On Judicial Review

In 1803, in the famous case of Marbury v. Madison, Chief Justice Marshall ruled that the Constitution gave the Supreme Court the authority to nullify acts of Congress—the power of judicial review. Though few seriously consider overruling this long-standing precedent, many legal scholars criticize the legal reasoning in the case and contend that Marshall usurped a power for the Supreme Court that the Constitution did not provide. Nevertheless, originalists who believe that any precedents inconsistent with the Constitution should be overruled have little reason for concern. Though Marbury v. Madison gives questionable Constitutional justifications for judicial review, the Constitution does provide the Supreme Court the power of judicial review for another reason—namely, Article III Section 1 vests the Supreme Court with “the judicial power,” a power which can be shown to include the power of judicial review. Despite the inadequate reasoning of Marbury v. Madison, the Constitution does empower the Supreme Court to nullify acts of Congress.

Marbury v. Madison

To begin, consider the reasons given in Marbury v. Madison for judicial review. In total, Marshall provides four reasons: 1) the writtenness of a written Constitution, 2) the Supremacy Clause of Article VI, 3) the oath of office for judges in Article VI, and 4) the Arising Clause in Article III. Regarding the first three reasons, none of them provide any inkling that the Supreme Court specifically has the power to nullify acts of Congress. Though the final justification provides greater evidence than the previous reasons, it does not necessarily imply a constitutional power of judicial review.

Firstly, the writtenness of the Constitution need not even imply that it should be followed. Rather than strict rules guiding the government, a written Constitution could merely be considered advice or guidelines which government officials should consider, like in the case of previously written Supreme Court cases. Even after making the reasonable assumption that its writtenness implies that it should be followed, the Constitution being written does not imply that the Supreme Court has the authority to overrule acts of Congress. One could as easily presume that a written Constitution should be enforced by a different branch of the government, such as the legislative branch. Though the writtenness of the Constitution allows for various implications, none of these implications leads convincingly to the conclusion that it grants the Supreme Court with the power to overrule acts of Congress.

Similarly, the Supremacy Clause of Article VI does not provide the Supreme Court with the authority to overrule acts of Congress. The Supremacy Clause states, “This Constitution, and the laws of the United States which shall be made in pursuance thereof…shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.” Though it shows that the Constitution was designed to be binding rather than merely advice, the clause does not show that the Supreme Court specifically should have the power to overrule acts of Congress. As the clause mentions “judges in every state” but not federal Supreme Court Justices, it would be more natural to infer from this clause that state judges, but not Supreme Court Justices, have the exclusive power of judicial review. For reasons similar to why the Constitution being written does not confer the Supreme Court the authority to overrule Congressional laws, the Supremacy Clause also does not confer this power.

Continuing, the oath of office does not confer the judiciary the power of judicial review. Regarding the oath of office, Article VI pertinently remarks, “The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution.” If judicial review rests on this clause, then by implication members of the state legislatures as well as any executive officer would also have the power of nullification. A duty to follow the Constitution does not grant a power to nullify acts by other people also claiming to follow the Constitution. As an oath confers a duty but not a power, the Supreme Court’s exclusive power of judicial review cannot be found in this clause.

Finally, Marshall’s one good textual basis for judicial review—the Arising Clause of Article III section 2—creates more questions than it answers. The pertinent part of the Arising Clause states that “the judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.” Clearly, the judicial power—whatever it is—can be used in cases dealing with the Constitution. Marshall concludes broadly that this power to hear cases arising under the Constitution includes the power to overrule acts of Congress. Though this represents one possibility, other conclusions could easily follow from an unspecified judicial power being exercised in constitutional cases. For example, the judicial power in cases arising under the Constitution could simply represent a refusal to enforce the law in that specific case without overruling the law, or the judicial power could simply be recommendations for Congress to consider in deciding whether to maintain the law–a power of writing authoritative op-ed pieces. Without knowing what the judicial power entails, this clause does not necessarily imply a power of judicial review. Instead, it shows that if the Supreme Court had a power of judicial review, then that power would extend to all cases arising under the Constitution.

The Judicial Power

As can be seen above, Marshall’s primary mistake was inferring from the Constitution that the judicial power included the power of judicial review. Legal scholars who are critical of the Constitutional justification for judicial review make a similar mistake: they infer from the absence of any statement in the Constitution saying “The Supreme Court shall have the authority to overrule acts of Congress” that the Constitution does not grant the power of judicial review. For both Marshall and his critics, their error results from attempting to define “the judicial power” simply by looking at the Constitution when, in fact, “the judicial power” remains undefined in the Constitution. As an undefined term, “the judicial power” can only be defined by looking outside of the Constitution.

In fact, the text of the Constitution implies the need for an investigation outside of the Constitution. The Legislative Vesting Clause of Article I Section 1 states, “All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives” (emphasis added). By including the phrase “herein granted,” the Legislative Vesting Clause defines legislative powers—legislative power shall consist of the powers “herein granted.” In contrast, the Judicial Vesting Clause of Article III Section 1 states, “The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish.” Unlike the Legislative Vesting Clause, the Judicial Vesting Clause does not define the judicial power. In contrast, it merely states that the judicial power—whatever it is—shall be vested in the Supreme Court. To determine what the judicial power shall be in cases to which the judicial power extends, such as cases arising under the Constitution, one must look outside of the Constitution because the judicial power remains undefined. As the Constitution was ratified in the late 1780s, the judicial power should be defined based on how it was understood in the period leading up to 1789.

Looking outside of the Constitution, Federalist 78 represents a very powerful source for defining the judicial power. In it, Alexander Hamilton remarks,

“The complete independence of the courts of justice is peculiarly essential in a limited Constitution. By a limited Constitution, I understand one which contains certain specified exceptions to the legislative authority; such, for instance, as that it shall pass no bills of attainder, no ex post facto laws, and the like. Limitations of this kind can be preserved in practice no other way than through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void…

“If it be said that the legislative body are themselves the constitutional judges of their own powers, and that the construction they put upon them is conclusive upon the other departments, it may be answered, that this cannot be the natural presumption, where it is not to be collected from any particular provisions in the Constitution…It is far more rational to suppose, that the courts were designed to be an intermediate body between the people and the legislature, in order, among other things, to keep the latter within the limits assigned to their authority…

“[W]henever a particular statute contravenes the Constitution, it will be the duty of the judicial tribunals to adhere to the latter and disregard the former.”

Though the Federalist Papers are not binding and essentially just represent op-ed pieces from informed individuals, they represent an adequate source for determining the definition and understanding of the judicial power among the public. The purpose of citing the Federalist Paper is not to determine authoritatively the powers granted in the Constitution but simply to determine the definition of terms within the Constitution. In the case of the judicial power, the definition of the term and the powers granted to the Supreme Court are essentially the same, and Federalist 78 shows that the judicial power grants the Supreme Court the power of judicial review.

Even more useful in determining the public meaning of the judicial power, prior to the above quotation in Federalist 78, Alexander Hamilton remarks, “It is urged that the authority which can declare the acts of another void, must necessarily be superior to the one whose acts may be declared void. As this doctrine is of great importance in all the American constitutions, a brief discussion of the ground on which it rests cannot be unacceptable” (emphasis added). In setting up his arguments in Federalist 78, Hamilton does not attempt to convince people whether the Supreme Court has the judicial power; instead, he seeks to explain why the Supreme should have the power of judicial review which “all the American constitutions” also grant to the judiciary. His target audience includes people who oppose the Constitution because it gives the judiciary an undemocratic power to overrule acts of Congress. Aware of the power of judicial review, people opposed the Constitution due to the self-evident inclusion of this power, deeming the granted power undemocratic and unnecessary in a document which allows the people to choose and, thus, control their legislatures. In Federalist 78, Hamilton seeks to defend the power of judicial review which the Supreme Court obviously has and to explain that this power will not lead to tyranny, showing the widespread understanding that the public meaning of the judicial power included judicial review.

The history of the judiciary in the period prior to the Constitution further solidifies this point. Between independence and the validation of the Constitution, many state courts invalidated acts passed by the state legislatures. The practice of judicial review had been accepted and used in many States, and State courts nullified state statutes on both written and unwritten constitutional grounds. Rather than a judicial invention copyrighted in 1803, judicial review has a history predating the Constitution, and judicial review had become part of the public meaning of “the judicial power.”

The above evidence shows that the judicial power included in its public definition the power of judicial review. Given the above evidence, the critics of judicial review have the burden of showing that the definition of the judicial power did not include the power of judicial review. Perhaps, for example, critics could find articles written at the time in response to Federalist 78 that condemned its underlying assumption that the Courts under the Constitution would have the power of judicial review. However, without convincing evidence to rebut this public meaning, the critics are left only with the assertion that the Constitution does not grant the Supreme Court the power of judicial review because it does not explicitly and unambiguously grant it.

Judicial Review: Too Important to be Inferred?

Though the Constitution does not define the judicial power, critics of the constitutional basis for judicial review could argue that reasonable judicial powers should be inferred but that unreasonable judicial powers should not be inferred. Judicial review could be deemed an unreasonable power to infer from the phrase “the judicial power” simply because overruling acts of Congress is a really big deal. Unlike reasonable judicial powers, this really important power should have been specifically and unambiguously enumerated. After all, a written Constitution serves the purpose of enumerating finite, specific powers, so any really important power like judicial review should have been specifically enumerated.

Though this reasoning sounds as question begging as Marshall’s opinion in Marbury v. Madison, its real error is that it misunderstands the underlying definitional problem. The Constitution simply does not define the judicial power so any definition given entails a granting to the Court of power not expressly and unambiguously granted in the Constitution. Unless one defines the judicial power as simply being a Supreme Court Justice and being at a place where cases are heard without exercising any powers over case other than hearing it, any definition of the judicial power gives the Supreme Court powers that are not unambiguously and specifically enumerated. Without a definition in the Constitution, all definitions of the judicial power have this defect.

Though nullifying acts of Congress is certainly a bid deal, the judicial power cannot be defined in any meaningful way that avoids granting it powers that are a big deal. For example, the judicial power could be defined to include the authority not to enforce a piece of legislation in a specific case without having the authority to nullify the act in its entirety. Ignoring a piece of legislation from the representative body of the people would certainly be a big deal. Instead, it could be limited to interpreting the meaning and text of legislation. As the power to interpret text includes the power to essentially rewrite a law (much as the Supreme Court has rewritten the Constitution since the beginning of the New Deal), the power would still be a big deal. Narrowing the power further, it could be defined as simply writing non-binding opinion pieces defending or criticizing Congressional laws on Constitutional or other grounds. Even still, people have been executed throughout history for deals much less big than openly criticizing the leaders of a government. Attempting to define the judicial power based on what seems reasonable still grants the judiciary very large powers unspecified in the Constitution. Unlike seeking its public meaning, this proposed method of defining the judicial power merely represents the arbitrary preferences of the critics of judicial review, including in the judicial power what seems reasonable to them and excluding what seems unreasonable to them.

Conclusion

Marbury v. Madison recognized that the Constitution granted the Supreme Court the power of judicial review. Upon inspection, the four reasons given for judicial review—the writtenness of the Constitution, the Supremacy Clause, the oath of office, and the Arising Clause—do not convincingly show that the Supreme Court has the power of judicial review. However, the Constitution vests the Supreme Court with the judicial power. Unlike legislative powers, the judicial power remains undefined in the Constitution. As such, to define the judicial power, people must look outside the Constitution. Both Federalist 78 and the history of judicial review in the 1780s shows that the judicial power at the time of the Constitution’s ratification included the power of judicial review. Though declaring an act of Congress unconstitutional is a big deal, the judicial power is simply not defined in the Constitution. Thus, any meaningful definition of the judicial power gives the Supreme Court powers that are a big deal. Despite critics of judicial review who argue for imposing arbitrary restrictions on the judicial power, the public understanding of the judicial power at the time of the founding shows that the Constitution grants the Supreme Court the power of judicial review as part of the judicial power and makes the Supreme Court a big deal.

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Vices are not crimes

In society today, we are faced with a question of where government gets its power, and what behaviors it can regulate with that power. Lysander Spooner in his work, “Vices are not Crimes” goes into depth describing the legal and philosophical reasoning for a limited and voluntary government that has only the rights that individuals possess, and have deemed necessary for the government to have.

Before the discussion of government and its regulating power begins, some definitions, and assumptions must be listed and explained.  In Vices are not crimes, Lysander Spooner uses the following as definitions for crimes and vices,

“Crimes are those acts by which one man harms the person or property of another. Vices are those acts by which a man harms himself or his property, and are simply the errors which a man makes in his search after his own happiness. Unlike crimes, they imply no malice toward others, and no interference with their persons or property. In vices, the very essence of crime — that is, the design to injure the person or property of another — is wanting. It is a maxim of the law that there can be no crime without a criminal intent; that is, without the intent to invade the person or property of another. But no one ever practices a vice with any such criminal intent. He practices his vice for his own happiness solely, and not from any malice toward others.”

This differentiation is so important because it is necessary in protecting the individuals’ right to liberty and his pursuit of happiness. This is because vices are those behaviors which a majority of people deem undesirable, but which allow individuals to increase their happiness, or avoid pain. From the time of our birth, we are ignorant of what causes happiness, and what avoids pain, and by our very natures we desire to seek happiness and avoid pain.  Unfortunately, in this endeavor we have a limited amount we can learn from others because we are all unique in our situation, physiology, and psychology, and therefore each unique in the degree in which each behavior causes happiness or pain. If I am denied the liberty to experiment in the socially deemed vices, and thus find out for myself what provides me happiness and pain, then I am forever held in ignorance by the majority, and thus vulnerable to their tyranny.  This is just like how the Catholic Church used to read the passages of the bible in latin, and only latin, while nobody they spoke to could understand it. The church had the authority to make moral statements and carry out punishments against those who disobeyed them, but denied the individuals the ability to understand the logic behind the moral rules.  This situation only leads to corruption by those who claim superiority in morality at the expense of those entrapped in ignorance.

Any action upon degree can be a vice or a crime. If I make a median salary of 30+ thousand dollars, and  gamble 50 dollars it can be considered a vice, but if I gamble 20 thousand dollars and I am unable to feed my children, then it is a crime, but if a millionaire gambles that 20 thousand dollars we must label his activity a vice. This fact proves that vices cannot be outlawed due to the uniqueness of the situation for every person. This is why people have to be able to experiment for themselves in order to figure out the point at which their vices start to have negative consequences on others. Throughout the history of man, a near infinite variety of behaviors have been engaged in and the consequences have been discovered, but with all this experimentation moral philosophers have yet to draft a unified theory of morality,

“Yet it is in the politician’s mind that in the midst of endless variety of opinion, that he  has the right to say, in regard to any particular action, or course of action, “We have tried this experiment, and determined every question involved in it. We have determined it, not only for ourselves, but for all others. And, as to all those who are weaker than we, we will coerce them to act in obedience to our conclusion. We will suffer no further experiment or inquiry by any one, and, consequently, no further acquisition of knowledge by anybody.”

Another argument used by society to prevent the engaging in of vices is making the sale of such materials required to engage in said vice illegal.  The problem with this logic is that the very nature of a sale is moral. The sale has been voluntarily entered into by 2 consenting individuals, and thus has no immorality attached to it. What can be said is that the purpose of the objects being sold has some weight on the morality of the sale. If the object of a sale, such as alcohol, is used as a vice, then the merchant can at the most be considered an accomplice to a vice. In our legal system, and in our reason, we understand that an accomplice to an act cannot have any more responsibility for the buyer’s acts than the buyer himself, unless the merchant engaged in fraud or knowingly sold an object to a mentally deficient individual.

The question will doubtless come up that such vices as drinking and driving when posing a danger to other men are performed then the behavior is legitimately prevented. I respond to this, “ where does this principle stop?” There is reasonable evidence that when a women is pregnant she is more likely to have injuries from complications of that pregnancy or through the natural course of that pregnancy, is it legitimate to prevent the voluntary act of conception? In addition it is quite likely that specific parenting techniques, genetic defects, or the simple birth of the child into a bad environment will lead to crime. This is the argument that was used by the eugenicist, who claimed that only certain individuals should have the right to conceive children because of the potential harm to society that inferior individuals would have, but as a society we have flat out refused to accept it.

Now that the rationale behind the permitting of vices has been discussed, we must move onto the discussion of government. Lysander Spooner has a philosophy characteristic of a classical liberal, or an anarchist,  and shows it in his stance towards government as highlighted in this quote, “It is a natural impossibility that a government should have a right to punish men for their vices; because it is impossible that a government should have any rights except such as the individuals composing it had previously had as individuals. They could not delegate to a government any rights they did not themselves possess. They could not contribute to the government any rights, except such as they themselves possessed as individuals.” In order to bring a better understanding of the argument an example of a real life situation is needed. If I said that it is unacceptable for everybody to engage practicing religion, watching TV, playing  video games, reading fiction, rock collecting, and drinking, and claimed I had the right to kidnap those who engaged in such behavior, and then further enslave a dozen individuals to preside over his trial as a jury, and after a guilty verdict is found, I hold him hostage in my barn for a decade,  and claim the right to hold a gun up to everybody’s head demanding their wallets in order to pay for is captivity, and all under a contract which nobody which lives under it has signed, I would be laughed at, but when a majority claiming itself to be government does this we applaud it as if we are being protected from some great evil.

It is the contention of this writing that Lysander Spooner’s work, “Vices are not crimes” provides a very accurate and powerful explanation of the difference between vices and crimes, namely whether or not there is a victim of the crime other than the perpetrator.  It also tries to discuss the extent of the power government has over our lives, put more precisely, government should only be a voluntary association of individuals with rights no greater than the individuals who comprise that association

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What are the facts about global warming?

In his book, The Rational Optimist, Matt Ridley discusses how through trade, our species has achieved unprecedented growth and prosperity.  He even tackles head on what some might consider the most daunting issue of our age, climate change.  He shows how through our endless human ingenuity, and through free markets, we can continue to become more prosperous while being good shepherds of our environment.

Just to give some background, I’m going to list a few problems in the science of climate change, that  Matt Ridley highlights before I discuss how free markets are already working to overcome this challenge.  Contrary to what some alarmists claim, several studies of the last three decades of relatively slow average temperature changes seem to indicate a low sensitivity rather than a high sensitivity model of greenhouse warming.  Furthermore, the warming we are experiencing increases the amount of water vapor in the air which many people point out is a potent greenhouse gas, but science is showing that cloud coverage may cause as much cooling as water vapor causes warming. Also, another potent greenhouse gas, methane, has been erratically decelerating in emissions contrary to those who claim the warming will release detrimental amounts of methane trapped under the permafrost.  Perhaps most important, there have been warmer years in Earth’s history such as in medieval times, and about 6000 years ago, but the most frightening aspect of global warming, the tipping points, were never reached.  Finally, the biggest fear people have is with the melting ice caps, but the science shows that the Greenland land based ice caps are losing less than 1 percent of their mass per century, and at that rate they won’t disappear until 12000 AD.

When discussing global warming, there are several benefits that are rarely mentioned. In the warmest scenario used by the IPCC, we will have the least amount of hunger, and will require less land to meet our agricultural needs, even before human innovations are taken into account. We will be able to go from 11.6 percent of the landmass being used for agriculture down to 5 percent in 2100(http://www.reason.com/news/show/132145.html).  This will occur for several reasons, one of which being the warmer world will have greater rainfall, like it did during previous warm periods. The IPCC estimated that on net, the population at risk of water shortages falls by 2100 due to the estimated warming, and the increased rainfall that it brings (http://wattsupwiththat.com/2008/09/18/how-the-ipcc-portrayed-a-net-positive-impact-of-climate-change-as-a-negative/#more-3138). Another reason for the diminished hunger and use of agricultural lands is the higher concentrations of CO2 in the atmosphere increasing the yields of crops; an already well known fact by greenhouse owners who enrich the air to 1000 ppm of CO2  to take advantage of this increased yield.

Considering there are many benefits to global warming that have been neglected to be mentioned, it is logical to expect that there are overstated costs to global warming, and you would be right to have that expectation. The most commonly mentioned cost to global warming is an all around worse hurricane season, in terms of winds, rainfall, and damage, but this is blatantly false.  During the 20th century we saw no increase in the number of, or maximum wind speeds of Atlantic hurricanes making land fall. Globally, tropical cyclone intensity hit a 30 year low in 2008. Also, the cost of Hurricanes is going up, but that has nothing to do with hurricanes, instead it is the result of building and insuring expensive coastal properties. Additionally, the number of deaths from hurricanes depends more on wealth and weather forecasts than the power of the hurricane. In 2007, well prepared Yucatan was hit by a category 5 hurricane, and suffered no casualties, while unprepared Burma had a similar storm, and lost the lives of 200,000. Another common myth about the potential costs of global warming is the increased susceptibility to malaria people will suffer, but the facts simply refute this notion.  Europe, North America, and Russia during the 19th and early 20th centuries when the temperatures were a full degree colder, experienced horrible cases of malaria. During the warming of the 20th century it has disappeared from these locations because people brought their cattle into barns giving mosquitoes another food source, people moved indoors at night behind closed windows, and they drained swamps and applied pesticides. Malaria expert Paul Reiter states that there is no evidence that climate change has played any role in the burgeoning tragedy of this disease at any altitude.  Finally, global warming is commonly thought to cause the extinction of coral reefs sometime this century. Those familiar with the subject of coral reefs admit that some reefs may die out if the world rapidly warms during the 21st century, but they also admit that the reefs in cooler regions may expand, and most importantly, the biggest danger to reefs are local threats such as silt, nutrient runoff, pollution, and overfishing of herbivorous fish that otherwise keep the reefs free from algae, not global warming.  Lastly, it is now clear that corals rebound quickly from the warming induced bleaching episodes within just a few years, which is thought to be how they survived the warming at the end of the last ice age.

Lets just for the sake of argument say that global warming is happening, and we have to do something about it. We still face the problem of calculating where to best invest our resources.  There have been several attempts at this. Nicholas Stern, who was appointed by the British government to estimate the potential future costs of global warming, calculated global warming to cost 29 dollars per ton of carbon dioxide. To achieve this he used discount rates far lower than the typical 6 percent, and as a result he overestimated the harm to the 22nd century by a factor of 100. According to him, your great, great, great grandfather whose standard of living was roughly that of a modern day Zambian, should have put aside most of his income to pay for your bills today. With higher discount rates we see that the cost of warming is far less than the harm done by climate mitigation measures today.  Economists estimate that a dollar spent on mitigating climate change brings 90 cents of benefits compared with 20 dollars benefit for each dollar invested in healthcare, and 16 dollars of benefit for each dollar spent on hunger.  What this means is climate mitigation measures make society worse off, and instead we should focus on alleviating real problems our society faces, such as hunger, healthcare, and malaria.

So, the last question I would like you to ponder is, if we move forward under the assumption that global warming is a real danger, but any investment in climate mitigation measures is a net harm to society, what can we do about global warming? Well fortunately this is the part where we talk about human ingenuity, and how that is helping us increase our prosperity while being more environmentally friendly. Italian engineer Cesare Marchetti once drew a graph of human energy use over the past 150 years, and highlighted how we moved from wood to coal to oil to gas, and how the percentage of carbon involved in combustion has declined. He said that by 2100 carbon will make up only 10 percent of our combustion, and will be replaced with hydrogen, as the trends have shown. Jesse Ausubel Predicts that if the energy system is left to its own devices, most of the carbon will be out of it by 2060 or 2070. What this means is, we will be able to meet our growing energy demands, while actually reducing our CO2 emissions.  Looking at solar panels, all it would take for this technology to be viable, and this is easier said than done, would be the capability to mass produce them at 200 dollars per square meter, and for them to have an efficiency of 12 percent. At that point they would be generating the equivalent of a barrel of oil for about 30 dollars. Seeing how it is not good to put all our eggs in one basket, engineers are close to being able to use sunlight to make hydrogen directly from water by using ruthenium dye as a catalyst, in effect replicating photosynthesis.  Finally, each year more than 200 billion tons of carbon are removed from the atmosphere by growing plants and plankton, and 200 billion tons are returned to it by rotting, digestion and respiration. Human activity adds less than 10 billion tons of carbon dioxide to this cycle, or about 5 percent. It might be possible for humans in this century to nudge the natural carbon cycle so that it can accept the additional 5 percent we put into it. This could be done by fertilizing desert stretches of ocean with iron phosphorus, by encouraging the growth of carbon rich oceanic organisms called salps, which sink to the bottom of the ocean taking the carbon dioxide with them, or by burying bio-char.

In conclusion, whether or not global warming is occurring on this planet, people are more than capable of adapting to whatever the environment throws at us, and all the while, increasing our standards of living dramatically.

References (ordered in the same order they appear)

  • the fact that the last 3 decades of relatively slow average temperature changes are more compatible with a low sensitivity, than a high sensitivity model of greenhouse warming
    • Lindzen, R.S. and choi, Y.S. 2009. On the determination of climate feedbacks from orbe data. Geophysical research letters. In press. Schwartz, S.E., R.J. Charlson, and H Rhode, 2007: quantifying climate change – too rosy a picture? Nature reports climate change 2:23-24, and Schwartz S.E. 2008 reply to comments by G Foster et al., R Knutti et al., and N Scafetta on heat capacity, time constant, and sensitivity of earth’s climate system. J. Geophys. Res. 113, D15105. (doi:10.1029/2008JD009872).
  • Clouds may slow warming as much as water vapor may amplify it.
    • Paltridge, G., Arking, and pook, M. 2009. Trends in middle- and upper- level tropospheric humidity from NCEP reanalysis data. Theoretical and applied climatology. (doi:10.1007/s00704-009-0117-x).
  • That the increase in methane has been erratically decelerating for years.
    • M.A.K. Khalil, C.L. Butenhoff and R.A. Rasmussen, Atmospheric methane: trends and cycles of sources and sinks, environmental science and technology 41:2131-7.
  • That there were warmer years in earth’s history in medieval times and about 6000 years ago yet no accelerations or tipping points were reached.
    • Loehle, C.2007. A 2000 year global temperature reconstruction based on non-treering proxies. Energy & environment 18:1049-58; and Moberg, A., D.M. Sonechkin, K Holmgren, N.M. Datsenko, and W. Karlen, 2005. Higly variable northern hemisphere temperatures reconstructed from low and high resolution proxy data. Nature 433:613-7
  • When discussing greenland’s ice, what is important is the land based ice cap, and that is what the following sources are discussing. This is because if you look at the other Greenland ice, it is ice that already is in the ocean, and this ice’s melting has no impact on sea level. The science says that the land based ice cap is losing mass at a rate of less than 1 percent per century, or put in another way, it will completely disappear at current trends around the year 12000 AD.  Of course there is a temperature at which the Greenland and Antarctic ice caps would disintegrate, but according to the IPCC scenarios if it is reached at all, it is certainly not going to be reached in the 21st century.
    • Even the highest estimates of Greenland melting Luthke, S.B. et al 2006.
    • Recent Greenland ice mass loss from drainage system from satellite gravity observant
    • ions. Science 314:1286-9.
    • If anything, the rate of melting in Greenland is slowing: van de wal, R.S.W. , et al 2008
    • Large and rapid melt induced velocity changes in the ablation zone of Greenland ice sheet science: 321:111
  • This effect, together with greater rainfall and new techniques, means that less habitat will probably be lost to farming in a warmer world. Indeed, under the warmest scenario, much land could revert to wilderness, leaving only 5 percent of the world under the plough in 2100, compared with the 11.6 percent today, allowing more space for wilderness.
  • All things being equal, warming will itself reduce the total population at risk from water shortage. On average rainfall will increase in a warmer world because of greater evaporation from the oceans, as it did in previous warm episodes such as the Holocene (when the arctic ocean may have been almost ice free in the summer), the Egyptian, roman, and medieval warm periods. The great droughts that changed history in western asia happened, as theory predicts, in times of cooling 8200 years ago, and 4200 years ago especially. If you take the IPCC’s assumptions and count the people living in zones that will have more water versus zones that will have less water, it is clear that the net population at risk of water shortage by 2100 falls under all their scenarios.  Although water will continue to be fought over, polluted, and exhausted, while rivers and boreholes may dry up because of over use, that will happen in a cool world as well.
  • The richest and warmest version of the future will have the least hunger, and will have ploughed the least extra land to feed itself. These calculations come not from barmy skeptics, but from the IPCC’s lead authors. And this is before taking into account the capacity of human societies to adapt to a changing climate.
    • Parry, M.L., Rosenzweig, C., Iglesias, A., Livermore, M. and Fischer, G, 2004: effects of climate change on global food production under SRES emissions and socio-economic scenarios. Global environment change 14:53-67
    • Levy, P.E., et al. 2004. Modelling the impact of future changes in climate, CO2 concentration and future land use on natural ecosystems and the terrestrial carbon sink. Global Environmental change 14:21-30.
  • During the warming of the 20th century there was no increase in either the number or the maximum wind speed of atlantic hurricanes making landfall. Globally, tropical cyclone intensity hit a 30 year low in 2008. The cost of hurricanes has increased greatly, but this is because of the building and insuring of expensive coastal properties, not because of storm intensity or frequency.
    • Pielke, R.A., Jr., Gratz, J., Landsea, C.W. , Collins, D., saunders, M.A. and Muslin, R, 2008: Normalized hurricane damage in the US:1900-2005. Natural Hazard Review 9:29-42
  • What about malaria? Malaria was rampant in Europe, north America, and Russia in the 19th and early 20th centuries when the world was nearly a degree colder than now. It disappeared, while the world was warming, because people kept their cattle in barns (giving mosquitoes another dining option), moved indoors at night behind closed windows, and to a lesser extent because swamps were drained and pesticides used.
    • Reiter, P. 2008. Global warming and malaria: knowing the horse before hitching the cart. Malaria Journal 7 (supplement 1): S3
  • There is no evidence that climate has played any role in the burgeoning tragedy of this disease at any altitude says Paul Reiter a malaria expert
    • Reiter P. 2007. Human ecology and human behavior. Civil society report on climate change. International policy network.
  • At the very most climate change has the possibility of increasing current deaths from malaria (a million people per year) by 30,000, an increase of 3 percent.
    • Goklany, I. 2004. Climate change and malaria. Science 306:56-7
  • The threats to species, rather than being climate change,  are: habitat loss, pollution, invasive competitors, and hunting.  Conservationists have been distracted from protecting species from the 4 causes of extinction listed above because of the environmental hysteria. Take coral reefs, which are suffering horribly from pollution, nutrient runoff and fishing – especially the harvesting of herbivorous fishes that otherwise keep reefs clean of algae.  It is true that rapidly heating the water by a few degrees can devastate reefs by bleaching out the corals symbiotic algae, as happened to many reefs in the especially warm el nino year of 1998. But bleaching depends more on the rate of change than the absolute temperature.  This must be true because nowhere on the planet, not even in the Persian gulf where water temperatures reach 35 degrees C is there a sea too warm for coral reefs. Lots of places are too cold for coral reefs, the Galapagos for example.
  • It is now clear that corals rebound quickly from bleaching episodes, repopulating dead reefs in just a few years which is presumably how they survived the warming lurches at the end of the last ice age. It is also apparent from recent research that corals become more resilient the more they experience sudden warmings.
    • Oliver T.A. and Palumbi, S.R. 2009. Distributions of stress-resistant coral symbionts match environmental patterns at local, but not regional scales. Marine ecology progress series 378:93-103 see also Baker, A.C. et al. 2004. Coral reefs: corals’ adaptive response to climate change. Nature 430:741, who say: “ the adaptive shift in symbiont communities indicates that these devasted reefs could be more resistant to future thermal stress, resulting in significantly longer extinction times for surviving corals than had previously been assumed.
  • Some reefs may die if the world warms rapidly in the 21st century, but others in cooler regions may expand.  Local threats to reefs are far more immediate than climate change.
    • Kleypas, J.A., Danabasoglu, G. and Lough. J.M. 2008. Potential role of the ocean thermostat in determining regional differences in coral reef bleaching events. Geophysical research letters 35: L03613. (doi:10.1029/2007GL032257)
  • Ocean acidification looks suspiciously like a back up plan by the environmental pressure groups in case the climate fails to warm: another try at condemning fossil fuels.  The oceans are alkaline, with an average pH of about 8.1, well above neutral (7). They are also extremely well buffered. Very high carbon dioxide levels could push that number down to about 7.95 by 2050 – still highly alkaline, and still much higher than it was for most of the last 100 million years. Some argue that this tiny downward shift in average alkalinity could make it harder for animals and plants that deposit calcium carbonate in their skeletons to do so, but this flies in the face of chemistry.  The reason the acidity is increasing is that the dissolved bicarbonate is increasing too – and increasing the bicarbonate concentration increases the ease with which carbonate can be precipitated out with calcium by creates that seek to do so. Even with tripled bicarbonate concentrations, corals show a continuing increase in both photosynthesis and calcification. This is confirmed by a rash of empirical studies showing that increased carbonic acid either has no effect or actually increases the growth of calcareous plankton, cuttlefish larvae, and coccolithophores.
    • Iglesias-rodriguez, M.D. et al. 2008. Phytoplankton calcification in a high CO2 world. Science 320:336-40. Other studies of the carbonate issue are summarized by Idso, C. 2009. CO2 Global warming and coral reefs. Vales lake publishing.
  • Nicholas Stern, who was appointed by the british government to estimate potential future costs doubled Richard tol’s figure of 14 dollars per ton and came to an estimate of 29 dollars per ton. How did he do this, and what does this mean? Stern used discount rates of 2.1 percent for the 21st century, 1.9 percent for the 22nd century and 1.4 percent for every subsequent century, compared with a typical discount rate of 6 percent. To put in context, the lower discount rates used by stern, multiplies the estimated harm to the 22nd century by a factor of 100. This also compares to saying that a life saved from coastal flooding in 2200 should have almost the same spending priority now as a life saved from AIDS or malaria today. Or put in a different way, it implied that your great, great, great grandfather, whose standard of living was roughly that of a modern day Zambian, should have put aside most of his income to pay your bills today.  With higher discount rates Stern’s argument collapses because even the worst case harm done by climate change in the 22nd century is far loss costly than harm done by climate mitigation measures today.
    • Weitzman, M 2007. Review of the stern review on the economics of climate.
  • If we want to most efficiently spend our money so as to improve the lives of our fellow man,  we should spend our efforts combating the problems of hunger, dirty water, indoor smoke, and malaria.  Economists estimate that a dollar spent on mitigating climate change brings 90 cents  of benefit compared with 20 dollars of benefit per dollar spent on healthcare and 16 dollars of benefit per dollar spent on hunger.  Keeping climate at 1990 levels, assuming it can be done,  (and assuming it can be done, could it be done without having negative unintended consequences,) would leave more than 90 percent of human mortality causes untouched.
    • Lomborg, B. 2008. How to get the biggest bang for 10 billion bucks . Wall Street Journal, 28 july 2008.
  • Italian engineer Cesare Marchetti once drew a graph of human energy use over the past 150 years as it migrated from wood to coal to oil to gas. In each case, the ratio of carbon atoms to hydrogen atoms fell, from 10 carbon for every 1 hydrogen in wood, to 1 in coal, to ½ in oil, to ¼ in methane.  In 1800 carbon atoms did 90 percent of combustion, but by 1935 it was 50 percent carbon and 50 percent hydrogen, and by 2100 90 percent of combustion may come from hydrogen – made with nuclear electricity most probably.
  • Jesse Ausubel predicts that “if the energy system is left to its own devices, most of the carbon will be out of it by 2060 or 2070.
  • This isn’t to say that renewable energy is inherently bad. On the contrary, it would be better to use them once they become more efficient, and the costs come down.  Once solar panels can be massed produced at 200 dollars per square meter, and with efficiency of 12 percent, they could generate the equivalent of a barrel of oil for about 30 dollars. Though the problem with solar and wind is their intermittences, and the need to develop more efficient batteries to store the energy produced.
  • It is possible that engineers may quite soon be able to use sunlight to make hydrogen directly from water with ruthenium dye as a catalyst – replicating photosynthesis in effect
    • Bullis, K. 2008. Sun+water=fuel. Technology review, November/December, 56-61
  • Each year more than 200 billion tons of carbon are removed from the atmosphere by growing plants and plankton,  and 200 billion are returned to it by rotting, digestion, and respiration. Human activity adds less than 10 billion tons to that cycle, or 5 percent. It cannot be beyond the with of 21st century humankind to nudge the natural carbon cycle into taking up 5 percent more than it releases by fertilizing desert stretches of the ocean with iron phosphorus; by encouraging the growth of carbon-rich oceanic organisms called salps, which sink to the bottom of the ocean, or by burying biochar – powdered charcoal made from crops.
    • Lebrato, M. and Jones, D.O.B. 2009. Mass deposition event of pyrosoma atlanticum carcusses off ivory coast of west Africa. Limnology and oceanography 54:1197-1209
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How Liberals Use the “Big Emphasis”

When people make untrue claims without evidence, one should usually assume they simply did not know the statement to be false. Everyone makes mistakes sometimes, and people may simply not have researched closely enough things they assumed to be true. Generally, people should be given the benefit of the doubt. After all, one purpose of discourse is to learn new things and correct one’s mistakes.

Nevertheless, in recent articles from allegedly credible liberal sources, liberals have devised an intellectually dishonest method of spreading their message. The technique is very similar to a term coined by Adolf Hitler and modified by his Minister of Propaganda Joseph Goebbels: the “Big Lie.” To use this propaganda technique, an individual should not make a small lie but instead a big lie, so surprising that nobody would believe it to be untrue. When repeated many times in many speeches, the Big Lie becomes accepted as true and even as commonsense. Whereas people remain skeptical about specific details, they tend to more readily accept grand statements, particularly from seemingly credible sources. The Big Lie succeeds by overcoming skepticism through confidently presented shocking statements.

In light of this term, I would like to coin another to describe a tactic used by a number of liberals: “the Big Emphasis.” Like the Big Lie, the Big Emphasis entails making a broad unsubstantiated statement. Rather than make the statement repeatedly, the Big Emphasis merely entails confidently repeating the statement again as if the speaker carefully looked at all the available information, claiming an expertise on the topic that would have to follow from the certainty of the statement. As with the Big Lie, the Big Emphasis serves the purpose of rebutting skepticism, making the audience believe a hyperbolic or outright untrue statement has support.

To help clarify the Big Emphasis, consider three examples. Firstly, Paul Krugman in his New York Times article The Medicare Killers remarks, “All, and I mean all, the evidence says that public systems like Medicare and Medicaid…are better than the private sector at controlling costs.” Whereas merely beginning with “all” would have sounded hyperbolic, Krugman emphasizes this statement by saying “and I mean all.” Coupled with his credibility resulting from his Noble Prize in economics, the Big Emphasis helps bolster the truth of Krugman’s dogmatic and verifiably false claim. In a thorough response to his false statement, Peter Suderman notes, among other things, the American Academy of Actuaries 2009 study showing that private, consumer driven healthcare plans lead to a drop (as in an actual decrease, not just a smaller increase) in costs. Regardless of the merits of Medicare, Medicaid, and publicly managed healthcare, Krugman’s claim that “[a]ll, and I mean all, the evidence” supports his position is as false as it is rhetorically powerful.

Secondly, consider Elizabeth Rosenthal’s New York Times article More Guns = More Killings. David Hemenway, director of Harvard Injury Control Research Center, remarks in the article, “There is no evidence that having more guns reduces crime. None at all.” Like Krugman, Hemenway appears as a credible source, in his case due to the reference to his Harvard position. Whereas “[t]here is no evidence” could have been understood as a strong or even hyperbolic statement, Hemenway engages in the Big Emphasis by following it with “[n]one at all.” By doing so, he projects the certainty of an expert to dissuade the reader from doubting the claim. As with Krugman’s Big Emphasis, Hemenway’s statement suggesting “[t]here is no evidence” is verifiably false. Among other possible sources, note the research in John Lott’s book More Guns, Less Crime, Don Kates and Gary Mauser’s Harvard Law study Would Banning Firearms Reduce Murder and Suicide? which remarks “whether causative or not, the consistent international pattern is that more guns equal less murder and other violent crime,” or places like Kennesaw, Georgia which have mandated for all its citizens to own guns and have since seen substantial reductions in murder and crime. Whether or not more guns causes more crime, Hemenway’s use of the Big Emphasis effectively removes skepticism from readers regarding a verifiably false statement, misleading his audience.

Thirdly, former President Bill Clinton at the International Consumer Electronics Show in Las Vegas recently remarked, “Half of all mass killings in the United States have occurred since the assault weapons ban expired in 2005. Half of all of them in the history of the country.” As a former Rhodes Scholar and a former president, Clinton has credibility as an intellectual leader among liberals. By first claiming that half of all mass killings occurred since the assault weapons ban, he provides a remarkable and surprising statistic, leading the audience to think he may simply mean that there have been a lot of mass killings since 2005. By following the statement up with the same specificity of half in the history of the country, presumably going back for several hundred years, Clinton shocks the audience into removing its skepticism, assuming that anybody making such a specific and surprising statement must have done the research to support it. Yet, the statement is unsurprisingly false. As Glenn Klesser notes in a Washington Post article that fact-checked the claim and gave Clinton three Pinocchios, a little more than 40% of the mass shootings after 1982 have happened since the assault weapons ban expired in 2005, and a much smaller percent of all mass shootings in American history have occurred since 2005. Though his statement can be shown definitively false, Clinton convinces his audience through the use of the Big Emphasis.

By making a surprising, largely unsubstantiated statement and restating it with certainty, a person with credibility on a topic can shock an audience so as to overcome skepticism. Though people who are not liberal probably also use this technique, individuals like Alex Jones or Glenn Beck cannot effectively use the Big Emphasis to most audiences due to their lack of credibility in the eyes of many. In contrast, Noble Laureates, prestigious academicians, and respected former presidents have the ethos needed to mislead through emphasis, and sometimes choose the intellectually dishonest path of doing so.

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“Active Liberty” Book Review

In Justice Stephen Breyer’s book Active Liberty, he argues that the Constitution created a federal government embodying the principles of democracy and, as such, judges should defer to Congress as well as state governments as the representative bodies of the people unless they intrude on narrow fundamental rights. Though acknowledging negative rights, he defends fundamental rights like free speech primarily as social rights that enhance the democratic process, and he claims that these rights should not be as strongly protected when not related to the democratic process.

What basis does he give for this interpretation? He essentially provides three reasons: (1) there is a history of voting and active participation in local government in the United State prior to the Constitution, (2) the Constitution starts with the phrase “we the people” which he understands to refer to the present public rather than the people of 1787, and (3) people vote for officials to represent them under the Constitution. Since “we the people” vote for members of the federal government and since people actively participated in state/and local governments prior to the Constitution, the Constitution allegedly grants nearly unlimited power to the federal government.

Though he alludes in a single parenthesis in the book to the Commerce Clause, he neglects to mention that Article I Section 8 of the Constitution specifically enumerates powers to Congress, that the Tenth Amendment restricts the federal government to those enumerated powers, and that the Ninth Amendment rebuts any interpretative method that construes the Constitution to deny or disparage rights retained by the people. After all, why—since voting happens—should he? Given his reasoning, if part of the Constitution said “the sole power of the federal government shall be national defense,” then his arguments would override that because, after all, voting happens—meaning under Breyer’s reasoning that such a clause should not be interpreted to restrict the government. In fact, he does ignore such a clause since the Tenth Amendment restricts the government to national defense and a handful of other powers.

To more specifically respond to his justifications, all three of them provide evidence that the Constitution designed a government intended to reflect generally the will of the people, but they do not show what powers the Constitution granted the democratically run federal government. His first reason provides little more than context since the history predating the Constitution in no way describes the actual powers enumerated to the federal government. Regarding his second reason, “we the people” in context does not even support his position that the preamble emphasizes the democratic nature of the Constitution by referring always to the present generation rather than the founding generation. Though he claims that the phrase refers to the present public rather than “we the people of 1787,” his interpretation ignores that the preamble continues beyond the first three words to say, “and secure the blessings of liberty to ourselves and our posterity” (emphasis added). As it references future generations, the Preamble shows that the Constitution created a government of fixed binding rules for the people and their posterity. Thirdly, the fact that various parts of the Constitution describe direct and indirect electoral processes does make government officials ultimately accountable to the people, but it does not describe what the government may do under the Constitution. The powers enumerated to Congress, and not the electoral process, determines the scope of the federal government’s powers.

More disappointing than his complete neglect of the Tenth Amendment, he also does not attempt to reconcile his support for judicial deference to enable Active Liberty with his support for the rights protected in cases not mentioned in this book such as Griswold v. Connecticut, Roe v. Wade, and Lawrence v. Texas (contraception use, abortion, and sodomy respectively). In fact, in his chapter on privacy, he quite explicitly says that it would be best for issues of privacy to be handled by the democratic people exercising their Active Liberty. Similarly, when covering the First Amendment, he limits its purpose to protecting the social benefits of speech in a democratic society, and he denies that the First Amendment strongly protects all other speech—even though its text quite explicitly protects a much broader array of rights. In contrast, an interpretation that protects the right to use contraception, have an abortion, and engage in sodomy removes these issues from the purview of the democratic process and limits the Active Liberty Breyer otherwise defends, but he supports these privacy interests nonetheless. Why? Just as he remains silent on why the Tenth Amendment does not meaningfully restrict the federal government, he remains equally silent on why the Due Process Clause protects this arbitrary hodgepodge of rights.

Though one has to wonder under Breyer’s reasoning why these specific rights deserve protection, one can more importantly ask why Breyer so narrowly limits the rights free from the clutches of Active Liberty. If people have a right to engage in sodomy in their home, then why does Active Liberty allow for the criminalization of prostitution done in the same home? If people have a right to use contraception in their home, then why does Active Liberty allow for the criminalization of medical marijuana use in the same home? For each arbitrary right that Breyer deems outside the scope of Active Liberty, many more rights could be protected under similar reasoning, but Breyer, at least for rights unrelated to promoting the democratic process, does not even attempt to produce a principle to determine which unlisted rights Active Liberty cannot violate.

As with most living constitutionalists, Breyer ignores substantial sections of the Constitution in determining his judicial philosophy. Despite his enormous focus on the electoral process described in the Constitution, he ignores that Article I Section 8 only enumerates a limited set of powers to the federal government, that the Tenth Amendment restricts the federal government to its delegated powers, and that the Ninth Amendment protects unlisted rights from being denied or disparaged. With his focus on Active Liberty, he provides no justification for why Active Liberty deserves restrictions in cases other than those that promote the democratic process, and more importantly no principle to explain the random rights that are deemed outside the scope of Active Liberty. Rather than a presumption of constitutionality due to its democratic nature, the Constitution should be interpreted to have a presumption of liberty due to the many limitations it imposes on government power. The amount of the Constitution about which Breyer remains silent when attempting to justify deferring to Active Liberty simply reveals how much of the Constitution must be ignored to come to such a conclusion.

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The crash of 08 from an Austrian’s perspective

The roots of the 2008 collapse can be summed up in two words: Government intervention. These include, Fannie Mae and Freddie Mac, The Community Reinvestment Act, a pro-ownership tax code, the Federal Reserve, and lastly, the too big to fail mentality. These interventions incentivized the economy in such a way that capital inefficiently flowed to sectors whose investments didn’t match consumer demand. Furthermore, the behavior of firms and consumers was riskier than it would otherwise have been under a free market as a result of these interventions. Fortunately, according to Thomas Woods Jr. in his book Meltdown, there are multiple actions that can be taken by government which will allow the markets to readjust and get back on the path to growth.

Fannie and Freddie are two entities that played a crucial role in orchestrating the current mess the economy is enduring. The function they performed was buying mortgages from banks, which they typically bundled into mortgage backed securities, and then sold to investors. The big three ratings agencies, S&P, Fitch, and Moody’s, in turn recklessly gave these securities high credit ratings, despite even the New York Times commenting on the high degree of risk forming in the mortgage industry. The ratings agency’s behavior was the result of the government regulations in the ratings market which allowed these firms to be shielded from competition, and their profits were therefore guaranteed. By any one agency rating the securities as anything other than AAA, they would have opened themselves up to SEC investigations, and most likely a revoking of their special privileges due to the political winds favoring the easy loans, and the instruments that made them possible.

The role that Fannie and Freddie played, allowed the banks to have more capital to loan out than they otherwise would have been able to in a free market, and subsequently, riskier and riskier loans were made because their risk was artificially diminished. Consequentially, less credit worthy individuals were able to get cheaper loans. This most fortuitous series of events pleased the banks because they were able to loan to minorities, and therefore protect themselves from the lawsuits the Community Reinvestment Act opened them up to. The Community Reinvestment Act was brought back to life after the Boston Fed published a flawed report showing that banks were lending less to minorities than they were lending to whites and Asians, even after adjusting for creditworthiness. This law basically allowed banks to be held liable for insufficient numbers of loans to minorities if those loans didn’t satisfy authorities.

Although Congress gladly welcomed the GSE’s actions which resulted in more political contributions, and lending to minorities, it was not Congress which originally encouraged this activity. As a matter of fact, this behavior was started by the Fed under Alan Greenspan who desired to reignite the economy after the Dot com bust and the 9/11 attacks which triggered a recession. Greenspan’s response to this recession was to lower the federal funds rate, eventually down to just 1 percent, and over the period of time from 2000 to 2007, more money was created than the previous years of the nation’s existence combined. This money and cheap credit found its way into the housing sector because the Fed encouraged the GSE’s as well as the FHA to borrow and lend more than they previously had. Some observers of the crash will try to draw attention to the sub-prime mortgage market, but in 2007, the percent increase in the rate of foreclosures happened simultaneously within both the prime and the sub-prime mortgage market. In addition, the nominal amount of prime mortgages that were foreclosed upon was greater than the nominal amount of sub-prime mortgages that were foreclosed upon, and this is due to the fact that 75 percent of the US mortgage market was comprised of prime mortgages. What the commonality between the prime and sub-prime mortgages that were foreclosed upon seems to be is the adjustable rate mortgages or ARMs as they are more commonly called. These ARMs were encouraged by Greenspan, but the problem with these is the speculators they attract. The ARMs include a very low teaser rate for a specified period of time before the rate changes according to various economic indices. The speculators would buy a house with these adjustable rate mortgages and either fix them up, or sit on them until they appreciated and then sell them for a profit. The adjustable rate mortgages and their teaser rates were a dream come true for speculators because before the teaser rate period was over, they would have sold the house and made a profit. In 2006, the price of houses began to fall because the high supply was pushing prices down, and during this period of decreasing prices, the foreclosure rate was already high. Once the prices fell by 1.4 percent over 6 months, the foreclosure rate skyrocketed by 43 percent. This would lead to the conclusion that the speculators seeing the home prices fall realized that their opportunity for profiting off the homes was decreasing, and because they had to have no money down, they could simply walk away from the homes without losing any equity.

The last of the causes of the 2008 collapse include the too big to fail mentality and the pro-ownership tax code. What is meant by this tax code is the tax incentives that government uses to try and steer people towards owning a home. Partaking in the housing market comes with several perks, including exemption from capital gains tax and the home mortgage interest deduction for homeowners, as well as, free land and subsidies for developers. These incentives steer capital away from other ventures and instead gets directed into housing because homeowners will benefit from the tax breaks and developers get the most return on their capital when they get all the goodies from the government. An implicit guarantee that the government gave banks, was the too big to fail mentality. The FDIC insured depositors’ money up to $100,000 and this allows the banks to take greater risks with this money because if they lose it then they know that the government will come in and cover their obligations, and this is known as moral hazard. Another example is if banks loaned out too much money, and customers got worried about the solvency of the bank to the extent that bank runs occurred, the Fed could bail them out by loaning them money through the discount window, and in essence saving them from the harm their dishonesty would have caused them. Perhaps the biggest too big to fail idea was the implicit guarantee that the Fed would bail out its major actors in the case where they were in danger of going bankrupt, according to economist Anthony Mueller. This too big to fail notion allowed banks to become highly leveraged, and take great risks, all while the FDIC, the SEC, and the Fed lulled customers and investors into an undeserved relaxed state, and thus letting the banks stay profitable in the good times, and get bailed out in the bad times. With this knowledge, who would ever engage in safe practices that earn you smaller returns when surely your competitors will take those artificially diminished risks?

The time is now to decide how we will recover from this hardship, and fortunately we have history as our ever faithful ally leading us in the right direction if we ever stopped to understand it. The methodology that was employed to free us from the much more severe downturn of 1920 to 1921 was a reduction in government spending, the national debt and taxes. This allowed the market to naturally do what it has an innate tendency to do, which is to adjust asset prices downward towards their true value, reduce credit consumption and indebtedness, and allow only the most resource efficient businesses to stay open while resource wasters go bankrupt. The action that is needed to be taken by government is to, let the failing businesses fail, abolish the GSEs, stop the bailouts and stimulus, and get government out of the money supply. The most important step of all is for the government to get out of the money supply. The Federal Reserve has caused this mess by manipulating interest rates, and has caused people to invest in projects that are not supported by the resources needed to complete them. Getting government out of the money supply and returning to a voluntary commodity standard will allow for confidence in the value of money which would be a much more desirable alternative to our debased dollar of today. The too big to fail mentality needs to be forever abolished as well. When a firm goes bankrupt its capital and assets don’t disappear, they are just transferred from an incapable steward of them to one who is more efficient. The idea that jobs are dependent on a failing firm’s existence is a tragic mistake indeed. The firm, by its very existence, is wasting wealth, and therefore more capable firms are forced to compete with this failing firm which raises prices and drags down the standard of living for everyone. The employees of this firm will be able to bring their talents to some other employment because the economy has limitless wants, and there will always be jobs needed to be done. Furthermore, Fannie and Freddie have to be dismantled so they cannot further distort the economy, and provide artificial funds for banks to loan. Harvard’s Jeffery Miron states that because of this mess’ occurrence being the government’s fault, any solution to this mess would logically include eliminating government’s presence not by attempting to fix bad government with more government. Finally, government bailouts and spending has to be eliminated. The government spending siphons resources away from the economy, and in a bust time when resources have already been misallocated, government spending will serve no other purpose than to further misallocate resources, and make our situation worse off.

If these suggestions Thomas Woods Jr provides in his book Meltdown are followed we can begin our return to prosperity, and if we don’t learn from our mistakes we are doomed to repeat them, and the next bust will be waiting around the corner.

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It Takes a World: On Liberty and the Welfare State

On October 9, 2012, the liberal-leaning Harvard political philosopher Michael Sandel hosted a BBC radio event at Harvard University called “Who Built it? Is the American Dream of Individual Success a Myth?” At the event which BBC will air sometime in the future, Sandel asked the audience questions regarding justice and the ethics of the welfare state. As a fair professor who I do not seek to critique in this essay, he did a very good job cultivating a discussion between both proponents and opponents of universal healthcare, redistribution, and other aspects of the welfare state. Nevertheless, though I attended the event with the Harvard Libertarian Forum and I did speak once during it in defense of my libertarian beliefs, I did not have the opportunity to rebut many of the points made by the audience’s progressives later in the discussion, and I feel that many of their points deserve a thorough response. If I had the chance to reply in full to the audience later in the discussion (and perhaps if I also had a few days to reflect as happened prior to writing this essay), then I would have respectfully made the following response:

Throughout this discussion, the supporters of the welfare state in this audience have continually made a grave error. They have repeatedly conflated society with either the arbitrary territorial boundaries that define the United States or, more often, with its government. One advocate of the welfare state most clearly expressed this mistake with the common progressive phrase “it takes a village to raise a child.” Whether conceptualizing a village to be a nation or to be its government, she and the general supporters of the welfare state have the same false vision of society.

A few decades ago, the founder of the Foundation for Economic Education Leonard Read rebutted this viewpoint with a simple yet profound observation in his essay “I, Pencil. In the essay, he asserts that nobody in the whole world knows how to make a simple pencil, and he then proves this point by showing the process by which this everyday miracle comes into existence. People make a pencil by using several different resources. These resources come from all over the world, from South America and Asia and elsewhere. People who gather these resources extensively use capital made by other people. With this capital, they cut down trees, gather other resources, transport these resources where they can be used productively, turn these resources into useful forms, combine them together, and eventually produce a pencil. People then transport these pencils across the United States and the rest of the world, making them accessible to consumers who can conveniently buy several of them for less than a dollar. In all, tens of thousands of people—if not many, many more—cooperate to form a pencil that no individual knew how to make. These are the very same pencils used to teach a child to write, to help a child to learn, to enable a child to express ideas, and generally to raise a child.

The progressives in this audience claim “it takes a village.” This narrow-minded statist idea overlooks a much more profound truth: it takes a world to make a pencil; it takes a world to raise a child. This voluntary and peaceful cooperation of people—from all backgrounds, from all religions, from all cultures, from all languages—is society.

With this understanding of society, we can now explain the flaws in this audience’s defenses of the welfare state. As I recall, proponents of the welfare state defended it primarily on three grounds. First, progressives saw an injustice in the idea that some people would go without healthcare or other “rights” due merely to luck. Second, they contended that the dependence of the wealthy on society, particularly on public roads, meant that the wealthy rightfully had a mandatory duty to provide benefits to the people on whom their wealth depended. Third, they considered poverty and/or economic inequality itself to be coercive, so they found that compensating for this injustice through the coercive mechanism of the state would be a justifiable means of enhancing freedom.

Regarding the first point, progressives correctly realize that many things and, in a broader sense including the luck of the gene pool, perhaps everything can be attributed to luck. Yet, this realization does not lead to the progressive conclusion. It does not follow that a poorer person has the “right” to rob a wealthier person merely on the basis of the wealthier person’s luck, and it similarly does not follow that a majority has the right to steal from a minority on a similar basis. Despite everyday ethics clearly contradicting the presumed collective right to take from others on the basis of luck, the progressive viewpoint becomes much more disconcerting after replacing their narrow statist definition of society with a broader and more accurate understanding of it. If a lack of luck granted the less fortunate a moral right to the property of the more fortunate, then certainly the rightful recipients would not be lower class Americans who have an abundance of wealth compared to citizens of third world nations. Rather, the progressives using this reasoning should instead advocate for all Americans to pay high taxes to compensate for the relative luck of Americans compared to the relative misfortune of others around the world—a conclusion which (rightfully) not a single person in this audience has drawn. More horrifyingly, rather than redistributing from the first world to the third world, the American and European welfare states actually implement extensive immigration restrictions, denying truly poor people in third world countries from peacefully pursuing happiness and improving their lives in first world nations. Far from an unrelated policy, immigration restrictions follow naturally from the disharmonious relationships created by the welfare state. If people from around the world could travel to any nation with universal healthcare and use it, the welfare state would quickly go bankrupt. To attempt (likely unsuccessfully) to benefit the poor in developed nations on the basis of their lack of luck, progressives intensify (quite successfully) the misfortunes of truly poor people around the world. Rather than compensating for luck, the welfare state disrupts the fundamental harmony of people peacefully and voluntarily interacting in a world community, substantially worsening the position of the unfortunate around the world.

On the second point, the proponents of the welfare state correctly note the dependence of people on others, meaning that wealthy people could not have earned their wealth alone. Given how much time this audience has spent explaining that proponents of a free society allegedly do not recognize the extensive interdependency of people, it is truly remarkable how this audience has neglected that the mutual dependency extends worldwide, that it takes a world to make a pencil and that it takes a world to raise a child. Presumably, by the progressive’s reasoning, a tree cutter in South America essential to making a pencil should have the same collective “rights” as a worker at Walmart who sells this pencil, but nobody here has made such a strange though logically consistent argument. Instead, they have tried to narrow the duty of the wealthy by asserting that public roads—already financed by its users through a gasoline tax and often through tolls—are the essential component of a society which legitimizes the government using force to redistribute from a nation’s wealthy to its poor in any amount desired. Though Democratic Senate candidate Elizabeth Warren made this extraordinarily weak argument in a short viral video and this former Harvard Professor is very popular among liberals in Massachusetts likely including people here, I must admit to being bewildered by the enormous prevalence in this audience of the claim that road building justifies the welfare state. Do private airports, trains, buses, boats, and other forms of transportation give their private owners a full entitlement to as much of the wealth of its users as desired simply because these private forms of transportation may have aided its users in making money? Certainly not. On specifically roads, the United States has a long history of privately funded roads; in fact, people privately created the first transcontinental road in the United States. Roads neither needed to be nor should have been created by the government. Just as a private road owner would not have a right to take forcibly the wealth of people who use their private roads, a public road builder similarly has no right to take coercively the wealth of its users. Though people certainly benefit by using private and public services, a mutual voluntary dependence cannot justify involuntary coercive government interventions.

On the third point of either poverty or inequality being coercive, progressives continue to make the same mistake of arbitrarily slicing America from the rest of the world by emphasizing inequality or poverty within the United States and ignoring it outside its boundaries, leading to the same flawed conclusions. Ignoring this narrow-minded statist flaw, we can directly respond to the point as follows: poverty is the null state of people at all places and at all times throughout all of history. As poverty represents the natural state of humanity, it cannot be any more coercive than any other natural occurrence—such as gravity. By voluntarily cooperating, people create wealth to bring humanity out of its null state of existence. Anybody’s peaceful actions in defiance of the null state of humanity are no more coercive than when one person defies gravity more than another people by jumping higher. In fact, whether it is done by wealthier or poorer people, wealth creation has a particular advantage compared to jumping. Unlike jumping, wealth creation also helps lift those around the wealth creators into the air, allowing people to reach new heights together. Whereas coercion entails using force or the threat of it on others to limit the opportunities of the coerced, wealth creation only creates new opportunities. New opportunities for some people do not coerce other people.

I would like to end with a general question for the members of this audience. Now that everyone understands what society entails, perhaps you will understand the point of the question: What about being merely proximate to wealth gives someone an entitlement to it? What about being close to a wealthy person gives a poorer person a right to the nearby wealth? Unless someone finds an answer, a free society guided by the principles of individual liberty remains the only just society.

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Added November 4, 2012: The radio broadcast of the program released on Tuesday can be found here. I can be heard nine minutes into the video. To understand the context of my statement as well as to hear a thoughtful and elegant speaker, It would be worthwhile to begin listening when Harvard Libertarian Forum President Corinne Curcie speaks at five minutes thirty seconds. Really, she’s a wonderful speaker.

The reference to “it takes a village” comes from the speaker who begins at twenty eight minutes ten seconds, and the speaker uses the specific phrase at twenty eight minutes forty seconds. Michael Sandel gives the summary of two of the three main progressive arguments for economic redistribution beginning at twenty nine minutes. A student expresses the coercion argument emphasizing poverty immediately afterwards, and a different student expresses the coercion argument emphasizing inequality at thirty two minutes fifty seconds while expanding it over the next few minutes.

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