“This is bad, it’s wrong, and it’s immoral. And somebody needs to say that.” Somebody did.

Next thing you know we’ll be needing papers to travel.

The speech is light on details, but it’s actually an abridged version of an editorial he penned late last year. Both versions focus on the “rich getting richer” and how the key to making America great again is to just siphon off a small piece of their wealth—heck they won’t even notice it—and invest in the middle class.

The middle class, he claims, are the “real” job creators in the economy. How’s that? Because they’re the largest and highest-spending consumers. Businesses, after all, can’t have any revenue unless someone gives it to them. And that someone is most likely to come from the middle class.

If the middle class could become wealthier (but not too wealthy) or grow in membership, that would “set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire.” Leaving aside for the moment the glaring contradiction wherein he says that business owners are the ones hiring, Hanauer would expand the middle class by levying a 3 percent surtax on incomes above $1 million and rolling back the Bush-era tax cuts to fund “rebuilding schools and infrastructure.”

Wait, what? I read his editorial over and over again, trying to find how he would set loose the “real job creators” but that’s all he’s got. Soak the rich, give the money to the federal government, and … it’ll all just work out?

This is the same tired argument put forth by Paul Krugman, John Maynard Keynes, and Karl Marx. The rich didn’t earn their money, the true source of wealth is labor, increase demand through government spending will boost the economy. These beliefs have held sway in various guises uninterrupted for 164 years now. To quote his TED talk, “it is astounding how significantly one idea can shape a society and its policies.”

That idea’s time has passed. It is time for a new idea to take hold. An idea that is the exact opposite of Hanauer et al’s: the idea that wealth comes from man’s mind.

Hanauer’s middle-class consumer has disposable income to spend for a product from a business. Where did he get that money? Most members of the American middle class are not self-employed (i.e., not business owners) so their money comes as wages from their employers. This illustrates the thing that Krugman and his ilk ignore: there can be no employee without the employer.

Every business ever was started by someone who had a vision and the drive to achieve it. From the smallest business where the owner is working by himself to the best-funded startup, that first person—the founder—was not the janitor, the line worker, or the cashier. They owe their jobs and their livelihoods to that ambitious owner.

That is not to say that a modern, substantial enterprise could exist without the janitor, the line worker, or the cashier. But it couldn’t continue with just them or without that founder. Read any business biography and take note of the hard work the founders put in.

The way to enlarge the middle class is not to penalize their employers but to make more of them want to be employers themselves. Removing the present sting that accompanies success will go a long way towards that end: the byzantine regulations that accompany hiring along with the substantial tax burden and the looming Obamacare rules are sufficient to dissuade the ambitious employee from making the leap.

The Tea Party movement represents the best hope of halting the federal Leviathan. We have written many words on the subject. In fact, several of us have participated in events for the first time in our lives. However, the whole affair elicits trepidation and pause. While a lot of the slogans, statements, and views are refreshing and spot on, a popular movement attracts those who would get out in front of it and use it to achieve real power.

Its decentralized nature is a blessing and a curse. The lack of central leadership means that no one person or group controls the message; its fractious nature engenders distrust of anyone who would try to do so. In a way, this makes the tea party a marketplace of ideas: the best ones garner the support and crackpots get shunted to the periphery. But with this dispersion comes the risk of a tent too open, unprincipled and unable to advance its ends effectively. The tea party movement rallied in support of Scott Brown’s election to the Senate to replace the late Ted Kennedy. He scared the dickens out of the Administration because he could play a pivotal role in blocking their agenda. But he’s already playing politics as usual, and displaying his superficial support for limited government. These sorts of hollow victories will continue to plague the tea party movement until and unless it firms up its core set of principles.

There are those who would co-opt the movement. Sarah Palin, for one, desperately wants to be the face of the Tea Party. She certainly stands the best chance of doing so with her outside-the-Beltway pedigree, down-home style, and incessant demagoguery. Others seek to steer it towards anti-abortion and anti-immigrant stances. The Republican Party certainly wants to assimilate its members back into the fold—practically taking for granted that the GOP is the movement’s natural home.

DIck Armey’s book, Give Us Liberty: A Tea Party Manifesto, recognizes all of this. It’s a clear, delimited outline of how the movement should proceed. If DIck Armey, a former economics professor and one of the principal authors of the 1994 Contract with America, and this book take hold of the movement, then we’re in better shape than I had feared.

In Chapter 4 “What We Stand For,” Armey writes:

You’ll notice this is a short chapter, and that is intentional. It just doesn’t take a lot of words to say that we just want to be free. Free to lead our lives as we please, so long as we do not infringe on the same freedom of others. We are endowed with certain unalienable rights and delegate only some of our power to the government to protect those rights. Defenders of limited government understand that the U.S. Constitution lists the specific powers it delegates. If it’s not mentioned, we retain that power.

He gets it. When he says that “Tea Partiers value equality of opportunity, not equality of outcomes” and “America is different because we are all about the individual over the collective” (by way of introducing a quote from The Fountainhead), this is the sentiment and direction the Tea Party needs to go if it is to fulfill the legacy inherent in its moniker. A return to the individualism of the past will go a long way towards righting the wrongs of modern America.

Give Us Liberty has no philosophical flaws, mostly because it confines itself to defending liberty and freedom in the vein of the Founding Fathers. Stylistically, it is a bit ham fisted about its FreedomWorks connection. The two authors are the think tank’s chairman and president, and it sometimes reads like FreedomWorks’ new employee orientation manual. The organization has done great work guiding and fomenting the movement, so I can overlook the institutional cheerleading.

Obviously, historical America, while freer than today, contained the seeds of the modern welfare state. In failing to properly delineate the limits of government and to mount a thorough defense of individual rights, our ancestors left far too much unsaid and uncodified. The moral code of self-sacrifice and the collective over the individual opened a door to the statist twentieth century—the ostensible defenders of capitalism (the conservatives), deprived of a moral ground by sharing the collectivists premises, could only point to the utilitarian benefits of freedom. Such a meek defense quickly fell and led to the federal overreach we have today.

A proper defense of capitalism and freedom requires an explicit commitment to individual rights. The challenge, then as now, is to mount a defense of property rights. Life and liberty are fairly easy to protect: people generally like to live and don’t cotton to people telling them what to do. But standing up for property rights is difficult under a morality of altruism and self-sacrifice. Arguing that Wal-Mart can build a super center wherever it wants—providing it can acquire the land—or that a single mother has no claim on your income runs afoul of the conventional view that the collective trumps the individual or that you are your brother’s keeper.

But property rights are the most fundamental of the individual rights because we cannot sustain our life or liberty without being able to produce. Unless the Tea Party movement can elaborate a capable defense of property, it will fail at shoring up our freedom. That defense must necessarily be based on Ayn Rand’s ethical system of egoism, which offers a consistent, principled justification in opposition to the conventional morality of altruism. Armey’s book is not that defense.

Without this concomitant cultural change, any political success will be short-lived. A movement that espouses individual rights yet allows that man has a duty to his fellow man has accepted a contradiction that will tear it apart at the first conflict. But the way things are heading today, electing a crop of politicians that at least pay lip service to limited government and economic freedom might give us the time needed to effect such a culture swing. At the very least, it will delay the dictatorship that is inevitable down the statist path.

The children running the lemonade stand in question were giving away their product for free to all comers. Savage, flush with indignation, contradicts her companion’s statement that this represented the “spirit of giving”:

“No!” I exclaimed from the back seat. “That’s not the spirit of giving. You can only really give when you give something you own. They’re giving away their parents’ things—the lemonade, cups, candy. It’s not theirs to give.”

She then relates the children and their parents to society and the government. People, she contends, act like money and things from the government have no cost. They enact social programs and balloon the deficit because the costs are diffuse and sunk—enabling them to get away with spending that they’d never agree to if they bore the full costs.

I agree with her as far as she goes, but it’s not nearly enough. The real source of our troubles isn’t that some kids are treating their parents’ presumably hard-earned income as a blank check to slake the thirst of strangers. It’s that people like Savage have bought into the idea that capitalism is nothing beyond the money-grubbing mechanics of running a business.

Her objection wasn’t that the children were seemingly ashamed of charging a price, but that they may have been treating themselves to their parents’ goods. If she had discovered that they bought all the raw materials with their own allowances or had otherwise scrimped and saved to put together the stand, she would have applauded their “spirit of giving.”

Capitalism is more than operating a lemonade stand. It’s about recognizing that you have the right to run a lemonade stand and to charge whatever you want. It’s about seeing the honor of trade. It’s about taking risks and taking responsibility for taking those risks. It’s about independence, not just financial but spiritual.

And it’s completely lost on Savage and her ilk. They don’t see the morality of capitalism because they can’t see morality in capitalism. Their moral standards allow for you to “charge a little more than what it costs you, so you can make money” but look askance at charging a lot more. Their morality makes little children balk at charging anything when people might need refreshment on a hot summer day.

Their morality sees business as a charity run for the benefit of others with a living meekly carved out for oneself. And that’s the savage truth.

Most recently, he told {via} a charter school trade conference that they represented “the only place innovation will come from.” They are certainly a source of innovative techniques—no one can dispute that. But to say that they are the sole hope for education and that the future depends on “great public education” is absolutely repugnant from a man who amassed his entire fortune in one of the freest sectors of our economy and graduated from a prestigious private school that had purchased an expensive minicomputer at a time when they weren’t widely available outside of universities.

Charter schools are a bastardization, a measure to introduce some elements of competition to the calcified public school system. It is widely held that the public school system has failed—charter schools represent the way out for those who cannot conceive of an alternative. And there certainly have been some innovative charter schools that have thrived from the limited freedom that this hybrid institution allows. But like the limited market-based experiments in the Soviet Union and other communist economies, charter schools are a sop to the free market—an effort to keep the public content by giving the appearance of choice and competition. They hinge on the uncontested notion that government has a responsibility to educate children.

Practically, they crowd out private schools more than public schools did. Parents fed up with their local school or district had no other choice but to pay private school tuition. Now, they can shop around for a charter school—or, worse yet, move their children from charter school to charter school as they try to find a good fit—and never pay a dime in tuition. More importantly, those who were in private schools may find a charter school that is close enough in quality to their current school and withdraw the student. This can easily devastate an otherwise sound private school.

But the choice charter schools offer is illusory. True choice comes from businesses having to satisfy market needs without public subsidy or protection. Private schools must of necessity be responsive to the concerns of parents: if they don’t offer a quality education at a reasonable price, there are other providers to choose from. Charter schools, in divorcing this financial relationship, are naturally less susceptible to parental concerns: most charter schools have significant waiting lists and the government pays the same per-pupil fee whether a parent has one child enrolled or four.

Charter schools stifle innovation by sucking the wind out of private education’s sails. Long term, they represent the greatest threat to the privatization of schooling in America because they don’t challenge the central premise that government has any place in educating the young. The true source of innovation in education is a free market, just like the one that existed in operating systems and word processing software. Even Bill Gates, committed altruist enamored of government, can recognize that parallel.

He discovers that the biggest subways are in non-European cities and that most of the prominent rapid transit systems are domestic. A commenter helpfully added further support:

Here’s a postcard from live free or die New Hampshire, circa 1877. And, oh no — Socialism!

The only problem with their history is that everything they cite was originally private. Chicago’s “L” was originally served by a number of companies that later integrated to provide better service before being taken over by the city after 60 years of service. The PATH system was built and run as the Hudson and Manhattan Railroad for nearly 50 years before it too was taken over by the Port Authority. The New York Subway, though owned and operated by the city from its inception, was built by private contractors. The Manchester Horse Railroad, offered up as an ironic commentary on the nineteenth-century, was actually a private company that flourished in its sixty years of operation until it too was taken over by the city.

Further examples abound: nearly every municipal transportation system prior to the Great Depression was privately-owned and operated—and that jumps to 100% if we look exclusively at the nineteenth century. Mass transit was historically a private affair, and a generally successful one at that. Unfortunately, as public transportation was supplanted by private—viz., the car—in the 1940s and 1950s it inevitably failed to maintain ridership and lapsed into bankruptcy. Once that happened, local politicians deemed it too important to fail and appropriated its assets and operations as a matter of civic pride. Unsurprisingly, public ownership and operation could not stanch the economic losses, which generally continue to this day.

Yglesias is right, though, to point to the contradiction of opposing a high-speed rail network while accepting a public highway system* and a raft of zoning and building code restrictions. A principled stand against one would entail a stand against them all, since they each represent an abrogation of someone’s property rights. One might argue that the opposition to new rail appropriations is strategic given the inordinate capital and ongoing operational expenses it represents. However, one can fight that fight and still indicate one’s rejection of the other abuses.

* On the other hand, the highway system does serve a military purpose, which was one of its original justifications. ↩

I believe that Audi intended it as a caricature: the only difference is that there is not yet an actual police force dedicated to environmental law enforcement at such a visible level. The absurd, petty laws from the commercial actually exist and the intrusiveness of the movement is incredible. (Looks like I’m not the only one that’s noticed the parallels.)

The pretext of global warming catastrophe is becoming increasingly flimsy as time passes. Each day finds new doubts coming to light—the jig is almost up. At some point, the justification for government expansion to prevent a cataclysmic future will evaporate entirely. The time is ripe for the left to make its move. With the health care legislation stalled for the time being, the Senate might take up Waxman-Markey or perhaps something even more meddlesome.

I think a lot of the opposition to socialized medicine by the public stemmed from picturing their health care being run by the post office or the DMV. This mental image crystallized the end towards which the reform was heading and galvanized them into action. In much the same way, I hope that the Audi commercial brought the slippery slope of the environmentalist movement into focus so that the average Super Bowl watcher could see what his view of “going green” would lead to when it became compulsory.

People don’t seem to mind statism when it’s affecting other people, but they draw a line when the hectoring and meddling becomes pervasive. This is the last remnant of the vaunted American sense of life. It is unprincipled, pragmatic, and tenuous to be sure:

A dictatorship cannot take hold in America today. This country, as yet, cannot be ruled—but it can explode. It can blow up into the helpless rage and blind violence of a civil war. It cannot be cowed into submission, passivity, malevolence, resignation. It cannot be “pushed around.” Defiance, not obedience, is the American’s answer to overbearing authority. The nation that ran an underground railroad to help human beings escape from slavery, or began drinking on principle in the face of Prohibition, will not say “Yes, sir,” to the enforcers of ration coupons and cereal prices. Not yet.
— Ayn Rand, “Don’t Let It Go,” Philosophy: Who Needs It, 213.

The dystopic future envisioned by Audi and its ad agency is chilling and repugnant, which is exactly the point of the ad no matter how inadvertent. Americans will meet the “overbearing authority” it represents with defiance and the left knows this.

Then I read something like this story out of San Diego and I feel like I am setting them up for a life of strife, struggle, and obstacles. There will always be some petty bureaucrat or administrator who will try to stub out their spirit when they show some spark or initiative. This little boy, who committed a “crime” but without “criminal intent,” had to surrender his innocent science project to a bomb squad while he and his fellow students were first put in lockdown and then evacuated. I’m sure he won’t make that “mistake” again.

Leaving aside the massive ignorance on the part of the administrators (and the “Arson Strike Team” for that matter) to fail to discern that the device had no bomb-worthiness, the real story here to me is that the perpetrators here were “very cooperative” when faced with a significant police and fire response and that they must now undergo counseling to deal with their errant ways.

Look around you. We live in a sanitized, filtered world where every level of government protects us from ourselves. We are made to surrender our fluids in order to board an airplane; we cannot just strike out and camp wherever we want; and if we wanted to start a research lab, a business, or even raise chickens on our own property, we cannot. All in the name of safety and order.

What’s going to happen in 20, 50, or 100 years when successive generations have matured in this sterile environment? I can foresee a world where technological innovation slows to a crawl and where the mental reins are taut. In a time when Atlas Shrugged seems prophetic, I fear that my children (or their grandchildren) might live to see a time when Anthem is.

But the emails from the Climate Research Unit (CRU) at the University of East Anglia in England have cast unavoidable doubts as to the legitimacy of the long-heralded consensus that had found the science to be “settled.” World leaders, when they weren’t feigning ignorance of the controversy, began to backpedal from commitments due to the groundswell of grassroots outrage.

Efforts by the willfully-blind politicians and apologists who saw AGW as the sin for which the West could finally be reigned in and yoked fell on incredulous ears. This blatant stonewalling and sleight-of-hand further emboldened he opposition, for rarely are he leftists so brazen.

The politicians tried to downplay the motley CRU’s chicanery as unrepresentative of the majority of climate scientists. Carol Browner, Obama’s global warming czar, after first trying to dismiss the emails as trivial then stated baldly that she is “sticking with the 2,500 scientists. These people have been studying this issue for a very long time and agree this problem is real.” The reporter conducting the interview failed to follow-up on the obvious question begging: how many of those scientists were involved in the conspiracy to quash dissent and how many of those who weren’t would now still consider the conclusion unimpeachable?

Skeptics, naturally, failed to argue against science as a numbers game, which would’ve decimated this consensus. Instead they chose to trot out their own quantified contrapuntal consensus. The disinterested onlookers, however, can’t help but shake their heads at the one-upmanship and politicking. For the layman, science is collecting data, making theories, and verifying other scientists’ theories. This window into the sausage factory has exposed climate science as the scientific equivalent of cooking the books.

Climate scientists and the leftists who love them invoked the talisman of “peer review” in a vain effort to intimidate the public. Trading on the public’s superficial understanding of the peer review process, they tut-tutted the skeptics’ claims because they generally didn’t publish their works in peer-reviewed journals. They cited study after study in prestigious journals that supported their view that man-made carbon dioxide emissions were amplifying the greenhouse effect and causing catastrophe. When the peer-review process is open, anonymous, and intellectually honest, it is a decent way to gradually move science in the direction of truth and to maintain its focus on reality.

But the researchers in this instance did everything in their power to subvert the peer-review process. In email after email, they spoke of ousting journal editors who may have wavered in their commitment to the cause, of thwarting requests for their raw data or methodologies, and of coordinating with their fellow travelers to present a united front when conducting peer review. Any legitimate scientist should be disgusted at their behavior—and many are.

But peer review is not in itself a validation of the conclusions of any particular study. As Climategate has demonstrated, it is subject to manipulation and fallibility. The peers that review a paper ostensibly examine the author’s methodology, but unusual or controversial conclusions may appear invalid and so the review can lead to a creeping orthodoxy as these papers never see the printed page. So the rejection of skepticism by dint of a lack of publication is disingenuous when the rejectors are also the publishing gatekeepers. In the end, the only way to validate a finding is through reference to reality: does the conclusion follow logically from the empirical data? Is the empirical data collected in an objective, verifiable manner? Reality is the arbiter here, not men.

Worse yet are those who would sweep aside the scandal, ignore the lack of foundation for the AGW position, and fail to amend their support for far-reaching, global economic changes because of the researchers’ good intentions. You see this viewpoint appear in nearly any comment thread on any blog entry and it commonly takes the form “sure they were out of line but shouldn’t we be moving towards cleaner energy, less oil dependence, and renewable fuels?” The “trick” here is “we.” The “we” in question is not the gradual process of technological replacement that takes place when millions of individuals in the market act to buy cheaper, safer technologies; they’re invariably talking about the government enacting mandates on individuals and companies. The latter, because it is achieved through force, is not something we should be undertaking. If renewable energy is desirable, then it will be taken up by industries when it becomes profitable to do so.

The AGW crowd has not earned the benefit of the doubt. The mainstream media so far have turned a blind eye, but world leaders attending Copenhagen must not be allowed to pretend like Climategate never occurred. It is a sad day when the voices of reason are the Danes and the Saudis.

This is the “public option” as it really is:

Any speech suitable for delivery to such a wide range of ages is likely to be little more than rah-rah cheerleading about staying in school. [UPDATE: That is exactly what it turned out to be.] But this sort of thing always starts out innocuously; next thing you know kids are writing out pledges to Obama that they’ll stay in school and there’s a weekly address to them. The whole thing reeks of the “cult of personality” that has encircled Obama since he announced his candidacy. I guarantee that he would not exercise subsequent restraint, it’s just not in his nature.

But the left rightly points out that Ronald Reagan and George H.W. Bush made such a speech once each and there wasn’t a groundswell of opposition. Leaving aside the fact that most parents of school-age children now were school-age children themselves back then (a salient point that they conveniently ignore), they see only one possible explanation for the current backlash: the president’s race.

For leftists, racism is the easiest way to dismiss an opponent. If you can blithely note that a lot of the opposition is in the South, you can get away without even considering other possibilities or actually arguing about anything. Leveling that charge effectively shuts down the discussion. It can’t be that a lot of people don’t trust Obama to give a innocuous speech or that they think the federal government is overreaching or that they spurn a politicization of education—it has to be that he doesn’t look like them.

I am sympathetic to those who are outraged at Obama’s audacity, but honestly it’s a minor issue. Even the most interventionist speech he could give pales next to the insidious messages that school children get everyday. We live in a culture of unreason and that permeates the classrooms of the nation, no matter the source of their funding. Parents should be evaluating the curriculum, not pulling their children out for a school day.

Tory health spokesman Andrew Lansley, who obtained the figures, said Labour had cut maternity beds by 2,340, or 22 per cent, since 1997. At the same time birth rates have been rising sharply – up 20 per cent in some areas.

“Man collapses with ruptured appendix… three weeks after NHS doctors ‘took it out’”:

“However, we would like to apologise if Mr Wattson felt dissatisfied with the care he received at Great Western Hospital.”

Paul Krugman, hack and Nobel Prize (debased) winner, recently said:

In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false. (emphasis mine)

The thing that I fear most about our turn to fascist medicine is not that these horror stories will come hear (though I do fear that plenty), but that the individual mandate will leave me and my family nowhere to turn to avoid this living hell.

The “public option” is bad and will tend to crowd out private insurance, especially if Wal-Mart puts millions on the rolls in one fell swoop. It’s terrible and a wanton violation of individual rights both in the service side and the expropriation end. But our health care system has “survived” Medicare, Medicaid, and the countless regulations that they have imposed.

I have great insurance presently. If I am forced to participate in the government health care system, my family’s quality of life will demonstrably suffer. And should bad things happen, my safety net of trusted doctors, advanced hospitals, and reasonable out-of-pocket expenses will evaporate. This is a life-or-death issue for me.

We Arizonans had a chance last election to create a state’s rights trial balloon that could have potentially nullified the whole endeavor. It was narrowly defeated and thankfully the state legislature has put it up for another statewide referendum in 2010.

A far better challenge to these infringements on our freedoms would be the Ninth Amendment but I’ll take what I can get. I just hope that 2010 is not too late.

Then I read this article about the reaction to the Whole Foods CEO’s recent editorial in The Wall Street Journal about establishing a free(r) market in health care. The following quotes could have come from straight from the Council of American Grocers:

Christine Taylor, a 34-year-old New Jersey shopper, vowed never to step foot in another Whole Foods again.

“I will no longer be shopping at Whole Foods,” Taylor told ABCNews.com. “I think a CEO should take care that if he speaks about politics, that his beliefs reflect at least the majority of his clients.”

And:

A commenter on the Whole Foods forum, identified only by his handle, “PracticePreach,” wrote, “It is an absolute slap in the face to the millions of progressive-minded consumers that have made [Whole Foods] what it is today.”

“You should know who butters your hearth-baked bread, John,” wrote the commenter. “Last time I checked it wasn’t the insurance industry conservatives who made you a millionaire a hundred times over.”

In these parasites’ view, Whole Foods was running a sale: buy organic produce and get John Mackey’s soul free. While sympathetic to his position and plight, I am not entirely sure what Mackey was expecting the reaction to be since his business caters primarily to leftist, environmentalist types with a predilection for government action and a general hostility to business. His customers gave him the means to a prominent pulpit but only inasmuch as he will spout their beliefs. They simply will not tolerate heterodoxy and he will lose business over this.

(If we start seeing buttons reading “We Don’t Buy Whole Foods” or discover that his CFO has stealthily been hiring socialists for key positions within the company, I’ll know that Mackey’s capitulation is near.)

As a historian, I am all too familiar with the dangers of placing too much stock in contemporaneous sources. Present events and actions attract the most attention, leading to a myopic search for explanation. Causation is best determined from afar since the historian has a diverse group of hypotheses from which to choose and can evaluate subsequent events for corroboration. But one cannot fully discount contemporary analysis; it offers up a rich source for facts and, uncommonly, spot-on assessments. With this trepidation, I cautiously read Thomas Woods Jr.’s 2009 book Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. Woods, an Austrian economist with the Ludwig von Mises Institute, sought to present an alternative to the previous and current administrations’ indictment of the free market on the charge of causing the present economic predicament.

The primary value in the book is re-locating the blame for the recession back where it belongs: government interference in the economy. He dismisses the Community Reinvestment Act, mortgage-backed securities, and credit default swaps for the noise that they are. These all had an impact on the depth of the recession but Woods’ identifies the singular perpetrator as the Federal Reserve.

The Fed manipulates interest rates in order to “stimulate” or put the brakes on the economy, depending on the direction they set the interest rates. The Austrians—and Woods here—correctly identifies that interest rates are effectively the pricing mechanism applied across time: how much is wealth deferred now worth in the future. In a free market, interest rates arise from individual savings preferences: if few people are willing to defer spending now, then the interest rate will increase due to diminished supply. They also may be induced to defer spending by an increased demand for money to lend. It’s a simple matter of supply and demand.

But the Fed’s increase of the capital stock does not represent deferred spending. It is an artificial adjustment to the supply without a corresponding increase in demand. This dislocation acts as a signal to businesses and consumers of capital that now is the time to undertake projects that are profitable only with cheap credit. Woods cites an apt analogy from Ludwig von Mises to illustrate this distortion:

Mises draws an analogy between an economy under the influence of artificially low interest rates and a home builder who falsely believes he has more resources—more bricks, say—than he really does. He will build a house whose size and proportions are different from the ones he would have chosen if he had known his true supply of bricks. He will not be able to complete this larger house with the number of bricks he has. The sooner he discovers his true brick supply the better, for then he can adjust his production plans before too much of the finished house is produced and too many of his labor and material resources are squandered. (69)

Woods also briefly covers the Austrian business cycle theory to illustrate that such economy-wide movements aren’t the fault of the free market such as it is. Their theory also posits that higher-order goods, like capital and wholesale products, are the most sensitive to interest-rate fluctuations while consumer goods are the last to respond. The recent boom and bust provides ample evidence of this observation, as capital-intensive industries were affected first and only recently have some consumer good manufacturers started to have trouble. The reason is solely due to money supply manipulations by the Federal Reserve.

Books of this nature always conclude with policy recommendations: it’s practically de rigueur. Refreshingly, Woods’ suggestions are entirely about how the federal government can extricate itself from money. He notes Mises’ observation that the “history of money is the history of government efforts to destroy money.” I have no beef with any of his ideas, which include abolishing Fannie Mae and Freddie Mac, getting rid of the Fed, and ending the system of fiat money that allows for hidden government spending.

This book is wonderful if for no other reason than introducing the reader to the Austrian School of economics, which is the most consistent defender of the free market in the economics profession. “Most consistent” here means that its defense of freedom rests on practical grounds—that liberty and economic freedom work well and much better than socialism. Woods’ book doesn’t go far enough: it’s not grounded in individual rights and the nature of man like John Allison’s talk was. But as an accessible, accurate analysis of the source of the current situation, it deserves a wide audience.

But I won’t. To me, the Fourth of July is like Valentine’s Day or New Year’s Day: a day when everyone celebrates something they should be doing year-round but aren’t. Reserving your energies and efforts to honor your values for a single day every year is actually a moral travesty. America is the greatest nation on earth and has been since its inception 233 years ago.

We here at The New Clarion love America. And we show that love (almost) daily when we chronicle and expose the distance we as a nation have strayed from where we ought to be. It is right and just to be patriotic for the United States and there’s no reason to limit it to just one day a year.

A polar bear expert was told that he wasn’t welcome at a meeting of the Polar Bear Specialist Group because he has argued repeatedly that polar bear populations are actually increasing. The chairman of the group explicitly stated that his views “counter to human-induced climate change are extremely unhelpful.” He had obtained funds to travel to the meeting but the members of the group voted down his attendance in spite of his unassailable expertise.

These two recent episodes are but the latest in a long series of denying dissent by the proponents of anthropogenic global warming (AGW). Spend any time online researching global warming and you’ll quickly discover countless more examples of earnest dissenters citing a laundry list of reasons to doubt only to be derided as “deniers” and shouted down until they leave. The pattern plays out time and again. What the EPA scientist, the polar bear researcher, and these online denizens fail to realize is that the truth is utterly irrelevant to AGW advocates.

(For the record, I am on the fence about the validity of the science of the AGW debate. Warming may or may not be happening and it may or may not be a consequence of mankind’s industrialization—I’ve seen convincing support for each. I am quite unqualified to pass judgement on the scientific merits of either side’s position or to dispute the findings of actual researchers. I read widely on the matter and have been following it since James Hansen’s Congressional testimony in 1988, but neither fact counts for much as far as science goes. However, I can opine on the political implications of the conclusions and the culture of AGW as a lay observer and I will strive to confine myself to that perspective.)

The rational person spends a tremendous amount of time and effort looking at reality, evaluating hypotheses, and considering alternative explanations when he tries to come to know something. After the effort is expended and the conclusions are arrived at, he can legitimately claim the mantle of “certainty” about the item before him. But his certainty is not inviolable: if new data or new facts come to light that he hadn’t considered, he will evaluate his certainty and amend his conclusions to reflect them. He understands that knowledge is not a static destination, but an ongoing process with milestones representing the intermediate points. This view is not skepticism—where knowledge and certainty are impossible—but an openness to re-consider one’s premises.

When a rational person sees someone come to the wrong conclusion, he assumes that that person is much like him. So he will point out the pertinent facts and try to help that person come to see the wider context that negates or modifies the earlier conclusion. If he’s right, he just might persuade the other person to change his mind.

Scientists generally operate like the rational person described above. They work according to the scientific method, which enshrines the inductive approach. Publishing their findings in a scientific journal is supposed to be the beginning of the journey to knowledge as other scientists test the results and publish their own findings. This emerging consensus is then grist for causal explanation, which is then itself tested in new scenarios and experiments. This process is more rigorous and formal than the rational person’s due to its inherently social nature: the rational person really only needs to understand an issue in his own mind whereas a scientist must cast his understanding in precise, objective terms that are available to others.

At odds with both the rational person and the scientist is the man of faith. For him, knowledge once obtained is sacrosanct; his certainty is absolute and unshakeable. In contrast, the process by which he acquires such certainty is relatively effortless: he is told what to believe and he accepts it wholesale. His mind is literally closed off to contradictory information as he resolutely refuses to consider it.

The source of his knowledge and certainty is other people so the pedigree is of vital importance to him. If he is a Christian, the opinions of his fellow worshippers might carry some weight but pale next to his priest or the Pope. If he is a Marxist, then an economics professor’s ideas trump a graduate student’s but lose out to a consensus of five economics professors. When knowledge is severed from its ties to an objective reality, the need for a standard does not vanish so it morphs into an authority accounting game.

Dissent—or even worse, apostasy—cannot be tolerated in the realm of faith. Doubt is an injection of reason that undermines the received knowledge. So men of faith gather with other men of faith, trusting that none of whom will raise uncomfortable doubts or ask serious questions of each other’s certainties. They take solace in the mutual affirmations of rightness and correctness. When they come across dissent, their defense mechanisms react automatically to neutralize the doubt and quash the questions that percolate to the surface of their faith. The faithful swarm to prevent a mental foothold and seize on their numbers for reassurance that they can’t all be wrong.

By now, you can probably already guess which side I think the AGW group falls into. For the most strident of AGW advocates, the ones who loudly proclaim that the debate is over, AGW has become an article of faith—a religion with all the dogma, rituals, and trappings of any traditional one. For them, AGW must never be questioned and they are prepared to do whatever it takes to accomplish that. If doubt does come up, they ratchet up the rhetoric to cow the less-fanatical proponents through a variant of Pascal’s Wager.

The rank and file listen to what the leaders tell them and the clustering with those of like “mind” prevents them from having to question their beliefs. Their lack of doubt is more a happenstance of laziness or ignorance or intellectual sloth than a conscious use of mental blinders. They are the ones most open to suasion: the prolonged cold snap is distinctly at odds with alarmism and the hyperbole of the leaders is so over the top that even the dimmest must recoil.

On that front, there is reason for hope. Australia recently rejected a climate change bill. 40% of Americans think that global warming is not caused by man. There was even some spirited opposition on the House floor last week.

But it may prove to be a false hope. Those unwilling to do the intellectual legwork necessary to come to a firm conclusion about AGW (or any issue, for that matter) are easily recalled to the fold should things get warmer or dissent be silenced. While rejoicing in the momentary victories of rejection of this or that anti-man piece of legislation, we cannot let up on the culture war. Victory there is the only longstanding one. To achieve that, we need a resurgence of reason and rational people. Luckily, there’s some positive signs on that front as well.