark (and now a libertarian, a species whose propensity to cavil is only exceeded by Marxist theoreticians and Jewish rabbis), pounced on my uncertainty about eliminating the police force, asking, “What crimes have the police ever prevented?”

Mark could go from convivial to confrontational in the flash of a rhetorical comment — eyes popping out, spit flying, face too close for comfort. But I’d grown up with him, liked him, and could calm him by tactfully pointing out that my opinions were provisional, while subtly reinforcing my affection for him. Luckily, the party chairman called the meeting to order. He announced that he was stepping down. He’d taken a political preference test and discovered that he was more conservative than libertarian. The honorable course, he believed, was to resign. The chair of the Yavapai County Libertarian Party was open.

With only a moment’s hesitation, Mark grabbed the baton and volunteered me for treasurer, adding that my clean-cut good looks, conventional attire, and calm demeanor were a necessary face for the party. It was a done deal: he became chairman and I became treasurer.

* * *

Mark had grown up the son of an oilman, bumping around places like Indonesia and Libya. He was precocious and idealistic from the start, with a sharp mind and boundless energy. He had raged in one direction or another since he was a preteen growing up in Phoenix, with his hidebound father ineffectively attempting to corral the boy’s energies with beatings. By the time he was 16, he’d been in and out of so much trouble that he was put in the California Youth Authority’s Los Angeles rehab center for unruly kids. As Dean Kuipers, in his September 1989 Spin article quotes him, “There was a lot of fighting, rapes, attempted rapes. I’m this screwed-up, basically naïve, suburban white kid, and this is right after the Watts riots. I came out of there pretty crazy, pretty wild.” Swearing never to be taken advantage of, he turned to weightlifting, self-defense and extreme endurance.

After reconnecting at the Libertarian Party meeting, we started to hang out together. Mark loved to take long runs in the mountains near Prescott. At sunrise, he’d run barefoot two and a half miles and up 2,000 feet to 7,000-foot Granite Mountain Pass and back, cutting a maniacal figure as he hurtled over rocks, prickly pear cactus, and blazing decomposed granite. I accompanied him once — with shoes. For us, being far from the beaten track, up on a mountain, down on a river, out in the desert or at sea was a meditation, a challenge, and a love affair all rolled into one. At his cabinet shop, he had a "heavy bag," which bore the brunt of his kickboxing workouts or his frustrations, demons that could materialize unpredictably at any time.

In high school, we’d hit it off: he a misfit, me a BMOC (big-man-on-campus). We’d found what we thought was a discarded B-52 fuel tank and decided to convert it into an outrigger canoe — the perfect undertaking for two hyperactive teens uncomfortable with just hanging out. The project was a big deal for a couple of 15-year-olds; it took most of the year. But we worked well together, and by the time I got my driver’s license, we had successfully launched the canoe on nearby Lake Pleasant. After that we drifted apart. During senior year he either left school or was kicked out.

Somehow, something similar happened after a few ill-attended Libertarian Party meetings where no one but me, Mark, and the new party secretary (of whom I retain no memory) showed up. We drifted our separate ways: me, to teach at an Outward Bound-type school in Colorado; Mark, to apply his boundless energy in new, more radical directions.

* * *

When local author Edward Abbey published The Monkeywrench Gang in 1975, it became an instant cult classic — the Atlas Shrugged of the environmental movement. The novel revolves around an unlikely alliance of four wilderness lovers who wage a war of low-tech sabotage — “monkeywrenching,” as they call it — against mineral exploitation and development of all stripes. The group is composed of Seldom Seen Smith, a “jack Mormon”; Dr. Sarvis, a rich, angry surgeon; Bonnie Abbzug, his (of course) gorgeous nurse; and a Neanderthal Vietnam vet named George Washington Hayduke. While “Who is John Galt?” became the catchphrase of Rand’s followers, “Hayduke Lives!”, appeared on bumper stickers, T-shirts, and graffiti — an expression of solidarity with monkeywrenching.

Monkeywrenchers proliferated — not least in Prescott. At our local college, a small group of activists fired up a chainsaw and, in the wee hours of the morning, cut down a new billboard just outside of town. But the novel’s impact was national. As Kuipers recounts,

“In April 1980, Dave Foreman and four other radical environmentalists took a hiking trip in the Pinacate Desert. They had all read about Hayduke and the Monkeywrench Gang, so as they sat in a dark, rural bar in San Luis, Mexico, they weren’t surprised to find themselves creating an organization that would advocate widespread ‘ecotage’ — property damage used to free wilderness areas from the blight of mining, foresting and commercial development. They named the group Earth First! after the premise of biocentrism that John Muir and Aldo Leopold had put forth: Every species on earth has an equal right to exist, the planet is not meant to be exploited, and measures must be taken to assure this. Today [1989], Earth First! has a network of over 50 ‘bureaus’ worldwide guided by project organizers rather than a main office. Edward Abbey’s fiction has become reality.”

Five years later, Foreman published (as both editor and partial author) Earth First!’s field manual, Ecodefense: A Field Guide to Monkeywrenching — a how-to book that details everything from foiling coyote traps to spiking trees to decommissioning heavy construction equipment to downing power lines.

Sometime between 1983 and 1986, Mark Davis discovered a new cause: saving the earth. He’d later say he was willing to die to prevent the rape of Mother Earth, yet — oddly — was unwilling to join Earth First! formally. Not only was he not much of a joiner; he viscerally disliked Dave Foreman, thinking him a poseur. Later, of course, he’d accept operational funds from him. Mark and the small group of Prescott-area activists that had coalesced for monkeywrenching operations dubbed themselves the Evan Mecham Eco-Terrorist International Conspiracy (EMETIC), deriving the name from the later-to-be-impeached, car-dealership-owning, hyper-conservative Arizona governor.

John Maynard Keynes said, “When the facts change, I change my mind. What do you do?” I changed my mind about this particular government intrusion.

Meanwhile, my environmental consciousness was fine tuning itself. Though I had no patience for Abbey and couldn’t get past the first chapter of The Monkeywrench Gang, one contrarian point he made struck a chord — and he made it in a very Randian manner. In a scene in Atlas Shrugged, Dagny Taggart, a railroad magnate and the novel’s heroine, is driving through endless, pristine forest. She’s terminally bored — until she spots a billboard. Her eyes light up, her lips curl into a smile, all her senses come alive, and she comments on the contrast between nature’s randomness and the billboard, an icon of the creative and purposeful effort of an individual.

Abbey, on the other hand, has one of his characters driving across a stunning Monument Valley-like landscape drinking beer and tossing the empties out the window — a monkeywrencher littering. His point is that compared to industrial magnitude pollution, which kills people and animals, empty cans along a roadway are not only harmless; they provide income for homeless scavengers. It got me to thinking about the difference between environmental aesthetics and environmental fundamentals, such as those with public health consequences, including air pollution — a subject first explored from a free-market perspective by Milton Friedman.

As a sometime land speculator, subdivider, and homebuilder, I faced a few decisions that helped focus my libertarian environmentalism — particularly in regard to zoning. At first I favored underground utilities, and was also instrumental in getting the county to institute a zoning ban on mobile and modular homes — both of these on aesthetic grounds. But when I received a cost estimate for underground utilities versus power poles for one project, I quickly changed my mind: the aesthetics were just not worth the price. The huge difference reflected a much greater expenditure of energy, time, and manpower. Aesthetics would have substantially increased the price of the finished product, thereby making it less affordable to more people. Additionally, underground utilities were costlier to maintain and repair.

One day a neighbor dropped by, worked up into a lather. He informed me that the state was planning to register all our wells with an eye, ultimately, to meter them, measure our water usage, and even charge us for the water from our own wells. My first reaction was outrage. But then the calmer strains of research took over. First, an overview of water policy, in libertarian author Terry L. Anderson’s Water Crisis: Ending the Policy Drought (Cato Institute & The Johns Hopkins University Press, 1983). Then, a reading of the pending legislation.

The long and short of it was that some critical Arizona aquifers were being depleted at an unsustainable rate. And Chino Valley was smack dab in the middle of one of these. As Anderson had clearly pointed out, aquifer extraction is a "tragedy of the commons" phenomenon. His mitigating proposals were right in line with Milton Friedman’s insights, and, to my surprise, so was Arizona’s new law. The new AMA (Active Management Area) designations were meant to monitor water extraction, granting first-come-first-served rights to users in, as it seemed to me, an equitable solution to our homegrown tragedy of the commons. John Maynard Keynes said, “When the facts change, I change my mind. What do you do?” I changed my mind about this particular government intrusion.

But it was zoning that, after one contentious, standing-room-only public meeting of the zoning board, really rattled me. One of my new neighbors (who had bought a 10-acre parcel from me) approached me one day requesting support for a zoning variance he was seeking. He was an elderly man of modest means, living out his dream of retiring to a wooded, rural homestead. He proposed to install a mobile home on his lot and live in it while building a log cabin around it to enclose it, thereby saving time, money and interior finishing materials. Even though, when the project was completed, there would have been no trace of a trailer; its invisible existence was still, technically, in violation of the zoning restrictions. Hence the need for a variance.

I agreed to support him.

His petition polarized the neighborhood. Ideological lines were drawn and factions formed, mostly by those whose visceral hatred of mobile homes was an integral part of their identity. Neighbors who had previously been on friendly terms now avoided each other. I breasted my cards: antagonizing people did not yield beneficial results. Since I’d sold most of the lots and helped establish the zoning restrictions, most people assumed I was against the variance.

When news of the sabotage reached the FBI offices in Phoenix, FBI headquarters in Washington, DC ordered an investigation opened immediately.

At the zoning board meeting the room was packed, the tension was thick and the tumult intimidating — particularly for the elderly petitioner and his wife. Visibly shunned by most attendees, they were so nervous that he stared straight ahead, stoic and impassive, clutching his notebook of prepared comments, while his wife stood beside him, cheeks wet with uncontrollable tears.

My heart went out to them. I approached them, shook their hands, encouraged them, sat with them. The meeting was called to order. For most of us, it was our first zoning hearing, so the chairman explained the procedure. First, the petitioners would present their request, along with their reasons for the variance they sought. Afterward, members of the public could offer arguments for or against the proposed variance.

Watching that man kowtow to the zoning board on its elevated dais with the factious audience murmuring hostile comments gave me a glimpse of what ‘struggle’ sessions in Mao’s China during the Cultural Revolution must have been like. Though already familiar with the political, philosophical, and economic arguments against zoning (see Land Use Without Zoning by Bernard H. Siegan, 1972 — a libertarian classic), I now became viscerally opposed to the institution.

After the old man presented his case and a dozen antis retorted, I spoke in his favor, surprising myself with such an eloquent supporting argument that the local newspaper quoted me and carried my photo.

All to no avail. The couple’s petition was rejected. I walked them out to their car. It was the least I could do.

* * *

In May 1986, three of the four sets of power lines leading to the Palo Verde nuclear power plant outside Phoenix were shorted with hemp cord and medium-gauge chain. The power plant’s lights flickered, the air reeked of ozone, and the technicians inside the control room scrambled to ensure that the backup generator would kick in. When news of the sabotage reached the FBI offices in Phoenix, FBI headquarters in Washington, DC ordered an investigation opened immediately. It was codenamed THERMCOM.

Though monkeywrenching continued throughout the next year, the FBI had few leads. Until October 5, 1987. That night, someone with a propane torch burned through bolts on several of the metal pylons supporting the chair lift towers at the Fairfield Snow Bowl ski area atop the San Francisco Peaks outside Flagstaff, Arizona. The peaks, the highest point in Arizona and visible for way over 100 miles, are sacred to the Navajo and Hopi Indian tribes living just to the northeast. EMETIC claimed credit.

On June 6, 1988, the FBI got its first break. Ron Frazier, one of the Prescott area eco-activists, became an FBI informant. He’d driven Mark Davis to a Phoenix welding supply store to purchase a torch, regulator, and hoses on September 29, 1987 — only one week before the torching. Unstable and jilted by his ex-lover, Ilse Asplund — who had then become Davis’ lover — he rationalized that he was protecting Ilse and her kids from the dangerous Davis. Mark could be arrogant and condescending and was oblivious to jealousy — traits that did not endear him to Frazier, a drug-addled stoner of modest intellect, once described as being a few neurons short of a full nervous system. The welding supply shop manager identified Mark Davis from a photo lineup. It wasn’t hard, given Mark’s distinctive split nostril.

Suspecting that EMETIC was somehow linked to Earth First!, the FBI assigned Michael Fain, an undercover agent, to infiltrate the group. Over the course of two years Fain, using the alias Mike Tait and the persona of a PTSD’d Vietnam vet, finagled himself into the group through the heartstrings of Peg Millet, half-sister of feminist author Kate Millet, an Earth First! activist and close confidant of Mark Davis. Some would say, later, that he was an agent provocateur. But he never gained the trust of Mark — who suspected he was a plant — until Tait accompanied him on his barefoot Granite Mountain run and “heavy bag” workouts.

In one instance, 28 power poles were cut three-quarters of the way through, and the last one finished off with a hacksaw, downing the entire power line when it toppled with an explosive flare of light.

On Labor Day, 1988, Tait, Millet, and a few other activists, hit the site of the proposed Mt. Graham observatory near Tucson, pulling out survey stakes lining the proposed access road to the observatory. Before the month was out, they struck again, cutting the power poles leading to the Hermit, Pine Nut, and Canyon uranium mines on both the North and South Rims of the Grand Canyon. These mines disgorge thousands of tons of earth with radioactive tailings and release a fine uranium dust into the winds — all on the border of national park land. With the North and South Rim mines being separated by a five-hour drive, EMETIC displayed a greater degree of coordination and synchronization than it had ever been credited with before. The EMETIC people had been particularly creative with their sabotage methods. In one instance, 28 power poles were cut three-quarters of the way through, and the last one finished off with a hacksaw, downing the entire power line when it toppled with an explosive flare of light.

The event was front-page news for days. At the subsequent trial, it was revealed that the FBI had known about the uranium mine strikes but declined to act, hoping that later it could somehow snare Dave Foreman, founder of Earth First!, whom it considered the ultimate kingpin.

A month later, on October 25, 1988, EMETIC hit the Fairfield Snow Bowl again, this time felling one of the chair lift’s main supports. EMETIC was getting bold. After the operation it sent communiqués to every radio and television station in Northern Arizona, warning the resort concessionaires to stop developing the San Francisco Peaks.

Now they had big plans, plans to do things that would stun the nation: cutting down the transmission lines leading from the Palo Verde (Arizona) and Diablo Canyon (San Luis Obispo, California) nuke plants, and the lines leading to the Rocky Flats atomic weapons facility near Denver. But the group needed a practice run.

The target was a transmission tower that supplied electricity to the Central Arizona Project’s (CAP’s) water-lift station near Wenden, Arizona. The CAP diverted Colorado River water to irrigate central Arizona. The commando team of Mark Davis, Mike Tait, Peg Millet, and Dr. Marc A. Baker, an ill-tempered botanist, was a nearly literal rendition of Abbey’s script.

After nightfall on May 30, 1989, they prepared to strike, with Mark as the ringleader bearing the torch. But so did the FBI — with a full SWAT team of more than 50 agents, H&K MP-5 sub-machine guns, helicopters with night-vision capability, and even bloodhounds. Davis and Baker were captured instantly. Tait disappeared. Peg Millet, 35 years old and a big woman, managed to elude capture, running into the desert, reaching Highway 60, and hitchhiking back to Prescott, over 60 miles away. She was apprehended the next day at work, where she showed up as if nothing had happened. Ilse Asplund, Davis’s girlfriend, and Dave Foreman were also arrested after the fact.

At the three-month-long trial, Gerry Spence, the celebrity attorney, headed the defense team representing Foreman. In a plea bargain, Asplund, Baker, Millet, and Davis pled guilty to one charge, involving about $5,200 worth of damage to the Snow Bowl ski lift. Foreman, who was thought to have funded part of the operations, got probation and a $250 fine and was forced to foreswear monkeywrenching. It was the end of Earth First!’s first incarnation. Baker served six months, while Asplund served one; each was fined $2,000. Millet was sentenced to 3 years and restitution of $19,821. Davis got six years and restitution of $19,821.

“I don’t want my species to die. I don’t want my kids to die. We are in the process of suicide. It’s all legal, but it’s suicide.”

At the sentencing hearing, the prosecutor wanted Davis to be remanded to jail immediately and to serve time without parole. But Davis had his say: “I have stood in front of men with guns and stopped them from beating women. I have stopped robberies. I have gone up a tower and pulled a man away from a 50,000 volt line,” he said, adding: “I don’t want my species to die. I don’t want my kids to die. We are in the process of suicide. It’s all legal, but it’s suicide.” Judge Broomfield was taken with Davis’ grandiloquence and gave him 17 days to report to prison. Furthermore, he gave Davis a sentence that would allow for parole at any time during his jail term.

* * *

In September 1991, four days before Mark reported to serve his time, the Los Angeles Times provided him with an editorial sounding board:

“An intelligent conservative knows some deep truths, including the illusory nature of free lunches and the inadvisability of taking irreversible actions without understanding the consequences. Our behavior is neither intelligent nor conservative . . . Growth by its very nature means an increase in the speed and efficiency of environmental destruction. Anyone who says aloud that infinite growth on a finite planet is impossible is ridiculed. Denial has become official policy. . . . If what I and my three colleagues did has no effect other than to further damage an already tattered social contract, then I apologize. That was not the point. I acknowledge the necessity of courts and laws, and accept my prison term. But I am not sorry.”

In the late ’90’s I ran into Mark at a local hardware store in Prescott. He’d served four years of his six-year sentence at the minimum security prison in Boron, California. A severe claustrophobe, he had found the incarceration nearly unbearable — he’d lost 40 pounds in the two months of jail following his arrest — as he had found the separation from his two little daughters. Whatever his faults, Mark was a devoted and loving father.

The same month and year that the Los Angeles Times gave Mark a soapbox, Bill Bradford published my first feature article in Liberty. Ever since, realizing that nudging a left- or right-winger toward the libertarian middle is much more productive than attempting to badger him into libertarian purity, I’ve focused my political energies on writing and teaching, two fields where illiberalism cloaks itself in the language of liberalism — always mindful of the adage that “education is the road from obstinate ignorance to thoughtful uncertainty.”




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